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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 June 30, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-13149
SYK-20210630_G1.JPG
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
0.250% Notes due 2024 SYK24A New York Stock Exchange
2.125% Notes due 2027 SYK27 New York Stock Exchange
0.750% Notes due 2029 SYK29 New York Stock Exchange
2.625% Notes due 2030 SYK30 New York Stock Exchange
1.000% Notes due 2031 SYK31 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
☐
Emerging growth company
☐
Non-accelerated filer
☐
Small reporting 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 377,096,272 shares of Common Stock, $0.10 par value, on June 30, 2021.
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Stryker Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (Unaudited)
Three Months Six Months
2021 2020 2021 2020
Net sales $ 4,294  $ 2,764  $ 8,247  $ 6,352 
Cost of sales 1,522  1,216  2,966  2,473 
Gross profit $ 2,772  $ 1,548  $ 5,281  $ 3,879 
Research, development and engineering expenses 310  233  598  487 
Selling, general and administrative expenses 1,505  1,225  3,080  2,555 
Recall charges 76  —  82  (6)
Amortization of intangible assets 149  110  330  228 
Total operating expenses $ 2,040  $ 1,568  $ 4,090  $ 3,264 
Operating income (loss) $ 732  $ (20) $ 1,191  $ 615 
Other income (expense), net (70) (67) (162) (112)
Earnings (loss) before income taxes $ 662  $ (87) $ 1,029  $ 503 
Income taxes 70  (4) 135  93 
Net earnings (loss) $ 592  $ (83) $ 894  $ 410 
Net earnings (loss) per share of common stock:
Basic $ 1.57  $ (0.22) $ 2.37  $ 1.09 
Diluted $ 1.55  $ (0.22) $ 2.34  $ 1.08 
Weighted-average shares outstanding (in millions):
Basic 376.9  375.5  376.6  375.1 
Effect of dilutive employee stock compensation 5.4  —  5.4  4.8 
Diluted 382.3  375.5  382.0  379.9 
Cash dividends declared per share of common stock $ 0.63  $ 0.575  $ 1.26  $ 1.15 
Anti-dilutive shares excluded from the calculation of dilutive employee stock options were 4.3 for the three months 2020 and de minimis in all other periods.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Three Months Six Months
2021 2020 2021 2020
Net earnings (loss) $ 592  $ (83) $ 894  $ 410 
Other comprehensive income (loss), net of tax:
Pension plans (4) (4) 3  (8)
Unrealized gains (losses) on designated hedges 8  (30) 36  (56)
Financial statement translation (80) (58) 175  (45)
Total other comprehensive income (loss), net of tax $ (76) $ (92) $ 214  $ (109)
Comprehensive income (loss) $ 516  $ (175) $ 1,108  $ 301 

See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
1
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
CONSOLIDATED BALANCE SHEETS
June 30 December 31
2021 2020
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 2,241  $ 2,943 
Marketable securities 84  81 
Accounts receivable, less allowance of $141 ($131 in 2020) 2,714  2,701 
Inventories:
Materials and supplies 658  678 
Work in process 264  251 
Finished goods 2,509  2,565 
Total inventories $ 3,431  $ 3,494 
Prepaid expenses and other current assets 562  488 
Total current assets $ 9,032  $ 9,707 
Property, plant and equipment:
Land, buildings and improvements 1,607  1,546 
Machinery and equipment 3,755  3,636 
Total property, plant and equipment $ 5,362  $ 5,182 
Less accumulated depreciation 2,624  2,430 
Property, plant and equipment, net $ 2,738  $ 2,752 
Goodwill 12,802  12,778 
Other intangibles, net 5,261  5,554 
Noncurrent deferred income tax assets 1,751  1,530 
Other noncurrent assets 2,114  2,009 
Total assets $ 33,698  $ 34,330 
Liabilities and shareholders' equity
Current liabilities
Accounts payable $ 864  $ 810 
Accrued compensation 890  925 
Income taxes 300  207 
Dividends payable 238  237 
Accrued product liabilities 444  515 
Accrued expenses and other liabilities 1,510  1,586 
Current maturities of debt 6  761 
Total current liabilities $ 4,252  $ 5,041 
Long-term debt, excluding current maturities 12,734  13,230 
Income taxes 927  990 
Other noncurrent liabilities 1,965  1,985 
Total liabilities $ 19,878  $ 21,246 
Shareholders' equity
Common stock, $0.10 par value 38  38 
Additional paid-in capital 1,844  1,741 
Retained earnings 12,881  12,462 
Accumulated other comprehensive loss (943) (1,157)
Total shareholders' equity $ 13,820  $ 13,084 
Total liabilities and shareholders' equity $ 33,698  $ 34,330 

See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
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STRYKER CORPORATION 2021 Second Quarter Form 10-Q
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Three Months Six Months
2021 2020 2021 2020
Common stock shares outstanding (in millions)
Beginning 376.7  375.4  376.1  374.5 
Issuance of common stock under stock compensation and benefit plans 0.4  0.2  1.0  1.1 
Repurchase of common stock —  —  —  — 
Ending 377.1  375.6  377.1  375.6 
Common stock
Beginning $ 38  $ 38  $ 38  $ 37 
Issuance of common stock under stock compensation and benefit plans —  —  —  1 
Repurchase of common stock —  —  —  — 
Ending $ 38  $ 38  $ 38  $ 38 
Additional paid-in capital
Beginning $ 1,806  $ 1,676  $ 1,741  $ 1,628 
Issuance of common stock under stock compensation and benefit plans (1) —  (4) (8)
Repurchase of common stock —  —  —  — 
Share-based compensation 39  30  107  86 
Ending $ 1,844  $ 1,706  $ 1,844  $ 1,706 
Retained earnings
Beginning $ 12,525  $ 12,024  $ 12,462  $ 11,748 
Net earnings (loss) 592  (83) 894  410 
Repurchase of common stock —  —  —  — 
Cash dividends declared (236) (216) (475) (433)
Ending $ 12,881  $ 11,725  $ 12,881  $ 11,725 
Accumulated other comprehensive income (loss)
Beginning $ (867) $ (623) $ (1,157) $ (606)
Other comprehensive income (loss) (76) (92) 214  (109)
Ending $ (943) $ (715) $ (943) $ (715)
Total Stryker shareholders' equity $ 13,820  $ 12,754  $ 13,820  $ 12,754 
Non-controlling interest —  —  —  — 
Total shareholders' equity $ 13,820  $ 12,754  $ 13,820  $ 12,754 

See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
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STRYKER CORPORATION 2021 Second Quarter Form 10-Q
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months
2021 2020
Operating activities
Net earnings $ 894  $ 410 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation 187  163 
Amortization of intangible assets 330  228 
Asset impairments 3  161 
Share-based compensation 107  86 
Recall charges 82  (6)
Sale of inventory stepped-up to fair value at acquisition 137  9 
Changes in operating assets and liabilities:
Accounts receivable (24) 671 
Inventories (128) (181)
Accounts payable 57  (34)
Accrued expenses and other liabilities 22  (375)
Recall-related payments (163) (12)
Income taxes (98) (39)
Other, net (76) 130 
Net cash provided by operating activities $ 1,330  $ 1,211 
Investing activities
Acquisitions, net of cash acquired (104) (26)
Purchases of marketable securities (31) (23)
Proceeds from sales of marketable securities 28  31 
Purchases of property, plant and equipment (189) (253)
Other investing, net (2) (9)
Net cash used in investing activities $ (298) $ (280)
Financing activities
Proceeds (payments) on short-term borrowings, net (7) 8 
Proceeds from issuance of long-term debt 5  2,293 
Payments on long-term debt (1,151) (500)
Dividends paid (475) (431)
Repurchases of common stock —  — 
Cash paid for taxes from withheld shares (74) (68)
Other financing, net (27) (14)
Net cash provided by (used in) financing activities $ (1,729) $ 1,288 
Effect of exchange rate changes on cash and cash equivalents (5) (17)
Change in cash and cash equivalents $ (702) $ 2,202 
Cash and cash equivalents at beginning of period 2,943  4,337 
Cash and cash equivalents at end of period $ 2,241  $ 6,539 

