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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Stryker Corp | NYSE:SYK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-8.38 | -2.49% | 328.12 | 335.725 | 320.715 | 333.14 | 2,766,932 | 23:32:30 |
|
(Mark one)
|
|
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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)
|
Large accelerated filer
|
[X]
|
|
Accelerated filer
|
[ ]
|
|
|
|
|
|
Non-accelerated filer
|
[ ]
|
|
Small reporting company
|
[ ]
|
|
ITEM 1.
|
FINANCIAL STATEMENTS.
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net sales
|
|
$
|
2,363
|
|
|
$
|
2,212
|
|
|
$
|
4,668
|
|
|
$
|
4,402
|
|
Cost of sales
|
|
808
|
|
|
730
|
|
|
1,577
|
|
|
1,443
|
|
||||
Gross profit
|
|
1,555
|
|
|
1,482
|
|
|
3,091
|
|
|
2,959
|
|
||||
Research, development and engineering expenses
|
|
158
|
|
|
132
|
|
|
308
|
|
|
261
|
|
||||
Selling, general and administrative expenses
|
|
1,148
|
|
|
1,015
|
|
|
2,353
|
|
|
1,931
|
|
||||
Intangible asset amortization
|
|
47
|
|
|
36
|
|
|
92
|
|
|
68
|
|
||||
Restructuring charges
|
|
5
|
|
|
9
|
|
|
10
|
|
|
23
|
|
||||
Total operating expenses
|
|
1,358
|
|
|
1,192
|
|
|
2,763
|
|
|
2,283
|
|
||||
Operating income
|
|
197
|
|
|
290
|
|
|
328
|
|
|
676
|
|
||||
Other income (expense), net
|
|
(30
|
)
|
|
(21
|
)
|
|
(54
|
)
|
|
(32
|
)
|
||||
Earnings before income taxes
|
|
167
|
|
|
269
|
|
|
274
|
|
|
644
|
|
||||
Income taxes
|
|
39
|
|
|
56
|
|
|
76
|
|
|
127
|
|
||||
Net earnings
|
|
$
|
128
|
|
|
$
|
213
|
|
|
$
|
198
|
|
|
$
|
517
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Basic net earnings per share of common stock
|
|
$
|
0.34
|
|
|
$
|
0.56
|
|
|
$
|
0.52
|
|
|
$
|
1.36
|
|
Diluted net earnings per share of common stock
|
|
$
|
0.33
|
|
|
$
|
0.56
|
|
|
$
|
0.51
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding—in millions:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
378.8
|
|
|
378.0
|
|
|
378.5
|
|
|
378.8
|
|
||||
Net effect of dilutive employee stock options
|
|
3.9
|
|
|
3.0
|
|
|
4.2
|
|
|
3.2
|
|
||||
Diluted
|
|
382.7
|
|
|
381.0
|
|
|
382.7
|
|
|
382.0
|
|
||||
Anti-dilutive shares excluded from the calculation of net effect of dilutive employee stock options
|
|
—
|
|
|
2.1
|
|
|
2.5
|
|
|
2.2
|
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net earnings
|
|
$
|
128
|
|
|
$
|
213
|
|
|
$
|
198
|
|
|
$
|
517
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|||||||||
|
Marketable Securities
|
|
4
|
|
|
(5
|
)
|
|
7
|
|
|
(6
|
)
|
||||
|
Pension Plans
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
2
|
|
||||
|
Hedges
|
|
(9
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||||
|
Financial Statement Translation
|
|
(33
|
)
|
|
20
|
|
|
4
|
|
|
(94
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
|
(37
|
)
|
|
14
|
|
|
(1
|
)
|
|
(98
|
)
|
|||||
Comprehensive income
|
|
$
|
91
|
|
|
$
|
227
|
|
|
$
|
197
