sykexhibit12715

Consolidated net sales of $2.6 billion and $9.7 billion increased 6.1% and 7.3% in the quarter and full year, respectively. Net sales in the quarter grew by 7.4% due to increased unit volume and changes in product mix and 3.1% as a result of acquisitions. Net sales in the quarter were negatively impacted by 2.6% due to the unfavorable impact of foreign currency exchange rates and 2.0% due to changes in price. Excluding the impact of acquisitions, net sales in the quarter increased 5.5% in constant currency.

Orthopaedics net sales of $1.1 billion increased 1.7% in the quarter, as reported, and 4.5% in constant currency. Net sales grew by 5.0% due to increased unit volume and changes in product mix and 2.8% as a result of acquisitions. Net sales were negatively impacted by 3.3% due to changes in price and 2.9% due to the unfavorable impact of foreign currency exchange rates. Excluding the impact of acquisitions, net sales increased 1.8% in constant currency.

MedSurg net sales of $1.1 billion increased 12.1% in the quarter, as reported, and 14.1% in constant currency. Net sales grew by 9.7% due to increased unit volume and changes in product mix and 4.7% as a result of acquisitions. Net sales were negatively impacted by 2.0% due to the unfavorable impact of foreign currency exchange rates and 0.3% due to changes in price. Excluding the impact of acquisitions, net sales increased 9.4% in constant currency.

Neurotechnology and Spine net sales of $454 million increased 3.9% in the quarter, as reported, and 7.0% in constant currency. Net sales grew by 8.5% due to increased unit volume and changes in product mix and 0.7% as a result of acquisitions. Net sales were negatively impacted by 3.0% due to the unfavorable impact of foreign currency exchange rates and 2.3% due to changes in price. Excluding the impact of acquisitions, net sales increased 6.3% in constant currency.

Reported net earnings include charges for the Rejuvenate, ABG II and Neptune recalls, tax impacts related to the establishment of the European regional headquarters and a planned cash repatriation, acquisition and integration related charges, additional cost of sales for inventory sold that was "stepped up" to fair value related to acquisitions, restructuring and related charges, and certain charges related to regulatory and legal matters. The effect of each of these matters on reported net earnings appears in the reconciliation of GAAP to non-GAAP measures provided below. These charges reduced the reported gross profit margin in the quarter from 66.1% to 65.9% and from 66.3% to 66.0% for the full year. These charges reduced the reported operating income margin in the quarter from 27.5% to 17.9% and from 25.0% to 12.9% for the full year.

Excluding the impact of the items described above, adjusted net earnings⁽³⁾ of $552 million and $1.8 billion increased 12.0% and 5.6% in the quarter and full year, respectively. Adjusted diluted net earnings per share⁽²⁾ of $1.44 and $4.73 increased 11.6% and 5.3% in the quarter and full year, respectively. As previously announced, beginning in 2014 we are also excluding amortization of intangible assets from our adjusted diluted net earnings per share⁽²⁾. Using this new measure, adjusted diluted net earnings per share⁽²⁾ for the fourth quarter and full year of 2013 would have been $1.29 and $4.49, respectively.

We expect 2015 constant currency sales growth in the range of 5.5% to 7.0%, including organic sales growth in the range of 4.5% to 6.0%. Based on current foreign currency exchange rates we expect adjusted diluted net earnings per share to be in the range of $1.05-$1.10 and $4.90-$5.10 in the first quarter and the full year, respectively. If foreign currency exchange rates hold near current levels, we expect sales in the first quarter and full year of 2015 to be negatively impacted by approximately 3% to 4% and adjusted diluted net earnings per share to be negatively impacted by approximately $0.08 and $0.30 in the first quarter and the full year, respectively.

This press release contains information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings as a result of workforce reductions and other restructuring activities. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Stryker is one of the world’s leading medical technology companies and, together with our customers, we are driven to make healthcare better. The Company offers a diverse array of innovative medical technologies, including orthopaedics, medical and surgical, and neurotechnology and spine products to help people lead more active and more satisfying lives. Stryker products and services are available in over 100 countries around the world. Please contact us for more information at www.stryker.com.