See accompanying notes to Consolidated Financial Statements.
Dollar amounts are in millions except per share amounts or as otherwise specified.
4
STRYKER CORPORATION 2021 Second 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 ("Stryker," the "Company," "we," us" or "our") on June 30, 2021 and the results of operations for the three and six months 2021. 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 2020.
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.
NOTE 2 - REVENUE RECOGNITION
Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2020.
We disaggregate our net sales by product line and geographic location 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 Six Months
2021 2020 2021 2020
Orthopaedics:
Knees $ 474  $ 241  $ 886  $ 673 
Hips 353  216  662  532 
Trauma and Extremities 674  330  1,314  722 
Other 127  107  250  189 
$ 1,628  $ 894  $ 3,112  $ 2,116 
MedSurg:
Instruments $ 517  $ 328  $ 986  $ 841 
Endoscopy 518  316  987  771 
Medical 640  632  1,262  1,219 
Sustainability 73  48  134  115 
$ 1,748  $ 1,324  $ 3,369  $ 2,946 
Neurotechnology and Spine:
Neurotechnology $ 611  $ 369  $ 1,181  $ 852 
Spine 307  177  585  438 
$ 918  $ 546  $ 1,766  $ 1,290 
Total $ 4,294  $ 2,764  $ 8,247  $ 6,352 
Net Sales by Geography
Three Months 2021 Three Months 2020
United States International United States International
Orthopaedics:
Knees $ 349  $ 125  $ 179  $ 62 
Hips 221  132  140  76 
Trauma and Extremities 475  199  208  122 
Other 99  28  96  11 
$ 1,144  $ 484  $ 623  $ 271 
MedSurg:
Instruments $ 401  $ 116  $ 249  $ 79 
Endoscopy 407  111  253  63 
Medical 488  152  454  178 
Sustainability 72  1  48  — 
$ 1,368  $ 380  $ 1,004  $ 320 
Neurotechnology and Spine:
Neurotechnology $ 371  $ 240  $ 211  $ 158 
Spine 217  90  128  49 
$ 588  $ 330  $ 339  $ 207 
Total $ 3,100  $ 1,194  $ 1,966  $ 798 
Net Sales by Geography
Six Months 2021 Six Months 2020
United States International United States International
Orthopaedics:
Knees $ 643  $ 243  $ 501  $ 172 
Hips 407  255  341  191 
Trauma and Extremities 915  399  468  254 
Other 193  57  165  24 
$ 2,158  $ 954  $ 1,475  $ 641 
MedSurg:
Instruments $ 756  $ 230  $ 659  $ 182 
Endoscopy 761  226  617  154 
Medical 961  301  908  311 
Sustainability 132  2  114  1 
$ 2,610  $ 759  $ 2,298  $ 648 
Neurotechnology and Spine:
Neurotechnology $ 706  $ 475  $ 512  $ 340 
Spine 410  175  324  114 
$ 1,116  $ 650  $ 836  $ 454 
Total $ 5,884  $ 2,363  $ 4,609  $ 1,743 
Contract Assets and Liabilities
On June 30, 2021 and December 31, 2020 contract assets recorded in our Consolidated Balance Sheets were not significant.
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 $476 and $416 on June 30, 2021 and December 31, 2020.
Dollar amounts are in millions except per share amounts or as otherwise specified.
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STRYKER CORPORATION 2021 Second Quarter Form 10-Q
NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI)
Three Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (3) $ (252) $ 18  $ (630) $ (867)
OCI —  (9) 7  (75) (77)
Income taxes —  2  (3) 2  1 
Reclassifications to:
Cost of sales —  —  4  —  4 
Other (income) expense —  4  (1) (9) (6)
Income taxes —  (1) 1  2  2 
Net OCI $ —  $ (4) $ 8  $ (80) $ (76)
Ending $ (3) $ (256) $ 26  $ (710) $ (943)
Three Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (3) $ (183) $ 21  $ (458) $ (623)
OCI (1) (8) (33) (91) (133)
Income taxes —  2  8  39  49 
Reclassifications to:
Cost of sales —  —  (3) —  (3)
Other (income) expense 1  3  (2) (7) (5)
Income taxes —  (1) —  1  — 
Net OCI $ —  $ (4) $ (30) $ (58) $ (92)
Ending $ (3) $ (187) $ (9) $ (516) $ (715)
Six Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (3) $ (259) $ (10) $ (885) $ (1,157)
OCI —  (1) 34  198  231 
Income taxes —  (2) (11) (10) (23)
Reclassifications to:
Cost of sales —  —  5  —  5 
Other (income) expense —  8  9  (17) — 
Income taxes —  (2) (1) 4  1 
Net OCI $ —  $ 3  $ 36  $ 175  $ 214 
Ending $ (3) $ (256) $ 26  $ (710) $ (943)
Six Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (3) $ (179) $ 47  $ (471) $ (606)
OCI —  (14) (72) (36) (122)
Income taxes —  2  19  2  23 
Reclassifications to:
Cost of sales —  —  —  —  — 
Other (income) expense —  6  (3) (14) (11)
Income taxes —  (2) —  3  1 
Net OCI $ —  $ (8) $ (56) $ (45) $ (109)
Ending $ (3) $ (187) $ (9) $ (516) $ (715)
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, cash flow and equity. We do not enter into derivative instruments for speculative purposes. We are exposed to potential 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. We have not changed our hedging
strategies, accounting practices or objectives from those disclosed in our Annual Report on Form 10-K for 2020.
Foreign Currency Hedges
June 2021 Cash Flow Net Investment Non-Designated Total
Gross notional amount $ 950  $ 1,792  $ 5,339  $ 8,081 
Maximum term in days 1612
Fair value:
Other current assets $ 11  $ —  $ 43  $ 54 
Other noncurrent assets 1  22  —  23 
Other current liabilities (16) —  (14) (30)
Other noncurrent liabilities (1) (7) —  (8)
Total fair value $ (5) $ 15  $ 29  $ 39 
December 2020 Cash Flow Net Investment Non-Designated Total
Gross notional amount $ 949  $ 1,828  $ 5,382  $ 8,159 
Maximum term in days 1793
Fair value:
Other current assets $ 9  $ —  $ 7  $ 16 
Other noncurrent assets —  4  —  4 
Other current liabilities (12) —  (121) (133)
Other noncurrent liabilities (1) (26) —  (27)
Total fair value $ (4) $ (22) $ (114) $ (140)
We have €1,500 in certain forward currency contracts designated as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. In addition to these derivative financial instruments designated as net investment hedges, we have designated €4,350 of senior unsecured notes as net investment hedges to selectively hedge portions of our investment in certain international subsidiaries. The currency effects of our Euro-denominated senior unsecured notes are reflected in AOCI within shareholders' equity where they offset gains and losses recorded on our net investment in international subsidiaries.
On June 30, 2021 the total after tax gain (loss) in AOCI related to designated net investment hedges was ($291).
Net Currency Exchange Rate Gains (Losses)
Three Months Six Months
Derivative instrument: Recorded in: 2021 2020 2021 2020
Cash Flow Cost of sales $ (4) $ 3  $ (5) $ — 
Net Investment Other income (expense), net 9  7  17  14 
Non-Designated Other income (expense), net 1  (2) (1) (9)
Total $ 6  $ 8  $ 11  $ 5 
Pretax gains (losses) on derivatives designated as cash flow hedges of ($9) and net investment hedges of $33 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense) in earnings within 12 months as of June 30, 2021. This 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
In the six months 2021 a loss of $11 was reclassified from AOCI to earnings relating to the termination of forward starting interest rate swaps with notional amounts of $750 designated as cash flow hedges as we now consider it probable that the original
Dollar amounts are in millions except per share amounts or as otherwise specified.
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STRYKER CORPORATION 2021 Second Quarter Form 10-Q
forecasted debt issuances will not occur. Pretax gains of $5 recorded in AOCI related to other interest rate hedges closed in conjunction with debt issuances are expected to be reclassified to other income (expense) in earnings within 12 months of June 30, 2021. The cash flow effect of interest rate 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 2020.
There were no significant transfers into or out of any level in 2021.
Assets Measured at Fair Value
June December
2021 2020
Cash and cash equivalents $ 2,241  $ 2,943 
Trading marketable securities 183  171 
Level 1 - Assets $ 2,424  $ 3,114 
Available-for-sale marketable securities:
Corporate and asset-backed debt securities $ 43  $ 38 
United States agency debt securities 5  5 
United States Treasury debt securities 32  36 
Foreign government 1  — 
Certificates of deposit 3  2 
Total available-for-sale marketable securities $ 84  $ 81 
Foreign currency exchange forward contracts 77  20 
Level 2 - Assets $ 161  $ 101 
Total assets measured at fair value $ 2,585  $ 3,215 
Liabilities Measured at Fair Value
June December
2021 2020
Deferred compensation arrangements $ 183  $ 171 
Level 1 - Liabilities $ 183  $ 171 
Foreign currency exchange forward contracts $ 38  $ 160 
Interest rate swap liability —  53 
Level 2 - Liabilities $ 38  $ 213 
Contingent consideration:
Beginning $ 393  $ 306 
Additions 4  108 
Change in estimate 18  9 
Settlements (21) (30)
Ending $ 394  $ 393 
Level 3 - Liabilities $ 394  $ 393 
Total liabilities measured at fair value $ 615  $ 777 
Fair Value of Available for Sale Securities by Maturity
June 2021 December 2020
Due in one year or less $ 44  $ 42 
Due after one year through three years $ 40  $ 39 
On June 30, 2021 and December 31, 2020 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income was $18 and $25 in the three months and $35 and $65 in the six months 2021 and 2020, which was recorded in other income (expense), net.
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.
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, the most significant of which 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 certain 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.
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. In September 2020 we entered into a second settlement agreement to compensate eligible United States patients who had revision surgery prior to September 9, 2020. 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.
With the acquisition of Wright as more fully described in Note 7, we are responsible for certain product liability claims, primarily related to certain hip products sold by Wright prior to its 2014 divestiture of the OrthoRecon business. We will continue to evaluate each claim and the possible loss we may incur.
We have incurred, and expect to incur in the future, costs associated with the defense and settlement of these matters. For the six months 2021 we have recorded charges of $82 and made payments of $163, primarily related to Rejuvenate and ABG II Modular-Neck hip stems. Based on the information that has been received, we have estimated the remaining range of probable loss related to recall matters globally to be approximately $415 to $550. We have recorded reserves representing the remaining 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 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.
Dollar amounts are in millions except per share amounts or as otherwise specified.
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STRYKER CORPORATION 2021 Second Quarter Form 10-Q
Leases
June December
2021 2020
Right-of-use assets $ 404  $ 423 
Lease liabilities, current $ 109  $ 109 
Lease liabilities, non-current $ 306  $ 325 
Other information:
Weighted-average remaining lease term 5.8 years 5.6 years
Weighted-average discount rate 2.74  % 2.57  %
Three Months Six Months
2021 2020 2021 2020
Operating lease cost $ 31  $ 31  $ 67  $ 67 
NOTE 7 - ACQUISITIONS
We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. The aggregate purchase price of our acquisitions, net of cash acquired was $108 and $26 in the six months 2021 and 2020.
In November 2020 we completed the acquisition of Wright Medical Group N.V. (Wright) for $30.75 per share, or an aggregate purchase price of $4.1 billion ($5.6 billion including convertible notes). Wright is a global medical device company focused on extremities and biologics. Wright is part of our Trauma and Extremities business within Orthopaedics. Goodwill attributable to the acquisition is not deductible for tax purposes.
In December 2020 we completed the acquisition of OrthoSensor, Inc. (OrthoSensor). OrthoSensor is a leader in the digital evolution of musculoskeletal care and sensor technology for total joint replacement. OrthoSensor is part of our Joint Replacement business within Orthopaedics. Goodwill attributable to the acquisition is not deductible for tax purposes.
Purchase price allocations for our significant acquisitions are:
Purchase Price Allocation of Acquired Net Assets
2020 Wright
Tangible assets and liabilities:
Accounts receivable $ 127 
Inventory 419 
Deferred income tax assets 477 
Other assets 345 
Debt (1,446)
Deferred income tax liabilities (490)
Product liabilities (211)
Other liabilities (291)
Intangible assets:
Customer and distributor relationships 182 
Developed technology and patents 1,510 
Trade name 58 
Goodwill 3,401 
Purchase price, net of cash acquired $ 4,081 
Weighted-average life of intangible assets 12
Purchase price allocations for Wright and other 2020 acquisitions were based on preliminary valuations, primarily related to intangible assets, product liabilities and deferred income taxes. Our estimates and assumptions are subject to change within the measurement period.
Consolidated Estimated Amortization Expense
Remainder of 2021 2022 2023 2024 2025
$ 300  $ 588  $ 567  $ 540  $ 521 
NOTE 8 - DEBT AND CREDIT FACILITIES
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 June 30, 2021.
Our commercial paper program backed by our primary revolving credit facility which expires in August 2023 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 June 30, 2021 there were no borrowings outstanding under our credit facility or commercial paper programs.
Summary of Total Debt June 2021 December 2020
Rate Due
Senior unsecured notes:
2.625% March 15, 2021 $ —  $ 750 
1.125% November 30, 2023 655  668 
0.600% December 1, 2023 597  597 
3.375% May 15, 2024 592  590 
0.250% December 3, 2024 1,010  1,030 
1.150% June 15, 2025 645  644 
3.375% November 1, 2025 747  747 
3.500% March 15, 2026 993  992 
2.125% November 30, 2027 891  909 
3.650% March 7, 2028 596  596 
0.750% March 1, 2029 950  969 
1.950% June 15, 2030 989  989 
2.625% November 30, 2030 767  782 
1.000% December 3, 2031 885  903 
4.100% April 1, 2043 392  392 
4.375% May 15, 2044 395  395 
4.625% March 15, 2046 982  981 
2.900% June 15, 2050 642  641 
Variable term loan November 10, 2023 —  400 
Other 12  16 
Total debt $ 12,740  $ 13,991 
Less current maturities of debt 6  761 
Total long-term debt $ 12,734  $ 13,230 
June 2021 December 2020
Unamortized debt issuance costs $ 66  $ 71 
Borrowing capacity on existing facilities $ 1,408  $ 2,903 
Fair value of senior unsecured notes $ 13,881  $ 15,022 
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 of our debt is classified within Level 2 of the fair value hierarchy.
In March 2021 we repaid $750 of senior unsecured notes with a coupon of 2.625% that were due on March 15, 2021.
In June 2021 we repaid the $400 term loan that was due on November 10, 2023.
NOTE 9 - INCOME TAXES
Our effective tax rates were 10.6% and 4.6% in the three months and 13.1% and 18.5% in the six months 2021 and 2020. The change in the effective income tax rate for the three months was primarily due to pre-tax losses and a change in geographic profit mix recorded in 2020 and certain discrete tax items recorded in 2021. The effective income tax rates for the six months 2021 and 2020 reflect the continued lower effective income tax rates as a result of our European operations.
In March 2021 the American Rescue Plan Act (the Act) was signed into law in the United States. We do not expect the provisions of the Act to have a material impact on our annual effective tax rate or Consolidated Financial Statements in 2021.
Dollar amounts are in millions except per share amounts or as otherwise specified.
8
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
NOTE 10 - SEGMENT INFORMATION
Three Months Six Months
2021 2020 2021 2020
Orthopaedics $ 1,628  $ 894  $ 3,112  $ 2,116 
MedSurg 1,748  1,324  3,369  2,946 
Neurotechnology and Spine 918  546  1,766  1,290 
Net sales $ 4,294  $ 2,764  $ 8,247  $ 6,352 
Orthopaedics $ 511  $ 163  $ 927  $ 555 
MedSurg 441  237  986  634 
Neurotechnology and Spine 313  75  442  285 
Segment operating income $ 1,265  $ 475  $ 2,355  $ 1,474 
Items not allocated to segments:
Corporate and other
(154) (130) (316) (267)
Acquisition and integration-related charges
(120) (19) (369) (56)
Amortization of intangible assets
(149) (110) (330) (228)
Restructuring-related and other charges
(17) (209) (31) (263)
Medical device regulations
(26) (22) (45) (46)
Recall-related matters
(76) —  (82) 6 
Regulatory and legal matters
9  (5) 9  (5)
Consolidated operating income (loss) $ 732  $ (20) $ 1,191  $ 615 
There were no significant changes to total assets by segment from information provided in our Annual Report on Form 10-K for 2020.
NOTE 11 - ASSET IMPAIRMENTS
Impairment charges in the six months 2021 were not significant. In the second quarter of 2020, due to the significant negative impact the COVID-19 pandemic had on our operations and financial results, we suspended certain in-process investments resulting in charges of $189 to impair certain long-lived assets (primarily the portion of our investment in a new global ERP system that was in-process of being developed for future deployment) and product line and other exit costs. These charges were included in cost of sales and selling, general and administrative expenses.
NOTE 12 - RISK AND UNCERTAINTIES
The government in China has launched regional and national programs for volume-based procurement ("VBP") of high-value medical consumables to reduce healthcare costs. Each VBP tender has specific requirements to award contracts to the lowest bidders who are able to satisfy the quality and quantity requirements. The successful bidders may experience increases in unit sales volume for certain products, while unsuccessful bidders will lose unit sales volume. While the unit volume increases for successful bidders may enable manufacturers to lower their distribution and commercial costs, we expect that the new prices required for a successful bid will, nevertheless, negatively impact our existing commercial operations of joint replacement and trauma products in China. Based on preliminary indications received subsequent to the end of the second quarter, we believe we will be a successful bidder in certain regional tenders for several of our trauma products and unsuccessful in the bid for other trauma products. When the final decisions are made, it is reasonably possible that we will record an impairment charge of approximately $100 relating to certain long-lived and intangible assets. The national VBP program for hips and knees is currently in preparation. If we are unsuccessful in that national program, we expect that our commercial operations of joint replacement products will also be negatively impacted; however, we do not expect additional intangible asset impairments. Spine products are part of the volume-based procurement in one province and it is not clear to what extent spine products will be included in further VBP initiatives provincial or nationwide. Our business in China represented approximately 2% of our revenues for the year ended December 31, 2020.
Dollar amounts are in millions except per share amounts or as otherwise specified.
9
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ABOUT STRYKER
Stryker 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.
COVID-19 Pandemic
The COVID-19 global pandemic has led to severe disruptions in the market and the global and United States economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown. In response, various governmental authorities and private enterprises have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. A significant number of our global suppliers, vendors, distributors and manufacturing facilities are located in regions that have been affected by the pandemic. Those operations have been materially adversely affected by restrictive government and private enterprise measures implemented in response to the pandemic.
Some of our products are particularly sensitive to reductions in elective medical procedures. Elective medical procedures were suspended in the first quarter of 2020 in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations through the first quarter of 2021. In the three months 2021 we saw recovery of elective procedures as the impact of the COVID-19 pandemic eased in most geographies. However, the recovery of elective procedures continues to be variable by region and geography. Demand increases for certain capital products continued from the first quarter 2021.
Overview of the Three and Six Months
In the three months 2021 we achieved sales growth of 55.4% and 17.6% from 2020 and 2019. Excluding the impact of acquisitions sales grew 42.9% and 9.3% in constant currency. We reported operating income margin of 17.0%, net earnings of $592 and net earnings per diluted share of $1.55. Excluding the impact of certain items, adjusted operating income margin(1) increased by 1,340 bps to 25.9%, with adjusted net earnings(1) of $861 and adjusted net earnings per diluted share(1) of $2.25 representing growth of 251.6%.
In the six months 2021 we achieved sales growth of 29.8% and 15.1% from 2020 and 2019. Excluding the impact of acquisitions sales grew 19.7% and 7.1% in constant currency. We reported operating income margin of 14.4%, net earnings of $894 and net earnings per diluted share of $2.34. Excluding the impact of certain items, adjusted operating income margin(1) increased by 570 bps to 24.7%, with adjusted net earnings(1) of $1,598 and adjusted net earnings per diluted share(1) of $4.18 representing growth of 68.5%.
Recent Developments
In March 2021 we repaid $750 of our senior unsecured notes with a coupon of 2.625% that were due on March 15, 2021. In June 2021 we repaid the $400 term loan that was due on November 10, 2023. Refer to Note 8 to our Consolidated Financial Statements for further information.
We have not repurchased any shares of our common stock under our authorized repurchase program in 2021. The total dollar value of shares of our common stock that could be acquired under our authorized share repurchase program was $1,033 as of June 30, 2021. We previously announced our intention to suspend our repurchase program through 2021.
The government in China has launched regional and national programs for volume-based procurement ("VBP") of high-value medical consumables to reduce healthcare costs. Each VBP tender has specific requirements to award contracts to the lowest bidders who are able to satisfy the quality and quantity requirements. The successful bidders may experience increases in unit sales volume for certain products, while unsuccessful bidders will lose unit sales volume. While the unit volume increases for successful bidders may enable manufacturers to lower their distribution and commercial costs, we expect that the new prices required for a successful bid will, nevertheless, negatively impact our existing commercial operations of joint replacement and trauma products in China. Based on preliminary indications received subsequent to the end of the second quarter, we believe we will be a successful bidder in certain regional tenders for several of our trauma products and unsuccessful in the bid for other trauma products. When the final decisions are made, it is reasonably possible that we will record an impairment charge of approximately $100 relating to certain long-lived and intangible assets. The national VBP program for hips and knees is currently in preparation. If we are unsuccessful in that national program, we expect that our commercial operations of joint replacement products will also be negatively impacted; however, we do not expect additional intangible asset impairments. Spine products are part of volume-based procurement in one province and it is not clear to what extent spine products will be included in further VBP initiatives provincial or nationwide. Our business in China represented approximately 2% of our revenues for the year ended December 31, 2020.
(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.
Dollar amounts are in millions except per share amounts or as otherwise specified.
10
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Six Months
Percent Net Sales Percentage Percent Net Sales Percentage
2021 2020 2021 2020 Change 2021 2020 2021 2020 Change
Net sales $ 4,294  $ 2,764  100.0  % 100.0  % 55.4  % $ 8,247  $ 6,352  100.0  % 100.0  % 29.8  %
Gross profit 2,772  1,548  64.6  56.0  79.1  5,281  3,879  64.0  61.1  36.1 
Research, development and engineering expenses 310  233  7.2  8.4  33.0  598  487  7.3  7.7  22.8 
Selling, general and administrative expenses 1,505  1,225  35.0  44.3  22.9  3,080  2,555  37.3  40.2  20.5 
Recall charges 76  —  1.8  —  nm 82  (6) 1.0  (0.1) nm
Amortization of intangible assets 149  110  3.5  4.0  35.5  330  228  4.0  3.6  44.7 
Other income (expense), net (70) (67) (1.6) (2.4) 4.5  (162) (112) (2.0) (1.8) 44.6 
Income taxes 70  (4) nm nm nm 135  93  nm nm nm
Net earnings (loss) $ 592  $ (83) 13.8  % (3.0) % nm $ 894  $ 410  10.8  % 6.5  % 118.0  %
Net earnings (loss) per diluted share $ 1.55  $ (0.22) nm $ 2.34  $ 1.08  116.7  %
Adjusted net earnings per diluted share(1)
$ 2.25  $ 0.64  nm $ 4.18  $ 2.48  68.5  %

