Stryker (SYK) 10-K risk factor changes: FY2022 vs FY2021

[removed: Words that] identify forward-looking statements [removed: include] [added: include, without limitation,] words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "goal," "strategy" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or our businesses.

[added: 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.

Therefore, actual results could differ materially and adversely from these forward-looking [removed: statements.][added: statements, historical experience or our present expectations.]

Additional risks and uncertainties not currently known to us or that we currently deem not to be material [added: or that could apply to any company] may also materially and adversely affect our business, cash flows, financial condition or results of operations.

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

In response, various governmental authorities and private enterprises [removed: have] implemented, and may continue to [removed: implement,] [added: implement or reimplement,] numerous [removed: measures to contain the pandemic,] [added: measures,] such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

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

[removed: Any delay or shortage] [added: We have experienced, and could continue to experience, delays and shortages] in the supply of components or materials [removed: or delay] [added: and delays] in delivering our products [added: that] may result in our inability to satisfy consumer demand for our products in a timely manner or at all, which could harm our reputation, future sales and profitability.

In addition, the pandemic [removed: could] adversely [removed: impact our ability, and] [added: impacted] the ability of [removed: our] [added: certain] third-party suppliers, manufacturers, distributors and [removed: customers,] [added: customers] to retain key employees and ensure the continued service and availability of skilled personnel necessary to run [removed: our, and their,] [added: their] complex operations.

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

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

[removed: We] [added: Moreover, 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.

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

A prolonged [added: or reemerging] impact of COVID-19 [added: (or other pandemics in the future)] also could heighten many of the other risks described in this report.

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 [removed: shifted and continues to shift or as may be mandated by governmental authorities in response to the COVID-19 pandemic: Some of our products are particularly sensitive to reductions in elective medical procedures.][added: shifted]

Elective medical procedures were suspended or reduced at various times [removed: in 2020 and 2021] [added: since the beginning of the COVID-19 pandemic] 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 whether elective medical procedures will again be suspended or reduced in the future and, to the extent individuals and customers are required to [removed: continue to de-prioritize,] delay or cancel elective procedures as a result of [added: a resurgence of] the COVID-19 pandemic or otherwise, our business, cash flows, financial condition and results of operations could be negatively affected.

In addition, our products in certain divisions, such as Medical, have experienced, and could continue to experience, higher demand as our customers [removed: focus] [added: have focused] on treating COVID-19 [removed: patients.][added: patients and preparing for future public health emergencies.]

In this regard, the accelerated development and production of products and services [removed: in an effort] to address medical and other requirements [removed: as a result of the pandemic] could increase the risk of regulatory enforcement actions, product defects or related claims.

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

Income tax audits associated with the allocation of income and other complex issues, including inventory transfer pricing and cost sharing, product royalty and foreign branch arrangements, may require an extended period [removed: of time] to resolve and may result in significant income tax adjustments.

While the provisions of the ACA are intended to expand access to health insurance coverage and improve the quality of healthcare over time, other provisions of the legislation, including Medicare provisions aimed at decreasing costs, comparative effectiveness research, an [removed: independent payment advisory board and pilot programs to evaluate alternative payment methodologies, are having a meaningful effect on the way healthcare is developed and delivered and could have a significant effect on our business.]

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

The process of obtaining [added: licenses,] regulatory clearances and/or approvals to market and sell our products can be costly and time consuming and the clearances and/or approvals might not be granted timely.

We have ongoing responsibilities under the laws and regulations applicable to the manufacturing of products within our facilities and those contracted by third parties that are subject to periodic inspections by the [removed: FDA] [added: FDA, state Boards of Pharmacy] and other governmental authorities to determine compliance with the quality system, medical device reporting regulations and other requirements.

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

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

[added: 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 [removed: third-parties] [added: 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 fraud and abuse laws.

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

[removed: In 2013 and 2018 we] settled claims brought by the United States Securities and Exchange Commission (SEC) related to the FCPA.

We are subject to privacy, data protection and data security regulations and laws globally, and could face substantial penalties if we fail to comply with such regulations and laws: We are subject to a variety of laws and regulations globally regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, [removed: transfer,] [added: transfer] and security of personally identifiable healthcare information.

[added: 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.

We are currently defendants in a number of product liability matters, including those relating to our Rejuvenate and ABGII Modular-Neck hip stems, LFIT Anatomic CoCr V40 Femoral Heads and the product liability lawsuits and claims relating to Wright [added: Medical Group N.V. (Wright)] legacy hip products discussed in Note 7 to our Consolidated Financial Statements.

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

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

Our ability to issue additional debt or enter into other financing arrangements on acceptable terms could be adversely affected by our debt levels, unfavorable changes in economic conditions or uncertainties that affect the capital [removed: markets, including disruption caused by the COVID-19 pandemic.][added: markets.]

In addition, we have experienced, and could continue to experience, loss of sales and profits due to delayed payments or insolvency of healthcare professionals, hospitals and other customers and suppliers facing liquidity issues [removed: caused by] [added: due to] the [removed: COVID-19 pandemic.][added: current macroeconomic environment, type and number of conditions being treated or for other reasons.]

As a result, we may be compelled to take additional measures to preserve our cash flow, including through the reduction of operating expenses or suspension of dividend [removed: payments, at least until the consequences of the pandemic subside.][added: payments.]

This has already impacted our joint replacement [removed: business] [added: and spine businesses] on a national level, and our trauma and [removed: spine] [added: certain neurovascular] products on a provincial level, and we expect further adoption of volume-based procurement provincially or nationally in China in [removed: 2022.][added: 2023.]

Words that

We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.

their use in or with our products.

We expect these inflationary pressures will continue.

Inflation in the United States and in many of the countries where we conduct business has resulted in, and may continue to result in, higher interest rates and increased capital, shipping and labor costs, weakening exchange rates against the United States Dollar and other similar effects.

Inflation may also cause our customers to reduce or delay orders for our products and services, which could have a material adverse impact on our sales and results of operations.

If we are unable to maintain these relationships due to regulatory restrictions, hospital access restrictions for non-patients or for

The ongoing war between Russia and Ukraine, and the global response to it, may adversely affect our business and results of operations: The war between Russia and Ukraine has resulted in the implementation of sanctions by the United States and other governments against Russia and has caused significant volatility and disruptions to the global markets.

It is not possible to predict the short- and long-term implications of this war, which could include but are not limited to further sanctions, economic and political instability, increases in inflation rate and energy prices, supply chain challenges and adverse effects on currency exchange rates and financial markets.

In addition, the United States government reported that United States sanctions against Russia in response to the conflict could lead to an increased threat of cyberattacks against United States companies.

These increased threats could pose risks to the security of our information technology systems, networks and product offerings, as well as the confidentiality, availability and integrity of our data.

Further, if the war expands beyond Ukraine or further intensifies, it could have an adverse impact on our operations in Poland or other areas.

We are continuing to monitor the situation in Ukraine and globally as well as assess its potential impact on our business.

Although Russia does not constitute a material portion of our business, and we do not rely significantly on Russian or Ukrainian sources of supply, a significant escalation or further expansion of the war or related disruptions to the global markets could have a material adverse effect on our results of operations.

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 acquisition of Vocera.

When cybersecurity incidents occur, we follow our incident response protocols and address them in accordance with applicable governmental regulations and other legal requirements.

Our response to these incidents and our investments to protect our information technology infrastructure and data may not shield us from significant losses and potential liability or prevent any future interruption or breach of our systems.

Ongoing inflationary pressures and other macroeconomic factors could also increase the cost of labor and harm our ability to recruit, hire and retain talented employees.

However, the manufacturing of certain of our product lines is concentrated in one or more plants or geographic regions.

