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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 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
strykerlogoa74.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
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

 
 
 
 

 
 
March 2020