nm - not meaningful
Geographic and Segment Net Sales Three Months Six Months
Percentage Change Percentage Change
2021 2020 As Reported Constant
Currency 		2021 2020 As Reported Constant
Currency
Geographic:
United States $ 3,100  $ 1,966  57.7  % 57.7  % $ 5,884  $ 4,609  27.7  % 27.7  %
International 1,194  798  49.7  37.9  2,363  1,743  35.6  25.6 
Total $ 4,294  $ 2,764  55.4  % 51.8  % $ 8,247  $ 6,352  29.8  % 27.1  %
Segment:
Orthopaedics $ 1,628  $ 894  82.3  % 77.9  % $ 3,112  $ 2,116  47.1  % 43.7  %
MedSurg 1,748  1,324  32.3  29.7  3,369  2,946  14.5  12.5 
Neurotechnology and Spine 918  546  66.9  62.4  1,766  1,290  36.5  33.0 
Total $ 4,294  $ 2,764  55.4  % 51.8  % $ 8,247  $ 6,352  29.8  % 27.1  %
Supplemental Net Sales Growth Information
Three Months Six Months
Percentage Change Percentage Change
United States International United States International
2021 2020 As Reported Constant Currency As Reported As Reported Constant Currency 2021 2020 As Reported Constant Currency As Reported As Reported Constant Currency
Orthopaedics:
Knees $ 474  $ 241  96.4  % 92.2  % 95.2  % 100.0  % 83.8  % $ 886  $ 673  31.7  % 29.0  % 28.4  % 41.3  % 30.6  %
Hips 353  216  63.3  58.7  57.0  74.8  61.5  662  532  24.4  21.1  19.1  33.8  24.5 
Trauma and Extremities 674  330  104.2  98.5  128.0  63.7  50.7  1,314  722  81.9  77.2  95.3  57.0  45.2 
Other 127  107  20.9  19.6  4.3  179.6  159.7  250  189  33.0  31.5  17.6  140.3  124.5 
$ 1,628  $ 894  82.3  % 77.9  % 83.6  % 79.4  % 65.4  % $ 3,112  $ 2,116  47.1  % 43.7  % 46.3  % 49.0  % 38.1  %
MedSurg:
Instruments $ 517  $ 328  58.8  % 55.8  % 61.0  % 51.7  % 39.4  % $ 986  $ 841  17.7  % 15.6  % 14.8  % 28.4  % 18.4  %
Endoscopy 518  316  64.0  61.2  61.0  76.2  62.4  987  771  28.1  26.1  23.3  47.5  36.9 
Medical 640  632  1.4  (1.1) 7.6  (14.5) (22.2) 1,262  1,219  3.5  1.3  5.9  (3.2) (11.2)
Sustainability 73  48  51.6  51.4  50.9  127.5  102.6  134  115  16.6  16.5  16.0  85.3 71.3
$ 1,748  $ 1,324  32.3  % 29.7  % 36.4  % 19.6  % 9.4  % $ 3,369  $ 2,946  14.5  % 12.5  % 13.6  % 17.7  % 8.5  %
Neurotechnology and Spine:
Neurotechnology $ 611  $ 369  65.6  % 60.9  % 75.1  % 52.8  % 42.3  % $ 1,181  $ 852  38.7  % 34.9  % 37.9  % 39.8  % 30.5  %
Spine 307  177  69.6  65.6  69.8  69.0  55.9  585  438  32.2  29.4  26.4  48.4  37.6 
$ 918  $ 546  66.9  % 62.4  % 73.1  % 56.9  % 45.8  % $ 1,766  $ 1,290  36.5  % 33.0  % 33.4  % 42.0  % 32.4  %
Total $ 4,294  $ 2,764  55.4  % 51.8  % 57.7  % 49.7  % 37.9  % $ 8,247  $ 6,352  29.8  % 27.1  % 27.7  % 35.6  % 25.6  %
Consolidated Net Sales
Consolidated net sales increased 55.4% in the three months 2021 as reported and 51.8% in constant currency, as foreign currency exchange rates positively impacted net sales by 3.6%. Excluding the 8.9% impact of acquisitions, net sales in constant currency increased by 43.4% from increased unit volume partially offset by 0.5% due to lower prices. The unit volume increase was due to higher shipments across all products except medical, as consolidated net sales in the three months 2020 were significantly negatively impacted by the global response to the COVID-19 pandemic.
Consolidated net sales increased 29.8% in the six months 2021 as reported and 27.1% in constant currency, as foreign currency exchange rates positively impacted net sales by 2.7%. Excluding the 7.4% impact of acquisitions, net sales in constant currency increased by 20.5% from increased unit volume partially offset by 0.8% due to lower prices. The unit volume increase was due to higher shipments across all products.
Orthopaedics Net Sales
Orthopaedics net sales increased 82.3% in the three months 2021 as reported and 77.9% in constant currency, as foreign
Dollar amounts are in millions except per share amounts or as otherwise specified.
11
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
currency exchange rates positively impacted net sales by 4.4%. Excluding the 27.2% impact of acquisitions, net sales in constant currency increased 52.2% from increased unit volume partially offset by 1.5% from lower prices. The unit volume increase was due to higher shipments across all orthopaedics products.
Orthopaedics net sales increased 47.1% in the six months 2021 as reported and 43.7% in constant currency, as foreign currency exchange rates positively impacted net sales by 3.4%. Excluding the 21.9% impact of acquisitions, net sales in constant currency increased 23.6% from higher unit volume partially offset by 1.8% from lower prices. The unit volume increase was due to higher shipments across all Orthopaedics products.
MedSurg Net Sales
MedSurg net sales increased 32.3% in the three months 2021 as reported and 29.7% in constant currency, as foreign currency exchange rates positively impacted net sales by 2.6%. Net sales in constant currency increased by 29.5% from increased unit volume and 0.1% due to higher prices. The unit volume increase was primarily due to higher shipments of instruments, endoscopy and sustainability solutions products partially offset by lower shipments of medical products.
MedSurg net sales increased 14.5% in the six months 2021 as reported and 12.5% in constant currency, as foreign currency exchange rates positively impacted net sales by 2.0%. Net sales in constant currency increased by 12.5% from increased unit volume partially offset by 0.1% due to lower prices. The unit volume increase was due to higher shipments across all MedSurg products.
Neurotechnology and Spine Net Sales
Neurotechnology and Spine net sales increased 66.9% in the three months 2021 as reported and 62.4% in constant currency, as foreign currency exchange rates positively impacted net sales by 4.5%. Excluding the 0.6% impact for acquisitions, net sales in constant currency increased by 62.4% from increased unit volume partially offset by 0.6% due to lower prices. The unit volume increase was due to higher shipments of neurotechnology and spine products.
Neurotechnology and Spine net sales increased 36.5% in the six months 2021 as reported and 33.0% in constant currency, as foreign currency exchange rates positively impacted net sales by 3.5%. Excluding the 0.2% impact for acquisitions, net sales in constant currency increased by 33.4% from increased unit volume partially offset by 0.6% due to lower prices. The unit volume increase was due to higher shipments of neurotechnology and spine products.
Gross Profit
Gross profit as a percentage of sales in the three months 2021 increased to 64.6% from 56.0% in 2020. Excluding the impact of the items noted below, gross profit increased to 66.0% of sales in the three months 2021 from 57.3% in 2020 primarily due to leverage from higher sales volumes and favorable mix, partially offset by lower selling prices.
Gross profit as a percentage of sales in the six months 2021 increased to 64.0% from 61.1% in 2020. Excluding the impact of the items noted below, gross profit increased to 65.7% of sales in the six months 2021 from 61.8% in 2020 primarily due to leverage from higher sales volumes and favorable mix, partially offset by lower selling prices.
Percent Net Sales
Three Months 2021 2020 2021 2020
Reported $ 2,772  $ 1,548  64.6  % 56.0  %
Inventory stepped-up to fair value 58  3  1.4  0.1 
Restructuring-related and other charges 2  32  —  1.2 
Adjusted $ 2,832  $ 1,583  66.0  % 57.3  %
Percent Net Sales
Six Months 2021 2020 2021 2020
Reported $ 5,281  $ 3,879  64.0  % 61.1  %
Inventory stepped-up to fair value 137  9  1.7  0.1 
Restructuring-related and other charges —  36  —  0.6 
Medical device regulations 1  1  —  — 
Adjusted $ 5,419  $ 3,925  65.7  % 61.8  %
Research, Development and Engineering Expenses
Research, development and engineering expenses increased $77 or 33.0% in the three months 2021 and decreased as a percentage of sales to 7.2% from 8.4% in 2020. Excluding the impact of the items noted below, expenses decreased to 6.6% of sales in 2021 from 7.6% in 2020.
Research, development and engineering expenses increased $111 or 22.8% in the six months 2021 and decreased as a percentage of sales to 7.3% from 7.7% in 2020. Excluding the impact of the items noted below, expenses decreased to 6.7% of sales in 2021 from 6.9% in 2020.
The decreases as a percentage of sales for the three and six months are due to leverage from higher sales volumes. Total expense increased due to disciplined ramp up in spending to facilitate our growth, including projects to develop new products, investments in new technologies and integration of recent acquisitions.
Percent Net Sales
Three Months 2021 2020 2021 2020
Reported $ 310  $ 233  7.2  % 8.4  %
Medical device regulations (26) (23) (0.6) (0.8)
Adjusted $ 284  $ 210  6.6  % 7.6  %
Percent Net Sales
Six Months 2021 2020 2021 2020
Reported $ 598  $ 487  7.3  % 7.7  %
Medical device regulations (44) (46) (0.6) (0.8)
Adjusted $ 554  $ 441  6.7  % 6.9  %
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $280 or 22.9% in the three months 2021 and decreased as a percentage of sales to 35.0% from 44.3% in 2020. Excluding the impact of the items noted below, expenses decreased to 33.4% of sales in 2021 from 37.1% in 2020.
Selling, general and administrative expenses increased $525 or 20.5% in the six months 2021 and decreased as a percentage of sales to 37.3% from 40.2% in 2020. Excluding the impact of the items noted below, expenses decreased to 34.3% of sales in 2021 from 35.8% in 2020.
The decreases as a percentage of sales for the three and six months are due to leverage from higher sales volumes. Total expense increased due to disciplined ramp up in spending to facilitate our growth.
Dollar amounts are in millions except per share amounts or as otherwise specified.
12
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
Percent Net Sales
Three Months 2021 2020 2021 2020
Reported $ 1,505  $ 1,225  35.0  % 44.3  %
Other acquisition and integration-related (62) (16) (1.4) (0.6)
Restructuring-related and other charges (16) (178) (0.4) (6.4)
Regulatory and legal matters 9  (5) 0.2  (0.2)
Adjusted $ 1,436  $ 1,026  33.4  % 37.1  %
Percent Net Sales
Six Months 2021 2020 2021 2020
Reported $ 3,080  $ 2,555  37.3  % 40.2  %
Other acquisition and integration-related (232) (47) (2.8) (0.7)
Restructuring-related and other charges (31) (227) (0.3) (3.6)
Regulatory and legal matters 9  (5) 0.1  (0.1)
Adjusted $ 2,826  $ 2,276  34.3  % 35.8  %
Recall Charges
Recall charges were $76 in the three months and $82 in the six months 2021 and minimal in the three and six months 2020. Charges were primarily due to the previously disclosed Rejuvenate and ABG II Modular-Neck hip stems. Refer to Note 6 to our Consolidated Financial Statements for further information.
Amortization of Intangible Assets
Amortization of intangible assets was $149 and $110 in the three months and $330 and $228 in the six months 2021 and 2020. The increase in 2021 was primarily due to the acquisition of Wright Medical in the fourth quarter of 2020. Refer to Note 7 to our Consolidated Financial Statements for further information.
Operating Income (Loss)
Operating income (loss) increased $752 to 17.0% of sales in the three months 2021 from (0.7)% of sales in 2020. Excluding the impact of the items noted below, operating income increased to 25.9% of sales in 2021 from 12.5% in 2020 primarily due to leverage from higher sales volumes and disciplined spending to facilitate our growth.
Operating income increased $576 or 93.7% to 14.4% of sales in the six months 2021 from 9.7% of sales in 2020. Excluding the impact of the items noted below, operating income increased to 24.7% of sales in 2021 from 19.0% in 2020 primarily due to leverage from higher sales volumes and disciplined spending to facilitate our growth.
Percent Net Sales
Three Months 2021 2020 2021 2020
Reported $ 732  $ (20) 17.0  % (0.7) %
Inventory stepped-up to fair value 58  3  1.4  0.1 
Other acquisition and integration-related 62  16  1.4  0.6 
Amortization of purchased intangible assets 149  110  3.5  4.0 
Restructuring-related and other charges 17  209  0.4  7.5 
Medical device regulations 26  22  0.6  0.8 
Recall-related matters 76  —  1.8  — 
Regulatory and legal matters (9) 5  (0.2) 0.2 
Adjusted $ 1,111  $ 345  25.9  % 12.5  %
Percent Net Sales
Six Months 2021 2020 2021 2020
Reported $ 1,191  $ 615  14.4  % 9.7  %
Inventory stepped-up to fair value 137  9  1.7  0.1 
Other acquisition and integration-related 232  47  2.8  0.7 
Amortization of purchased intangible assets 330  228  4.0  3.7 
Restructuring-related and other charges 31  263  0.4  4.1 
Medical device regulations 45  46  0.5  0.7 
Recall-related matters 82  (6) 1.0  (0.1)
Regulatory and legal matters (9) 5  (0.1) 0.1 
Adjusted $ 2,039  $ 1,207  24.7  % 19.0  %
Other Income (Expense), Net
Other income (expense), net was ($70) and ($67) in the three months and ($162) and ($112) in the six months 2021 and 2020. The increase in net expense in 2021 was primarily due to increased interest expense driven by the additional debt from the bond offerings completed in June 2020 and November 2020.
Income Taxes
Our effective tax rates were 10.6% and 4.6% in the three months and 13.1% and 18.5% in the six months 2021 and 2020. The change in the effective income tax rate for the three months was primarily due to pre-tax losses and a change in geographic profit mix recorded in 2020 and certain discrete tax items recorded in 2021. The effective income tax rates for the six months 2021 and 2020 reflect the continued lower effective income tax rates as a result of our European operations.
In March 2021 the American Rescue Plan Act (the Act) was signed into law in the United States. We do not expect the provisions of the Act to have a material impact on our annual effective tax rate or Consolidated Financial Statements in 2021.
Net Earnings (Loss)
Net earnings (loss) increased to $592 or $1.55 per diluted share in the three months 2021 from ($83) or ($0.22) per diluted share in 2020. Adjusted net earnings per diluted share(1) increased to $2.25 in 2021 from $0.64 in 2020, as net earnings in the three months 2020 were significantly negatively impacted by the global response to the COVID-19 pandemic. The impact of foreign currency exchange rates increased net earnings per diluted share by approximately $0.06 in 2021 and had a minimal impact on net earnings (loss) per diluted share in 2020.
Net earnings increased to $894 or $2.34 per diluted share in the six months 2021 from $410 or $1.08 per diluted share in 2020. Adjusted net earnings per diluted share(1) increased 68.5% to $4.18 in 2021 from $2.48 in 2020. The impact of foreign currency exchange rates increased net earnings per diluted share by approximately $0.12 in 2021 and reduced net earnings per diluted share by approximately $0.02 in 2020.
Percent Net Sales
Three Months 2021 2020 2021 2020
Reported $ 592  $ (83) 13.8  % (3.0) %
Inventory stepped-up to fair value 43  1  1.0  — 
Other acquisition and integration-related 51  12  1.2  0.4 
Amortization of purchased intangible assets 113  88  2.7  3.2 
Restructuring-related and other charges 15  170  0.3  6.2 
Medical device regulations 21  18  0.5  0.7 
Recall-related matters 68  —  1.6  — 
Regulatory and legal matters (12) 6  (0.3) 0.2 
Tax matters (30) 33  (0.7) 1.2 
Adjusted $ 861  $ 245  20.1  % 8.9  %
Percent Net Sales
Six Months 2021 2020 2021 2020
Reported $ 894  $ 410  10.8  % 6.5  %
Inventory stepped-up to fair value 103  6  1.2  0.1 
Other acquisition and integration-related 180  36  2.2  0.6 
Amortization of purchased intangible assets 264  184  3.3  2.9 
Restructuring-related and other charges 33  212  0.4  3.3 
Medical device regulations 37  36  0.4  0.6 
Recall-related matters 73  (4) 0.9  (0.1)
Regulatory and legal matters (12) 6  (0.1) 0.1 
Tax matters 26  58  0.3  0.9 
Adjusted $ 1,598  $ 944  19.4  % 14.9  %

