10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-09165

STRYKER CORPORATION
(Exact name of registrant as specified in its charter)

Michigan			38-1239739
(State of incorporation)			(I.R.S. Employer Identification No.)
2825 Airview Boulevard	Kalamazoo,	Michigan	49002
(Address of principal executive offices)			(Zip Code)
	(269)	385-2600
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 Par Value	SYK	New York Stock Exchange
1.125% Notes due 2023	SYK23	New York Stock Exchange
2.125% Notes due 2027	SYK27	New York Stock Exchange
2.625% Notes due 2030	SYK30	New York Stock Exchange
Floating Rate Notes due 2020	SYK20A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Small reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐    No ☒

There were 374,366,776 shares of Common Stock, $0.10 par value, on September 30, 2019.

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Stryker Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

	Three Months						Nine Months
	2019			2018			2019			2018
Net sales	$	3,587		$	3,242		$	10,753		$	9,805
Cost of sales	1,257			1,087			3,760			3,323
Gross profit	$	2,330		$	2,155		$	6,993		$	6,482
Research, development and engineering expenses	246			221			717			641
Selling, general and administrative expenses	1,291			1,242			3,976			3,668
Recall charges	49			4			179			10
Amortization of intangible assets	116			112			352			324
Total operating expenses	$	1,702		$	1,579		$	5,224		$	4,643
Operating income	$	628		$	576		$	1,769		$	1,839
Other income (expense), net	(47		)	(42		)	(143		)	(140		)
Earnings before income taxes	$	581		$	534		$	1,626		$	1,699
Income taxes	115			(56		)	268			214
Net earnings	$	466		$	590		$	1,358		$	1,485
Net earnings per share of common stock:
Basic	$	1.24		$	1.58		$	3.63		$	3.97
Diluted	$	1.23		$	1.55		$	3.58		$	3.90
Weighted-average shares outstanding (in millions):
Basic	374.2			374.1			373.8			374.0
Effect of dilutive employee stock options	6.1			6.1			6.0			6.4
Diluted	380.3			380.2			379.8			380.4
Cash dividends declared per share of common stock	$	0.52		$	0.47		$	1.56		$	1.41

Anti-dilutive shares excluded from the calculation of dilutive employee stock options were de minimis in all periods.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months						Nine Months
	2019			2018			2019			2018
Net earnings	$	466		$	590		$	1,358		$	1,485
Other comprehensive income (loss), net of tax:
Marketable securities	—			—			1			(1		)
Pension plans	13			(3		)	2			(1		)
Unrealized gains (losses) on designated hedges	(15		)	6			(28		)	23
Financial statement translation	79			(50		)	103			(72		)
Total other comprehensive income (loss), net of tax	$	77		$	(47	)	$	78		$	(51	)
Comprehensive income	$	543		$	543		$	1,436		$	1,434

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 1

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

CONSOLIDATED BALANCE SHEETS

	September 30			December 31
	2019			2018
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,948		$	3,616
Marketable securities	88			83
Accounts receivable, less allowance of $75 ($64 in 2018)	2,438			2,332
Inventories:
Materials and supplies	679			606
Work in process	185			149
Finished goods	2,405			2,200
Total inventories	$	3,269		$	2,955
Prepaid expenses and other current assets	823			747
Total current assets	$	8,566		$	9,733
Property, plant and equipment:
Land, buildings and improvements	1,263			1,041
Machinery and equipment	3,340			3,236
Total property, plant and equipment	$	4,603		$	4,277
Less accumulated depreciation	2,143			1,986
Property, plant and equipment, net	$	2,460		$	2,291
Goodwill	8,704			8,563
Other intangibles, net	4,056			4,163
Noncurrent deferred income tax assets	1,586			1,678
Other noncurrent assets	1,287			801
Total assets	$	26,659		$	27,229
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	659		$	646
Accrued compensation	767			917
Income taxes payable	87			158
Dividend payable	192			192
Accrued expenses and other liabilities	1,690			1,521
Current maturities of debt	526			1,373
Total current liabilities	$	3,921		$	4,807
Long-term debt, excluding current maturities	7,889			8,486
Income taxes	1,095			1,228
Other noncurrent liabilities	1,439			978
Total liabilities	$	14,344		$	15,499
Shareholders' equity
Common stock, $0.10 par value	37			37
Additional paid-in capital	1,593			1,559
Retained earnings	11,238			10,765
Accumulated other comprehensive loss	(553		)	(631		)
Total shareholders' equity	$	12,315		$	11,730
Total liabilities and shareholders' equity	$	26,659		$	27,229

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 2

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

	Three Months						Nine Months
	2019			2018			2019			2018
Common stock shares outstanding (in millions)
Beginning	374.1			374.0			374.4			374.4
Issuance of common stock under stock option and benefit plans	0.3			0.2			1.9			1.7
Repurchase of common stock	—			—			(1.9		)	(1.9		)
Ending	374.4			374.2			374.4			374.2
Common stock
Beginning	$	37		$	37		$	37		$	37
Issuance of common stock under stock option and benefit plans	—			—			—			—
Repurchase of common stock	—			—			—			—
Ending	$	37		$	37		$	37		$	37
Additional paid-in capital
Beginning	$	1,569		$	1,503		$	1,559		$	1,496
Issuance of common stock under stock option and benefit plans	(8		)	2			(53		)	(41		)
Repurchase of common stock	—			—			(8		)	(7		)
Share-based compensation	32			30			95			87
Ending	$	1,593		$	1,535		$	1,593		$	1,535
Retained earnings
Beginning	$	10,967		$	8,477		$	10,765		$	8,986
Cumulative effect of accounting changes	—			—			—			(759		)
Net earnings	466			590			1,358			1,485
Repurchase of common stock	—			—			(299		)	(293		)
Cash dividends declared	(195		)	(175		)	(586		)	(527		)
Ending	$	11,238		$	8,892		$	11,238		$	8,892
Accumulated other comprehensive (loss) income
Beginning	$	(630	)	$	(557	)	$	(631	)	$	(553	)
Other comprehensive income (loss)	77			(47		)	78			(51		)
Ending	$	(553	)	$	(604	)	$	(553	)	$	(604	)
Total Stryker shareholders' equity	$	12,315		$	9,860		$	12,315		$	9,860
Non-controlling interest
Beginning	$	—		$	—		$	—		$	14
Interest purchased	—			—			—			(15		)
Net earnings attributable to noncontrolling interest	—			—			—			—
Foreign currency exchange translation adjustment	—			—			—			1
Ending	$	—		$	—		$	—		$	—
Total shareholders' equity	$	12,315		$	9,860		$	12,315		$	9,860

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 3

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Nine Months
	2019			2018
Operating activities
Net earnings	$	1,358		$	1,485
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	231			223
Amortization of intangible assets	352			324
Share-based compensation	95			87
Recall charges	179			10
Sale of inventory stepped-up to fair value at acquisition	55			6
Changes in operating assets and liabilities:
Accounts receivable	(124		)	119
Inventories	(414		)	(445		)
Accounts payable	37			57
Accrued expenses and other liabilities	64			(40		)
Recall-related payments	(172		)	(89		)
Income taxes	(94		)	(231		)
Other, net	(111		)	58
Net cash provided by operating activities	$	1,456		$	1,564
Investing activities
Acquisitions, net of cash acquired	(281		)	(770		)
Purchases of marketable securities	(57		)	(214		)
Proceeds from sales of marketable securities	52			173
Purchases of property, plant and equipment	(450		)	(418		)
Net cash used in investing activities	$	(736	)	$	(1,229	)
Financing activities
Proceeds (payments) on short-term borrowings, net	(7		)	(8		)
Proceeds from issuance of long-term debt	—			595
Payments on long-term debt	(1,341		)	(600		)
Dividends paid	(585		)	(528		)
Repurchases of common stock	(307		)	(300		)
Cash paid for taxes from withheld shares	(130		)	(104		)
Payments to purchase noncontrolling interest	—			(14		)
Other financing, net	10			8
Net cash (used in) provided by financing activities	$	(2,360	)	$	(951	)
Effect of exchange rate changes on cash and cash equivalents	(28		)	(8		)
Change in cash and cash equivalents	$	(1,668	)	$	(624	)
Cash and cash equivalents at beginning of period	3,616			2,542
Cash and cash equivalents at end of period	$	1,948		$	1,918

See accompanying notes to Consolidated Financial Statements.

Dollar amounts are in millions except per share amounts or as otherwise specified. 4

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

General Information

Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring items, considered necessary to fairly present the financial position of Stryker Corporation and its consolidated subsidiaries (the "Company," "we," us" or "our") on September 30, 2019 and the results of operations for the three and nine months 2019. The results of operations included in these Consolidated Financial Statements may not necessarily be indicative of our annual results. These statements should be read in conjunction with our Annual Report on Form 10-K for 2018.

Certain prior year amounts have been reclassified to conform with current year presentation in our Consolidated Statements of Cash Flows.

New Accounting Pronouncements Not Yet Adopted

We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.

In August 2018 the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. We are in the process of evaluating the impact on our Consolidated Financial Statements and the timing of adoption of this update.

Accounting Pronouncements Recently Adopted

On January 1, 2019 we adopted ASU 2016-02, Leases, and related amendments (ASC 842), which require lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. Refer to Note 6 for further information.

On January 1, 2019 we adopted ASU 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. The adoption of this update did not have a material impact on our Consolidated Financial Statements.

NOTE 2 - REVENUE RECOGNITION

Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2018.

We disaggregate our net sales by product line and geography for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.

Net Sales by Product Line
	Three Months				Nine Months
	2019		2018		2019		2018
Orthopaedics:
Knees	$	426	$	395	$	1,305	$	1,236
Hips	332		316		1,011		983
Trauma and Extremities	407		376		1,197		1,152
Other	97		84		272		244
	$	1,262	$	1,171	$	3,785	$	3,615
MedSurg:
Instruments	$	476	$	442	$	1,474	$	1,292
Endoscopy	474		443		1,424		1,335
Medical	554		492		1,627		1,508
Sustainability	72		66		212		190
	$	1,576	$	1,443	$	4,737	$	4,325
Neurotechnology and Spine:
Neurotechnology	$	488	$	435	$	1,436	$	1,282
Spine	261		193		795		583
	$	749	$	628	$	2,231	$	1,865
Total	$	3,587	$	3,242	$	10,753	$	9,805

Net Sales by Geography
	Three Months 2019				Three Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	318	$	108	$	291	$	104
Hips	211		121		198		118
Trauma and Extremities	262		145		242		134
Other	81		16		67		17
	$	872	$	390	$	798	$	373
MedSurg:
Instruments	$	373	$	103	$	352	$	90
Endoscopy	377		97		346		97
Medical	442		112		393		99
Sustainability	71		1		66		—
	$	1,263	$	313	$	1,157	$	286
Neurotechnology and Spine:
Neurotechnology	$	314	$	174	$	284	$	150
Spine	195		66		142		52
	$	509	$	240	$	426	$	202
Total	$	2,644	$	943	$	2,381	$	861

Dollar amounts are in millions except per share amounts or as otherwise specified. 5

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Net Sales by Geography
	Nine Months 2019				Nine Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	962	$	343	$	896	$	340
Hips	643		368		610		373
Trauma and Extremities	768		429		729		423
Other	223		49		198		46
	$	2,596	$	1,189	$	2,433	$	1,182
MedSurg:
Instruments	$	1,168	$	306	$	1,007	$	285
Endoscopy	1,136		288		1,049		286
Medical	1,288		339		1,158		350
Sustainability	210		2		189		1
	$	3,802	$	935	$	3,403	$	922
Neurotechnology and Spine:
Neurotechnology	$	922	$	514	$	820	$	462
Spine	598		197		424		159
	$	1,520	$	711	$	1,244	$	621
Total	$	7,918	$	2,835	$	7,080	$	2,725

Contract Assets and Liabilities

On September 30, 2019 there were no contract assets recorded on our Consolidated Balance Sheets.

Our contract liabilities arise as a result of consideration received from customers at inception of contracts for certain businesses or where the timing of billing for services precedes satisfaction of our performance obligations. We generally satisfy performance obligations within one year from the contract inception date. Our contract liabilities were $319 and $327 on September 30, 2019 and December 31, 2018.

NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI)

Three Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(3	)	$	(148	)	$	37		$	(516	)	$	(630	)
OCI	—			11			(18		)	116			109
Income taxes	—			1			10			(32		)	(21		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	—			1			—			(7		)	(6		)
Income taxes	—			—			(5		)	2			(3		)
Net OCI	$	—		$	13		$	(15	)	$	79		$	77
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Three Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(5	)	$	(132	)	$	45		$	(465	)	$	(557	)
OCI	1			(2		)	8			(50		)	(43		)
Income taxes	—			(2		)	(2		)	—			(4		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	(1		)	2			1			—			2
Income taxes	—			(1		)	1			—			—
Net OCI	$	—		$	(3	)	$	6		$	(50	)	$	(47	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

Nine Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(137	)	$	50		$	(540	)	$	(631	)
OCI	1			(5		)	(34		)	144			106
Income taxes	—			4			18			(36		)	(14		)
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			4			—			(7		)	(3		)
Income taxes	—			(1		)	(8		)	2			(7		)
Net OCI	$	1		$	2		$	(28	)	$	103		$	78
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Nine Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(134	)	$	28		$	(443	)	$	(553	)
OCI	(1		)	(6		)	32			(84		)	(59		)
Income taxes	—			1			(8		)	12			5
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			6			1			—			7
Income taxes	—			(2		)	2			—			—
Net OCI	$	(1	)	$	(1	)	$	23		$	(72	)	$	(51	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

NOTE 4 - DERIVATIVE INSTRUMENTS

We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both derivative and non-derivative financial instruments) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings and cash flow. We do not enter into derivative instruments for speculative purposes. We have not changed our hedging strategies, accounting practices or objectives from those disclosed in our Annual Report on Form 10-K for 2018.

Foreign Currency Hedges

September 2019	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	804		$	1,100	$	5,874		$	7,778
Maximum term in days									586
Fair value:
Other current assets	$	7		$	—	$	189		$	196
Other noncurrent assets	—			44		—			44
Other current liabilities	(9		)	—		(10		)	(19		)
Other noncurrent liabilities	(1		)	—		—			(1		)
Total fair value	$	(3	)	$	44	$	179		$	220

December 2018	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	870		$	—	$	5,466		$	6,336
Maximum term in days									586
Fair value:
Other current assets	$	15		$	—	$	28		$	43
Other noncurrent assets	1			—		33			34
Other current liabilities	(5		)	—		(15		)	(20		)
Total fair value	$	11		$	—	$	46		$	57

In July 2019 we entered into €1.0 billion in certain forward currency contracts and designated these as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. We have elected to use the spot method to assess effectiveness for our derivatives designated as net investment hedges. Accordingly, the change in fair value attributable to changes in the spot rate is recorded in AOCI. We

Dollar amounts are in millions except per share amounts or as otherwise specified. 6

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

exclude the spot-forward difference from the assessment of hedge effectiveness and amortize this amount separately on a straight-line basis over the term of the forward contracts. This amortization will be recorded to Other income (expense), net on our Consolidated Statements of Earnings.

On September 30, 2019 the total after tax gain amount in AOCI related to our €2.25 billion senior unsecured notes designated as net investment hedges was $61. We evaluate the effectiveness of our net investment hedges quarterly.

We are exposed to credit loss in the event of nonperformance by our counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum loss exposure is the asset balance of the instrument.

Net Currency Exchange Rate Gains (Losses)

		Three Months					Nine Months
Derivative instrument	Recorded in:	2019			2018		2019			2018
Cash Flow	Cost of sales	$	2		$	2	$	4		$	4
Net Investment	Other income (expense), net	7			—		7			—
Non-Designated	Other income (expense), net	(6		)	1		(10		)	(3		)
	Total	$	3		$	3	$	1		$	1

Pretax gains (losses) on derivatives designated as cash flow of ($3) and net investment hedges of $25 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense) in earnings within 12 months as of September 30, 2019. The cash flow hedge reclassification is primarily due to the sale of inventory that includes previously hedged purchases. A component of the AOCI amounts related to net investment hedges is reclassified over the life of the hedge instruments as we elected to exclude the initial value of the component related to the spot-forward difference from the effectiveness assessment.

