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 March 31, 2020

OR

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

Commission file number: 001-13149

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
Floating Rate Notes due 2020	SYK20A	New York Stock Exchange

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

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

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

Large accelerated filer	☒	Accelerated filer	☐	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 375,378,477 shares of Common Stock, $0.10 par value, on March 31, 2020.

STRYKER CORPORATION 2020 First Quarter Form 10-Q

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Stryker Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

	Three Months
	2020			2019
Net sales	$	3,588		$	3,516
Cost of sales	1,257			1,233
Gross profit	$	2,331		$	2,283
Research, development and engineering expenses	254			225
Selling, general and administrative expenses	1,330			1,403
Recall charges	(6		)	13
Amortization of intangible assets	118			114
Total operating expenses	$	1,696		$	1,755
Operating income	$	635		$	528
Other income (expense), net	(45		)	(48		)
Earnings before income taxes	$	590		$	480
Income taxes	97			68
Net earnings	$	493		$	412
Net earnings per share of common stock:
Basic	$	1.32		$	1.10
Diluted	$	1.30		$	1.09
Weighted-average shares outstanding (in millions):
Basic	374.8			373.3
Effect of dilutive employee stock compensation	4.9			6.0
Diluted	379.7			379.3
Cash dividends declared per share of common stock	$	0.575		$	0.52

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months
	2020			2019
Net earnings	$	493		$	412
Other comprehensive income (loss), net of tax:
Marketable securities	—			1
Pension plans	(4		)	(4		)
Unrealized gains (losses) on designated hedges	(26		)	(16		)
Financial statement translation	13			85
Total other comprehensive income (loss), net of tax	$	(17	)	$	66
Comprehensive income	$	476		$	478

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

CONSOLIDATED BALANCE SHEETS

	March 31			December 31
	2020			2019
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	3,964		$	4,337
Marketable securities	84			88
Accounts receivable, less allowance of $100 ($88 in 2019)	2,646			2,893
Inventories:
Materials and supplies	738			677
Work in process	187			178
Finished goods	2,434			2,427
Total inventories	$	3,359		$	3,282
Prepaid expenses and other current assets	683			760
Total current assets	$	10,736		$	11,360
Property, plant and equipment:
Land, buildings and improvements	1,419			1,263
Machinery and equipment	3,357			3,451
Total property, plant and equipment	$	4,776		$	4,714
Less accumulated depreciation	2,169			2,147
Property, plant and equipment, net	$	2,607		$	2,567
Goodwill	9,025			9,069
Other intangibles, net	4,107			4,227
Noncurrent deferred income tax assets	1,537			1,575
Other noncurrent assets	1,428			1,369
Total assets	$	29,440		$	30,167
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	736		$	675
Accrued compensation	430			955
Income taxes	227			171
Dividends payable	216			213
Accrued expenses and other liabilities	1,450			1,527
Current maturities of debt	1,103			859
Total current liabilities	$	4,162		$	4,400
Long-term debt, excluding current maturities	9,404			10,231
Income taxes	1,026			1,068
Other noncurrent liabilities	1,733			1,661
Total liabilities	$	16,325		$	17,360
Shareholders' equity
Common stock, $0.10 par value	38			37
Additional paid-in capital	1,676			1,628
Retained earnings	12,024			11,748
Accumulated other comprehensive loss	(623		)	(606		)
Total shareholders' equity	$	13,115		$	12,807
Total liabilities and shareholders' equity	$	29,440		$	30,167

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

	Three Months
	2020			2019
Common stock shares outstanding (in millions)
Beginning	374.5			374.4
Issuance of common stock under stock compensation and benefit plans	0.9			1.3
Repurchase of common stock	—			(1.9		)
Ending	375.4			373.8
Common stock
Beginning	$	37		$	37
Issuance of common stock under stock compensation and benefit plans	1			—
Ending	$	38		$	37
Additional paid-in capital
Beginning	$	1,628		$	1,559
Issuance of common stock under stock compensation and benefit plans	(8		)	(48		)
Repurchase of common stock	—			(8		)
Share-based compensation	56			35
Ending	$	1,676		$	1,538
Retained earnings
Beginning	$	11,748		$	10,765
Net earnings	493			412
Repurchase of common stock	—			(299		)
Cash dividends declared	(217		)	(195		)
Ending	$	12,024		$	10,683
Accumulated other comprehensive (loss) income
Beginning	$	(606	)	$	(631	)
Other comprehensive income (loss)	(17		)	66
Ending	$	(623	)	$	(565	)
Total Stryker shareholders' equity	$	13,115		$	11,693
Non-controlling interest	—			—
Total shareholders' equity	$	13,115		$	11,693

