Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ABOUT STRYKER

Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology, Orthopaedics and Spine that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually.

We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine. MedSurg and Neurotechnology products include surgical equipment and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke (Neurovascular), a comprehensive line of products for traditional brain and open skull based surgical procedures; orthobiologic and biosurgery products, including synthetic bone grafts and vertebral augmentation products (Neuro Cranial). Orthopaedics and Spine products consist primarily of implants used in hip and knee joint replacements and trauma and extremity surgeries, and cervical, thoracolumbar and interbody systems used in spinal injury, deformity and degenerative therapies.

Macroeconomic Environment

The global economy continues to experience inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts of the macroeconomic environment which we anticipate will continue. Higher interest rates and capital costs, higher shipping costs, increased costs of labor, fluctuating foreign currency exchange rates and the military conflicts in Russia and Ukraine and the Middle East result in additional economic challenges and uncertainties. These conditions may cause our customers to decrease or delay orders for our products and services, and the higher interest rates may impact deal mix for our capital products.

Overview of the Three and Six Months

In the three months 2024 we achieved sales growth of 8.5% from 2023. Excluding the impact of acquisitions and divestitures, sales grew 9.0% in constant currency. We reported operating income margin of 19.4%, net earnings of $825 and net earnings per diluted share of $2.14. Excluding the impact of certain items, adjusted operating income margin(1) increased by 30 basis points to 24.6%, with adjusted net earnings(1) of $1,085 and adjusted net earnings per diluted share(1) of $2.81, an increase of 10.6% from 2023.

In the six months 2024 we achieved sales growth of 9.1% from 2023. Excluding the impact of acquisitions and divestitures, sales grew 9.5% in constant currency. We reported operating income margin of 19.0%, net earnings of $1,613 and net earnings per diluted share of $4.19. Excluding the impact of certain items, adjusted operating income margin(1) increased by 60 basis points to 23.3%, with adjusted net earnings(1) of $2,047 and adjusted net earnings per diluted share(1) of $5.31, an increase of 13.5% from 2023.

Recent Developments

On March 20, 2024 we acquired SERF for net cash consideration of $244. SERF's implants strengthen the global portfolio of our Joint Replacement business within Orthopaedics and Spine. Refer to Note 7 to our Consolidated Financial Statements for further information.

(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-GAAP financial measures used in this report and a reconciliation to the most directly comparable GAAP financial measure.

CONSOLIDATED RESULTS OF OPERATIONS
			Three Months																														Six Months
															Percent Net Sales												Percentage																		Percent Net Sales												Percentage
			2024						2023						2024						2023						Change						2024						2023						2024						2023						Change
Net sales			$	5,422					$	4,996					100.0		%				100.0		%				8.5		%				$	10,665					$	9,774					100.0		%				100.0		%				9.1		%
Gross profit			3,416						3,181						63.0						63.7						7.4						6,749						6,197						63.3						63.4						8.9
Research, development and engineering expenses			363						346						6.7						6.9						4.9						731						685						6.9						7.0						6.7
Selling, general and administrative expenses			1,847						1,709						34.1						34.2						8.1						3,687						3,490						34.6						35.7						5.6
Amortization of intangible assets			155						161						2.9						3.2						(3.7)						308						322						2.9						3.3						(4.3)
Other income (expense), net			(53)						(66)						(1.0)						(1.3)						(19.7)						(102)						(122)						(1.0)						(1.2)						(16.4)
Income taxes			173						161						nm						nm						7.5						308						248						nm						nm						24.2
Net earnings			$	825					$	738					15.2		%				14.8		%				11.8		%				$	1,613					$	1,330					15.1		%				13.6		%				21.3		%
Net earnings per diluted share			$	2.14					$	1.93																	10.9		%				$	4.19					$	3.47																	20.7		%
Adjusted net earnings per diluted share**(1)**			$	2.81					$	2.54																	10.6		%				$	5.31					$	4.68																	13.5		%