Interest Rate Hedges

On September 30, 2019 we had interest rate swap agreements with notional amounts of €600 and $750 designated as forward starting interest rate swaps in anticipation of future debt issuances. Pretax losses of $6 and $8 for the €600 and $750 interest rate swap agreements were recorded in AOCI as of September 30, 2019. Upon the probable issuance of the debt, these amounts will be released to interest expense over the term of the debt. The cash flow effect of these hedges is recorded in cash flow from operations.

NOTE 5 - FAIR VALUE MEASUREMENTS

Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for 2018.

There were no significant transfers into or out of any level in 2019.

Assets Measured at Fair Value	September		December
	2019		2018
Cash and cash equivalents	$	1,948	$	3,616
Trading marketable securities	139		118
Level 1 - Assets	$	2,087	$	3,734
Available-for-sale marketable securities:
Corporate and asset-backed debt securities	$	36	$	38
United States agency debt securities	3		11
United States Treasury debt securities	40		23
Certificates of deposit	9		11
Total available-for-sale marketable securities	$	88	$	83
Foreign currency exchange forward contracts	240		77
Level 2 - Assets	$	328	$	160
Total assets measured at fair value	$	2,415	$	3,894

Liabilities Measured at Fair Value	September			December
	2019			2018
Deferred compensation arrangements	$	139		$	118
Level 1 - Liabilities	$	139		$	118
Foreign currency exchange forward contracts	$	20		$	20
Interest rate swap liability	$	14		$	—
Level 2 - Liabilities	$	34		$	20
Contingent consideration:
Beginning	$	117		$	32
Additions	166			77
Change in estimate	(11		)	15
Settlements	(17		)	(7		)
Ending	$	255		$	117
Level 3 - Liabilities	$	255		$	117
Total liabilities measured at fair value	$	428		$	255

Fair Value of Available for Sale Securities by Maturity
	September 2019		December 2018
Due in one year or less	$	44	$	51
Due after one year through three years	$	44	$	32

On September 30, 2019 and December 31, 2018 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income recorded in other income (expense), net, was $36 and $29 in the three months and was $109 and $79 in the nine months 2019 and 2018.

Our investments in available-for-sale marketable securities had a minimum credit quality rating of A2 (Moody's), A (Standard & Poor's) and A (Fitch). We do not plan to sell the investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We do not consider these investments to be other-than-temporarily impaired on September 30, 2019. On September 30, 2019 the majority of our investments with unrealized losses that were not deemed to be other-than-temporarily impaired were in a continuous unrealized loss position for less than twelve months, and the losses were not material.

Securities in a Continuous Unrealized Loss Position
	Number of Investments	Fair Value
Corporate and asset-backed	4	$	1
United States agency	1	1
United States Treasury	5	10
Total	10	$	12

NOTE 6 - CONTINGENCIES AND COMMITMENTS

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 below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings, the claimants seek damages as

Dollar amounts are in millions except per share amounts or as otherwise specified. 7

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's 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, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for product liability claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows.

In 2010 we filed a lawsuit in federal court against Zimmer Biomet Holdings, Inc. (Zimmer), alleging that a Zimmer product infringed on three of our patents. In 2013 following a jury trial favorable to us, the trial judge entered a final judgment that, among other things, awarded us damages of $76 and ordered Zimmer to pay us enhanced damages. Zimmer appealed this ruling. In December 2014 the Federal Circuit affirmed the damages awarded to us, reversed the order for enhanced damages and remanded the issue of attorney fees to the trial court. In May 2015 the trial court entered a stipulated judgment that, among other things, required Zimmer to pay us the base amount of damages and interest, while the issues of enhanced damages and attorney fees continue to be pursued. In June 2015 we recorded a $54 gain, net of legal costs, which was recorded within selling, general and administrative expenses. On June 13, 2016 the United States Supreme Court vacated the decision of the Federal Circuit that reversed our judgment for enhanced damages and remanded the case to the Federal Circuit to reconsider the issue. On September 12, 2016 the Federal Circuit issued an opinion that, among other things, remanded the issue of enhanced damages to the trial court. On July 12, 2017 the trial court reaffirmed its award of enhanced damages and entered a judgment of $164 in our favor. Zimmer appealed, and on December 10, 2018 the Federal Circuit affirmed the decision. Zimmer filed a petition on January 23, 2019 to seek a rehearing of this ruling by the entire Federal Circuit. On March 19, 2019 the Federal Circuit denied Zimmer’s petition for a rehearing. Zimmer conditionally paid us $167 while it pursued a review of the decision by the Supreme Court. On October 7, 2019 the Supreme Court denied Zimmer’s petition for review. Zimmer has until November 1, 2019 to file a petition for rehearing of the denial.

Recall Matters

In June 2012 we voluntarily recalled our Rejuvenate and ABG II Modular-Neck hip stems and terminated global distribution of these hip products. Product liability lawsuits relating to this voluntary recall have been filed against us. In November 2014 we entered into a settlement agreement to compensate eligible United States patients who had revision surgery prior to November 3, 2014 and in December 2016 the settlement program was extended to patients who had revision surgery prior to December 19, 2016. We continue to offer support for recall-related care and reimburse patients who are not eligible to enroll in the settlement program for testing and treatment services, including any necessary revision surgeries. In addition, there are remaining lawsuits that we will continue to defend against.

In August 2016 and May 2018 we voluntarily recalled certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads. Product liability lawsuits and claims relating to this voluntary

recall have been filed against us. In November 2018 we entered into a settlement agreement to resolve a significant number of claims and lawsuits related to the recalls. The specific terms of the settlement agreement, including the financial terms, are confidential.

We have incurred, and expect to incur in the future, costs associated with the defense and settlement of these matters. Based on the information that has been received, we have estimated the remaining range of probable loss related to these matters globally to be approximately $265 to $505. We have recorded charges to earnings representing the minimum of the range of probable loss. The final outcomes of these matters are dependent on many factors that are difficult to predict. Accordingly, the ultimate cost related to these matters globally may be materially different than the amount of our current estimate and accruals and could have a material adverse effect on our results of operations and cash flows.

Leases

We lease various manufacturing, warehousing and distribution facilities, administrative and sales offices as well as equipment under operating leases. We evaluate our contracts to identify leases, which is generally if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. Certain of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis over the term of the lease beginning with the date of initial control of the asset. With the adoption of ASC 842 we recognized all leases with terms greater than twelve months in duration on our Consolidated Balance Sheets as right-of-use assets and lease liabilities of approximately $350 as of January 1, 2019. We adopted the standard using the prospective approach and did not retrospectively apply to prior periods. Right-of-use assets are recorded in Other noncurrent assets on our Consolidated Balance Sheets. Current and non-current lease liabilities are recorded in Accrued expenses and other liabilities and Other noncurrent liabilities, respectively, on our Consolidated Balance Sheets.

We have made certain assumptions and judgments when applying ASC 842, the most significant of which are:

• We elected the package of practical expedients available for transition which allow us to not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases and whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.

• We did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.

• For all asset classes, we elected to not recognize a right-of-use asset and lease liability for short-term leases.

• For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component.

• The determination of the discount rate used in a lease is our incremental borrowing rate which is based on what we would normally pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments.

Dollar amounts are in millions except per share amounts or as otherwise specified. 8

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Leases			September
			2019
Right-of-use assets			$	362
Lease liabilities, current			$	87
Lease liabilities, non-current			$	278
Other information
Weighted-average remaining lease term			5.9 years
Weighted-average discount rate			3.32		%
	Three Months 2019		Nine Months 2019
Operating lease cost	$	34	102

NOTE 7 - ACQUISITIONS

We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. Cash paid for acquisitions, net of cash acquired, was $281 and $770 in the nine months 2019 and 2018. Acquisition and integration related charges, including the amortization of inventory stepped up to fair value, was $32 and $8 in the three months and $223 and $49 in the nine months 2019 and 2018.

In March 2019 we completed the acquisition of OrthoSpace, Ltd. for total cash consideration of $110 with future milestone payments of up to an additional $110. OrthoSpace is a medical device company specializing in orthopaedic biodegradable technology for the treatment of irreparable rotator cuff tears. Goodwill attributable to the acquisition was $114 and is not deductible for tax purposes.

In November 2018 we completed the acquisition of K2M Group Holdings, Inc. (K2M) for $27.50 per share, or an aggregate purchase price of approximately $1,380. K2M is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. K2M is part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.

In February 2018 we completed the acquisition of Entellus Medical, Inc. (Entellus) for $24.00 per share, or an aggregate purchase price of $697, net of cash acquired. Entellus is focused on delivering superior patient and physician experiences through products designed for the minimally invasive treatment of various ear, nose and throat (ENT) disease states. Entellus is part of our Neurotechnology business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.

The purchase price allocations for K2M and OrthoSpace are preliminary and are based on estimates and assumptions that are subject to change within the measurement period. The purchase price allocation for the acquisition of Entellus was completed in 2019.

Purchase Price Allocation of Acquired Net Assets
	2018
	K2M			Entellus
Tangible assets:
Accounts receivable	$	58		$	17
Inventory	131			14
Other assets	122			62
Contingent consideration	—			(79		)
Other liabilities	(247		)	(76		)
Intangible assets:
Customer relationship	34			33
Distributor relationship	1			—
Trade name	10			—
Developed technology and patents	475			261
Internally developed software	2			—
Goodwill	794			465
Purchase price, net of cash acquired	$	1,380		$	697
Weighted-average life of intangible assets	14			16

Estimated Amortization Expense
Remainder of 2019		2020		2021		2022		2023
$	114	$	442	$	424	$	414	$	393

In October 2019 we completed the acquisition of Mobius Imaging and Cardan Robotics for cash consideration of approximately $370 and future development and commercial milestones of up to $130. Mobius is a leader in point-of-care imaging technology focused on integrating advanced imaging technologies into medical workflow.  Cardan is working to develop innovative robotics and navigation technology systems for surgical and interventional radiology procedures. Mobius and Cardan will be part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes. The preliminary purchase price allocation for this acquisition will be performed during the fourth quarter 2019.

NOTE 8 - DEBT AND CREDIT FACILITIES

In January 2019 we repaid $500 of our senior unsecured notes with a coupon of 1.800% that were due on January 15, 2019. In March 2019 we repaid $750 of our senior unsecured notes with a coupon of 2.000% that were due on March 8, 2019. Our commercial paper program allows us to have a maximum of $1,500 in commercial paper outstanding with maturities up to 397 days from the date of issuance. On September 30, 2019 there were no amounts outstanding under our commercial paper program.

We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on September 30, 2019.

Dollar amounts are in millions except per share amounts or as otherwise specified. 9

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Summary of Total Debt			September 2019		December 2018
Senior unsecured notes:
	Rate	Due
	1.800%	January 15, 2019	$	—	$	500
	2.000%	March 8, 2019	—		750
	4.375%	January 15, 2020	500		499
	Variable	November 30, 2020	329		343
	2.625%	March 15, 2021	748		747
	1.125%	November 30, 2023	602		627
	3.375%	May 15, 2024	587		584
	3.375%	November 1, 2025	746		746
	3.500%	March 15, 2026	991		990
	2.125%	November 30, 2027	819		853
	3.650%	March 7, 2028	595		595
	2.625%	November 30, 2030	704		733
	4.100%	April 1, 2043	391		391
	4.375%	May 15, 2044	395		395
	4.625%	March 15, 2046	981		980
Other			27		126
Total debt			$	8,415	$	9,859
Less current maturities of debt			526		1,373
Total long-term debt			$	7,889	$	8,486
Unamortized debt issuance costs			$	45	$	50
Available borrowing capacity			$	1,547	$	1,548
Fair value of senior unsecured notes			$	9,280	$	9,746

The fair value of the senior unsecured notes was estimated using quoted interest rates, maturities and amounts of borrowings based on quoted active market prices and yields that took into account the underlying terms of the debt instruments. Substantially all our debt is classified within Level 2 of the fair value hierarchy.

NOTE 9 - INCOME TAXES

Our effective tax rates were 19.8% and (10.5)% in the three months and 16.5% and 12.6% in the nine months 2019 and 2018. The increase in the effective tax rate for the three and nine months was primarily due to adjustments related to the Tax Cuts and Jobs Act of 2017 and favorable audit settlements in 2018.

NOTE 10 - SEGMENT INFORMATION

	Three Months						Nine Months
	2019			2018			2019			2018
Orthopaedics	$	1,262		$	1,171		$	3,785		$	3,615
MedSurg	1,576			1,443			4,737			4,325
Neurotechnology and Spine	749			628			2,231			1,865
Net sales	$	3,587		$	3,242		$	10,753		$	9,805
Orthopaedics	$	437		$	397		$	1,322		$	1,263
MedSurg	389			341			1,170			968
Neurotechnology and Spine	204			173			617			532
Segment operating income	$	1,030		$	911		$	3,109		$	2,763
Items not allocated to segments:
Corporate and other	(117		)	(104		)	(371		)	(291		)
Acquisition and integration-related charges	(32		)	(8		)	(223		)	(49		)
Amortization of intangible assets	(116		)	(112		)	(352		)	(324		)
Restructuring-related charges	(48		)	(39		)	(146		)	(124		)
Medical device regulations	(15		)	(2		)	(34		)	(5		)
Recall-related matters	(49		)	(4		)	(179		)	(10		)
Regulatory and legal matters	(25		)	(66		)	(35		)	(121		)
Consolidated operating income	$	628		$	576		$	1,769		$	1,839

There were no significant changes to total assets by segment from information provided in our Annual Report on Form 10-K for 2018.

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

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

ABOUT STRYKER

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

We segregate our operations into three reportable business segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. Orthopaedics products consist primarily of implants used in hip and knee joint replacements and trauma and extremities surgeries. MedSurg products include surgical equipment and surgical navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), reprocessed and remanufactured medical devices (Sustainability) and other medical device products used in a variety of medical specialties. Neurotechnology and Spine products include neurosurgical, neurovascular and spinal implant devices.

Overview of the Three and Nine Months

In the three months 2019 we achieved sales growth of 10.6%. Excluding the impact of acquisitions sales grew 8.6% in constant currency. We reported operating income margin of 17.5%, net earnings of $466 and net earnings per diluted share of $1.23. Excluding the impact of certain items, we expanded adjusted operating income margin 50 basis points to 25.4%, with adjusted net earnings⁽¹⁾ of $725 and growth of 13.0% in adjusted net earnings per diluted share⁽¹⁾.

In the nine months 2019 we achieved sales growth of 9.7%. Excluding the impact of acquisitions sales grew 8.1% in constant currency. We reported operating income margin of 16.5%, net earnings of $1,358 and net earnings per diluted share of $3.58. Excluding the impact of certain items, we expanded adjusted operating income margin 30 basis points to 25.5%, with adjusted net earnings⁽¹⁾ of $2,191 and growth of 12.5% in adjusted net earnings per diluted share⁽¹⁾.

Recent Developments

In January 2019 we repaid $500 of our senior unsecured notes with a coupon of 1.800% that were due on January 15, 2019. In March 2019 we repaid $750 of our senior unsecured notes with a coupon of 2.000% that were due on March 8, 2019.

In the nine months 2019 we completed acquisitions for total cash consideration of $281 with future milestone payments primarily due upon the achievement of certain clinical and sales milestones.

In the nine months 2019 we repurchased 1.9 million shares of our common stock at a cost of $307 under our authorized repurchase program. The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of September 30, 2019.

On January 1, 2019 we adopted ASU 2016-02, Leases, and related amendments (ASC 842), which require lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. Refer to Note 6 to our Consolidated Financial Statements for further information. The adoption of this update did not have a material impact on our Consolidated Financial Statements.