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months
	2020			2019
Operating activities
Net earnings	$	493		$	412
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	80			76
Amortization of intangible assets	118			114
Share-based compensation	56			35
Recall charges	(6		)	13
Sale of inventory stepped-up to fair value at acquisition	6			24
Changes in operating assets and liabilities:
Accounts receivable	204			50
Inventories	(122		)	(139		)
Accounts payable	63			(12		)
Accrued expenses and other liabilities	(550		)	(166		)
Recall-related payments	(4		)	(20		)
Income taxes	84			9
Other, net	169			(83		)
Net cash provided by operating activities	$	591		$	313
Investing activities
Acquisitions, net of cash acquired	(23		)	(180		)
Purchases of marketable securities	(8		)	(20		)
Proceeds from sales of marketable securities	12			19
Purchases of property, plant and equipment	(144		)	(122		)
Net cash used in investing activities	$	(163	)	$	(303	)
Financing activities
Proceeds (payments) on short-term borrowings, net	4			(12		)
Payments on long-term debt	(500		)	(1,341		)
Dividends paid	(215		)	(195		)
Repurchases of common stock	—			(307		)
Cash paid for taxes from withheld shares	(56		)	(97		)
Other financing, net	(1		)	5
Net cash provided by (used in) financing activities	$	(768	)	$	(1,947	)
Effect of exchange rate changes on cash and cash equivalents	(33		)	(5		)
Change in cash and cash equivalents	$	(373	)	$	(1,942	)
Cash and cash equivalents at beginning of period	4,337			3,616
Cash and cash equivalents at end of period	$	3,964		$	1,674

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

General Information

Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring items, considered necessary to fairly present the financial position of Stryker Corporation and its consolidated subsidiaries (the "Company," "we," us" or "our") on March 31, 2020 and the results of operations for the three months 2020. 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 2019.

Certain prior year amounts have been reclassified to conform with current year presentation of segment results.

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.

Accounting Pronouncements Recently Adopted

On January 1, 2020 we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses for accounts receivables, loans and other financial instruments. The adoption of this update did not have a material impact on our Consolidated Financial Statements.

NOTE 2 - REVENUE RECOGNITION

Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2019.

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
	2020		2019
Orthopaedics:
Knees	$	432	$	439
Hips	316		336
Trauma and Extremities	392		396
Other	82		79
	$	1,222	$	1,250
MedSurg:
Instruments	$	513	$	461
Endoscopy	455		470
Medical	587		531
Sustainability	67		65
	$	1,622	$	1,527
Neurotechnology and Spine:
Neurotechnology	$	483	$	469
Spine	261		270
	$	744	$	739
Total	$	3,588	$	3,516

Net Sales by Geography
	Three Months 2020				Three Months 2019
	United States		International		United States		International
Orthopaedics:
Knees	$	322	$	110	$	320	$	119
Hips	201		115		213		123
Trauma and Extremities	260		132		254		142
Other	69		13		63		16
	$	852	$	370	$	850	$	400
MedSurg:
Instruments	$	410	$	103	$	365	$	96
Endoscopy	364		91		376		94
Medical	454		133		416		115
Sustainability	66		1		64		1
	$	1,294	$	328	$	1,221	$	306
Neurotechnology and Spine:
Neurotechnology	$	301	$	182	$	300	$	169
Spine	196		65		208		62
	$	497	$	247	$	508	$	231
Total	$	2,643	$	945	$	2,579	$	937

Contract Assets and Liabilities

On March 31, 2020 there were no contract assets recorded on our Consolidated Balance Sheets.

Our contract liabilities arise as a result of consideration received from customers at inception of contracts for certain businesses or where the timing of billing for services precedes satisfaction of our performance obligations. We generally satisfy performance obligations within one year from the contract inception date. Our contract liabilities were $361 and $313 on March 31, 2020 and December 31, 2019.

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

Three Months 2020	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(3	)	$	(179	)	$	47		$	(471	)	$	(606	)
OCI	1			(6		)	(39		)	55			11
Income taxes	—			—			11			(37		)	(26		)
Reclassifications to:
Cost of sales	—			—			3			—			3
Other (income) expense	(1		)	3			(1		)	(7		)	(6		)
Income taxes	—			(1		)	—			2			1
Net OCI	$	—		$	(4	)	$	(26	)	$	13		$	(17	)
Ending	$	(3	)	$	(183	)	$	21		$	(458	)	$	(623	)

Three Months 2019	Marketable Securities			Pension Plans			Hedges			Financial Statement Translation			Total
Beginning	$	(4	)	$	(137	)	$	50		$	(540	)	$	(631	)
OCI	1			(6		)	(19		)	94			70
Income taxes	—			1			6			(9		)	(2		)
Reclassifications to:
Cost of sales	—			—			(2		)	—			(2		)
Other (income) expense	—			1			—			—			1
Income taxes	—			—			(1		)	—			(1		)
Net OCI	$	1		$	(4	)	$	(16	)	$	85		$	66
Ending	$	(3	)	$	(141	)	$	34		$	(455	)	$	(565	)

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

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 2019.

