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What changed in Stryker Corporation's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Stryker Corporation's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+248 added−219 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in Stryker Corporation's 2024 10-K

248 paragraphs added · 219 removed · 176 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeMost of our employees also have variable components to their compensation packages that reward employees based on individual, business unit and/or company-wide performance. Our proxy statement provides more detail on the competitive compensation programs we offer. Information about our Executive Officers As of January 31, 2024 Name Age Title First Became an Executive Officer Kevin A.
Biggest changeOur proxy statement provides more detail on the competitive compensation programs we offer to our executive officers. Information about our Executive Officers As of January 31, 2025 Name Age Title First Became an Executive Officer Kevin A. Lobo 59 Chair, Chief Executive Officer and President 2011 Yin C. Becker 61 Vice President, Chief Corporate Affairs Officer 2016 William E.
Most of our products are marketed directly to doctors, hospitals and other healthcare facilities. As used herein, and except where the context otherwise requires, "Stryker," "we," "us," and "our" refer to Stryker Corporation and its consolidated subsidiaries. Business Segments and Geographic Information We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine.
Most of our products are marketed directly to doctors, hospitals and other healthcare facilities. As used herein, and except where the context otherwise requires, "Stryker," "we," "us," and "our" refer to Stryker Corporation and its consolidated subsidiaries. Business Segments and Geographic Information We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics.
The craniomaxillofacial implant offering includes cranial, maxillofacial and chest wall devices as well as dural substitutes and sealants. We are one of five leading global competitors in Instruments; the other four being Zimmer Biomet Holdings, Inc. (Zimmer), Medtronic plc (Medtronic), Johnson & Johnson and ConMed Linvatec, Inc. (a subsidiary of CONMED Corporation).
The craniomaxillofacial implant offering includes cranial, maxillofacial and chest wall devices as well as dural substitutes and sealants. We are one of five leading global competitors in Instruments; the other four being Zimmer Biomet Holdings, Inc. (Zimmer), Medtronic plc (Medtronic), Johnson & Johnson MedTech (a subsidiary of Johnson & Johnson) and ConMed Linvatec, Inc. (a subsidiary of CONMED Corporation).
We are one of five leading global competitors in Medical; the other four being Baxter International Inc., Zoll Medical Corporation, Medline Industries and Ferno-Washington, Inc. We are one of five leading global competitors in Neurotechnology; the other four being Medtronic, Johnson & Johnson, Terumo Corporation and Penumbra, Inc.
We are one of five leading global competitors in Medical; the other four being Baxter International Inc., Zoll Medical Corporation, Medline Industries and Ferno-Washington, Inc. We are one of five leading global competitors in Neurotechnology; the other four being Medtronic, Johnson & Johnson Medtech, Terumo Corporation and Penumbra, Inc.
The European Union enacted the European Union Medical Device Regulation in May 2017 with an original effective date of May 2021, which imposes stricter requirements for the marketing and sale of medical devices, including in the areas of clinical evaluation requirements, quality systems, labeling and post-market surveillance.
The European Union enacted the European Union Medical Device Regulation in May 2017 with an original effective date of May 2022, 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.
Our products are sold in approximately 75 countries through company-owned subsidiaries and branches as well 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; 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.
Our products are sold in approximately 75 countries through company-owned subsidiaries and branches as well 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; clinical communication and artificial intelligence-assisted virtual care platform technology; 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.
Stiles 47 Group President, Orthopaedics and Spine 2021 Each of our executive officers was elected by our Board of Directors to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of shareholders in 2024 or until a successor is chosen and qualified or until his or her resignation or removal.
Stiles 48 Group President, Orthopaedics 2021 Each of our executive officers was elected by our Board of Directors to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of shareholders in 2025 or until a successor is chosen and qualified or until his or her resignation or removal.
Attracting and Hiring We understand that every employee drives our success. We focus on attracting, identifying and selecting strong candidates who will be successful at Stryker and ensuring that each person we hire brings the talent, expertise and passion we need to continue to be successful. Health and Safety Ensuring our employees' safety is a top priority.
We focus on attracting, identifying and selecting strong candidates who will be successful at Stryker and ensuring that each person we hire brings the talent, expertise and passion we need to continue to be successful. Health and Safety Ensuring our employees' safety is a top priority.
ITEM 1. BUSINESS. Stryker Corporation (Stryker or the Company) 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.
ITEM 1. BUSINESS. Stryker Corporation (Stryker or the Company) 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 and Orthopaedics that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually.
Raw Materials and Inventory Raw materials essential to our business are generally readily available from multiple sources; however, certain of our raw materials are currently sourced from single suppliers. Substantially all products we manufacture are stocked in inventory, while certain MedSurg products are assembled to order.
These combined solutions empower Stryker to deliver a complete portfolio across all trauma segments. Raw Materials and Inventory Raw materials essential to our business are generally readily available from multiple sources; however, certain of our raw materials are currently sourced from single suppliers. Substantially all products we manufacture are stocked in inventory, while certain MedSurg products are assembled to order.
We believe when people are able to do what they do best, they will look forward to coming to work and, in turn, will deliver great business results.
We believe in attracting the right people, maintaining and building employee engagement and developing our employees. We believe when people are able to do what they do best, they will look forward to coming to work and, in turn, will deliver great business results.
Financial information regarding our reportable business segments and certain geographic information is included under "Consolidated Results of Operations" in Item 7 of this report and Note 14 to our Consolidated Financial Statements.
Financial information regarding our reportable business segments and certain geographic information is included under "Consolidated Results of Operations" in Item 7 of this report and Note 14 to our Consolidated Financial Statements. In the fourth quarter 2024 we reorganized our Spine business to align with certain updates to our internal reporting structure.
We bring patients and physicians advanced implant designs and specialized instrumentation that make orthopaedic surgery and recovery simpler, faster and more effective. We support surgeons with the technology and services they need as they develop new surgical techniques.
We bring patients and physicians advanced implant designs and specialized instrumentation that make orthopaedic surgery and recovery simpler, faster and more effective. We support surgeons with the technologies, products and services they need to support each patient’s clinical challenge.
In addition, business practices in the healthcare industry are scrutinized, particularly in the United States, by federal and state government agencies. The resulting investigations and prosecutions carry the risk of significant civil and criminal penalties. Environment We are subject to various rules and regulation in the United States and internationally related to the protection of human health and the environment.
In addition, business practices in the healthcare industry are scrutinized, particularly in the United States, by federal and state government agencies. Any resulting investigations and prosecutions potentially carry the risk of significant civil and criminal penalties.
Our DE&I strategy is centered around these three commitments: • Strengthen the diversity of our workforce • Advance a culture of inclusion, engagement and belonging • Maximize the power of inclusion to drive innovation and growth We are advancing our commitments through the following actions, among others: • Increasing access to talent through strategic partnerships and campaigns • Growing and engaging talent with a range of opportunities to learn and develop • Aligning our employee resource groups to focus on creating community and belonging As of December 31, 2023 approximately 38.1% of our employees were women and 27.9% of our employees in the United States identified as racially or ethnically diverse.
Our DE&I strategy is centered around these three commitments: • Strengthen the diversity of our workforce • Advance a culture of inclusion, engagement and belonging • Maximize the power of inclusion to drive innovation and growth We are advancing our commitments through the following actions, among others: • Increasing access to talent through strategic partnerships and campaigns • Growing and engaging talent with a range of opportunities to learn and develop • Aligning our employee resource groups, which are open to all employees, to focus on creating community and belonging Attracting and Hiring We understand that every employee drives our success.
Competitive Pay and Benefits Our compensation and benefits programs are designed to attract and retain top talent and to incentivize performance and alignment to our mission and values.
Competitive Pay and Benefits Our compensation and benefits programs are designed to attract and retain top talent and to incentivize performance and alignment to our mission and values. We offer market-competitive base pay and benefits to our employees in countries around the world.
Our spinal implant offering includes cervical and thoracolumbar systems that include fixation, minimally invasive and interbody systems used in spinal injury, complex spine and degenerative therapies. Our spine enabling technologies portfolio includes best in class imaging solutions, image-guided surgical technology, patient specific implants and digital health solutions supporting surgeons and their patients throughout the continuum of care.
Our spine enabling technologies portfolio includes best in class imaging solutions, image-guided surgical technology, patient specific implants and digital health solutions supporting surgeons and their patients throughout the continuum of care.
We are one of four leading global competitors for joint replacement and trauma and extremities products and robotics; the other three being Zimmer, DePuy Synthes (a Johnson & Johnson company) and Smith & Nephew. We are one of four leading global competitors in Spine; the other three being Medtronic Sofamor Danek, Inc. (a subsidiary of Medtronic), Globus Medical, Inc.
We are one of four leading global competitors for joint replacement and trauma and extremities products and robotics; the other three being Zimmer, Johnson & Johnson MedTech and Smith & Nephew.
Alongside our customers around the world, we impact more than 150 million patients annually. Our core values guide our behaviors and actions and are fundamental to how we execute our mission. Stryker was incorporated in Michigan in 1946 as the successor company to a business founded in 1941 by Dr. Homer H.
Our core values guide our behaviors and actions and are fundamental to how we execute our mission. Stryker was incorporated in Michigan in 1946 as the successor company to a business founded in 1941 by Dr. Homer H. Stryker, a prominent orthopaedic surgeon and inventor of several medical products.
We also provide tools and resources that enable managers and teams to act on the insights we gain from our surveys and to drive employee engagement and strong business outcomes. Diversity, Equity and Inclusion (DE&I) An essential part of our culture is respecting each individual’s strengths and values.
We also provide tools and resources that enable managers and teams to act on the insights we gain from our surveys and to drive employee engagement and strong business outcomes.
The FDA's Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain records and provide for inspections of our facilities by the FDA.
The FDA's Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain records and provide for inspections of our facilities by the FDA. There are also certain requirements of state, local and foreign governments that must be complied with in the manufacture and marketing of our products.
Available Information Our main corporate website address is www.stryker.com. The information on our website is not incorporated by reference into this report.
Each of our executive officers held the position above or served Stryker in various executive or administrative capacities for at least five years. Available Information Our main corporate website address is www.stryker.com. The information on our website is not incorporated by reference into this report.
We do not expect compliance with these requirements to have a material effect on purchases of property, plant and equipment, cash flows, net earnings or competitive position. Employees On December 31, 2023 we had approximately 52,000 employees globally, with approximately 27,000 employees in the United States.
We believe our policies, practices and procedures are properly designed to comply, in all material respects, with applicable environmental laws and regulations. We do not expect compliance with these requirements to have a material effect on purchases of property, plant and equipment, cash flows, net earnings or competitive position.
Our success depends on our ability to attract the best talent. To do so, we continue to focus on creating and maintaining a great workplace. We believe in attracting the right people, maintaining and building employee engagement and developing our employees.
Our company values of integrity, accountability, people and performance are a key component of that mission. Our people, as one of our core values, continue to be a key focus. Our success depends on our ability to attract the best talent. To do so, we continue to focus on creating and maintaining a great workplace.
Our talented employees are an integral reason for our standing as a global leader in medical technologies where, together with our customers, we are driven to make healthcare better. Our company values of integrity, accountability, people and performance are a key component of that mission. Our people, as one of our core values, continue to be a key focus.
Employees On December 31, 2024 we had approximately 53,000 employees globally, with approximately 27,000 employees in the United States. Our talented employees are an integral reason for our standing as a global leader in medical technologies where, together with our customers, we are driven to make healthcare better.
On December 31, 2023 we owned approximately 5,200 United States patents and approximately 7,700 patents in other countries. Seasonality Our business is generally not seasonal in nature; however, the number of orthopaedic implant surgeries is typically lower in the summer months, and sales of capital equipment are generally higher in the fourth quarter.
Seasonality Our business is generally not seasonal in nature; however, the number of orthopaedic implant surgeries is typically lower in the Dollar amounts in millions except per share amounts or as otherwise specified. 2 STRYKER CORPORATION 2024 FORM 10-K summer months, and sales of capital equipment are generally higher in the fourth quarter.
Building on this foundation, we are focused on maintaining an inclusive, engaging work environment and prioritizing DE&I in keeping with our values of integrity and people.
Dollar amounts in millions except per share amounts or as otherwise specified. 3 STRYKER CORPORATION 2024 FORM 10-K Diversity, Equity and Inclusion (DE&I) An essential part of our culture is respecting each individual’s strengths and values. Building on this foundation, we are focused on maintaining an inclusive, engaging work environment in keeping with our values of integrity and people.
Our operations involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. We believe our policies, practices and procedures are properly designed to comply, in all material respects, with applicable environmental laws and regulations.
Environment We are subject to various rules and regulation in the United States and internationally related to the protection of human health and the environment. Our operations involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes.
Lobo 58 Chair, Chief Executive Officer and President 2011 Yin C. Becker 60 Vice President, Chief Corporate Affairs Officer 2016 William E. Berry Jr. 58 Vice President, Chief Accounting Officer 2014 Glenn S. Boehnlein 62 Vice President, Chief Financial Officer 2016 M. Kathryn Fink 54 Vice President, Chief Human Resources Officer 2016 Robert S.
Berry Jr. 59 Vice President, Chief Accounting Officer 2014 Glenn S. Boehnlein 63 Vice President, Chief Financial Officer 2016 M. Kathryn Fink 55 Vice President, Chief Human Resources Officer 2016 Robert S. Fletcher 54 Vice President, Chief Legal Officer 2019 Viju S. Menon 57 Group President, Global Quality and Operations 2018 J.
Composition of Orthopaedics and Spine Net Sales 2023 2022 2021 Knees $ 2,273 26 % $ 1,997 25 % $ 1,848 25 % Hips 1,544 18 1,413 18 1,342 18 Trauma and Extremities 3,147 36 2,807 36 2,664 35 Spine 1,189 14 1,146 15 1,167 15 Other 509 6 475 6 549 7 Total $ 8,662 100 % $ 7,838 100 % $ 7,570 100 % In 2023 we continued our full commercial launch of the Insignia hip stem.
Composition of Orthopaedics Net Sales 2024 2023 2022 Knees $ 2,447 27 % $ 2,273 27 % $ 1,997 26 % Hips 1,704 19 1,544 18 1,413 19 Trauma and Extremities 3,507 39 3,147 38 2,807 37 Spinal Implants 707 8 713 9 733 10 Other 712 8 658 8 606 8 Total $ 9,077 100 % $ 8,335 100 % $ 7,556 100 % In 2024 we continued the full commercial launch of our Triathlon Hinge revision knee system.
Instruments also saw continued momentum from the launch of the System 9 total joint power tool. Endoscopy expanded its product offering with the launch of the 4K 1788 Camera platform that features several enhancements for a broader range of clinical applications and specialties, including urology, neurology and ear, nose and throat.
Our 1788 Camera platform features several enhancements for a broader range of clinical applications and specialties, including urology, neurology and ear, nose and throat and can be used to visualize indocyanine green and Cytalux.
Fletcher 53 Vice President, Chief Legal Officer 2019 Viju S. Menon 56 Group President, Global Quality and Operations 2018 J. Andrew Pierce 50 Group President, MedSurg and Neurotechnology 2021 Spencer S.
Andrew Pierce 51 Group President, MedSurg and Neurotechnology 2021 Spencer S.
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Stryker, a prominent orthopaedic surgeon and inventor of several medical products.
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The spine enabling technologies portfolio (Enabling Technologies) was reclassified to Other Orthopaedics and Spine, the Interventional Spine (IVS) portfolio was reclassified to Neuro Cranial and the remaining Spine business was renamed to Spinal Implants.