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

CONSOLIDATED RESULTS OF OPERATIONS

	Three Months												Nine Months
							Percent Net Sales				Percentage								Percent Net Sales				Percentage
	2019			2018			2019		2018		Change		2019			2018			2019		2018		Change
Net sales	$	3,587		$	3,242		100.0	%	100.0	%	10.6	%	$	10,753		$	9,805		100.0	%	100.0	%	9.7	%
Gross profit	2,330			2,155			65.0		66.5		8.1		6,993			6,482			65.0		66.1		7.9
Research, development and engineering expenses	246			221			6.9		6.8		11.3		717			641			6.7		6.5		11.9
Selling, general and administrative expenses	1,291			1,242			36.0		38.3		3.9		3,976			3,668			37.0		37.4		8.4
Recall charges	49			4			1.4		0.1		nm		179			10			1.7		0.1		nm
Amortization of intangible assets	116			112			3.2		3.5		3.6		352			324			3.3		3.3		8.6
Other income (expense), net	(47		)	(42		)	(1.3	)	(1.3	)	11.9		(143		)	(140		)	(1.3	)	(1.4	)	2.1
Income taxes	115			(56		)					nm		268			214							25.2
Net earnings	$	466		$	590		13.0	%	18.2	%	(21.0	)%	$	1,358		$	1,485		12.6	%	15.1	%	(8.6	)%
Net earnings per diluted share	$	1.23		$	1.55						(20.6	)%	$	3.58		$	3.90						(8.2	)%
Adjusted net earnings per diluted share(1)	$	1.91		$	1.69						13.0	%	$	5.77		$	5.13						12.5	%

nm - not meaningful

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Geographic and Segment Net Sales	Three Months								Nine Months
					Percentage Change								Percentage Change
	2019		2018		As Reported		Constant Currency		2019		2018		As Reported		Constant Currency
Geographic:
United States	$	2,644	$	2,381	11.1	%	11.1	%	$	7,918	$	7,080	11.8	%	11.8	%
International	943		861		9.5		12.9		2,835		2,725		4.0		9.6
Total	$	3,587	$	3,242	10.6	%	11.5	%	$	10,753	$	9,805	9.7	%	11.2	%
Segment:
Orthopaedics	$	1,262	$	1,171	7.8	%	8.8	%	$	3,785	$	3,615	4.7	%	6.5	%
MedSurg	1,576		1,443		9.2		10.0		4,737		4,325		9.5		10.8
Neurotechnology and Spine	749		628		19.4		20.2		2,231		1,865		19.6		21.4
Total	$	3,587	$	3,242	10.6	%	11.5	%	$	10,753	$	9,805	9.7	%	11.2	%

Supplemental Net Sales Growth Information
	Three Months														Nine Months
					Percentage Change														Percentage Change
									United States		International												United States		International
	2019		2018		As Reported		Constant Currency		As Reported		As Reported		Constant Currency		2019		2018		As Reported		Constant Currency		As Reported		As Reported		Constant Currency
Orthopaedics:
Knees	$	426	$	395	7.8	%	8.8	%	8.9	%	4.6	%	8.4	%	$	1,305	$	1,236	5.6	%	7.2	%	7.3	%	0.9	%	6.7	%
Hips	332		316		5.2		6.4		7.0		2.3		5.6		1,011		983		2.9		4.9		5.4		(1.3	)	3.9
Trauma and Extremities	407		376		8.0		9.1		8.3		7.6		10.7		1,197		1,152		3.9		5.7		5.4		1.3		6.4
Other	97		84		15.8		16.3		20.3		(2.2	)	—		272		244		11.7		12.8		12.7		7.5		13.0
	$	1,262	$	1,171	7.8	%	8.8	%	9.2	%	4.7	%	8.0	%	$	3,785	$	3,615	4.7	%	6.5	%	6.7	%	0.6	%	6.0	%
MedSurg:
Instruments	$	476	$	442	7.7	%	8.5	%	5.8	%	15.6	%	19.4	%	$	1,474	$	1,292	14.2	%	15.5	%	16.0	%	7.5	%	13.7	%
Endoscopy	474		443		6.8		7.6		8.6		0.1		4.0		1,424		1,335		6.6		8.0		8.2		0.7		7.4
Medical	554		492		12.6		13.5		12.5		13.3		17.3		1,627		1,508		7.9		9.2		11.2		(3.2	)	2.5
Sustainability	72		66		9.7		9.7		9.2		nm		nm		212		190		11.7		11.8		11.2		nm		nm
	$	1,576	$	1,443	9.2	%	10.0	%	9.1	%	9.6	%	13.5	%	$	4,737	$	4,325	9.5	%	10.8	%	11.7	%	1.4	%	7.6	%
Neurotechnology and Spine:
Neurotechnology	$	488	$	435	12.2	%	13.1	%	10.7	%	15.1	%	17.6	%	$	1,436	$	1,282	12.0	%	13.8	%	12.6	%	11.0	%	16.0	%
Spine	261		193		35.3		36.2		38.2		27.6		30.8		795		583		36.4		38.0		41.0		24.1		30.0
	$	749	$	628	19.4	%	20.2	%	19.9	%	18.3	%	21.0	%	$	2,231	$	1,865	19.6	%	21.4	%	22.2	%	14.4	%	19.6	%
Total	$	3,587	$	3,242	10.6	%	11.5	%	11.1	%	9.5	%	12.9	%	$	10,753	$	9,805	9.7	%	11.2	%	11.8	%	4.0	%	9.6	%

Consolidated Net Sales

Consolidated net sales increased 10.6% in the three months 2019 as reported and 11.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.9%. Excluding the 2.9% impact of acquisitions, net sales in constant currency increased by 9.3% from unit volume partially offset by 0.7% due to lower prices. The unit volume increase was primarily due to higher shipments of neurotechnology, knee, hip, trauma and extremities and medical and endoscopy products.

Consolidated net sales increased 9.7% in the nine months 2019 as reported and 11.2% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.5%. Excluding the 3.1% impact of acquisitions, net sales in constant currency increased by 9.1% from unit volume partially offset by 1.0% due to lower prices. The unit volume increase was primarily due to higher shipments of neurotechnology, instruments, knee, hip, trauma and extremities and medical and endoscopy products.

Orthopaedics Net Sales

Orthopaedics net sales increased 7.8% in the three months 2019 as reported and 8.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.0%. Net sales in constant currency increased by 10.1% from unit volume partially offset by 1.3% due to lower prices. The unit volume increase was primarily due to higher shipments of knee, hip and trauma and extremities products.

Orthopaedics net sales increased 4.7% in the nine months 2019 as reported and 6.5% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.8%. Net sales in constant currency increased by 8.1% from unit volume partially offset by 1.6% due to lower prices. The unit volume increase was primarily due to higher shipments of knee, hip and trauma and extremities products.

MedSurg Net Sales

MedSurg net sales increased 9.2% in the three months 2019 as reported and 10.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 1.2% impact of acquisitions, net sales in constant currency increased by 9.2% from unit volume partially offset by 0.4% due to lower prices. The unit volume increase was primarily due to higher shipments of medical and endoscopy products and sustainability solutions.

MedSurg net sales increased 9.5% in the nine months 2019 as reported and 10.8% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.3%. Excluding the 1.1% impact of acquisitions, net sales in constant currency increased by 10.2% from unit volume partially offset by 0.5% due to lower prices. The unit volume increase was primarily due to higher shipments of instruments, medical and endoscopy products and sustainability solutions.

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Neurotechnology and Spine Net Sales

Neurotechnology and Spine net sales increased 19.4% in the three months 2019 as reported and 20.2% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Excluding the 12.6% impact of acquisitions, net sales in constant currency increased by 7.8% from unit volume partially offset by 0.2% due to lower prices. The unit volume increase was primarily due to higher shipments of neurotechnology products.

Neurotechnology and Spine net sales increased 19.6% in the nine months 2019 as reported and 21.4% in constant currency, as foreign currency exchange rates negatively impacted net sales by 1.8%. Excluding the 13.8% impact of acquisitions, net sales in constant currency increased by 8.5% from unit volume partially offset by 0.9% due to lower prices. The unit volume increase was primarily due to higher shipments of neurotechnology products.

Gross Profit

Gross profit as a percentage of sales in the three months 2019 decreased to 65.0% from 66.5% in 2018. Excluding the impact of the items noted below, gross profit decreased to 65.7% of sales in the three months 2019 from 66.2% in 2018 primarily due to lower selling prices and product mix, partially offset by increases due to leverage from higher sales volumes.

Gross profit as a percentage of sales in the nine months 2019 decreased to 65.0% from 66.1% in 2018. Excluding the impact of the items noted below, gross profit decreased to 65.7% of sales in the nine months 2019 from 66.2% in 2018 primarily due to lower selling prices and product mix, partially offset by increases due to leverage from higher sales volumes.

						Percent Net Sales
Three Months	2019		2018			2019		2018
Reported	$	2,330	$	2,155		65.0	%	66.5	%
Inventory stepped up to fair value	17		(11		)	0.4		(0.4	)
Restructuring-related and other charges	10		4			0.3		0.1
Adjusted	$	2,357	$	2,148		65.7	%	66.2	%

					Percent Net Sales
Nine Months	2019		2018		2019		2018
Reported	$	6,993	$	6,482	65.0	%	66.1	%
Inventory stepped up to fair value	55		—		0.5		—
Restructuring-related and other charges	21		9		0.2		0.1
Medical device regulations	1		1		—		—
Adjusted	$	7,070	$	6,492	65.7	%	66.2	%

Research, Development and Engineering Expenses

Research, development and engineering expenses increased $25 or 11.3% to 6.9% of sales in the three months 2019 from 6.8% in 2018. Excluding the impact of the items noted below, expenses decreased to 6.5% of sales in 2019 from 6.7% in 2018 due to leverage from higher sales volumes. Projects to develop new products, investments in new technologies and recent acquisitions contributed to the increased spending levels.

Research, development and engineering expenses increased $76 or 11.9% to 6.7% of sales in the nine months 2019 from 6.5% in 2018. Excluding the impact of the items noted below, expenses decreased to 6.4% of sales in 2019 from 6.5% in 2018 due to leverage from higher sales volumes. Projects to develop new products, investments in new technologies and recent acquisitions contributed to the increased spending levels.

							Percent Net Sales
Three Months	2019			2018			2019		2018
Reported	$	246		$	221		6.9	%	6.8	%
Medical device regulations	(15		)	(2		)	(0.4	)	(0.1	)
Adjusted	$	231		$	219		6.5	%	6.7	%

							Percent Net Sales
Nine Months	2019			2018			2019		2018
Reported	$	717		$	641		6.7	%	6.5	%
Medical device regulations	(33		)	(5		)	(0.3	)	—
Adjusted	$	684		$	636		6.4	%	6.5	%

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $49 or 3.9% in the three months 2019 and decreased as a percentage of sales to 36.0% from 38.3% in 2018. Excluding the impact of the items noted below, expenses decreased to 33.8% of sales in 2019 from 34.6% in 2018, primarily due to leverage from higher sales volumes and continued focus on our operating expense improvement initiatives, partially offset by the leverage from recent acquisitions.

Selling, general and administrative expenses increased $308 or 8.4% in the nine months 2019 and decreased as a percentage of sales to 37.0% from 37.4% in 2018. Excluding the impact of the items noted below, expenses decreased to 33.9% of sales in 2019 from 34.5% in 2018, primarily due to leverage from higher sales volumes and continued focus on our operating expense improvement initiatives, partially offset by the leverage from recent acquisitions.

							Percent Net Sales
Three Months	2019			2018			2019		2018
Reported	$	1,291		$	1,242		36.0	%	38.3	%
Other acquisition and integration-related	(15		)	(19		)	(0.4	)	(0.6	)
Restructuring-related and other charges	(37		)	(35		)	(1.1	)	(1.1	)
Regulatory and legal matters	(25		)	(66		)	(0.7	)	(2.0	)
Adjusted	$	1,214		$	1,122		33.8	%	34.6	%

							Percent Net Sales
Nine Months	2019			2018			2019		2018
Reported	$	3,976		$	3,668		37.0	%	37.4	%
Other acquisition and integration-related	(168		)	(49		)	(1.6	)	(0.5	)
Restructuring-related and other charges	(125		)	(115		)	(1.2	)	(1.2	)
Regulatory and legal matters	(35		)	(121		)	(0.3	)	(1.2	)
Adjusted	$	3,648		$	3,383		33.9	%	34.5	%

Recall Charges

Recall charges were $49 and $4 in the three months and were $179 and $10 in the nine months 2019 and 2018. Charges were primarily due to the previously disclosed Rejuvenate and ABGII Modular-Neck hip stems and LFIT V40 femoral head voluntary recalls. Refer to Note 6 to our Consolidated Financial Statements for further information.

Amortization of Intangible Assets

Amortization of intangible assets was $116 and $112 in the three months and was $352 and $324 in the nine months 2019 and 2018. The increase in 2019 was primarily due to our recent acquisitions. Refer to Note 7 to our Consolidated Financial Statements for further information.

Operating Income

Operating Income increased $52 or 9.0% to 17.5% of net sales in the three months 2019 from 17.8% in 2018. Excluding the impact of the items noted below, operating income increased to 25.4% of sales in 2019 from 24.9% in 2018 primarily due to leverage from

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

higher sales volumes and continued focus on our operating expense improvement initiatives, partially offset by lower selling prices.

Operating Income decreased $70 or 3.8% to 16.5% of net sales in the nine months 2019 from 18.8% in 2018. Excluding the impact of the items noted below, operating income increased to 25.5% of sales in 2019 from 25.2% in 2018 primarily due to leverage from higher sales volumes and continued focus on our operating expense improvement initiatives, partially offset by lower selling prices.

						Percent Net Sales
Three Months	2019		2018			2019		2018
Reported	$	628	$	576		17.5	%	17.8	%
Inventory stepped up to fair value	17		(11		)	0.5		(0.3	)
Other acquisition and integration-related	15		19			0.4		0.6
Amortization of purchased intangible assets	116		112			3.2		3.4
Restructuring-related and other charges	48		39			1.3		1.2
Medical device regulations	15		2			0.4		0.1
Recall-related matters	49		4			1.4		0.1
Regulatory and legal matters	25		66			0.7		2.0
Adjusted	$	913	$	807		25.4	%	24.9	%

					Percent Net Sales
Nine Months	2019		2018		2019		2018
Reported	$	1,769	$	1,839	16.5	%	18.8	%
Inventory stepped up to fair value	55		—		0.5		—
Other acquisition and integration-related	168		49		1.6		0.5
Amortization of purchased intangible assets	352		324		3.2		3.3
Restructuring-related and other charges	146		124		1.4		1.3
Medical device regulations	34		5		0.3		—
Recall-related matters	179		10		1.7		0.1
Regulatory and legal matters	35		121		0.3		1.2
Adjusted	$	2,738	$	2,472	25.5	%	25.2	%

Other Income (Expense), Net

Other income (expense), net was ($47) and ($42) in the three months and was ($143) and ($140) in the nine months 2019 and 2018. The increase in 2019 was primarily due to higher interest expense due to higher interest rates partially offset by an increase in interest income due to higher interest rates.

Income Taxes

The effective tax rates were 19.8% and (10.5)% in the three months and 16.5% and 12.6% in the nine months 2019 and 2018. The increase in the effective tax rate in 2019 was primarily due to adjustments related to the Tax Cuts and Jobs Act of 2017 and favorable audit settlements in 2018.

Net Earnings

Net earnings decreased to $466 or $1.23 per diluted share in the three months 2019 from $590 or $1.55 per diluted share in 2018. Adjusted net earnings per diluted share⁽¹⁾ increased 13.0% to $1.91 in 2019 from $1.69 in 2018. The impact of foreign currency exchange rates on net earnings per diluted share was a decrease of net earnings per diluted share of approximately $0.02 in 2019 and was neutral in 2018.

Net earnings decreased to $1,358 or $3.58 per diluted share in the nine months 2019 from $1,485 or $3.90 per diluted share in 2018. Adjusted net earnings per diluted share⁽¹⁾ increased 12.5% to $5.77 in 2019 from $5.13 in 2018. The impact of foreign currency exchange rates on net earnings per diluted share was a decrease of net earnings per diluted share of approximately $0.12 in 2019 and an increase of approximately $0.06 in 2018.