Dollar amounts are in millions except per share amounts or as otherwise specified.
13
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
Non-GAAP Financial Measures
We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted 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 past and future performance. The following are examples of the types of adjustments that may be included in a period:
1.Acquisition and integration-related costs. Costs related to integrating recently acquired businesses (e.g., costs associated with the termination of sales relationships, workforce reductions and other integration-related activities)
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, certain long-lived 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, other income (expense), net, 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, except for 4.3 million anti-dilutive shares excluded from reported net loss per dilutive share for the three months 2020.
Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2021 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other income (expense), net Net Earnings Effective
Tax Rate 		Diluted EPS
Reported $ 2,772  $ 1,505  $ 310  $ 732  $ (70) $ 592  10.6  % $ 1.55 
Reported percent net sales 64.6  % 35.0  % 7.2  % 17.0  % (1.6) % 13.8  %
Acquisition and integration-related charges:
Inventory stepped-up to fair value 58  —  —  58  —  43  0.6  0.11 
Other acquisition and integration-related —  (62) —  62  —  51  0.1  0.13 
Amortization of purchased intangible assets —  —  —  149  —  113  1.4  0.29 
Restructuring-related and other charges 2  (16) —  17  —  15  (0.1) 0.03 
Medical device regulations —  —  (26) 26  —  21  0.1  0.06 
Recall-related matters —  —  —  76  —  68  (0.4) 0.18 
Regulatory and legal matters —  9  —  (9) (3) (12) 0.3  (0.03)
Tax matters —  —  —  —  —  (30) 4.4  (0.07)
Adjusted $ 2,832  $ 1,436  $ 284  $ 1,111  $ (73) $ 861  17.0  % $ 2.25 
Adjusted percent net sales 66.0  % 33.4  % 6.6  % 25.9  % (1.7) % 20.1  %
Dollar amounts are in millions except per share amounts or as otherwise specified.
14
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
Three Months 2020 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income (Loss) Other income (expense), net Net Earnings (Loss) Effective
Tax Rate 		Diluted EPS
Reported $ 1,548  $ 1,225  $ 233  $ (20) $ (67) $ (83) 4.6  % $ (0.22)
Reported percent net sales 56.0  % 44.3  % 8.4  % (0.7) % (2.4) % (3.0) %
Acquisition and integration-related charges:
Inventory stepped-up to fair value 3  —  —  3  —  1  (0.5) — 
Other acquisition and integration-related —  (16) —  16  —  12  (2.0) 0.03 
Amortization of purchased intangible assets —  —  —  110  —  88  (7.0) 0.23 
Restructuring-related and other charges 32  (178) —  209  —  170  (10.7) 0.45 
Medical device regulations —  —  (23) 22  —  18  (2.4) 0.05 
Recall-related matters —  —  —  —  —  —  —  — 
Regulatory and legal matters —  (5) —  5  —  6  2.3  0.02 
Tax matters —  —  —  —  7  33  30.1  0.08 
Adjusted $ 1,583  $ 1,026  $ 210  $ 345  $ (60) $ 245  14.4  % $ 0.64 
Adjusted percent net sales 57.3  % 37.1  % 7.6  % 12.5  % (2.2) % 8.9  %
Six Months 2021 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other income (expense), net Net Earnings Effective
Tax Rate 		Diluted EPS
Reported $ 5,281  $ 3,080  $ 598  $ 1,191  $ (162) $ 894  13.1  % $ 2.34 
Reported percent net sales 64.0  % 37.3  % 7.3  % 14.4  % (2.0) % 10.8  %
Acquisition and integration-related charges:
Inventory stepped-up to fair value 137  —  —  137  —  103  1.1  0.27 
Other acquisition and integration-related —  (232) —  232  —  180  1.6  0.47 
Amortization of purchased intangible assets —  —  —  330  —  264  1.6  0.69 
Restructuring-related and other charges —  (31) —  31  11  33  0.3  0.08 
Medical device regulations 1  —  (44) 45  —  37  0.2  0.10 
Recall-related matters —  —  —  82  —  73  (0.3) 0.19 
Regulatory and legal matters —  9  —  (9) (3) (12) 0.2  (0.03)
Tax matters —  —  —  —  —  26  (2.6) 0.07 
Adjusted $ 5,419  $ 2,826  $ 554  $ 2,039  $ (154) $ 1,598  15.2  % $ 4.18 
Adjusted percent net sales 65.7  % 34.3  % 6.7  % 24.7  % (1.9) % 19.4  %
Six Months 2020 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other income (expense), net Net Earnings Effective
Tax Rate 		Diluted EPS
Reported $ 3,879  $ 2,555  $ 487  $ 615  $ (112) $ 410  18.5  % $ 1.08 
Reported percent net sales 61.1  % 40.2  % 7.7  % 9.7  % (1.8) % 6.5  %
Acquisition and integration-related charges:
Inventory stepped-up to fair value 9  —  —  9  —  6  0.2  0.02 
Other acquisition and integration-related —  (47) —  47  —  36  0.7  0.09 
Amortization of purchased intangible assets —  —  —  228  —  184  2.4  0.48 
Restructuring-related and other charges 36  (227) —  263  —  212  2.6  0.56 
Medical device regulations 1  —  (46) 46  —  36  0.8  0.09 
Recall-related matters —  —  —  (6) —  (4) (0.1) (0.01)
Regulatory and legal matters —  (5) —  5  —  6  (0.4) 0.02 
Tax matters —  —  —  —  7  58  (10.4) 0.15 
Adjusted $ 3,925  $ 2,276  $ 441  $ 1,207  $ (105) $ 944  14.3  % $ 2.48 
Adjusted percent net sales 61.8  % 35.8  % 6.9  % 19.0  % (1.7) % 14.9  %
FINANCIAL CONDITION AND LIQUIDITY
Six Months 2021 2020
Net cash provided by operating activities $ 1,330  $ 1,211 
Net cash used in investing activities (298) (280)
Net cash provided by (used in) financing activities (1,729) 1,288 
Effect of exchange rate changes on cash and cash equivalents (5) (17)
Change in cash and cash equivalents $ (702) $ 2,202 
Operating Activities
Cash provided by operating activities was $1,330 and $1,211 in the six months 2021 and 2020. The increase was primarily due to higher net earnings partially offset by changes in working capital accounts related to increased sales and higher recall-related payments.
Investing Activities    
Cash used in investing activities was $298 and $280 in the six months 2021 and 2020. The increase in cash used in 2021 was
primarily due to increased payments for acquisitions partially offset by lower purchases of property, plant and equipment.
Financing Activities
Cash provided by (used in) financing activities was ($1,729) and $1,288 in the six months 2021 and 2020. Cash used in 2021 was primarily driven by debt repayments of $750 in March 2021 and $400 for the term loan in June 2021. Cash provided in 2020 was driven by the issuance of $2,300 of notes in June 2020 partially offset by debt repayments of $500 in January 2020. We did not repurchase any shares in the six months 2021 or 2020.
Six Months 2021 2020
Total dividends paid to common shareholders $ 475  $ 431 
Liquidity
Cash, cash equivalents and marketable securities were $2,325 and $3,024 on June 30, 2021 and December 31, 2020. Current assets exceeded current liabilities by $4,780 and $4,666 on June 30, 2021 and December 31, 2020. We anticipate being able
Dollar amounts are in millions except per share amounts or as otherwise specified.
15
STRYKER CORPORATION 2021 Second Quarter Form 10-Q
to support our short-term liquidity and operating needs from a variety of sources including cash from operations, commercial paper, existing credit lines and capital expenditure and operating expense reductions. We maintain a revolving credit facility with $1.5 billion of committed capital which expires in August 2023.
We raised funds in the capital markets in 2020, 2019 and 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 42% on June 30, 2021 compared to 30% on December 31, 2020.
Critical Accounting Policies
There were no changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for 2020.
New Accounting Pronouncements Not Yet Adopted
Refer to Note 1 to our Consolidated Financial Statements for information.
Guarantees and Other Off-Balance Sheet Arrangements
We do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, of a magnitude that we believe could have a material impact on our financial condition or liquidity.
OTHER MATTERS
Legal and Regulatory Matters
We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of our business, including proceedings related to product, labor, intellectual property and other matters. Refer to Note 6 to our Consolidated Financial Statements for further information.
FORWARD-LOOKING STATEMENTS
This report contains statements 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, including uncertainties related to the impact of the COVID-19 pandemic on our operations and financial results. 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 2020. 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 2020. We disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We consider our greatest potential areas of market risk exposure to be exchange rate risk and the impacts of the COVID-19 pandemic on our operations and financial results. 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 2020. There were no material changes from the information provided therein. We are not able to quantify the impacts of the COVID-19 pandemic on our financial results. Qualitative disclosures about the COVID-19 pandemic are included in Part I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-Q and Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for 2020.
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 June 30, 2021. Based on that evaluation, the Certifying Officers concluded the Company's disclosure controls and procedures were effective as of June 30, 2021.
Changes in Internal Control Over Financial Reporting
There was no change to our internal control over financial reporting during the three months 2021 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
We issued 3,231 shares of our common stock in the three months 2021 as performance incentive awards to employees. 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 six months 2021 we did not repurchase any shares of our common stock under our authorized repurchase program. The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of June 30, 2021. As previously announced we intend to maintain the suspension of our share repurchase program through 2021.
Dollar amounts are in millions except per share amounts or as otherwise specified.
16

