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, 2022

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

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 378,154,080 shares of Common Stock, $0.10 par value, on March 31, 2022.

STRYKER CORPORATION 2022 First Quarter Form 10-Q

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Stryker Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

	Three Months
	2022		2021
Net sales	$	4,275	$	3,953
Cost of sales	1,541		1,444
Gross profit	$	2,734	$	2,509
Research, development and engineering expenses	413		288
Selling, general and administrative expenses	1,710		1,575
Recall charges	14		6
Amortization of intangible assets	150		181
Total operating expenses	$	2,287	$	2,050
Operating income	$	447	$	459
Other income (expense), net	(61)		(92)
Earnings before income taxes	$	386	$	367
Income taxes	63		65
Net earnings	$	323	$	302
Net earnings per share of common stock:
Basic	$	0.86	$	0.80
Diluted	$	0.84	$	0.79
Weighted-average shares outstanding (in millions):
Basic	377.7		376.3
Effect of dilutive employee stock compensation	5.0		5.4
Diluted	382.7		381.7
Cash dividends declared per share of common stock	$	0.695	$	0.63

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
	2022		2021
Net earnings	$	323	$	302
Other comprehensive income (loss), net of tax:
Marketable securities	(1)		—
Pension plans	(1)		7
Unrealized gains (losses) on designated hedges	1		28
Financial statement translation	53		255
Total other comprehensive income (loss), net of tax	$	52	$	290
Comprehensive income	$	375	$	592

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

CONSOLIDATED BALANCE SHEETS

	March 31		December 31
	2022		2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,458	$	2,944
Marketable securities	72		75
Accounts receivable, less allowance of $140 ($167 in 2021)	2,991		3,022
Inventories:
Materials and supplies	750		691
Work in process	298		264
Finished goods	2,477		2,359
Total inventories	$	3,525	$	3,314
Prepaid expenses and other current assets	679		662
Total current assets	$	8,725	$	10,017
Property, plant and equipment:
Land, buildings and improvements	1,708		1,656
Machinery and equipment	3,824		3,842
Total property, plant and equipment	$	5,532	$	5,498
Less accumulated depreciation	2,739		2,665
Property, plant and equipment, net	$	2,793	$	2,833
Goodwill	15,228		12,918
Other intangibles, net	5,430		4,840
Noncurrent deferred income tax assets	1,602		1,760
Other noncurrent assets	2,359		2,263
Total assets	$	36,137	$	34,631
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	1,084	$	1,129
Accrued compensation	703		1,092
Income taxes	173		192
Dividends payable	263		263
Accrued product liabilities	430		401
Accrued expenses and other liabilities	1,541		1,465
Current maturities of debt	214		7
Total current liabilities	$	4,408	$	4,549
Long-term debt, excluding current maturities	13,885		12,472
Income taxes	917		913
Other noncurrent liabilities	1,881		1,820
Total liabilities	$	21,091	$	19,754
Shareholders' equity
Common stock, $0.10 par value	38		38
Additional paid-in capital	1,947		1,890
Retained earnings	13,540		13,480
Accumulated other comprehensive loss	(479)		(531)
Total shareholders' equity	$	15,046	$	14,877
Total liabilities and shareholders' equity	$	36,137	$	34,631

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

	Three Months
	2022		2021
Common stock shares outstanding (in millions)
Beginning	377.5		376.1
Issuance of common stock under stock compensation and benefit plans	0.7		0.6
Ending	378.2		376.7
Common stock
Beginning	$	38	$	38
Issuance of common stock under stock compensation and benefit plans	—		—
Ending	$	38	$	38
Additional paid-in capital
Beginning	$	1,890	$	1,741
Issuance of common stock under stock compensation and benefit plans	(14)		(3)
Share-based compensation	71		68
Ending	$	1,947	$	1,806
Retained earnings
Beginning	$	13,480	$	12,462
Net earnings	323		302
Cash dividends declared	(263)		(239)
Ending	$	13,540	$	12,525
Accumulated other comprehensive income (loss)
Beginning	$	(531)	$	(1,157)
Other comprehensive income (loss)	52		290
Ending	$	(479)	$	(867)
Total shareholders' equity	$	15,046	$	13,502