|
|
|
$
|
419
|
|
1
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
June 30
|
|
December 31
|
||||
|
2014
|
|
2013
|
|||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,319
|
|
|
$
|
1,339
|
|
Marketable securities
|
|
3,426
|
|
|
2,641
|
|
||
Accounts receivable, less allowance of $68 ($72 in 2013)
|
|
1,503
|
|
|
1,518
|
|
||
Inventories
|
|
|
|
|
||||
Materials and supplies
|
|
254
|
|
|
227
|
|
||
Work in process
|
|
104
|
|
|
85
|
|
||
Finished goods
|
|
1,229
|
|
|
1,110
|
|
||
Total inventories
|
|
1,587
|
|
|
1,422
|
|
||
Deferred income taxes
|
|
941
|
|
|
880
|
|
||
Prepaid expenses and other current assets
|
|
605
|
|
|
535
|
|
||
Total current assets
|
|
9,381
|
|
|
8,335
|
|
||
Property, plant and equipment
|
|
|
|
|
||||
Land, buildings and improvements
|
|
693
|
|
|
686
|
|
||
Machinery and equipment
|
|
1,933
|
|
|
1,811
|
|
||
Total property, plant and equipment
|
|
2,626
|
|
|
2,497
|
|
||
Less allowance for depreciation
|
|
1,499
|
|
|
1,416
|
|
||
Net property, plant and equipment
|
|
1,127
|
|
|
1,081
|
|
||
Other assets
|
|
|
|
|
||||
Goodwill
|
|
4,101
|
|
|
3,844
|
|
||
Other intangibles, net
|
|
2,090
|
|
|
1,989
|
|
||
Other
|
|
530
|
|
|
494
|
|
||
Total assets
|
|
$
|
17,229
|
|
|
$
|
15,743
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
337
|
|
|
$
|
314
|
|
Accrued compensation
|
|
399
|
|
|
535
|
|
||
Income taxes
|
|
97
|
|
|
131
|
|
||
Dividend payable
|
|
116
|
|
|
115
|
|
||
Accrued recall expenses
|
|
1,354
|
|
|
772
|
|
||
Accrued expenses and other liabilities
|
|
780
|
|
|
765
|
|
||
Current maturities of debt
|
|
630
|
|
|
25
|
|
||
Total current liabilities
|
|
3,713
|
|
|
2,657
|
|
||
Long-term debt, excluding current maturities
|
|
3,237
|
|
|
2,739
|
|
||
Other liabilities
|
|
1,277
|
|
|
1,300
|
|
||
Shareholders' equity
|
|
|
|
|
||||
Common stock, $0.10 par value:
|
|
|
|
|
||||
Authorized: 1 billion shares, outstanding: 378 million shares (378 million in 2013)
|
|
38
|
|
|
38
|
|
||
Additional paid-in capital
|
|
1,208
|
|
|
1,160
|
|
||
Retained earnings
|
|
7,525
|
|
|
7,617
|
|
||
Accumulated other comprehensive income
|
|
231
|
|
|
232
|
|
||
Total shareholders' equity
|
|
9,002
|
|
|
9,047
|
|
||
Total liabilities & shareholders' equity
|
|
$
|
17,229
|
|
|
$
|
15,743
|
|
2
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income |
|
Total
|
||||||||||
Balances at December 31, 2013
|
|
$
|
38
|
|
|
$
|
1,160
|
|
|
$
|
7,617
|
|
|
$
|
232
|
|
|
$
|
9,047
|
|
Net earnings
|
|
|
|
|
|
198
|
|
|
|
|
198
|
|
||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Issuance of 1.6 million shares of common stock under stock option and benefit plans, including $5 excess income tax benefit
|
|
|
|
9
|
|
|
|
|
|
|
9
|
|
||||||||
Repurchase and retirement of 0.8 million shares of common stock
|
|
|
|
(2
|
)
|
|
(59
|
)
|
|
|
|
(61
|
)
|
|||||||
Share-based compensation
|
|
|
|
41
|
|
|
|
|
|
|
41
|
|
||||||||