ITEM 5. OTHER INFORMATION
Section 13(r) of the Securities Exchange Act of 1934, as amended, requires an issuer to disclose in its annual or quarterly reports whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to parties subject to sanctions administered by the Office of Foreign Assets Control (“OFAC”) within the United States Department of the Treasury, whether or not such activities are prohibited or sanctionable under United States law. On March 2, 2021, the United States government designated the Russian Federal Security Service (the “FSB”) under additional sanctions authorities. On the same day, OFAC issued General License No. 1B (the “OFAC General License”), which generally authorizes certain licensing, permitting, certification, notification and related transactions with the FSB as may be required pursuant to Russian encryption product import controls for the importation, distribution or use of certain information technology products and radio frequency technology products in the Russian Federation.
As required under Russian law and as permitted under the OFAC General License, one of our subsidiaries in Russia periodically files notifications with or applies for import licenses and permits from the FSB on our behalf in connection with the importation of our products into Russia. These notification and licensing activities are free of charge, and none of our gross revenue or net profits are attributable to such activities. We expect to continue to file notifications with and apply for import licenses and permits from the FSB to qualify our products for importation and distribution in the Russian Federation to the extent required under Russian law, but only so long as such notification and licensing activities are authorized by the OFAC General License, any successor general license or other authorization issued by OFAC.
ITEM 6. EXHIBITS
10(i)*
31(i)*
31(ii)*
32(i)*
32(ii)*
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.
17
STRYKER CORPORATION 2021 Second 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: July 28, 2021 /s/ KEVIN A. LOBO
Kevin A. Lobo
Chair and Chief Executive Officer
Date: July 28, 2021 /s/ GLENN S. BOEHNLEIN
Glenn S. Boehnlein
Vice President, Chief Financial Officer
18

Exhibit 10(i)
STRYKER CORPORATION

TERMS AND CONDITIONS
RELATING TO RESTRICTED STOCK UNITS GRANTED
PURSUANT TO THE 2011 LONG-TERM INCENTIVE PLAN, AS AMENDED AND RESTATED

NON-EMPLOYEE DIRECTORS

1.    The Restricted Stock Units (“RSUs”) with respect to Common Stock of Stryker Corporation (the “Company”) granted to you during 2021 are subject to these Terms and Conditions Relating to Restricted Stock Units Granted Pursuant to the 2011 Long-Term Incentive Plan, as Amended and Restated (the “Terms and Conditions”) and all of the terms and conditions of the Stryker Corporation 2011 Long-Term Incentive Plan, as Amended and Restated (the “2011 Plan”), which is incorporated herein by reference. In the case of a conflict between these Terms and Conditions and the terms of the 2011 Plan, the provisions of the 2011 Plan will govern. Capitalized terms used but not defined herein have the meaning provided therefor in the 2011 Plan, and "Stock Plan Administrator" means UBS Financial Services Inc. (or any other independent service provider engaged by the Company to assist with the implementation, operation and administration of the 2011 Plan).

