Stryker (SYK) 10-K risk factor changes: FY2021 vs FY2020

[removed: In addition, any statements that] refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The COVID-19 pandemic has materially adversely affected, and could continue to materially adversely affect, our operations, supply chain, manufacturing, product [removed: distribution] [added: distribution, customers] and other business activities: The global COVID-19 pandemic has led to severe disruptions in the market and the United States and international economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown.

A significant number of our [added: customers,] global suppliers, [removed: vendors,] distributors and manufacturing facilities are located in regions that have been affected by the pandemic and those operations have been, and could continue to be, materially affected by restrictive [removed: government] measures implemented in response to the pandemic.

As a result, some of our [added: customers,] distributors and indirect [added: sales] channels have at times been unable to [added: retain employees,] distribute [added: or use] our products or provide required services.

In addition, the pandemic could adversely impact our [added: ability, and the] ability [added: of our third-party suppliers, manufacturers, distributors and customers,] to retain key employees and [added: ensure] the continued service and availability of skilled personnel necessary to run [removed: our complex productions, as well as our executive officers and other members of our management team, third-party suppliers, manufacturers, distributors] [added: our,] and [removed: vendors.][added: their, complex operations.]

To the extent our management or other [added: personnel, or the management or other] personnel [added: of our third-party suppliers, manufacturers, distributors and customers,] are impacted in significant numbers by the pandemic and are not available to perform their job duties, we could experience delays in, or the suspension of, our manufacturing operations, [added: sales activities,] research and product development activities, regulatory work streams, clinical development programs and other important commercial [added: and corporate] functions.

The extent of the pandemic’s effect on our business [added: and industry] will depend on future developments, including the duration, spread and intensity of the [removed: pandemic] [added: pandemic, including future resurgences and/or the spread of variants,] and the successful development, distribution and acceptance of vaccines for COVID-19, all of which are uncertain and difficult to predict.

We are not able at this time to estimate with certainty the effect of these and other unforeseen factors on our business, but the adverse impact on our business, cash flows, financial condition and results of operations [added: has been, and] could [removed: be] [added: in the future be,] material.

We have experienced, and may continue to experience, a significant and unpredictable need to adjust our operations as market demand for certain of our products has shifted and continues to shift or as may be mandated [removed: by][added: by governmental authorities in response to the COVID-19 pandemic: Some of our products are particularly sensitive to reductions in elective medical procedures.]

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

Elective medical procedures were [removed: suspended, especially] [added: suspended or reduced at various times] in [removed: the first and fourth quarters of] 2020 and [removed: the first quarter of 2021,] [added: 2021] in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations.

It is not possible to predict [removed: the exact timing of a broad resumption of] [added: whether] elective medical procedures [added: will again be suspended or reduced in the future] and, to the extent individuals [added: and customers] are required to continue to de-prioritize, delay or cancel elective procedures as a result of the COVID-19 pandemic or otherwise, our business, cash flows, financial condition and results of operations could be negatively affected.

Unpredictable increases in demand for certain of our products [added: have exceeded in the past, and] could exceed [added: in the future,] our capacity to meet such demand timely, which could adversely affect our customer relationships and result in negative publicity.

Current economic and political conditions make tax rules in jurisdictions subject to significant [removed: change:] [added: change:] Our future results of operations could be affected by changes in the effective tax rate as a result of changes in tax laws, regulations and judicial rulings.

We are continuing to evaluate the impact of tax reform [added: in the countries in which we operate] as new guidance and regulations are published.

In addition, further changes in the tax laws [removed: of foreign jurisdictions] could arise, including as a result of the base erosion and profit shifting (BEPS) project undertaken by the Organisation for [removed: Economic Cooperation and Development (OECD).]

[added: Income tax] authorities regularly perform audits of our income tax filings.

We cannot predict what other healthcare programs and regulations will ultimately be implemented at the federal or state level or the effect [removed: of] [added: that] any future legislation or regulation in the United States may have on our business.

We are subject to extensive governmental regulation relating to the classification, manufacturing, [added: sterilization,] labeling, marketing and sale of our products: The classification, manufacturing, sterilization, labeling, marketing and sale of our products are subject to extensive and evolving regulations and rigorous regulatory enforcement by the FDA, European [removed: Union (EU),] [added: Union,] the NMPA in China, and other governmental authorities in the United States and internationally.

Costs to comply with regulations, including the [removed: EU] [added: European Union] Medical Device Regulation enacted by the [removed: EU] [added: European Union] in May 2017 and effective in May 2021, the free trade agreement [removed: recently executed] between the [removed: UK] [added: United Kingdom] and the [removed: EU] [added: European Union] that became effective January 1, 2021, and the regulatory laws established by the NMPA in China, and costs associated with remediation can be significant.

[removed: If we fail to comply with applicable regulatory] requirements, we may be subject to a range of sanctions, including substantial fines, warning letters that require corrective action, product seizures, recalls, the suspension of product manufacturing, revocation of approvals, exclusion from future participation in government healthcare programs, substantial fines and criminal prosecution.

We are subject to federal, state and foreign healthcare regulations, including anti-bribery, anti-corruption, anti-kickback and false claims laws, globally and could face substantial penalties if we fail to comply with such regulations and laws: The relationships that we, and third-parties that market and/or sell our products, have with healthcare professionals, such as physicians, hospitals, healthcare organizations and others, are subject to scrutiny under various state and federal laws often referred to collectively as healthcare [added: fraud and abuse laws.]

These laws and regulations are broad in scope and are subject to evolving interpretation and we have in the past been, and in the future could be, required to incur substantial costs to [added: investigate, audit and] monitor compliance or to alter our practices.

Violations of these laws [added: could result in litigation and we] may be [removed: punishable by] [added: subject to] criminal or civil [added: penalties and] sanctions, including substantial fines, imprisonment of current or former employees and exclusion from participation in governmental healthcare programs.

We [removed: are working] [added: continue] to implement recommendations that resulted from the independent compliance consultant’s review of our commercial [added: practices to enhance our commercial business] practices.

Further, the [removed: EU’s] [added: European Union’s] General Data Protection Regulation (GDPR), which became effective in May 2018, applies to all of our activities related to products and services that we offer to [removed: EU] [added: European Union] customers and employees.

The GDPR established [removed: new] requirements regarding the handling of personal data and includes significant penalties for non-compliance (including possible fines of up to 4% of total company revenue).

These matters are subject to many uncertainties and [added: outcomes are not predictable.]

In addition, we may incur significant legal expenses [added: for product liability claims] regardless of whether we are found to be liable.

We have exposure to exchange rate fluctuations on cross border transactions and translation of local currency results into United States Dollars: We report our financial results in United States Dollars and approximately 30% of our net sales are denominated in foreign currencies, including the Australian Dollar, British Pound, Canadian Dollar, [added: Chinese Yuan,] Euro and Japanese Yen.

Cross border transactions with external parties and intercompany relationships result in increased exposure to [removed: foreign currency exchange effects.]

[added: Higher] borrowing costs or the inability to access capital markets could adversely affect our ability to support future growth and operating requirements.

We may be unable to maintain adequate working relationships with healthcare professionals: We seek to maintain close working relationships with respected physicians and medical personnel in healthcare [removed: organizations] [added: organizations,] such as hospitals and [removed: universities] [added: universities,] who assist in product research and development.

These indirect channels often are the main point of contact for the healthcare [removed: professional] [added: professionals] and healthcare organization customers who buy and use our products.

Our ability to market, distribute, and sell our products through indirect channels has been adversely affected as a result of precautionary responses to the COVID-19 pandemic, including [added: travel restrictions, suspension and shutdown orders and other measures intended to limit person-to-person contact.]

We are subject to [removed: additional] risks associated with our extensive global operations: We develop, manufacture and distribute our products globally.

Our global operations are subject to risks and potential costs, including changes in reimbursement, changes in regulatory requirements, differing local product preferences and product requirements, diminished protection of intellectual property in some countries, tariffs and other trade protection measures, international trade disputes and import or export requirements, difficulty in staffing and managing foreign operations, introduction of new internal business structures and programs, political and economic [removed: instability (such] [added: instability, such] as the United Kingdom's exit from the European [removed: Union, commonly referred to as "Brexit"),] [added: Union (Brexit),] and disruptions of transportation due to a global pandemic of contagious diseases like COVID-19 or otherwise, such as reduced availability of transportation, port closures, increased border controls or closures, increased transportation costs and increased security threats to our supply chain.

[added: We may be unable to capitalize on previous or future acquisitions: In addition to internally developed products, we invest in new products and technologies through acquisitions, including our pending acquisition of Vocera Communications, Inc.] Such investments are inherently risky, and we cannot guarantee that any acquisition will be successful or will not have a material unfavorable impact on us.

[removed: The risks include the activities required and resources allocated to integrate new businesses, diversion of] management time that could adversely affect management's ability to focus on other projects, the inability to realize the expected benefits, savings or synergies from the acquisition, the loss of key personnel, litigation resulting from the acquisition and exposure to unexpected liabilities of acquired companies.

In addition, we rely on networks and services, including internet sites, cloud and SaaS solutions, data hosting and processing facilities and tools and other hardware, software [added: (including open source software)] and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our business.

In addition, any statements that

For example, certain of our products contain electronic components and we have experienced, and could continue to experience, limited product availability due to the electronic components shortage in certain product lines.

If the shortage persists, we may not be able to obtain electronic components from our suppliers on a timely basis, or at all, or identify any alternative suppliers to provide the electronic components we need to produce our products.

Our relationships with our employees may be disrupted due to measures implemented in response to the COVID-19 pandemic.

We have observed an overall tightening and increasingly competitive labor market due to labor shortages caused in part by the COVID-19 pandemic and responsive measures, which has included increased wages offered by other employers and voluntary attrition of our employees and the employees of our third-party suppliers, manufacturers, distributors and customers.

Economic Cooperation and Development (OECD).

If we fail to comply with applicable regulatory

STRYKER CORPORATION 2021 FORM 10-K

These laws and regulations are broad

in scope and are subject to evolving interpretation and we have in the past been, and in the future could be, required to incur substantial costs to monitor compliance or to alter our practices.