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Net Sales by Reportable Segment 2023 2022 2021 MedSurg and Neurotechnology $ 11,836 58 % $ 10,611 58 % $ 9,538 56 % Orthopaedics and Spine 8,662 42 7,838 42 7,570 44 Total $ 20,498 100 % $ 18,449 100 % $ 17,108 100 % MedSurg and Neurotechnology MedSurg products include surgical equipment, patient and caregiver safety technologies, and navigation systems (Instruments), endoscopic and communications systems and reprocessed and remanufactured medical devices (Endoscopy), and patient handling, emergency medical equipment, intensive care disposable products and clinical communication and workflow solutions (Medical).
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In addition, we changed the name of our “Orthopaedics and Spine” operating segment to “Orthopaedics.” Quarterly Net Sales - Enabling Technologies 2024 2023 2022 Mar 31 $ 30 $ 31 $ 30 Jun 30 $ 31 $ 32 $ 25 Sep 30 $ 59 $ 54 $ 44 Dec 31 $ 32 $ 32 $ 32 Total $ 152 $ 149 $ 131 Quarterly Net Sales - IVS 2024 2023 2022 Mar 31 $ 98 $ 77 $ 65 Jun 30 $ 98 $ 83 $ 73 Sep 30 $ 117 $ 84 $ 72 Dec 31 $ 100 $ 83 $ 72 Total $ 413 $ 327 $ 282 Quarterly Net Sales - Spinal Implants 2024 2023 2022 Mar 31 $ 171 $ 176 $ 183 Jun 30 $ 178 $ 181 $ 193 Sep 30 $ 186 $ 180 $ 182 Dec 31 $ 172 $ 176 $ 175 Total $ 707 $ 713 $ 733 Net Sales by Reportable Segment 2024 2023 2022 MedSurg and Neurotechnology $ 13,518 60 % $ 12,163 59 % $ 10,893 59 % Orthopaedics 9,077 40 8,335 41 7,556 41 Total $ 22,595 100 % $ 20,498 100 % $ 18,449 100 % MedSurg and Neurotechnology MedSurg products include surgical equipment, patient and caregiver safety technologies, and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), and patient handling, emergency medical equipment, intensive care disposable products and clinical communication and artificial intelligence-assisted virtual care platform technology (Medical).
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Composition of MedSurg and Neurotechnology Net Sales 2023 2022 2021 Instruments $ 2,569 22 % $ 2,279 21 % $ 2,111 22 % Endoscopy 3,033 26 2,725 26 2,418 25 Medical 3,459 29 3,031 29 2,607 27 Neurovascular 1,226 10 1,200 11 1,188 13 Neuro Cranial 1,549 13 1,376 13 1,214 13 Total $ 11,836 100 % $ 10,611 100 % $ 9,538 100 % In 2023 Instruments launched the Neptune S, which is the only constantly closed low-fluid waste management system on the market.
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Dollar amounts in millions except per share amounts or as otherwise specified. 1 STRYKER CORPORATION 2024 FORM 10-K Composition of MedSurg and Neurotechnology Net Sales 2024 2023 2022 Instruments $ 2,834 21 % $ 2,534 21 % $ 2,245 21 % Endoscopy 3,389 25 3,068 25 2,759 25 Medical 3,852 28 3,459 28 3,031 28 Neurovascular 1,307 10 1,226 11 1,200 11 Neuro Cranial 2,136 16 1,876 15 1,658 15 Total $ 13,518 100 % $ 12,163 100 % $ 10,893 100 % In 2024 Instruments launched SurgiCount+ powered by Triton, which combines our existing sponge counting technology with artificial intelligence and quantifying blood loss software.
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In addition, 1788 can be used to visualize indocyanine green and Cytalux. Medical launched the Xpedition powered stair chair, designed with an integrated workflow for first responders, maintaining the same storage footprint as Stryker's Stair-PRO and enhanced user interface for ease of use. Xpedition allows caregivers to safely and ergonomically move patients over a variety of terrains.
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We also launched CoPilot, which combines with our Spine Q guidance system to help surgeons plan and perform certain spinal procedures, including supporting bone resection, pedicle preparation and screw delivery. In addition we completed the acquisition of Vertos Medical, Inc., a leader in interventional pain management solutions for chronic lower back pain caused by lumbar spinal stenosis.
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Neurovascular completed the acquisition of Cerus Endovascular Limited (Cerus), a leader in the design and development of neurointerventional devices for the treatment of intracranial aneurysms. The acquisition of Cerus is highly complementary to our Neurovascular business and strengthens our hemorrhagic portfolio globally.
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The acquisition of Vertos is complementary to our Interventional Spine business as we continue to focus on advanced pain procedures. Endoscopy continued to deliver its 4K 1788 Camera platform to the market.
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Neurovascular also launched the Target Tetra coil in the United States, Japan, Korea and Europe, Middle East, Africa for the treatment of small aneurysms and the Vecta 46 Intermediate Catheter in the United States, Japan and Korea.
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Medical launched the LIFEPAK 35 monitor/defibrillator, our next generation platform designed to optimize care with new clinical features such as the new Glasgow 30.4 algorithm, cprINSIGHT, 15-lead monitoring capabilities, and STJ insight and mapping. LIFEPAK 35 combines a modern intuitive touch screen display and increased processing power with Bluetooth and WiFi data connectivity.
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Dollar amounts in millions except per share amounts or as otherwise specified. 1 STRYKER CORPORATION 2023 FORM 10-K Orthopaedics and Spine Orthopaedics products consist primarily of implants used in total joint replacements, such as hip, knee and shoulder, and trauma and extremities surgeries.
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Medical also completed the acquisition of care.ai, a virtual care and ambient intelligence solutions platform. care.ai adds complementary technology that is expected to integrate seamlessly with the Vocera platform (Vocera) and Stryker’s devices, providing customers with an enterprise-wide ecosystem that is intended to deliver dynamic clinical workflows and further the development of smart care facilities.
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The Mako Robotic-Arm Assisted Surgical System was designed to help surgeons provide patients with a personalized surgical experience based on their specific diagnosis and anatomy. The Mako System currently offers three applications supporting Partial Knee, Total Hip and Total Knee procedures.
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Neurovascular initiated a targeted launch of the Surpass Elite Flow Diverting Stent (FDS) in the U.S. and South Korea. Surpass Elite FDS is designed to reduce thrombin generation when compared to unmodified stents. Additionally, Neurovascular launched Surpass Evolve FDS in Japan.
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Mako is the only robotic-arm assisted technology enabled by 3D CT-based pre-operative planning and, with AccuStop™ haptic technology, Mako provides surgeons the ability to know more about their patients' anatomy so they can cut less in bone preparation and implant placement with intra-operative haptic guidance.
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The Stryker FDS platform is designed to effectively treat aneurysms by redirecting blood flow away from the aneurysm to promote healing. Orthopaedics Orthopaedics products primarily include implants used in total joint replacements, such as hip, knee and shoulder, and trauma and extremities surgeries.
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Insignia received approval in Japan from the Pharmaceuticals and Medical Devices Agency and clinical cases occurred in December 2023. With the addition of Japan, Insignia is now being used clinically in six countries worldwide (United States, Canada, Japan, New Zealand, Singapore and Hong Kong).
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Triathlon Hinge received approval in August of 2023 and is now released in the U.S., Ca nada and New Zealand.
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We also saw our first clinical use of the Triathlon Hinge revision knee system in August 2023. The Hinge product helps restore patient mobility in challenging cases and we anticipate moving towards full commercial launch in 2024. In 2023 we celebrated the 10th anniversary of the Triathlon Tritanium Baseplate.
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We also continued delivering growth in total hip arthroplasty, particularly in the primary segment where Direct Anterior Reconstructive Technology and Mako Total Hip can help to reduce, if not eliminate, a surgeon's use of intraoperative fluoroscopy during direct anterior hip procedures.
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Since its introduction in 2013, Triathlon Cementless, which includes the Triathlon Tritanium Baseplate, has delivered a decade of positive patient impact, demonstrated impressive survivorship data and has become a trusted solution for surgeons across the globe. In 2023 we celebrated the 10-year anniversary of the Mako Surgical Corp. acquisition and the Mako SmartRobotics™ technology.
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With the acquisition of SERF SAS, we strengthened distribution in key European markets and continue to scale differentiated solutions such as the Novae monolithic dual mobility cup engineered to deliver greater hip stability and reduce dislocation risk. We continued to expand our global footprint of Mako SmartRobotics™ in 2024 which is now sold in more than 45 countries.
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Over the past ten years, this groundbreaking technology has transformed the orthopaedics landscape, resulting in tremendous patient impact for surgeons and their patients. Additionally, we reached the milestone of 1 million Mako SmartRobotics™ procedures performed globally.
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To date more than one million robotic Mako Total Knees and 1.5 million robotic procedures across Total Hips, Total Knees and Partial Knees have been performed globally. Stryker’s Joint Replacement division also launched the “Scan. Plan. Mako Can.” direct to patient campaign, accelerating awareness of Mako technology in the U.S.
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There are also certain requirements of Dollar amounts in millions except per share amounts or as otherwise specified. 2 STRYKER CORPORATION 2023 FORM 10-K state, local and foreign governments that must be complied with in the manufacture and marketing of our products.
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In December 2024 we performed our first Mako Shoulder procedure using robotic-arm assistance to remove bone, prepare the glenoid surface and enable positioning and placement of the Perform Reversed Glenoid implant. In 2024 Trauma launched Pangea, a comprehensive variable angle plating portfolio designed to optimize plate fit to bone utilizing simple, intuitive instrumentation that enhances ease of use and reproducibility.
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In addition, we establish forums for collecting qualitative feedback to gain insights and identify actions we can take so that employees feel included, engaged and able to achieve their full potential.
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On December 31, 2024 we owned approximately 5,600 United States patents and approximately 8,600 patents in other countries.
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Dollar amounts in millions except per share amounts or as otherwise specified. 3 STRYKER CORPORATION 2023 FORM 10-K We offer market-competitive base pay and benefits to our employees in countries around the world. We regularly evaluate our compensation and benefit offerings and levels, using recognized outside consulting firms to ensure internal fairness and competitiveness in our offerings.
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We regularly evaluate our compensation and benefit offerings and levels, using recognized outside consulting firms to ensure internal fairness and competitiveness in our offerings. Most of our employees also have variable components to their compensation packages that reward employees based on individual, business unit and/or company-wide performance.
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Each of our executive officers held the position above or served Stryker in various executive or administrative capacities for at least five years, except for Mr. Fletcher. Prior to joining Stryker in April 2019, Mr. Fletcher held various legal leadership roles with Johnson & Johnson for the previous 14 years, most recently as the Worldwide Vice President, Litigation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome important factors that could cause our actual results to differ from our expectations in any forward-looking statements include: • weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our products; • geopolitical risks, including from international conflicts and upcoming elections in the United States and other countries, which could, among other things, lead to increased market volatility; • pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; • changes in foreign currency exchange markets; • legislative and regulatory actions; • unanticipated issues arising in connection with clinical studies and otherwise that affect approval of new products by the FDA and foreign regulatory agencies; • inflationary pressures; • increased interest rates or interest rate volatility; • supply chain disruptions; • changes in labor markets; • changes in reimbursement levels from third-party payors; • a significant increase in product liability claims; • the ultimate total cost with respect to recall-related and other regulatory and quality matters; • the impact of investigative and legal proceedings and compliance risks; • resolution of tax audits; • changes in tax laws and regulations; • the impact of legislation to reform the healthcare system in the United States or other countries; • costs to comply with medical device regulations; • changes in financial markets; • changes in our credit ratings; • changes in the competitive environment; • our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes; • our ability to realize anticipated cost savings; • potential negative impacts resulting from climate change or other environmental, social and governance and sustainability related matters; • the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties; • breaches or failures of our or our vendors’ or customers’ information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft; and • other risks detailed in our filings with the SEC.
Biggest changeSome important factors that could cause our actual results to differ from our expectations in any forward-looking statements include: • weakening of economic conditions, or the anticipation thereof, that could adversely affect the level of demand for our or Inari Medical, Inc.’s (“Inari”) products; • geopolitical risks, including from international conflicts, which could, among other things, lead to increased market volatility; Dollar amounts in millions except per share amounts or as otherwise specified. 4 STRYKER CORPORATION 2024 FORM 10-K • pricing pressures generally, including cost-containment measures that have adversely affected and could in the future adversely affect the price of or demand for our or Inari’s products; • changes in foreign currency exchange markets; • legislative and regulatory actions; • unanticipated issues arising in connection with clinical studies and otherwise that affect approval of new products, including Inari products, by the FDA and foreign regulatory agencies; • inflationary pressures; • increased interest rates or interest rate volatility; • supply chain disruptions; • changes in labor markets; • changes in coverage and reimbursement levels from third-party payors; • changes in the competitive environment; • breaches, failures or other disruptions of our or our vendors’ or customers’ information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft; • a significant increase in product liability claims; • the ultimate total cost with respect to recall-related and other regulatory and quality matters; • the impact of investigative and legal proceedings and compliance risks; • resolution of tax audits; • changes in tax laws and regulations; • the impact of legislation to reform the healthcare system in the United States or other countries; • costs to comply with medical device regulations; • changes in financial markets; • changes in our credit ratings; • our ability to integrate and realize the anticipated benefits of acquisitions in full or at all or within the expected timeframes, including our acquisition of Inari; • our ability to realize any anticipated cost savings; • potential negative impacts resulting from climate change or other environmental, social and governance and sustainability related matters; • the impact on our operations and financial results of any public health emergency and any related policies and actions by governments or other third parties; • uncertainties as to the timing of the tender offer for shares of Inari common stock and the subsequent merger with Inari; • uncertainties as to how many of Inari’s stockholders will tender their shares in the tender offer; • the failure to satisfy any of the closing conditions to the acquisition of Inari, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period (and the risk that such governmental approval may result in the imposition of conditions that could adversely affect the expected benefits of the transaction); • delays in consummating the acquisition of Inari or the risk that the transaction may not close at all; • unexpected liabilities, costs, charges or expenses in connection with the acquisition of Inari; • the effects of the proposed Inari transaction (or the announcement thereof) on the parties’ relationships with employees, customers, other business partners or governmental entities; and • other risks detailed in our filings with the SEC.
Further, our customers have experienced, and could continue to experience, staffing shortages that may result in decreased demand for our products, which could negatively affect our business and financial results.
Further, our customers have experienced, and may continue to experience, staffing shortages that may result in decreased demand for our products, which could negatively affect our business and financial results.
BUSINESS AND OPERATIONAL RISKS We use a variety of raw materials, components, devices and third-party services in our global supply chains, production and distribution processes; significant shortages, price increases or unavailability of third-party services have in the past increased, and could in the future increase, our operating costs and could require significant capital expenditures or adversely impact the competitive position of our products: Our reliance on certain suppliers to secure raw materials, components and finished devices, and on certain third-party service providers, such as sterilization service providers, exposes us to product shortages and unanticipated increases in prices, whether due to inflationary pressure, regulatory changes, litigation exposure, geopolitical tensions or otherwise.
BUSINESS AND OPERATIONAL RISKS We use a variety of raw materials, components, devices and third-party services in our global supply chains, production and distribution processes; significant shortages, price increases or unavailability of third-party services have in the past increased, and could in the future increase, our operating costs and could require significant capital expenditures or adversely impact the competitive position of our products: Our reliance on certain suppliers to secure raw materials, components and finished devices, and on certain third-party service providers, such as sterilization service providers, exposes us to the risk of product shortages and unanticipated increases in prices, whether due to inflationary pressure, regulatory changes, litigation exposure, geopolitical tensions or otherwise.
The impact of healthcare reform legislation on our business remains uncertain: Several markets where we sell our products are making efforts to expand access to health care or health insurance coverage while decreasing costs. These efforts may have a direct or unintended negative impact on access to medical technology and could have a significant effect on our business.