Cash dividends declared of $0.61 per share of common stock
|
|
|
|
|
|
(231
|
)
|
|
|
|
(231
|
)
|
||||||||
Balances at June 30, 2014
|
|
$
|
38
|
|
|
$
|
1,208
|
|
|
$
|
7,525
|
|
|
$
|
231
|
|
|
$
|
9,002
|
|
3
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
|
$
|
128
|
|
|
$
|
213
|
|
|
$
|
198
|
|
|
$
|
517
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
47
|
|
|
43
|
|
|
93
|
|
|
81
|
|
||||
Amortization of intangible assets
|
|
47
|
|
|
36
|
|
|
92
|
|
|
68
|
|
||||
Share-based compensation
|
|
20
|
|
|
18
|
|
|
41
|
|
|
38
|
|
||||
Restructuring charges
|
|
5
|
|
|
10
|
|
|
10
|
|
|
24
|
|
||||
Sale of inventory stepped up to fair value at acquisition
|
|
9
|
|
|
8
|
|
|
14
|
|
|
8
|
|
||||
Recall accruals
|
|
252
|
|
|
187
|
|
|
582
|
|
|
227
|
|
||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
|
(40
|
)
|
|
(18
|
)
|
|
53
|
|
|
(11
|
)
|
||||
Inventories
|
|
(59
|
)
|
|
(25
|
)
|
|
(120
|
)
|
|
(63
|
)
|
||||
Accounts payable
|
|
(19
|
)
|
|
(21
|
)
|
|
11
|
|
|
(30
|
)
|
||||
Accrued expenses and other liabilities
|
|
57
|
|
|
82
|
|
|
(142
|
)
|
|
(70
|
)
|
||||
Income taxes
|
|
(81
|
)
|
|
(141
|
)
|
|
(137
|
)
|
|
(150
|
)
|
||||
Other
|
|
—
|
|
|
(36
|
)
|
|
(123
|
)
|
|
(47
|
)
|
||||
Net cash provided by operating activities
|
|
366
|
|
|
356
|
|
|
572
|
|
|
592
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investing activities
|
|
|
|
|
|
|
|
|
||||||||
Acquisitions, net of cash acquired
|
|
(185
|
)
|
|
(62
|
)
|
|
(457
|
)
|
|
(662
|
)
|
||||
Purchases of marketable securities
|
|
(1,580
|
)
|
|
(1,843
|
)
|
|
(2,597
|
)
|
|
(2,616
|
)
|
||||
Proceeds from sales of marketable securities
|
|
804
|
|
|
754
|
|
|
1,812
|
|
|
1,816
|
|
||||
Purchases of property, plant and equipment
|
|
(54
|
)
|
|
(47
|
)
|
|
(124
|
)
|
|
(96
|
)
|
||||
Net cash used in investing activities
|
|
(1,015
|
)
|
|
(1,198
|
)
|
|
(1,366
|
)
|
|
(1,558
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Financing activities
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from borrowings
|
|
1,469
|
|
|
102
|
|
|
1,813
|
|
|
1,162
|
|
||||
Payments on borrowings
|
|
(665
|
)
|
|
(100
|
)
|
|
(720
|
)
|
|
(151
|
)
|
||||
Dividends paid
|
|
(116
|
)
|
|
(100
|
)
|
|
(231
|
)
|
|
(201
|
)
|
||||
Repurchase and retirement of common stock
|
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
|
(250
|
)
|
||||
Other
|
|
(40
|
)
|
|
5
|
|
|
(28
|
)
|
|
(2
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
588
|
|
|
(93
|
)
|
|
774
|
|
|
558
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Change in cash and cash equivalents
|
|
$
|
(62
|
)
|
|
$
|
(942
|
)
|
|
$
|
(20
|
)
|
|
$
|
(424
|
)
|
4
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
Marketable Securities
|
|
Pension Plans
|
|
Hedges
|
|
Financial Statement Translation
|
|
Total
|
||||||||||||||||||||||||||||||
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
||||||||||||||||||||
Beginning balance