Foreign Currency Hedges

March 2020	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	837		$	1,094	$	5,275		$	7,206
Maximum term in days									1555
Fair value:
Other current assets	$	30		$	—	$	100		$	130
Other noncurrent assets	5			105		—			110
Other current liabilities	(2		)	—		(27		)	(29		)
Other noncurrent liabilities	—			—		—			—
Total fair value	$	33		$	105	$	73		$	211

December 2019	Cash Flow			Net Investment		Non-Designated			Total
Gross notional amount	$	801		$	1,113	$	6,174		$	8,088
Maximum term in days									1646
Fair value:
Other current assets	$	5		$	—	$	180		$	185
Other noncurrent assets	1			40		—			41
Other current liabilities	(10		)	—		(11		)	(21		)
Other noncurrent liabilities	(2		)	—		—			(2		)
Total fair value	$	(6	)	$	40	$	169		$	203

In December 2019 and November 2018 we designated the issuance of €2,400 and €2,250 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 March 31, 2020 the total after tax gain amount in AOCI related to these designated net investment hedges was $83.

In July 2019 we entered into €1.0 billion in certain forward currency contracts and designated these as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros.

Net Currency Exchange Rate Gains (Losses)

		Three Months
Derivative instrument	Recorded in:	2020			2019
Cash Flow	Cost of sales	$	(3	)	$	2
Net Investment	Other income (expense), net	7			—
Non-Designated	Other income (expense), net	(7		)	(2		)
	Total	$	(3	)	$	—

Pretax gains (losses) on derivatives designated as cash flow of $26 and net investment hedges of $27 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense) in earnings within 12 months as of March 31, 2020. 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 conjunction with our offering of senior unsecured notes in November 2019 we terminated cash flow hedges with gross notional amounts of €600 designated as forward starting interest rate swaps of our interest rates, the impact of which will be recognized over time as a benefit within interest expense. Pretax gains recorded in AOCI related to closed interest rate hedges of $6 are expected to be reclassified to other income (expense) in earnings within 12 months of March 31, 2020.

On March 31, 2020 we had interest rate swap agreements with notional amounts of $750 designated as forward starting interest rate swaps in anticipation of future debt issuances. Pretax losses of $62 were recorded in AOCI as of March 31, 2020. Upon the probable issuance of the debt, these amounts will be released to interest expense over the term of the debt. The cash flow effect of these hedges is recorded in cash flow from operations.

NOTE 5 - FAIR VALUE MEASUREMENTS

Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for 2019.

There were no significant transfers into or out of any level in 2020.

Assets Measured at Fair Value	March		December
	2020		2019
Cash and cash equivalents	$	3,964	$	4,337
Trading marketable securities	127		149
Level 1 - Assets	$	4,091	$	4,486
Available-for-sale marketable securities:
Corporate and asset-backed debt securities	$	32	$	32
United States agency debt securities	3		2
United States Treasury debt securities	45		49
Certificates of deposit	4		5
Total available-for-sale marketable securities	$	84	$	88
Foreign currency exchange forward contracts	240		226
Interest rate swap asset	—		17
Level 2 - Assets	$	324	$	331
Total assets measured at fair value	$	4,415	$	4,817

Liabilities Measured at Fair Value	March		December
	2020		2019
Deferred compensation arrangements	$	127	$	149
Level 1 - Liabilities	$	127	$	149
Foreign currency exchange forward contracts	$	29	$	23
Interest rate swap liability	62		—
Level 2 - Liabilities	$	91	$	23
Contingent consideration:
Beginning	$	306	$	117
Additions	—		298
Change in estimate	—		(10		)
Settlements	—		(99		)
Ending	$	306	$	306
Level 3 - Liabilities	$	306	$	306
Total liabilities measured at fair value	$	524	$	478

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

Fair Value of Available for Sale Securities by Maturity
	March 2020		December 2019
Due in one year or less	$	46	$	50
Due after one year through three years	$	38	$	38

On March 31, 2020 and December 31, 2019 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income recorded in other income (expense), net, was $40 and $39 in the three months 2020 and 2019.

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 that are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings, the claimants seek damages as well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for product liability claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows.

Recall Matters

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

In August 2016 and May 2018 we voluntarily recalled certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads. Product liability lawsuits and claims relating to this voluntary recall have been filed against us. In November 2018 we entered into a settlement agreement to resolve a significant number of claims and lawsuits related to the recalls. The specific terms of the settlement agreement, including the financial terms, are confidential.