The impact of healthcare reform legislation on our business remains uncertain: Several markets where we sell our products are making efforts to expand access to healthcare or health insurance coverage while decreasing costs. These efforts may have a direct or unintended negative impact on access to medical technology and could have a significant effect on our business.
Some of our products and services, and information technology systems, contain or use open-source software, which poses particular risks, including potential security vulnerabilities, licensing compliance issues and quality issues. We, our customers and third-party hosting services have experienced, and expect to continue to experience, security breaches of, or unauthorized access to, products or systems.
Some of our products, services, and information technology systems contain or use open-source software which poses particular risks, including potential security vulnerabilities, licensing compliance issues and quality issues. We, our customers and third-party hosting services have experienced, and expect to continue to experience, security breaches of, unauthorized access to, and disruptions of, products or systems.
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 delay or cancel elective procedures, our business, cash flows, financial condition and results of operations could be negatively affected.
It is not possible to predict whether elective medical procedures will be suspended or reduced in the future and, to the extent individuals and customers are required to delay or cancel elective procedures, our business, cash flows, financial condition and results of operations could be negatively affected.
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.
These laws and regulations are broad in scope and are subject to evolving interpretation and enforcement 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.
Numerous and evolving cybersecurity threats have posed, and will continue to pose, risks to the security of our IT systems, networks and product offerings, as well as the confidentiality, availability and integrity of our data.
Furthermore, numerous and evolving cybersecurity threats have posed, and will continue to pose, risks to the security of our IT systems, networks and product offerings, as well as the confidentiality, availability and integrity of our data.
For example, in the past we experienced limited product availability due to an electronic components shortage in certain product lines. If a similar shortage occurs in the future with respect to other raw materials or components, we may not be able to obtain them from our suppliers on a timely basis, or at all, or identify alternative suppliers.
For example, in the past we experienced limited product availability due to an electronic components shortage in certain product lines. If a similar shortage occurs in the future with respect to any raw materials or components, we may not be able to obtain them from our suppliers on a timely basis, or at all, or identify alternative suppliers.
Pricing pressure has also increased due to continued consolidation among healthcare providers, trends toward managed care, the shift toward governments becoming the primary payers of healthcare expenses, reduction in reimbursement levels and medical procedure volumes and government laws and regulations relating to sales and promotion, reimbursement and pricing generally.
Pricing pressure has also increased due to continued consolidation among healthcare providers, trends toward managed care, the shift toward governments becoming the primary payers of healthcare expenses, reduction in coverage or reimbursement levels and medical procedure volumes and government laws and regulations relating to sales and promotion, reimbursement and pricing generally.
Pandemics and public health emergencies, and the fear thereof, have in the past materially adversely affected and could in the future materially adversely affect, our operations, supply chain, manufacturing, product distribution, customers and other business activities: In connection with COVID-19, governmental authorities and private enterprises implemented, and may in the future implement in connection with another pandemic or public health emergency (or in response to the fear thereof), measures, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.
Pandemics and public health emergencies, and the fear thereof, have in the past materially adversely affected and could in the future materially adversely affect, our operations, supply chain, manufacturing, product distribution, customers and other business activities: In connection with prior pandemics, governmental authorities and private enterprises implemented, and may in the future implement in connection with another pandemic or public health emergency (or in response to the fear thereof), measures, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.
Inflation, higher interest rates or interest rate volatility may also cause our customers to reduce or delay orders for our products and services. Any of the foregoing could have a material adverse impact on our sales, profitability and results of operations.
Inflation, high interest rates or interest rate volatility may also cause our customers to reduce or delay orders for our products and services. Any of the foregoing could have a material adverse impact on our sales, profitability and results of operations.
We operate in a highly competitive industry in which competition in the development and improvement of new and existing products is significant: The markets in which we compete are highly competitive, and a significant element of our strategy is to increase revenue growth by focusing on innovation and new product development.
We operate in a highly competitive industry in which competition and the regulatory burden in the development and improvement of new and existing products is significant: The markets in which we compete are highly competitive, and a significant element of our strategy is to increase revenue growth by focusing on innovation, new product development and improvement of existing products.
If sole-source suppliers or service providers are unable or unwilling to deliver these materials or services as a result of financial difficulties, acquisition by a third party, natural disasters or otherwise, we may not be able to manufacture or have available one or more products during such period of unavailability and our business could suffer.
If sole-source suppliers or service providers are unable or unwilling to deliver these materials or services as a result of financial difficulties, business disruptions, acquisition by a third party, natural disasters or otherwise, we may not be able to manufacture or have available one or more products during such period of unavailability and our business could suffer, possibly materially.
In this regard, the accelerated development and production of products and services to address medical and other requirements could increase the risk of regulatory enforcement actions, product defects or related claims or reputational harm.
In this regard, the accelerated development and production of products and services to address medical and other requirements could increase the risk of regulatory enforcement actions, product defects or related claims or reputational harm, among other things.
If we are unable to recruit, hire, develop and retain a talented, competitive work force in our highly competitive industry, or if we are unable to plan effective succession for the future, we may not be able to meet our strategic business objectives.
If we are unable to recruit, hire, develop and retain a talented, competitive workforce in our highly competitive industry, or if we are unable to plan effective succession for the future, we may not be able to meet our strategic business objectives.
Additionally, as threats continue to evolve and increase, and as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, we may be required to devote significant additional resources to modify and enhance our security controls and to identify and remediate any security vulnerabilities, which could adversely impact our net income.
Additionally, as threats continue to evolve and increase, and as the regulatory environment and customer requirements related to information security, data collection and use, and privacy become increasingly rigorous, we may be required to devote significant additional resources to modify and enhance our security controls and to identify and remediate any security vulnerabilities, which could adversely impact our net income.
Dependence on patent and other proprietary rights and failing to protect such rights or to be successful in litigation related to such rights may impact offerings in our product portfolios: Our long-term success largely depends on our ability to market technologically competitive products.
Dependence on intellectual proprietary rights and failing to protect such rights or to be successful in litigation related to such rights may impact offerings in our product portfolios: Our long-term success largely depends on our ability to market technologically competitive products.
In addition, several raw materials, components, finished devices and services are procured from a sole source due to the quality considerations, unique intellectual property considerations or constraints associated with regulatory requirements.
In addition, several raw materials, components, finished devices and services are procured from a sole source due to, among other things, the quality considerations, unique intellectual property considerations or constraints associated with regulatory requirements.
The OECD, which represents a coalition of member countries, has put forth two proposed frameworks—Pillar One and Pillar Two—that revise the existing profit allocation and nexus rules and ensure a minimal level of taxation, respectively.
The OECD, which represents a coalition of member countries, has put forth two proposed frameworks that revise the existing profit allocation and nexus rules (Pillar 1) and ensure a minimal level of taxation (Pillar 2), respectively.
We have experienced, and may continue to experience, inflationary increases in manufacturing costs and operating expenses, as well as negative impacts from weakening or strengthening exchange rates against the United States Dollar.
We have experienced, and may in the future experience, inflationary increases in manufacturing costs and operating expenses, as well as negative impacts from weakening or strengthening exchange rates against the United States Dollar.
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 Cerus in 2023. Such investments are inherently risky, and we cannot guarantee that any acquisition will be successful or will not have a material unfavorable impact on us.
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. Such investments are inherently risky, and we cannot guarantee that any acquisition will be successful or will not have a material unfavorable impact on us.
When cybersecurity incidents occur, we follow our incident response protocols and address them in accordance with applicable governmental regulations and other legal requirements.
When cybersecurity or other technology related incidents occur, we follow our incident response protocols and address them in accordance with applicable governmental regulations and other legal requirements.
If our IT systems are damaged or cease to function properly, the networks or service providers we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches or unauthorized access and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action.
If our IT systems, networks or processes are damaged or cease to function properly for any reason, the networks, service providers, hardware or software we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches or unauthorized access and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action and fines, penalties and expenses related thereto.
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, energy, shipping and labor costs, weakening or strengthening exchange rates against the United States Dollar and other similar effects.
Inflation in the United States and in many of the countries where we conduct business has resulted in, and may in the future result in, high interest rates and increased capital, energy, shipping and labor costs, weakening or strengthening exchange rates against the United States Dollar and other similar effects.
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 to resolve and may result in significant income tax adjustments.
Income tax authorities regularly perform audits of our income tax filings. 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 to resolve and may result in significant income tax adjustments.
Cross border transactions with external parties and intercompany relationships result in increased exposure to foreign currency exchange effects. While we use derivative instruments to manage the impact of currency exchange, our hedging strategies may not be successful, and our unhedged exposures continue to be subject to currency fluctuations.
Cross border transactions with external parties, financing transactions in currencies other than the United States Dollar and intercompany relationships result in increased exposure to foreign currency exchange effects. While we use derivative instruments to manage the impact of currency exchange, our hedging strategies may not be successful, and our unhedged exposures continue to be subject to currency fluctuations.
Our global operations are subject to risks and costs related to, among other things, changes in reimbursement; changes in regulatory requirements (such as the staggered phase-in period for manufacturers to comply with the European Union Medical Device Regulation (MDR) through December 2028); differing local product preferences and product requirements; diminished protection of intellectual property in some countries; tariffs and other trade protection measures, as well as increasing localization and protectionism policies in certain jurisdictions; international trade disputes and import or export requirements; difficulty in staffing and managing foreign operations; introduction of new internal business structures and programs; political and economic instability; current or potential geopolitical conflicts, such as the tensions between China and Taiwan and the wars in Ukraine and the Middle East, and related sanctions and other developments; disruptions of transportation, including port closures, increased border controls or border closures or reduced transportation availability, due to military conflicts, a global pandemic of contagious diseases like COVID-19 or otherwise; increased energy or transportation costs; fluctuations in currency exchange rates and financial markets; and increased security threats to our supply chain.
Our global operations are subject to risks and costs related to, among other things, changes in coverage or reimbursement levels from third-party payors in the United States and other countries; changes in regulatory requirements (such as the staggered phase-in period for manufacturers to comply with Dollar amounts in millions except per share amounts or as otherwise specified. 6 STRYKER CORPORATION 2024 FORM 10-K the European Union Medical Device Regulation (MDR) through December 2028); differing local product preferences and product requirements; diminished protection of intellectual property in some countries; tariffs and other trade protection measures, as well as increasing localization and protectionism policies in certain jurisdictions; international trade disputes and import or export requirements; difficulty in staffing and managing foreign operations; introduction of new internal business structures and programs; political and economic instability and uncertainty; current or potential geopolitical conflicts, such as the tensions between China and Taiwan and the wars in Ukraine and the Middle East, and related sanctions and other developments; disruptions of transportation, including port closures, increased border controls or border closures or reduced transportation availability, due to military conflicts, a global pandemic of contagious diseases like COVID-19 or otherwise; increased energy or transportation costs; fluctuations in currency exchange rates and financial markets; and increased security threats to our supply chain.
If we fail to obtain or maintain adequate intellectual property protection, it could allow others to sell products that directly compete with proprietary features in our product portfolio. Also, our issued patents may be subject to claims challenging their validity and scope and raising other issues. In addition, currently pending or future patent applications may not result in issued patents.
If we fail to obtain or maintain adequate intellectual property protection, it could allow others to sell products that directly compete with proprietary features in our product portfolio. Also, our issued patents may be subject to claims challenging their validity and scope and raising other issues.
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 Medical Group N.V. (Wright) legacy hip products discussed in Note 7 to our Consolidated Financial Statements.
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 Medical Group N.V.
While such breaches or unauthorized access have not been material to date, we cannot guarantee that any future breach or unauthorized access will not be material and any breach or unauthorized access could impact the use of such products and systems and the security of information stored therein.
While such breaches, unauthorized access and disruptions have not had a material effect on us to date, we cannot guarantee that any future breach or unauthorized access will not be material and any breach or unauthorized access could impact the use of such products and systems and the security of information stored therein.
Shifts in weather patterns caused by climate change are expected to increase the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures or flooding, which could cause more significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of hospitals, medical care facilities and other customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities and decreased revenues than what we have experienced in the past from such events.
Shifts in weather patterns caused by climate change have increased and are expected to further increase the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures and flooding, which could cause more significant business and supply chain Dollar amounts in millions except per share amounts or as otherwise specified. 11 STRYKER CORPORATION 2024 FORM 10-K interruptions, damage to our products and facilities as well as the infrastructure of hospitals, medical care facilities and other customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities and decreased revenues than what we have experienced in the past from such events.
We cannot guarantee that we will achieve our announced corporate responsibility goals and initiatives. The criteria by which our corporate responsibility practices are assessed may change due to the quickly evolving landscape, which could result in greater regulatory requirements or expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
The criteria by which our corporate responsibility practices are assessed may change due to the quickly evolving landscape, which could result in greater regulatory requirements or expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
We are subject to pricing pressures as a result of cost containment measures in the United States and other countries and other factors: Initiatives to limit the growth of general healthcare expenses and hospital costs are ongoing in the markets in which we do business.
We are subject to pricing pressures as a result of cost containment measures in the United States and other countries and other factors, including changes in reimbursement practices and coverage policies and third-party payor cost containment measures: Initiatives to limit the growth of general healthcare expenses and hospital costs are ongoing in the markets in which we do business.
In addition, in many countries, the laws and regulations applicable to us or our industry are evolving, and we have in certain cases become subject to divergent and conflicting laws and regulations across our operations, which could increase risk over time.
In addition, in many countries, the laws and regulations applicable to us or our industry are evolving, and we have in certain cases become subject to divergent and conflicting laws and regulations across our operations, which has increased the risks we are subject to.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS We could be negatively impacted by corporate responsibility and sustainability-related matters: Governments, investors, customers, employees and other stakeholders have been increasingly focused on corporate responsibility practices and disclosures, and expectations in this area continue to rapidly evolve. On occasion, we announce new initiatives, including goals, under our corporate responsibility framework.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS We could be negatively impacted by corporate responsibility and sustainability-related matters: Governments, investors, customers, employees and other stakeholders have been focused on corporate responsibility practices and disclosures, and expectations in this area continue to rapidly evolve, including in diverging directions.
Dollar amounts in millions except per share amounts or as otherwise specified. 8 STRYKER CORPORATION 2023 FORM 10-K We are subject to federal, state and foreign healthcare regulations, including anti-bribery, anti-corruption, anti-kickback and false claims laws, globally and could face substantial penalties if we fail to comply with such regulations and laws: The relationships that we, and third parties that market and/or sell our products, have with healthcare professionals, such as physicians, hospitals, healthcare organizations and others, are subject to scrutiny under various state and federal laws often referred to collectively as healthcare fraud and abuse laws.
We are subject to federal, state and foreign healthcare regulations, including anti-bribery, anti-corruption, anti-kickback and false claims laws, globally and could face substantial penalties if we fail to comply with such regulations and laws: The relationships that we, and third parties that market and/or sell our products, have with healthcare professionals, such as physicians, hospitals, healthcare organizations and others, are subject to scrutiny under various state and federal laws often referred to collectively as healthcare fraud and abuse laws.
These matters are subject to uncertainties and outcomes are not predictable. Further, the European Representative Actions Directive (the Collective Redress Directive), which became effective in 2023, mandates a class action regime in each EU member state to facilitate domestic and cross-border class actions in a wide range of areas, including product liability claims with medical devices.
Further, the European Representative Actions Directive (the Collective Redress Directive) mandates a class action regime in each EU member state to facilitate domestic and cross-border class actions in a wide range of areas, including product liability claims with medical devices.
If we are unable to maintain these relationships due to regulatory restrictions, hospital access restrictions for non-patients or for other reasons, our ability to develop, market and sell new and improved products could be adversely affected.