						Percent Net Sales
Three Months	2019		2018			2019		2018
Reported	$	466	$	590		13.0	%	18.2	%
Inventory stepped up to fair value	13		(11		)	0.4		(0.3	)
Other acquisition and integration-related	8		17			0.2		0.5
Amortization of purchased intangible assets	105		92			2.8		2.8
Restructuring-related and other charges	40		31			1.1		0.9
Medical device regulations	13		2			0.4		0.1
Recall-related matters	28		2			0.8		0.1
Regulatory and legal matters	14		50			0.4		1.5
Tax matters	38		(130		)	1.1		(4.0	)
Adjusted	$	725	$	643		20.2	%	19.8	%

						Percent Net Sales
Nine Months	2019		2018			2019		2018
Reported	$	1,358	$	1,485		12.6	%	15.1	%
Inventory stepped up to fair value	42		(4		)	0.4		—
Other acquisition and integration-related	126		41			1.2		0.4
Amortization of purchased intangible assets	294		263			2.8		2.7
Restructuring-related and other charges	122		98			1.1		1.0
Medical device regulations	28		4			0.3		0.1
Recall-related matters	144		7			1.3		0.1
Regulatory and legal matters	19		92			0.2		0.9
Tax matters	58		(35		)	0.5		(0.4	)
Adjusted	$	2,191	$	1,951		20.4	%	19.9	%

⁽¹⁾Non-GAAP Financial Measures

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

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

past and future performance. The following are examples of the types of adjustments that may be included in a period:

1. Acquisition and integration-related costs. Costs related to integrating recently acquired businesses and specific costs (e.g., inventory step-up and deal costs) related to the consummation of the acquisition process.

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

3. Restructuring-related and other charges. Costs associated with the termination of sales relationships in certain countries, workforce reductions, elimination of product lines, weather-related asset impairments and associated costs and other restructuring-related activities.

4. Medical Device Regulations. 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 European Union and China regulations for medical devices.

5. Recall-related matters. Our best estimate of the minimum of the range of probable loss to resolve the Rejuvenate, LFIT V40 and other product recalls.

6. Regulatory and legal matters. Our best estimate of the minimum of the range of probable loss to resolve certain regulatory matters and other legal settlements.

7. Tax matters. Charges represent the impact of accounting for certain significant and discrete tax items.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Consolidated Results of Operations below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

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

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2019	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	2,330		$	1,291		$	246		$	628		$	466		19.8	%	$	1.23
Reported percent net sales	65.0		%	36.0		%	6.9		%	17.5		%	13.0		%
Acquisition and integration-related charges:
Inventory stepped up to fair value	17			—			—			17			13			0.2		0.03
Other acquisition and integration-related	—			(15		)	—			15			8			0.6		0.02
Amortization of purchased intangible assets	—			—			—			116			105			(1.5	)	0.28
Restructuring-related and other charges	10			(37		)	—			48			40			0.1		0.11
Medical device regulations	—			—			(15		)	15			13			—		0.03
Recall-related matters	—			—			—			49			28			2.2		0.07
Regulatory and legal matters	—			(25		)	—			25			14			1.2		0.04
Tax matters	—			—			—			—			38			(6.5	)	0.10
Adjusted	$	2,357		$	1,214		$	231		$	913		$	725		16.1	%	$	1.91
Adjusted percent net sales	65.7		%	33.8		%	6.5		%	25.4		%	20.2		%

Three Months 2018	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	2,155		$	1,242		$	221		$	576		$	590		(10.5	)%	$	1.55
Reported percent net sales	66.5		%	38.3		%	6.8		%	17.8		%	18.2		%
Acquisition and integration-related charges:
Inventory stepped up to fair value	(11		)	—			—			(11		)	(11		)	0.3		(0.03		)
Other acquisition and integration-related	—			(19		)	—			19			17			—		0.05
Amortization of purchased intangible assets	—			—			—			112			92			0.5		0.24
Restructuring-related and other charges	4			(35		)	—			39			31			0.4		0.08
Medical device regulations	—			—			(2		)	2			2			—		—
Recall-related matters	—			—			—			4			2			0.1		0.01
Regulatory and legal matters	—			(66		)	—			66			50			1.0		0.13
Tax matters	—			—			—			—			(130		)	24.3		(0.34		)
Adjusted	$	2,148		$	1,122		$	219		$	807		$	643		16.1	%	$	1.69
Adjusted percent net sales	66.2		%	34.6		%	6.7		%	24.9		%	19.8		%

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

Nine Months 2019	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	6,993		$	3,976		$	717		$	1,769		$	1,358		16.5	%	$	3.58
Reported percent net sales	65.0		%	37.0		%	6.7		%	16.5		%	12.6		%
Acquisition and integration-related charges:
Inventory stepped up to fair value	55			—			—			55			42			0.3		0.11
Other acquisition and integration-related	—			(168		)	—			168			126			1.0		0.33
Amortization of purchased intangible assets	—			—			—			352			294			0.1		0.78
Restructuring-related and other charges	21			(125		)	—			146			122			0.1		0.32
Medical device regulations	1			—			(33		)	34			28			0.1		0.07
Recall-related matters	—			—			—			179			144			0.4		0.38
Regulatory and legal matters	—			(35		)	—			35			19			0.5		0.05
Tax matters	—			—			—			—			58			(3.5	)	0.15
Adjusted	$	7,070		$	3,648		$	684		$	2,738		$	2,191		15.5	%	$	5.77
Adjusted percent net sales	65.7		%	33.9		%	6.4		%	25.5		%	20.4		%

Nine Months 2018	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	6,482		$	3,668		$	641		$	1,839		$	1,485		12.6	%	$	3.90
Reported percent net sales	66.1		%	37.4		%	6.5		%	18.8		%	15.1		%
Acquisition and integration-related charges:
Inventory stepped up to fair value	—			—			—			—			(4		)	0.2		(0.01		)
Other acquisition and integration-related	—			(49		)	—			49			41			—		0.11
Amortization of purchased intangible assets	—			—			—			324			263			0.5		0.69
Restructuring-related and other charges	9			(115		)	—			124			98			0.3		0.26
Medical device regulations	1			—			(5		)	5			4			—		0.01
Recall-related matters	—			—			—			10			7			—		0.02
Regulatory and legal matters	—			(121		)	—			121			92			0.6		0.24
Tax matters	—			—			—			—			(35		)	2.1		(0.09		)
Adjusted	$	6,492		$	3,383		$	636		$	2,472		$	1,951		16.3	%	$	5.13
Adjusted percent net sales	66.2		%	34.5		%	6.5		%	25.2		%	19.9		%

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

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

FINANCIAL CONDITION AND LIQUIDITY

Nine Months	2019			2018
Net cash provided by operating activities	$	1,456		$	1,564
Net cash used in investing activities	(736		)	(1,229		)
Net cash (used in) provided by financing activities	(2,360		)	(951		)
Effect of exchange rate changes on cash and cash equivalents	(28		)	(8		)
Change in cash and cash equivalents	$	(1,668	)	$	(624	)

Operating Activities

Cash provided by operating activities was $1,456 and $1,564 in the nine months 2019 and 2018. The decrease was primarily due to increases in cash used in working capital, primarily accounts receivable and lower net earnings. These uses of cash are partially offset by the receipt of cash for a prospective legal settlement. Refer to Note 6 to our Consolidated Financial Statements for further information.

Investing Activities    

Cash used in investing activities was $736 and $1,229 in the nine months 2019 and 2018. The decrease in cash used was primarily due to decreased payments for acquisitions in 2019.

Financing Activities

Cash used in financing activities was $2,360 and $951 in the nine months 2019 and 2018. The increase in cash used was primarily driven by the repayment of $1,341 of debt upon maturity in 2019, $584 of dividend payments and $307 of repurchases of common

stock.

Nine Months	2019		2018
Total dividends paid to common shareholders	$	585	$	528
Total amount paid to repurchase common stock	$	307	$	300
Shares of repurchased common stock (in millions)	1.9		1.9

Liquidity

Cash, cash equivalents and marketable securities were $2,036 and $3,699 on September 30, 2019 and December 31, 2018. Current assets exceeded current liabilities by $4,645 and $4,926 on September 30, 2019 and December 31, 2018. 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 raised funds in the capital markets in 2018 and may continue to do so from time to time. We continue to have strong investment-grade short-term and long-term debt ratings that we believe should enable us to refinance our debt as needed.

Our cash, cash equivalents and marketable securities held in locations outside the United States was approximately 35% on September 30, 2019 compared to 25% on December 31, 2018. We intend to use this cash to expand operations organically and through acquisitions.

Critical Accounting Policies

There were no changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for 2018.

New Accounting Pronouncements Not Yet Adopted

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

Guarantees and Other Off-Balance Sheet Arrangements

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

Dollar amounts are in millions except per share amounts or as otherwise specified. 18

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

OTHER MATTERS

Legal and Regulatory Matters

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

FORWARD-LOOKING STATEMENTS

This report contains statements referring to us that are not historical facts and are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are intended to take advantage of the "safe harbor" provisions of the Reform Act, are based on current projections about operations, industry conditions, financial condition and liquidity. Words that identify forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "goal," "strategy" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or our businesses. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Those statements are not guarantees and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements. Some important factors that could cause our actual results to differ from our expectations in any forward-looking statements include those risks discussed in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for 2018. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We consider our greatest potential area of market risk exposure to be exchange rate risk. Quantitative and qualitative disclosures about exchange rate risk are included in Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for 2018. There were no material changes from the information provided therein.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer (the Certifying Officers), evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) on September 30, 2019. Based on that evaluation, the Certifying Officers concluded the Company's disclosure controls and procedures were effective as of September 30, 2019.

Changes in Internal Control Over Financial Reporting

Other than certain changes in internal control associated with the implementation of our enterprise resource planning system at our Instruments business, there was no change to our internal control over financial reporting during the three months 2019 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the three months 2019 we did not issue shares of our common stock as performance incentive awards to employees. When issued, these shares are not registered under the Securities Act of 1933 based on the conclusion that the awards would not be events of sale within the meaning of Section 2(a)(3) of the Act.

In March 2015 we announced that our Board of Directors had authorized us to purchase up to $2,000 of our common stock. The manner, timing and amount of repurchases are determined by management based on an evaluation of market conditions, stock price, and other factors and are subject to regulatory considerations. Purchases are made from time to time in the open market, in privately negotiated transactions or otherwise.

In the three months 2019 we did not repurchase any shares of our common stock under our authorized repurchase program. The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of September 30, 2019.

ITEM 6. EXHIBITS

3(i)	Bylaws of Stryker Corporation (as amended through July 31, 2019) - Incorporated by reference to Exhibit 3.1 to the Company's Form 8-K dated August 6, 2019 (Commission File No. 001-13149)
31(i)*	Certification of Principal Executive Officer of Stryker Corporation pursuant to Rule 13a-14(a)
31(ii)*	Certification of Principal Financial Officer of Stryker Corporation pursuant to Rule 13a-14(a)
32(i)*	Certification by Principal Executive Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350
32(ii)*	Certification by Principal Financial Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350
101.INS	iXBRL Instance Document
101.SCH	iXBRL Schema Document
101.CAL	iXBRL Calculation Linkbase Document
101.DEF	iXBRL Definition Linkbase Document
101.LAB	iXBRL Label Linkbase Document
101.PRE	iXBRL Presentation Linkbase Document
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)
	† Filed with this Form 10-Q
	* Furnished with this Form 10-Q

Dollar amounts are in millions except per share amounts or as otherwise specified. 19

STRYKER CORPORATION 2019 Third Quarter Form 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		STRYKER CORPORATION
		(Registrant)
Date:	October 30, 2019	/s/ KEVIN A. LOBO
		Kevin A. Lobo
		Chairman and Chief Executive Officer
Date:	October 30, 2019	/s/ GLENN S. BOEHNLEIN
		Glenn S. Boehnlein
		Vice President, Chief Financial Officer

20

EX-31.1

Exhibit 31(i)

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin A. Lobo, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 of Stryker Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 30, 2019	/s/ KEVIN A. LOBO
		Kevin A. Lobo
		Chairman and Chief Executive Officer

EX-31.2

Exhibit 31(ii)

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Glenn S. Boehnlein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 of Stryker Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	October 30, 2019	/s/ GLENN S. BOEHNLEIN
		Glenn S. Boehnlein
		Vice President, Chief Financial Officer

EX-32.1

Exhibit 32(i)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Stryker Corporation (the "Company") for the quarter ended September 30, 2019 (the "Report"), I, Kevin A. Lobo, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 30, 2019	/s/ KEVIN A. LOBO
		Kevin A. Lobo
		Chairman and Chief Executive Officer

EX-32.2

Exhibit 32(ii)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Stryker Corporation (the "Company") for the quarter ended September 30, 2019 (the "Report"), I, Glenn S. Boehnlein, Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 30, 2019	/s/ GLENN S. BOEHNLEIN
		Glenn S. Boehnlein
		Vice President, Chief Financial Officer

XML

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Revenue Recognition [Abstract]
Contract liabilities	$ 319	$ 327

XML

Contingencies and Commitments (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Lease, Cost

Leases			September
			2019
Right-of-use assets			$	362
Lease liabilities, current			$	87
Lease liabilities, non-current			$	278
Other information
Weighted-average remaining lease term			5.9 years
Weighted-average discount rate			3.32		%
	Three Months 2019		Nine Months 2019
Operating lease cost	$	34	102

XML

Debt and Credit Facilities (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018
Commercial Paper	$ 0
Other Long-term Debt	27,000,000			$ 126,000,000
Total debt	8,415,000,000			9,859,000,000
Less current maturities of debt	526,000,000			1,373,000,000
Total long-term debt	7,889,000,000			8,486,000,000
Unamortized debt issuance costs	45,000,000			50,000,000
Available borrowing capacity	1,547,000,000			1,548,000,000
Fair value of senior unsecured notes	$ 9,280,000,000			9,746,000,000
Senior Unsecured Notes 1.800% due 2019
Repaid face amount of debt			$ 500,000,000
Stated interest rate	1.80%
Maturity Date	Jan. 15, 2019
Unsecured Debt	$ 0			500,000,000
Senior Unsecured Notes 2.000% due 2019
Repaid face amount of debt		$ 750,000,000
Stated interest rate	2.00%
Maturity Date	Mar. 08, 2019
Unsecured Debt	$ 0			750,000,000
Commercial Paper
Debt instrument, maturity	397 days
Commercial Paper | Maximum
Commercial paper	$ 1,500,000,000
Senior Unsecured Notes 4.375% due 2020
Stated interest rate	4.375%
Maturity Date	Jan. 15, 2020
Unsecured Debt	$ 500,000,000			499,000,000
Senior Unsecured Notes Variable due 2020
Maturity Date	Nov. 30, 2020
Unsecured Debt	$ 329,000,000			343,000,000
Senior Unsecured Notes 2.625% due 2021
Stated interest rate	2.625%
Maturity Date	Mar. 15, 2021
Unsecured Debt	$ 748,000,000			747,000,000
Senior Unsecured Notes 1.125% due 2021
Stated interest rate	1.125%
Maturity Date	Nov. 30, 2023
Unsecured Debt	$ 602,000,000			627,000,000
Senior Unsecured Notes 3.375% due 2024
Stated interest rate	3.375%
Maturity Date	May 15, 2024
Unsecured Debt	$ 587,000,000			584,000,000
Senior Unsecured Notes 3.375% due 2025
Stated interest rate	3.375%
Maturity Date	Nov. 01, 2025
Unsecured Debt	$ 746,000,000			746,000,000
Senior Unsecured Notes 3.50% due 2026
Stated interest rate	3.50%
Maturity Date	Mar. 15, 2026
Unsecured Debt	$ 991,000,000			990,000,000
Senior Unsecured Notes 2.125% due 2027
Stated interest rate	2.125%
Maturity Date	Nov. 30, 2027
Unsecured Debt	$ 819,000,000			853,000,000
Senior Unsecured Notes 3.650% due 2028
Stated interest rate	3.65%
Maturity Date	Mar. 07, 2028
Unsecured Debt	$ 595,000,000			595,000,000
Senior Unsecured Notes 2.625% due 2030
Stated interest rate	2.625%
Maturity Date	Nov. 30, 2030
Unsecured Debt	$ 704,000,000			733,000,000
Senior Unsecured Notes 4.100% due 2043
Stated interest rate	4.10%
Maturity Date	Apr. 01, 2043
Unsecured Debt	$ 391,000,000			391,000,000
Senior Unsecured Notes 4.375% due 2044
Stated interest rate	4.375%
Maturity Date	May 15, 2044
Unsecured Debt	$ 395,000,000			395,000,000
Senior Unsecured Notes 4.625% due 2046
Stated interest rate	4.625%
Maturity Date	Mar. 15, 2046
Unsecured Debt	$ 981,000,000			$ 980,000,000