We manage a portion of our exposure to

and continues to shift or as may be mandated by governmental authorities: Some of our products are particularly sensitive to reductions in elective medical procedures.

independent payment advisory board and pilot programs to evaluate alternative payment methodologies, are having a meaningful effect on the way healthcare is developed and delivered and could have a significant effect on our business.

In 2013 and 2018 we

Regulators are also imposing new data privacy and security requirements, including new and greater monetary fines for privacy violations.

For example, the European Union’s General Data Protection Regulation (GDPR) established rules regarding the handling of personal data.

Non-compliance with the GDPR may result in monetary penalties of up to 4% of total company revenue.

Other governmental authorities around the world are imposing similar types of laws and regulations, data breach reporting and penalties for non-compliance and increasing security requirements.

In addition, any statements that

COVID-19 PANDEMIC RISKS

Moreover, the actions we take to mitigate the effect of the pandemic on our workforce could reduce the efficiency of our operations or prove insufficient.

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

Economic Cooperation and Development (OECD).

If we fail to comply with applicable regulatory

Further, the 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 European Union customers and employees.

The GDPR established 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).

Other governmental authorities around the world are considering similar types of legislative and regulatory proposals concerning data protection, which could impose significant limitations and increase our cost of providing our products and services where we process personal data.

These laws and regulations are broad

foreign currency exchange effects.

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.

As a result of the COVID-19 pandemic, our access to these professionals has been limited as hospitals have restricted access for non-patients, including our research and development specialists and other employees, and governmental authorities have imposed travel restrictions, shutdowns or similar measures, which has adversely affected our ability to develop, market and sell 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 travel restrictions, suspension and shutdown orders and other measures intended to limit person-to-person contact.

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

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

In addition,

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

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

In [removed: 2021] [added: 2022] we achieved reported net sales growth of [removed: 19.2%.][added: 7.8%.]

Excluding the impact of acquisitions and divestitures, sales grew [removed: 12.6%] [added: 9.7%] in constant currency.

We reported net earnings of [removed: $1,994] [added: $2,358] and net earnings per diluted share of [removed: $5.21.][added: $6.17.]

Excluding the impact of certain items, we achieved adjusted net earnings(1) of [removed: $3,474][added: $3,571 and adjusted net earnings per diluted share(1) of $9.34 representing growth of 2.8%.]

[removed: and adjusted] [added: Adjusted] net earnings per diluted [removed: share(1) of] [added: share(1) was $9.34 in 2022 compared to] $9.09 [removed: representing growth of 22.3%.][added: in 2021 and $7.43 in 2020.]

Refer to Note [removed: 14] [added: 8] to our Consolidated Financial Statements for further information.

We continued our capital allocation strategy by investing [removed: $339] [added: $2,563] in acquisitions and paying [removed: $950] [added: $1,051] in dividends to our shareholders.

Refer to Note [removed: 10] [added: 8] to our Consolidated Financial Statements for further information.

[removed: Gauss] [added: Vocera] is part of our [removed: Instruments] [added: Medical] business within MedSurg and Neurotechnology.

Refer to Note [removed: 15] [added: 11] to our Consolidated Financial Statements for further information.

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

| [added: 2022 | | |] 2021 | | | 2020 | | | [removed: 2019] | | | [added: 2022] | | | 2021 | | | 2020 | | | [removed: 2019] | | | [added: 2022 vs. 2021] | | | 2021 vs. 2020 | | | [removed: 2020 vs. 2019] | | | [removed: | | |]

| Net sales | | | $ | [removed: 17,108] [added: 18,449] | | $ | [removed: 14,351] [added: 17,108] | | $ | [removed: 14,884] [added: 14,351] | | | | | 100.0 | | % | 100.0 | | % | 100.0 | | % | | | | [removed: 19.2] [added: 7.8] | | % | [removed: (3.6)] [added: 19.2] | | % |

| Gross profit | | | [added: 11,578 | | |] 10,968 | | | 9,057 | | | [removed: 9,696] | | | [added: 62.8] | | | 64.1 | | | 63.1 | | | [removed: 65.1] | | | [added: 5.6] | | | 21.1 | | | [removed: (6.6) | | |]

| Research, development and engineering expenses | | | [added: 1,454 | | |] 1,235 | | | 984 | | | [removed: 971] | | | [added: 7.9] | | | 7.2 | | | 6.9 | | | [removed: 6.5] | | | [added: 17.7] | | | 25.5 | | | [removed: 1.3 | | |]

| Selling, general and administrative expenses | | | [added: 6,455 | | |] 6,427 | | | 5,361 | | | [removed: 5,356] | | | [added: 35.0] | | | 37.6 | | | 37.4 | | | [removed: 36.0] | | | [added: 0.4] | | | 19.9 | | | [removed: 0.1 | | |]

| Recall charges, net [removed: of insurance proceeds] | | | [added: (15) | | |] 103 | | | 17 | | | [removed: 192] | | | [added: (0.1)] | | | 0.6 | | | 0.1 | | | [removed: 1.3] | | | [removed: | | |] nm | | | [removed: (91.1)] [added: nm] | | |

| Amortization of intangible assets | | | [added: 627 | | |] 619 | | | 472 | | | [removed: 464] | | | [added: 3.4] | | | 3.6 | | | 3.3 | | | [removed: 3.1] | | | [added: 1.3] | | | 31.1 | | | [removed: 1.7 | | |]

| Other income (expense), net | | | [added: (158) | | |] (303) | | | (269) | | | [removed: (151)] | | | [added: (0.9)] | | | (1.8) | | | (1.9) | | | [removed: (1.0)] | | | [added: (47.9)] | | | 12.6 | | | [removed: 78.1 | | |]

| Income taxes | | | [removed: 287] [added: 325] | | | [removed: 355] [added: 287] | | | [removed: 479] [added: 355] | | | | | | [added: nm] | | | [added: nm] | | | [added: nm] | | | | | | [removed: (19.2)] [added: 13.2] | | | [removed: (25.9)] [added: (19.2)] | | |

| Net earnings | | | $ | [removed: 1,994] [added: 2,358] | | $ | [removed: 1,599] [added: 1,994] | | $ | [removed: 2,083] [added: 1,599] | | | | | [removed: 11.7] [added: 12.8] | | % | [removed: 11.1] [added: 11.7] | | % | [removed: 14.0] [added: 11.1] | | % | | | | [removed: 24.7] [added: 18.3] | | % | [removed: (23.2)] [added: 24.7] | | % |

| Net earnings per diluted share | | | $ | [removed: 5.21] [added: 6.17] | | $ | [removed: 4.20] [added: 5.21] | | $ | [removed: 5.48] [added: 4.20] | | | | | | | | | | | | | | | | | [removed: 24.0] [added: 18.4] | | % | [removed: (23.4)] [added: 24.0] | | % |

| Adjusted net earnings per diluted share(1) | | | $ | [removed: 9.09] [added: 9.34] | | $ | [removed: 7.43] [added: 9.09] | | $ | [removed: 8.26] [added: 7.43] | | | | | | | | | | | | | | | | | [removed: 22.3] [added: 2.8] | | % | [removed: (10.0)] [added: 22.3] | | % |

| | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | | | | | |

| | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | | | | As Reported | | | Constant Currency | | | | | | As Reported | | | Constant Currency | | |

| United States | | | $ | [removed: 12,321] [added: 13,638] | | $ | [removed: 10,455] [added: 12,321] | | $ | [removed: 10,957] [added: 10,455] | | | | | [removed: 17.9] [added: 10.7] | | % | [removed: 17.9] [added: 10.7] | | % | | | | [removed: (4.6)] [added: 17.9] | | % | [removed: (4.6)] [added: 17.9] | | % |

