Item 1. BUSINESS.

Stryker Corporation (Stryker or the Company) is one of the world's leading medical technology companies and, together with its customers, is driven to make healthcare better. The Company offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes.

Our core values guide our behaviors and actions and are fundamental to how we execute our mission.

Stryker was incorporated in Michigan in 1946 as the successor company to a business founded in 1941 by Dr. Homer H. Stryker, a prominent orthopaedic surgeon and the inventor of several medical products. Our products are sold in over 75 countries through company-owned subsidiaries and branches, as well as third-party dealers and distributors, and include implants used in joint replacement and trauma surgeries; Mako Robotic-Arm Assisted technology; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment and intensive care disposable products; neurosurgical, neurovascular and spinal devices; as well as other products used in a variety of medical specialties. In the United States most of our products are marketed directly to doctors, hospitals and other healthcare facilities.

As used herein, and except where the context otherwise requires, "Stryker," "we," "us," and "our" refer to Stryker Corporation and its consolidated subsidiaries.

Business Segments and Geographic Information

We segregate our operations into three reportable business segments: Orthopaedics, MedSurg and Neurotechnology and Spine. Financial information regarding our reportable business segments and certain geographic information is included under "Consolidated Results of Operations" in Item 7 of this report and Note 14 to our Consolidated Financial Statements.

Net Sales by Reportable Segment
			2020									2019									2018
Orthopaedics			$	4,959		34		%				$	5,252		35		%				$	4,991		37		%
MedSurg			6,400			45						6,492			44						6,045			44
Neurotechnology and Spine			2,992			21						3,140			21						2,565			19
Total			$	14,351		100		%				$	14,884		100		%				$	13,601		100		%

Orthopaedics

Orthopaedics products consist primarily of implants used in total joint replacements, such as hip, knee and shoulder, and trauma and extremities surgeries. We bring patients and physicians

advanced implant designs and specialized instrumentation that make orthopaedic surgery and recovery simpler, faster and more effective. We support surgeons with the technology and services they need as they develop new surgical techniques. The Mako Robotic-Arm Assisted Surgical System was designed to help surgeons provide patients with a personalized surgical experience based on their specific diagnosis and anatomy. The Mako System currently offers three applications supporting Partial Knee, Total Hip and Total Knee procedures. Mako is the only robotic-arm assisted technology enabled by 3D CT-based pre-operative planning, and with AccuStop™ haptic technology, Mako provides surgeons the ability to know more about their patients' anatomy so they can cut less in bone preparation and implant placement with intra-operative haptic guidance.

Stryker is one of four leading global competitors for joint replacement and trauma and extremities products and robotics; the other three being Zimmer Biomet Holdings, Inc. (Zimmer), DePuy Synthes (a Johnson & Johnson company) and Smith & Nephew plc (Smith & Nephew).

Composition of Orthopaedics Net Sales
			2020									2019									2018
Knees			$	1,567		32		%				$	1,815		35		%				$	1,701		34		%
Hips			1,206			24						1,383			26						1,336			27
Trauma and Extremities			1,722			35						1,639			31						1,580			32
Other			464			9						415			8						374			7
Total			$	4,959		100		%				$	5,252		100		%				$	4,991		100		%

In 2020 we completed the acquisition of Wright Medical Group N.V. (Wright) for an aggregate purchase price of $4.1 billion ($5.6 billion including convertible notes). Wright develops, manufactures and markets a complementary product portfolio of surgical solutions for upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics. The Wright acquisition enhances our global market position in trauma and extremities, providing opportunities to advance innovation and reach more patients.

MedSurg

MedSurg products include surgical equipment, patient and caregiver safety technologies, and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), reprocessed and remanufactured medical devices (Sustainability) and other medical device products used in a variety of medical specialties.

Stryker is one of five leading global competitors in Instruments; the other four being Zimmer, Medtronic plc., Johnson & Johnson and ConMed Linvatec, Inc. (a subsidiary of CONMED Corporation). In Endoscopy we compete with Smith & Nephew, ConMed Linvatec, Arthrex, Inc., Karl Storz GmbH & Co., Olympus Optical Co. Ltd. and STERIS plc. In Medical our primary competitors are Hill-Rom Holdings, Inc., Zoll Medical Corporation, Medline Industries and Ferno-Washington, Inc.