2.    Your right to receive the Shares issuable pursuant to the RSUs shall be only as follows:

(a)    If you continue to be a Director, you will receive the Shares underlying the RSUs that have become vested as soon as administratively possible following the vesting date as set forth in the award letter.

(b)     If you cease to be a Director by reason of Disability (as such term is defined in the 2011 Plan) or death prior to the date that your RSUs become fully vested, you or your estate will become fully vested in your RSUs, and you, your legal representative or your estate will receive all of the underlying Shares as soon as administratively practicable following your termination by Disability or death.

(c)    If you cease to be a Director by reason of Retirement (as such term is defined in the 2011 Plan) prior to the date that your RSUs become fully vested, you (or your estate in the event of your death after your termination by Retirement) will continue to vest in your RSUs in accordance with the vesting schedule as set forth in the award letter as if you had continued your service as a Director.
    
(d)    If you cease to be a Director prior to the date that your RSUs become fully vested for any reason other than those provided in (b) or (c) above, you shall cease vesting in your RSUs effective as of your Termination Date, which shall be the last day of your active service as a Director.
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(e)    Notwithstanding the foregoing, the Company may, in its sole discretion, settle your RSUs in the form of: (i) a cash payment to the extent settlement in Shares (1) is prohibited under local law, (2) would require you or the Company to obtain the approval of any governmental and/or regulatory body in your country of residence or (3) is administratively burdensome; or (ii) Shares, but require you to immediately sell such Shares (in which case, the Company shall have the authority to issue sales instructions in relation to such Shares on your behalf).

(f)    You may elect to defer delivery of the Shares that are otherwise issuable upon the vesting date by completing a prescribed deferral election form and returning it to the Company according to the instructions on such deferral election form. The deferral election form will be distributed to you separately. If made, the deferral election shall be irrevocable. You generally shall receive your Shares at such time(s) specified in the deferral election form.

3.    The number of Shares subject to the RSUs shall be subject to adjustment and the vesting dates hereof may be accelerated as follows:

(a)    In the event that the Shares, as presently constituted, shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise) or if the number of such Shares shall be increased through the payment of a stock dividend or a dividend on the Shares of rights or warrants to purchase securities of the Company shall be made, then there shall be substituted for or added to each Share theretofore subject to the RSUs the number and kind of shares of stock or other securities into which each outstanding Share shall be so changed, or for which each such Share shall be exchanged, or to which each such Share shall be entitled. The other terms of the RSUs shall also be appropriately amended as may be necessary to reflect the foregoing events. In the event there shall be any other change in the number or kind of the outstanding Shares, or of any stock or other securities into which such Shares shall have been exchanged, then if the Board of Directors shall, in its sole discretion, determine that such change equitably requires an adjustment in the RSUs, such adjustment shall be made in accordance with such determination.

(b)    Fractional Shares resulting from any adjustment in the RSUs may be settled in cash or otherwise as the Board of Directors shall determine, in its sole discretion. Notice of any adjustment will be given to you and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes hereof.

(c)    The Board of Directors shall have the power to amend the RSUs to permit the immediate vesting of the RSUs (and to terminate any unvested RSUs) and the distribution of the underlying Shares prior to the effectiveness of (i) any disposition of substantially all of the assets of the Company, (ii) the shutdown, discontinuance of
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operations or dissolution of the Company, or (iii) the merger or consolidation of the Company with or into any other unrelated corporation.

4.    If you are resident outside of the United States, you agree, as a condition of the grant of the RSUs, to repatriate all payments attributable to the Shares and/or cash acquired under the 2011 Plan (including, but not limited to, dividends, dividend equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the RSUs) required by and in accordance with local foreign exchange rules and regulations in your country of residence. In addition, you also agree to take any and all actions, and consent to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in your country of residence. Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence.

5.    If you are resident in a country that is a member of the European Union, the grant of the RSUs and these Terms and Conditions are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any provision of these Terms and Conditions is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

6.    Regardless of any action the Company takes with respect to any or all income tax (including U.S. federal, state and local taxes or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including the grant of the RSUs, the vesting of the RSUs, the subsequent sale of any Shares acquired pursuant to the RSUs and the receipt of any dividends or dividend equivalents and (ii) do not commit to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate your liability for Tax-Related Items. Further, if you become subject to taxation in more than one country between the grant date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one country.

Prior to any taxable event (or such later date(s) as specified in a valid deferral election form), if your country of residence (and/or the country services as a director occur, if different) requires withholding of Tax-Related Items, the Company shall withhold a number of whole Shares that have an aggregate Fair Market Value that the Company, taking into account local requirements and administrative issues, determines in its sole discretion is appropriate to cover withholding for Tax-Related Items with respect to the
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Shares. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items. In cases where the Fair Market Value of the number of whole Shares withheld is greater than the amount required to be paid to the relevant government authorities with respect to withholding for Tax-Related Items, the Company shall make a cash payment to you equal to the difference as soon as administratively practicable. In the event that withholding in Shares is prohibited or problematic under applicable law or otherwise may trigger adverse consequences to the Company, the Company shall withhold the Tax-Related Items required to be withheld with respect to the Shares in cash from your director fees or other amounts payable to you. In the event the withholding requirements are not satisfied through the withholding of Shares or through your director fees or other amounts payable to you by the Company, no Shares will be issued to you (or your estate) unless and until satisfactory arrangements have been made by you with respect to the payment of any Tax-Related Items that the Company determines, in its sole discretion, should be withheld or collected with respect to such RSUs. By accepting these RSUs, you expressly consent to the withholding of Shares and/or withholding from your director fees or other amounts payable to you as provided for hereunder. All other Tax-Related Items related to the RSUs and any Shares delivered in payment thereof are your sole responsibility.
    
7.    The RSUs are intended to be exempt from the requirements of Code Section 409A. The 2011 Plan and these Terms and Conditions shall be administered and interpreted in a manner consistent with this intent. If the Company determines that these Terms and Conditions are subject to Code Section 409A and that it has failed to comply with the requirements of that Section, the Company may, at the Company’s sole discretion, and without your consent, amend these Terms and Conditions to cause them to comply with Code Section 409A or be exempt from Code Section 409A.
    
8.    The RSUs shall be transferable only by will or the laws of descent and distribution. If you purport to make any transfer of the RSUs, except as aforesaid, the RSUs and all rights thereunder shall terminate immediately.

9.    The RSUs shall not be vested in whole or in part, and the Company shall not be obligated to issue any Shares subject to the RSUs, if such issuance would, in the opinion of counsel for the Company, violate the Securities Act of 1933 or any other U.S. federal, state or non-U.S. statute having similar requirements as it may be in effect at the time. The RSUs are subject to the further requirement that, if at any time the Board of Directors shall determine in its discretion that the listing or qualification of the Shares subject to the RSUs under any securities exchange requirements or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of or in connection with the issuance of Shares pursuant to the RSUs, the RSUs may not be vested in whole or in part unless such listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board of Directors.

10.    The grant of the RSUs shall not confer upon you any right to serve as a Director of the Company nor limit in any way the right of the Company to terminate your
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service as a Director at any time. You shall have no rights as a shareholder of the Company with respect to any Shares issuable upon the vesting of the RSUs until the date of issuance of such Shares.

11.     You acknowledge and agree that the 2011 Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of the RSUs under the 2011 Plan is a one-time benefit and does not create any contractual or other right to receive a grant of RSUs or any other award under the 2011 Plan or other benefits in lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or termination of the 2011 Plan shall not constitute a change or impairment of the terms and conditions of your service as a Director of the Company.

12.    These Terms and Conditions shall bind and inure to the benefit of the Company, its successors and assigns and you and your estate in the event of your death.
    
13.    The Company is located at 2825 Airview Boulevard Kalamazoo, Michigan 49002, U.S.A. and grants RSUs under the 2011 Plan to employees and directors of the Company and Subsidiaries in its sole discretion. In conjunction with the Company’s grant of the RSUs under the 2011 Plan and its ongoing administration of such awards, the Company is providing the following information about its data collection, processing and transfer practices (“Personal Data Activities”). In accepting the grant of the RSUs, you expressly and explicitly consent to the Personal Data Activities as described herein.

(a)    The Company collects, processes and uses your personal data, including your name, home address, email address, and telephone number, date of birth, social insurance number or other identification number, citizenship, any Shares or directorships held in the Company, and details of all RSUs or any other equity compensation awards granted, canceled, exercised, vested, or outstanding in your favor, which the Company receives from you. In granting the RSUs under the Plan, the Company will collect your personal data for purposes of allocating Shares and implementing, administering and managing the 2011 Plan. The Company’s legal basis for the collection, processing and usage of your personal data is your consent.

(b)    The Company transfers your personal data to the Stock Plan Administrator. In the future, the Company may select a different Stock Plan Administrator and share your personal data with another company that serves in a similar manner. The Stock Plan Administrator will open an account for you, if an account is not already in place, to receive and trade Shares acquired under the 2011 Plan. You will be asked to agree on separate terms and data processing practices with the Stock Plan Administrator, which is a condition to your ability to participate in the 2011 Plan.

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(c)    The Company and the Stock Plan Administrator are based in the United States. You should note that your country of residence may have enacted data privacy laws that are different from the United States. The Company’s legal basis for the transfer of your personal data to the United States is your consent.

(d)    Your participation in the 2011 Plan and your grant of consent is purely voluntary. You may deny or withdraw your consent at any time. If you do not consent, or if you withdraw your consent, you may be unable to participate in the 2011 Plan. This would not affect your existing directorship or your annual cash retainer; instead, you merely may forfeit the opportunities associated with the 2011 Plan.

You may have a number of rights under the data privacy laws in your country of residence. For example, your rights may include the right to (i) request access or copies of personal data the Company processes, (ii) request rectification of incorrect data, (iii) request deletion of data, (iv) place restrictions on processing, (v) lodge complaints with competent authorities in your country or residence, and/or (vi) request a list with the names and addresses of any potential recipients of your personal data. To receive clarification regarding your rights or to exercise your rights, you should contact the Company’s Human Resources Department.

14.    The grant of the RSUs is not intended to be a public offering of securities in your country of residence. The Company has not submitted any registration statement, prospectus or other filing(s) with the local securities authorities (unless otherwise required under local law). No employee of the Company is permitted to advise you on whether you should acquire Shares under the 2011 Plan or provide you with any legal, tax or financial advice with respect to the grant of the RSUs. The acquisition of Shares involves certain risks, and you should carefully consider all risk factors and tax considerations relevant to the acquisition of Shares under the 2011 Plan or the disposition of them. Further, you should carefully review all of the materials related to the RSUs and the 2011 Plan, and you should consult with your personal legal, tax and financial advisors for professional advice in relation to your personal circumstances.

15.    All questions concerning the construction, validity and interpretation of the RSUs and the 2011 Plan shall be governed and construed according to the laws of the state of Michigan, without regard to the application of the conflicts of laws provisions thereof. Any disputes regarding the RSUs or the 2011 Plan shall be brought only in the state or federal courts of the state of Michigan.

16.    The Company may, in its sole discretion, decide to deliver any documents related to the RSUs or other awards granted to you under the 2011 Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the 2011 Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

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17.    The invalidity or unenforceability of any provision of the 2011 Plan or these Terms and Conditions shall not affect the validity or enforceability of any other provision of the 2011 Plan or these Terms and Conditions.

18.    If you are resident outside of the United States, you acknowledge and agree that it is your express intent that these Terms and Conditions, the 2011 Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the RSUs be drawn up in English. If you have received these Terms and Conditions, the 2011 Plan or any other documents related to the RSUs translated into a language other than English and the meaning of the translated version is different than the English version, the English version will control.

19.    Notwithstanding any provisions of these Terms and Conditions to the contrary, the RSUs shall be subject to any special terms and conditions for your country of residence set forth in an addendum to these Terms and Conditions (an “Addendum”). Further, if you transfer your residence to another country reflected in an Addendum to these Terms and Conditions at the time of transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such special terms and conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the award and the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of these Terms and Conditions.
    