STRYKER CORPORATION 2021 FORM 10-K

foreign currency exchange effects.

This has already impacted our joint replacement business on a national level, and our trauma and spine products on a provincial level, and we expect further adoption of volume-based procurement provincially or nationally in China in 2022.

New business models, products and surgical procedures are introduced on an ongoing basis and our present or future products could be rendered obsolete or uneconomical by technological advances by us, as we continue to innovate to address physician and patient needs, or by our existing competitors and new market entrants.

Our existing competitors and new market entrants may respond more quickly to new or emerging technologies, undertake more extensive marketing campaigns, have greater access to clinical information

to support ongoing product position in the market, have greater financial, marketing and other resources or be more successful in attracting potential customers, employees and strategic partners.

The risks include the activities required and resources allocated to integrate new businesses, diversion of

STRYKER CORPORATION 2021 FORM 10-K

Some of our products and services, and information technology systems, contain or use open source software, which poses particular risks, including potential security vulnerabilities, licensing compliance issues and quality issues.

the development, marketing and selling of new and existing products.

Further, the ongoing remote work environment in response to COVID-19 could harm our culture and/or decrease employee engagement, which could adversely impact our ability to recruit, hire, develop and retain a talented, competitive work force.

In addition,

STRYKER CORPORATION 2021 FORM 10-K

during 2021, the market experienced increasing inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts of the COVID-19 pandemic, which we anticipate will continue in 2022.

We may experience inflationary increases in manufacturing costs and operating expenses, caused by the COVID-19 pandemic or as a result of general macroeconomic factors, and may not be able to pass these cost increases on to our customers in a timely manner, which could have a material adverse impact on our profitability and results of operations.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RISKS

We could be negatively impacted by ESG and sustainability-related matters: Governments, investors, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving.

On occasion, we announce new initiatives, including goals, under our Corporate Responsibility framework.

This framework is aligned with our areas of interest, which include environment and sustainability, social impact, diversity, equity and inclusion and supply chain management, among others.

The criteria by which our ESG practices are assessed may change due to the quickly evolving landscape, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.

Moreover, the increasing attention to corporate ESG initiatives could also result in reduced demand for products, reduced profits and increased investigations and litigation.

If we are unable to satisfy such new criteria, investors may conclude that our policies and/or actions with respect to ESG matters are inadequate.

If we fail or are perceived to have failed to achieve previously announced initiatives or goals or to accurately disclose our progress on such initiatives or goals, our reputation, business, financial condition and results of operations could be adversely impacted.

Physical effects of climate change or legal, regulatory or market measures intended to address climate change could adversely affect our operations and operating results: Risks associated with climate change are subject to increasing societal, regulatory and political focus in the United States and globally.

Shifts in weather patterns caused by climate change are expected to increase the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures or flooding, which could cause more significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of hospitals, medical care facilities and other customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities, and decreased revenues than what we have experienced in the past from such events.

In addition, increased public concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of

climate change, which could include the adoption of more stringent environmental laws and regulations or stricter enforcement of existing laws and regulations.

Such developments could result in increased compliance costs and adverse impacts on raw material sourcing, manufacturing operations and the distribution of our products, which could adversely affect our operations and operating results.

Further, our relationships with our employees may be disrupted due to the cost-saving and other measures implemented in response to the COVID-19 pandemic, including employee furloughs, which could result in increased employment litigation and claims for severance or other benefits tied to terminations or furloughs or attempts to unionize portions of our workforce.

governmental authorities in response to the COVID-19 pandemic: Some of our products are particularly sensitive to reductions in elective medical procedures.

Further, in an effort to increase the wider availability of needed medical and other supplies and products in response to the pandemic, governments may require us (such as under the United States Defense Production Act) to allocate manufacturing capacity in a way that adversely affects our regular operations, results in differential treatment of customers and/or adversely affects our reputation and customer relationships.

It is also possible that certain of our operations are deemed non-essential and thus subject to suspension or other restrictions by government orders.

We cannot predict how these changes in operations, if implemented, would affect our future operations and commercial activities as the impact of the pandemic begins to subside.

In December 2017 the Tax Cuts and Jobs Act of 2017 was signed into law in the United States.

Income tax

fraud and abuse laws.

outcomes are not predictable.

Higher

New products and surgical procedures are introduced on an ongoing basis and our present or future products could be rendered obsolete or uneconomical by technological advances by our competitors, who may respond more quickly to new or emerging technologies, undertake more extensive marketing campaigns, have greater financial, marketing and other resources or be more successful in attracting potential customers, employees and strategic partners.

travel restrictions, suspension and shutdown orders and other measures intended to limit person-to-person contact.

We may be unable to capitalize on previous or future acquisitions: In addition to internally developed products, we invest in new products and technologies through acquisitions.

We may be unable to capitalize on the Wright acquisition: The success of the Wright acquisition will depend, in part, on our ability to successfully combine and integrate Wright into our businesses and realize the anticipated benefits, including synergies, from the transaction.

If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected.

The integration of Wright into Stryker may result in material challenges, including: the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies; blending the cultures of Stryker and Wright; maintaining employee morale and retaining key management, sales and other employees; retaining existing business and operational relationships; the possibility of faulty assumptions underlying expectations regarding the integration process; consolidating corporate and administrative infrastructures and eliminating duplicative operations; unanticipated issues in integrating information technology, communications and other systems; continuing the regular and uninterrupted cadence of product launches; and unforeseen

costs, expenses and liabilities (including litigation related liabilities) associated with the acquisition.

MedSurg has principal manufacturing and distribution facilities in the United States in Arizona, California, Florida, Illinois, Michigan, Puerto Rico, Texas and Washington and outside the United States in France, Germany, Ireland, Mexico, Switzerland and Turkey.

Neurotechnology and Spine has principal manufacturing and distribution facilities in Illinois, Utah and Virginia and outside the United States in China, France, Ireland and Switzerland.

Insurance coverage limits provided by third-party

We offer innovative products and services in [removed: Orthopaedics,] Medical and Surgical, [removed: and Neurotechnology] [added: Neurotechnology, Orthopaedics] and Spine that help improve patient and hospital outcomes.

The COVID-19 [removed: global] pandemic has led to severe disruptions in the market and the global and United States economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown.

A significant number of our [added: customers,] global suppliers, vendors, distributors and manufacturing facilities are located in regions that have been affected by the pandemic.

Elective medical procedures were suspended in the first quarter of 2020 in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of [removed: operations.][added: operations through the first quarter of 2021.]

Excluding the impact of [removed: acquisitions,] [added: acquisitions and divestitures,] sales [removed: declined 4.8%] [added: grew 12.6%] in constant currency.

We reported net earnings of [removed: $1,599] [added: $1,994] and net earnings per diluted share of [removed: $4.20.][added: $5.21.]

Excluding the impact of certain items, we achieved adjusted net earnings(1) of [removed: $2,827 and adjusted net earnings per diluted share(1) of $7.43 representing a decline of 10.0%.][added: $3,474]

We continued our capital allocation strategy by investing [removed: $4,222] [added: $339] in acquisitions and paying [removed: $863] [added: $950] in dividends to our shareholders.

In [removed: 2020] [added: 2021] we completed acquisitions for total net cash consideration of [removed: $4,222] [added: $339] and [removed: $82] [added: $54] in future milestone payments primarily due upon the achievement of certain regulatory and commercial milestones.

In [removed: 2020] [added: 2021] we did not repurchase any shares of our common stock under our authorized repurchase program.

The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of December 31, [removed: 2020.][added: 2021.]

| Net sales | | | $ | [removed: 14,351] [added: 17,108] | | $ | [removed: 14,884] [added: 14,351] | | $ | [removed: 13,601] [added: 14,884] | | | | | 100.0 | | % | 100.0 | | % | 100.0 | | % | | | | [removed: (3.6)] [added: 19.2] | | % | [removed: 9.4] [added: (3.6)] | | % |

| Gross profit | | | [added: 10,968 | | |] 9,057 | | | 9,696 | | | [removed: 8,938] | | | [added: 64.1] | | | 63.1 | | | 65.1 | | | [removed: 65.7] | | | [added: 21.1] | | | (6.6) | | | [removed: 8.5 | | |]

| Research, development and engineering expenses | | | [added: 1,235 | | |] 984 | | | 971 | | | [removed: 862] | | | [added: 7.2] | | | 6.9 | | | 6.5 | | | [removed: 6.3] | | | [added: 25.5] | | | 1.3 | | | [removed: 12.6 | | |]

| Selling, general and administrative expenses | | | [added: 6,427 | | |] 5,361 | | | 5,356 | | | [removed: 5,099] | | | [added: 37.6] | | | 37.4 | | | 36.0 | | | [removed: 37.5] | | | [added: 19.9] | | | 0.1 | | | [removed: 5.0 | | |]

| Recall charges, net of insurance proceeds | | | [added: 103 | | |] 17 | | | 192 | | | [removed: 23] | | | [added: 0.6] | | | 0.1 | | | 1.3 | | | [removed: 0.2] | | | [added: nm] | | | (91.1) | | | [removed: nm | | |]

| Amortization of intangible assets | | | [added: 619 | | |] 472 | | | 464 | | | [removed: 417] | | | [added: 3.6] | | | 3.3 | | | 3.1 | | | [removed: 3.1] | | | [added: 31.1] | | | 1.7 | | | [removed: 11.3 | | |]

| Other income (expense), net | | | [added: (303) | | |] (269) | | | (151) | | | [removed: (181)] | | | [added: (1.8)] | | | (1.9) | | | (1.0) | | | [removed: (1.3)] | | | [added: 12.6] | | | 78.1 | | | [removed: (16.6) | | |]

| Income taxes | | | [removed: 355] [added: 287] | | | [removed: 479] [added: 355] | | | [removed: (1,197)] [added: 479] | | | | | | | | | | | | | | | | | | [removed: (25.9)] [added: (19.2)] | | | [removed: nm] [added: (25.9)] | | |

| Net earnings | | | $ | [removed: 1,599] [added: 1,994] | | $ | [removed: 2,083] [added: 1,599] | | $ | [removed: 3,553] [added: 2,083] | | | | | [removed: 11.1] [added: 11.7] | | % | [removed: 14.0] [added: 11.1] | | % | [removed: 26.1] [added: 14.0] | | % | | | | [removed: (23.2)] [added: 24.7] | | % | [removed: (41.4)] [added: (23.2)] | | % |

| Net earnings per diluted share | | | $ | [removed: 4.20] [added: 5.21] | | $ | [removed: 5.48] [added: 4.20] | | $ | [removed: 9.34] [added: 5.48] | | | | | | | | | | | | | | | | | [removed: (23.4)] [added: 24.0] | | % | [removed: (41.3)] [added: (23.4)] | | % |

| Adjusted net earnings per diluted share(1) | | | $ | [removed: 7.43] [added: 9.09] | | $ | [removed: 8.26] [added: 7.43] | | $ | [removed: 7.31] [added: 8.26] | | | | | | | | | | | | | | | | | [removed: (10.0)] [added: 22.3] | | % | [removed: 13.0] [added: (10.0)] | | % |

| Dollar amounts in millions except per share amounts or as otherwise specified. | | | [removed: 11] [added: 18] | | |