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(82
|
)
|
|
$
|
(81
|
)
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
343
|
|
|
$
|
306
|
|
|
$
|
268
|
|
|
$
|
232
|
|
Other comprehensive income (OCI)
|
7
|
|
|
11
|
|
|
—
|
|
|
(3
|
)
|
|
(12
|
)
|
|
(16
|
)
|
|
(33
|
)
|
|
4
|
|
|
(38
|
)
|
|
(4
|
)
|
||||||||||
Income tax expense on OCI
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
6
|
|
||||||||||
Reclassifications out of AOCI into:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
4
|
|
||||||||||
Other (income) expense
|
(2
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(9
|
)
|
||||||||||
Income tax expense (benefit)
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||||||
Total other comprehensive income
|
4
|
|
|
7
|
|
|
1
|
|
|
—
|
|
|
(9
|
)
|
|
(12
|
)
|
|
(33
|
)
|
|
4
|
|
|
(37
|
)
|
|
(1
|
)
|
||||||||||
Balance at June 30
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
(81
|
)
|
|
$
|
(81
|
)
|
|
$
|
(5
|
)
|
|
$
|
(5
|
)
|
|
$
|
310
|
|
|
$
|
310
|
|
|
$
|
231
|
|
|
$
|
231
|
|
5
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||||
|
June
|
December 31
|
|
June
|
December 31
|
|
June
|
December 31
|
|
June
|
December 31
|
||||||||||||||||
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
||||||||||||||||
Cash and cash equivalents
|
$
|
1,319
|
|
$
|
1,339
|
|
|
$
|
1,319
|
|
$
|
1,339
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Available-for-sale marketable securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate and asset-backed debt securities
|
1,529
|
|
1,177
|
|
|
—
|
|
—
|
|
|
1,529
|
|
1,177
|
|
|
—
|
|
—
|
|
||||||||
Foreign government debt securities
|
898
|
|
845
|
|
|
—
|
|
—
|
|
|
898
|
|
845
|
|
|
—
|
|
—
|
|
||||||||
United States agency debt securities
|
402
|
|
211
|
|
|
—
|
|
—
|
|
|
402
|
|
211
|
|
|
—
|
|
—
|
|
||||||||
United States treasury debt securities
|
491
|
|
350
|
|
|
—
|
|
—
|
|
|
491
|
|
350
|
|
|
—
|
|
—
|
|
||||||||
Certificates of deposit
|
101
|
|
53
|
|
|
—
|
|
—
|
|
|
101
|
|
53
|
|
|
—
|
|
—
|
|
||||||||
Other
|
5
|
|
5
|
|
|
—
|
|
—
|
|
|
5
|
|
5
|
|
|
—
|
|
—
|
|
||||||||
Total available-for-sale marketable securities
|
3,426
|
|
2,641
|
|
|
—
|
|
—
|
|
|
3,426
|
|
2,641
|
|
|
—
|
|
—
|
|
||||||||
Trading marketable securities
|
77
|
|
72
|
|
|
77
|
|
72
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Foreign currency exchange forward contracts
|
13
|
|
25
|
|
|
—
|
|
—
|
|
|
13
|
|
25
|
|
|
—
|
|
—
|
|
||||||||
|
$
|
4,835
|
|
$
|
4,077
|
|
|
$
|
1,396
|
|
$
|
1,411
|
|
|
$
|
3,439
|
|
$
|
2,666
|
|
|
$
|
—
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Deferred compensation arrangements
|
$
|
77
|
|
$
|
72
|
|
|
$
|
77
|
|
$
|
72
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Contingent consideration
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning Balance
|
|
|
|
|
|
|
|
|
|
59
|
|
103
|
|
||||||||||||||
Losses included in earnings
|
|
|
|
|
|
|