| International | | | [removed: 4,787] [added: 4,811] | | | [removed: 3,896] [added: 4,787] | | | [removed: 3,927] [added: 3,896] | | | | | | [removed: 22.8] [added: 0.5] | | | [removed: 18.8] [added: 11.7] | | | | | | [removed: (0.8)] [added: 22.8] | | | [removed: (0.9)] [added: 18.8] | | |

| Total | | | $ | [removed: 17,108] [added: 18,449] | | $ | [removed: 14,351] [added: 17,108] | | $ | [removed: 14,884] [added: 14,351] | | | | | [removed: 19.2] [added: 7.8] | | % | [removed: 18.1] [added: 11.0] | | % | | | | [removed: (3.6)] [added: 19.2] | | % | [removed: (3.6)] [added: 18.1] | | % |

| MedSurg and Neurotechnology | | | $ | [removed: 9,538] [added: 10,611] | | $ | [removed: 8,345] [added: 9,538] | | $ | [removed: 8,475] [added: 8,345] | | | | | [removed: 14.3] [added: 11.2] | | % | [removed: 13.3] [added: 14.1] | | % | | | | [removed: (1.5)] [added: 14.3] | | % | [removed: (1.5)] [added: 13.3] | | % |

| Orthopaedics and Spine | | | [removed: 7,570] [added: 7,838] | | | [removed: 6,006] [added: 7,570] | | | [removed: 6,409] [added: 6,006] | | | | | | [removed: 26.0] [added: 3.5] | | | [removed: 24.8] [added: 7.0] | | | | | | [removed: (6.3)] [added: 26.0] | | | [removed: (6.4)] [added: 24.8] | | |

| Total | | | $ | [removed: 17,108] [added: 18,449] | | $ | [removed: 14,351] [added: 17,108] | | $ | [removed: 14,884] [added: 14,351] | | | | | [removed: 19.2] [added: 7.8] | | % | [removed: 18.1] [added: 11.0] | | % | | | | [removed: (3.6)] [added: 19.2] | | % | [removed: (3.6)] [added: 18.1] | | % |

| | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | | | | | | | | | | | |

| | | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | | | | | | As Reported | | | Constant Currency | | | As Reported | | | As Reported | | | Constant Currency | | | | | | As Reported | | | Constant Currency | | | As Reported | | | As Reported | | | Constant Currency | | |

| Instruments | | | $ | [removed: 2,111] [added: 2,279] | | $ | [removed: 1,863] [added: 2,111] | | $ | [removed: 1,959] [added: 1,863] | | | | | [removed: 13.4] [added: 8.0] | | % | [removed: 12.5] [added: 10.4] | | % | [removed: 11.3] [added: 10.6] | | % | [removed: 20.9] [added: (0.9)] | | % | [removed: 16.6] [added: 10.0] | | % | | | | [removed: (5.0)] [added: 13.4] | | % | [removed: (5.0)] [added: 12.5] | | % | [removed: (4.7)] [added: 11.3] | | % | [removed: (6.1)] [added: 20.9] | | % | [removed: (6.2)] [added: 16.6] | | % |

| Endoscopy | | | [removed: 2,141] [added: 2,423] | | | [removed: 1,763] [added: 2,141] | | | [removed: 1,983] [added: 1,763] | | | | | | [removed: 21.5] [added: 13.2] | | | [removed: 20.8] [added: 15.9] | | | [removed: 18.6] [added: 14.6] | | | [removed: 32.7] [added: 8.2] | | | [removed: 29.4] [added: 20.8] | | | | | | [removed: (11.1)] [added: 21.5] | | | [removed: (11.0)] [added: 20.8] | | | [removed: (10.7)] [added: 18.6] | | | [removed: (12.5)] [added: 32.7] | | | [removed: (12.2)] [added: 29.4] | | |

| Medical | | | [removed: 2,607] [added: 3,031] | | | [removed: 2,524] [added: 2,607] | | | [removed: 2,264] [added: 2,524] | | | | | | [removed: 3.3] [added: 16.2] | | | [removed: 2.2] [added: 18.6] | | | [removed: 5.1] [added: 20.6] | | | [removed: (2.4)] [added: 1.5] | | | [removed: (6.6)] [added: 11.7] | | | | | | [removed: 11.5] [added: 3.3] | | | [removed: 11.8] [added: 2.2] | | | [removed: 6.9] [added: 5.1] | | | [removed: 28.9] [added: (2.4)] | | | [removed: 30.3] [added: (6.6)] | | |

| Neurovascular | | | [removed: 1,188] [added: 1,200] | | | [removed: 973] [added: 1,188] | | | [removed: 924] [added: 973] | | | | | | [removed: 22.0] [added: 1.1] | | | [removed: 19.5] [added: 7.2] | | | [removed: 18.3] [added: (0.9)] | | | [removed: 24.4] [added: 2.3] | | | [removed: 20.3] [added: 12.2] | | | | | | [removed: 5.3] [added: 22.0] | | | [removed: 4.9] [added: 19.5] | | | [removed: (2.4)] [added: 18.3] | | | [removed: 11.1] [added: 24.4] | | | [removed: 10.1] [added: 20.3] | | |

| Neuro Cranial | | | [removed: 1,214] [added: 1,376] | | | [removed: 972] [added: 1,214] | | | [removed: 1,059] [added: 972] | | | | | | [removed: 24.9] [added: 13.3] | | | [removed: 24.3] [added: 15.4] | | | [removed: 23.4] [added: 14.9] | | | [removed: 32.4] [added: 6.1] | | | [removed: 28.6] [added: 17.5] | | | | | | [removed: (8.2)] [added: 24.9] | | | [removed: (8.3)] [added: 24.3] | | | [removed: (10.1)] [added: 23.4] | | | [removed: 1.2] [added: 32.4] | | | [removed: 1.0] [added: 28.6] | | |

| Other | | | [removed: 277] [added: 302] | | | [removed: 250] [added: 277] | | | [removed: 286] [added: 250] | | | | | | [removed: 10.4] [added: 9.2] | | | [removed: 10.3] [added: 9.3] | | | [removed: 10.0] [added: 8.9] | | | [removed: 48.9] [added: 25.3] | | | [removed: 40.8] [added: 29.9] | | | | | | [removed: (12.3)] [added: 10.4] | | | [removed: (12.3)] [added: 10.3] | | | [removed: (12.4)] [added: 10.0] | | | [removed: —] [added: 48.9] | | | [removed: (2.2)] [added: 40.8] | | |

Alongside our customers around the world, Stryker impacts more than 130 million patients annually.

Macroeconomic Environment

The global economy is experiencing increased inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts of the COVID-19 pandemic and current macroeconomic environment which we anticipate will continue.

Higher interest rates and capital costs, higher shipping costs, increased costs of labor and weakening foreign currency exchange rates are creating additional economic challenges.

These conditions may cause our customers to decrease or delay orders for our products and services, and we expect the higher interest rates to impact demand for our capital products.

Our operations have been adversely impacted by the inflationary pressures primarily related to labor, steel and transportation costs as well as the impact of purchasing electronic components at premium prices on the spot market.

Sales growth in certain products has been constrained by the continuing supply chain challenges and electronic component shortages, especially impacting the capital products in our MedSurg businesses, although the supply chain constraints eased somewhat in the fourth quarter.

Russia and Ukraine Conflict

The military conflict in Russia and Ukraine and the sanctions imposed by the United States government and other nations in response to this conflict have caused significant volatility and disruptions to the global markets.

Given that we provide life-saving and life-enhancing products, we plan to continue operating in Russia provided we can safely do so.

In 2022 net sales in Russia were approximately 0.3% of our revenues.

Although Russia does not constitute a material portion of our business, there is uncertainty around the impact it will have on the global economy, supply chains and fuel and energy prices generally, and therefore our business.