We rely on these professionals to assist us in the development and improvement of proprietary products. If we are unable to maintain these relationships due to regulatory restrictions, hospital access restrictions for non-patients or for other reasons, our ability to develop, market and sell new and improved products could be adversely affected.
We have experienced, and may continue to experience, a significant and unpredictable need to adjust our operations as market demand for certain of our products has shifted and continues to shift or as may be mandated by governmental authorities: Some of our products are particularly sensitive to reductions in elective medical procedures.
We have experienced, and may continue to experience, a significant and unpredictable need to adjust our operations as market demand for certain of our products has shifted and continues to shift or as may be mandated by Dollar amounts in millions except per share amounts or as otherwise specified. 8 STRYKER CORPORATION 2024 FORM 10-K governmental authorities: Some of our products are particularly sensitive to reductions in elective medical procedures.
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.
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.
Additional capital that we may require in the future may not be available to us or may only be available to us on unfavorable terms, which could negatively affect our liquidity: Our future capital requirements will depend on many factors, including operating requirements, current and future Dollar amounts in millions except per share amounts or as otherwise specified. 9 STRYKER CORPORATION 2023 FORM 10-K acquisitions and the need to refinance existing debt.
Additional capital that we may require in the future may not be available to us or may only be available to us on unfavorable terms, which could negatively affect our liquidity: Our future capital requirements will depend on many factors, including operating requirements, current and future acquisitions and the need to refinance existing debt.
Pursuant to these settlements, we paid fines and penalties and retained an independent compliance consultant. We continue to implement recommendations that resulted from the independent compliance consultant’s review of our commercial practices to enhance our commercial business practices.
For example, in 2013 and 2018 we settled claims brought by the SEC related to the FCPA. Pursuant to these settlements, we paid fines and penalties and retained an independent compliance consultant. We continue to implement recommendations that resulted from the independent compliance consultant’s review of our commercial practices to enhance our commercial business practices.
The Collective Redress Directive could result in additional litigation risks and significant legal expenses. In addition, we may incur significant legal expenses or reputational damage for product liability claims regardless of whether we are found to be liable.
In addition, we may incur significant legal expenses or reputational damage for product liability claims regardless of whether we are found to be liable.
We may be unable to maintain adequate working relationships with healthcare professionals: We seek to maintain close working relationships with respected physicians and medical personnel in healthcare organizations, such as hospitals and universities, who assist in product research and development. We rely on these professionals to assist us in the development and improvement of proprietary products.
We may be unable to maintain adequate working relationships with healthcare professionals: We work with healthcare professionals in a transparent and responsible manner and seek to maintain these relationships with respected physicians and medical personnel in healthcare organizations, such as hospitals and universities, who assist in product research and development.
These governmental authorities may impose additional requirements or limits on the methods, procedures or agents we use to manufacture and sterilize our products, which could have a negative impact on our business.
These governmental authorities may impose additional requirements or limits on the methods, procedures or agents we use to manufacture and sterilize our products, which could have a negative impact on our business. For example, governmental authorities in the United States and internationally have or are considering adopting regulations on the use of per- and polyfluoroalkyl substances.
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 (both within and outside the European Union) have enacted new laws implementing Pillar Two or have proposed legislation. The OECD continues to release additional guidance on the two-pillar framework, with widespread implementation anticipated by 2024.
In 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.
Violations 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. In 2013 and 2018 we settled claims brought by the SEC related to the FCPA.
Violations or alleged violations of these laws have in the past resulted and could in the future result in investigations, litigation or government proceedings, and we have been and may in the future 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.
The extent of a particular cyber incident and the steps that we may need to take to investigate the incident may Dollar amounts in millions except per share amounts or as otherwise specified. 6 STRYKER CORPORATION 2023 FORM 10-K not be immediately clear, and it may take a significant amount of time before such investigation can be completed and full and reliable information about the incident is known.
The extent of a particular cyber incident and the steps that we may need to take to investigate the incident may not be immediately clear, and it may take a significant amount of time before such investigation can be completed and full and reliable information about the incident is known.
New business models, products and surgical procedures are introduced on an ongoing basis and our present or future products could be rendered obsolete or uneconomical by internal or external technological advances, as we continue to innovate to address physician and patient needs, or by our existing competitors and new market entrants.
New business models, products and surgical procedures, as well as improvements to existing products, are introduced on an ongoing basis and our present or future products could be rendered obsolete or uneconomical by internal or external technological advances, including by our existing competitors and new market entrants, which could adversely impact demand for certain of our existing products.
If we are unable to develop and launch Dollar amounts in millions except per share amounts or as otherwise specified. 5 STRYKER CORPORATION 2023 FORM 10-K new products, our ability to maintain or expand our market position in the markets in which we participate may be negatively impacted.
If we are unable to develop and launch new products, our ability to maintain or expand our market position in the markets in which we participate may be negatively impacted.
These changes, and any additional contemplated changes, could increase tax expense. We could be negatively impacted by future changes in the allocation of income to each of the income tax jurisdictions in which we operate: We operate in multiple income tax jurisdictions both in the United States and internationally.
We could be negatively impacted by future changes in the allocation of income to each of the income tax jurisdictions in which we operate: We operate in multiple income tax jurisdictions both in the United States and internationally. Accordingly, our management must determine the appropriate allocation of income to each jurisdiction based on current interpretations of complex income tax regulations.
Moreover, the increasing attention to corporate responsibility initiatives could also result in reduced demand for our products, reduced profits and increased investigations and litigation. If we are unable to satisfy evolving criteria, investors and other stakeholders may conclude that our policies and/or actions with respect to corporate responsibility matters are inadequate.
If we are unable to satisfy evolving criteria, certain investors and other stakeholders may conclude that our policies and/or actions with respect to corporate responsibility matters are inadequate or undesirable.
These indirect channels often are the main point of contact for the healthcare professionals and healthcare organization customers who buy and use our products.
We rely on indirect distribution channels and major distributors that are independent of Stryker: In many markets we rely on indirect distribution channels to market, distribute and sell our products. These indirect channels often are the main point of contact for the healthcare professionals and healthcare organization customers who buy and use our products.
In addition, the weakening or strengthening of the United States Dollar results in favorable or unfavorable translation effects when the results of our foreign locations are translated into United States Dollars.
In addition, the weakening or strengthening of the United States Dollar results in favorable or unfavorable translation effects when the results of our foreign locations are translated into United States Dollars. In recent years, currency exchange rates have been especially volatile, and these currency fluctuations have affected, and may continue to affect, our results of operations.
In addition, a significant number of our employees working remotely has exposed us, and may continue to expose us, to greater risks related to cybersecurity and cyber-liability.
In addition, a significant number of our employees working remotely has exposed us, and may continue to expose us, to greater risks related to cybersecurity and cyber-liability. Hardware and software failures or delays in our key information technology systems, networks, processes or sites could disrupt our operations, cause the loss of confidential information or otherwise adversely impact our business.
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.
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.
This framework is aligned with our areas of interest, which include environment and sustainability, social impact, diversity, equity and inclusion and supply chain management, among others. Implementation of these goals and initiatives involves risks and uncertainties, requires investments and depends in part on third-party performance or data that is outside our control.
Implementation of these initiatives involves risks and uncertainties, requires investments and depends in part on third-party performance or data that is outside our control. We cannot guarantee that we will achieve our announced corporate responsibility initiatives.
We incur significant costs to comply with regulations, including the MDR.
We may also be subject to legal obligations in some countries that require disclosure or sharing of proprietary information. We incur significant costs to comply with regulations, including the MDR.
Any of the foregoing risks could have a material adverse impact on our profitability and results of operations. In addition, since 2022 the market has experienced increasing inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts following the COVID-19 pandemic. We expect these inflationary pressures will continue.
Dollar amounts in millions except per share amounts or as otherwise specified. 5 STRYKER CORPORATION 2024 FORM 10-K In addition, in recent years, the market has experienced inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts following the COVID-19 pandemic.
Removed
All forward-looking statements Dollar amounts in millions except per share amounts or as otherwise specified. 4 STRYKER CORPORATION 2023 FORM 10-K contained in this report are qualified in their entirety by this cautionary statement.
Added
Any of the foregoing risks could have a material adverse impact on our profitability and results of operations.
Removed
This has already impacted our joint replacement and spine businesses on a national level, and our trauma and certain neurovascular products on a provincial level, and we expect further adoption of volume-based procurement provincially or nationally in China in 2024.
Added
Coverage policies and reimbursement levels can vary across the payer community globally, regionally, and locally, and may affect which products customers purchase, the market acceptance rate for new technologies and the prices customers are willing to pay for those products in a particular jurisdiction.
Removed
For example, China's National Health Commission has launched an anti-corruption campaign focused on investigating government officials and individuals employed by state-owned entities and public institutions in the healthcare sector, which has resulted in us seeing some limitations to physician and surgeon access.
Added
Furthermore, any changes to the coverage or reimbursement landscape, or adverse decisions relating to our products by administrators of these systems could significantly reduce reimbursement for procedures using our products or result in denial of reimbursement for those products, which could adversely affect customer demand, or the price customers are willing to pay for such products.
Removed
Although this has not had a material impact on our business, if other jurisdictions were to take this approach, our business could be adversely impacted. We rely on indirect distribution channels and major distributors that are independent of Stryker: In many markets we rely on indirect distribution channels to market, distribute and sell our products.
Added
Public and private payers have challenged, and are expected to continue to challenge, prices charged for medical products and services. Such downward pricing pressures from any or all of these payers may result in an adverse effect on our business, results of operations, financial condition and cash flows.
Removed
Elective medical procedures were suspended or reduced at various times during the COVID-19 pandemic in many of the markets where our products are marketed and sold, which negatively affected Dollar amounts in millions except per share amounts or as otherwise specified. 7 STRYKER CORPORATION 2023 FORM 10-K our business, cash flows, financial condition and results of operations.
Added
The success of our products and services depends on, among other things, our ability to properly identify customer needs and predict future needs; innovate and develop new technologies, services and applications at an accelerated pace; and appropriately allocate our research and development spending to products and services with higher growth.
Removed
In addition, during the COVID-19 pandemic our products in certain divisions, such as Medical, experienced higher demand as our customers were focused on treating COVID-19 patients and preparing for future public health emergencies.
Added
Emerging technologies such as generative artificial intelligence (AI) may be used by malicious actors to create more targeted phishing narratives, spread disinformation about us or our products or otherwise strengthen social engineering capabilities.
Removed
Accordingly, our management must determine the appropriate allocation of income to each jurisdiction based on current interpretations of complex income tax regulations. Income tax authorities regularly perform audits of our income tax filings.
Added
Our systems, networks, processes and sites may be vulnerable to damage, disruptions and shutdown from a variety of sources, including malfunctions in maintenance updates or security patches, design defects, the age of the technology, network failures, modernization or other initiatives, human acts and natural disasters.
Added
For example, some of our information technology systems contain legacy third-party software components for which we depend on a layered security Dollar amounts in millions except per share amounts or as otherwise specified. 7 STRYKER CORPORATION 2024 FORM 10-K approach to protect against exploitation, which may not be effective.
Added
Any such damage or disruptions could also compromise the security of our information systems and networks. These issues can also arise as a result of failures by, or in the software or hardware of, third parties, including networks or service providers, with whom we do business and over whom we have limited or no control.
Added
Any disruption or failure of our systems, networks, processes or sites could have a material impact on our business and operations.
Added
Our use of AI and other emerging technologies could adversely impact our business and financial results: We have begun to deploy AI and other emerging technologies in various facets of our operations and we continue to explore further use cases.
Added
The rapid advancement of these technologies presents opportunities for us in research, manufacturing, commercialization, and other business endeavors, but also entails risks, including that AI-generated content, analyses, or recommendations we utilize could be deficient, that our competitors may more quickly or effectively adopt AI capabilities, or that our use of AI or other emerging technologies increases regulatory, cybersecurity and other significant risks.
Added
In addition, any disruption or failure in the AI functionality we incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our product offerings. The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDollar amounts in millions except per share amounts or as otherwise specified. 10 STRYKER CORPORATION 2023 FORM 10-K In the event of a cybersecurity incident, we have an incident response plan that includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Biggest changeIn the event of a cybersecurity incident, we have an incident response plan that includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. The cybersecurity and product security teams routinely practice this plan with functions across the organization.
GOVERNANCE Cybersecurity risks are overseen by the full Board of Directors and the Audit Committee. The Audit Committee is central to the Board of Directors’ oversight of cybersecurity risks and bears the primary responsibility for overseeing cybersecurity risk. The Audit Committee actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major cybersecurity initiatives.
The Audit Committee is central to the Board of Directors’ oversight of cybersecurity risks and bears the primary responsibility for overseeing cybersecurity risk. The Audit Committee actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major cybersecurity initiatives. This involvement ensures that cybersecurity considerations are integrated into our broader strategic objectives.
The cybersecurity and product security teams routinely practice this plan with functions across the organization. We conduct tabletop exercises with senior management, during which we practice the procedures in place to ensure that potentially material cybersecurity risks and incidents are escalated to management and the Board of Directors where applicable.
We conduct tabletop exercises with senior management, during which we practice the procedures in place to ensure that potentially material cybersecurity risks and incidents are escalated to management and the Board of Directors where applicable. GOVERNANCE Cybersecurity risks are overseen by the full Board of Directors and the Audit Committee.
This involvement ensures that cybersecurity considerations are integrated into our broader strategic objectives. Our CISO provides comprehensive updates to the Audit Committee quarterly and the full Board of Directors at least annually.
Our CISO provides comprehensive updates to the Audit Committee quarterly and the full Board of Directors periodically.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES. We have approximately 28 company-owned and 294 leased locations worldwide including 43 manufacturing locations. We believe that our properties are in good operating condition and adequate for the manufacture and distribution of our products. We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Biggest changeITEM 2. PROPERTIES. We have approximately 27 company-owned and 297 leased locations worldwide including 45 manufacturing locations. We believe that our properties are in good operating condition and adequate for the manufacture and distribution of our products.
Added
Dollar amounts in millions except per share amounts or as otherwise specified. 12 STRYKER CORPORATION 2024 FORM 10-K We do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. We are involved in various proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor and intellectual property, and the matters described in more detail in Note 7 to our Consolidated Financial Statements.
Biggest changeITEM 3. LEGAL PROCEEDINGS. 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 7 to our Consolidated Financial Statements for further information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCompany / Index 2018 2019 2020 2021 2022 2023 Stryker Corporation $ 100.00 $ 135.33 $ 159.91 $ 176.26 $ 163.19 $ 202.03 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P 500 Health Care Index $ 100.00 $ 120.82 $ 137.07 $ 172.89 $ 169.51 $ 173.00 Dollar amounts in millions except per share amounts or as otherwise specified. 11 STRYKER CORPORATION 2023 FORM 10-K
Biggest changeCompany / Index 2019 2020 2021 2022 2023 2024 Stryker Corporation $ 100.00 $ 118.17 $ 130.25 $ 120.59 $ 149.29 $ 181.15 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P 500 Health Care Index $ 100.00 $ 113.45 $ 143.09 $ 140.29 $ 143.18 $ 146.87 Dollar amounts in millions except per share amounts or as otherwise specified. 13 STRYKER CORPORATION 2024 FORM 10-K
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the New York Stock Exchange under the symbol SYK. Our Board of Directors considers payment of cash dividends at its quarterly meetings. On January 31, 2024 there were 2,501 shareholders of record of our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on the New York Stock Exchange under the symbol SYK. Our Board of Directors considers payment of cash dividends at its quarterly meetings. On January 31, 2025 there were 2,510 shareholders of record of our common stock.
These shares were not registered under the Securities Act of 1933 based on the conclusion that the awards were not events of sale within the meaning of Section 2(a)(3) of the Act. The following graph compares our total returns (including reinvestment of dividends) against the Standard & Poor’s (S&P) 500 Index and the S&P 500 Health Care Index.