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net earnings	$ 466	$ 590	$ 1,358	$ 1,485
Other comprehensive income (loss), net of tax:
Marketable securities	0	0	1	(1)
Pension plans	13	(3)	2	(1)
Unrealized gains (losses) on designated hedges	(15)	6	(28)	23
Financial statement translation	79	(50)	103	(72)
Total other comprehensive income (loss), net of tax	77	(47)	78	(51)
Comprehensive income	$ 543	$ 543	$ 1,436	$ 1,434

XML

Derivative Instruments (Income Statement Location) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Foreign Exchange Contract
Derivative Instruments, Gain (Loss) [Line Items]
Net currency exchange rate gains (losses)	$ 3	$ 3	$ 1	$ 1
Foreign Exchange Contract | Cost of sales
Derivative Instruments, Gain (Loss) [Line Items]
Net currency exchange rate gains (losses)	2	2	4	4
Foreign Exchange Contract | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Net currency exchange rate gains (losses)	(6)	1	(10)	(3)
Net Investment Hedging [Member] | Other income (expense), net
Derivative Instruments, Gain (Loss) [Line Items]
Net currency exchange rate gains (losses)	$ 7	$ 0	$ 7	$ 0

XML

Fair Value Measurements (Unrealized Losses And Fair Value Of Investments With Unrealized Losses) (Details) $ in Millions	Sep. 30, 2019 USD ($) investment
Number of Investments | investment	10
Fair Value | $	$ 12
Corporate and asset-backed debt securities
Number of Investments | investment	4
Fair Value | $	$ 1
United States agency debt securities
Number of Investments | investment	1
Fair Value | $	$ 1
United States Treasury debt securities
Number of Investments | investment	5
Fair Value | $	$ 10

XML

Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net earnings	$ 1,358	$ 1,485
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	231	223
Amortization of intangible assets	352	324
Share-based compensation	95	87
Recall charges	179	10
Sale of inventory stepped-up to fair value at acquisition	55	6
Changes in operating assets and liabilities:
Accounts receivable	(124)	119
Inventories	(414)	(445)
Accounts payable	37	57
Accrued expenses and other liabilities	64	(40)
Recall-related payments	(172)	(89)
Income taxes	(94)	(231)
Other, net	(111)	58
Net cash provided by operating activities	1,456	1,564
Investing activities
Acquisitions, net of cash acquired	(281)	(770)
Purchases of marketable securities	(57)	(214)
Proceeds from sales of marketable securities	52	173
Purchases of property, plant and equipment	(450)	(418)
Net cash used in investing activities	(736)	(1,229)
Financing activities
Proceeds (payments) on short-term borrowings, net	(7)	(8)
Proceeds from issuance of long-term debt	0	595
Payments on long-term debt	(1,341)	(600)
Dividends paid	(585)	(528)
Repurchases of common stock	(307)	(300)
Cash paid for taxes from withheld shares	(130)	(104)
Payments to purchase noncontrolling interest	0	(14)
Other financing, net	10	8
Net cash (used in) provided by financing activities	(2,360)	(951)
Effect of exchange rate changes on cash and cash equivalents	(28)	(8)
Change in cash and cash equivalents	(1,668)	(624)
Cash and cash equivalents at beginning of period	3,616	2,542
Cash and cash equivalents at end of period	$ 1,948	$ 1,918

XML

Debt and Credit Facilities

9 Months Ended

Sep. 30, 2019

Long-term Debt, Unclassified [Abstract]

Debt And Credit Facilities

DEBT AND CREDIT FACILITIES

In January 2019 we repaid $500 of our senior unsecured notes with a coupon of 1.800% that were due on January 15, 2019. In March 2019 we repaid $750 of our senior unsecured notes with a coupon of 2.000% that were due on March 8, 2019. Our commercial paper program allows us to have a maximum of $1,500 in commercial paper outstanding with maturities up to 397 days from the date of issuance. On September 30, 2019 there were no amounts outstanding under our commercial paper program.

We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on September 30, 2019.

Summary of Total Debt			September 2019		December 2018
Senior unsecured notes:
	Rate	Due
	1.800%	January 15, 2019	$	—	$	500
	2.000%	March 8, 2019	—		750
	4.375%	January 15, 2020	500		499
	Variable	November 30, 2020	329		343
	2.625%	March 15, 2021	748		747
	1.125%	November 30, 2023	602		627
	3.375%	May 15, 2024	587		584
	3.375%	November 1, 2025	746		746
	3.500%	March 15, 2026	991		990
	2.125%	November 30, 2027	819		853
	3.650%	March 7, 2028	595		595
	2.625%	November 30, 2030	704		733
	4.100%	April 1, 2043	391		391
	4.375%	May 15, 2044	395		395
	4.625%	March 15, 2046	981		980
Other			27		126
Total debt			$	8,415	$	9,859
Less current maturities of debt			526		1,373
Total long-term debt			$	7,889	$	8,486
Unamortized debt issuance costs			$	45	$	50
Available borrowing capacity			$	1,547	$	1,548
Fair value of senior unsecured notes			$	9,280	$	9,746

The fair value of the senior unsecured notes was estimated using quoted interest rates, maturities and amounts of borrowings based on quoted active market prices and yields that took into account the underlying terms of the debt instruments. Substantially all our debt is classified within Level 2 of the fair value hierarchy.

XML

Derivative Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both derivative and non-derivative financial instruments) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings and cash flow. We do not enter into derivative instruments for speculative purposes. We have not changed our hedging strategies, accounting practices or objectives from those disclosed in our Annual Report on Form 10-K for 2018.

Foreign Currency Hedges

September 2019	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	804		$	1,100	$	5,874		$	7,778
Maximum term in days									586
Fair value:
Other current assets	$	7		$	—	$	189		$	196
Other noncurrent assets	—			44		—			44
Other current liabilities	(9		)	—		(10		)	(19		)
Other noncurrent liabilities	(1		)	—		—			(1		)
Total fair value	$	(3	)	$	44	$	179		$	220

December 2018	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	870		$	—	$	5,466		$	6,336
Maximum term in days									586
Fair value:
Other current assets	$	15		$	—	$	28		$	43
Other noncurrent assets	1			—		33			34
Other current liabilities	(5		)	—		(15		)	(20		)
Total fair value	$	11		$	—	$	46		$	57

In July 2019 we entered into €1.0 billion in certain forward currency contracts and designated these as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. We have elected to use the spot method to assess effectiveness for our derivatives designated as net investment hedges. Accordingly, the change in fair value attributable to changes in the spot rate is recorded in AOCI. We

exclude the spot-forward difference from the assessment of hedge effectiveness and amortize this amount separately on a straight-line basis over the term of the forward contracts. This amortization will be recorded to Other income (expense), net on our Consolidated Statements of Earnings.

On September 30, 2019 the total after tax gain amount in AOCI related to our €2.25 billion senior unsecured notes designated as net investment hedges was $61. We evaluate the effectiveness of our net investment hedges quarterly.

We are exposed to credit loss in the event of nonperformance by our counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum loss exposure is the asset balance of the instrument.

Net Currency Exchange Rate Gains (Losses)

		Three Months					Nine Months
Derivative instrument	Recorded in:	2019			2018		2019			2018
Cash Flow	Cost of sales	$	2		$	2	$	4		$	4
Net Investment	Other income (expense), net	7			—		7			—
Non-Designated	Other income (expense), net	(6		)	1		(10		)	(3		)
	Total	$	3		$	3	$	1		$	1

Pretax gains (losses) on derivatives designated as cash flow of ($3) and net investment hedges of $25 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense) in earnings within 12 months as of September 30, 2019. The cash flow hedge reclassification is primarily due to the sale of inventory that includes previously hedged purchases. A component of the AOCI amounts related to net investment hedges is reclassified over the life of the hedge instruments as we elected to exclude the initial value of the component related to the spot-forward difference from the effectiveness assessment.

Interest Rate Hedges

On September 30, 2019 we had interest rate swap agreements with notional amounts of €600 and $750 designated as forward starting interest rate swaps in anticipation of future debt issuances. Pretax losses of $6 and $8 for the €600 and $750 interest rate swap agreements were recorded in AOCI as of September 30, 2019. Upon the probable issuance of the debt, these amounts will be released to interest expense over the term of the debt. The cash flow effect of these hedges is recorded in cash flow from operations.

XML

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Schedule of Disaggregated Revenue

We disaggregate our net sales by product line and geography for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.

Net Sales by Product Line
	Three Months				Nine Months
	2019		2018		2019		2018
Orthopaedics:
Knees	$	426	$	395	$	1,305	$	1,236
Hips	332		316		1,011		983
Trauma and Extremities	407		376		1,197		1,152
Other	97		84		272		244
	$	1,262	$	1,171	$	3,785	$	3,615
MedSurg:
Instruments	$	476	$	442	$	1,474	$	1,292
Endoscopy	474		443		1,424		1,335
Medical	554		492		1,627		1,508
Sustainability	72		66		212		190
	$	1,576	$	1,443	$	4,737	$	4,325
Neurotechnology and Spine:
Neurotechnology	$	488	$	435	$	1,436	$	1,282
Spine	261		193		795		583
	$	749	$	628	$	2,231	$	1,865
Total	$	3,587	$	3,242	$	10,753	$	9,805

Net Sales by Geography
	Three Months 2019				Three Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	318	$	108	$	291	$	104
Hips	211		121		198		118
Trauma and Extremities	262		145		242		134
Other	81		16		67		17
	$	872	$	390	$	798	$	373
MedSurg:
Instruments	$	373	$	103	$	352	$	90
Endoscopy	377		97		346		97
Medical	442		112		393		99
Sustainability	71		1		66		—
	$	1,263	$	313	$	1,157	$	286
Neurotechnology and Spine:
Neurotechnology	$	314	$	174	$	284	$	150
Spine	195		66		142		52
	$	509	$	240	$	426	$	202
Total	$	2,644	$	943	$	2,381	$	861

Net Sales by Geography
	Nine Months 2019				Nine Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	962	$	343	$	896	$	340
Hips	643		368		610		373
Trauma and Extremities	768		429		729		423
Other	223		49		198		46
	$	2,596	$	1,189	$	2,433	$	1,182
MedSurg:
Instruments	$	1,168	$	306	$	1,007	$	285
Endoscopy	1,136		288		1,049		286
Medical	1,288		339		1,158		350
Sustainability	210		2		189		1
	$	3,802	$	935	$	3,403	$	922
Neurotechnology and Spine:
Neurotechnology	$	922	$	514	$	820	$	462
Spine	598		197		424		159
	$	1,520	$	711	$	1,244	$	621
Total	$	7,918	$	2,835	$	7,080	$	2,725

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Fair Value Measurements (Valuation Of Financial Instruments By Pricing Categories) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 1,948	$ 3,616	$ 1,918	$ 2,542
Assets
Available-for-sale securities, current	88	83
Investments Fair Value Disclosure	2,415	3,894
Contingent consideration:
Total liabilities measured at fair value	428	255
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	1,948	3,616
Trading marketable securities	139	118
Assets
Investments Fair Value Disclosure	2,087	3,734
Deferred compensation arrangements	139	118
Contingent consideration:
Total liabilities measured at fair value	139	118
Fair Value, Inputs, Level 2
Assets
Investments Fair Value Disclosure	328	160
Contingent consideration:
Total liabilities measured at fair value	34	20
Fair Value, Inputs, Level 2 | Foreign currency exchange forward contracts
Assets
Derivative asset	240	77
Liabilities
Foreign currency exchange forward contracts	20	20
Fair Value, Inputs, Level 2 | Available-for-sale marketable securities:
Assets
Available-for-sale securities, current	88	83
Fair Value, Inputs, Level 2 | Available-for-sale marketable securities: | Corporate and asset-backed debt securities
Assets
Available-for-sale securities, current	36	38
Fair Value, Inputs, Level 2 | Available-for-sale marketable securities: | United States agency debt securities
Assets
Available-for-sale securities, current	3	11
Fair Value, Inputs, Level 2 | Available-for-sale marketable securities: | United States Treasury debt securities
Assets
Available-for-sale securities, current	40	23
Fair Value, Inputs, Level 2 | Available-for-sale marketable securities: | Certificates of deposit
Assets
Available-for-sale securities, current	9	11
Fair Value, Inputs, Level 3
Contingent consideration:
Beginning	117	32
Additions	166	77
Change in estimate	(11)	15
Settlements	(17)	(7)
Ending	255	117
Total liabilities measured at fair value	$ 255	$ 117

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Consolidated Statements Of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Net sales	$ 3,587	$ 3,242	$ 10,753	$ 9,805
Cost of sales	1,257	1,087	3,760	3,323
Gross profit	2,330	2,155	6,993	6,482
Research, development and engineering expenses	246	221	717	641
Selling, general and administrative expenses	1,291	1,242	3,976	3,668
Recall charges	49	4	179	10
Amortization of intangible assets	116	112	352	324
Total operating expenses	1,702	1,579	5,224	4,643
Operating income	628	576	1,769	1,839
Other income (expense), net	(47)	(42)	(143)	(140)
Earnings before income taxes	581	534	1,626	1,699
Income taxes	115	(56)	268	214
Net earnings	$ 466	$ 590	$ 1,358	$ 1,485
Net earnings per share of common stock:
Basic	$ 1.24	$ 1.58	$ 3.63	$ 3.97
Diluted	$ 1.23	$ 1.55	$ 3.58	$ 3.90
Weighted-average shares outstanding (in millions):
Basic	374.2	374.1	373.8	374.0
Effect of dilutive employee stock options	6.1	6.1	6.0	6.4
Diluted	380.3	380.2	379.8	380.4
Cash dividends declared per share of common stock (in dollars per share)	$ 0.52	$ 0.47	$ 1.56	$ 1.41