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months
	2022		2021
Operating activities
Net earnings	$	323	$	302
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	92		95
Amortization of intangible assets	150		181
Share-based compensation	71		68
Recall charges	14		6
Sale of inventory stepped-up to fair value at acquisition	5		79
Changes in operating assets and liabilities:
Accounts receivable	53		65
Inventories	(229)		(73)
Accounts payable	(52)		(37)
Accrued expenses and other liabilities	(348)		(178)
Recall-related payments	(9)		(8)
Income taxes	(3)		6
Other, net	136		(54)
Net cash provided by operating activities	$	203	$	452
Investing activities
Acquisitions, net of cash acquired	(2,563)		(27)
Purchases of marketable securities	(9)		(5)
Proceeds from sales of marketable securities	11		12
Purchases of property, plant and equipment	(119)		(83)
Other investing, net	(2)		7
Net cash used in investing activities	$	(2,682)	$	(96)
Financing activities
Proceeds (payments) on short-term borrowings, net	(170)		2
Proceeds from issuance of long-term debt	1,500		5
Payments on long-term debt	—		(750)
Payments of dividends	(262)		(238)
Cash paid for taxes from withheld shares	(72)		(53)
Other financing, net	(3)		(19)
Net cash provided by (used in) financing activities	$	993	$	(1,053)
Effect of exchange rate changes on cash and cash equivalents	—		(8)
Change in cash and cash equivalents	$	(1,486)	$	(705)
Cash and cash equivalents at beginning of period	2,944		2,943
Cash and cash equivalents at end of period	$	1,458	$	2,238

See accompanying notes to Consolidated Financial Statements.

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

STRYKER CORPORATION 2022 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 ("Stryker," the "Company," "we," "us" or "our") on March 31, 2022 and the results of operations for the three months 2022. 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 2021.

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.

New Accounting Pronouncements Recently Adopted

On January 1, 2022 we adopted ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers. 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 2021.

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
	2022		2021
MedSurg and Neurotechnology:
Instruments	$	528	$	469
Endoscopy	538		469
Medical	664		622
Neurovascular	301		289
Neuro Cranial	323		281
Other	69		61
	$	2,423	$	2,191
Orthopaedics and Spine:
Knees	$	464	$	412
Hips	327		309
Trauma and Extremities	685		640
Spine	279		278
Other	97		123
	$	1,852	$	1,762
Total	$	4,275	$	3,953

Net Sales by Geography
	Three Months 2022				Three Months 2021
	United States		International		United States		International
MedSurg and Neurotechnology:
Instruments	$	414	$	114	$	355	$	114
Endoscopy	418		120		354		115
Medical	525		139		473		149
Neurovascular	110		191		111		178
Neuro Cranial	264		59		224		57
Other	68		1		60		1
	$	1,799	$	624	$	1,577	$	614
Orthopaedics and Spine:
Knees	$	345	$	119	$	294	$	118
Hips	202		125		186		123
Trauma and Extremities	487		198		440		200
Spine	200		79		193		85
Other	72		25		94		29
	$	1,306	$	546	$	1,207	$	555
Total	$	3,105	$	1,170	$	2,784	$	1,169

Contract Assets and Liabilities

On March 31, 2022 and December 31, 2021 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 $635 and $529 on March 31, 2022 and December 31, 2021.

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

Three Months 2022	Marketable Securities		Pension Plans		Hedges		Financial Statement Translation		Total
Beginning	$	—	$	(155)	$	40	$	(416)	$	(531)
OCI	(1)		(4)		4		86		85
Income taxes	—		2		(2)		(25)		(25)
Reclassifications to:
Other (income) expense	—		2		(1)		(11)		(10)
Income taxes	—		(1)		—		3		2
Net OCI	$	(1)	$	(1)	$	1	$	53	$	52
Ending	$	(1)	$	(156)	$	41	$	(363)	$	(479)

Three Months 2021	Marketable Securities		Pension Plans		Hedges		Financial Statement Translation		Total
Beginning	$	(3)	$	(259)	$	(10)	$	(885)	$	(1,157)
OCI	—		8		27		273		308
Income taxes	—		(4)		(8)		(12)		(24)
Reclassifications to:
Cost of sales	—		—		1		—		1
Other (income) expense	—		4		10		(8)		6
Income taxes	—		(1)		(2)		2		(1)
Net OCI	$	—	$	7	$	28	$	255	$	290
Ending	$	(3)	$	(252)	$	18	$	(630)	$	(867)

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

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

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 2021.