|
|
|
—
|
|
(5
|
)
|
||||||||||||||
Settlements
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
(39
|
)
|
||||||||||||||
Balance at the end of the period
|
45
|
|
59
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
45
|
|
59
|
|
||||||||
Foreign currency exchange forward contracts
|
13
|
|
2
|
|
|
—
|
|
—
|
|
|
13
|
|
2
|
|
|
—
|
|
—
|
|
||||||||
|
$
|
135
|
|
$
|
133
|
|
|
$
|
77
|
|
$
|
72
|
|
|
$
|
13
|
|
$
|
2
|
|
|
$
|
45
|
|
$
|
59
|
|
Summary of marketable securities:
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||||||||||||||
|
June
|
December
|
|
June
|
December
|
|
June
|
December
|
|
June
|
December
|
||||||||||||||||
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
||||||||||||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate and asset-backed debt securities
|
$
|
1,526
|
|
$
|
1,177
|
|
|
$
|
3
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
(1
|
)
|
|
$
|
1,529
|
|
$
|
1,177
|
|
Foreign government debt securities
|
894
|
|
846
|
|
|
4
|
|
—
|
|
|
—
|
|
(1
|
)
|
|
898
|
|
845
|
|
||||||||
United States agency debt securities
|
402
|
|
211
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
402
|
|
211
|
|
||||||||
United States treasury debt securities
|
490
|
|
350
|
|
|
1
|
|
—
|
|
|
—
|
|
—
|
|
|
491
|
|
350
|
|
||||||||
Certificates of deposit
|
101
|
|
53
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
101
|
|
53
|
|
||||||||
Other
|
5
|
|
5
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
5
|
|
5
|
|
||||||||
Total available-for-sale marketable securities
|
$
|
3,418
|
|
$
|
2,642
|
|
|
$
|
8
|
|
$
|
1
|
|
|
$
|
—
|
|
$
|
(2
|
)
|
|
3,426
|
|
2,641
|
|
||
Trading marketable securities
|
|
|
|
|
|
|
|
|
|
77
|
|
72
|
|
||||||||||||||
Total marketable securities
|
|
|
|
|
|
|
|
|
|
$
|
3,503
|
|
$
|
2,713
|
|
||||||||||||
Reported as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Current assets-marketable securities
|
|
|
|
|
|
|
|
|
|
$
|
3,426
|
|
$
|
2,641
|
|
||||||||||||
Noncurrent assets-other
|
|
|
|
|
|
|
|
|
|
77
|
|
72
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
$
|
3,503
|
|
$
|
2,713
|
|
6
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
|
$
|
500
|
|
|
$
|
500
|
|
Due after one year through three years
|
|
284
|
|
|
285
|
|
||
Due after three years
|
|
2,634
|
|
|
2,641
|
|
||
|
|
$
|
3,418
|
|
|
$
|
3,426
|
|
|
Corporate and Asset-Backed Debt Securities
|
|
Foreign Government Debt Securities
|
|
United States Agency Debt Securities
|
|
Other
|
|
Total
|
|||||||||||||||||||||||||
|
Less Than 12 Months
|
Total
|
|
Less Than 12 Months
|
Total
|
|
Less Than 12 Months
|
Total
|
|
Less Than 12 Months
|
Total
|
|
Less Than 12 Months
|
Total
|
||||||||||||||||||||
Number of investments
|
92
|
|
99
|
|
|
3
|
|
3
|
|
|
33
|
|
33
|
|
|
81
|
|
81
|
|
|
209
|
|
216
|
|
||||||||||
Fair value
|
$
|
200
|
|
$
|
203
|
|
|
$
|
14
|
|
$
|
14
|
|
|
$
|
312
|
|
$
|
312
|
|
|
$
|
21
|
|
$
|
21
|
|
|
$
|
547