China Volume-Based Procurement and Import Purchase Evaluation

The government in China has launched regional and national programs for volume-based procurement (VBP) of high-value medical consumables to reduce healthcare costs.

Each VBP program has specific requirements to award contracts to the lowest bidders who are able to satisfy the quality and quantity requirements.

The successful bidders may be guaranteed sales volume for certain products, while unsuccessful bidders may lose unit sales volume.

We have been a winning bidder in certain national and regional VBP programs, including those for joint

replacement and trauma products in 2021 and certain neurovascular products in the fourth quarter of 2022.

The prices required for a successful bid have negatively impacted the commercial operations of joint replacement, trauma and certain neurovascular products in China.

We were unsuccessful in our bids in the VBP program for spine products that took place in the third quarter of 2022 and as a result we are exiting the spine business in China.

To date our other businesses have not been significantly impacted, but may be in the future as a result of additional VBP programs.

China has also issued national guiding standards for Import Purchase Evaluation (IPE) which has increased the purchase of locally sourced equipment in China's public hospitals and is impacting our MedSurg business in China.

Our business in China represented approximately 2.4% our revenues in 2022.

Overview of 2022

In February 2022 we entered into a $1.5 billion term loan agreement that matures on February 22, 2025 and bears interest at a base rate based on the Term Secured Overnight Financing Rate (SOFR) plus 0.725%.

In 2022 we repaid $650 of this term loan.

In February 2022 we completed the acquisition of Vocera for $79.25 per share, or an aggregate purchase price of $2.6 billion, net of cash acquired ($3.0 billion including convertible notes).

Vocera is a leader in the digital care coordination and communication category.

Goodwill attributable to the acquisition reflects the strategic benefits of expanding our presence in adjacent markets, diversifying our product portfolio, advancing innovations, and accelerating our digital aspirations.

In 2022 we recorded a goodwill impairment charge of $216 related to our Spine business.

On August 16, 2022 the Inflation Reduction Act (IRA) was enacted into law.

The IRA includes a 15% corporate alternative minimum tax effective in 2023 and a 1% tax on share repurchases after December 31, 2022.

We do not expect the tax-related provisions of the IRA to have a material impact on our Consolidated Financial Statements.

The impact of the excise tax on share repurchases will be dependent on the extent of share repurchases made in future periods.

| Goodwill impairment | | | 216 | | | — | | | — | | | | | | 1.2 | | | — | | | — | | | | | | nm | | | nm | | |

| | | | $ | 10,611 | | $ | 9,538 | | $ | 8,345 | | | | | 11.2 | | % | 14.1 | | % | 14.2 | | % | 3.0 | | % | 13.8 | | % | | | | 14.3 | | % | 13.3 | | % | 13.0 | | % | 18.1 | | % | 14.0 | | % |

| | | | $ | 7,838 | | $ | 7,570 | | $ | 6,006 | | | | | 3.5 | | % | 7.0 | | % | 6.0 | | % | (2.2) | | % | 9.3 | | % | | | | 26.0 | | % | 24.8 | | % | 25.0 | | % | 28.6 | | % | 24.5 | | % |

Consolidated net sales increased 7.8% as reported and 11.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by 3.2%.

MedSurg and Neurotechnology net sales in 2022 increased 11.2% as reported and 14.1% in constant currency, as foreign currency exchange rates negatively impacted net sales by 2.9%.

Gross profit as a percentage of net sales decreased to 62.8% in 2022 from 64.1% in 2021.

COVID-19 Pandemic

The COVID-19 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.

In response, various governmental authorities and private enterprises have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

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

Those operations have been materially adversely affected by restrictive government and private enterprise measures implemented in response to the pandemic.

Some of our products are particularly sensitive to reductions in elective medical procedures.

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 operations through the first quarter of 2021.

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

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.

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 2021 we completed acquisitions for total net cash consideration of $339 and $54 in future milestone payments primarily due upon the achievement of certain regulatory and commercial milestones.

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.

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).

In 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, 2021.

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.

| | | | $ | 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 | | % |

| | | | $ | 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) | | % |

Consolidated net sales in 2020 were significantly negatively impacted by the global response to the COVID-19 pandemic.

Consolidated net sales decreased 3.6% as reported and in constant currency.

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

MedSurg and Neurotechnology net sales in 2020 decreased 1.5% as reported and 1.5% in constant currency.

Gross profit was significantly negatively impacted by the global response to the COVID-19 pandemic in 2020, decreasing as a percentage of net sales to 63.1% from 65.1% in 2019.

Excluding the impact of the items noted below, gross profit decreased to 63.8% from 65.9% in 2019 primarily due to lower sales volumes, lower selling prices, lower manufacturing volumes and unfavorable product mix due to the postponement of elective medical procedures.

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

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.

Excluding the impact of the items noted below, expenses increased to 33.6% in 2021 from 33.1% in 2020 and 33.5% in 2019 primarily due to disciplined ramp up in spending to facilitate our growth.

The increase in 2021 was primarily due to the acquisition of Wright Medical Group N.V. (Wright) in the fourth quarter of 2020.

Operating income as a percentage of sales in 2020 decreased to 15.5% from 18.2% in 2019.

Excluding the impact of the items noted below, operating income decreased to 24.4% in 2020 from 26.3% in 2019 due to unfavorable product mix and the impact of lower sales volumes from the postponement of elective medical procedures partially offset by continued focus on our operating expense savings actions.

The effective income tax rate for 2020 and 2019 reflects the tax effect related to the transfer of intellectual properties between tax jurisdictions, the effective income tax rates as a result of our European operations and the tax effect of future remittances of the undistributed earnings of foreign subsidiaries.

Adjusted net earnings per diluted share(1) of $9.09 increased 22.3% from $7.43 in 2020 compared to $8.26 in 2019.

The impact of foreign currency exchange rates increased net earnings per diluted share by approximately $0.19 in 2021 and reduced net earnings per diluted share by approximately $0.02 and $0.14 in 2020 and 2019.

indicative of our past and future performance.

Our best estimate of the

| Reported | | | $ | 9,696 | | $ | 5,356 | | $ | 971 | | $ | 2,713 | | $ | (151) | | $ | 2,083 | | 18.7 | | % | $ | 5.48 | |

We sell our products globally and, as a result, our [added: operations and] financial results could be significantly affected by [removed: factors such as] market risk exposure from [removed: weak economic conditions,] exchange rate [removed: risk and the impacts of the COVID-19 pandemic on our operations and financial results.][added: risk.]

[removed: We develop and manufacture products in the United States, Canada, China,] [added: Costa Rica,] France, Germany, India, Ireland, Mexico, [removed: Puerto Rico, Switzerland and] [added: Switzerland,] Turkey and [added: United Kingdom 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: 2021] [added: 2022] fair value of these instruments by approximately [removed: $514.][added: $388.]

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

We develop and manufacture products in the United States, Canada, China,

STRYKER CORPORATION 2022 FORM 10-K

| | | | | | |

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

We are not able to quantify the impacts of the COVID-19 pandemic on our financial results.

Qualitative disclosures about the COVID-19 pandemic are included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part I, Item 1A "Risk Factors" of this Form 10-K.

Stryker Corporation (Stryker or the Company) is one of the world's leading medical technology companies and, together with [removed: its] [added: our] customers, [removed: is] [added: we are] driven to make healthcare better.

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

[removed: ][added: ]

Stryker, a prominent orthopaedic surgeon and [removed: the] inventor of several medical products.

Our products are sold in over 75 countries through company-owned subsidiaries and [removed: branches,] [added: branches] as well [removed: as,] [added: as] third-party dealers and distributors, and include surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment and intensive care disposable products; [added: clinical communication and workflow solutions;] neurosurgical and neurovascular devices; implants used in joint replacement and trauma surgeries; Mako Robotic-Arm Assisted technology; spinal devices; as well as other products used in a variety of medical specialties.