STRYKER CORPORATION (Unaudited - Millions of Dollars, Except Per Share Amounts) CONDENSED STATEMENTS OF EARNINGS

	Fourth Quarter								Year Ended December 31
	2014			2013			% Change		2014			2013			% Change
Net sales	$	2,618		$	2,468		6.1		$	9,675		$	9,021		7.3
Cost of sales	892			852			4.6		3,291			2,977			10.5
GROSS PROFIT	1,726			1,616			6.8		6,384			6,044			5.6
% of sales	65.9		%	65.5		%			66.0		%	67.0		%
Research, development & engineering expenses	153			139			10.1		614			536			14.6
Selling general & administrative expenses	1,059			1,011			4.7		4,336			4,114			5.4
Intangibles amortization	46			36			27.8		188			138			36.2
TOTAL OPERATING EXPENSES	1,258			1,186			6.1		5,138			4,788			7.3
OPERATING INCOME	468			430			8.8		1,246			1,256			(0.8	)
% of sales	17.9		%	17.4		%			12.9		%	13.9		%
Other income (expense)	(7		)	1			(800.0	)	(86		)	(44		)	95.5
EARNINGS BEFORE INCOME TAXES	461			431			7.0		1,160			1,212			(4.3	)
Income Taxes	201			45			346.7		645			206			213.1
NET EARNINGS	$	260		$	386		(32.6	)	$	515		$	1,006		(48.8	)
Net earnings per share
Basic	$	0.68		$	1.02		(33.3	)	$	1.36		$	2.66		(48.9	)
Diluted	$	0.67		$	1.01		(33.7	)	$	1.34		$	2.63		(49.0	)
Average shares outstanding
Basic	378.5			378.4					378.5			378.6
Diluted	383.0			382.3					382.8			382.1

CONDENSED BALANCE SHEETS

	December		December
	2014		2013
ASSETS
Cash and cash equivalents	$	1,795	$	1,339
Marketable securities	3,205		2,641
Accounts receivable (net)	1,572		1,518
Inventories	1,588		1,422
Other current assets	1,513		1,415
TOTAL CURRENT ASSETS	9,673		8,335
Property, plant and equipment (net)	1,098		1,081
Goodwill and other intangibles (net)	6,204		5,833
Other assets	738		494
TOTAL ASSETS	$	17,713	$	15,743
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities	$	4,463	$	2,657
Other liabilities	1,408		1,300
Long-term debt, excluding current maturities	3,246		2,739
Shareholders' equity	8,596		9,047
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	17,713	$	15,743

CONDENSED STATEMENTS OF CASH FLOWS

	Fourth Quarter						Year Ended December 31
	2014			2013			2014			2013
OPERATING ACTIVITIES
Net earnings	$	260		$	386		$	515		$	1,006
Depreciation	50			46			190			169
Intangibles amortization	46			36			188			138
Restructuring charges	16			12			30			50
Changes in operating assets and liabilities and other, net	303			192			859			523
NET CASH PROVIDED BY OPERATING ACTIVITIES	675			672			1,782			1,886
INVESTING ACTIVITIES
Acquisitions, net of cash acquired	(91		)	(1,634		)	(916		)	(2,320		)
Change in marketable securities, net	64			1,399			(729		)	298
Purchases of property, plant and equipment	(61		)	(56		)	(233		)	(195		)
NET CASH USED IN INVESTING ACTIVITIES	(88		)	(291		)	(1,878		)	(2,217		)
FINANCING ACTIVITIES
Borrowings of debt, net	(36		)	(9		)	173			14
Dividends paid	(116		)	(100		)	(462		)	(401		)
Proceeds from issuance of long term debt	—			—			986			991
Repurchase and retirement of common stock	—			(65		)	(100		)	(317		)
Other	74			21			32			13
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(78		)	(153		)	629			300
Effect of exchange rate changes on cash and cash equivalents	(70		)	1			(77		)	(25		)
CHANGE IN CASH AND CASH EQUIVALENTS	$	439		$	229		$	456		$	(56	)

STRYKER CORPORATION For the Fourth Quarter and Year Ended December 31 (Unaudited - Millions of Dollars) CONDENSED SALES ANALYSIS

	Fourth Quarter							Year Ended December 31
					% Change							% Change
	2014		2013		As Reported		Constant Currency	2014		2013		As Reported	Constant Currency
Geographic sales
U.S.	$	1,818	$	1,636	11.1		11.1	$	6,558	$	5,984	9.6	9.6
International	800		832		(3.8	)	3.8	3,117		3,037		2.6	5.7
NET SALES	$	2,618	$	2,468	6.1		8.6	$	9,675	$	9,021	7.3	8.3
Worldwide sales
Orthopaedics	$	1,110	$	1,091	1.7		4.5	$	4,153	$	3,949	5.2	6.3
MedSurg	1,054		940		12.1		14.1	3,781		3,414		10.8	11.7
Neurotechnology and Spine	454		437		3.9		7.0	1,741		1,658		5.0	6.2
NET SALES	$	2,618	$	2,468	6.1		8.6	$	9,675	$	9,021	7.3	8.3