Foreign Currency Hedges

March 2022	Cash Flow		Net Investment		Non-Designated		Total
Gross notional amount	$	711	$	2,224	$	3,993	$	6,928
Maximum term in years							4.6
Fair value:
Other current assets	$	16	$	49	$	33	$	98
Other noncurrent assets	1		74		—		75
Other current liabilities	(7)		—		(29)		(36)
Other noncurrent liabilities	(1)		—		—		(1)
Total fair value	$	9	$	123	$	4	$	136

December 2021	Cash Flow		Net Investment		Non-Designated		Total
Gross notional amount	$	973	$	2,266	$	5,512	$	8,751
Maximum term in years							4.9
Fair value:
Other current assets	$	15	$	39	$	92	$	146
Other noncurrent assets	1		65		—		66
Other current liabilities	(7)		—		(10)		(17)
Total fair value	$	9	$	104	$	82	$	195

We had €2.0 billion at March 31, 2022 and December 31, 2021 in certain foreign currency forward 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 had €4.4 billion at March 31, 2022 and December 31, 2021 of senior unsecured notes designated 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, 2022 the total after tax gain (loss) in AOCI related to designated net investment hedges was $42.

Net Currency Exchange Rate Gains (Losses)

Derivative		Three Months
instrument:	Recorded in:	2022		2021
Cash Flow	Cost of sales	$	—	$	(1)
Net Investment	Other income (expense), net	11		8
Non-Designated	Other income (expense), net	1		(2)
	Total	$	12	$	5

Pretax gains (losses) on derivatives designated as cash flow hedges of $13 and net investment hedges of $34 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense), net in earnings within 12 months as of March 31, 2022. 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

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), net in earnings within 12 months of March 31, 2022. 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 2021.

There were no significant transfers into or out of any level of the fair value hierarchy in 2022.

Assets Measured at Fair Value	March		December
	2022		2021
Cash and cash equivalents	$	1,458	$	2,944
Trading marketable securities	182		193
Level 1 - Assets	$	1,640	$	3,137
Available-for-sale marketable securities:
Corporate and asset-backed debt securities	$	49	$	48
Foreign government debt securities	2		2
United States agency debt securities	5		5
United States Treasury debt securities	14		19
Certificates of deposit	2		1
Total available-for-sale marketable securities	$	72	$	75
Foreign currency exchange forward contracts	173		212
Level 2 - Assets	$	245	$	287
Total assets measured at fair value	$	1,885	$	3,424

Liabilities Measured at Fair Value	March		December
	2022		2021
Deferred compensation arrangements	$	182	$	193
Level 1 - Liabilities	$	182	$	193
Foreign currency exchange forward contracts	$	37	$	17
Level 2 - Liabilities	$	37	$	17
Contingent consideration:
Beginning	$	306	$	393
Additions	—		62
Change in estimate	(17)		(1)
Settlements	(4)		(148)
Ending	$	285	$	306
Level 3 - Liabilities	$	285	$	306
Total liabilities measured at fair value	$	504	$	516

Fair Value of Available for Sale Securities by Maturity
	March 2022		December 2021
Due in one year or less	$	40	$	36
Due after one year through three years	$	32	$	39

On March 31, 2022 and December 31, 2021 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income was $15 and $17 in the three months 2022 and 2021, 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

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

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.

In April 2022 the United States District Court for the District of Delaware issued a judgment following a jury verdict in favor of PureWick Corporation (PureWick) for its 2019 complaint seeking patent infringement damages related to our PrimaFit and PrimoFit products. The court awarded damages and we recorded charges of $28 in March 2022. If PureWick seeks enhancement of the judgment and is successful, the judgment could total approximately $100 and include an injunction against future sales. We intend to appeal the outcome of this case.

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. In April 2022 we executed a second 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 Medical Group N.V. (Wright) in November 2020, 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 three months 2022 we have recorded charges of $14 and made payments of $9, primarily related to Wright hip products. 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 $385 to $520. 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.

Leases	March			December
	2022			2021
Right-of-use assets	$	490		$	419
Lease liabilities, current	$	129		$	112
Lease liabilities, non-current	$	370		$	310
Other information:
Weighted-average remaining lease term	5.5 years			5.4 years
Weighted-average discount rate	2.65		%	2.86		%

	Three Months
	2022		2021
Operating lease cost	$	31	$	36

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 $2,563 and $31 in the three months 2022 and 2021.