When issued, these shares are not registered under the Securities Act of 1933 based on the conclusion that the awards are not events of sale within the meaning of Section 2(a)(3) of the Act. The following graph compares our total returns (including 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, 2018 in our common stock and each of the indices.
The graph assumes $100 (not in millions) invested on December 31, 2019 in our common stock and each of the indices.
We did not repurchase any shares in the three months ended December 31, 2023 and the total dollar value of shares that could be acquired under our authorized repurchase program at December 31, 2023 was $1,033. In the fourth quarter 2023 we issued 5 shares of our common stock as performance incentive awards to employees.
We did not repurchase any shares in the three months ended December 31, 2024 and the total dollar value of shares that could be acquired under our authorized repurchase program at December 31, 2024 was $1,033. In the fourth quarter 2024 we did not issue shares of our common stock as performance incentive awards to employees.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeStatement of Earnings Data 2023 2022 2021 2020 2019 Net sales $ 20,498 $ 18,449 $ 17,108 $ 14,351 $ 14,884 Cost of sales 7,440 6,871 6,140 5,294 5,188 Gross profit $ 13,058 $ 11,578 $ 10,968 $ 9,057 $ 9,696 Research, development and engineering expenses 1,388 1,454 1,235 984 971 Selling, general and administrative expenses 7,129 6,455 6,427 5,361 5,356 Recall charges, net 18 (15) 103 17 192 Amortization of intangible assets 635 627 619 472 464 Goodwill impairment — 216 — — — Total operating expenses $ 9,170 $ 8,737 $ 8,384 $ 6,834 $ 6,983 Operating income $ 3,888 $ 2,841 $ 2,584 $ 2,223 $ 2,713 Other income (expense), net (215) (158) (303) (269) (151) Earnings before income taxes $ 3,673 $ 2,683 $ 2,281 $ 1,954 $ 2,562 Income taxes 508 325 287 355 479 Net earnings $ 3,165 $ 2,358 $ 1,994 $ 1,599 $ 2,083 Net earnings per share of common stock: Basic $ 8.34 $ 6.23 $ 5.29 $ 4.26 $ 5.57 Diluted $ 8.25 $ 6.17 $ 5.21 $ 4.20 $ 5.48 Dividends declared per share of common stock $ 3.050 $ 2.835 $ 2.585 $ 2.355 $ 2.135 Balance Sheet Data Cash, cash equivalents and current marketable securities $ 3,053 $ 1,928 $ 3,019 $ 3,024 $ 4,425 Accounts receivable, net 3,765 3,565 3,022 2,701 2,893 Inventories 4,843 3,995 3,314 3,494 2,980 Property, plant and equipment, net 3,215 2,970 2,833 2,752 2,567 Total assets $ 39,912 $ 36,884 $ 34,631 $ 34,330 $ 30,167 Accounts payable 1,517 1,413 1,129 810 675 Total debt 12,995 13,048 12,479 13,991 11,090 Shareholders’ equity $ 18,593 $ 16,616 $ 14,877 $ 13,084 $ 12,807 Cash Flow Data Net cash provided by operating activities $ 3,711 $ 2,624 $ 3,263 $ 3,277 $ 2,191 Purchases of property, plant and equipment 575 588 525 487 649 Depreciation 393 371 371 340 314 Acquisitions, net of cash acquired 390 2,563 339 4,222 802 Amortization of intangible assets 635 627 619 472 464 Payments of dividends 1,139 1,051 950 863 778 Repurchase of common stock — — — — 307 Other Data Number of shareholders of record 2,518 2,533 2,551 2,597 2,636 Approximate number of employees 52,000 51,000 46,000 43,000 40,000 Dollar amounts in millions except per share amounts or as otherwise specified. 12 STRYKER CORPORATION 2023 FORM 10-K
Biggest changeStatement of Earnings Data 2024 2023 2022 2021 2020 Net sales $ 22,595 $ 20,498 $ 18,449 $ 17,108 $ 14,351 Cost of sales 8,155 7,440 6,871 6,140 5,294 Gross profit $ 14,440 $ 13,058 $ 11,578 $ 10,968 $ 9,057 Research, development and engineering expenses 1,466 1,388 1,454 1,235 984 Selling, general and administrative expenses 7,685 7,111 6,386 6,266 5,163 Amortization of intangible assets 623 635 627 619 472 Goodwill and other impairments 977 36 270 264 215 Total operating expenses $ 10,751 $ 9,170 $ 8,737 $ 8,384 $ 6,834 Operating income $ 3,689 $ 3,888 $ 2,841 $ 2,584 $ 2,223 Other income (expense), net (197) (215) (158) (303) (269) Earnings before income taxes $ 3,492 $ 3,673 $ 2,683 $ 2,281 $ 1,954 Income taxes 499 508 325 287 355 Net earnings $ 2,993 $ 3,165 $ 2,358 $ 1,994 $ 1,599 Net earnings per share of common stock: Basic $ 7.86 $ 8.34 $ 6.23 $ 5.29 $ 4.26 Diluted $ 7.76 $ 8.25 $ 6.17 $ 5.21 $ 4.20 Dividends declared per share of common stock $ 3.240 $ 3.050 $ 2.835 $ 2.585 $ 2.355 Balance Sheet Data Cash, cash equivalents and current marketable securities $ 3,743 $ 3,053 $ 1,928 $ 3,019 $ 3,024 Accounts receivable, net 3,987 3,765 3,565 3,022 2,701 Inventories 4,774 4,843 3,995 3,314 3,494 Property, plant and equipment, net 3,448 3,215 2,970 2,833 2,752 Total assets $ 42,971 $ 39,912 $ 36,884 $ 34,631 $ 34,330 Accounts payable 1,679 1,517 1,413 1,129 810 Total debt 13,597 12,995 13,048 12,479 13,991 Shareholders’ equity $ 20,634 $ 18,593 $ 16,616 $ 14,877 $ 13,084 Cash Flow Data Net cash provided by operating activities $ 4,242 $ 3,711 $ 2,624 $ 3,263 $ 3,277 Purchases of property, plant and equipment 755 575 588 525 487 Depreciation 427 393 371 371 340 Acquisitions, net of cash acquired 1,628 390 2,563 339 4,222 Amortization of intangible assets 623 635 627 619 472 Payments of dividends 1,219 1,139 1,051 950 863 Repurchase of common stock — — — — — Other Data Number of shareholders of record 2,520 2,518 2,533 2,551 2,597 Approximate number of employees 53,000 52,000 51,000 46,000 43,000 Dollar amounts in millions except per share amounts or as otherwise specified. 14 STRYKER CORPORATION 2024 FORM 10-K

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+32 added−19 removed47 unchanged
Biggest changeReconciliation of the Most Directly Comparable GAAP Financial Measure to Non-GAAP Financial Measure 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 $ 13,058 $ 7,129 $ 1,388 $ 3,888 $ (215) $ 508 $ 3,165 13.8 % $ 8.25 Acquisition and integration-related costs: Inventory stepped-up to fair value — — — — — — — — — Other acquisition and integration-related (a) — (20) — 20 — (25) 45 (0.8) 0.12 Amortization of purchased intangible assets — — — 635 — 132 503 1.2 1.31 Structural optimization and other special charges (b) 39 (166) (1) 206 — 47 159 0.5 0.42 Goodwill impairment — — — — — — — — — Medical device regulations (c) 2 — (94) 96 — 22 74 0.2 0.19 Recall-related matters (d) — — — 18 — 4 14 — 0.04 Regulatory and legal matters (e) — (92) — 92 — 29 63 0.4 0.16 Tax matters (f) — — — — (8) (51) 43 (1.2) 0.11 Adjusted $ 13,099 $ 6,851 $ 1,293 $ 4,955 $ (223) $ 666 $ 4,066 14.1 % $ 10.60 2022 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 $ 11,578 $ 6,455 $ 1,454 $ 2,841 $ (158) $ 325 $ 2,358 12.1 % $ 6.17 Acquisition and integration-related costs: Inventory stepped-up to fair value 12 — — 12 — 3 9 — 0.02 Other acquisition and integration-related (a) — (138) — 138 — 34 104 0.5 0.27 Amortization of purchased intangible assets — — — 627 — 132 495 1.7 1.30 Structural optimization and other special charges (b) 56 (206) (87) 349 — 66 283 0.7 0.74 Goodwill impairment — — — 216 — — 216 (1.1) 0.57 Medical device regulations (c) 3 — (137) 140 — 25 115 0.2 0.30 Recall-related matters (d) — — — (15) — (3) (12) — (0.03) Regulatory and legal matters (e) — (76) — 76 — 7 69 (0.2) 0.18 Tax matters (f) — — — — (75) (9) (66) 0.1 (0.18) Adjusted $ 11,649 $ 6,035 $ 1,230 $ 4,384 $ (233) $ 580 $ 3,571 14.0 % $ 9.34 Dollar amounts in millions except per share amounts or as otherwise specified. 17 STRYKER CORPORATION 2023 FORM 10-K 2021 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 $ 10,968 $ 6,427 $ 1,235 $ 2,584 $ (303) $ 287 $ 1,994 12.6 % $ 5.21 Acquisition and integration-related costs: Inventory stepped-up to fair value 266 — — 266 — 63 203 1.0 0.53 Other acquisition and integration-related (a) — (319) — 319 — 75 244 1.2 0.64 Amortization of purchased intangible assets — — — 619 — 130 489 1.6 1.28 Structural optimization and other special charges (b) 28 (358) — 386 11 52 345 (0.3) 0.90 Goodwill impairment — — — — — — — — — Medical device regulations (c) 5 — (102) 107 — 17 90 — 0.24 Recall-related matters (d) — — — 103 — 14 89 — 0.23 Regulatory and legal matters (e) — 2 — (2) (7) 3 (12) 0.2 (0.02) Tax matters (f) — — — — — (32) 32 (1.4) 0.08 Adjusted $ 11,267 $ 5,752 $ 1,133 $ 4,382 $ (299) $ 609 $ 3,474 14.9 % $ 9.09 (a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including: 2023 2022 2021 Termination of sales relationships $ 5 $ 21 $ 154 Employee retention and workforce reductions 6 33 90 Changes in the fair value of contingent consideration (1) (135) — Manufacturing integration costs 2 32 16 Stock compensation payments upon a change in control — 132 — Other integration-related activities 8 55 59 Adjustments to Operating Income $ 20 $ 138 $ 319 Charges for acquisition-related tax provisions (30) — — Other income taxes related to acquisition and integration-related costs 5 34 75 Adjustments to Income Taxes $ (25) $ 34 $ 75 Adjustments to Net Earnings $ 45 $ 104 $ 244 (b) Structural optimization and other special charges represent the costs associated with: 2023 2022 2021 Employee retention and workforce reductions $ 69 $ 74 $ 39 Closure/transfer of manufacturing and other facilities 50 83 52 Product line exits 32 80 61 Certain long-lived and intangible asset write-offs and impairments 28 96 203 Other charges 27 16 31 Adjustments to Operating Income $ 206 $ 349 $ 386 Adjustments to Other Income (Expense), Net $ — $ — $ 11 Adjustments to Income Taxes $ 47 $ 66 $ 52 Adjustments to Net Earnings $ 159 $ 283 $ 345 (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.
Biggest changeReconciliation of the Most Directly Comparable GAAP Financial Measure to Non-GAAP Financial Measure 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 $ 14,440 $ 7,685 $ 1,466 $ 3,689 $ (197) $ 499 $ 2,993 14.3 % $ 7.76 Acquisition and integration-related costs: Inventory stepped-up to fair value 46 — — 46 — 12 34 0.2 0.09 Other acquisition and integration-related (a) — (107) (1) 108 — 23 85 0.2 0.22 Amortization of purchased intangible assets — — — 623 — 128 495 1.0 1.28 Structural optimization and other special charges (b) 59 (77) (2) 138 1 29 110 0.3 0.29 Goodwill and other impairments (c) — — — 977 — 125 852 (0.6) 2.21 Medical device regulations (d) 9 — (49) 58 — 14 44 0.1 0.11 Recall-related matters (e) 11 (29) — 40 — 10 30 0.1 0.08 Regulatory and legal matters (f) — (36) — 36 — 7 29 0.1 0.08 Tax matters (g) — — — — — (28) 28 (0.9) 0.07 Adjusted $ 14,565 $ 7,436 $ 1,414 $ 5,715 $ (196) $ 819 $ 4,700 14.8 % $ 12.19 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 $ 13,058 $ 7,111 $ 1,388 $ 3,888 $ (215) $ 508 $ 3,165 13.8 % $ 8.25 Acquisition and integration-related costs: Inventory stepped-up to fair value — — — — — — — — — Other acquisition and integration-related (a) — (20) — 20 — (25) 45 (0.8) 0.12 Amortization of purchased intangible assets — — — 635 — 132 503 1.2 1.31 Structural optimization and other special charges (b) 39 (130) (1) 170 — 38 132 0.4 0.34 Goodwill and other impairments (c) — — — 36 — 9 27 0.1 0.08 Medical device regulations (d) 2 — (94) 96 — 22 74 0.2 0.19 Recall-related matters (e) — (18) — 18 — 4 14 — 0.04 Regulatory and legal matters (f) — (92) — 92 — 29 63 0.4 0.16 Tax matters (g) — — — — (8) (51) 43 (1.2) 0.11 Adjusted $ 13,099 $ 6,851 $ 1,293 $ 4,955 $ (223) $ 666 $ 4,066 14.1 % $ 10.60 2022 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 $ 11,578 $ 6,386 $ 1,454 $ 2,841 $ (158) $ 325 $ 2,358 12.1 % $ 6.17 Acquisition and integration-related costs: Inventory stepped-up to fair value 12 — — 12 — 3 9 — 0.02 Other acquisition and integration-related (a) — (138) — 138 — 34 104 0.6 0.27 Amortization of purchased intangible assets — — — 627 — 132 495 1.7 1.30 Structural optimization and other special charges (b) 56 (152) (87) 295 — 61 234 0.8 0.61 Goodwill and other impairments (c) — — — 270 — 5 265 (1.2) 0.70 Medical device regulations (d) 3 — (137) 140 — 25 115 0.2 0.30 Recall-related matters (e) — 15 — (15) — (3) (12) — (0.03) Regulatory and legal matters (f) — (76) — 76 — 7 69 (0.2) 0.18 Tax matters (g) — — — — (75) (9) (66) 0.1 (0.18) Adjusted $ 11,649 $ 6,035 $ 1,230 $ 4,384 $ (233) $ 580 $ 3,571 14.1 % $ 9.34 (a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including: Dollar amounts in millions except per share amounts or as otherwise specified. 19 STRYKER CORPORATION 2024 FORM 10-K 2024 2023 2022 Termination of sales relationships $ 4 $ 5 $ 21 Employee retention and workforce reductions 22 6 33 Changes in the fair value of contingent consideration 8 (1) (135) Manufacturing integration costs 3 2 32 Stock compensation payments upon a change in control 22 — 132 Other integration-related activities 49 8 55 Adjustments to Operating Income $ 108 $ 20 $ 138 Charges for acquisition-related tax provisions — — — Other income taxes related to acquisition and integration-related costs 23 (25) 34 Adjustments to Income Taxes $ 23 $ (25) $ 34 Adjustments to Net Earnings $ 85 $ 45 $ 104 (b) Structural optimization and other special charges represent the costs associated with: 2024 2023 2022 Employee retention and workforce reductions $ 23 $ 69 $ 74 Closure/transfer of manufacturing and other facilities 31 50 83 Product line exits 37 22 34 Termination of sales relationships 8 — — Other charges 39 29 104 Adjustments to Operating Income $ 138 $ 170 $ 295 Adjustments to Other Income (Expense), Net $ 1 $ — $ — Adjustments to Income Taxes $ 29 $ 38 $ 61 Adjustments to Net Earnings $ 110 $ 132 $ 234 (c) Goodwill and other impairments represent the costs associated with: 2024 2023 2022 Goodwill impairments $ 456 $ — $ 216 Certain long-lived and intangible asset write-offs and impairments 466 26 8 Product line exits (e.g., long-lived asset and specifically-identified intangible asset write-offs) 55 10 46 Adjustments to Operating Income $ 977 $ 36 $ 270 Adjustments to Income Taxes $ 125 $ 9 $ 5 Adjustments to Net Earnings $ 852 $ 27 $ 265 (d) 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.