[removed: In the United States most] [added: Most] of our products are marketed directly to doctors, hospitals and other healthcare facilities.

| | | | [removed: 2021] [added: 2022] | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2019] [added: 2020] | | | | | |

| MedSurg and Neurotechnology | | | $ | [removed: 9,538] [added: 10,611] | | [removed: 56] [added: 58] | | % | | | | $ | [removed: 8,345] [added: 9,538] | | [removed: 58] [added: 56] | | % | | | | $ | [removed: 8,475] [added: 8,345] | | [removed: 57] [added: 58] | | % |

| Orthopaedics and Spine | | | [removed: 7,570] [added: 7,838] | | | [removed: 44] [added: 42] | | | | | | [removed: 6,006] [added: 7,570] | | | [removed: 42] [added: 44] | | | | | | [removed: 6,409] [added: 6,006] | | | [removed: 43] [added: 42] | | |

| Total | | | $ | [removed: 17,108] [added: 18,449] | | 100 | | % | | | | $ | [removed: 14,351] [added: 17,108] | | 100 | | % | | | | $ | [removed: 14,884] [added: 14,351] | | 100 | | % |

[added: MedSurg products include surgical equipment, patient and caregiver safety technologies, and navigation systems] (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical [removed: equipment and] [added: equipment,] intensive care disposable products [added: and clinical communication and workflow solutions] (Medical), reprocessed and remanufactured medical devices, and other medical device products used in a variety of medical specialties.

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

| | | | [removed: 2021] [added: 2022] | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2019] [added: 2020] | | | | | |

| Instruments | | | $ | [removed: 2,111] [added: 2,279] | | [removed: 22] [added: 21] | | % | | | | $ | [removed: 1,863] [added: 2,111] | | 22 | | % | | | | $ | [removed: 1,959] [added: 1,863] | | [removed: 23] [added: 22] | | % |

| Endoscopy | | | [removed: 2,141] [added: 2,423] | | | [removed: 22] [added: 23] | | | | | | [removed: 1,763] [added: 2,141] | | | [removed: 21] [added: 22] | | | | | | [removed: 1,983] [added: 1,763] | | | [removed: 23] [added: 21] | | |

| Medical | | | [removed: 2,607] [added: 3,031] | | | [removed: 27] [added: 29] | | | | | | [removed: 2,524] [added: 2,607] | | | [removed: 30] [added: 27] | | | | | | [removed: 2,264] [added: 2,524] | | | [removed: 27] [added: 30] | | |

| Neurovascular | | | [removed: 1,188] [added: 1,200] | | | [removed: 13] [added: 11] | | | | | | [removed: 973] [added: 1,188] | | | [removed: 12] [added: 13] | | | | | | [removed: 924] [added: 973] | | | [removed: 11] [added: 12] | | |

| Neuro Cranial | | | [removed: 1,214] [added: 1,376] | | | 13 | | | | | | [removed: 972] [added: 1,214] | | | [removed: 12] [added: 13] | | | | | | [removed: 1,059] [added: 972] | | | [removed: 13] [added: 12] | | |

| Other | | | [removed: 277] [added: 302] | | | 3 | | | | | | [removed: 250] [added: 277] | | | 3 | | | | | | [removed: 286] [added: 250] | | | 3 | | |

| Total | | | $ | [removed: 9,538] [added: 10,611] | | 100 | | % | | | | $ | [removed: 8,345] [added: 9,538] | | 100 | | % | | | | $ | [removed: 8,475] [added: 8,345] | | 100 | | % |

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

[added: 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.

| | | | [removed: 2021] [added: 2022] | | | | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2019] [added: 2020] | | | | | |

| Knees | | | $ | [removed: 1,848] [added: 1,997] | | 25 | | % | | | | $ | [removed: 1,567] [added: 1,848] | | [removed: 26] [added: 25] | | % | | | | $ | [removed: 1,815] [added: 1,567] | | [removed: 28] [added: 26] | | % |

| Hips | | | [removed: 1,342] [added: 1,413] | | | 18 | | | | | | [removed: 1,206] [added: 1,342] | | | [removed: 20] [added: 18] | | | | | | [removed: 1,383] [added: 1,206] | | | [removed: 22] [added: 20] | | |

| Trauma and Extremities | | | [removed: 2,664] [added: 2,807] | | | [removed: 35] [added: 36] | | | | | | [removed: 1,722] [added: 2,664] | | | [removed: 29] [added: 35] | | | | | | [removed: 1,639] [added: 1,722] | | | [removed: 26] [added: 29] | | |

| Spine | | | [removed: 1,167] [added: 1,146] | | | 15 | | | | | | [removed: 1,047] [added: 1,167] | | | [removed: 17] [added: 15] | | | | | | [removed: 1,157] [added: 1,047] | | | [removed: 18] [added: 17] | | |

| Other | | | [removed: 549] [added: 475] | | | [removed: 7] [added: 6] | | | | | | [removed: 464] [added: 549] | | | [removed: 8] [added: 7] | | | | | | [removed: 415] [added: 464] | | | [removed: 6] [added: 8] | | |

| Total | | | $ | [removed: 7,570] [added: 7,838] | | 100 | | % | | | | $ | [removed: 6,006] [added: 7,570] | | 100 | | % | | | | $ | [removed: 6,409] [added: 6,006] | | 100 | | % |

United States Food and Drug Administration (FDA) approval was received in [removed: 2020,] [added: 2021,] Health Canada approval was received in the [removed: first] [added: fourth] quarter of [removed: 2021] [added: 2022] and [removed: European Union] [added: Japan’s Pharmaceuticals and Medical Devices Agency (PMDA)] approval is [removed: expected] [added: anticipated] in [removed: early 2022.][added: the second half of 2023.]

Where some electronic components have had limited availability due to [removed: current] [added: recent] 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.

[removed: We seek to obtain patent protection on our products] whenever appropriate for protecting our competitive advantage.

On December 31, [removed: 2021] [added: 2022] we owned approximately [removed: 4,458] [added: 4,800] United States patents and approximately [removed: 7,199] [added: 7,300] 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 [added: higher in the fourth quarter.]

In the United States the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act and its subsequent amendments and the regulations issued and proposed thereunder provide for [added: federal] regulation by the FDA of the design, manufacture and marketing of medical devices, including most of our products.

[removed: Many] [added: On the federal level, many] of our new products fall into FDA classifications that require notification submitted as a 510(k) and review by the FDA before we begin marketing them.

The European Union enacted the European Union Medical Device Regulation in May 2017 with an [added: original] effective date of May [removed: 2021,] [added: 2021 (the transition timeline is currently being reevaluated by the European Parliament),] 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.

[removed: A gap analysis against the prior Medical Device Directive (MDD)] [added: been completed] and a [removed: compliance] plan [removed: are] [added: is] being [removed: implemented] [added: executed] for both the European Union and United Kingdom regulations to ensure compliance and minimize business disruption.

[removed: Finally, we] [added: We] are required to comply with the unique regulatory requirements of each country within which we market and sell our products.

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

Alongside our customers around the world, Stryker impacts more than 130 million patients annually.

We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine.

In 2022 Instruments launched the next generation of the System 9 total joint power tool and the CD NXT power tool with automatic depth measurement allowing for fast, accurate and consistent digital depth measurement across a variety of procedures.

Endoscopy expanded its product offering for the Ambulatory Surgery Center (ASC) market with the launch of a new 4K 1688 Autoclavable Camera and SDC4K image capture device.

Endoscopy also launched a new line of fluorescent capable laparoscopes to improve image quality in laparoscopic procedures.

Medical completed the acquisition of Vocera Communications, Inc. (Vocera), a leader in digital care coordination and communication.