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Consolidated Statements Of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Total Stryker shareholders' equity	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes					$ (759)
Beginning balance at Dec. 31, 2017			$ 37	$ 1,496	8,986	$ (553)	$ 14
Beginning balance (in shares) at Dec. 31, 2017			374.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under stock option and benefit plans				(41)
Issuance of common stock under stock option and benefit plans (in shares)			1.7
Repurchase of common stock				(7)	(293)
Repurchase of common stock (in shares)			(1.9)
Share-based compensation				87
Net earnings (loss)	$ 1,485				1,485		0
Cash dividends declared					(527)
Other comprehensive income (loss)	(51)					(51)
Interest purchased							(15)
Foreign currency exchange translation adjustment							1
Ending balance at Sep. 30, 2018	9,860	$ 9,860	$ 37	1,535	8,892	(604)	0
Ending balance (in shares) at Sep. 30, 2018			374.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes					0
Beginning balance at Jun. 30, 2018			$ 37	1,503	8,477	(557)	0
Beginning balance (in shares) at Jun. 30, 2018			374.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under stock option and benefit plans				2
Issuance of common stock under stock option and benefit plans (in shares)			0.2
Repurchase of common stock (in shares)			0.0
Share-based compensation				30
Net earnings (loss)	590				590		0
Cash dividends declared					(175)
Other comprehensive income (loss)	(47)					(47)
Interest purchased							0
Foreign currency exchange translation adjustment							0
Ending balance at Sep. 30, 2018	9,860	9,860	$ 37	1,535	8,892	(604)	0
Ending balance (in shares) at Sep. 30, 2018			374.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes					0
Beginning balance at Dec. 31, 2018	11,730		$ 37	1,559	10,765	(631)	0
Beginning balance (in shares) at Dec. 31, 2018			374.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under stock option and benefit plans			$ 0	(53)
Issuance of common stock under stock option and benefit plans (in shares)			1.9
Repurchase of common stock			$ 0	(8)	(299)
Repurchase of common stock (in shares)			(1.9)
Share-based compensation				95
Net earnings (loss)	1,358				1,358		0
Cash dividends declared					(586)
Other comprehensive income (loss)	78					78
Interest purchased							0
Foreign currency exchange translation adjustment							0
Ending balance at Sep. 30, 2019	12,315	12,315	$ 37	1,593	11,238	(553)	0
Ending balance (in shares) at Sep. 30, 2019			374.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes					0
Beginning balance at Jun. 30, 2019			$ 37	1,569	10,967	(630)	0
Beginning balance (in shares) at Jun. 30, 2019			374.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under stock option and benefit plans			$ 0	(8)
Issuance of common stock under stock option and benefit plans (in shares)			0.3
Repurchase of common stock			$ 0
Repurchase of common stock (in shares)			0.0
Share-based compensation				32
Net earnings (loss)	466				466		0
Cash dividends declared					(195)
Other comprehensive income (loss)	77					77
Interest purchased							0
Foreign currency exchange translation adjustment							0
Ending balance at Sep. 30, 2019	$ 12,315	$ 12,315	$ 37	$ 1,593	$ 11,238	$ (553)	$ 0
Ending balance (in shares) at Sep. 30, 2019			374.4

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Contingencies and Commitments (Narrative) (Details) $ in Millions			1 Months Ended	12 Months Ended
	Mar. 19, 2019 USD ($)	Jul. 12, 2017 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2010 patent	Sep. 30, 2019 USD ($)
Voluntary recall | Minimum
Loss Contingencies [Line Items]
Estimate of possible loss						$ 265
Voluntary recall | Maximum
Loss Contingencies [Line Items]
Estimate of possible loss						$ 505
Zimmer Product Infringement
Loss Contingencies [Line Items]
Number of patents infringed upon | patent					3
Value of damages awarded		$ 164		$ 76
Gain (loss) related to litigation settlement			$ 54
Proceeds from legal settlements	$ 167

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Basis Of Presentation (Policies)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.

In August 2018 the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. We are in the process of evaluating the impact on our Consolidated Financial Statements and the timing of adoption of this update.

Accounting Pronouncements Recently Adopted

Accounting Pronouncements Recently Adopted

On January 1, 2019 we adopted ASU 2016-02, Leases, and related amendments (ASC 842), which require lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. Refer to Note 6 for further information.

On January 1, 2019 we adopted ASU 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. The adoption of this update did not have a material impact on our Consolidated Financial Statements.

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Acquisitions

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. Cash paid for acquisitions, net of cash acquired, was $281 and $770 in the nine months 2019 and 2018. Acquisition and integration related charges, including the amortization of inventory stepped up to fair value, was $32 and $8 in the three months and $223 and $49 in the nine months 2019 and 2018.

In March 2019 we completed the acquisition of OrthoSpace, Ltd. for total cash consideration of $110 with future milestone payments of up to an additional $110. OrthoSpace is a medical device company specializing in orthopaedic biodegradable technology for the treatment of irreparable rotator cuff tears. Goodwill attributable to the acquisition was $114 and is not deductible for tax purposes.

In November 2018 we completed the acquisition of K2M Group Holdings, Inc. (K2M) for $27.50 per share, or an aggregate purchase price of approximately $1,380. K2M is a global leader of complex spine and minimally invasive solutions focused on achieving three-dimensional Total Body Balance. K2M is part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.

In February 2018 we completed the acquisition of Entellus Medical, Inc. (Entellus) for $24.00 per share, or an aggregate purchase price of $697, net of cash acquired. Entellus is focused on delivering superior patient and physician experiences through products designed for the minimally invasive treatment of various ear, nose and throat (ENT) disease states. Entellus is part of our Neurotechnology business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes.

The purchase price allocations for K2M and OrthoSpace are preliminary and are based on estimates and assumptions that are subject to change within the measurement period. The purchase price allocation for the acquisition of Entellus was completed in 2019.

Purchase Price Allocation of Acquired Net Assets
	2018
	K2M			Entellus
Tangible assets:
Accounts receivable	$	58		$	17
Inventory	131			14
Other assets	122			62
Contingent consideration	—			(79		)
Other liabilities	(247		)	(76		)
Intangible assets:
Customer relationship	34			33
Distributor relationship	1			—
Trade name	10			—
Developed technology and patents	475			261
Internally developed software	2			—
Goodwill	794			465
Purchase price, net of cash acquired	$	1,380		$	697
Weighted-average life of intangible assets	14			16

Estimated Amortization Expense
Remainder of 2019		2020		2021		2022		2023
$	114	$	442	$	424	$	414	$	393

In October 2019 we completed the acquisition of Mobius Imaging and Cardan Robotics for cash consideration of approximately $370 and future development and commercial milestones of up to $130. Mobius is a leader in point-of-care imaging technology focused on integrating advanced imaging technologies into medical workflow.  Cardan is working to develop innovative robotics and navigation technology systems for surgical and interventional radiology procedures. Mobius and Cardan will be part of our Spine business within Neurotechnology and Spine. Goodwill attributable to the acquisition is not deductible for tax purposes. The preliminary purchase price allocation for this acquisition will be performed during the fourth quarter 2019.

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Accumulated Other Comprehensive (Loss) Income (AOCI)

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive (Loss) Income (AOCI)

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI)

Three Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(3	)	$	(148	)	$	37		$	(516	)	$	(630	)
OCI	—			11			(18		)	116			109
Income taxes	—			1			10			(32		)	(21		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	—			1			—			(7		)	(6		)
Income taxes	—			—			(5		)	2			(3		)
Net OCI	$	—		$	13		$	(15	)	$	79		$	77
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Three Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(5	)	$	(132	)	$	45		$	(465	)	$	(557	)
OCI	1			(2		)	8			(50		)	(43		)
Income taxes	—			(2		)	(2		)	—			(4		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	(1		)	2			1			—			2
Income taxes	—			(1		)	1			—			—
Net OCI	$	—		$	(3	)	$	6		$	(50	)	$	(47	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

Nine Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(137	)	$	50		$	(540	)	$	(631	)
OCI	1			(5		)	(34		)	144			106
Income taxes	—			4			18			(36		)	(14		)
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			4			—			(7		)	(3		)
Income taxes	—			(1		)	(8		)	2			(7		)
Net OCI	$	1		$	2		$	(28	)	$	103		$	78
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Nine Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(134	)	$	28		$	(443	)	$	(553	)
OCI	(1		)	(6		)	32			(84		)	(59		)
Income taxes	—			1			(8		)	12			5
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			6			1			—			7
Income taxes	—			(2		)	2			—			—
Net OCI	$	(1	)	$	(1	)	$	23		$	(72	)	$	(51	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Sales and Other Financial Information by Business Segment

	Three Months						Nine Months
	2019			2018			2019			2018
Orthopaedics	$	1,262		$	1,171		$	3,785		$	3,615
MedSurg	1,576			1,443			4,737			4,325
Neurotechnology and Spine	749			628			2,231			1,865
Net sales	$	3,587		$	3,242		$	10,753		$	9,805
Orthopaedics	$	437		$	397		$	1,322		$	1,263
MedSurg	389			341			1,170			968
Neurotechnology and Spine	204			173			617			532
Segment operating income	$	1,030		$	911		$	3,109		$	2,763
Items not allocated to segments:
Corporate and other	(117		)	(104		)	(371		)	(291		)
Acquisition and integration-related charges	(32		)	(8		)	(223		)	(49		)
Amortization of intangible assets	(116		)	(112		)	(352		)	(324		)
Restructuring-related charges	(48		)	(39		)	(146		)	(124		)
Medical device regulations	(15		)	(2		)	(34		)	(5		)
Recall-related matters	(49		)	(4		)	(179		)	(10		)
Regulatory and legal matters	(25		)	(66		)	(35		)	(121		)
Consolidated operating income	$	628		$	576		$	1,769		$	1,839

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets Measured at Fair Value	September		December
	2019		2018
Cash and cash equivalents	$	1,948	$	3,616
Trading marketable securities	139		118
Level 1 - Assets	$	2,087	$	3,734
Available-for-sale marketable securities:
Corporate and asset-backed debt securities	$	36	$	38
United States agency debt securities	3		11
United States Treasury debt securities	40		23
Certificates of deposit	9		11
Total available-for-sale marketable securities	$	88	$	83
Foreign currency exchange forward contracts	240		77
Level 2 - Assets	$	328	$	160
Total assets measured at fair value	$	2,415	$	3,894

Liabilities Measured at Fair Value	September			December
	2019			2018
Deferred compensation arrangements	$	139		$	118
Level 1 - Liabilities	$	139		$	118
Foreign currency exchange forward contracts	$	20		$	20
Interest rate swap liability	$	14		$	—
Level 2 - Liabilities	$	34		$	20
Contingent consideration:
Beginning	$	117		$	32
Additions	166			77
Change in estimate	(11		)	15
Settlements	(17		)	(7		)
Ending	$	255		$	117
Level 3 - Liabilities	$	255		$	117
Total liabilities measured at fair value	$	428		$	255

Investments Classified by Contractual Maturity Date

Fair Value of Available for Sale Securities by Maturity
	September 2019		December 2018
Due in one year or less	$	44	$	51
Due after one year through three years	$	44	$	32

Schedule of Unrealized Loss on Investments

Securities in a Continuous Unrealized Loss Position
	Number of Investments	Fair Value
Corporate and asset-backed	4	$	1
United States agency	1	1
United States Treasury	5	10
Total	10	$	12

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019 Rate	Sep. 30, 2018 Rate	Sep. 30, 2019	Sep. 30, 2018
Income Tax [Abstract]
Effective income tax rate reconciliation, percent	19.80%	(10.50%)	16.50%	12.60%

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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax [Abstract]

Income Taxes

INCOME TAXES

Our effective tax rates were 19.8% and (10.5)% in the three months and 16.5% and 12.6% in the nine months 2019 and 2018. The increase in the effective tax rate for the three and nine months was primarily due to adjustments related to the Tax Cuts and Jobs Act of 2017 and favorable audit settlements in 2018.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for 2018.

There were no significant transfers into or out of any level in 2019.

Assets Measured at Fair Value	September		December
	2019		2018
Cash and cash equivalents	$	1,948	$	3,616
Trading marketable securities	139		118
Level 1 - Assets	$	2,087	$	3,734
Available-for-sale marketable securities:
Corporate and asset-backed debt securities	$	36	$	38
United States agency debt securities	3		11
United States Treasury debt securities	40		23
Certificates of deposit	9		11
Total available-for-sale marketable securities	$	88	$	83
Foreign currency exchange forward contracts	240		77
Level 2 - Assets	$	328	$	160
Total assets measured at fair value	$	2,415	$	3,894

Liabilities Measured at Fair Value	September			December
	2019			2018
Deferred compensation arrangements	$	139		$	118
Level 1 - Liabilities	$	139		$	118
Foreign currency exchange forward contracts	$	20		$	20
Interest rate swap liability	$	14		$	—
Level 2 - Liabilities	$	34		$	20
Contingent consideration:
Beginning	$	117		$	32
Additions	166			77
Change in estimate	(11		)	15
Settlements	(17		)	(7		)
Ending	$	255		$	117
Level 3 - Liabilities	$	255		$	117
Total liabilities measured at fair value	$	428		$	255

Fair Value of Available for Sale Securities by Maturity
	September 2019		December 2018
Due in one year or less	$	44	$	51
Due after one year through three years	$	44	$	32

On September 30, 2019 and December 31, 2018 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income recorded in other income (expense), net, was $36 and $29 in the three months and was $109 and $79 in the nine months 2019 and 2018.

Our investments in available-for-sale marketable securities had a minimum credit quality rating of A2 (Moody's), A (Standard & Poor's) and A (Fitch). We do not plan to sell the investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We do not consider these investments to be other-than-temporarily impaired on September 30, 2019. On September 30, 2019 the majority of our investments with unrealized losses that were not deemed to be other-than-temporarily impaired were in a continuous unrealized loss position for less than twelve months, and the losses were not material.

Securities in a Continuous Unrealized Loss Position
	Number of Investments	Fair Value
Corporate and asset-backed	4	$	1
United States agency	1	1
United States Treasury	5	10
Total	10	$	12

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Acquisitions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended			3 Months Ended		9 Months Ended
	Mar. 31, 2019	Aug. 31, 2018	Feb. 28, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Acquisitions, net of cash acquired						$ 281	$ 770
Acquisition and integration-related charges				$ 32	$ 8	223	$ 49
Goodwill				$ 8,704		$ 8,704		$ 8,563
OrthoSpace, Ltd.
Business Acquisition [Line Items]
Acquisitions, net of cash acquired	$ 110
Future milestone payments	110
Goodwill	$ 114
K2M
Business Acquisition [Line Items]
Acquisitions, net of cash acquired		$ 1,380
Goodwill								794
Consideration transferred (in dollars per share)		$ 27.50
Entellus
Business Acquisition [Line Items]
Acquisitions, net of cash acquired			$ 697
Goodwill								$ 465
Consideration transferred (in dollars per share)			$ 24.00

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Basis Of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

General Information

Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring items, considered necessary to fairly present the financial position of Stryker Corporation and its consolidated subsidiaries (the "Company," "we," us" or "our") on September 30, 2019 and the results of operations for the three and nine months 2019. The results of operations included in these Consolidated Financial Statements may not necessarily be indicative of our annual results. These statements should be read in conjunction with our Annual Report on Form 10-K for 2018.

Certain prior year amounts have been reclassified to conform with current year presentation in our Consolidated Statements of Cash Flows.

New Accounting Pronouncements Not Yet Adopted

We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.

In August 2018 the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. We are in the process of evaluating the impact on our Consolidated Financial Statements and the timing of adoption of this update.

Accounting Pronouncements Recently Adopted

On January 1, 2019 we adopted ASU 2016-02, Leases, and related amendments (ASC 842), which require lease assets and liabilities to be recorded on the balance sheet for leases with terms greater than twelve months. Refer to Note 6 for further information.

On January 1, 2019 we adopted ASU 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. The adoption of this update did not have a material impact on our Consolidated Financial Statements.