ITEM 7. 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.
ITEM 7. 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, and Orthopaedics that help improve patient and healthcare outcomes.
Research, Development and Engineering Expenses Research, development and engineering expenses as a percentage of net sales in 2023 decreased to 6.8% from 7.9% in 2022 primarily due to increased spending for product launches, the write-off of certain intangible assets and higher spend related to medical device regulations in the European Union in 2022.
Research, development and engineering expenses as a percentage of net sales in 2023 decreased to 6.8% from 7.9% in 2022 primarily due to increased spending for product launches, the write-off of certain intangible assets and higher spend related to the new medical device regulations in the European Union in 2022.
We did not identify any factors in 2023 or 2022 that would lead us to believe that those reporting units are at risk of a goodwill impairment. Accordingly, we performed qualitative assessments and concluded it was more likely than not that the fair values of those reporting units exceeded their respective carrying amounts.
We did not identify any factors in 2024 or 2023 that would lead us to believe that those reporting units are at risk of a goodwill impairment. Accordingly, we performed qualitative assessments and concluded it was more likely than not that the fair values of those reporting units exceeded their respective carrying amounts.
CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH REQUIREMENTS In 2023 we recorded charges for various legal matters as further described in Note 7 to our Consolidated Financial Statements. Recorded reserves represent the best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known.
CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH REQUIREMENTS In 2024 we recorded charges for various legal matters as further described in Note 7 to our Consolidated Financial Statements. Recorded reserves represent the best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known.
(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) 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.
While segment mix was not a significant driver of the change in gross profit as a percent of net sales between 2023, 2022 and 2021, 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.
While segment mix was not a significant driver of the change in gross profit as a percent of net sales between 2024, 2023 and 2022, 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 segment.
(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 recall-related matters.
The increase in net expense in 2023 compared to 2022 was primarily due to the release of accrued interest of $50 in 2022 related to the effective settlement of the United States federal income tax audit for years 2014 through 2018. Refer to Note 11 to our Consolidated Financial Statements for further information.
The increase in net expense in 2023 from 2022 was primarily due to the release of accrued interest of $50 in 2022 related to the effective settlement of the United States federal income tax audit for years 2014 through 2018. Refer to Note 11 to our Consolidated Financial Statements for further information and higher interest income in 2023.
We are not able to reasonably estimate the future periods in which payments will be made. As further described in Note 11 to our Consolidated Financial Statements, on December 31, 2023 we had a reserve for uncertain income tax positions of $371.
We are not able to reasonably estimate the future periods in which payments will be made. As further described in Note 11 to our Consolidated Financial Statements, on December 31, 2024 we had a reserve for uncertain income tax positions of $349.
Excluding the 0.3% impact of acquisitions and divestitures, net sales in constant currency increased by 10.2% from increased unit volume and 1.6% due to higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology products.
Excluding the 0.3% impact of acquisitions and divestitures, net sales in constant currency increased by 10.2% from increased unit volume and 1.7% due to higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.
In certain of these jurisdictions, we may take tax positions that management believes are supportable but are potentially subject to successful challenge by the applicable taxing authority. These differences of interpretation with the respective governmental taxing authorities can be impacted by the local economic and fiscal environment.
We operate in multiple jurisdictions with complex tax policy and regulatory environments. In certain of these jurisdictions, we may take tax positions that management believes are supportable but are potentially subject to successful challenge by the applicable taxing authority. These differences of interpretation with the respective governmental taxing authorities can be impacted by the local economic and fiscal environment.
Alongside our customers around the world, we impact more than 150 million patients annually. Our goal is to achieve sales growth at the high-end of the medical technology (MedTech) industry and maintain our long-term capital allocation strategy that prioritizes: (1) Acquisitions, (2) Dividends and (3) Share repurchases.
Alongside our customers around the world, we impact more than 150 million patients annually. Our goal is to achieve sales growth at the high-end of the medical technology (MedTech) industry and maintain our long-term capital allocation strategy that prioritizes: (1) Acquisitions, (2) Dividends and (3) Share repurchases. Overview of 2024 In 2024 we achieved reported net sales growth of 10.2%.
These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement.
Deferred tax assets generally represent the tax effect of items that can be used as a tax deduction or credit in future years for which we have already recorded the tax benefit in our income statement.
Our cash, cash equivalents and marketable securities held in locations outside the United States was approximately 25% and 36% on December 31, 2023 and 2022.
Our cash, cash equivalents and marketable securities held in locations outside the United States was approximately 20% and 25% on December 31, 2024 and 2023.
As further described in Note 12 to our Consolidated Financial Statements, on December 31, 2023 our defined benefit pension plans were underfunded by $341, of which approximately $337 related to plans outside the United States.
As further described in Note 12 to our Consolidated Financial Statements, on December 31, 2024 our defined benefit pension plans were underfunded by $290, of which approximately $291 related to plans outside the United States.
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%. Excluding the 2.3% impact of acquisitions and divestitures, net sales in constant currency increased by 11.2% from increased unit volume and 0.6% due to higher prices.
MedSurg and Neurotechnology Net Sales MedSurg and Neurotechnology net sales in 2024 increased 11.1% as reported and 11.6% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.4% impact of acquisitions and divestitures, net sales in constant currency increased by 9.5% from increased unit volume and 1.7% due to higher prices.
Refer to Note 10 to our Consolidated Financial Statements for further information. 2023 2022 2021 Dividends paid per common share $ 3.00 $ 2.78 $ 2.52 Total dividends paid to common shareholders $ 1,139 $ 1,051 $ 950 Liquidity Cash, cash equivalents and marketable securities were $3,053 and $1,928, and our current assets exceeded current liabilities by $4,597 and $3,972 on December 31, 2023 and 2022.
Refer to Note 10 to our Consolidated Financial Statements for further information. 2024 2023 2022 Dividends paid per common share $ 3.20 $ 3.00 $ 2.78 Total dividends paid to common shareholders $ 1,219 $ 1,139 $ 1,051 Liquidity Cash, cash equivalents and marketable securities were $3,743 and $3,053, and our current assets exceeded current liabilities by $7,231 and $4,597 on December 31, 2024 and 2023.
Excluding the 0.1% impact of acquisitions and divestitures, net sales in constant currency increased by 10.9% from increased unit volume and 0.6% due to higher prices. The unit volume increase was primarily due to higher shipments across all product lines.
Excluding the 0.1% impact of acquisitions and divestitures, net sales in constant currency increased by 10.9% from increased unit volume and 0.6% due to higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses and most Orthopaedics businesses.
The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology products and most Orthopaedics and Spine products. MedSurg and Neurotechnology Net Sales MedSurg and Neurotechnology net sales in 2023 increased 11.5% as reported and 12.1% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%.
The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses. MedSurg and Neurotechnology net sales in 2023 increased 11.7% as reported and 12.2% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%.
The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology products. Orthopaedics and Spine Net Sales Orthopaedics and Spine net sales in 2023 increased 10.5% as reported and 11.1% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%.
The unit volume increase was primarily due to higher shipments across all businesses. Consolidated net sales in 2023 increased 11.1% as reported and 11.6% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%.
There were no share repurchases in 2023, 2022 or 2021. We maintain debt levels that we consider appropriate after evaluating a number of factors including cash requirements for ongoing operations, investment and financing plans (including acquisitions and share repurchase activities) and overall cost of capital.
In 2022 we made payments of $653 on long-term debt and dividend payments of $1,051. There were no share repurchases in 2024, 2023 or 2022. We maintain debt levels that we consider appropriate after evaluating a number of factors including cash requirements for ongoing operations, investment and financing plans (including acquisitions and share repurchase activities) and overall cost of capital.
Net Earnings Net earnings for 2023 increased to $3,165 or $8.25 per diluted share from $2,358 or $6.17 per diluted share in 2022 and $1,994 or $5.21 per diluted share in 2021. Refer to the comments above for discussion of the primary drivers of the change.
Net Earnings Net earnings for 2024 increased to $2,993 or $7.76 per diluted share from $3,165 or $8.25 per diluted share in 2023 and $2,358 or $6.17 per diluted share in 2022. Refer to the comments above for discussion of the primary drivers of the change.
Selling, General and Administrative Expenses Selling, general and administrative expenses as a percentage of net sales in 2023 decreased to 34.8% from 35.0% in 2022 primarily due to charges of $132 related to share-based awards for Vocera employees that vested upon our acquisition in 2022, partially offset by disciplined increases in spend and investments in 2023 to support our growth, including sales growth incentives and increased spend on travel and meetings.
Selling, general and administrative expenses as a percentage of net sales in 2023 of 34.7% remained relatively flat with 34.6% in 2022 as charges of $132 related to share-based awards for Vocera employees that vested upon our acquisition in 2022 were partially offset by disciplined increases in spend and investments in 2023 to support our growth, including sales growth incentives and increased spend on travel and meetings.
In our quantitative impairment tests, the fair value of our Spine reporting unit was determined using a discounted cash flow analysis, which is a form of the income approach.
In our quantitative goodwill impairment tests performed at September 30 and October 31, the fair value of our Spine reporting unit was determined using a discounted cash flow analysis, which is a form of the income approach.
Consolidated net sales in 2022 increased 7.8% as reported and 11.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by 3.2%. Excluding the 1.3% impact of acquisitions and divestitures, net sales in constant currency increased by 10.6% from increased unit volume partially offset by 0.9% due to lower prices.
Consolidated Net Sales Consolidated net sales in 2024 increased 10.2% as reported and 10.7% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.5% impact of acquisitions and divestitures, net sales in constant currency increased by 9.1% from increased unit volume and 1.1% due to higher prices.
(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including: 2023 2022 2021 Adjustments related to the transfer of certain intellectual properties between tax jurisdictions $ (89) $ (182) $ (77) Certain tax audit settlements 24 162 — Reversal of deferred income tax on undistributed earnings of foreign subsidiaries — 71 — Other significant and discrete tax items 14 (60) 45 Adjustments to Income Taxes $ (51) $ (9) $ (32) Benefits for certain tax audit settlements (9) (45) — Other tax related adjustments 1 (30) — Adjustments to Other Income (Expense), Net $ (8) $ (75) $ — Adjustments to Net Earnings $ 43 $ (66) $ 32 Dollar amounts in millions except per share amounts or as otherwise specified. 18 STRYKER CORPORATION 2023 FORM 10-K FINANCIAL CONDITION AND LIQUIDITY Net cash provided by (used in): 2023 2022 2021 Operating activities $ 3,711 $ 2,624 $ 3,263 Investing activities (962) (2,924) (859) Financing activities (1,594) (749) (2,365) Effect of exchange rate changes (28) (51) (38) Change in cash and cash equivalents $ 1,127 $ (1,100) $ 1 We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates despite the current macroeconomic environment.
(g) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including: 2024 2023 2022 Adjustments related to the transfer of certain intellectual properties between tax jurisdictions $ (185) $ (89) $ (182) Certain tax audit settlements (1) 24 162 Reversal of deferred income tax on undistributed earnings of foreign subsidiaries — — 71 Deferred tax benefit on outside basis related to the anticipated sale of the Spinal Implants business 170 — — Other significant and discrete tax items (12) 14 (60) Adjustments to Income Taxes $ (28) $ (51) $ (9) Benefits for certain tax audit settlements — (9) (45) Other tax related adjustments — 1 (30) Adjustments to Other Income (Expense), Net $ — $ (8) $ (75) Adjustments to Net Earnings $ 28 $ 43 $ (66) FINANCIAL CONDITION AND LIQUIDITY Net cash provided by (used in): 2024 2023 2022 Operating activities $ 4,242 $ 3,711 $ 2,624 Investing activities (3,000) (962) (2,924) Financing activities (525) (1,594) (749) Effect of exchange rate changes (36) (28) (51) Change in cash and cash equivalents $ 681 $ 1,127 $ (1,100) We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates despite the current macroeconomic environment.
Refer to the comments above for discussion of the primary drivers of the change. MedSurg and Neurotechnology operating income as a percentage of net sales increased to 28.2% in 2023 from 25.8% in 2022. MedSurg and Neurotechnology operating income as a percentage of net sales decreased to 25.8% in 2022 from 29.4% in 2021.
Operating income decreased as a percentage of sales to 16.3% in 2024 from 19.0% in 2023 and increased from 15.4% in 2022. Refer to the comments above for discussion of the primary drivers of the change. MedSurg and Neurotechnology operating income as a percentage of net sales increased to 29.6% in 2024 from 28.5% in 2023.
Our overall cash position reflects our business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations. Operating Activities Cash provided by operating activities was $3,711, $2,624 and $3,263 in 2023, 2022 and 2021. The increase from 2022 was primarily due to higher net earnings and increased collections on accounts receivable.
Our overall cash position reflects our business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations. Operating Activities Cash provided by operating activities was $4,242, $3,711 and $2,624 in 2024, 2023 and 2022. The increase in 2024 was primarily due to higher cash earnings partially offset by changes in working capital.
The decrease in Orthopaedics and Spine operating income as a percentage of net sales for 2023 from 2022 was primarily driven by higher selling, general and administrative expenses due to continued investments including sales growth incentives and a more normalized cadence of travel and meetings and higher manufacturing and supply chain costs primarily due to increased inventory reserves partially offset by higher unit volumes.
The decrease in Orthopaedics operating income as a percentage of net sales for 2023 from 2022 was primarily driven by higher higher manufacturing and supply chain costs primarily due to increased inventory reserves partially offset by higher unit volumes.
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.
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.
Legal and Other Contingencies We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, intellectual property, and other matters that are more fully described in Note 7 to our Consolidated Financial Statements.
Dollar amounts in millions except per share amounts or as otherwise specified. 23 STRYKER CORPORATION 2024 FORM 10-K Legal and Other Contingencies We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, intellectual property and other matters that are more fully described in Note 7 to our Consolidated Financial Statements.
These repayments were offset by net proceeds of $1,781 from the issuance of various senior unsecured notes as described in Note 10 to our Consolidated Financial Statements. In 2022 we made payments of $653 on long-term debt and dividend payments of $1,051. In 2021 we made payments of $1,151 on long-term debt and dividend payments of $950.
These repayments were offset by net proceeds of $3,011 from the issuance of senior unsecured notes as described in Note 10 to our Consolidated Financial statements. In 2023 we received proceeds of 1,241 from issuance of long-term debt and made payments of $2,058 on long-term debt and dividend payments of $1,139.
We raised funds in the capital 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.
We also have a revolving credit agreement maturing in October 2026 with an aggregate principal amount of $2,250. We raised funds in the capital 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.
The key components of the change were: Dollar amounts in millions except per share amounts or as otherwise specified. 14 STRYKER CORPORATION 2023 FORM 10-K Gross Profit Percent Net Sales 2021 64.1 % Sales pricing (30) bps Volume and mix 110 bps Manufacturing and supply chain costs (360) bps Inventory stepped up to fair value 150 bps 2022 62.8 % Sales pricing 20 bps Volume and mix 100 bps Manufacturing and supply chain costs (40) bps Inventory stepped up to fair value 10 bps 2023 63.7 % Gross profit as a percentage of net sales increased to 63.7% in 2023 from 62.8% in 2022 due to higher sales pricing and favorable volume offset by higher manufacturing and supply chain costs primarily due to higher raw material costs in the first six months of 2023 and supply chain inefficiencies.