Vocera brings a highly complementary and innovative portfolio to Medical that is expected to enhance our Advanced Digital Healthcare offerings and further advance our focus on preventing adverse events throughout the continuum of care.

In addition, Medical launched the Power Pro 2 cot, the industry’s first connected ambulance cot.

In 2022 Neurovascular launched the Vecta 71/74 aspiration system in Japan, Korea, Australia and New Zealand as well as the Cat 7 distal access catheter in China.

We also continued the launch of the next generation of the market leading Synchro guidewire in Asia Pacific.

In 2022 we moved to a full commercial launch of Insignia hip stem in the United States after first clinical use in December 2021.

We seek to obtain patent protection on our products

In addition, state licensing requirements often apply to certain of our business operations and products.

A gap analysis against the prior Medical Device Directive (MDD) has

Listening to and

| As of January 31, 2023 | | | | | | | | | | | |

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

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.

The Mako

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.

higher in the fourth quarter.

The dollar amount of customer backlog orders at any given time is not meaningful to an understanding of our business taken as a whole.

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

price regulation and competitive pricing.

Stryker is made up of hardworking, results-oriented people who are driven to go above and beyond for our customers.

recognized outside consulting firms to ensure fairness and competitiveness in our offerings.

| As of January 31, 2022 | | | | | | | | | | | |

For the fiscal year ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

Yes [removed: ☒ No] ☐ [added: No ☒]

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately [removed: $91,942,474,363] [added: $70,965,162,853] at June 30, [removed: 2021.][added: 2022.]

There were [removed: 377,544,686] [added: 378,831,249] shares outstanding of the registrant’s common stock, $0.10 par value, on January 31, [removed: 2022.][added: 2023.]

Portions of the proxy statement to be filed with the U.S. Securities and Exchange Commission relating to the [removed: 2022] [added: 2023] Annual Meeting of Shareholders (the [removed: 2022] [added: 2023] proxy statement) are incorporated by reference into Part III.

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

| Item 1. | | | Business | | | [removed: [1](#i2e9b98e114ab4a2ba09a958d786789f3_13)] [added: [1](#icec46013a0ad4608b89f97e433dd3417_13)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [4](#i2e9b98e114ab4a2ba09a958d786789f3_16)] [added: [4](#icec46013a0ad4608b89f97e433dd3417_16)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [9](#i2e9b98e114ab4a2ba09a958d786789f3_19)] [added: [9](#icec46013a0ad4608b89f97e433dd3417_19)] | | |

| Item 2. | | | Properties | | | [removed: [9](#i2e9b98e114ab4a2ba09a958d786789f3_22)] [added: [9](#icec46013a0ad4608b89f97e433dd3417_22)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [9](#i2e9b98e114ab4a2ba09a958d786789f3_25)] [added: [10](#icec46013a0ad4608b89f97e433dd3417_25)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [9](#i2e9b98e114ab4a2ba09a958d786789f3_28)] [added: [10](#icec46013a0ad4608b89f97e433dd3417_28)] | | |

| Item 5. | | | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [9](#i2e9b98e114ab4a2ba09a958d786789f3_34)] [added: [10](#icec46013a0ad4608b89f97e433dd3417_34)] | | |

| Item 6. | | | Selected Financial Data | | | [removed: [11](#i2e9b98e114ab4a2ba09a958d786789f3_37)] [added: [11](#icec46013a0ad4608b89f97e433dd3417_37)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [12](#i2e9b98e114ab4a2ba09a958d786789f3_40)] [added: [12](#icec46013a0ad4608b89f97e433dd3417_40)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [19](#i2e9b98e114ab4a2ba09a958d786789f3_73)] [added: [19](#icec46013a0ad4608b89f97e433dd3417_73)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [20](#i2e9b98e114ab4a2ba09a958d786789f3_76)] [added: [21](#icec46013a0ad4608b89f97e433dd3417_76)] | | |

| | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) | | | [removed: [20](#i2e9b98e114ab4a2ba09a958d786789f3_76)] [added: [21](#icec46013a0ad4608b89f97e433dd3417_76)] | | |

| | | | Consolidated Statements of Earnings | | | [removed: [22](#i2e9b98e114ab4a2ba09a958d786789f3_79)] [added: [23](#icec46013a0ad4608b89f97e433dd3417_79)] | | |

| | | | Consolidated Statements of Comprehensive Income | | | [removed: [22](#i2e9b98e114ab4a2ba09a958d786789f3_82)] [added: [23](#icec46013a0ad4608b89f97e433dd3417_82)] | | |

| | | | Consolidated Balance Sheets | | | [removed: [23](#i2e9b98e114ab4a2ba09a958d786789f3_85)] [added: [24](#icec46013a0ad4608b89f97e433dd3417_85)] | | |

| | | | Consolidated Statements of Shareholders’ Equity | | | [removed: [24](#i2e9b98e114ab4a2ba09a958d786789f3_91)] [added: [25](#icec46013a0ad4608b89f97e433dd3417_91)] | | |

| | | | Consolidated Statements of Cash Flows | | | [removed: [25](#i2e9b98e114ab4a2ba09a958d786789f3_94)] [added: [26](#icec46013a0ad4608b89f97e433dd3417_94)] | | |

| | | | Notes to Consolidated Financial Statements | | | [removed: [26](#i2e9b98e114ab4a2ba09a958d786789f3_97)] [added: [27](#icec46013a0ad4608b89f97e433dd3417_97)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [37](#i2e9b98e114ab4a2ba09a958d786789f3_151)] [added: [39](#icec46013a0ad4608b89f97e433dd3417_145)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [38](#i2e9b98e114ab4a2ba09a958d786789f3_154)] [added: [39](#icec46013a0ad4608b89f97e433dd3417_148)] | | |

| Item 9B. | | | Other Information | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_157)] [added: [40](#icec46013a0ad4608b89f97e433dd3417_151)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_157)] [added: [40](#icec46013a0ad4608b89f97e433dd3417_151)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_163)] [added: [40](#icec46013a0ad4608b89f97e433dd3417_160)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_166)] [added: [40](#icec46013a0ad4608b89f97e433dd3417_163)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_169)] [added: [40](#icec46013a0ad4608b89f97e433dd3417_166)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_172)] [added: [41](#icec46013a0ad4608b89f97e433dd3417_169)] | | |

| Item 14. | | | Principal [removed: Accounting] [added: Accountant] Fees and Services | | | [removed: [39](#i2e9b98e114ab4a2ba09a958d786789f3_175)] [added: [41](#icec46013a0ad4608b89f97e433dd3417_172)] | | |

| Item 15. | | | Exhibits, Financial Statement Schedules | | | [removed: [40](#i2e9b98e114ab4a2ba09a958d786789f3_181)] [added: [42](#icec46013a0ad4608b89f97e433dd3417_178)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [43](#i2e9b98e114ab4a2ba09a958d786789f3_187)] [added: [45](#icec46013a0ad4608b89f97e433dd3417_184)] | | |

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

We have approximately [removed: 28] [added: 27] company-owned and [removed: 328] [added: 322] leased locations worldwide including [removed: 50] [added: 48] manufacturing locations.

STRYKER CORPORATION 2022 FORM 10-K

| | | | | | |

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

On January 31, [removed: 2022] [added: 2023] there were [removed: 2,543] [added: 2,523] shareholders of record of our common stock.

We did not repurchase any shares in the three months ended December 31, [removed: 2021] [added: 2022] and the total dollar value of shares that could be acquired under our authorized repurchase program at December 31, [removed: 2021] [added: 2022] was $1,033.

In the fourth quarter [removed: 2021] [added: 2022] we [removed: did not issue] [added: issued 48] shares of our common stock as performance incentive awards to employees.