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

| | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | | | | | As Reported | | | Constant Currency | | | | | | As Reported | | | Constant Currency | | |

| United States | | | $ | [removed: 10,455] [added: 12,321] | | $ | [removed: 10,957] [added: 10,455] | | $ | [removed: 9,848] [added: 10,957] | | | | | [removed: (4.6)] [added: 17.9] | | % | [removed: (4.6)] [added: 17.9] | | % | | | | [removed: 11.3] [added: (4.6)] | | % | [removed: 11.3] [added: (4.6)] | | % |

| International | | | [removed: 3,896] [added: 4,787] | | | [removed: 3,927] [added: 3,896] | | | [removed: 3,753] [added: 3,927] | | | | | | [removed: (0.8)] [added: 22.8] | | | [removed: (0.9)] [added: 18.8] | | | | | | [removed: 4.6] [added: (0.8)] | | | [removed: 9.3] [added: (0.9)] | | |

| Total | | | $ | [removed: 14,351] [added: 17,108] | | $ | [removed: 14,884] [added: 14,351] | | $ | [removed: 13,601] [added: 14,884] | | | | | [removed: (3.6)] [added: 19.2] | | % | [removed: (3.6)] [added: 18.1] | | % | | | | [removed: 9.4] [added: (3.6)] | | % | [removed: 10.7] [added: (3.6)] | | % |

| | | | | | | | | | [removed: Percentage Change] | | | | | | [added: Percentage Change] | | | | | | | | | | | | | | | | | | [removed: Percentage Change] | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | [removed: United States] | | | [removed: International] | | | [added: United States] | | | [added: International] | | | | | | | | | | | | | | | United States | | | International | | | | | |

| | | | [added: 2021 | | |] 2020 | | | 2019 | | | [added: | | |] As Reported | | | Constant Currency | | | As Reported | | | As Reported | | | Constant Currency | | | | | | [removed: 2019 | | | 2018 | | |] As Reported | | | Constant Currency | | | As Reported | | | As Reported | | | Constant Currency | | |

| Hips | | | [removed: 1,206] [added: 1,342] | | | [removed: 1,383] [added: 1,206] | | | [removed: (12.8)] [added: 1,383] | | | [removed: (12.7)] | | | [removed: (12.0)] [added: 11.2] | | | [removed: (14.1)] [added: 9.9] | | | [removed: (13.8)] [added: 5.8] | | | [added: 21.1] | | | [removed: 1,383] [added: 17.2] | | | [removed: 1,336] | | | [removed: 3.5] [added: (12.8)] | | | [removed: 5.2] [added: (12.7)] | | | [removed: 5.4] [added: (12.0)] | | | [removed: 0.3] [added: (14.1)] | | | [removed: 4.8] [added: (13.8)] | | |

| Trauma and Extremities | | | [removed: 1,722] [added: 2,664] | | | [removed: 1,639] [added: 1,722] | | | [removed: 5.1] [added: 1,639] | | | [removed: 4.7] | | | [removed: 8.4] [added: 54.6] | | | [removed: (0.9)] [added: 53.0] | | | [removed: (1.9)] [added: 63.8] | | | [added: 36.8] | | | [removed: 1,639] [added: 32.3] | | | [removed: 1,580] | | | [removed: 3.7] [added: 5.1] | | | [removed: 5.2] [added: 4.7] | | | [removed: 4.9] [added: 8.4] | | | [removed: 1.6] [added: (0.9)] | | | [removed: 5.8] [added: (1.9)] | | |

| Other | | | [removed: 464] [added: 549] | | | [removed: 415] [added: 464] | | | [removed: 11.7] [added: 415] | | | [removed: 11.4] | | | [removed: 15.8] [added: 18.2] | | | [removed: (4.9)] [added: 18.0] | | | [removed: (6.5)] [added: 10.1] | | | [added: 58.8] | | | [removed: 415] [added: 57.4] | | | [removed: 374] | | | [removed: 11.2] [added: 11.7] | | | [removed: 12.0] [added: 11.4] | | | [removed: 11.5] [added: 15.8] | | | [removed: 10.0] [added: (4.9)] | | | [removed: 14.2] [added: (6.5)] | | |

| Endoscopy | | | [removed: 1,763] [added: 2,141] | | | [removed: 1,983] [added: 1,763] | | | [removed: (11.1)] [added: 1,983] | | | [removed: (11.0)] | | | [removed: (10.7)] [added: 21.5] | | | [removed: (12.5)] [added: 20.8] | | | [removed: (12.2)] [added: 18.6] | | | [added: 32.7] | | | [removed: 1,983] [added: 29.4] | | | [removed: 1,846] | | | [removed: 7.5] [added: (11.1)] | | | [removed: 8.6] [added: (11.0)] | | | [removed: 10.1] [added: (10.7)] | | | [removed: (1.8)] [added: (12.5)] | | | [removed: 3.4] [added: (12.2)] | | |

| Medical | | | [removed: 2,524] [added: 2,607] | | | [removed: 2,264] [added: 2,524] | | | [removed: 11.5] [added: 2,264] | | | [removed: 11.8] | | | [removed: 6.9] [added: 3.3] | | | [removed: 28.9] [added: 2.2] | | | [removed: 30.3] [added: 5.1] | | | [added: (2.4)] | | | [removed: 2,264] [added: (6.6)] | | | [removed: 2,118] | | | [removed: 6.9] [added: 11.5] | | | [removed: 8.1] [added: 11.8] | | | [removed: 9.6] [added: 6.9] | | | [removed: (2.4)] [added: 28.9] | | | [removed: 2.9] [added: 30.3] | | |

| [removed: Neurotechnology] [added: MedSurg] and [removed: Spine:] [added: Neurotechnology:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Spine | | | [removed: 1,047] [added: 1,167] | | | [removed: 1,157] [added: 1,047] | | | [removed: (9.5)] [added: 1,157] | | | [removed: (9.6)] | | | [removed: (12.5)] [added: 11.5] | | | [removed: (0.6)] [added: 10.5] | | | [removed: (0.9)] [added: 8.7] | | | [added: 19.1] | | | [removed: 1,157] [added: 15.2] | | | [removed: 828] | | | [removed: 31.1] [added: (9.5)] | | | [removed: 32.3] [added: (9.6)] | | | [removed: 34.7] [added: (12.5)] | | | [removed: 21.3] [added: (0.6)] | | | [removed: 25.4] [added: (0.9)] | | |

Excluding the [removed: 1.2%] [added: 0.4%] impact of acquisitions, net sales in constant currency decreased by [removed: 4.1%] [added: 1.8%] from decreased unit volume and [removed: 0.7%] [added: 0.1%] due to lower prices.

[removed: Consolidated] [added: MedSurg and Neurotechnology] net sales in [removed: 2019] [added: 2021] increased [removed: 9.4%] [added: 14.3%] as reported and [removed: 10.7%] [added: 13.3%] in constant currency, as foreign currency exchange rates [removed: negatively] [added: positively] impacted net sales by [removed: 1.3%.][added: 1.0%.]

In the second quarter of 2021 we saw partial recovery of elective procedures in most geographies; however, in the third quarter of 2021 we saw hospitalization rates increase, especially in the United States, as a result of the Delta variant.

This, along with the Omicron variant, has continued to adversely impact elective procedures and increased inflationary pressure on our gross margin, including an increase in freight and transportation costs as well as increased absenteeism in the fourth quarter of 2021.

Overview of 2021

In 2021 we achieved reported net sales growth of 19.2%.

and adjusted net earnings per diluted share(1) of $9.09 representing growth of 22.3%.

Effective December 31, 2021 we changed our reportable business segments to (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine to align to our new internal reporting structure.

Refer to Note 14 to our Consolidated Financial Statements for further information.

In 2021 we had total long-term debt repayments of $1,151.

In October 2021 we entered into a new revolving credit agreement that replaces our previous agreement dated August 19, 2016.

In September 2021 we completed the acquisition of Gauss Surgical, Inc. (Gauss) for $120 in cash and up to $40 in future milestone payments.

Gauss is a medical device company that has developed Triton, an artificial intelligence-enabled platform for real-time monitoring of blood loss during surgery.

Gauss is part of our Instruments business within MedSurg and Neurotechnology.

In January 2022 we announced a definitive merger agreement to acquire all of the issued and outstanding common shares of Vocera Communications, Inc. (Vocera) for $79.25 per share, or an aggregate purchase price of approximately $3.1 billion (including convertible notes).

Refer to Note 6 to our Consolidated Financial Statements for further information.

In 2021 we recorded asset impairments of $264, $105 for certain long-lived and intangible assets related to the China volume-based procurement program and the remaining consisting primarily of in-process research and development, other intangible assets and property, plant and equipment as a result of COVID-19-related demand impacts on in-process product development and certain other divestiture and restructuring activities.