nm - not meaningful

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

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

Geographic and Segment Net Sales			Three Months																					Six Months
															Percentage Change																					Percentage Change
			2024						2023						As Reported			Constant Currency						2024						2023						As Reported			Constant Currency
Geographic:
United States			$	4,047					$	3,711					9.1		%	9.1		%				$	7,961					$	7,223					10.2		%	10.2		%
International			1,375						1,285						7.0			10.5						2,704						2,551						6.0			8.7
Total			$	5,422					$	4,996					8.5		%	9.4		%				$	10,665					$	9,774					9.1		%	9.8		%
Segment:
MedSurg and Neurotechnology			$	3,117					$	2,860					9.0		%	9.8		%				$	6,116					$	5,550					10.2		%	10.8		%
Orthopaedics and Spine			2,305						2,136						7.9			8.9						4,549						4,224						7.7			8.5
Total			$	5,422					$	4,996					8.5		%	9.4		%				$	10,665					$	9,774					9.1		%	9.8		%

Supplemental Net Sales Growth Information
			Three Months																																				Six Months
															Percentage Change																																				Percentage Change
																								United States						International																														United States						International
			2024						2023						As Reported			Constant Currency						As Reported						As Reported			Constant Currency						2024						2023						As Reported			Constant Currency						As Reported						As Reported			Constant Currency
MedSurg and Neurotechnology:
Instruments			$	698					$	622					12.3		%	12.9		%				12.3		%				12.4		%	15.4		%				$	1,365					$	1,188					14.9		%	15.3		%				16.0		%				10.4		%	12.5		%
Endoscopy			768						713						7.6			8.3						8.2						5.3			9.0						1,546						1,420						8.9			9.4						9.6						5.6			8.6
Medical			908						841						8.0			8.4						11.9						(8.7)			(6.5)						1,772						1,619						9.4			9.7						14.2						(9.5)			(8.1)
Neurovascular			327						311						5.3			8.0						2.3						7.3			11.8						637						595						7.1			9.6						2.6						10.2			14.5
Neuro Cranial			416						373						11.6			12.2						10.6						16.2			19.9						796						728						9.3			9.9						8.9						11.4			14.7
			$	3,117					$	2,860					9.0		%	9.8		%				10.3		%				4.9		%	8.3		%				$	6,116					$	5,550					10.2		%	10.8		%				12.0		%				4.6		%	7.3		%
Orthopaedics and Spine:
Knees			$	602					$	562					7.1		%	8.0		%				6.6		%				8.2		%	11.7		%				$	1,190					$	1,128					5.5		%	6.2		%				4.8		%				7.3		%	10.0		%
Hips			428						393						8.9			10.6						4.3						16.9			21.7						821						768						7.0			8.4						5.5						9.6			13.5
Trauma and Extremities			832						766						8.6			9.3						9.1						7.4			9.8						1,662						1,535						8.3			8.6						9.7						4.5			5.9
Spine			307						296						3.8			4.4						4.4						2.0			4.3						607						580						4.6			5.0						4.1						6.0			7.6
Other			136						119						14.3			16.4						15.4						11.7			18.9						269						213						26.2			28.7						28.1						22.1			29.9
			$	2,305					$	2,136					7.9		%	8.9		%				7.3		%				9.4		%	12.9		%				$	4,549					$	4,224					7.7		%	8.5		%				7.8		%				7.5		%	10.1		%
Total			$	5,422					$	4,996					8.5		%	9.4		%				9.1		%				7.0		%	10.5		%				$	10,665					$	9,774					9.1		%	9.8		%				10.2		%				6.0		%	8.7		%

Note: Beginning in the first quarter 2024, a product line previously included in Instruments has been reclassified to Endoscopy to align with a change in our internal reporting structure. We have reflected this change in all historical periods presented.

Consolidated Net Sales

Consolidated net sales increased 8.5% in the three months 2024 as reported and 9.4% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.9%. Excluding the 0.4% impact of acquisitions and divestitures, net sales in constant currency increased by 7.9% from increased unit volume and 1.1% due to higher prices. The unit volume increase was due to higher product shipments across all MedSurg and Neurotechnology and Orthopaedics and Spine businesses.

Consolidated net sales increased 9.1% in the six months 2024 as reported and 9.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.7%. Excluding the 0.3% impact of acquisitions and divestitures, net sales in constant currency increased by 8.6% from increased unit volume and 0.9% due to higher prices. The unit volume increase was due to higher product shipments across all MedSurg and Neurotechnology and Orthopaedics and Spine businesses.