Composition of MedSurg Net Sales
			2020									2019									2018
Instruments			$	1,863		29		%				$	1,959		30		%				$	1,822		30		%
Endoscopy			1,763			28						1,983			31						1,846			31
Medical			2,524			39						2,264			35						2,118			35
Sustainability			250			4						286			4						259			4
Total			$	6,400		100		%				$	6,492		100		%				$	6,045		100		%

In 2020 Instruments launched a new system of corded power tools for conducting small bone orthopaedic procedures and Zipline Medical (2019 acquisition) single use, surgical site closure devices that are utilized across multiple procedures, including orthopaedic arthroplasty, where it provides improved outcomes.

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STRYKER CORPORATION 2020 FORM 10-K

In 2020 Medical launched the ProCuity Bed Series, connected and scalable beds for all patient care environments with wireless and advanced fall prevention technologies, the first smart bed series to market.

Neurotechnology and Spine

Neurotechnology and Spine products include neurosurgical, neurovascular, craniomaxillofacial and spinal implant devices. Our neurotechnology offering includes products used for minimally invasive endovascular techniques; a comprehensive line of products for traditional brain and open skull based surgical procedures; orthobiologic and biosurgery products, including synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. The Craniomaxillofacial implant offering includes cranial, maxillofacial, and chest wall devices as well as dural substitutes and sealants. Our spinal implant offering includes cervical and thoracolumbar systems that include fixation, minimally invasive, and interbody systems used in spinal injury, complex spine and degenerative therapies.

Stryker is one of five leading global competitors in Neurotechnology; the other four being Medtronic, Johnson & Johnson, Terumo Corporation and Penumbra, Inc. Stryker is one of five leading global competitors in Spine; the other four being Medtronic Sofamor Danek, Inc. (a subsidiary of Medtronic), DePuy Synthes, Nuvasive, Inc. and Globus Medical, Inc.

Composition of Neurotechnology and Spine Net Sales
			2020									2019									2018
Neurotechnology			$	1,945		65		%				$	1,983		63		%				$	1,737		68		%
Spine			1,047			35						1,157			37						828			32
Total			$	2,992		100		%				$	3,140		100		%				$	2,565		100		%

In 2020 Stryker received Food and Drug Administration (FDA) pre-market approval (PMA) for the next generation Surpass Evolve™ Flow Diverter to treat unruptured large and giant wide-neck intracranial aneurysms. In addition, Stryker received China National Medical Products Administration (NMPA) approval for the Surpass Streamline™ Flow Diverter. These two devices further expand our commercial footprint into the global flow diversion market.

In 2020 Stryker received FDA PMA of its Neuroform Atlas™ Stent System for the treatment of wide-neck intracranial aneurysms in conjuction with embolic detachable coils in the posterior circulation of the neurovasculature. The Neuroform Atlas™ device was previously approved for the anterior circulation. Neuroform Atlas™ Stent System has also been approved and has launched in China.

Also in 2020 Stryker launched the next generation Trevo product and line extensions of numerous Access products.

Raw Materials and Inventory

Raw materials essential to our business are generally readily available from multiple sources; however, certain of our raw materials are currently sourced from single suppliers. Substantially all products we manufacture are stocked in inventory, while certain MedSurg products are assembled to order.

Patents and Trademarks

Patents and trademarks are significant to our business to the extent that a product or an attribute of a product represents a unique design or process. Patent protection of such products restricts competitors from duplicating these unique designs and features. We seek to obtain patent protection on our products whenever appropriate for protecting our competitive advantage. On December 31, 2020 we owned approximately 4,045 United

States patents and approximately 6,407 patents in other countries.

Seasonality

Our business is generally not seasonal in nature; however, the number of orthopaedic implant surgeries is typically lower in the summer months, and sales of capital equipment are generally higher in the fourth quarter. The dollar amount of customer backlog orders at any given time is not meaningful to an understanding of our business taken as a whole.

Competition

In each of our product lines we compete with local and global companies. The development of new and innovative products is important to our success in all areas of our business. Competition in research involving the development and improvement of new and existing products and processes is particularly significant. The competitive environment requires substantial investments in continuing research and maintaining sales forces.