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Derivative Instruments (Narrative) (Details) € in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 EUR (€)	Jul. 26, 2019 USD ($)	Dec. 31, 2018 USD ($)
Document Period End Date	Sep. 30, 2019
Foreign Exchange Contract
Derivative, Notional Amount	$ 7,778			$ 6,336
Designated as Hedging Instrument | Foreign Exchange Contract
Derivative, fair value	61
Cash flow hedge gain (loss) to be reclassified within twelve months	(3)
Other Income	25
Derivative, Notional Amount	804		$ 1,000	870
Designated as Hedging Instrument | Interest Rate Swap [Member]
Derivative, Notional Amount	750	€ 600
Net Investment Hedging [Member] | Foreign Exchange Contract
Derivative, Notional Amount	2,250
Net Investment Hedging [Member] | Designated as Hedging Instrument
Derivative, Notional Amount	1,100			$ 0
Accrued Expenses | Designated as Hedging Instrument | Interest Rate Swap [Member]
Derivative Assets (Liabilities), at Fair Value, Net	(6)
Other noncurrent liabilities | Designated as Hedging Instrument | Interest Rate Swap [Member]
Derivative Assets (Liabilities), at Fair Value, Net	$ (8)

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Gain on sale of marketable securities	$ 36	$ 29	$ 109	$ 79

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Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 1,948	$ 3,616
Marketable securities	88	83
Accounts receivable, less allowance of $75 ($64 in 2018)	2,438	2,332
Inventories:
Materials and supplies	679	606
Work in process	185	149
Finished goods	2,405	2,200
Total inventories	3,269	2,955
Prepaid expenses and other current assets	823	747
Total current assets	8,566	9,733
Property, plant and equipment:
Land, buildings and improvements	1,263	1,041
Machinery and equipment	3,340	3,236
Total property, plant and equipment	4,603	4,277
Less accumulated depreciation	2,143	1,986
Property, plant and equipment, net	2,460	2,291
Goodwill	8,704	8,563
Other intangibles, net	4,056	4,163
Noncurrent deferred income tax assets	1,586	1,678
Other noncurrent assets	1,287	801
Total assets	26,659	27,229
Current liabilities
Accounts payable	659	646
Accrued compensation	767	917
Income taxes payable	87	158
Dividend payable	192	192
Accrued expenses and other liabilities	1,690	1,521
Current maturities of debt	526	1,373
Total current liabilities	3,921	4,807
Long-term debt, excluding current maturities	7,889	8,486
Income taxes	1,095	1,228
Other noncurrent liabilities	1,439	978
Total liabilities	14,344	15,499
Shareholders' equity
Common stock, $0.10 par value	37	37
Additional paid-in capital	1,593	1,559
Retained earnings	11,238	10,765
Accumulated other comprehensive loss	(553)	(631)
Total shareholders' equity	12,315	11,730
Total liabilities and shareholders' equity	$ 26,659	$ 27,229

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

Purchase Price Allocation of Acquired Net Assets
	2018
	K2M			Entellus
Tangible assets:
Accounts receivable	$	58		$	17
Inventory	131			14
Other assets	122			62
Contingent consideration	—			(79		)
Other liabilities	(247		)	(76		)
Intangible assets:
Customer relationship	34			33
Distributor relationship	1			—
Trade name	10			—
Developed technology and patents	475			261
Internally developed software	2			—
Goodwill	794			465
Purchase price, net of cash acquired	$	1,380		$	697
Weighted-average life of intangible assets	14			16

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Estimated Amortization Expense
Remainder of 2019		2020		2021		2022		2023
$	114	$	442	$	424	$	414	$	393

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Accumulated Other Comprehensive (Loss) Income (AOCI) (Tables)

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Three Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(3	)	$	(148	)	$	37		$	(516	)	$	(630	)
OCI	—			11			(18		)	116			109
Income taxes	—			1			10			(32		)	(21		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	—			1			—			(7		)	(6		)
Income taxes	—			—			(5		)	2			(3		)
Net OCI	$	—		$	13		$	(15	)	$	79		$	77
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Three Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(5	)	$	(132	)	$	45		$	(465	)	$	(557	)
OCI	1			(2		)	8			(50		)	(43		)
Income taxes	—			(2		)	(2		)	—			(4		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	(1		)	2			1			—			2
Income taxes	—			(1		)	1			—			—
Net OCI	$	—		$	(3	)	$	6		$	(50	)	$	(47	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

Nine Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(137	)	$	50		$	(540	)	$	(631	)
OCI	1			(5		)	(34		)	144			106
Income taxes	—			4			18			(36		)	(14		)
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			4			—			(7		)	(3		)
Income taxes	—			(1		)	(8		)	2			(7		)
Net OCI	$	1		$	2		$	(28	)	$	103		$	78
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Nine Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(134	)	$	28		$	(443	)	$	(553	)
OCI	(1		)	(6		)	32			(84		)	(59		)
Income taxes	—			1			(8		)	12			5
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			6			1			—			7
Income taxes	—			(2		)	2			—			—
Net OCI	$	(1	)	$	(1	)	$	23		$	(72	)	$	(51	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

Reclassification out of Accumulated Other Comprehensive Income

Three Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(3	)	$	(148	)	$	37		$	(516	)	$	(630	)
OCI	—			11			(18		)	116			109
Income taxes	—			1			10			(32		)	(21		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	—			1			—			(7		)	(6		)
Income taxes	—			—			(5		)	2			(3		)
Net OCI	$	—		$	13		$	(15	)	$	79		$	77
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Three Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(5	)	$	(132	)	$	45		$	(465	)	$	(557	)
OCI	1			(2		)	8			(50		)	(43		)
Income taxes	—			(2		)	(2		)	—			(4		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	(1		)	2			1			—			2
Income taxes	—			(1		)	1			—			—
Net OCI	$	—		$	(3	)	$	6		$	(50	)	$	(47	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

Nine Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(137	)	$	50		$	(540	)	$	(631	)
OCI	1			(5		)	(34		)	144			106
Income taxes	—			4			18			(36		)	(14		)
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			4			—			(7		)	(3		)
Income taxes	—			(1		)	(8		)	2			(7		)
Net OCI	$	1		$	2		$	(28	)	$	103		$	78
Ending	$	(3	)	$	(135	)	$	22		$	(437	)	$	(553	)

Nine Months 2018	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(134	)	$	28		$	(443	)	$	(553	)
OCI	(1		)	(6		)	32			(84		)	(59		)
Income taxes	—			1			(8		)	12			5
Reclassifications to:
Cost of sales	—			—			(4		)	—			(4		)
Other (income) expense	—			6			1			—			7
Income taxes	—			(2		)	2			—			—
Net OCI	$	(1	)	$	(1	)	$	23		$	(72	)	$	(51	)
Ending	$	(5	)	$	(135	)	$	51		$	(515	)	$	(604	)

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Revenue Recognition - Disaggregated Sales Analysis (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Net sales	$ 3,587	$ 3,242	$ 10,753	$ 9,805
United States
Disaggregation of Revenue [Line Items]
Net sales	2,644	2,381	7,918	7,080
International
Disaggregation of Revenue [Line Items]
Net sales	943	861	2,835	2,725
Orthopaedics
Disaggregation of Revenue [Line Items]
Net sales	1,262	1,171	3,785	3,615
Orthopaedics | United States
Disaggregation of Revenue [Line Items]
Net sales	872	798	2,596	2,433
Orthopaedics | International
Disaggregation of Revenue [Line Items]
Net sales	390	373	1,189	1,182
Orthopaedics | Knees
Disaggregation of Revenue [Line Items]
Net sales	426	395	1,305	1,236
Orthopaedics | Knees | United States
Disaggregation of Revenue [Line Items]
Net sales	318	291	962	896
Orthopaedics | Knees | International
Disaggregation of Revenue [Line Items]
Net sales	108	104	343	340
Orthopaedics | Hips
Disaggregation of Revenue [Line Items]
Net sales	332	316	1,011	983
Orthopaedics | Hips | United States
Disaggregation of Revenue [Line Items]
Net sales	211	198	643	610
Orthopaedics | Hips | International
Disaggregation of Revenue [Line Items]
Net sales	121	118	368	373
Orthopaedics | Trauma and Extremities
Disaggregation of Revenue [Line Items]
Net sales	407	376	1,197	1,152
Orthopaedics | Trauma and Extremities | United States
Disaggregation of Revenue [Line Items]
Net sales	262	242	768	729
Orthopaedics | Trauma and Extremities | International
Disaggregation of Revenue [Line Items]
Net sales	145	134	429	423
Orthopaedics | Other
Disaggregation of Revenue [Line Items]
Net sales	97	84	272	244
Orthopaedics | Other | United States
Disaggregation of Revenue [Line Items]
Net sales	81	67	223	198
Orthopaedics | Other | International
Disaggregation of Revenue [Line Items]
Net sales	16	17	49	46
MedSurg
Disaggregation of Revenue [Line Items]
Net sales	1,576	1,443	4,737	4,325
MedSurg | United States
Disaggregation of Revenue [Line Items]
Net sales	1,263	1,157	3,802	3,403
MedSurg | International
Disaggregation of Revenue [Line Items]
Net sales	313	286	935	922
MedSurg | Instruments
Disaggregation of Revenue [Line Items]
Net sales	476	442	1,474	1,292
MedSurg | Instruments | United States
Disaggregation of Revenue [Line Items]
Net sales	373	352	1,168	1,007
MedSurg | Instruments | International
Disaggregation of Revenue [Line Items]
Net sales	103	90	306	285
MedSurg | Endoscopy
Disaggregation of Revenue [Line Items]
Net sales	474	443	1,424	1,335
MedSurg | Endoscopy | United States
Disaggregation of Revenue [Line Items]
Net sales	377	346	1,136	1,049
MedSurg | Endoscopy | International
Disaggregation of Revenue [Line Items]
Net sales	97	97	288	286
MedSurg | Medical
Disaggregation of Revenue [Line Items]
Net sales	554	492	1,627	1,508
MedSurg | Medical | United States
Disaggregation of Revenue [Line Items]
Net sales	442	393	1,288	1,158
MedSurg | Medical | International
Disaggregation of Revenue [Line Items]
Net sales	112	99	339	350
MedSurg | Sustainability
Disaggregation of Revenue [Line Items]
Net sales	72	66	212	190
MedSurg | Sustainability | United States
Disaggregation of Revenue [Line Items]
Net sales	71	66	210	189
MedSurg | Sustainability | International
Disaggregation of Revenue [Line Items]
Net sales	1	0	2	1
Neurotechnology and Spine
Disaggregation of Revenue [Line Items]
Net sales	749	628	2,231	1,865
Neurotechnology and Spine | United States
Disaggregation of Revenue [Line Items]
Net sales	509	426	1,520	1,244
Neurotechnology and Spine | International
Disaggregation of Revenue [Line Items]
Net sales	240	202	711	621
Neurotechnology and Spine | Neurotechnology
Disaggregation of Revenue [Line Items]
Net sales	488	435	1,436	1,282
Neurotechnology and Spine | Neurotechnology | United States
Disaggregation of Revenue [Line Items]
Net sales	314	284	922	820
Neurotechnology and Spine | Neurotechnology | International
Disaggregation of Revenue [Line Items]
Net sales	174	150	514	462
Neurotechnology and Spine | Spine
Disaggregation of Revenue [Line Items]
Net sales	261	193	795	583
Neurotechnology and Spine | Spine | United States
Disaggregation of Revenue [Line Items]
Net sales	195	142	598	424
Neurotechnology and Spine | Spine | International
Disaggregation of Revenue [Line Items]
Net sales	$ 66	$ 52	$ 197	$ 159

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Acquisitions (Future Amortization Expense) (Details) $ in Millions	Sep. 30, 2019 USD ($)
Business Combinations [Abstract]
Remainder of 2019	$ 114
2020	442
2021	424
2022	414
2023	$ 393

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Accumulated Other Comprehensive (Loss) Income (AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period	$ (630)	$ (557)	$ (631)	$ (553)
OCI	109	(43)	106	(59)
Income taxes	(21)	(4)	(14)	5
Cost of sales	1,257	1,087	3,760	3,323
Other (income) expense	(47)	(42)	(143)	(140)
Income taxes	(115)	56	(268)	(214)
Net OCI	77	(47)	78	(51)
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period	(553)	(604)	(553)	(604)
Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cost of sales	(2)	(2)	(4)	(4)
Other (income) expense	(6)	2	(3)	7
Income taxes	(3)	0	(7)	0
Net OCI	77	(47)	78	(51)
Marketable Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period	(3)	(5)	(4)	(4)
OCI	0	1	1	(1)
Income taxes	0	0	0	0
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period	(3)	(5)	(3)	(5)
Marketable Securities | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cost of sales	0	0	0	0
Other (income) expense	0	(1)	0	0
Income taxes	0	0	0	0
Net OCI	0	0	1	(1)
Pension Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period	(148)	(132)	(137)	(134)
OCI	11	(2)	(5)	(6)
Income taxes	1	(2)	4	1
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period	(135)	(135)	(135)	(135)
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cost of sales	0	0	0	0
Other (income) expense	1	2	4	6
Income taxes	0	(1)	(1)	(2)
Net OCI	13	(3)	2	(1)
Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period	37	45	50	28
OCI	(18)	8	(34)	32
Income taxes	10	(2)	18	(8)
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period	22	51	22	51
Hedges | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cost of sales	(2)	(2)	(4)	(4)
Other (income) expense	0	1	0	1
Income taxes	(5)	1	(8)	2
Net OCI	(15)	6	(28)	23
Financial Statement Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period	(516)	(465)	(540)	(443)
OCI	116	(50)	144	(84)
Income taxes	(32)	0	(36)	12
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period	(437)	(515)	(437)	(515)
Financial Statement Translation | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cost of sales	0	0	0	0
Other (income) expense	(7)	0	(7)	0
Income taxes	2	0	2	0
Net OCI	$ 79	$ (50)	$ 103	$ (72)

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Debt and Credit Facilities (Tables)

9 Months Ended

Sep. 30, 2019

Long-term Debt, Unclassified [Abstract]

Schedule of Long-term Debt Instruments

Summary of Total Debt			September 2019		December 2018
Senior unsecured notes:
	Rate	Due
	1.800%	January 15, 2019	$	—	$	500
	2.000%	March 8, 2019	—		750
	4.375%	January 15, 2020	500		499
	Variable	November 30, 2020	329		343
	2.625%	March 15, 2021	748		747
	1.125%	November 30, 2023	602		627
	3.375%	May 15, 2024	587		584
	3.375%	November 1, 2025	746		746
	3.500%	March 15, 2026	991		990
	2.125%	November 30, 2027	819		853
	3.650%	March 7, 2028	595		595
	2.625%	November 30, 2030	704		733
	4.100%	April 1, 2043	391		391
	4.375%	May 15, 2044	395		395
	4.625%	March 15, 2046	981		980
Other			27		126
Total debt			$	8,415	$	9,859
Less current maturities of debt			526		1,373
Total long-term debt			$	7,889	$	8,486
Unamortized debt issuance costs			$	45	$	50
Available borrowing capacity			$	1,547	$	1,548
Fair value of senior unsecured notes			$	9,280	$	9,746

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

September 2019	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	804		$	1,100	$	5,874		$	7,778
Maximum term in days									586
Fair value:
Other current assets	$	7		$	—	$	189		$	196
Other noncurrent assets	—			44		—			44
Other current liabilities	(9		)	—		(10		)	(19		)
Other noncurrent liabilities	(1		)	—		—			(1		)
Total fair value	$	(3	)	$	44	$	179		$	220

December 2018	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	870		$	—	$	5,466		$	6,336
Maximum term in days									586
Fair value:
Other current assets	$	15		$	—	$	28		$	43
Other noncurrent assets	1			—		33			34
Other current liabilities	(5		)	—		(15		)	(20		)
Total fair value	$	11		$	—	$	46		$	57

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

		Three Months					Nine Months
Derivative instrument	Recorded in:	2019			2018		2019			2018
Cash Flow	Cost of sales	$	2		$	2	$	4		$	4
Net Investment	Other income (expense), net	7			—		7			—
Non-Designated	Other income (expense), net	(6		)	1		(10		)	(3		)
	Total	$	3		$	3	$	1		$	1

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Acquisitions (Allocation Of The Preliminary Purchase Price To The Acquired Net Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Sep. 30, 2019
Goodwill	$ 8,563	$ 8,704
K2M
Accounts receivable	58
Inventory	131
Other assets	122
Contingent consideration	0
Other liabilities	(247)
Goodwill	794
Assets and liabilities acquired, net	$ 1,380
Weighted-average life of intangible assets	14 years
K2M | Customer relationship
Intangible assets acquired	$ 34
K2M | Distributor relationship
Intangible assets acquired	1
K2M | Trade name
Intangible assets acquired	10
K2M | Developed technology and patents
Intangible assets acquired	475
K2M | Internally developed software
Intangible assets acquired	2
Entellus
Accounts receivable	17
Inventory	14
Other assets	62
Contingent consideration	(79)
Other liabilities	(76)
Goodwill	465
Assets and liabilities acquired, net	$ 697
Weighted-average life of intangible assets	16 years
Entellus | Customer relationship
Intangible assets acquired	$ 33
Entellus | Distributor relationship
Intangible assets acquired	0
Entellus | Trade name
Intangible assets acquired	0
Entellus | Developed technology and patents
Intangible assets acquired	261
Entellus | Internally developed software
Intangible assets acquired	$ 0