MedSurg and Neurotechnology Net Sales

MedSurg and Neurotechnology net sales increased 9.0% in the three months 2024 as reported and 9.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 0.1% impact of acquisitions and divestitures, net sales in constant currency increased by 7.6% from increased unit volume and 2.1% from higher prices. The unit volume

increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

MedSurg and Neurotechnology net sales increased 10.2% in the six months 2024 as reported and 10.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%. Excluding the 0.2% impact of acquisitions and divestitures, net sales in constant currency increased by 8.8% from increased unit volume and 1.8% from higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

Orthopaedics and Spine Net Sales

Orthopaedics and Spine net sales increased 7.9% in the three months 2024 as reported and 8.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Excluding the 0.9% impact of acquisitions and divestitures, net sales in constant currency increased 8.4% from increased unit volume partially offset by 0.4% from lower prices. The unit volume increase was due to higher shipments across all Orthopaedics and Spine businesses.

Orthopaedics and Spine net sales increased 7.7% in the six months 2024 as reported and 8.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 0.5% impact of acquisitions and divestitures, net sales in constant currency increased 8.3% from increased unit volume partially offset by 0.3% from lower prices. The unit volume increase was due to higher shipments across all Orthopaedics and Spine businesses.

Dollar amounts are in millions except per share amounts or as otherwise specified.			11

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

Gross Profit

Gross profit was $3,416 and $3,181 in the three months 2024 and 2023. The key components of the change were:

			Gross Profit Percent Net Sales
Three Months 2023			63.7		%
Sales pricing			40 bps
Volume and mix			50 bps
Manufacturing and supply chain costs			(80) bps
Structural optimization and other special charges			(60) bps
Inventory stepped up to fair value			(20) bps
Three Months 2024			63.0		%

Gross profit as a percentage of net sales in the three months 2024 decreased to 63.0% from 63.7% in 2023 primarily due to higher manufacturing and supply chain costs and structural optimization and other special charges partially offset by favorable volumes and higher sales prices.

Gross profit was $6,749 and $6,197 in the six months 2024 and 2023. The key components of the change were:

			Gross Profit Percent Net Sales
Six Months 2023			63.4		%
Sales pricing			30 bps
Volume and mix			50 bps
Manufacturing and supply chain costs			(50) bps
Structural optimization and other special charges			(30) bps
Inventory stepped up to fair value			(10) bps
Six Months 2024			63.3		%

Gross profit as a percentage of net sales in the six months 2024 remained relatively flat with 2023.

While segment mix was not a significant driver of the change in gross profit as a percent of net sales between the three and six months 2024 and 2023, we generally expect segment mix to have an unfavorable impact for the foreseeable future as we anticipate more rapid sales growth in our lower gross margin MedSurg and Neurotechnology segment than our Orthopaedics and Spine segment.

Research, Development and Engineering Expenses

Research, development and engineering expenses increased $17 or 4.9% in the three months 2024. As a percentage of net sales, expenses in the three months 2024 of 6.7% was relatively consistent with the three months 2023 of 6.9%.

Research, development and engineering expenses increased $46 or 6.7% in the six months 2024. As a percentage of net sales, expenses in the six months 2024 of 6.9% was relatively consistent with the six months 2023 of 7.0%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $138 or 8.1% in the three months 2024. As a percentage of net sales, expenses in the three months 2024 of 34.1% was relatively consistent with the three months 2023 of 34.2%.

Selling, general and administrative expenses increased $197 or 5.6% in the six months 2024 and decreased as a percentage of net sales to 34.6% from 35.7% in 2023, primarily due to higher charges in the six months 2023 for structural optimization and certain legal matters, in addition to continued spend discipline in the six months 2024.

Amortization of Intangible Assets

Amortization of intangible assets was $155 and $161 in the three months and $308 and $322 in the six months 2024 and 2023.

Refer to Note 7 to our Consolidated Financial Statements for further information.

Operating Income

Operating income was $1,051 and $965 in the three months 2024 and 2023. Operating income as a percentage of net sales in the three months 2024 increased to 19.4% from 19.3% in 2023. Refer to the discussion above for the primary drivers of the change.

Operating income was $2,023 and $1,700 in the six months 2024 and 2023. Operating income as a percentage of net sales in the six months 2024 increased to 19.0% from 17.4% in 2023. Refer to the discussion above for the primary drivers of the change.