We believe our commitment to innovation, quality and service and our reputation differentiates us in the highly competitive product categories in which we operate and enables us to compete effectively. We believe that our competitive position in the future will depend to a large degree on our ability to develop new products and make improvements to existing products.

Regulation

Our businesses are subject to varying degrees of governmental regulation in the countries in which we operate, and the general trend is toward increasingly stringent regulation.

In the United States the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act and its subsequent amendments and the regulations issued and proposed thereunder provide for regulation by the FDA of the design, manufacture and marketing of medical devices, including most of our products. Many of our new products fall into FDA classifications that require notification submitted as a 510(k) and review by the FDA before we begin marketing them. Certain of our products require extensive clinical testing, consisting of safety and efficacy studies, followed by pre-market approval (PMA) applications for specific surgical indications. Certain of our products also fall under the FDA's drug classification, as well as other FDA classifications.

The FDA's Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain records and provide for inspections of our facilities by the FDA. There are also certain requirements of state, local and foreign governments that must be complied with in the manufacture and marketing of our products.

The member states of the European Union (EU) adopted the European Medical Device Directives, which form a single set of medical device regulations for all EU member countries. These regulations require companies that manufacture and distribute medical devices in EU member countries to meet certain quality system requirements and obtain CE marking for their products. We have authorization to apply the CE marking to substantially all of our products. In addition, the EU enacted the EU Medical Device Regulation (EU MDR) in May 2017 with an effective date of May 2021, which imposes stricter requirements for the marketing and sale of medical devices, including in the areas of clinical evaluation requirements, quality systems, labeling and post-market surveillance. More recently, a free trade agreement was executed between the UK and the EU that became effective January 1, 2021. A gap analysis and compliance plan is being implemented to ensure compliance and minimize business

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STRYKER CORPORATION 2020 FORM 10-K

disruption. Finally, we are required to comply with the unique regulatory requirements of each country within which we market and sell our products, including China, whose National Medical Products Administration (NMPA) has recently promulgated more stringent regulatory requirements.

Initiatives to limit the growth of general healthcare expenses and hospital costs are ongoing in the markets in which we do business. These initiatives are sponsored by government agencies, legislative bodies and the private sector and include price regulation and competitive pricing. It is not possible to predict at this time the long-term impact of such cost containment measures on our future business. In addition, business practices in the healthcare industry are scrutinized, particularly in the United States, by federal and state government agencies. The resulting investigations and prosecutions carry the risk of significant civil and criminal penalties.

Environment

We are subject to various rules and regulation in the United States and internationally related to the protection of human health and the environment. Our operations involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. We believe our policies, practices and procedures are properly designed to comply, in all material respects, with applicable environmental laws and regulations. We do not expect compliance with these requirements to have a material effect on purchases of property, plant and equipment, cash flows, net earnings or competitive position.

Employees

On December 31, 2020 we had approximately 43,000 employees globally, with approximately 24,000 employees in the United States. Our talented employees are an integral reason for our standing as one of the world's leading medical technology companies where, together with our customers, we are driven to make healthcare better. Our company values of integrity, accountability, people and performance are a key component of that mission. As one of our core values, we recognize that we must and will continue to focus on our people.

Our success is dependent on our ability to attract the best talent that reflects our diverse communities. To do so, we continue to focus on the basics of creating a great workplace. We believe in attracting the right people, maintaining and building employee engagement and developing our employees. We believe when people are able to do what they do best, they will look forward to coming to work and in turn, will deliver great business results. Stryker is made up of hardworking, results-oriented people who are driven to go above and beyond for our customers.

Our leadership team and Board of Directors receive regular updates on our people and culture strategy and provide feedback on our strategy and goals, including alignment to mission and values, peer benchmarking and stakeholder feedback.

Employee Development

Employee development at Stryker is extensive and exists at all levels of the organization, including company-wide training on our Code of Conduct, job-related technical training and management and leadership training. Our development programs include on-the-job learning, coaching and mentoring, management and leadership development courses, team building and collaboration training and immersive experiences with expert partners.