XML

Segment Information (Sales And Other Financial Information By Business Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Net sales	$ 3,587	$ 3,242	$ 10,753	$ 9,805
Segment operating income	628	576	1,769	1,839
Acquisition and integration-related charges	(32)	(8)	(223)	(49)
Amortization of intangible assets	(116)	(112)	(352)	(324)
Recall-related matters	(49)	(4)	(179)	(10)
Orthopaedics
Segment Reporting Information [Line Items]
Net sales	1,262	1,171	3,785	3,615
MedSurg
Segment Reporting Information [Line Items]
Net sales	1,576	1,443	4,737	4,325
Neurotechnology and Spine
Segment Reporting Information [Line Items]
Net sales	749	628	2,231	1,865
Operating Segments
Segment Reporting Information [Line Items]
Net sales	3,587	3,242	10,753	9,805
Segment operating income	1,030	911	3,109	2,763
Operating Segments | Orthopaedics
Segment Reporting Information [Line Items]
Net sales	1,262	1,171	3,785	3,615
Segment operating income	437	397	1,322	1,263
Operating Segments | MedSurg
Segment Reporting Information [Line Items]
Net sales	1,576	1,443	4,737	4,325
Segment operating income	389	341	1,170	968
Operating Segments | Neurotechnology and Spine
Segment Reporting Information [Line Items]
Net sales	749	628	2,231	1,865
Segment operating income	204	173	617	532
Corporate and other
Segment Reporting Information [Line Items]
Segment operating income	(117)	(104)	(371)	(291)
Segment Reconciling Items
Segment Reporting Information [Line Items]
Acquisition and integration-related charges	(32)	(8)	(223)	(49)
Amortization of intangible assets	(116)	(112)	(352)	(324)
Restructuring-related charges	(48)	(39)	(146)	(124)
Medical device regulations	(15)	(2)	(34)	(5)
Recall-related matters	(49)	(4)	(179)	(10)
Regulatory and legal matters	$ (25)	$ (66)	$ (35)	$ (121)

XML

Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

	Three Months						Nine Months
	2019			2018			2019			2018
Orthopaedics	$	1,262		$	1,171		$	3,785		$	3,615
MedSurg	1,576			1,443			4,737			4,325
Neurotechnology and Spine	749			628			2,231			1,865
Net sales	$	3,587		$	3,242		$	10,753		$	9,805
Orthopaedics	$	437		$	397		$	1,322		$	1,263
MedSurg	389			341			1,170			968
Neurotechnology and Spine	204			173			617			532
Segment operating income	$	1,030		$	911		$	3,109		$	2,763
Items not allocated to segments:
Corporate and other	(117		)	(104		)	(371		)	(291		)
Acquisition and integration-related charges	(32		)	(8		)	(223		)	(49		)
Amortization of intangible assets	(116		)	(112		)	(352		)	(324		)
Restructuring-related charges	(48		)	(39		)	(146		)	(124		)
Medical device regulations	(15		)	(2		)	(34		)	(5		)
Recall-related matters	(49		)	(4		)	(179		)	(10		)
Regulatory and legal matters	(25		)	(66		)	(35		)	(121		)
Consolidated operating income	$	628		$	576		$	1,769		$	1,839

There were no significant changes to total assets by segment from information provided in our Annual Report on Form 10-K for 2018.

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Contingencies and Commitments

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Commitments

CONTINGENCIES AND COMMITMENTS

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 below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings, the claimants seek damages as

well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's 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, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for product liability claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows.

In 2010 we filed a lawsuit in federal court against Zimmer Biomet Holdings, Inc. (Zimmer), alleging that a Zimmer product infringed on three of our patents. In 2013 following a jury trial favorable to us, the trial judge entered a final judgment that, among other things, awarded us damages of $76 and ordered Zimmer to pay us enhanced damages. Zimmer appealed this ruling. In December 2014 the Federal Circuit affirmed the damages awarded to us, reversed the order for enhanced damages and remanded the issue of attorney fees to the trial court. In May 2015 the trial court entered a stipulated judgment that, among other things, required Zimmer to pay us the base amount of damages and interest, while the issues of enhanced damages and attorney fees continue to be pursued. In June 2015 we recorded a $54 gain, net of legal costs, which was recorded within selling, general and administrative expenses. On June 13, 2016 the United States Supreme Court vacated the decision of the Federal Circuit that reversed our judgment for enhanced damages and remanded the case to the Federal Circuit to reconsider the issue. On September 12, 2016 the Federal Circuit issued an opinion that, among other things, remanded the issue of enhanced damages to the trial court. On July 12, 2017 the trial court reaffirmed its award of enhanced damages and entered a judgment of $164 in our favor. Zimmer appealed, and on December 10, 2018 the Federal Circuit affirmed the decision. Zimmer filed a petition on January 23, 2019 to seek a rehearing of this ruling by the entire Federal Circuit. On March 19, 2019 the Federal Circuit denied Zimmer’s petition for a rehearing. Zimmer conditionally paid us $167 while it pursued a review of the decision by the Supreme Court. On October 7, 2019 the Supreme Court denied Zimmer’s petition for review. Zimmer has until November 1, 2019 to file a petition for rehearing of the denial.

Recall Matters

In June 2012 we voluntarily recalled our Rejuvenate and ABG II Modular-Neck hip stems and terminated global distribution of these hip products. Product liability lawsuits relating to this voluntary recall have been filed against us. In November 2014 we entered into a settlement agreement to compensate eligible United States patients who had revision surgery prior to November 3, 2014 and in December 2016 the settlement program was extended to patients who had revision surgery prior to December 19, 2016. We continue to offer support for recall-related care and reimburse patients who are not eligible to enroll in the settlement program for testing and treatment services, including any necessary revision surgeries. In addition, there are remaining lawsuits that we will continue to defend against.

In August 2016 and May 2018 we voluntarily recalled certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads. Product liability lawsuits and claims relating to this voluntary

recall have been filed against us. In November 2018 we entered into a settlement agreement to resolve a significant number of claims and lawsuits related to the recalls. The specific terms of the settlement agreement, including the financial terms, are confidential.

We have incurred, and expect to incur in the future, costs associated with the defense and settlement of these matters. Based on the information that has been received, we have estimated the remaining range of probable loss related to these matters globally to be approximately $265 to $505. We have recorded charges to earnings representing the minimum of the range of probable loss. The final outcomes of these matters are dependent on many factors that are difficult to predict. Accordingly, the ultimate cost related to these matters globally may be materially different than the amount of our current estimate and accruals and could have a material adverse effect on our results of operations and cash flows.

Leases

We lease various manufacturing, warehousing and distribution facilities, administrative and sales offices as well as equipment under operating leases. We evaluate our contracts to identify leases, which is generally if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. Certain of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis over the term of the lease beginning with the date of initial control of the asset. With the adoption of ASC 842 we recognized all leases with terms greater than twelve months in duration on our Consolidated Balance Sheets as right-of-use assets and lease liabilities of approximately $350 as of January 1, 2019. We adopted the standard using the prospective approach and did not retrospectively apply to prior periods. Right-of-use assets are recorded in Other noncurrent assets on our Consolidated Balance Sheets. Current and non-current lease liabilities are recorded in Accrued expenses and other liabilities and Other noncurrent liabilities, respectively, on our Consolidated Balance Sheets.

We have made certain assumptions and judgments when applying ASC 842, the most significant of which are:

• We elected the package of practical expedients available for transition which allow us to not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases and whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.

• We did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.

• For all asset classes, we elected to not recognize a right-of-use asset and lease liability for short-term leases.

• For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component.

• The determination of the discount rate used in a lease is our incremental borrowing rate which is based on what we would normally pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments.

Leases			September
			2019
Right-of-use assets			$	362
Lease liabilities, current			$	87
Lease liabilities, non-current			$	278
Other information
Weighted-average remaining lease term			5.9 years
Weighted-average discount rate			3.32		%
	Three Months 2019		Nine Months 2019
Operating lease cost	$	34	102

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Derivative Instruments (Forward Currency Exchange Contracts) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Jul. 26, 2019
Foreign Exchange Contract
Derivative [Line Items]
Notional Amount	$ 7,778	$ 6,336
Maximum term in days	586 days	586 days
Derivative, Fair Value, Net	$ 220	$ 57
Foreign Exchange Contract | Other current assets
Derivative [Line Items]
Derivative assets	196	43
Foreign Exchange Contract | Other noncurrent assets
Derivative [Line Items]
Derivative assets	44	34
Foreign Exchange Contract | Other current liabilities
Derivative [Line Items]
Derivative liabilities	(19)	(20)
Foreign Exchange Contract | Other noncurrent liabilities
Derivative [Line Items]
Derivative liabilities	(1)
Foreign Exchange Contract | Net Investment
Derivative [Line Items]
Notional Amount	804	870	$ 1,000
Derivative, Fair Value, Net	(3)	11
Foreign Exchange Contract | Net Investment | Other current assets
Derivative [Line Items]
Derivative assets	7	15
Foreign Exchange Contract | Net Investment | Other noncurrent assets
Derivative [Line Items]
Derivative assets	0	1
Foreign Exchange Contract | Net Investment | Other current liabilities
Derivative [Line Items]
Derivative liabilities	(9)	(5)
Foreign Exchange Contract | Net Investment | Other noncurrent liabilities
Derivative [Line Items]
Derivative liabilities	(1)
Foreign Exchange Contract | Non-Designated
Derivative [Line Items]
Notional Amount	5,874	5,466
Derivative, Fair Value, Net	179	46
Foreign Exchange Contract | Non-Designated | Other current assets
Derivative [Line Items]
Derivative assets	189	28
Foreign Exchange Contract | Non-Designated | Other noncurrent assets
Derivative [Line Items]
Derivative assets	0	33
Foreign Exchange Contract | Non-Designated | Other current liabilities
Derivative [Line Items]
Derivative liabilities	10	15
Foreign Exchange Contract | Non-Designated | Other noncurrent liabilities
Derivative [Line Items]
Derivative liabilities	0
Net Investment Hedging [Member] | Net Investment
Derivative [Line Items]
Notional Amount	1,100	0
Derivative, Fair Value, Net	44	0
Net Investment Hedging [Member] | Net Investment | Other current assets
Derivative [Line Items]
Derivative assets	0	0
Net Investment Hedging [Member] | Net Investment | Other noncurrent assets
Derivative [Line Items]
Derivative assets	44	0
Net Investment Hedging [Member] | Net Investment | Other current liabilities
Derivative [Line Items]
Derivative liabilities	0	$ 0
Net Investment Hedging [Member] | Net Investment | Other noncurrent liabilities
Derivative [Line Items]
Derivative liabilities	0
Net Investment Hedging [Member] | Foreign Exchange Contract
Derivative [Line Items]
Notional Amount	$ 2,250

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2019 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	000-09165
Entity Registrant Name	STRYKER CORP
Entity Incorporation, State or Country Code	MI
Entity Tax Identification Number	38-1239739
Entity Address, Address Line One	2825 Airview Boulevard
Entity Address, City or Town	Kalamazoo,
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49002
City Area Code	(269)
Local Phone Number	385-2600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	374,366,776
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000310764
Current Fiscal Year End Date	--12-31
Common Stock
Document Information [Line Items]
Title of each class	Common Stock, $.10 Par Value
Trading Symbol	SYK
Security Exchange Name	NYSE
Senior Unsecured Notes 1.125% due 2021
Document Information [Line Items]
Title of each class	1.125% Notes due 2023
Trading Symbol	SYK23
Security Exchange Name	NYSE
Senior Unsecured Notes 2.125% due 2027
Document Information [Line Items]
Title of each class	2.125% Notes due 2027
Trading Symbol	SYK27
Security Exchange Name	NYSE
Senior Unsecured Notes 2.625% due 2030
Document Information [Line Items]
Title of each class	2.625% Notes due 2030
Trading Symbol	SYK30
Security Exchange Name	NYSE
Senior Unsecured Notes Variable due 2020
Document Information [Line Items]
Title of each class	Floating Rate Notes due 2020
Trading Symbol	SYK20A
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 75	$ 64
Common stock, par value (in dollars per share)	$ 0.1	$ 0.1

XML

Fair Value Measurements (Assets and Liabilities Measured At Fair Value On A Recurring Basis Using Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Due in one year or less	$ 44	$ 51
Due after one year through three years	44	32
Fair Value, Inputs, Level 2 | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange forward contracts	14	0
Fair Value, Inputs, Level 2 | Foreign Exchange Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange forward contracts	$ 20	$ 20

XML

Revenue Recognition

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Revenue Recognition

REVENUE RECOGNITION

Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2018.

We disaggregate our net sales by product line and geography for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.

Net Sales by Product Line
	Three Months				Nine Months
	2019		2018		2019		2018
Orthopaedics:
Knees	$	426	$	395	$	1,305	$	1,236
Hips	332		316		1,011		983
Trauma and Extremities	407		376		1,197		1,152
Other	97		84		272		244
	$	1,262	$	1,171	$	3,785	$	3,615
MedSurg:
Instruments	$	476	$	442	$	1,474	$	1,292
Endoscopy	474		443		1,424		1,335
Medical	554		492		1,627		1,508
Sustainability	72		66		212		190
	$	1,576	$	1,443	$	4,737	$	4,325
Neurotechnology and Spine:
Neurotechnology	$	488	$	435	$	1,436	$	1,282
Spine	261		193		795		583
	$	749	$	628	$	2,231	$	1,865
Total	$	3,587	$	3,242	$	10,753	$	9,805

Net Sales by Geography
	Three Months 2019				Three Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	318	$	108	$	291	$	104
Hips	211		121		198		118
Trauma and Extremities	262		145		242		134
Other	81		16		67		17
	$	872	$	390	$	798	$	373
MedSurg:
Instruments	$	373	$	103	$	352	$	90
Endoscopy	377		97		346		97
Medical	442		112		393		99
Sustainability	71		1		66		—
	$	1,263	$	313	$	1,157	$	286
Neurotechnology and Spine:
Neurotechnology	$	314	$	174	$	284	$	150
Spine	195		66		142		52
	$	509	$	240	$	426	$	202
Total	$	2,644	$	943	$	2,381	$	861

Net Sales by Geography
	Nine Months 2019				Nine Months 2018
	United States		International		United States		International
Orthopaedics:
Knees	$	962	$	343	$	896	$	340
Hips	643		368		610		373
Trauma and Extremities	768		429		729		423
Other	223		49		198		46
	$	2,596	$	1,189	$	2,433	$	1,182
MedSurg:
Instruments	$	1,168	$	306	$	1,007	$	285
Endoscopy	1,136		288		1,049		286
Medical	1,288		339		1,158		350
Sustainability	210		2		189		1
	$	3,802	$	935	$	3,403	$	922
Neurotechnology and Spine:
Neurotechnology	$	922	$	514	$	820	$	462
Spine	598		197		424		159
	$	1,520	$	711	$	1,244	$	621
Total	$	7,918	$	2,835	$	7,080	$	2,725

Contract Assets and Liabilities

On September 30, 2019 there were no contract assets recorded on our Consolidated Balance Sheets.

Our contract liabilities arise as a result of consideration received from customers at inception of contracts for certain businesses or where the timing of billing for services precedes satisfaction of our performance obligations. We generally satisfy performance obligations within one year from the contract inception date. Our contract liabilities were $319 and $327 on September 30, 2019 and December 31, 2018.

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Contingencies and Commitments - Leases (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
Right-of-use assets	$ 362	$ 362
Lease liabilities, current	87	87
Lease liabilities, non-current	$ 278	$ 278
Other information
Weighted-average remaining lease term	5 years 10 months 24 days	5 years 10 months 24 days
Weighted-average discount rate	3.32%	3.32%
Operating lease cost	$ 34	$ 102
ASU 2016-02
Lessee, Lease, Description [Line Items]
Right-of-use assets			$ 350