SUPPLEMENTAL SALES GROWTH ANALYSIS

	Fourth Quarter
					Percentage Change
									U.S.		International
	2014		2013		As Reported		Constant Currency		As Reported		As Reported		Constant Currency
Orthopaedics
Knees	$	363	$	371	(2.2	)	—		(0.1	)	(6.9	)	0.3
Hips	331		341		(3.0	)	0.1		4.5		(12.1	)	(5.3	)
Trauma and Extremities	335		307		9.2		12.9		18.7		(0.8	)	6.9
Other	81		72		11.9		13.3		18.7		(14.1	)	(7.3	)
ORTHOPAEDICS	1,110		1,091		1.7		4.5		7.3		(6.9	)	0.3

MedSurg
Instruments	393		350		12.4		14.8		16.9		1.0		9.4
Endoscopy	390		352		10.6		12.7		15.6		(1.5	)	5.6
Medical	218		188		16.1		17.7		21.3		(4.4	)	3.5
Sustainability	53		50		6.9		7.0		7.0		nm		nm
MEDSURG	1,054		940		12.1		14.1		16.7		(0.9	)	6.8

Neurotechnology and Spine
Neurotechnology	262		240		9.2		13.0		13.3		3.3		12.6
Spine	192		197		(2.5	)	(0.5	)	(1.3	)	(5.2	)	1.4
NEUROTECHNOLOGY AND SPINE	454		437		3.9		7.0		6.2		—		8.3


	Year Ended December 31
					Percentage Change
									U.S.		International
	2014		2013		As Reported		Constant Currency		As Reported		As Reported		Constant Currency
Orthopaedics
Knees	$	1,396	$	1,371	1.8		2.7		4.3		(3.5	)	(0.7	)
Hips	1,291		1,272		1.5		2.7		6.1		(4.2	)	(1.4	)
Trauma and Extremities	1,230		1,116		10.2		11.4		14.8		5.1		7.7
Other	236		190		24.0		25.2		37.4		(7.6	)	(3.7	)
ORTHOPAEDICS	4,153		3,949		5.2		6.3		9.4		(1.1	)	1.7

MedSurg
Instruments	1,424		1,269		12.2		13.1		14.8		5.7		8.8
Endoscopy	1,382		1,222		13.1		14.2		13.3		12.6		16.2
Medical	766		710		7.9		8.8		9.3		2.2		6.7
Sustainability	209		213		(1.9	)	(1.9	)	(1.8	)	nm		nm
MEDSURG	3,781		3,414		10.8		11.7		11.7		7.9		11.5

Neurotechnology and Spine
Neurotechnology	1,001		915		9.4		10.9		11.2		6.7		10.4
Spine	740		743		(0.4	)	0.3		(1.6	)	2.5		5.2
NEUROTECHNOLOGY AND SPINE	1,741		1,658		5.0		6.2		5.0		5.1		8.5

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 operating income; adjusted other income (expense); adjusted effective income tax rate; adjusted net earnings; and adjusted diluted net earnings per share. We believe that these non-GAAP measures provide meaningful information to assist 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 year results at prior year average foreign currency exchange rates. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates and acquisitions that 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.

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, operating income, other income/(expense), effective income tax rate, net earnings and diluted net earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Results of Operations below, provide a more complete understanding of our business. 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.

STRYKER CORPORATION For the Fourth Quarter and Year Ended December 31, 2014 and 2013 (Unaudited - Millions of Dollars, Except Per Share Amounts) RECONCILIATION OF ACTUAL RESULTS TO ADJUSTED RESULTS

Three Months Ended December 31, 2014	Gross Profit		Selling, General & Administrative Expenses			Intangible Amortization			Operating Income		Net Earnings		Effective Tax Rate		Diluted EPS
AS REPORTED	$	1,726	$	1,059		$	46		$	468	$	260	43.6	%	$	0.67
Acquisition and integration related charges (a)
Inventory stepped up to fair value	3		—			—			3		—		0.4		—
Other acquisition and integration related	—		(29		)	—			29		18		1.0		0.05
Amortization of intangible assets	—		—			(46		)	46		34		0.3		0.09
Restructuring and related charges (b)	1		(62		)	—			63		41		1.7		0.10
Rejuvenate and recall matters (c)	—		(112		)	—			112		116		(6.2	)	0.33
Tax matters (f)	—		—			—			—		83		(18.2	)	0.20
ADJUSTED	$	1,730	$	856		$	—		$	721	$	552	22.6	%	$	1.44