Refer to Note 15 to our Consolidated Financial Statements for further information.

| 2021 | | | 2020 | | | 2019 | | | | | | 2021 | | | 2020 | | | 2019 | | | | | | 2021 vs. 2020 | | | 2020 vs. 2019 | | | | | |

| | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | | 2020 vs. 2019 | | | | | | | | |

| MedSurg and Neurotechnology | | | $ | 9,538 | | $ | 8,345 | | $ | 8,475 | | | | | 14.3 | | % | 13.3 | | % | | | | (1.5) | | % | (1.5) | | % |

| Orthopaedics and Spine | | | 7,570 | | | 6,006 | | | 6,409 | | | | | | 26.0 | | | 24.8 | | | | | | (6.3) | | | (6.4) | | |

| Total | | | $ | 17,108 | | $ | 14,351 | | $ | 14,884 | | | | | 19.2 | | % | 18.1 | | % | | | | (3.6) | | % | (3.6) | | % |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | 2021 vs. 2020 | | | | | | | | | | | | | | | | | | 2020 vs. 2019 | | | | | | | | | | | | | | |

| Instruments | | | $ | 2,111 | | $ | 1,863 | | $ | 1,959 | | | | | 13.4 | | % | 12.5 | | % | 11.3 | | % | 20.9 | | % | 16.6 | | % | | | | (5.0) | | % | (5.0) | | % | (4.7) | | % | (6.1) | | % | (6.2) | | % |

| Neurovascular | | | 1,188 | | | 973 | | | 924 | | | | | | 22.0 | | | 19.5 | | | 18.3 | | | 24.4 | | | 20.3 | | | | | | 5.3 | | | 4.9 | | | (2.4) | | | 11.1 | | | 10.1 | | |

| Neuro Cranial | | | 1,214 | | | 972 | | | 1,059 | | | | | | 24.9 | | | 24.3 | | | 23.4 | | | 32.4 | | | 28.6 | | | | | | (8.2) | | | (8.3) | | | (10.1) | | | 1.2 | | | 1.0 | | |

| Other | | | 277 | | | 250 | | | 286 | | | | | | 10.4 | | | 10.3 | | | 10.0 | | | 48.9 | | | 40.8 | | | | | | (12.3) | | | (12.3) | | | (12.4) | | | — | | | (2.2) | | |

| | | | $ | 9,538 | | $ | 8,345 | | $ | 8,475 | | | | | 14.3 | | % | 13.3 | | % | 13.0 | | % | 18.1 | | % | 14.0 | | % | | | | (1.5) | | % | (1.5) | | % | (3.9) | | % | 6.1 | | % | 6.2 | | % |

| Orthopaedics and Spine: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Knees | | | $ | 1,848 | | $ | 1,567 | | $ | 1,815 | | | | | 18.0 | | % | 16.9 | | % | 15.4 | | % | 25.5 | | % | 21.3 | | % | | | | (13.7) | | % | (13.7) | | % | (13.1) | | % | (15.3) | | % | (15.5) | | % |

| | | | $ | 7,570 | | $ | 6,006 | | $ | 6,409 | | | | | 26.0 | | % | 24.8 | | % | 25.0 | | % | 28.6 | | % | 24.5 | | % | | | | (6.3) | | % | (6.4) | | % | (5.6) | | % | (8.0) | | % | (8.4) | | % |

| Total | | | $ | 17,108 | | $ | 14,351 | | $ | 14,884 | | | | | 19.2 | | % | 18.1 | | % | 17.9 | | % | 22.8 | | % | 18.8 | | % | | | | (3.6) | | % | (3.6) | | % | (4.6) | | % | (0.8) | | % | (0.9) | | % |

Consolidated net sales increased 19.2% as reported and 18.1% in constant currency.

Excluding the 1.2% impact of acquisitions, net

STRYKER CORPORATION 2021 FORM 10-K

unit volume partially offset by 0.5% due to lower prices.

Gross profit as a percentage of net sales increased to 64.1% in 2021 from 63.1% in 2020.

Disciplined ramp up in spending to facilitate our growth, including projects to develop new products, investments in new technologies and integration of recent acquisitions contributed to the increase.

Both 2021 and 2020 included charges related to certain asset impairments.

Refer to Note 15 to our Consolidated Financial Statements for further information.

While we saw progressive improvement in the second and third quarters, to the extent individuals are required to continue to de-prioritize or delay elective procedures as a result of the COVID-19 pandemic or otherwise, as we experienced in the fourth quarter, our business, cash flows, financial condition and results of operations could be negatively affected.

Overview of 2020

The response to the COVID-19 pandemic has included unprecedented measures to slow the spread of the virus taken by local governments and health care authorities globally, including

the postponement of elective medical procedures and social contact restrictions, which have had, and could continue to have, a significant negative impact on Stryker’s operations and financial results.

In 2020 reported net sales declined 3.6%.

In 2020 we received $3,292 from issuance of debt and had total debt repayments of $2,297.

We exercised our right under the acquisition clause of our credit and term loan facilities to increase the maximum permitted leverage to 5.0:1 effective as of December 31, 2020.

In November 2020 we completed the acquisition of Wright for $30.75 per share, or an aggregate purchase price of $4.1 billion ($5.6 billion including convertible notes).

Wright is a global medical device company focused on extremities and biologics.

Wright is part of our Trauma and Extremities business within Orthopaedics.

In December 2020 we completed the acquisition of OrthoSensor, Inc. (OrthoSensor).

OrthoSensor is a leader in the digital evolution of musculoskeletal care and sensor technology for total joint replacement.

OrthoSensor is part of our Joint Replacement business within Orthopaedics.

We previously announced our intention to suspend our share repurchase program through 2021.

| 2020 | | | 2019 | | | 2018 | | | | | | 2020 | | | 2019 | | | 2018 | | | | | | Current Year End | | | Prior Year End | | | | | |

| | | | | | | | | | | | | Current Year End | | | | | | | | | Prior Year End | | | | | | | | |

| Orthopaedics | | | $ | 4,959 | | $ | 5,252 | | $ | 4,991 | | | | | (5.6) | | % | (5.7) | | % | | | | 5.2 | | % | 6.7 | | % |

| MedSurg | | | 6,400 | | | 6,492 | | | 6,045 | | | | | | (1.4) | | | (1.3) | | | | | | 8.8 | | | 9.9 | | |

| Neurotechnology and Spine | | | 2,992 | | | 3,140 | | | 2,565 | | | | | | (4.7) | | | (4.9) | | | | | | 19.2 | | | 20.5 | | |

| Orthopaedics: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Knees | | | $ | 1,567 | | $ | 1,815 | | (13.7) | | % | (13.7) | | % | (13.1) | | % | (15.3) | | % | (15.5) | | % | | | | $ | 1,815 | | $ | 1,701 | | 6.7 | | % | 8.1 | | % | 8.2 | | % | 2.6 | | % | 7.6 | | % |

| | | | $ | 4,959 | | $ | 5,252 | | (5.6) | | % | (5.7) | | % | (3.9) | | % | (9.2) | | % | (9.6) | | % | | | | $ | 5,252 | | $ | 4,991 | | 5.2 | | % | 6.7 | | % | 6.8 | | % | 1.9 | | % | 6.4 | | % |

| MedSurg: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Instruments | | | $ | 1,863 | | $ | 1,959 | | (5.0) | | % | (5.0) | | % | (4.7) | | % | (6.1) | | % | (6.2) | | % | | | | $ | 1,959 | | $ | 1,822 | | 12.0 | | % | 13.1 | | % | 12.9 | | % | 8.7 | | % | 13.8 | | % |

| Sustainability | | | 250 | | | 286 | | | (12.3) | | | (12.3) | | | (12.4) | | | nm | | | nm | | | | | | 286 | | | 259 | | | 10.4 | | | 10.4 | | | 9.9 | | | nm | | | nm | | |

| | | | $ | 6,400 | | $ | 6,492 | | (1.4) | | % | (1.3) | | % | (2.9) | | % | 4.7 | | % | 5.3 | | % | | | | $ | 6,492 | | $ | 6,045 | | 8.8 | | % | 9.9 | | % | 10.8 | | % | 1.3 | | % | 6.5 | | % |

| Neurotechnology | | | $ | 1,945 | | $ | 1,983 | | (1.9) | | % | (2.1) | | % | (7.7) | | % | 8.8 | | % | 8.2 | | % | | | | $ | 1,983 | | $ | 1,737 | | 13.5 | | % | 14.9 | | % | 13.9 | | % | 12.7 | | % | 16.7 | | % |

| | | | $ | 2,992 | | $ | 3,140 | | (4.7) | | % | (4.9) | | % | (9.6) | | % | 6.1 | | % | 5.6 | | % | | | | $ | 3,140 | | $ | 2,565 | | 19.2 | | % | 20.5 | | % | 21.3 | | % | 14.9 | | % | 18.9 | | % |

| Total | | | $ | 14,351 | | $ | 14,884 | | (3.6) | | % | (3.6) | | % | (4.6) | | % | (0.8) | | % | (0.9) | | % | | | | $ | 14,884 | | $ | 13,601 | | 9.4 | | % | 10.7 | | % | 11.3 | | % | 4.6 | | % | 9.3 | | % |

Excluding the 0.5% impact of acquisitions, net sales in constant currency decreased by 1.8% from decreased unit volume with a nominal impact from changes in pricing.

MedSurg net sales in 2019 increased 8.8% as reported and 9.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.1%.

Neurotechnology and Spine Net Sales

Neurotechnology and Spine net sales in 2020 decreased 4.7% as reported and 4.9% in constant currency, as foreign currency

exchange rates positively impacted net sales by 0.2%.

The unit volume decrease was primarily due to lower shipments of spine and neurotechnology products.

Neurotechnology and Spine net sales in 2019 increased 19.2% as reported and 20.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.3%.

Excluding the 11.6% impact of acquisitions, net sales in constant currency increased by 9.6% from increased unit volume partially offset by 0.7% due to lower prices.

The unit volume increase was primarily due to higher shipments of neurotechnology products.

Gross profit as a percentage of net sales decreased to 65.1% in 2019 from 65.7% in 2018.

Projects to develop new products, investments in new technologies, integration of recent acquisitions and the impact of lower sales contributed to the increase partially offset by operating expense savings actions in response to the COVID-19 pandemic.