MedSurg and Neurotechnology operating income as a percentage of net sales increased to 27.6% in the three months 2024 from 27.3% in 2023. Orthopaedics and Spine operating income as a percentage of net sales increased to 29.3% in the three months 2024 from 28.1% in 2023. The key components of the change were:

			Operating Income Percent Net Sales
			MedSurg and Neurotechnology			Orthopaedics and Spine
Three Months 2023			27.3		%	28.1		%
Sales pricing			150 bps			(30) bps
Volume			250 bps			740 bps
Manufacturing and supply chain costs			(90) bps			(320) bps
Research, development and engineering expenses			(80) bps			(60) bps
Selling, general and administrative expenses			(200) bps			(210) bps
Three Months 2024			27.6		%	29.3		%

The increase in MedSurg and Neurotechnology operating income as a percentage of net sales for the three months was primarily driven by higher unit volumes and higher prices partially offset by higher selling, general and administrative expenses, higher manufacturing and supply chain costs and higher research, development and engineering expenses due to disciplined increases in spend and investments to support our growth.

The increase in Orthopaedics and Spine operating income as a percentage of net sales for the three months was primarily driven by higher unit volumes partially offset by higher manufacturing and supply chain costs and higher selling, general and administrative expenses.

MedSurg and Neurotechnology operating income as a percentage of net sales increased to 27.2% in the six months 2024 from 25.4% in 2023. Orthopaedics and Spine operating income as a percentage of net sales decreased to 28.2% in the six months 2024 from 28.5% in 2023. The key components of the change were:

			Operating Income Percent Net Sales
			MedSurg and Neurotechnology			Orthopaedics and Spine
Six Months 2023			25.4		%	28.5		%
Sales pricing			130 bps			(20) bps
Volume			300 bps			410 bps
Manufacturing and supply chain costs			40 bps			(150) bps
Research, development and engineering expenses			(90) bps			(70) bps
Selling, general and administrative expenses			(200) bps			(200) bps
Six Months 2024			27.2		%	28.2		%

The increase in MedSurg and Neurotechnology operating income as a percentage of net sales for the six months was primarily

Dollar amounts are in millions except per share amounts or as otherwise specified.			12

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

driven by higher unit volumes and higher prices partially offset by higher selling, general and administrative expenses and higher research, development and engineering expenses due to disciplined increases in spend and investments to support our growth.

The decrease in Orthopaedics and Spine operating income as a percentage of net sales for the six months was primarily driven by higher selling, general and administrative expenses, higher manufacturing and supply chain costs and higher research, development and engineering expenses due to disciplined increases in spend and investments to support our growth partially offset by higher unit volumes.

Other Income (Expense), Net

Other income (expense), net was ($53) and ($66) in the three months and ($102) and ($122) in the six months 2024 and 2023.

Income Taxes

Our effective tax rates were 17.3% and 16.0% in the three and six months 2024 and 17.9% and 15.7% in the three and six months 2023. The effective tax rates for the three and six months 2024 and 2023 reflect the continued lower effective income tax rates as a result of our European operations and certain discrete tax items. The Organisation for Economic Cooperation and Development (OECD), which represents a coalition of member countries, has put forth two proposed base erosion and profit shifting frameworks that revise the existing profit allocation and nexus rules (Pillar One) and ensure a minimal level of taxation (Pillar Two). On December 12, 2022 the European Union member states agreed to implement the Inclusive Framework’s global corporate minimum tax rate of 15%, and various countries within and outside the European Union have either enacted or proposed new tax laws implementing Pillar Two in 2024. The OECD continues to release additional guidance and we anticipate more countries will enact similar tax laws. Some of the new tax laws are effective in 2024 while others will be effective in future years. These tax law changes and any additional contemplated tax law changes could increase tax expense in future periods.

Net Earnings

Net earnings increased to $825 or $2.14 per diluted share in the three months 2024 from $738 or $1.93 per diluted share in 2023. Net earnings increased to $1,613 or $4.19 per diluted share in the six months 2024 from $1,330 or $3.47 per diluted share in 2023. Refer to the discussion above for the primary drivers of the change.

Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures. To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rates excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded. These adjustments are irregular in timing and may not be indicative of our past and future performance. The following are examples of the types of adjustments that may be included in a period:

1.Acquisition and integration-related costs. Costs related to integrating recently acquired businesses (e.g., costs associated with the termination of sales relationships, employee retention and workforce reductions, manufacturing integration costs and other integration-related activities), changes in the fair value of contingent consideration, amortization of inventory stepped-up to fair value, specific costs (e.g., deal costs and costs associated with legal entity rationalization) related to the consummation of the acquisition process and legal entity rationalization and acquisition-related tax items.

2.Amortization of purchased intangible assets. Periodic amortization expense related to purchased intangible assets.

3.Structural optimization and other special charges. Costs associated with employee retention and workforce reductions, the closure or transfer of manufacturing and other facilities (e.g., site closure costs, contract termination costs and redundant employee costs during the work transfers), product line exits (primarily inventory, long-lived

Dollar amounts are in millions except per share amounts or as otherwise specified.			13

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

asset and specifically-identified intangible asset write-offs), certain long-lived and intangible asset write-offs and impairments and other charges.

4.Medical device regulations. Costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the new medical device reporting regulations and other requirements of the European Union.

5.Recall-related matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve the Rejuvenate, LFIT V40, Wright legacy hip products and other product recalls.

6.Regulatory and legal matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

7.Tax matters. Impact of accounting for certain significant and discrete tax items.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, income taxes, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Consolidated Results of

Operations below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The weighted-average diluted shares outstanding used in the calculation of adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2024			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	3,416		$	1,847		$	363		$	1,051		$	(53)		$	173		$	825		17.3		%	$	2.14
Reported percent net sales			63.0		%	34.1		%	6.7		%	19.4		%	(1.0)		%	nm			15.2		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			9			—			—			9			—			2			7			0.1			0.02
Other acquisition and integration-related (a)			—			(14)			—			14			—			2			12			0.1			0.03
Amortization of purchased intangible assets			—			—			—			155			—			32			123			0.8			0.33
Structural optimization and other special charges (b)			40			(35)			—			75			—			17			58			0.5			0.15
Medical device regulations (c)			4			—			(11)			15			—			4			11			0.1			0.02
Recall-related matters (d)			11			(6)			—			17			—			4			13			0.1			0.03
Regulatory and legal matters (e)			—			2			—			(2)			—			(1)			(1)			—			—
Tax matters (f)			—			—			—			—			(1)			(38)			37			(3.8)			0.09
Adjusted			$	3,480		$	1,794		$	352		$	1,334		$	(54)		$	195		$	1,085		15.2		%	$	2.81
Adjusted percent net sales			64.2		%	33.1		%	6.5		%	24.6		%	(1.0)		%	nm			20.0		%

Dollar amounts are in millions except per share amounts or as otherwise specified.			14

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

Three Months 2023			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	3,181		$	1,709		$	346		$	965		$	(66)		$	161		$	738		17.9		%	$	1.93
Reported percent net sales			63.7		%	34.2		%	6.9		%	19.3		%	(1.3)		%	nm			14.8		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			—			—			—			—			—			—			—			—			—
Other acquisition and integration-related (a)			—			(2)			—			2			—			2			—			0.1			—
Amortization of purchased intangible assets			—			—			—			161			—			34			127			1.1			0.33
Structural optimization and other special charges (b)			9			(63)			—			72			—			17			55			0.7			0.14
Medical device regulations (c)			—			—			(27)			27			—			8			19			0.4			0.05
Recall-related matters (d)			—			(3)			—			3			—			1			2			—			0.01
Regulatory and legal matters (e)			—			14			—			(14)			—			(3)			(11)			(0.1)			(0.03)
Tax matters (f)			—			—			—			—			—			(46)			46			(4.9)			0.11
Adjusted			$	3,190		$	1,655		$	319		$	1,216		$	(66)		$	174		$	976		15.2		%	$	2.54
Adjusted percent net sales			63.9		%	33.1		%	6.4		%	24.3		%	(1.3)		%	nm			19.5		%

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

			Three Months
			2024						2023
Termination of sales relationships			$	2					$	—
Employee retention and workforce reductions			4						—
Changes in the fair value of contingent consideration			2						(2)
Manufacturing integration costs			1						—
Other integration-related activities			5						4
Adjustments to Operating Income			$	14					$	2
Adjustments to Income Taxes			$	2					$	2
Adjustments to Net Earnings			$	12					$	—