Three Months Ended December 31, 2013	Gross Profit		Selling, General & Administrative Expenses			Intangible Amortization			Operating Income		Net Earnings			Effective Tax Rate		Diluted EPS
AS REPORTED	$	1,616	$	1,011		$	36		$	430	$	386		10.3	%	$	1.01
Acquisition and integration related charges (a)
Inventory stepped up to fair value	12		—			—			12		9			0.1		0.02
Other acquisition and integration related	—		(32		)	—			32		22			0.5		0.06
Amortization of intangible assets	—		—			(36		)	36		24			0.6		0.06
Restructuring and related charges (b)	2		(13		)	—			15		10			0.2		0.03
Rejuvenate and recall matters (c)	—		(99		)	—			99		63			3.1		0.16
Regulatory and legal matters (e)	7		(4		)	—			11		10			0.2		0.03
Donations (e)	—		(25		)	—			25		15			0.8		0.04
Tax matters (f)	—		—			—			—		(46		)	8.4		(0.12		)
ADJUSTED	$	1,637	$	838		$	—		$	660	$	493		24.2	%	$	1.29



Year Ended December 31, 2014	Gross Profit		Selling, General & Administrative Expenses			Intangible Amortization			Operating Income		Net Earnings		Effective Tax Rate		Diluted EPS
AS REPORTED	$	6,384	$	4,336		$	188		$	1,246	$	515	55.6	%	$	1.34
Acquisition and integration related charges (a)
Inventory stepped up to fair value	27		—			—			27		15		0.5		0.04
Other acquisition and integration related	—		(75		)	—			75		50		0.7		0.13
Amortization of intangible assets	—		—			(188		)	188		133		1.1		0.35
Restructuring and related charges (b)	1		(116		)	—			117		78		1.1		0.20
Rejuvenate and recall matters (c)	—		(761		)	—			761		628		(3.1	)	1.65
Tax matters (f)	—		—			—			—		391		(33.6	)	1.02
ADJUSTED	$	6,412	$	3,384		$	—		$	2,414	$	1,810	22.3	%	$	4.73



Year Ended December 31, 2013	Gross Profit		Selling, General & Administrative Expenses			Intangible Amortization			Operating Income		Net Earnings			Effective Tax Rate		Diluted EPS
AS REPORTED	$	6,044	$	4,114		$	138		$	1,256	$	1,006		17.0	%	$	2.63
Acquisition and integration related charges (a)
Inventory stepped up to fair value	28		—			—			28		21			0.1		0.06
Other acquisition and integration related	—		(70		)	—			70		51			0.3		0.13
Amortization of intangible assets	—		—			(138		)	138		98			0.4		0.26
Restructuring and related charges (b)	11		(52		)	—			63		46			0.3		0.12
Rejuvenate and recall matters (c)	—		(622		)	—			622		460			2.0		1.20
Regulatory and legal matters (d)	7		(62		)	—			69		63			(0.6	)	0.17
Donations (e)	—		(25		)				25		15			0.3		0.04
Tax matters (f)	—		—						—		(46		)	2.9		(0.12		)
ADJUSTED	$	6,090	$	3,283		$	—		$	2,271	$	1,714		22.7	%	$	4.49



(a)	In 2013 the Company completed the acquisition of Trauson Holdings Company Limited and MAKO Surgical Corp. In 2014 the Company completed acquisitions including Patient Safety Technologies, Inc., Pivot Medical, Inc., Berchtold Holding, AG., and Small Bone Innovations, Inc. As a result, the Company has incurred certain acquisition and integration related charges.
(b)	In both 2013 and 2014 the Company incurred certain restructuring and related charges associated with focused workforce reductions, other restructuring activities and long-lived asset impairments.
(c)	Charges represent our best estimate of the minimum of the range of probable loss to resolve the recall of Rejuvenate / ABG II modular-neck hip stems and certain matters pertaining to the recall of Neptune Waste Management System.
(d)	Charges represent our best estimate of the probable loss to resolve certain previously disclosed regulatory matters and other legal settlements.
(e)	Charges represent a donation to an educational institution.
(f)	Charges represent the tax impacts related to the establishment of the European regional headquarters, a planned cash repatriation and certain tax discrete items.


•	MedSurg 10.8% or 11.7% constant currency