Our operating results are primarily exposed to changes in exchange rates among the United States Dollar, Australian Dollar, British Pound, Canadian Dollar, [added: Chinese Yuan,] Euro and Japanese Yen.

We develop and manufacture products in the United States, Canada, China, France, Germany, [added: India,] Ireland, [removed: Japan,] Mexico, Puerto Rico, Switzerland and Turkey and incur costs in the applicable local currencies.

A hypothetical 10% change in foreign currencies relative to the United States Dollar would change the December 31, [removed: 2020] [added: 2021] fair value of these instruments by approximately [removed: $550.][added: $514.]

| Dollar amounts in millions except per share amounts or as otherwise specified. | | | [removed: 18] [added: 19] | | |

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

[removed: The Company] [added: Stryker] offers innovative products and services in [removed: Orthopaedics,] Medical and Surgical, [removed: and Neurotechnology] [added: Neurotechnology, Orthopaedics] and Spine that help improve patient and hospital outcomes.

[removed: ][added: ]

Our products are sold in over 75 countries through company-owned subsidiaries and branches, as well [removed: as] [added: as,] third-party dealers and distributors, and include [removed: 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; [removed: neurosurgical,] [added: neurosurgical and] neurovascular [added: devices; implants used in joint replacement] and [added: trauma surgeries; Mako Robotic-Arm Assisted technology;] spinal devices; as well as other products used in a variety of medical specialties.

| | | | [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | [removed: 2018] [added: 2019] | | | | | |

| Total | | | $ | [removed: 14,351] [added: 17,108] | | 100 | | % | | | | $ | [removed: 14,884] [added: 14,351] | | 100 | | % | | | | $ | [removed: 13,601] [added: 14,884] | | 100 | | % |

[added: We bring patients and physicians] advanced implant designs and specialized instrumentation that make orthopaedic surgery and recovery simpler, faster and more effective.

[removed: 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.

Mako is the only robotic-arm assisted technology enabled by 3D CT-based pre-operative [removed: planning, and] [added: 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.

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

| Composition of Orthopaedics [added: and Spine] Net Sales | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Knees | | | $ | [removed: 1,567] [added: 1,848] | | [removed: 32] [added: 25] | | % | | | | $ | [removed: 1,815] [added: 1,567] | | [removed: 35] [added: 26] | | % | | | | $ | [removed: 1,701] [added: 1,815] | | [removed: 34] [added: 28] | | % |

| Hips | | | [removed: 1,206] [added: 1,342] | | | [removed: 24] [added: 18] | | | | | | [removed: 1,383] [added: 1,206] | | | [removed: 26] [added: 20] | | | | | | [removed: 1,336] [added: 1,383] | | | [removed: 27] [added: 22] | | |

| Trauma and Extremities | | | [removed: 1,722] [added: 2,664] | | | 35 | | | | | | [removed: 1,639] [added: 1,722] | | | [removed: 31] [added: 29] | | | | | | [removed: 1,580] [added: 1,639] | | | [removed: 32] [added: 26] | | |

| Other | | | [removed: 464] [added: 549] | | | [removed: 9] [added: 7] | | | | | | [removed: 415] [added: 464] | | | 8 | | | | | | [removed: 374] [added: 415] | | | [removed: 7] [added: 6] | | |

[removed: 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 [removed: devices (Sustainability)] [added: devices,] and other medical device products used in a variety of medical specialties.

[removed: Stryker is] [added: We are] one of five leading global competitors in Instruments; the other four being [removed: Zimmer,] [added: Zimmer Biomet Holdings, Inc. (Zimmer),] Medtronic plc., Johnson & Johnson and ConMed Linvatec, Inc. (a subsidiary of CONMED Corporation).

In Endoscopy we compete with [removed: Smith & Nephew, ConMed Linvatec, Arthrex, Inc.,] Karl Storz GmbH & Co., Olympus Optical Co. [removed: Ltd.] [added: Ltd., Smith & Nephew plc (Smith & Nephew), ConMed Linvatec, Arthrex, Inc.] and STERIS plc.

In Medical our primary competitors are [removed: Hill-Rom Holdings,] [added: Baxter/Hill-Rom,] Inc., Zoll Medical Corporation, Medline Industries and Ferno-Washington, Inc. [added: Stryker is also one of five leading global competitors in Neurotechnology; the other four being Medtronic, Johnson & Johnson, Terumo Corporation and Penumbra, Inc.]

| Composition of MedSurg [added: and Neurotechnology] Net Sales | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Instruments | | | $ | [removed: 1,863] [added: 2,111] | | [removed: 29] [added: 22] | | % | | | | $ | [removed: 1,959] [added: 1,863] | | [removed: 30] [added: 22] | | % | | | | $ | [removed: 1,822] [added: 1,959] | | [removed: 30] [added: 23] | | % |

| Endoscopy | | | [removed: 1,763] [added: 2,141] | | | [removed: 28] [added: 22] | | | | | | [removed: 1,983] [added: 1,763] | | | [removed: 31] [added: 21] | | | | | | [removed: 1,846] [added: 1,983] | | | [removed: 31] [added: 23] | | |

| Medical | | | [removed: 2,524] [added: 2,607] | | | [removed: 39] [added: 27] | | | | | | [removed: 2,264] [added: 2,524] | | | [removed: 35] [added: 30] | | | | | | [removed: 2,118] [added: 2,264] | | | [removed: 35] [added: 27] | | |

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

[removed: Neurotechnology] [added: MedSurg] and [removed: Spine][added: Neurotechnology]

Neurotechnology [removed: and Spine products include] [added: includes] neurosurgical, [removed: neurovascular, craniomaxillofacial] [added: neurovascular] and [removed: spinal] [added: craniomaxillofacial] implant [removed: devices.][added: products.]

Our neurotechnology offering includes products used for minimally invasive endovascular [removed: techniques;] [added: procedures;] 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 [removed: products;] [added: products (Neuro Cranial);] and minimally invasive products for the treatment of acute ischemic and hemorrhagic [removed: stroke.][added: stroke (Neurovascular).]

The [removed: Craniomaxillofacial] [added: craniomaxillofacial] implant offering includes cranial, maxillofacial, and chest wall [removed: devices] [added: devices,] as well [removed: as] [added: as,] dural substitutes and sealants.

Our spinal implant offering includes cervical and thoracolumbar systems that include fixation, minimally [removed: invasive,] [added: invasive] and interbody systems used in spinal injury, complex spine and degenerative therapies.

[removed: Stryker is one of five leading global competitors in Neurotechnology; the other four being Medtronic, Johnson & Johnson, Terumo Corporation and Penumbra, Inc. Stryker is] [added: We are] 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.

| Spine | | | [removed: 1,047] [added: 1,167] | | | [removed: 35] [added: 15] | | | | | | [removed: 1,157] [added: 1,047] | | | [removed: 37] [added: 17] | | | | | | [removed: 828] [added: 1,157] | | | [removed: 32] [added: 18] | | |

[added: On December 31, 2021 we owned approximately 4,458 United] States patents and approximately [removed: 6,407] [added: 7,199] patents in other countries.

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 [removed: higher in the fourth quarter.]

[removed: In addition, the EU] [added: The European Union] enacted the [removed: EU] [added: European Union] Medical Device Regulation [removed: (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.

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

These initiatives are sponsored by government agencies, legislative bodies and the private sector and include [removed: price regulation and competitive pricing.]

On December 31, [removed: 2020] [added: 2021] we had approximately [removed: 43,000] [added: 46,000] employees globally, with approximately [removed: 24,000] [added: 25,000] employees in the United States.

We believe when people are able to do what they do best, they will look forward to coming to work [removed: and] [added: and,] in turn, will deliver great business results.

[removed: Employee] [added: Our employee] development [removed: 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.

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 [removed: people, and we continue to integrate this strategy with our efforts to attract, develop and retain a diverse workforce.][added: people.]

[removed: We regularly evaluate our compensation and benefit offerings and levels, using] recognized outside consulting firms to ensure fairness and competitiveness in our offerings.

Effective December 31, 2021 we changed our reportable business segments to (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine to align to our new internal reporting structure.

We have reflected this change in all historical periods presented.

| MedSurg and Neurotechnology | | | $ | 9,538 | | 56 | | % | | | | $ | 8,345 | | 58 | | % | | | | $ | 8,475 | | 57 | | % |

| Orthopaedics and Spine | | | 7,570 | | | 44 | | | | | | 6,006 | | | 42 | | | | | | 6,409 | | | 43 | | |

MedSurg products include surgical equipment, patient and caregiver safety technologies, and navigation systems

| | | | 2021 | | | | | | | | | 2020 | | | | | | | | | 2019 | | | | | |

| Neurovascular | | | 1,188 | | | 13 | | | | | | 973 | | | 12 | | | | | | 924 | | | 11 | | |

| Neuro Cranial | | | 1,214 | | | 13 | | | | | | 972 | | | 12 | | | | | | 1,059 | | | 13 | | |

| Other | | | 277 | | | 3 | | | | | | 250 | | | 3 | | | | | | 286 | | | 3 | | |

| Total | | | $ | 9,538 | | 100 | | % | | | | $ | 8,345 | | 100 | | % | | | | $ | 8,475 | | 100 | | % |

In 2021 Instruments launched a T7 helmet with increased comfort and disposables in orthopaedic instruments, and had strong second year sales of TPX next generation corded power tools for conducting small bone orthopaedic procedures.

Endoscopy launched the SLX surgical light portfolio to improve safety in the operating room through customized lighting.

In addition, Endoscopy launched the InSpace balloon, the industry’s first balloon implant for arthroscopic treatment of massive, irreparable rotator cuff tears (MIRCTs).

Medical increased penetration and focus in their broad portfolio with significant investment in their specialized sales forces.

In 2021 we furthered our expansion into the global flow diversion market with the continued launch of the next generation Surpass Evolve™ Flow Diverter in the United States and Brazil, as well as the Surpass Streamline™ Flow Diverter in China and Japan.

Also in 2021 we continued the launches of the Trevo NXT and Vecta Aspiration Catheter families, as well as the next generation of the market leading Synchro guidewire in multiple regions of the world.