(b) Structural optimization and other special charges represent the costs associated with:

			Three Months
			2024						2023
Employee retention and workforce reductions			$	3					$	47
Closure/transfer of manufacturing and other facilities			10						12
Product line exits			15						6
Certain long-lived and intangible asset write-offs and impairments			7						2
Termination of sales relationships in certain countries			1						—
Other charges			39						5
Adjustments to Operating Income			$	75					$	72
Adjustments to Income Taxes			$	17					$	17
Adjustments to Net Earnings			$	58					$	55

(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(d) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

			Three Months
			2024						2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions			$	(47)					$	(47)
Certain tax audit settlements			(2)						(4)
Other tax matters			11						5
Adjustments to Income Taxes			$	(38)					$	(46)
Benefits for certain tax audit settlements			(1)						—
Adjustments to Other Income (Expense), Net			$	(1)					$	—
Adjustments to Net Earnings			$	37					$	46

Dollar amounts are in millions except per share amounts or as otherwise specified.			15

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

Six Months 2024			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	6,749		$	3,687		$	731		$	2,023		$	(102)		$	308		$	1,613		16.0		%	$	4.19
Reported percent net sales			63.3		%	34.6		%	6.9		%	19.0		%	(1.0)		%	nm			15.1		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			9			—			—			9			—			2			7			0.1			0.02
Other acquisition and integration-related (a)			—			(1)			—			1			—			3			(2)			0.2			(0.01)
Amortization of purchased intangible assets			—			—			—			308			—			64			244			1.1			0.64
Structural optimization and other special charges (b)			43			(46)			—			89			—			20			69			0.4			0.18
Medical device regulations (c)			5			—			(23)			28			—			7			21			0.1			0.05
Recall-related matters (d)			11			(11)			—			22			—			5			17			0.1			0.04
Regulatory and legal matters (e)			—			—			—			—			—			—			—			—			—
Tax matters (f)			—			—			—			—			(1)			(79)			78			(4.1)			0.20
Adjusted			$	6,817		$	3,629		$	708		$	2,480		$	(103)		$	330		$	2,047		13.9		%	$	5.31
Adjusted percent net sales			63.9		%	34.0		%	6.6		%	23.3		%	(1.0)		%	nm			19.2		%

Six Months 2023			Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes			Net Earnings			Effective Tax Rate			Diluted EPS
Reported			$	6,197		$	3,490		$	685		$	1,700		$	(122)		$	248		$	1,330		15.7		%	$	3.47
Reported percent net sales			63.4		%	35.7		%	7.0		%	17.4		%	(1.2)		%	nm			13.6		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value			—			—			—			—			—			—			—			—			—
Other acquisition and integration-related (a)			—			(8)			—			8			—			3			5			0.1			0.01
Amortization of purchased intangible assets			—			—			—			322			—			68			254			1.4			0.66
Structural optimization and other special charges (b)			11			(103)			—			114			—			25			89			0.6			0.23
Medical device regulations (c)			—			—			(55)			55			—			13			42			0.3			0.11
Recall-related matters (d)			—			(3)			—			3			—			1			2			—			0.01
Regulatory and legal matters (e)			—			(20)			—			20			—			3			17			—			0.04
Tax matters (f)			—			—			—			—			(9)			(66)			57			(4.0)			0.15
Adjusted			$	6,208		$	3,356		$	630		$	2,222		$	(131)		$	295		$	1,796		14.1		%	$	4.68
Adjusted percent net sales			63.5		%	34.3		%	6.4		%	22.7		%	(1.3)		%	nm			18.4		%

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:

			Six Months
			2024						2023
Termination of sales relationships			$	3					$	—
Employee retention and workforce reductions			4						—
Changes in the fair value of contingent consideration			(14)						(3)
Manufacturing integration costs			1						2
Other integration-related activities			7						9
Adjustments to Operating Income			$	1					$	8
Adjustments to Income Taxes			$	3					$	3
Adjustments to Net Earnings			$	(2)					$	5

(b) Structural optimization and other special charges represent the costs associated with:

			Six Months
			2024						2023
Employee retention and workforce reductions			$	2					$	68
Closure/transfer of manufacturing and other facilities			16						24
Product line exits			15						9
Certain long-lived and intangible asset write-offs and impairments			10						3
Termination of sales relationships in certain countries			1						—
Other charges			45						10
Adjustments to Operating Income			$	89					$	114
Adjustments to Income Taxes			$	20					$	25
Adjustments to Net Earnings			$	69					$	89

(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(d) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:

Dollar amounts are in millions except per share amounts or as otherwise specified.			16

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

			Six Months
			2024						2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions			$	(94)					$	(94)
Certain tax audit settlements			(2)						24
Other tax matters			17						4
Adjustments to Income Taxes			$	(79)					$	(66)
Benefits for certain tax audit settlements			(1)						(9)
Adjustments to Other Income (Expense), Net			$	(1)					$	(9)
Adjustments to Net Earnings			$	78					$	57

FINANCIAL CONDITION AND LIQUIDITY

			Six Months
Net cash provided by (used in):			2024						2023
Operating activities			$	837					$	1,133
Investing activities			(525)						(665)
Financing activities			(1,384)						(886)
Effect of exchange rate changes			(25)						(25)
Change in cash and cash equivalents			$	(1,097)					$	(443)

Operating Activities

Cash provided by operating activities was $837 and $1,133 in the six months 2024 and 2023. The decrease was primarily due to the timing of payments and collections in working capital accounts partially offset by higher net earnings.

Investing Activities

Cash used in investing activities was $525 and $665 in the six months 2024 and 2023. The six months 2024 included cash paid for the SERF acquisition partially offset by proceeds from the settlement of certain foreign currency forward contracts designated as net investment hedges. The six months 2023 included cash paid for the Cerus acquisition. Refer to Notes 4 and 7 to our Consolidated Financial Statements for further information on derivative instruments and acquisitions.

Financing Activities

Cash used in financing activities was $1,384 and $886 in the six months 2024 and 2023. Cash used in 2024 was primarily comprised of the repayment of the outstanding $600 principal amount of maturing senior unsecured notes, dividend payments of $609 and cash paid for taxes on withheld shares of $127. Cash used in 2023 was primarily driven by a repayment of $200 on the term loan used to fund the acquisition of Vocera, dividend payments of $569 and cash paid for taxes on withheld shares of $111.

We did not repurchase any shares in the six months 2024 and 2023.

Liquidity

Cash, cash equivalents and marketable securities were $1,957 and $3,053 on June 30, 2024 and December 31, 2023. Current assets exceeded current liabilities by $4,719 and $4,597 on June 30, 2024 and December 31, 2023. We anticipate being able to support our short-term liquidity and operating needs from a variety of sources including cash from operations, commercial paper and existing credit lines.

We have raised funds in the capital markets and have accessed the credit markets in the past and may continue to do so from time-to-time. We continue to have strong investment-grade short-term and long-term debt ratings that we believe should enable us to refinance our debt as needed.

Our cash, cash equivalents and marketable securities held in locations outside the United States was 31% on June 30, 2024 compared to 25% on December 31, 2023.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for 2023.

New Accounting Pronouncements Not Yet Adopted

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

Guarantees and Other Off-Balance Sheet Arrangements

We do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, of a magnitude that we believe could have a material impact on our financial condition or liquidity.

OTHER MATTERS

Legal and Regulatory Matters

We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of our business, including proceedings related to product, labor, intellectual property and other matters. Refer to Note 6 to our Consolidated Financial Statements for further information.

FORWARD-LOOKING STATEMENTS

This report contains statements that are not historical facts and are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current projections about operations, industry conditions, financial condition and liquidity. Words that identify forward-looking statements 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. 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. Those statements are not guarantees and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements, historical experience or our present expectations. Some important factors that could cause our actual results to differ from our expectations in any forward-looking statements include the risks discussed in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for 2023. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for 2023. While we believe that the assumptions underlying such forward-looking statements are reasonable, there can be no assurance that future events or developments will not cause such statements to be inaccurate. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. We expressly disclaim any intention or obligation to publicly update or revise any forward-

Dollar amounts are in millions except per share amounts or as otherwise specified.			17

STRYKER CORPORATION						2024 Second Quarter Form 10-Q

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.