We have incurred, and expect to incur in the future, costs associated with the defense and settlement of these matters. Based on the

information that has been received, we have estimated the remaining range of probable loss related to these matters globally to be approximately $290 to $535. We have recorded charges to earnings representing the minimum of the range of probable loss. The final outcomes of these matters are dependent on many factors that are difficult to predict. Accordingly, the ultimate cost related to these matters globally may be materially different than the amount of our current estimate and accruals and could have a material adverse effect on our results of operations and cash flows.

Leases	March			December
	2020			2019
Right-of-use assets	$	393		$	384
Lease liabilities, current	$	89		$	86
Lease liabilities, non-current	$	306		$	301
Other information
Weighted-average remaining lease term	5.9 years			6.2 years
Weighted-average discount rate	3.09		%	3.34		%
	Three Months
	2020			2019
Operating lease cost	$	36		34

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 $23 and $308 in the three months 2020 and 2019.

In October 2019 we completed the acquisition of Mobius Imaging and Cardan Robotics for net cash consideration of $360 and future regulatory and commercial milestone payments of up to $130. Mobius Imaging is a leader in point-of-care imaging technology focused on integrating advanced imaging technologies into medical workflow. Cardan Robotics is working to develop innovative robotics and navigation technology systems for surgical and interventional radiology procedures. Mobius Imaging and Cardan Robotics (Mobius) are part of our Spine business within Neurotechnology and Spine. For income tax purposes the acquisition was treated as an asset purchase. Goodwill attributable to the acquisition is deductible for tax purposes.

In March 2019 we completed the acquisition of OrthoSpace, Ltd. (OrthoSpace) for net cash consideration of $110 and future regulatory milestone payments of up to $110. OrthoSpace is a medical device company specializing in orthopaedic biodegradable technology for the treatment of irreparable rotator cuff tears. OrthoSpace is part of our Endoscopy business within MedSurg. Goodwill attributable to the acquisition is not deductible for tax purposes.

In November 2019 we announced a definitive agreement to acquire all of the issued and outstanding ordinary shares of Wright Medical Group N.V. (Wright) for $30.75 per share, or an aggregate purchase price of approximately $5.4 billion (including convertible notes). Pursuant to the agreement, on December 13, 2019 our wholly owned subsidiary, Stryker B.V., commenced a tender offer to purchase all of the outstanding ordinary shares, par value €0.03 per share, of Wright at a price of $30.75 per share, without interest, but subject to any applicable withholding of taxes. We expect the acquisition to close in the second half of 2020, subject to the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other required approvals and clearances under applicable antitrust laws and other customary conditions. Wright is a global medical device company focused on extremities and biologics. Following closing, we plan to integrate

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

STRYKER CORPORATION 2020 First Quarter Form 10-Q

Wright into our Trauma and Extremities business within Orthopaedics.

Purchase price allocations for our significant acquisitions are presented below:

Purchase Price Allocation of Acquired Net Assets
	2019
	Mobius			OrthoSpace
Tangible assets:
Accounts receivable	$	3		$	1
Inventory	6			1
Other assets	2			1
Contingent consideration	(4		)	—
Other liabilities	(10		)	(29		)
Intangible assets:
Customer relationship	7			—
Developed technology and patents	59			120
In-process research and development	98			—
Non-compete agreements	9			—
Goodwill	303			114
Purchase price, net of cash acquired	$	473		$	208
Weighted-average life of intangible assets	12			18

The purchase price allocation for Mobius is based on preliminary valuations, primarily related to intangible assets that are subject to change within the measurement period. The purchase price allocation for OrthoSpace was finalized in 2020.

Estimated Amortization Expense
Remainder of 2020		2021		2022		2023		2024
$	341	$	440	$	438	$	417	$	386

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 March 31, 2020.

Our commercial paper program allows us to have a maximum of $1,500 in commercial paper outstanding with maturities up to 397 days from the date of issuance. On March 31, 2020 there were no amounts outstanding under our commercial paper program.

Summary of Total Debt			March 2020		December 2019
Senior unsecured notes:
	Rate	Due
	4.375%	January 15, 2020	$	—	$	500
	Variable	November 30, 2020	328		333
	2.625%	March 15, 2021	749		749
	1.125%	November 30, 2023	599		609
	3.375%	May 15, 2024	588		587
	0.250%	December 3, 2024	923		938
	3.375%	November 1, 2025	746		746
	3.500%	March 15, 2026	991		991
	2.125%	November 30, 2027	815		829
	3.650%	March 7, 2028	596		596
	0.750%	March 1, 2029	869		884
	2.625%	November 30, 2030	700		712
	1.000%	December 3, 2031	809		823
	4.100%	April 1, 2043	392		391
	4.375%	May 15, 2044	395		395
	4.625%	March 15, 2046	981		981
Other			26		26
Total debt			$	10,507	$	11,090
Less current maturities of debt			1,103		859
Total long-term debt			$	9,404	$	10,231