Orthopaedics and Spine

The Mako

Our spine enabling technologies portfolio includes best in class imaging solutions, image-guided surgical technology, patient specific implants and digital health solutions supporting surgeons and their patients throughout the continuum of care.

| | | | 2021 | | | | | | | | | 2020 | | | | | | | | | 2019 | | | | | |

| Total | | | $ | 7,570 | | 100 | | % | | | | $ | 6,006 | | 100 | | % | | | | $ | 6,409 | | 100 | | % |

In 2021 we moved to full commercial launch in the United States, and first clinical use in the European Union and Canada, of the new Tornier Perform Humeral™ shoulder implant system for anatomic and reverse shoulder arthroplasty.

United States Food and Drug Administration (FDA) approval was received in 2020, Health Canada approval was received in the first quarter of 2021 and European Union approval is expected in early 2022.

Where some electronic components have had limited availability due to current global shortages, we have worked closely with suppliers to ensure this temporary supply constraint did not have a material adverse effect on continuity of supply.

higher in the fourth quarter.

Certain of our products also fall under other FDA classifications, such as drugs and Human Cells, Tissues, and Cellular and Tissue-Based Products.

Additionally, as a result of the exit of the United Kingdom from the European Union (Brexit), new medical device regulations were released by the United Kingdom, which became effective January 1, 2021.

A gap analysis against the prior Medical Device Directive (MDD) and a compliance plan are being implemented for both the European Union and United Kingdom regulations to ensure compliance and minimize business disruption.

For example, China's National Medical Products Administration (NMPA) has recently promulgated more stringent regulatory requirements.

STRYKER CORPORATION 2021 FORM 10-K

price regulation and competitive pricing.

Our people, as one of our core values, continue to be a key focus.

Our DE&I strategy is centered around these three commitments:

- Strengthen the diversity of our workforce

- Advance a culture of inclusion, engagement and belonging

- Maximize the power of inclusion to drive innovation and growth

We are advancing our commitments through the following actions, among others:

- Holding leadership accountable through transparent data, performance objectives and inclusion in our business review process

- Engaging and inspiring all talent and empowering every employee to take action

- Developing our people and processes by removing barriers and optimizing the power of diverse backgrounds, talents and perspectives

We segregate our operations into three reportable business segments: Orthopaedics, MedSurg and Neurotechnology and Spine.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 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 | | |

Orthopaedics

We bring patients and physicians

| 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

| 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.

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.

| Composition of Neurotechnology and Spine Net Sales | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Neurotechnology | | | $ | 1,945 | | 65 | | % | | | | $ | 1,983 | | 63 | | % | | | | $ | 1,737 | | 68 | | % |

| 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.

On December 31, 2020 we owned approximately 4,045 United

Certain of our products also fall under the FDA's drug classification, as well as other FDA classifications.

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.

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

disruption.

As one of our core values, we recognize that we must and will continue to focus on our people.

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.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

[removed: ][added: ]

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately [removed: $63,413,151,504] [added: $91,942,474,363] at June 30, [removed: 2020.][added: 2021.]

There were [removed: 376,200,942] [added: 377,544,686] shares outstanding of the registrant’s common stock, $0.10 par value, on January 31, [removed: 2021.][added: 2022.]

Portions of the proxy statement to be filed with the U.S. Securities and Exchange Commission relating to the [removed: 2021] [added: 2022] Annual Meeting of Shareholders (the [removed: 2021] [added: 2022] proxy statement) are incorporated by reference into Part III.

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

| Item 1. | | | Business | | | [removed: [1](#i98b02bddd9044e2cafeb19d9c324afdc_13)] [added: [1](#i2e9b98e114ab4a2ba09a958d786789f3_13)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [4](#i98b02bddd9044e2cafeb19d9c324afdc_16)] [added: [4](#i2e9b98e114ab4a2ba09a958d786789f3_16)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [9](#i98b02bddd9044e2cafeb19d9c324afdc_19)] [added: [9](#i2e9b98e114ab4a2ba09a958d786789f3_19)] | | |

| Item 2. | | | Properties | | | [removed: [9](#i98b02bddd9044e2cafeb19d9c324afdc_22)] [added: [9](#i2e9b98e114ab4a2ba09a958d786789f3_22)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [9](#i98b02bddd9044e2cafeb19d9c324afdc_25)] [added: [9](#i2e9b98e114ab4a2ba09a958d786789f3_25)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [9](#i98b02bddd9044e2cafeb19d9c324afdc_28)] [added: [9](#i2e9b98e114ab4a2ba09a958d786789f3_28)] | | |

| Item 5. | | | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [9](#i98b02bddd9044e2cafeb19d9c324afdc_34)] [added: [9](#i2e9b98e114ab4a2ba09a958d786789f3_34)] | | |

| Item 6. | | | Selected Financial Data | | | [removed: [10](#i98b02bddd9044e2cafeb19d9c324afdc_37)] [added: [11](#i2e9b98e114ab4a2ba09a958d786789f3_37)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [11](#i98b02bddd9044e2cafeb19d9c324afdc_40)] [added: [12](#i2e9b98e114ab4a2ba09a958d786789f3_40)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [18](#i98b02bddd9044e2cafeb19d9c324afdc_73)] [added: [19](#i2e9b98e114ab4a2ba09a958d786789f3_73)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [19](#i98b02bddd9044e2cafeb19d9c324afdc_76)] [added: [20](#i2e9b98e114ab4a2ba09a958d786789f3_76)] | | |

| | | | Report of Independent Registered Public Accounting Firm [added: (PCAOB ID: 42)] | | | [removed: [19](#i98b02bddd9044e2cafeb19d9c324afdc_76)] [added: [20](#i2e9b98e114ab4a2ba09a958d786789f3_76)] | | |

| | | | Consolidated Statements of Earnings | | | [removed: [21](#i98b02bddd9044e2cafeb19d9c324afdc_79)] [added: [22](#i2e9b98e114ab4a2ba09a958d786789f3_79)] | | |

| | | | Consolidated Statements of Comprehensive Income | | | [removed: [21](#i98b02bddd9044e2cafeb19d9c324afdc_85)] [added: [22](#i2e9b98e114ab4a2ba09a958d786789f3_82)] | | |

| | | | Consolidated Balance Sheets | | | [removed: [22](#i98b02bddd9044e2cafeb19d9c324afdc_88)] [added: [23](#i2e9b98e114ab4a2ba09a958d786789f3_85)] | | |

| | | | Consolidated Statements of Shareholders’ Equity | | | [removed: [23](#i98b02bddd9044e2cafeb19d9c324afdc_94)] [added: [24](#i2e9b98e114ab4a2ba09a958d786789f3_91)] | | |

| | | | Consolidated Statements of Cash Flows | | | [removed: [24](#i98b02bddd9044e2cafeb19d9c324afdc_97)] [added: [25](#i2e9b98e114ab4a2ba09a958d786789f3_94)] | | |

| | | | Notes to Consolidated Financial Statements | | | [removed: [25](#i98b02bddd9044e2cafeb19d9c324afdc_100)] [added: [26](#i2e9b98e114ab4a2ba09a958d786789f3_97)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [37](#i98b02bddd9044e2cafeb19d9c324afdc_163)] [added: [37](#i2e9b98e114ab4a2ba09a958d786789f3_151)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [37](#i98b02bddd9044e2cafeb19d9c324afdc_166)] [added: [38](#i2e9b98e114ab4a2ba09a958d786789f3_154)] | | |

| Item 9B. | | | Other Information | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_169)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_157)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_175)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_163)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_178)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_166)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_181)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_169)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_184)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_172)] | | |

| Item 14. | | | Principal Accounting Fees and Services | | | [removed: [38](#i98b02bddd9044e2cafeb19d9c324afdc_187)] [added: [39](#i2e9b98e114ab4a2ba09a958d786789f3_175)] | | |

| Item 15. | | | Exhibits, Financial Statement Schedules | | | [removed: [39](#i98b02bddd9044e2cafeb19d9c324afdc_193)] [added: [40](#i2e9b98e114ab4a2ba09a958d786789f3_181)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [42](#i98b02bddd9044e2cafeb19d9c324afdc_199)] [added: [43](#i2e9b98e114ab4a2ba09a958d786789f3_187)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | | | [39](#i2e9b98e114ab4a2ba09a958d786789f3_157) | | |

STRYKER CORPORATION 2021 FORM 10-K

We have approximately 28 company-owned and [removed: 353] [added: 328] leased locations worldwide including [removed: 56] [added: 50] manufacturing locations.

On January 31, [removed: 2021] [added: 2022] there were [removed: 2,582] [added: 2,543] shareholders of record of our common stock.

We did not repurchase any shares in the three months ended December 31, [removed: 2020] [added: 2021] and the total dollar value of shares that could be acquired under our authorized repurchase program at December 31, [removed: 2020] [added: 2021] was $1,033.

In the fourth quarter [removed: 2020] [added: 2021] we did not issue shares of our common stock as performance incentive awards to employees.

The graph assumes $100 (not in millions) invested on December 31, [removed: 2015] [added: 2016] in our common stock and each of the indices.