[removed: When issued, these] [added: These] shares [removed: are] [added: were] not registered under the Securities Act of 1933 based on the conclusion that the awards [removed: would] [added: were] not [removed: be] events of sale within the meaning of Section 2(a)(3) of the Act.

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

The following graph compares our total returns (including [removed: reinvestments] [added: reinvestment] of dividends) against the Standard & Poor’s (S&P) 500 Index and the S&P 500 Health Care Index.

The graph assumes $100 (not in millions) invested on December 31, [removed: 2016] [added: 2017] in our common stock and each of the indices.

[removed: ][added: ]

| Company / Index | | | [removed: 2016 | | |] 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | [added: 2022 | | |]

| Stryker Corporation | | | $ | 100.00 | | $ | 102.43 | | $ | 138.62 | | $ | 163.81 | | $ | 180.56 | | $ | 167.16 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 95.62 | | $ | 125.72 | | $ | 148.85 | | $ | 191.58 | | $ | 156.88 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | $ | 106.47 | | $ | 128.64 | | $ | 145.93 | | $ | 184.07 | | $ | 180.47 | |

| | | | | | |

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

| 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 | |

STRYKER CORPORATION 2021 FORM 10-K

| Statement of Earnings Data | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2017] [added: 2018] | | |

| Net sales | | | | | | $ | [removed: 17,108] [added: 18,449] | | | | | $ | [removed: 14,351] [added: 17,108] | | | | | $ | [removed: 14,884] [added: 14,351] | | | | | $ | [removed: 13,601] [added: 14,884] | | | | | $ | [removed: 12,444] [added: 13,601] | |

| Cost of sales | | | | | | [removed: 6,140] [added: 6,871] | | | | | | [removed: 5,294] [added: 6,140] | | | | | | [removed: 5,188] [added: 5,294] | | | | | | [removed: 4,663] [added: 5,188] | | | | | | [removed: 4,264] [added: 4,663] | | |

| Gross profit | | | | | | $ | [removed: 10,968] [added: 11,578] | | | | | $ | [removed: 9,057] [added: 10,968] | | | | | $ | [removed: 9,696] [added: 9,057] | | | | | $ | [removed: 8,938] [added: 9,696] | | | | | $ | [removed: 8,180] [added: 8,938] | |

| Research, development and engineering expenses | | | | | | [removed: 1,235] [added: 1,454] | | | | | | [removed: 984] [added: 1,235] | | | | | | [removed: 971] [added: 984] | | | | | | [removed: 862] [added: 971] | | | | | | [removed: 787] [added: 862] | | |

| Selling, general and administrative expenses | | | | | | [removed: 6,427] [added: 6,455] | | | | | | [removed: 5,361] [added: 6,427] | | | | | | [removed: 5,356] [added: 5,361] | | | | | | [removed: 5,099] [added: 5,356] | | | | | | [removed: 4,552] [added: 5,099] | | |

| Recall [removed: charges] [added: charges, net] | | | | | | [removed: 103] [added: (15)] | | | | | | [removed: 17] [added: 103] | | | | | | [removed: 192] [added: 17] | | | | | | [removed: 23] [added: 192] | | | | | | [removed: 173] [added: 23] | | |

| Amortization of intangible assets | | | | | | [removed: 619] [added: 627] | | | | | | [removed: 472] [added: 619] | | | | | | [removed: 464] [added: 472] | | | | | | [removed: 417] [added: 464] | | | | | | [removed: 371] [added: 417] | | |

| Total operating expenses | | | | | | $ | [removed: 8,384] [added: 8,737] | | | | | $ | [removed: 6,834] [added: 8,384] | | | | | $ | [removed: 6,983] [added: 6,834] | | | | | $ | [removed: 6,401] [added: 6,983] | | | | | $ | [removed: 5,883] [added: 6,401] | |

| Operating income | | | | | | $ | [removed: 2,584] [added: 2,841] | | | | | $ | [removed: 2,223] [added: 2,584] | | | | | $ | [removed: 2,713] [added: 2,223] | | | | | $ | [removed: 2,537] [added: 2,713] | | | | | $ | [removed: 2,297] [added: 2,537] | |

| Other income (expense), net | | | | | | [removed: (303)] [added: (158)] | | | | | | [removed: (269)] [added: (303)] | | | | | | [removed: (151)] [added: (269)] | | | | | | [removed: (181)] [added: (151)] | | | | | | [removed: (234)] [added: (181)] | | |

| Earnings before income taxes | | | | | | $ | [removed: 2,281] [added: 2,683] | | | | | $ | [removed: 1,954] [added: 2,281] | | | | | $ | [removed: 2,562] [added: 1,954] | | | | | $ | [removed: 2,356] [added: 2,562] | | | | | $ | [removed: 2,063] [added: 2,356] | |

| Income taxes | | | | | | [removed: 287] [added: 325] | | | | | | [removed: 355] [added: 287] | | | | | | [removed: 479] [added: 355] | | | | | | [removed: (1,197)] [added: 479] | | | | | | [removed: 1,043] [added: (1,197)] | | |

| Net earnings | | | | | | $ | [removed: 1,994] [added: 2,358] | | | | | $ | [removed: 1,599] [added: 1,994] | | | | | $ | [removed: 2,083] [added: 1,599] | | | | | $ | [removed: 3,553] [added: 2,083] | | | | | $ | [removed: 1,020] [added: 3,553] | |

| Basic | | | | | | $ | [removed: 5.29] [added: 6.23] | | | | | $ | [removed: 4.26] [added: 5.29] | | | | | $ | [removed: 5.57] [added: 4.26] | | | | | $ | [removed: 9.50] [added: 5.57] | | | | | $ | [removed: 2.73] [added: 9.50] | |

| Diluted | | | | | | $ | [removed: 5.21] [added: 6.17] | | | | | $ | [removed: 4.20] [added: 5.21] | | | | | $ | [removed: 5.48] [added: 4.20] | | | | | $ | [removed: 9.34] [added: 5.48] | | | | | $ | [removed: 2.68] [added: 9.34] | |

| Dividends declared per share of common stock | | | | | | $ | [removed: 2.585] [added: 2.835] | | | | | $ | [removed: 2.355] [added: 2.585] | | | | | $ | [removed: 2.135] [added: 2.355] | | | | | $ | [removed: 1.93] [added: 2.135] | | | | | $ | [removed: 1.745] [added: 1.930] | |

| Cash, cash equivalents and current marketable securities | | | | | | $ | [removed: 3,019] [added: 1,928] | | | | | $ | [removed: 3,024] [added: 3,019] | | | | | $ | [removed: 4,425] [added: 3,024] | | | | | $ | [removed: 3,699] [added: 4,425] | | | | | $ | [removed: 2,793] [added: 3,699] | |

| Accounts receivable, net | | | | | | [removed: 3,022] [added: 3,565] | | | | | | [removed: 2,701] [added: 3,022] | | | | | | [removed: 2,893] [added: 2,701] | | | | | | [removed: 2,332] [added: 2,893] | | | | | | [removed: 2,198] [added: 2,332] | | |

| Inventories | | | | | | [removed: 3,314] [added: 3,995] | | | | | | [removed: 3,494] [added: 3,314] | | | | | | [removed: 2,980] [added: 3,494] | | | | | | [removed: 2,955] [added: 2,980] | | | | | | [removed: 2,465] [added: 2,955] | | |

| Property, plant and equipment, net | | | | | | [removed: 2,833] [added: 2,970] | | | | | | [removed: 2,752] [added: 2,833] | | | | | | [removed: 2,567] [added: 2,752] | | | | | | [removed: 2,291] [added: 2,567] | | | | | | [removed: 1,975] [added: 2,291] | | |