The key components of the change were: Gross Profit Percent Net Sales 2022 62.8 % Sales pricing 20 bps Volume and mix 100 bps Manufacturing and supply chain costs (40) bps Inventory stepped up to fair value 10 bps 2023 63.7 % Sales pricing 40 bps Volume and mix 60 bps Manufacturing and supply chain costs (40) bps Inventory stepped up to fair value (20) bps Structural optimization and other special charges (20) bps 2024 63.9 % Dollar amounts in millions except per share amounts or as otherwise specified. 16 STRYKER CORPORATION 2024 FORM 10-K Gross profit as a percentage of net sales increased to 63.9% in 2024 from 63.7% in 2023 due to higher sales pricing and favorable volume partially offset by higher manufacturing and supply chain costs primarily due to inflationary pressures impacting fixed and variable manufacturing costs as well as higher amortization of inventory stepped up to fair value.
Assets classified as held for sale, if any, are recorded at the lower of carrying amount or fair value less costs to sell.
Assets classified as held for sale, if any, are recorded at the lower of carrying amount or fair value less costs to sell. During 2022 we recognized a goodwill impairment charge of $216 for the Spine reporting unit.
The decrease in MedSurg and Neurotechnology operating income as a percentage of net sales in 2022 from 2021 was primarily driven by higher manufacturing and supply chain costs due to supply chain challenges impacting capital products in our MedSurg businesses and higher selling, general and administrative expenses due to a return to more normal levels following the COVID pandemic partially offset by higher unit volumes and prices.
The increase in MedSurg and Neurotechnology operating income as a percentage of net sales in 2023 from 2022 was primarily driven by higher unit volumes, higher prices and lower manufacturing and supply chain costs due to supply chain challenges impacting capital products in our MedSurg businesses in 2022 which improved in 2023 partially offset by higher selling, general and administrative expenses as a percentage of sales due to continued investments including sales growth incentives and a more normalized cadence of travel and meetings.
For the quantitative impairment test of goodwill, we corroborate our concluded value under the income approach using a market approach that utilizes trading multiples derived from a peer set of similar companies.
For the quantitative impairment test of goodwill, we corroborate our concluded value under the income approach using a market approach that utilizes trading multiples derived from a peer set of similar companies. The income approach calculates the present value of estimated future cash flows and requires certain assumptions and estimates be made regarding market conditions and our future profitability.
Costs specific to updating our Dollar amounts in millions except per share amounts or as otherwise specified. 16 STRYKER CORPORATION 2023 FORM 10-K 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 .
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 .
The undiscounted cash flows expected to be generated by the related assets are estimated over their useful life based on updated projections.
The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual asset level or the asset group level. The undiscounted cash flows expected to be generated by the related assets are estimated over their useful life based on updated projections.
Financing Activities Cash used in financing activities was $1,594, $749 and $2,365 in 2023, 2022 and 2021. Cash used in 2023 was primarily driven by dividend payments of $1,139 and repayments of debt, including $850 to pay off the $1,500 term loan used to fund the acquisition of Vocera and $1,208 to pay off maturing senior unsecured notes.
Financing Activities Cash used in financing activities was $525, $1,594 and $749 in 2024, 2023 and 2022. Cash used in 2024 was primarily driven by dividend payments of $1,219 and repayments of $2,039 to pay off maturing senior unsecured notes.
We subsequently issued $600 of 4.850% senior unsecured notes due December 8, 2028 and €600 of 3.375% senior unsecured notes due December 11, 2028. (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.
In November 2024 we repaid the outstanding €500 of floating rate senior notes and in December 2024 we repaid €850 of 0.250% senior unsecured notes. (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.
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.
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 Dollar amounts in millions except per share amounts or as otherwise specified. 18 STRYKER CORPORATION 2024 FORM 10-K and the amount of favorable awards from settlements. 7.
Orthopaedics and Spine operating income as a percentage of net sales decreased to 27.7% in 2023 from 29.3% in 2022. Orthopaedics and Spine operating income as a percentage of net sales increased to 29.3% in 2022 from 28.8% in 2021.
MedSurg and Neurotechnology operating income as a percentage of net sales increased to 28.5% in 2023 from 26.0% in 2022. Orthopaedics operating income as a percentage of net sales increased to 28.5% in 2024 from 27.2% in 2023. Orthopaedics operating income as a percentage of net sales increased to 27.2% in 2023 from 29.1% in 2022.
The effective income tax rates for 2023, 2022 and 2021 reflect the continued lower effective income tax rates as a result of our European operations, the tax effect related to the transfers of intellectual property between tax jurisdictions, the tax effect of future remittances of the undistributed earnings of foreign subsidiaries and certain discrete tax items.
Additionally, the effective income tax rates for 2024, 2023 and 2022 reflect the continued lower effective income tax rates as a result of our European operations and certain discrete tax items.
Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary and reverse over time, such as depreciation expense.
Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences are temporary and reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities.
These amounts include amortization related to intangible assets acquired in the second quarter 2023 from Cerus and in the first quarter 2022 from Vocera. Refer to Notes 6 and 8 to our Consolidated Financial Statements for further information. Goodwill Impairment In 2022 we recorded a goodwill impairment charge of $216 related to our Spine business.
Amortization of Intangible Assets Amortization of intangible assets was $623, $635 and $627 in 2024, 2023 and 2022. These amounts include amortization related to intangible assets acquired in 2024 from various acquisitions, 2023 from Cerus Endovascular Limited (Cerus) and 2022 from Vocera. Refer to Notes 6 and 8 to our Consolidated Financial Statements for further information.
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 also have a revolving credit agreement maturing in October 2026 with an aggregate principal amount of $2,250.
In addition, we have $750 of short-term investments which mature in the first quarter of 2025. 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.
Net sales in constant currency increased by 11.9% from increased unit volume partially offset by 0.8% due to lower prices. The unit volume increase was due to higher shipments across all Orthopaedics and Spine products.
Excluding the 0.1% impact of acquisitions and divestitures, net sales in constant currency increased by 11.9% from increased unit volume partially offset by 1.1% due to lower prices. The unit volume increase was due to higher shipments across most Orthopaedics businesses. Gross Profit Gross profit was $14,440, $13,058 and $11,578 in 2024, 2023, and 2022.
CONSOLIDATED RESULTS OF OPERATIONS Percent Net Sales Percentage Change 2023 2022 2021 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net sales $ 20,498 $ 18,449 $ 17,108 100.0 % 100.0 % 100.0 % 11.1 % 7.8 % Gross profit 13,058 11,578 10,968 63.7 62.8 64.1 12.8 5.6 Research, development and engineering expenses 1,388 1,454 1,235 6.8 7.9 7.2 (4.5) 17.7 Selling, general and administrative expenses 7,129 6,455 6,427 34.8 35.0 37.6 10.4 0.4 Recall charges, net 18 (15) 103 0.1 (0.1) 0.6 nm nm Amortization of intangible assets 635 627 619 3.1 3.4 3.6 1.3 1.3 Goodwill impairment — 216 — — 1.2 — nm nm Other income (expense), net (215) (158) (303) (1.0) (0.9) (1.8) 36.1 (47.9) Income taxes 508 325 287 nm nm nm 56.3 13.2 Net earnings $ 3,165 $ 2,358 $ 1,994 15.4 % 12.8 % 11.7 % 34.2 % 18.3 % Net earnings per diluted share $ 8.25 $ 6.17 $ 5.21 33.7 % 18.4 % Adjusted net earnings per diluted share (1) $ 10.60 $ 9.34 $ 9.09 13.5 % 2.8 % nm - not meaningful Dollar amounts in millions except per share amounts or as otherwise specified. 13 STRYKER CORPORATION 2023 FORM 10-K Geographic and Segment Net Sales Percentage Change 2023 vs. 2022 2022 vs. 2021 2023 2022 2021 As Reported Constant Currency As Reported Constant Currency Geographic: United States $ 15,257 $ 13,638 $ 12,321 11.9 % 11.9 % 10.7 % 10.7 % International 5,241 4,811 4,787 8.9 10.9 0.5 11.7 Total $ 20,498 $ 18,449 $ 17,108 11.1 % 11.6 % 7.8 % 11.0 % Segment: MedSurg and Neurotechnology $ 11,836 $ 10,611 $ 9,538 11.5 % 12.1 % 11.2 % 14.1 % Orthopaedics and Spine 8,662 7,838 7,570 10.5 11.1 3.5 7.0 Total $ 20,498 $ 18,449 $ 17,108 11.1 % 11.6 % 7.8 % 11.0 % Supplemental Net Sales Growth Information Percentage Change 2023 vs. 2022 2022 vs. 2021 United States International United States International 2023 2022 2021 As Reported Constant Currency As Reported As Reported Constant Currency As Reported Constant Currency As Reported As Reported Constant Currency MedSurg and Neurotechnology: Instruments $ 2,569 $ 2,279 $ 2,111 12.7 % 13.0 % 13.3 % 10.4 % 11.8 % 8.0 % 10.4 % 10.6 % (0.9) % 10.0 % Endoscopy 3,033 2,725 2,418 11.3 11.7 12.1 7.6 9.9 12.7 15.2 13.8 8.3 20.9 Medical 3,459 3,031 2,607 14.1 14.4 15.0 10.8 12.3 16.2 18.6 20.6 1.5 11.7 Neurovascular 1,226 1,200 1,188 2.1 4.0 8.1 (1.4) 1.5 1.1 7.2 (0.9) 2.3 12.2 Neuro Cranial 1,549 1,376 1,214 12.6 13.0 11.9 16.1 18.4 13.3 15.4 14.9 6.1 17.5 $ 11,836 $ 10,611 $ 9,538 11.5 % 12.1 % 13.0 % 7.0 % 9.1 % 11.2 % 14.1 % 14.2 % 3.0 % 13.8 % Orthopaedics and Spine: Knees $ 2,273 $ 1,997 $ 1,848 13.9 % 14.4 % 12.2 % 18.8 % 20.9 % 8.0 % 11.2 % 10.6 % 1.0 % 12.9 % Hips 1,544 1,413 1,342 9.2 10.4 10.1 7.7 10.7 5.3 10.1 9.1 (0.6) 11.5 Trauma and Extremities 3,147 2,807 2,664 12.1 12.2 12.9 10.1 10.5 5.4 8.7 9.0 (3.2) 8.0 Spine 1,189 1,146 1,167 3.8 4.0 5.7 (1.6) (0.9) (1.8) 1.1 0.6 (7.7) 2.4 Other 509 475 549 7.1 8.8 (2.0) 33.8 40.9 (13.3) (10.3) (16.9) (0.9) 12.8 $ 8,662 $ 7,838 $ 7,570 10.5 % 11.1 % 10.2 % 11.2 % 13.0 % 3.5 % 7.0 % 6.0 % (2.2) % 9.3 % Total $ 20,498 $ 18,449 $ 17,108 11.1 % 11.6 % 11.9 % 8.9 % 10.9 % 7.8 % 11.0 % 10.7 % 0.5 % 11.7 % Note: Beginning in the first quarter 2023 we consolidated Other MedSurg and Neurotechnology into Endoscopy as Other MedSurg and Neurotechnology (primarily Sustainability Solutions) has been fully integrated into our Endoscopy business.
CONSOLIDATED RESULTS OF OPERATIONS Percent Net Sales Percentage Change 2024 2023 2022 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net sales $ 22,595 $ 20,498 $ 18,449 100.0 % 100.0 % 100.0 % 10.2 % 11.1 % Gross profit 14,440 13,058 11,578 63.9 63.7 62.8 10.6 12.8 Research, development and engineering expenses 1,466 1,388 1,454 6.5 6.8 7.9 5.6 (4.5) Selling, general and administrative expenses 7,685 7,111 6,386 34.0 34.7 34.6 8.1 11.4 Amortization of intangible assets 623 635 627 2.8 3.1 3.4 (1.9) 1.3 Goodwill and other impairments 977 36 270 4.3 0.2 1.5 nm nm Other income (expense), net (197) (215) (158) (0.9) (1.0) (0.9) (8.4) 36.1 Income taxes 499 508 325 nm nm nm (1.8) 56.3 Net earnings $ 2,993 $ 3,165 $ 2,358 13.2 % 15.4 % 12.8 % (5.4) % 34.2 % Net earnings per diluted share $ 7.76 $ 8.25 $ 6.17 (5.9) % 33.7 % Adjusted net earnings per diluted share (1) $ 12.19 $ 10.60 $ 9.34 15.0 % 13.5 % nm - not meaningful Geographic and Segment Net Sales Percentage Change 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 As Reported Constant Currency As Reported Constant Currency Geographic: United States $ 16,943 $ 15,257 $ 13,638 11.0 % 11.0 % 11.9 % 11.9 % International 5,652 5,241 4,811 7.9 9.8 8.9 10.9 Total $ 22,595 $ 20,498 $ 18,449 10.2 % 10.7 % 11.1 % 11.6 % Segment: MedSurg and Neurotechnology $ 13,518 $ 12,163 $ 10,893 11.1 % 11.6 % 11.7 % 12.2 % Orthopaedics 9,077 8,335 7,556 8.9 9.4 10.3 10.9 Total $ 22,595 $ 20,498 $ 18,449 10.2 % 10.7 % 11.1 % 11.6 % Dollar amounts in millions except per share amounts or as otherwise specified. 15 STRYKER CORPORATION 2024 FORM 10-K Supplemental Net Sales Growth Information Percentage Change 2024 vs. 2023 2023 vs. 2022 United States International United States International 2024 2023 2022 As Reported Constant Currency As Reported As Reported Constant Currency As Reported Constant Currency As Reported As Reported Constant Currency MedSurg and Neurotechnology: Instruments $ 2,834 $ 2,534 $ 2,245 11.9 % 12.1 % 12.5 % 9.5 % 10.6 % 12.9 % 13.0 % 13.5 % 10.4 % 11.8 % Endoscopy 3,389 3,068 2,759 10.5 11.0 11.1 7.7 10.7 11.2 11.7 11.9 8.0 9.9 Medical 3,852 3,459 3,031 11.4 11.7 14.6 (2.0) (0.3) 14.1 14.4 15.0 10.7 12.3 Neurovascular 1,307 1,226 1,200 6.6 8.2 4.7 7.9 10.5 2.2 4.0 8.3 (1.5) 1.5 Neuro Cranial 2,136 1,876 1,658 13.9 14.1 15.0 8.7 10.2 13.1 13.4 12.7 15.4 16.8 $ 13,518 $ 12,163 $ 10,893 11.1 % 11.6 % 12.7 % 5.9 % 7.9 % 11.7 % 12.2 % 13.1 % 7.2 % 9.2 % Orthopaedics: Knees $ 2,447 $ 2,273 $ 1,997 7.6 % 8.2 % 6.7 % 10.4 % 12.2 % 13.8 % 14.4 % 12.3 % 18.5 % 20.9 % Hips 1,704 1,544 1,413 10.3 11.3 7.2 15.9 18.4 9.3 10.4 10.3 7.5 10.7 Trauma and Extremities 3,507 3,147 2,807 11.4 11.6 12.6 8.3 9.1 12.1 12.2 12.9 10.1 10.5 Spinal Implants 707 713 733 (0.7) (0.3) (2.1) 2.5 3.8 (2.7) (2.0) (2.2) (4.1) (3.4) Other 712 658 606 8.1 9.6 7.3 10.1 15.4 8.6 9.5 2.9 25.8 32.3 $ 9,077 $ 8,335 $ 7,556 8.9 % 9.4 % 8.4 % 10.2 % 12.0 % 10.3 % 10.9 % 10.0 % 11.1 % 13.1 % Total $ 22,595 $ 20,498 $ 18,449 10.2 % 10.7 % 11.0 % 7.9 % 9.8 % 11.1 % 11.6 % 11.9 % 8.9 % 10.9 % Note: In the fourth quarter 2024 we reorganized our Spine business to align with certain updates to our internal reporting structure.