[removed: ][added: ]

| Company / Index | | | [removed: 2015 | | |] 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | |]

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

| Stryker Corporation | | | $ | 100.00 | | $ | 130.84 | | $ | 134.02 | | $ | 181.37 | | $ | 214.32 | | $ | 236.24 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 121.83 | | $ | 116.49 | | $ | 153.17 | | $ | 181.35 | | $ | 233.41 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | $ | 122.08 | | $ | 129.97 | | $ | 157.04 | | $ | 178.15 | | $ | 224.71 | |

| Dollar amounts in millions except per share amounts or as otherwise specified. | | | 10 | | |

STRYKER CORPORATION 2021 FORM 10-K

| | | | | | |

| --- | --- | --- | --- | --- | --- |

As previously announced we intend to maintain the suspension of our share repurchase program through 2021.

| Stryker Corporation | | | $ | 100.00 | | $ | 130.69 | | $ | 170.99 | | $ | 175.15 | | $ | 237.03 | | $ | 280.09 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 111.96 | | $ | 136.40 | | $ | 130.42 | | $ | 171.49 | | $ | 203.04 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | $ | 97.31 | | $ | 118.79 | | $ | 126.47 | | $ | 152.81 | | $ | 173.36 | |

| Statement of Earnings Data | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2016] [added: 2017] | | |

| Net sales | | | | | | $ | [removed: 14,351] [added: 17,108] | | | | | $ | [removed: 14,884] [added: 14,351] | | | | | $ | [removed: 13,601] [added: 14,884] | | | | | $ | [removed: 12,444] [added: 13,601] | | | | | $ | [removed: 11,325] [added: 12,444] | |

| Cost of sales | | | | | | [removed: 5,294] [added: 6,140] | | | | | | [removed: 5,188] [added: 5,294] | | | | | | [removed: 4,663] [added: 5,188] | | | | | | [removed: 4,264] [added: 4,663] | | | | | | [removed: 3,821] [added: 4,264] | | |

| Gross profit | | | | | | $ | [removed: 9,057] [added: 10,968] | | | | | $ | [removed: 9,696] [added: 9,057] | | | | | $ | [removed: 8,938] [added: 9,696] | | | | | $ | [removed: 8,180] [added: 8,938] | | | | | $ | [removed: 7,504] [added: 8,180] | |

| Research, development and engineering expenses | | | | | | [removed: 984] [added: 1,235] | | | | | | [removed: 971] [added: 984] | | | | | | [removed: 862] [added: 971] | | | | | | [removed: 787] [added: 862] | | | | | | [removed: 715] [added: 787] | | |

| Selling, general and administrative expenses | | | | | | [removed: 5,361] [added: 6,427] | | | | | | [removed: 5,356] [added: 5,361] | | | | | | [removed: 5,099] [added: 5,356] | | | | | | [removed: 4,552] [added: 5,099] | | | | | | [removed: 4,137] [added: 4,552] | | |

| Recall charges | | | | | | [removed: 17] [added: 103] | | | | | | [removed: 192] [added: 17] | | | | | | [removed: 23] [added: 192] | | | | | | [removed: 173] [added: 23] | | | | | | [removed: 158] [added: 173] | | |

| Amortization of intangible assets | | | | | | [removed: 472] [added: 619] | | | | | | [removed: 464] [added: 472] | | | | | | [removed: 417] [added: 464] | | | | | | [removed: 371] [added: 417] | | | | | | [removed: 319] [added: 371] | | |

| Total operating expenses | | | | | | $ | [removed: 6,834] [added: 8,384] | | | | | $ | [removed: 6,983] [added: 6,834] | | | | | $ | [removed: 6,401] [added: 6,983] | | | | | $ | [removed: 5,883] [added: 6,401] | | | | | $ | [removed: 5,329] [added: 5,883] | |

| Operating income | | | | | | $ | [removed: 2,223] [added: 2,584] | | | | | $ | [removed: 2,713] [added: 2,223] | | | | | $ | [removed: 2,537] [added: 2,713] | | | | | $ | [removed: 2,297] [added: 2,537] | | | | | $ | [removed: 2,175] [added: 2,297] | |

| Other income (expense), net | | | | | | [removed: (269)] [added: (303)] | | | | | | [removed: (151)] [added: (269)] | | | | | | [removed: (181)] [added: (151)] | | | | | | [removed: (234)] [added: (181)] | | | | | | [removed: (254)] [added: (234)] | | |

| Earnings before income taxes | | | | | | $ | [removed: 1,954] [added: 2,281] | | | | | $ | [removed: 2,562] [added: 1,954] | | | | | $ | [removed: 2,356] [added: 2,562] | | | | | $ | [removed: 2,063] [added: 2,356] | | | | | $ | [removed: 1,921] [added: 2,063] | |

| Income taxes | | | | | | [removed: 355] [added: 287] | | | | | | [removed: 479] [added: 355] | | | | | | [removed: (1,197)] [added: 479] | | | | | | [removed: 1,043] [added: (1,197)] | | | | | | [removed: 274] [added: 1,043] | | |

| Net earnings | | | | | | $ | [removed: 1,599] [added: 1,994] | | | | | $ | [removed: 2,083] [added: 1,599] | | | | | $ | [removed: 3,553] [added: 2,083] | | | | | $ | [removed: 1,020] [added: 3,553] | | | | | $ | [removed: 1,647] [added: 1,020] | |

| Basic | | | | | | $ | [removed: 4.26] [added: 5.29] | | | | | $ | [removed: 5.57] [added: 4.26] | | | | | $ | [removed: 9.50] [added: 5.57] | | | | | $ | [removed: 2.73] [added: 9.50] | | | | | $ | [removed: 4.40] [added: 2.73] | |

| Diluted | | | | | | $ | [removed: 4.20] [added: 5.21] | | | | | $ | [removed: 5.48] [added: 4.20] | | | | | $ | [removed: 9.34] [added: 5.48] | | | | | $ | [removed: 2.68] [added: 9.34] | | | | | $ | [removed: 4.35] [added: 2.68] | |

| Dividends declared per share of common stock | | | | | | $ | [removed: 2.355] [added: 2.585] | | | | | $ | [removed: 2.135] [added: 2.355] | | | | | $ | [removed: 1.93] [added: 2.135] | | | | | $ | [removed: 1.745] [added: 1.93] | | | | | $ | [removed: 1.565] [added: 1.745] | |

| Cash, cash equivalents and current marketable securities | | | | | | $ | [removed: 3,024] [added: 3,019] | | | | | $ | [removed: 4,425] [added: 3,024] | | | | | $ | [removed: 3,699] [added: 4,425] | | | | | $ | [removed: 2,793] [added: 3,699] | | | | | $ | [removed: 3,384] [added: 2,793] | |

| Accounts receivable, net | | | | | | [removed: 2,701] [added: 3,022] | | | | | | [removed: 2,893] [added: 2,701] | | | | | | [removed: 2,332] [added: 2,893] | | | | | | [removed: 2,198] [added: 2,332] | | | | | | [removed: 1,967] [added: 2,198] | | |

| [removed: Inventories(1)] [added: Inventories] | | | | | | [removed: 3,494] [added: 3,314] | | | | | | [removed: 2,980] [added: 3,494] | | | | | | [removed: 2,955] [added: 2,980] | | | | | | [removed: 2,465] [added: 2,955] | | | | | | [removed: 2,030] [added: 2,465] | | |

| Property, plant and equipment, net | | | | | | [removed: 2,752] [added: 2,833] | | | | | | [removed: 2,567] [added: 2,752] | | | | | | [removed: 2,291] [added: 2,567] | | | | | | [removed: 1,975] [added: 2,291] | | | | | | [removed: 1,569] [added: 1,975] | | |

| Total assets | | | | | | $ | [removed: 34,330] [added: 34,631] | | | | | $ | [removed: 30,167] [added: 34,330] | | | | | $ | [removed: 27,229] [added: 30,167] | | | | | $ | [removed: 22,197] [added: 27,229] | | | | | $ | [removed: 20,435] [added: 22,197] | |

| Accounts payable | | | | | | [removed: 810] [added: 1,129] | | | | | | [removed: 675] [added: 810] | | | | | | [removed: 646] [added: 675] | | | | | | [removed: 487] [added: 646] | | | | | | [removed: 437] [added: 487] | | |

| Total debt | | | | | | [removed: 13,991] [added: 12,479] | | | | | | [removed: 11,090] [added: 13,991] | | | | | | [removed: 9,859] [added: 11,090] | | | | | | [removed: 7,222] [added: 9,859] | | | | | | [removed: 6,914] [added: 7,222] | | |

| Shareholders’ equity | | | | | | $ | [removed: 13,084] [added: 14,877] | | | | | $ | [removed: 12,807] [added: 13,084] | | | | | $ | [removed: 11,730] [added: 12,807] | | | | | $ | [removed: 9,980] [added: 11,730] | | | | | $ | [removed: 9,550] [added: 9,980] | |

| Net cash provided by operating activities | | | | | | $ | [removed: 3,277] [added: 3,263] | | | | | $ | [removed: 2,191] [added: 3,277] | | | | | $ | [removed: 2,610] [added: 2,191] | | | | | $ | [removed: 1,559] [added: 2,610] | | | | | $ | [removed: 1,915] [added: 1,559] | |

| Purchases of property, plant and equipment | | | | | | [removed: 487] [added: 525] | | | | | | [removed: 649] [added: 487] | | | | | | [removed: 572] [added: 649] | | | | | | [removed: 598] [added: 572] | | | | | | [removed: 490] [added: 598] | | |

| Depreciation | | | | | | [removed: 340] [added: 371] | | | | | | [removed: 314] [added: 340] | | | | | | [removed: 306] [added: 314] | | | | | | [removed: 271] [added: 306] | | | | | | [removed: 227] [added: 271] | | |

| Acquisitions, net of cash acquired | | | | | | [removed: 4,222] [added: 339] | | | | | | [removed: 802] [added: 4,222] | | | | | | [removed: 2,451] [added: 802] | | | | | | [removed: 831] [added: 2,451] | | | | | | [removed: 4,332] [added: 831] | | |

| [removed: Dividends paid] [added: Payments of dividends] | | | | | | [removed: 863] [added: 950] | | | | | | [removed: 778] [added: 863] | | | | | | [removed: 703] [added: 778] | | | | | | [removed: 636] [added: 703] | | | | | | [removed: 568] [added: 636] | | |

| Repurchase of common stock | | | | | | — | | | | | | [removed: 307] [added: —] | | | | | | [removed: 300] [added: 307] | | | | | | [removed: 230] [added: 300] | | | | | | [removed: 13] [added: 230] | | |

| Number of shareholders of record | | | | | | [removed: 2,597] [added: 2,551] | | | | | | [removed: 2,636] [added: 2,597] | | | | | | [removed: 2,732] [added: 2,636] | | | | | | [removed: 2,850] [added: 2,732] | | | | | | [removed: 3,010] [added: 2,850] | | |

| Approximate number of employees | | | | | | [removed: 43,000] [added: 46,000] | | | | | | [removed: 40,000] [added: 43,000] | | | | | | [removed: 36,000] [added: 40,000] | | | | | | [removed: 33,000] [added: 36,000] | | | | | | 33,000 | | |

| Dollar amounts in millions except per share amounts or as otherwise specified. | | | [removed: 10] [added: 11] | | |

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

| Amortization of intangible assets | | | | | | 619 | | | | | | 472 | | | | | | 464 | | | | | | 417 | | | | | | 371 | | |

(1) Loaner instrumentation not intended to be sold of $302 in 2019 has been reclassified from inventories to other noncurrent assets to conform with current year presentation.