| Total assets | | | | | | $ | [removed: 34,631] [added: 36,884] | | | | | $ | [removed: 34,330] [added: 34,631] | | | | | $ | [removed: 30,167] [added: 34,330] | | | | | $ | [removed: 27,229] [added: 30,167] | | | | | $ | [removed: 22,197] [added: 27,229] | |

| Accounts payable | | | | | | [removed: 1,129] [added: 1,413] | | | | | | [removed: 810] [added: 1,129] | | | | | | [removed: 675] [added: 810] | | | | | | [removed: 646] [added: 675] | | | | | | [removed: 487] [added: 646] | | |

| Total debt | | | | | | [removed: 12,479] [added: 13,048] | | | | | | [removed: 13,991] [added: 12,479] | | | | | | [removed: 11,090] [added: 13,991] | | | | | | [removed: 9,859] [added: 11,090] | | | | | | [removed: 7,222] [added: 9,859] | | |

| Shareholders’ equity | | | | | | $ | [removed: 14,877] [added: 16,616] | | | | | $ | [removed: 13,084] [added: 14,877] | | | | | $ | [removed: 12,807] [added: 13,084] | | | | | $ | [removed: 11,730] [added: 12,807] | | | | | $ | [removed: 9,980] [added: 11,730] | |

| Net cash provided by operating activities | | | | | | $ | [removed: 3,263] [added: 2,624] | | | | | $ | [removed: 3,277] [added: 3,263] | | | | | $ | [removed: 2,191] [added: 3,277] | | | | | $ | [removed: 2,610] [added: 2,191] | | | | | $ | [removed: 1,559] [added: 2,610] | |

| Purchases of property, plant and equipment | | | | | | [removed: 525] [added: 588] | | | | | | [removed: 487] [added: 525] | | | | | | [removed: 649] [added: 487] | | | | | | [removed: 572] [added: 649] | | | | | | [removed: 598] [added: 572] | | |

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

| Acquisitions, net of cash acquired | | | | | | [removed: 339] [added: 2,563] | | | | | | [removed: 4,222] [added: 339] | | | | | | [removed: 802] [added: 4,222] | | | | | | [removed: 2,451] [added: 802] | | | | | | [removed: 831] [added: 2,451] | | |

| Amortization of intangible assets | | | | | | [removed: 619] [added: 627] | | | | | | [removed: 472] [added: 619] | | | | | | [removed: 464] [added: 472] | | | | | | [removed: 417] [added: 464] | | | | | | [removed: 371] [added: 417] | | |

| Payments of dividends | | | | | | [removed: 950] [added: 1,051] | | | | | | [removed: 863] [added: 950] | | | | | | [removed: 778] [added: 863] | | | | | | [removed: 703] [added: 778] | | | | | | [removed: 636] [added: 703] | | |

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

| Number of shareholders of record | | | | | | [removed: 2,551] [added: 2,533] | | | | | | [removed: 2,597] [added: 2,551] | | | | | | [removed: 2,636] [added: 2,597] | | | | | | [removed: 2,732] [added: 2,636] | | | | | | [removed: 2,850] [added: 2,732] | | |

| Approximate number of employees | | | | | | [removed: 46,000] [added: 51,000] | | | | | | [removed: 43,000] [added: 46,000] | | | | | | [removed: 40,000] [added: 43,000] | | | | | | [removed: 36,000] [added: 40,000] | | | | | | [removed: 33,000] [added: 36,000] | | |

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

| Goodwill impairment | | | | | | 216 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

We have audited the accompanying consolidated balance sheets of Stryker Corporation and subsidiaries (the Company) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial 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: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] 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 [removed: 11, 2022] [added: 10, 2023] expressed an unqualified opinion thereon.

| [added: Product-related liabilities] | | | [removed: Product Liabilities] [added: 26] | | | [added: | | | 39 | | |]

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

| *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. [removed: Uncertainty in a] [added: Assessing] tax [removed: position may arise because] [added: positions involves judgment including interpreting] tax laws [removed: are subject to interpretation. The Company uses significant judgment] [added: of multiple jurisdictions and assumptions relevant] to [removed: (1) determine whether, based on] the [removed: technical merits, a] [added: measurement of an unrecognized] tax [added: benefit, including the estimated amount of tax liability that may be incurred should the tax] position [removed: is more likely than] not [removed: to] be sustained [added: upon inspection by a tax authority. These judgments] and [removed: (2) measure] [added: assumptions can significantly affect] the [removed: amount of tax benefit that qualifies] [added: reserve] for [removed: recognition.] [added: uncertain tax positions.] At December 31, [removed: 2021,] [added: 2022,] the Company had accrued liabilities of [removed: $444] [added: $286] million relating to uncertain tax positions. [removed: 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 [removed: benefits.] [added: benefits when recorded.] Our audit procedures [removed: included, among others, evaluating the assumptions the Company used] to [removed: develop its] [added: test the Company’s] uncertain tax positions [removed: and related unrecognized income] [added: included, among others, involvement of our] tax [removed: benefit amounts] [added: professionals, including transfer pricing professionals. This included evaluating third-party transfer pricing studies obtained] by [removed: jurisdiction. We also tested] the [removed: completeness] [added: Company] and [removed: accuracy of] [added: assessing] the [removed: underlying data used by] [added: Company’s correspondence with] the [removed: Company to calculate its uncertain tax positions. For example, we involved our tax professionals to evaluate] [added: relevant] tax [removed: technical merits, which included, for certain intercompany transactions, assessing] [added: authorities. We analyzed] the Company’s assumptions and [removed: pricing methodology] [added: data used] to determine [removed: they were arm’s length and complied with local jurisdictional laws] [added: the amount of tax benefit to recognize] and [removed: regulations. We] [added: tested the accuracy of the calculations. Our testing] also [removed: evaluated] [added: included] the [removed: estimated liabilities for unrecognized income tax benefits in] [added: evaluation of the ongoing positions and] consideration of [removed: current tax controversy] [added: changes, the recording of penalties] and [removed: litigation trends in similar positions challenged by] [added: interest and the ultimate settlement and payment of certain] tax [removed: authorities.] [added: matters.] We also evaluated the adequacy of the Company’s disclosures included in Note 11 related to these tax matters. | | |

[removed: February 11, 2022][added: | | | | 2022 | | |]

STRYKER CORPORATION [removed: 2021] [added: 2022] FORM 10-K

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net sales | | | $ | [removed: 17,108] [added: 18,449] | | | | | $ | [removed: 14,351] [added: 17,108] | | | | | $ | [removed: 14,884] [added: 14,351] | |

| Cost of sales | | | [removed: 6,140] [added: 6,871] | | | | | | [removed: 5,294] [added: 6,140] | | | | | | [removed: 5,188] [added: 5,294] | | |

| Gross profit | | | $ | [removed: 10,968] [added: 11,578] | | | | | $ | [removed: 9,057] [added: 10,968] | | | | | $ | [removed: 9,696] [added: 9,057] | |

| Research, development and engineering expenses | | | [removed: 1,235] [added: 1,454] | | | | | | [removed: 984] [added: 1,235] | | | | | | [removed: 971] [added: 984] | | |

| Selling, general and administrative expenses | | | [removed: 6,427] [added: 6,455] | | | | | | [removed: 5,361] [added: 6,427] | | | | | | [removed: 5,356] [added: 5,361] | | |

| Recall [removed: charges] [added: charges, net] | | | [removed: 103] [added: (15)] | | | | | | [removed: 17] [added: 103] | | | | | | [removed: 192] [added: 17] | | |

| Amortization of intangible assets | | | [removed: 619] [added: 627] | | | | | | [removed: 472] [added: 619] | | | | | | [removed: 464] [added: 472] | | |

| Total operating expenses | | | $ | [removed: 8,384] [added: 8,737] | | | | | $ | [removed: 6,834] [added: 8,384] | | | | | $ | [removed: 6,983] [added: 6,834] | |