20.    The Company reserves the right to impose other requirements on the RSUs, any Shares acquired pursuant to the RSUs, and your participation in the 2011 Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the award and the 2011 Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

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STRYKER CORPORATION

ADDENDUM TO
TERMS AND CONDITIONS
RELATING TO RESTRICTED STOCK UNITS GRANTED
PURSUANT TO THE 2011 PLAN, AS AMENDED AND RESTATED

In addition to the terms of the 2011 Plan and the Terms and Conditions, the RSUs are subject to the following additional terms and conditions (the “Addendum”). All capitalized terms as contained in this Addendum shall have the same meaning as set forth in the 2011 Plan and the Terms and Conditions. Pursuant to Section 20 of the Terms and Conditions, if you transfer your residence and/or employment to another country reflected in an Addendum at the time of transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law, rules and regulations, or to facilitate the operation and administration of the award and the 2011 Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer).

Data Privacy Information: European Union (“EU”) / European Economic Area (“EEA”) / Switzerland and the United Kingdom*

*The below information is for data privacy purposes only and you should determine whether any other special terms and conditions apply to your awards in these jurisdictions.

1.    Data Privacy. If you reside and/or you work in the EU / EEA, Switzerland or the United Kingdom the following provision replaces Section 14 of the Terms and Conditions:

The Company is located at 2825 Airview Boulevard Kalamazoo, Michigan 49002, U.S.A. and grants RSUs under the 2011 Plan to employees and directors of the Company and its Subsidiaries in its sole discretion. You should review the following information about the Company’s data processing practices.

(a)    Data Collection, Processing and Usage. Pursuant to applicable data protection laws, you are hereby notified that the Company collects, processes and uses certain personally-identifiable information about you for the legitimate interest of implementing, administering and managing the 2011 Plan and generally administering equity awards; specifically, including your name, home address, email address and telephone number, date of birth, social insurance number or other identification number, citizenship, any Shares or directorships held in the Company, and details of all options or any other awards granted, canceled, exercised, vested, or outstanding in your favor, which the Company receives from you. In granting the RSUs under the 2011 Plan, the
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Company will collect your personal data for purposes of allocating Shares and implementing, administering and managing the 2011 Plan. The Company’s collection, processing, use and transfer of your personal data is necessary for the performance of the Company’s contractual obligations under the Plan and pursuant to the Company’s legitimate interest of managing and generally administering equity awards. Your refusal to provide personal data would make it impossible for the Company to perform its contractual obligations and may affect your ability to participate in the 2011 Plan. As such, by participating in the 2011 Plan, you voluntarily acknowledge the collection, processing and use of your personal data as described herein.

(b)    Stock Plan Administration Service Provider. The Company transfers participant data to the Stock Plan Administrator. In the future, the Company may select a different Stock Plan Administrator and share your data with another company that serves in a similar manner. The Stock Plan Administrator will open an account for you, if an account is not already in place, to receive and trade Shares acquired under the 2011 Plan. You will be asked to agree on separate terms and data processing practices with the Stock Plan Administrator, which is a condition to your ability to participate in the 2011 Plan.

(c)    International Data Transfers. The Company and the Stock Plan Administrator are based in the United States. The Company can only meet its contractual obligations to you if your personal data is transferred to the United States. The Company’s legal basis for the transfer of your personal data to the United States is to satisfy its contractual obligations to you and/or its use of the standard data protection clauses adopted by the EU Commission.

(d)    Data Retention. The Company will use your personal data only as long as is necessary to implement, administer and manage your participation in the 2011 Plan or as required to comply with legal or regulatory obligations, including under tax and security laws. When the Company no longer needs your personal data, the Company will remove it from its systems. If the Company keeps your data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be for compliance with relevant laws or regulations.

(e)    Data Subject Rights. You may have a number of rights under data privacy laws in your country of residence. For example, your rights may include the right to (i) request access or copies of personal data the Company processes, (ii) request rectification of incorrect data, (iii) request deletion of data, (iv) place restrictions on processing, (v) lodge complaints with competent authorities in your country of residence, and/or (vi) request a list with the names and addresses of any potential recipients of the Participant’s personal data. To receive clarification regarding your rights or to exercise your rights, you should contact the Company’s Human Resources Department.

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ARGENTINA

No country specific provisions.

AUSTRALIA

1.    RSUs Conditioned on Satisfaction of Regulatory Obligations. If you are (a) a director of a Subsidiary incorporated in Australia, or (b) a person who is a management-level executive of a Subsidiary incorporated in Australia and who also is a director of a Subsidiary incorporated outside of the Australia, the grant of the RSUs is conditioned upon satisfaction of the shareholder approval provisions of section 200B of the Corporations Act 2001 (Cth) in Australia.

The Australian Offer document can be accessed here [UBS INSERT LINK HERE]

AUSTRIA

No country specific provisions.

BELGIUM

No country specific provisions.

BRAZIL

1.    Compliance with Law. By accepting the RSUs, you acknowledge and agree to comply with applicable Brazilian laws and to pay any and all applicable taxes associated with the vesting of the RSUs, the issuance and/or sale of Shares acquired under the 2011 Plan and the receipt of any dividends.

CANADA

1.    Settlement in Shares. Notwithstanding anything to the contrary in the Terms and Conditions or the 2011 Plan, the RSUs shall be settled only in Shares (and may not be settled in cash).

2.    Termination of Employment. The following supplements Section 2(d) of the Terms and Conditions as well as any other section required to give effect to the same:
In the event of your termination of employment for any reason (other than by reason of death, Disability or Retirement), either by you or by the Employer, with or without cause, your rights to vest or to continue to vest in the RSUs and receive Shares under the 2011 Plan, if any, will terminate as of the actual Termination Date. For this purpose, the “Termination Date” shall mean the last day on which you are actively employed by the Employer, and shall not include or be extended by any period following such day during
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which you are in receipt of or eligible to receive any notice of termination, pay in lieu of notice of termination, severance pay or any other payments or damages, whether arising under statute, contract or at common law.
Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued entitlement to vesting during a statutory notice period, your right to vest in the RSUs under the 2011 Plan, if any, will terminate effective as of the last day of your minimum statutory notice period, but you will not earn or be entitled to pro-rated vesting if the vesting date falls after the end of your statutory notice period, nor will you be entitled to any compensation for lost vesting.
3.    Use of English Language.  If you are a resident of Quebec, by accepting your RSUs, you acknowledge and agree that it is your wish that the Terms and Conditions, this Addendum, as well as all other documents, notices and legal proceedings entered into, given or instituted pursuant to your RSUs, either directly or indirectly, be drawn up in English.

Langue anglaise. En acceptant l'allocation de vos RSUs, vous reconnaissez et acceptez avoir souhaité que le Termes et Conditions, le présent avenant, ainsi que tous autres documents exécutés, avis donnés et procédures judiciaires intentées, relatifs, directement ou indirectement, à l'allocation de vos RSUs, soient rédigés en anglais.

BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE 2011 PLAN, THE TERMS AND CONDITIONS AND THIS ADDENDUM.

PLEASE SIGN AND RETURN THIS ADDENDUM VIA EMAIL NO LATER THAN APRIL 30, 2021 TO STOCKPLANADMINISTRATION@STRYKER.COM.

___________________________________    
Signature
______________________________
Name (Printed)
_____________________
Date    

CHILE

1.    Private Placement. The following provision shall replace Section 15 of the Terms and Conditions:

The grant of the RSUs hereunder is not intended to be a public offering of securities in Chile but instead is intended to be a private placement.
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a)The starting date of the offer will be the grant date, and this offer conforms to General Ruling no. 336 of the Chilean Commission for the Financial Markets (“CMF”);
b)The offer deals with securities not registered in the registry of securities or in the registry of foreign securities of the CMF, and therefore such securities are not subject to its oversight;
c)The Company, as the issuer, is not obligated to provide public information in Chile regarding the foreign securities, as such securities are not registered with the CMF; and
d)The Shares, as foreign securities, shall not be subject to public offering as long as they are not registered with the corresponding registry of securities in Chile.

a)La fecha de inicio de la oferta será el de la fecha de otorgamiento y esta oferta se acoge a la norma de Carácter General n° 336 de la Comisión para el Mercado Financiero Chilena (“CMF”);
b)La oferta versa sobre valores no inscritos en el registro de valores o en el registro de valores extranjeros que lleva la CMF, por lo que tales valores no están sujetos a la fiscalización de ésta;
c)Por tratar de valores no inscritos no existe la obligación por parte del emisor de entregar en chile información pública respecto de esos valores; y
d)Esos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el registro de valores correspondiente.

CHINA

1.    RSUs Conditioned on Satisfaction of Regulatory Obligations. If you are a People’s Republic of China (“PRC”) national, the grant of the RSUs is conditioned upon the Company securing all necessary approvals from the PRC State Administration of Foreign Exchange to permit the operation of the 2011 Plan and the participation of PRC nationals, as determined by the Company in its sole discretion.

2.    Sale of Shares. Notwithstanding anything to the contrary in the 2011 Plan, upon any termination of your relationship with the Company, you shall be required to sell all Shares acquired under the 2011 Plan within such time period as may be established by the PRC State Administration of Foreign Exchange.

3.    Exchange Control Restrictions. You acknowledge and agree that you will be required immediately to repatriate to the PRC the proceeds from the sale of any Shares acquired under the 2011 Plan, as well as any other cash amounts attributable to the Shares acquired under the 2011 Plan (collectively, “Cash Proceeds”). Further, you acknowledge and agree that the repatriation of the Cash Proceeds must be effected
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through a special bank account established by the local company, the Company or one of its Subsidiaries, and you hereby consent and agree that the Cash Proceeds may be transferred to such account by the Company on your behalf prior to being delivered to you. The Cash Proceeds may be paid to you in U.S. dollars or local currency at the Company’s discretion. If the Cash Proceeds are paid to you in U.S. dollars, you understand that a U.S. dollar bank account must be established and maintained in China so that the proceeds may be deposited into such account. If the Cash Proceeds are paid to you in local currency, you acknowledge and agree that the Company is under no obligation to secure any particular exchange conversion rate and that the Company may face delays in converting the Cash Proceeds to local currency due to exchange control restrictions. You agree to bear any currency fluctuation risk between the time the Shares are sold and the Cash Proceeds are converted into local currency and distributed to you. You further agree to comply with any other requirements that may be imposed by the local company, the Company and its Subsidiaries in the future in order to facilitate compliance with exchange control requirements in the PRC.

COLOMBIA

1.    Securities Law Information. The Shares subject to the RSUs are not and will not be registered in the Colombian registry of publicly traded securities (Registro Nacional de Valores y Emisores) and therefore the Shares may not be offered to the public in Colombia. Nothing in this document should be construed as the making of a public offer of securities in Colombia.

COSTA RICA

No country specific provisions.

DENMARK

1.    Treatment of RSUs upon Termination of Employment. Notwithstanding any provision in the Terms and Conditions or the 2011 Plan to the contrary, unless you are a member of registered management who is not considered a salaried employee, the treatment of the RSUs upon a termination of employment which is not a result of death shall be governed by Sections 4 and 5 of the Danish Act on Stock Option in Employment Relations. However, if the provisions in the Terms and Conditions or the Plan governing the treatment of the RSUs upon a termination of employment are more favorable, then the provisions of the Terms and Conditions or the 2011 Plan will govern.

FINLAND

1.    Withholding of Tax-Related Items. Notwithstanding anything in Section 6 of the Terms and Conditions to the contrary, if you are a local national of Finland, any Tax-Related Items shall be withheld only in cash or other amounts payable to you in cash or such other withholding methods as may be permitted under the 2011 Plan and allowed under local law.
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FRANCE

1.    Use of English Language.  By accepting your RSUs, you acknowledge and agree that it is your wish that the Terms and Conditions, this Addendum, as well as all other documents, notices and legal proceedings entered into, given or instituted pursuant to your RSUs, either directly or indirectly, be drawn up in English.

Langue anglaise. En acceptant l'allocation de vos RSUs, vous reconnaissez et acceptez avoir souhaité que le Termes et Conditions, le présent avenant, ainsi que tous autres documents exécutés, avis donnés et procédures judiciaires intentées, relatifs, directement ou indirectement, à l'allocation de vos RSUs, soient rédigés en anglais.

BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE 2011 PLAN, THE TERMS AND CONDITIONS AND THIS ADDENDUM.

PLEASE SIGN AND RETURN THIS ADDENDUM VIA EMAIL NO LATER THAN APRIL 30, 2021 TO STOCKPLANADMINISTRATION@STRYKER.COM.

___________________________________    
Signature
______________________________
Name (Printed)                        
_____________________
Date    

GERMANY

No country specific provisions.

HONG KONG

1.    Important Notice. Warning: The contents of the Terms and Conditions, this Addendum, the 2011 Plan, and all other materials pertaining to the RSUs and/or the 2011 Plan have not been reviewed by any regulatory authority in Hong Kong. You are hereby advised to exercise caution in relation to the offer thereunder. If you have any doubts about any of the contents of the aforesaid materials, you should obtain independent professional advice.
Page 14


2.    Lapse of Restrictions. If, for any reason, Shares are issued to you within six (6) months of the grant date, you agree that you will not sell or otherwise dispose of any such Shares prior to the six-month anniversary of the grant date.

3.    Settlement in Shares. Notwithstanding anything to the contrary in this Addendum, the Terms and Conditions or the 2011 Plan, the RSUs shall be settled only in Shares (and may not be settled in cash).

4.    Nature of the Plan. The Company specifically intends that the 2011 Plan will not be treated as an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). To the extent any court, tribunal or legal/regulatory body in Hong Kong determines that the 2011 Plan constitutes an occupational retirement scheme for the purposes of ORSO, the grant of the RSUs shall be null and void.

INDIA

1.    Repatriation Requirements. You expressly agree to repatriate all sale proceeds and dividends attributable to Shares acquired under the 2011 Plan in accordance with local foreign exchange rules and regulations. Neither the Company, the local company or any of the Company’s Subsidiaries shall be liable for any fines or penalties resulting from your failure to comply with applicable laws, rules or regulations.

IRELAND

No country specific provisions.

ITALY

No country specific provisions.

JAPAN

No country specific provisions.

MEXICO

No country specific provisions.

Page 15

NETHERLANDS

1.    Waiver of Termination Rights. As a condition to the grant of the RSUs, you hereby waive any and all rights to compensation or damages as a result of the termination of your relationship with the Company and the local company for any reason whatsoever, insofar as those rights result or may result from (a) the loss or diminution in value of such rights or entitlements under the 2011 Plan, or (b) you ceasing to have rights under or ceasing to be entitled to any awards under the 2011 Plan as a result of such termination.

2.    Tax Deferral Upon Retirement. Unless you otherwise elect by contacting Stryker no later than April 30, 2021, you hereby agree that upon Retirement eligibility, the RSUs shall not become taxable until the date of settlement when Shares are actually delivered or otherwise made available.

NEW ZEALAND

1.    WARNING. You are being offered RSUs to be settled in the form of shares of Stryker Corporation common stock. If the Company runs into financial difficulties and is wound up, you may lose some or all your investment. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to this offer because it is an offer made under the Employee Share Scheme exemption. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. You should ask questions, read all documents carefully, and seek independent financial advice before accepting the offer. The Company’s Shares are currently traded on the New York Stock Exchange under the ticker symbol “SYK” and Shares acquired under the 2011 Plan may be sold through this exchange. You may end up selling the Shares at a price that is lower than the value of the Shares when you acquired them. The price will depend on the demand for the Company's Shares. The Company’s most recent annual report (which includes the Company’s financial statements) is available at [http://phx.corporate-ir.net/phoenix.zhtml?c=118965&p=irol-irhome]. You are entitled to receive a copy of this report, free of charge, upon written request to the Company at STOCKPLANADMINISTRATION@STRYKER.COM.

POLAND

No country specific provisions.

PORTUGAL

No country specific provisions.

Page 16

PUERTO RICO

No country specific provisions.

ROMANIA

No country specific provisions.

RUSSIA

1.    IMPORTANT NOTIFICATION. If you are a citizen of the Russian Federation, any cash proceeds derived from the 2011 Plan (including any dividend equivalents payable in cash but excluding cash dividends) must be remitted directly to a personal bank account opened with an authorized bank in the Russian Federation (an “Authorized Russian Account”). Thereafter, you may, in your sole discretion, personally transfer such amounts from your Authorized Russian Account to a bank account legally established outside of the Russian Federation with a non-Russian bank located in the Organization for Economic Co-operation and Development or the Financial Action Task Force countries (an “Authorized Foreign Account”). Cash dividends (but not dividend equivalents payable in cash) can be remitted directly to an Authorized Foreign Account. However, you are required to notify the Russian tax authorities within one month of opening or closing an Authorized Foreign Account or changing the account details. You also are required to file quarterly reports of any transactions involving any Authorized Foreign Account you hold with the Russian tax authorities.

2.    SECURITIES LAW NOTIFICATION. The grant of RSUs and the issuance of Shares upon vesting are not intended to be an offering of securities with the Russian Federation, and the Terms and Conditions, the 2011 Plan, this Addendum and all other materials that you receive in connection with the grant of RSUs and your participation in the 2011 Plan (collectively, “Grant Materials”) do not constitute advertising or a solicitation within the Russian Federation. In connection with your grant of RSUs, the Company has not submitted any registration statement, prospectus or other filing with the Russian Federal Bank or any other governmental or regulatory body within the Russian Federation, and the Grant Materials expressly may not be used, directly or indirectly, for the purpose of making a securities offering or public circulation of Shares within the Russian Federation.

3.    EXCHANGE CONTROL NOTIFICATION. You are solely responsible for complying with applicable Russian exchange control regulations. Since the exchange control regulations change frequently and without notice, you should consult your legal advisor prior to the acquisition or sale of Shares under the 2011 Plan to ensure compliance with current regulations. As noted, it is your personal responsibility to comply with Russian exchange control laws, and neither the Company nor any Subsidiary will be liable for any fines or penalties resulting from failure to comply with applicable laws.
Page 17

4.    ANTI-CORRUPTION NOTIFICATION. Anti-corruption laws prohibit certain public servants, their spouses and their dependent children from owning any foreign source financial instruments (e.g., shares of foreign companies such as the Company). Accordingly, you should inform the Company if you are covered by these laws as this relates to your acquisition of Shares under the 2011 Plan.

SINGAPORE

1.    Qualifying Person Exemption. The following provision shall replace Section 15 of the Terms and Conditions:

The grant of the RSUs under the 2011 Plan is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2011 Ed.) (“SFA”). The 2011 Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that, as a result, the RSUs are subject to section 257 of the SFA and you will not be able to make (a) any subsequent sale of the Shares in Singapore or (ii) any offer of such subsequent sale of the Shares subject to the RSUs in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2011 Ed.).

2.    Director Reporting Notification. If you are a director, associate director or shadow director of a Singapore company, you are subject to certain notification requirements under the Singapore Companies Act. Among these requirements is an obligation to notify the Singapore company in writing when you receive an interest (e.g., RSUs or Shares) in the Company or any related company. In addition, you must notify the Singapore company when you sell Shares (including when you sell Shares acquired at vesting of the Restricted Stock Units). These notifications must be made within two business days of acquiring or disposing of any interest in the Company or any related company. In addition, a notification must be made of Participant’s interests in the Company or any related company within two business days of becoming the a director.

SOUTH AFRICA

1.    Exchange Control Obligations. You are solely responsible for complying with applicable exchange control regulations and rulings (the “Exchange Control Regulations”) in South Africa. As the Exchange Control Regulations change frequently and without notice, you should consult your legal advisor prior to the acquisition or sale of Shares under the 2011 Plan to ensure compliance with current Exchange Control Regulations. Neither the Company nor any of its Subsidiaries will be liable for any fines or penalties resulting from your failure to comply with applicable laws.

2.    Securities Law Information and Deemed Acceptance of RSUs.  Neither the RSUs nor the underlying Shares shall be publicly offered or listed on any stock exchange in South Africa.  The offer is intended to be private pursuant to Section 96 of the Companies Act and is not subject to the supervision of any South African
Page 18

governmental authority. Pursuant to Section 96 of the Companies Act, the RSU offer must be finalized on or before the 60th day following the grant date.  If you do not want to accept the RSUs, you are required to decline the RSUs no later than the 60th day following the grant date.  If you do not reject the RSUs on or before the 60th day following the grant date, you will be deemed to accept the RSUs.

SOUTH KOREA

No country specific provisions.

SPAIN

No country specific provisions.

SWITZERLAND

1.    Securities Law Information. Neither this document nor any other materials relating to the RSUs (i) constitutes a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”) (ii) may be publicly distributed or otherwise made publicly available in Switzerland to any person other than an employee of the Company or (iii) has been or will be filed with, approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Supervisory Authority, FINMA.

TAIWAN

1.    Securities Law Notice. The offer of participation in the 2011 Plan is available only for employees of the Company and its Subsidiaries. The offer of participation in the 2011 Plan is not a public offer of securities by a Taiwanese company.
THAILAND

No country specific provisions.

TURKEY

1.    Securities Law Information. Under Turkish law, you are not permitted to sell any Shares acquired under the 2011 Plan within Turkey. The Shares are currently traded on the New York Stock Exchange, which is located outside of Turkey, under the ticker symbol “SYK” and the Shares may be sold through this exchange.

2.    Financial Intermediary Obligation. You acknowledge that any activity related to investments in foreign securities (e.g., the sale of Shares) should be conducted through a bank or financial intermediary institution licensed by the Turkey Capital Markets Board and should be reported to the Turkish Capital Markets Board.
Page 19

You solely are responsible for complying with this requirement and should consult with a personal legal advisor for further information regarding any obligations in this respect.

UNITED ARAB EMIRATES

1.    Securities Law Information. The offer of the RSUs is available only for select Employees of the Company and its Subsidiaries and is in the nature of providing incentives in the United Arab Emirates. The 2011 Plan and the Terms and Conditions are intended for distribution only to such individuals and must not be delivered to, or relied on by any other person. Prospective purchasers of securities should conduct their own due diligence.
The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with this statement, including the 2011 Plan and the Terms and Conditions, or any other incidental communication materials distributed in connection with the RSUs. Further, neither the Ministry of Economy nor the Dubai Department of Economic Development has approved this statement nor taken steps to verify the information set out in it, and has no responsibility for it. Residents of the United Arab Emirates who have any questions regarding the contents of the 2011 Plan and the Terms and Conditions should obtain independent advice.

UNITED KINGDOM

1.    Income Tax and Social Insurance Contribution Withholding. The following provision shall supplement Section 6 of the Terms and Conditions:

Without limitation to Section 6 of the Terms and Conditions, you agree that you are liable for all Tax-Related Items and hereby covenant to pay all such Tax-Related Items, as and when requested by the Company, the local company or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and/or the local company against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC on your behalf (or any other tax authority or any other relevant authority).
2.    Exclusion of Claim. You acknowledge and agree that you will have no entitlement to compensation or damages in consequence of the termination of your service with the Company and the local company for any reason whatsoever and whether or not in breach of contract, insofar as any purported claim to such entitlement arises or may arise from your ceasing to have rights under or to be entitled to vest in the RSUs as a result of such termination of service (whether the termination is in breach of contract or otherwise), or from the loss or diminution in value of the RSUs. Upon the grant of the RSUs, you shall be deemed irrevocably to have waived any such entitlement.

Page 20

Exhibit 31(i)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
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 June 30, 2021 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: July 28, 2021 /s/ KEVIN A. LOBO
Kevin A. Lobo
Chair and Chief Executive Officer


Exhibit 31(ii)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
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 June 30, 2021 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: July 28, 2021 /s/ GLENN S. BOEHNLEIN
Glenn S. Boehnlein
Vice President, Chief Financial Officer


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 June 30, 2021 (the "Report"), I, Kevin A. Lobo, Chair 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: July 28, 2021 /s/ KEVIN A. LOBO
Kevin A. Lobo
Chair and Chief Executive Officer






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 June 30, 2021 (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: July 28, 2021 /s/ GLENN S. BOEHNLEIN
Glenn S. Boehnlein
Vice President, Chief Financial Officer