Refer to Note 1 to our Consolidated Financial Statements for further information.

We have audited the accompanying consolidated balance sheets of Stryker Corporation and subsidiaries (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of earnings and comprehensive income, [removed: shareholders'] [added: shareholders’] equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the [removed: "consolidated] [added: “consolidated] financial [removed: statements").][added: statements“).]

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 11, [removed: 2021] [added: 2022] expressed an unqualified opinion thereon.

| Dollar amounts in millions except per share amounts or as otherwise specified. | | | [removed: 19] [added: 37] | | |

STRYKER CORPORATION [removed: 2020] [added: 2021] FORM 10-K

| *Description of the Matter* | | | As described in Note 7 to the consolidated financial statements, the Company [removed: recorded $470 million of liabilities, including $192] [added: recognized $385] million [removed: assumed in connection with the acquisition accounting] of [removed: Wright,] [added: liabilities] at December 31, [removed: 2020] [added: 2021] for product [added: liability] matters relating to [removed: Rejuvenate and ABG II Modular-Neck hip stems, LFIT Anatomic CoCr V40 Femoral Heads, and Wright hip product future settlements.] [added: claims for certain products.] The Company establishes liabilities for product claims to the extent probable future losses are estimable based on quantitative and qualitative information from various sources. [removed: The Company engages, when required, external specialists to perform an actuarial analysis to estimate the outstanding liabilities.] Auditing management’s estimate of product liabilities was especially challenging due to the significant measurement uncertainty associated with the product liabilities estimate that involved management’s significant judgment and [removed: actuarial] analysis. Further, the product liability is sensitive to significant management assumptions, including average costs per claim and the number of future claims, including those resulting in revision surgery. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated management’s design and tested the operating effectiveness of the controls over the Company’s product liability estimation process, including management's assessment of the assumptions, and the completeness and accuracy of the data underlying the product liabilities. To evaluate the liabilities for product claims, we performed audit procedures that included, among others, testing the completeness and accuracy of the underlying claims and average cost per claim data [removed: provided to management's actuarial specialist] and obtaining legal confirmation letters to evaluate the [removed: reserves recorded.] [added: liabilities recognized.] We involved our actuarial specialists in the evaluation of the methodologies [added: and significant assumptions] applied by [removed: the Company] [added: management] in [removed: determining] [added: estimating] the [removed: actuarially calculated range of loss] [added: product liabilities] and [removed: assessment of significant assumptions, including number] [added: range] of [removed: future claims and revision surgeries factored into the resulting estimated product liabilities.] [added: probable losses.] We also evaluated the adequacy of the Company’s disclosures included in Note 7 related to these liabilities. | | |

| *Description of the Matter* | | | As described in Note 11 to the consolidated financial statements, the Company operates in multiple jurisdictions with complex tax policy and regulatory environments and establishes reserves for uncertain tax positions in accordance with the accounting guidance governing uncertainty in income taxes. Uncertainty in a tax position may arise because tax laws are subject to interpretation. The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. At December 31, [removed: 2020,] [added: 2021,] the Company had accrued liabilities of [removed: $457] [added: $444] million relating to uncertain tax positions. Auditing management’s analysis of the Company’s uncertain tax positions and the related unrecognized tax benefits was especially challenging as the analysis involved significant auditor judgment due to complex interpretations of tax laws, legal rulings and determination of arm’s length pricing for intercompany transactions. | | |

| *How We Addressed the Matter in Our Audit* | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting process for uncertain tax positions. For example, we tested controls over management’s identification of uncertain tax positions and its application of the recognition and measurement principles, including management’s review of the inputs and calculations of unrecognized income tax benefits. Our audit procedures included, among others, evaluating the assumptions the Company used to develop its uncertain tax positions and related unrecognized income tax benefit amounts by jurisdiction. We also tested the completeness and accuracy of the underlying data used by the Company to calculate its uncertain tax positions. For example, we [removed: compared the estimated liabilities for unrecognized income tax benefits to similar positions in prior periods and assessed management’s consideration of current tax controversy and litigation trends in similar positions challenged by tax authorities. We also assessed the historical accuracy of management’s estimates of its unrecognized income tax benefits by comparing the estimates with the resolution of those positions. We] involved our tax professionals to evaluate tax technical merits, which included, for certain intercompany transactions, assessing the Company’s assumptions and pricing methodology to determine they were arm’s length and complied with local jurisdictional laws and regulations. We also evaluated the [added: estimated liabilities for unrecognized income tax benefits in consideration of current tax controversy and litigation trends in similar positions challenged by tax authorities. We also evaluated the] adequacy of the Company’s disclosures included in Note 11 related to these tax matters. | | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net sales | | | $ | [removed: 14,351] [added: 17,108] | | | | | $ | [removed: 14,884] [added: 14,351] | | | | | $ | [removed: 13,601] [added: 14,884] | |

| Cost of sales | | | [removed: 5,294] [added: 6,140] | | | | | | [removed: 5,188] [added: 5,294] | | | | | | [removed: 4,663] [added: 5,188] | | |

| Gross profit | | | $ | [removed: 9,057] [added: 10,968] | | | | | $ | [removed: 9,696] [added: 9,057] | | | | | $ | [removed: 8,938] [added: 9,696] | |

| Research, development and engineering expenses | | | [removed: 984] [added: 1,235] | | | | | | [removed: 971] [added: 984] | | | | | | [removed: 862] [added: 971] | | |

| Selling, general and administrative expenses | | | [removed: 5,361] [added: 6,427] | | | | | | [removed: 5,356] [added: 5,361] | | | | | | [removed: 5,099] [added: 5,356] | | |

| Recall charges | | | [removed: 17] [added: 103] | | | | | | [removed: 192] [added: 17] | | | | | | [removed: 23] [added: 192] | | |

| Amortization of intangible assets | | | [removed: 472] [added: 619] | | | | | | [removed: 464] [added: 472] | | | | | | [removed: 417] [added: 464] | | |

| Total operating expenses | | | $ | [removed: 6,834] [added: 8,384] | | | | | $ | [removed: 6,983] [added: 6,834] | | | | | $ | [removed: 6,401] [added: 6,983] | |

| Operating income | | | $ | [removed: 2,223] [added: 2,584] | | | | | $ | [removed: 2,713] [added: 2,223] | | | | | $ | [removed: 2,537] [added: 2,713] | |

| Other income (expense), net | | | [removed: (269)] [added: (303)] | | | | | | [removed: (151)] [added: (269)] | | | | | | [removed: (181)] [added: (151)] | | |

| Earnings before income taxes | | | $ | [removed: 1,954] [added: 2,281] | | | | | $ | [removed: 2,562] [added: 1,954] | | | | | $ | [removed: 2,356] [added: 2,562] | |

| Income taxes | | | [removed: 355] [added: 287] | | | | | | [removed: 479] [added: 355] | | | | | | [removed: (1,197)] [added: 479] | | |

| Net earnings | | | $ | [removed: 1,599] [added: 1,994] | | | | | $ | [removed: 2,083] [added: 1,599] | | | | | $ | [removed: 3,553] [added: 2,083] | |

| Basic | | | $ | [removed: 4.26] [added: 5.29] | | | | | $ | [removed: 5.57] [added: 4.26] | | | | | $ | [removed: 9.50] [added: 5.57] | |

| Diluted | | | $ | [removed: 4.20] [added: 5.21] | | | | | $ | [removed: 5.48] [added: 4.20] | | | | | $ | [removed: 9.34] [added: 5.48] | |

| Basic | | | [removed: 375.5] [added: 377.0] | | | | | | [removed: 374.0] [added: 375.5] | | | | | | [removed: 374.1] [added: 374.0] | | |

| Effect of dilutive employee stock compensation | | | [removed: 4.8] [added: 5.3] | | | | | | [removed: 5.9] [added: 4.8] | | | | | | [removed: 6.2] [added: 5.9] | | |

| Diluted | | | [removed: 380.3] [added: 382.3] | | | | | | [removed: 379.9] [added: 380.3] | | | | | | [removed: 380.3] [added: 379.9] | | |

| Marketable securities | | | [removed: —] [added: 3] | | | | | | [removed: 1] [added: —] | | | | | | [removed: —] [added: 1] | | |

| Pension plans | | | [removed: (80)] [added: 104] | | | | | | [removed: (42)] [added: (80)] | | | | | | [removed: (3)] [added: (42)] | | |

| Unrealized gains (losses) on designated hedges | | | [removed: (57)] [added: 50] | | | | | | [removed: (3)] [added: (57)] | | | | | | [removed: 22] [added: (3)] | | |

| Financial statement translation | | | [removed: (414)] [added: 469] | | | | | | [removed: 69] [added: (414)] | | | | | | [removed: (97)] [added: 69] | | |

| Total other comprehensive income (loss), net of tax | | | $ | [removed: (551)] [added: 626] | | | | | $ | [removed: 25] [added: (551)] | | | | | $ | [removed: (78)] [added: 25] | |

| Comprehensive income | | | $ | [removed: 1,048] [added: 2,620] | | | | | $ | [removed: 2,108] [added: 1,048] | | | | | $ | [removed: 3,475] [added: 2,108] | |

| | | | [added: 2021 | | | | | |] 2020 | | | | | | 2019 | | |

| Cash and cash equivalents | | | $ | [removed: 2,943] [added: 2,944] | | | | | $ | [removed: 4,337] [added: 2,943] | |

| Marketable securities | | | [removed: 81] [added: 75] | | | | | | [removed: 88] [added: 81] | | |

| Accounts receivable, less allowance of [removed: $131 ($88] [added: $167 ($131] in [removed: 2019)] [added: 2020)] | | | [removed: 2,701] [added: 3,022] | | | | | | [removed: 2,893] [added: 2,701] | | |