|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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)
|
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
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
Non-accelerated filer
|
☐
|
|
Small reporting company
|
☐
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
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
|
|
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
1
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
2
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
3
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
4
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
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
|
|
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
|
)
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
6
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
|
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
|
|
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
|
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
7
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
•
|
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
|
|
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
|
|
|
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
|
|
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
|
|
|
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
|
%
|
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
|
%
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
12
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
|
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
|
%
|
|
|
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
|
%
|
|
|
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
|
%
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
13
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
|
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
|
%
|
|
|
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
|
%
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
14
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
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.
|
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
|
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
|
)
|
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
|
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
18
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 6.
|
EXHIBITS
|
Dollar amounts are in millions except per share amounts or as otherwise specified.
|
19
|
STRYKER CORPORATION
|
|
2019 Third Quarter Form 10-Q
|
|
|
|
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
|
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
|
(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
|
(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
|