We encourage all employees to establish individual development plans, in partnership with their manager, to help employees gain the needed development experience to grow their careers.

Employee Engagement

An engaged workplace culture that drives performance and business outcomes is central to our mission. Listening to and learning from our employees forms the foundation of an engaging culture. More than 90% of our global employees participate in our annual engagement survey, which provides a valued platform for listening and allows us to take action based on the feedback collected.

We supplement our annual engagement survey with targeted pulse surveys to gather feedback on topics relevant to the current climate. Additionally, we establish forums for collecting qualitative feedback to gain insights and identify actions we can take to ensure all employees feel included, engaged and able to achieve their full potential.

We also provide tools and resources that enable managers and teams to act on the insights we gain from our surveys and to drive employee engagement and strong business outcomes.

Diversity, Equity and Inclusion (DE&I)

An essential part of our culture is respecting each individual’s strengths and values. Building on this foundation, we are focused on maintaining an inclusive, engaging work environment and prioritizing DE&I in keeping with our values of integrity and people, and we continue to integrate this strategy with our efforts to attract, develop and retain a diverse workforce. Key components of our overall DE&I strategy include:

• Strengthen the diversity of our workforce: We are committed to recruiting and hiring top talent from all backgrounds, providing targeted development for under-represented talent and further integrating DE&I into our policies, processes and practices.

• Advance a culture of inclusion, engagement and belonging: We focus on establishing an equitable culture that removes barriers, engages talent from different backgrounds and inspires employees to reach their full potential. Our current efforts are focused on advancing our employee resources groups, educating our employees on DE&I and continuing our work to build inclusive leadership capabilities.

• Maximize the power of inclusion to drive innovation and growth: We leverage our talent to create diverse teams to solve complex problems and leverage diverse inputs to advance our mission of making healthcare better.

Attracting and Hiring

We understand that every employee drives our success. We focus on attracting, identifying and selecting strong candidates who will be successful at Stryker and ensuring that each person we hire brings the talent, expertise and passion we need to continue to be successful.

Competitive Pay and Benefits

Our compensation and benefits programs are designed to attract and retain top talent and to incentivize performance and alignment to our mission and values.

We offer market-competitive base pay and benefits to our employees in countries around the world. We regularly evaluate our compensation and benefit offerings and levels, using recognized outside consulting firms to ensure fairness and competitiveness in our offerings.

Most of our employees also have variable components to their compensation packages that reward employees based on individual, business unit and/or company-wide performance.

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Information about our Executive Officers

As of January 31, 2021
Name			Age			Title			First Became an Executive Officer
Kevin A. Lobo			55			Chairman and Chief Executive Officer			2011
Yin C. Becker			57			Vice President, Communications, Public Affairs and Corporate Marketing			2016
William E. Berry Jr.			55			Vice President, Corporate Controller and Principal Accounting Officer			2014
Glenn S. Boehnlein			59			Vice President, Chief Financial Officer			2016
M. Kathryn Fink			51			Vice President, Chief Human Resources Officer			2016
Robert S. Fletcher			50			Vice President, Chief Legal Officer			2019
Viju S. Menon			53			Group President, Global Quality and Operations			2018
Timothy J. Scannell			56			President and Chief Operating Officer			2008

Each of our executive officers was elected by our Board of Directors to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of shareholders in 2021 or until a successor is chosen and qualified or until his or her resignation or removal. Each of our executive officers held the position above or served Stryker in various executive or administrative capacities for at least five years, except for Mr. Fletcher and Mr. Menon. Prior to joining Stryker in April 2019, Mr. Fletcher held various legal leadership roles with Johnson & Johnson for the previous 14 years, most recently as the Worldwide Vice President, Litigation. Prior to joining Stryker in April 2018, Mr. Menon held various senior supply chain leadership roles with Verizon Communications Inc. during the previous eight years, most recently as the Chief Supply Chain Officer.

Available Information

Our main corporate website address is www.stryker.com. Copies of our filings with the United States Securities and Exchange Commission (SEC) are available free of charge on our website within the "Investors Relations" section as soon as reasonably practicable after having been electronically filed or furnished to the SEC. All SEC filings are also available at the SEC's website at www.sec.gov.