In February 2022 we completed the acquisition of Vocera Communications, Inc. (Vocera) for $79.25 per share, or an aggregate purchase price of $2.6 billion, net of cash acquired ($3.0 billion including convertible notes). Vocera is a leader in the digital care coordination and communication category. Vocera is part of our Medical business within MedSurg and Neurotechnology. Goodwill attributable to the acquisition reflects the strategic benefits of expanding our presence in adjacent markets, diversifying our product portfolio, advancing innovations, and accelerating our digital aspirations. This goodwill is not deductible for tax purposes.

In the three months 2022 note holders elected to redeem the 1.50% and 0.50% convertible notes assumed in the Vocera acquisition for $101 and $324. These repayments are classified as financing activities in the Consolidated Statements of Cash Flows.

Share-based awards for Vocera employees vested upon our acquisition and a charge of $132 was recorded in selling, general and administrative expenses.

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

STRYKER CORPORATION 2022 First Quarter Form 10-Q

Purchase price allocations for our significant acquisitions are:

Purchase Price Allocation of Acquired Net Assets
2022	Vocera
Tangible assets and liabilities:
Accounts receivable	$	33
Inventory	13
Deferred income tax assets	70
Other assets	92
Debt	(425)
Deferred income tax liabilities	(183)
Other liabilities	(115)
Intangible assets:
Customer and distributor relationships	550
Developed technology and patents	178
Trade name	18
Goodwill	2,332
Purchase price, net of cash acquired of $281	$	2,563
Weighted-average life of intangible assets	13

Purchase price allocations for Vocera were based on preliminary valuations, primarily related to intangible assets and deferred income taxes. Our estimates and assumptions are subject to change within the measurement period.

Consolidated Estimated Amortization Expense
Remainder of 2022		2023		2024		2025		2026
$	484	$	624	$	594	$	573	$	515

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, 2022.

In February 2022 we entered into a $1.5 billion term loan agreement that matures on February 22, 2025 and bears interest at a base rate based on the Term Secured Overnight Financing Rate (SOFR) plus 0.725%.

In the first quarter of 2022 our Board of Directors approved an increase to the maximum amount of commercial paper that can be outstanding from $1,500 to $2,250.

On March 31, 2022 we had $195 outstanding under our commercial paper programs which allows for maturities up to 397 days from the date of issuance.

Summary of Total Debt			March 2022		December 2021
	Rate	Due
Senior unsecured notes:
	1.125%	November 30, 2023	$	610	$	622
	0.600%	December 1, 2023	594		598
	3.375%	May 15, 2024	598		593
	0.250%	December 3, 2024	941		958
	1.150%	June 15, 2025	646		645
	3.375%	November 1, 2025	748		748
	3.500%	March 15, 2026	994		994
	2.125%	November 30, 2027	829		845
	3.650%	March 7, 2028	597		597
	0.750%	March 1, 2029	885		901
	1.950%	June 15, 2030	990		990
	2.625%	November 30, 2030	714		727
	1.000%	December 3, 2031	824		840
	4.100%	April 1, 2043	392		392
	4.375%	May 15, 2044	395		395
	4.625%	March 15, 2046	982		982
	2.900%	June 15, 2050	642		642
Term loan		February 22, 2025	1,500		—
Commercial paper			195		—
Other			23		10
Total debt			$	14,099	$	12,479
Less current maturities of debt			214		7
Total long-term debt			$	13,885	$	12,472
			March 2022		December 2021
Unamortized debt issuance costs			$	59	$	62
Borrowing capacity on existing facilities			$	2,162	$	2,162
Fair value of senior unsecured notes			$	12,369	$	13,391

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.

NOTE 9 - INCOME TAXES

Our effective tax rates were 16.3% and 17.7% in the three months 2022 and 2021. The change in the effective income tax rate for the three months was primarily due to lower tax expense from our operating structure and current profit mix.

We are routinely audited by income tax authorities in the jurisdictions we operate. It is reasonably possible within the next 12 months that uncertain tax positions, excluding interest, could decrease by as much as $175 as a result of the resolution of tax matters.

Dollar amounts are in millions except per share amounts or as otherwise specified. 8

STRYKER CORPORATION 2022 First Quarter Form 10-Q

NOTE 10 - SEGMENT INFORMATION

As previously disclosed, effective December 31, 2021 we changed our reportable business segments to (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine to align to our new internal reporting structure.

	Three Months
	2022		2021
MedSurg and Neurotechnology	$	2,423	$	2,191
Orthopaedics and Spine	1,852		1,762
Net sales	$