Due to the impairment charge in 2022, we also performed a quantitative impairment test for our Spine reporting unit at October 31, 2023 and determined that its fair value exceeded its carrying amount by 10%. Accordingly, we did not record any additional impairment charges. At October 31, 2023, goodwill attributable to the Spine reporting unit was approximately $1.0 billion.
Due to the impairment charge in 2022, we performed a quantitative impairment test for our Spine reporting unit at October 31, 2023 and determined that its fair value exceeded its carrying amount and no additional impairment charges were recorded. The Spine business’s operating results continue to be affected by inflationary pressures and the competitive environment.
Orthopaedics and Spine net sales in 2022 increased 3.5% as reported and 7.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by 3.5%. Net sales in constant currency increased by 9.9% from increased unit volume partially offset by 2.9% due to lower prices.
Orthopaedics Net Sales Orthopaedics net sales in 2024 increased 8.9% as reported and 9.4% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%. Excluding the 0.7% impact of acquisitions and divestitures, net sales in constant currency increased by 8.7% from increased unit volume.
The increase in Orthopaedics and Spine operating income as a percentage of net sales for 2022 from 2021 was primarily driven by higher unit volumes partially offset by lower prices. Other Income (Expense), Net Other income (expense), net was ($215), ($158) and ($303) in 2023, 2022 and 2021.
The increase in Orthopaedics operating income as a percentage of net sales for 2024 from 2023 was primarily driven by higher sales volumes and a decrease in selling, general and administrative expenses as a percentage of sales partially offset by higher manufacturing and supply chain costs.
Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. Income Taxes Our annual tax rate is determined based on our income, statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes.
Income Taxes Our annual tax rate is determined based on our income, statutory tax rates and the tax impacts of items treated differently for tax purposes than for financial reporting purposes. Tax law requires certain items be included in the tax return at different times than the items are reflected in the financial statements.
Although realization is not assured, management believes it is more likely than not that our deferred tax assets, net of valuation allowances, will be realized. We operate in multiple jurisdictions with complex tax policy and regulatory environments.
Realization of certain deferred tax assets is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Although realization is not assured, management believes it is more likely than not that our deferred tax assets, net of valuation allowances, will be realized.
We review our other long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual asset level or the asset group level.
We believe such assumptions and estimates are also comparable to those that would be used by other marketplace participants. We review our other long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
The key components of the change were: Operating Income Percent Net Sales MedSurg and Neurotechnology Orthopaedics and Spine 2021 29.4 % 28.8 % Sales pricing 40 bps (210) bps Volume 440 bps 440 bps Manufacturing and supply chain costs (570) bps (80) bps Research, development and engineering expenses (70) bps (40) bps Selling, general and administrative expenses (200) bps (60) bps 2022 25.8 % 29.3 % Sales pricing 120 bps (60) bps Volume 390 bps 540 bps Manufacturing and supply chain costs 100 bps (170) bps Research, development and engineering expenses (20) bps (40) bps Selling, general and administrative expenses (350) bps (430) bps 2023 28.2 % 27.7 % The increase in MedSurg and Neurotechnology operating income as a percentage of net sales in 2023 from 2022 was primarily driven by higher unit volumes, higher prices and lower Dollar amounts in millions except per share amounts or as otherwise specified. 15 STRYKER CORPORATION 2023 FORM 10-K manufacturing and supply chain costs due to supply chain challenges impacting capital products in our MedSurg businesses in 2022 which improved in 2023 partially offset by higher selling, general and administrative expenses due to continued investments including sales growth incentives and a more normalized cadence of travel and meetings.
The key components of the change were: Operating Income Percent Net Sales MedSurg and Neurotechnology Orthopaedics 2022 26.0 % 29.1 % Sales pricing 70 bps (30) bps Volume 100 bps 80 bps Manufacturing and supply chain costs 90 bps (220) bps Research, development and engineering expenses 50 bps 20 bps Selling, general and administrative expenses (60) bps (40) bps 2023 28.5 % 27.2 % Sales pricing 70 bps 0 bps Volume 40 bps 70 bps Manufacturing and supply chain costs (40) bps (20) bps Research, development and engineering expenses 0 bps 10 bps Selling, general and administrative expenses 40 bps 70 bps 2024 29.6 % 28.5 % The increase in MedSurg and Neurotechnology operating income as a percentage of net sales in 2024 from 2023 was primarily driven by higher unit volumes, higher prices and a decrease in selling, general and administrative expenses as a percentage of sales partially offset by higher manufacturing and supply chain costs.
Refer to Note 8 to our Consolidated Financial Statements for further information. Operating Income Operating income was $3,888, $2,841 and $2,584 in 2023, 2022 and 2021. Operating income increased as a percentage of sales to 19.0% in 2023 from 15.4% in 2022 and from 15.1% in 2021.
Refer to Notes 8, 16 and 17 to our Consolidated Financial Statements for further information. In 2024, 2023 and 2022 we recorded other impairments of $159, $36 and $54. Refer to Notes 15 and 16 to our Consolidated Financial Statements for further information. Operating Income Operating income was $3,689, $3,888 and $2,841 in 2024, 2023 and 2022.
We believe these accounting Dollar amounts in millions except per share amounts or as otherwise specified. 19 STRYKER CORPORATION 2023 FORM 10-K policies and the others set forth in Note 1 to our Consolidated Financial Statements are critical to understanding our results of operations and financial condition.
We believe these accounting policies and the others set forth in Note 1 to our Consolidated Financial Statements are critical to understanding our results of operations and financial condition. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition.
Contractual Obligations Total 2024 2025 - 2026 2027 - 2028 After 2028 Debt repayments $ 13,080 $ 2,097 $ 2,400 $ 3,582 $ 5,001 Interest payments 3,163 348 560 453 1,802 Unconditional purchase obligations 2,750 2,349 296 85 20 Minimum lease payments 520 150 195 97 78 United States Tax Cuts and Jobs Act Transition Tax 354 158 196 — — Other 68 13 20 16 19 Total $ 19,935 $ 5,115 $ 3,667 $ 4,233 $ 6,920 CRITICAL ACCOUNTING POLICIES AND ESTIMATES In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application.
Contractual Obligations Total 2025 2026-2027 2028-2029 After 2029 Debt repayments $ 13,702 $ 1,410 $ 1,779 $ 3,404 $ 7,109 Interest payments 3,809 420 730 593 2,066 Unconditional purchase obligations 2,855 2,610 200 30 15 Minimum lease payments 550 156 217 104 73 United States Tax Cuts and Jobs Act Transition Tax 196 196 — — — Other 75 9 24 21 21 Total $ 21,187 $ 4,801 $ 2,950 $ 4,152 $ 9,284 CRITICAL ACCOUNTING POLICIES AND ESTIMATES In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application.
Research, development and engineering expenses as a percentage of net sales in 2022 increased to 7.9% from 7.2% in 2021 primarily due to increased spending for product launches, the write-off of certain intangible assets and higher spend related to the new medical device regulations in the European Union in 2022.
Research, Development and Engineering Expenses Research, development and engineering expenses as a percentage of net sales in 2024 decreased to 6.5% from 6.8% in 2023 primarily due to lower spend on medical device regulations in the European Union.
We reported net earnings of $3,165 and net earnings per diluted share of $8.25. Excluding the impact of certain items, we achieved adjusted net earnings (1) of $4,066 and adjusted net earnings per diluted share (1) of $10.60 representing growth of 13.5%.
Excluding the impact of acquisitions and divestitures, sales grew 10.2% in constant currency. We reported net earnings of $2,993 and net earnings per diluted share of $7.76. Excluding the impact of certain items, we achieved adjusted net earnings (1) of $4,700 and adjusted net earnings per diluted share (1) of $12.19 representing growth of 15.0%.
Dollar amounts in millions except per share amounts or as otherwise specified. 21 STRYKER CORPORATION 2023 FORM 10-K
Dollar amounts in millions except per share amounts or as otherwise specified. 21 STRYKER CORPORATION 2024 FORM 10-K Inherent in determining our annual tax rate are judgments regarding business plans, tax planning opportunities and expectations about future outcomes.
Investing Activities Cash used in investing activities was $962, $2,924 and $859 in 2023, 2022 and 2021. The decrease in cash used in 2023 was primarily due to lower amounts paid for acquisitions. Our 2023 acquisitions included Cerus and in 2022 we acquired Vocera.
Cash used in 2024 included cash paid for various acquisitions and purchases of short-term investments partially offset by proceeds from the settlement of certain foreign currency forward contracts designated as net investment hedges. The decrease in cash used in 2023 was primarily due to lower amounts paid for acquisitions. Our 2023 acquisitions included Cerus and in 2022 we acquired Vocera.
The decrease in net expense in 2022 compared to 2021 was primarily due to the aforementioned release of accrued interest and higher interest income in 2022. Income Taxes Our effective tax rate was 13.8%, 12.1% and 12.6% for 2023, 2022 and 2021.
Income Taxes Our effective tax rate was 14.3%, 13.8% and 12.1% for 2024, 2023 and 2022.
Gross profit as a percentage of net sales decreased to 62.8% in 2022 from 64.1% in 2021 due to higher manufacturing and supply chain costs primarily due to increased costs from purchases of electronic components at premium prices on the spot market and other inflationary pressures, primarily related to labor, steel and transportation, as well as inefficiencies from supply chain disruptions partially offset by favorable volume and lower amortization of inventory stepped up to fair value.
Gross profit as a percentage of net sales increased to 63.7% in 2023 from 62.8% in 2022 due to higher sales pricing and favorable volume offset by higher manufacturing and supply chain costs primarily due to higher raw material costs in the first six months of 2023 and supply chain inefficiencies.
We believe our estimates are appropriate based upon current and future market conditions and the best information available at the impairment assessment date. However, future impairment charges could be required if we do not achieve our cash flow, revenue and profitability projections or if there is an increase in the weighted average cost of capital.
We believe our estimates are appropriate based upon current and future market conditions and the best information available at the impairment assessment date. As of December 31, 2024, there is no goodwill remaining attributable to the Spinal Implants disposal group. Finally we compared the carrying amount of the disposal group to the fair value less cost to sell.
We continued our capital allocation strategy by investing $390 in acquisitions and paying $1,139 in dividends to our shareholders. In May 2023 we acquired Cerus for net cash consideration of $289 and up to $225 in future milestone payments. Cerus designs, develops and manufactures neurovascular products used for the treatment of hemorrhagic stroke.
We continued our capital allocation strategy by investing $1,628 in acquisitions and paying $1,219 in dividends to our shareholders. In 2024 we completed various acquisitions for total consideration of $1,628 in upfront payments, net of cash acquired, as well as $400 of contingent consideration if certain commercial or clinical milestones are achieved.
Hypothetical changes in our estimates of the discount rate, long-term revenue growth and long-term operating margin would result in impairment charges as follows: Change in selected assumption Percentage decline in fair value Impairment charge 100 bps increase in discount rate 12 % $ 51 100 bps decrease in long-term revenue growth 7 — 100 bps decrease in long-term operating margin 3 — Historical impairment assessments for our other reporting units have indicated that their implied fair values exceed their respective carrying amounts by at least 100%.
We believe our estimates are appropriate based upon current and future market conditions and the best information available at the impairment assessment date. Historical goodwill impairment assessments for our other reporting units have indicated that their implied fair values exceed their respective carrying amounts by at least 100%.
Endoscopy includes sales related to Other of $343, $302 and $277 for 2023, 2022 and 2021. We have reflected these changes in all historical periods presented. Consolidated Net Sales Consolidated net sales in 2023 increased 11.1% as reported and 11.6% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.5%.
The unit volume increase was due to higher shipments across all Orthopaedics businesses. Orthopaedics net sales in 2023 increased 10.3% as reported and 10.9% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.6%.
Removed
Macroeconomic Environment The global economy continues to experience increased inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts of the macroeconomic environment which we anticipate will continue.
Added
Refer to Note 6 to our Consolidated Financial Statements for further information. In May 2024 we repaid the outstanding $600 principal amount of the 3.375% senior unsecured notes due May 15, 2024.
Removed
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 create additional economic challenges and uncertainties.
Added
In September 2024 we issued $750 of 4.250% senior unsecured notes due September 11, 2029, €800 of 3.375% senior unsecured notes due September 11, 2032, $750 of 4.625% senior unsecured notes due September 11, 2034 and €600 of 3.625% senior unsecured notes due September 11, 2036.
Removed
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 2023 In 2023 we achieved reported net sales growth of 11.1%. Excluding the impact of acquisitions and divestitures, sales grew 11.5% in constant currency.
Added
The spine enabling technologies portfolio (Enabling Technologies) was reclassified to Other Orthopaedics, the interventional spine portfolio was reclassified to Neuro Cranial and the remaining Spine business was renamed to Spinal Implants. Neuro Cranial includes sales related to interventional spine of $413, $327 and $282 for 2024, 2023 and 2022.
Removed
Cerus is part of our Neurovascular business within MedSurg and Neurotechnology. Refer to Note 6 to our Consolidated Financial Statements for further information. During 2023 we made payments of $850 to extinguish the remaining balance on the $1.5 billion term loan scheduled to mature February 22, 2025.
Added
Other Orthopaedics includes sales related to Enabling Technologies of $152, $149 and $131 for 2024, 2023 and 2022. 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 these changes in all historical periods presented.
Removed
In August 2023 we issued €500 of floating rate senior notes due November 16, 2024. The notes bear interest at a rate based on the three-month Euro Interbank Offered Rate (EURIBOR) plus 0.3%. The notes are callable at February 16, 2024, May 16, 2024 or October 16, 2024 either by us or at the option of the notes holders.
Added
Selling, General and Administrative Expenses Selling, general and administrative expenses as a percentage of net sales in 2024 decreased to 34.0% from 34.7% in 2023 primarily due to continued spend discipline and lower charges for structural optimization and certain legal matters partially offset by higher acquisition-related costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed2 unchanged
Biggest changeA hypothetical 10% change in foreign currencies relative to the United States Dollar would change the December 31, 2023 fair value of these instruments by approximately $389. Dollar amounts in millions except per share amounts or as otherwise specified. 22 STRYKER CORPORATION 2023 FORM 10-K
Biggest changeA hypothetical 10% change in foreign currencies relative to the United States Dollar would change the December 31, 2024 fair value of these instruments by approximately $489. Dollar amounts in millions except per share amounts or as otherwise specified. 24 STRYKER CORPORATION 2024 FORM 10-K
Our operating results are primarily exposed to changes in exchange rates among the United States Dollar, Australian Dollar, British Pound, Canadian Dollar, Euro and Japanese Yen. We develop and manufacture products in the United States, Canada, China, Costa Rica, France, Germany, India, Ireland, Mexico, Switzerland, Turkey and the United Kingdom and incur costs in the applicable local currencies.
Our operating results are primarily exposed to changes in exchange rates among the United States Dollar, Australian Dollar, British Pound, Canadian Dollar, Euro and Japanese Yen. We develop and manufacture products in the United States, Canada, China, Costa Rica, France, Germany, India, Ireland, Israel, Mexico, Poland, Switzerland, Turkey and the United Kingdom and incur costs in the applicable local currencies.

Other SYK 10-K year-over-year comparisons