|
|
$
|
550
|
|
Unrealized losses
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||||||||||||||||||
|
Gross Notional
|
|
Other Current Assets
|
|
Other Assets – Noncurrent
|
|
Other Current Liabilities
|
|
Other Liabilities – Noncurrent
|
|
Gross Notional
|
|
Other Current Assets
|
|
Other Assets – Noncurrent
|
|
Other Current Liabilities
|
|
Other Liabilities – Noncurrent
|
||||||||||||||||||||
Designated
|
$
|
420
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
344
|
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Non-designated
|
2,353
|
|
|
12
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
2,000
|
|
|
10
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||||||||
|
$
|
2,773
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
2,344
|
|
|
$
|
21
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
—
|
|
7
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
8
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
2014
|
|
2014
|
|
2014
|
|
2013
|
||||||||
|
|
Berchtold
|
|
PST
|
|
Other
|
|
MAKO
|
||||||||
Purchase price paid
|
|
$
|
172
|
|
|
$
|
120
|
|
|
$
|
148
|
|
|
$
|
1,679
|
|
Tangible assets acquired:
|
|
|
|
|
|
|
|
|
||||||||
Inventory
|
|
22
|
|
|
7
|
|
|
5
|
|
|
50
|
|
||||
Other assets
|
|
38
|
|
|
19
|
|
|
25
|
|
|
174
|
|
||||
Liabilities
|
|
(45
|
)
|
|
(33
|
)
|
|
(32
|
)
|
|
(277
|
)
|
||||
Intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Customer relationship
|
|
11
|
|
|
33
|
|
|
4
|
|
|
91
|
|
||||
Trade name
|
|
7
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||
Developed technology & patents
|
|
32
|
|
|
26
|
|
|
70
|
|
|
231
|
|
||||
IPRD
|
|
—
|
|
|
—
|
|
|
2
|
|
|
169
|
|
||||
Goodwill
|
|
107
|
|
|
68
|
|
|
74
|
|
|
1,217
|
|
||||
|
|
$
|
172
|
|
|
$
|
120
|
|
|
$
|
148
|
|
|
$
|
1,679
|
|
|
|
|
|
June 30
|
|
December 31
|
||||
|
|
|
|
2014
|
|
2013
|
||||
Senior unsecured notes:
|
|
|
|
|
||||||
|
Rate
|
Due
|
|
|
|
|
||||
|
3.00%
|
January 15, 2015
|
|
$
|
500
|
|
|
$
|
500
|
|
|
2.00%
|
September 30, 2016
|
|
749
|
|
|
749
|
|
||
|
1.30%
|
April 1, 2018
|
|
598
|
|
|
598
|
|
||
|
4.375%
|
January 15, 2020
|
|
498
|
|
|
498
|
|
||
|
3.375%
|
May 15, 2024
|
|
595
|
|
|
—
|
|
||
|
4.10%
|
April 1, 2043
|
|
394
|
|
|
394
|
|
||
|
4.375%
|
May 15, 2044
|
|
398
|
|
|
—
|
|
||
Commercial paper
|
|
100
|
|
|
—
|
|
||||
Other
|
|
35
|
|
|
25
|
|
||||
|
Total debt
|
|
3,867
|
|
|
2,764
|
|
|||
|
Less current maturities
|
|
(630
|
)
|
|
(25
|
)
|
|||
|
Total long-term debt
|
|
$
|
3,237
|
|
|
$
|
2,739
|
|
9
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
Total
|
|
Severance and Related Costs
|
|
Contractual Obligations and Other
|
||||||
January 1 Balance
|
|
$
|
20
|
|
|
$
|
10
|
|
|
$
|
10
|
|
Charges to earnings
|
|
10
|
|
|
4
|
|
|
6
|
|
|||
Cash paid
|
|
(15
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|||
June 30 Balance
|
|
$
|
15
|
|
|
$
|
6
|
|
|
$
|
9
|
|
|
Reconstructive
|
|
MedSurg
|
|
Neurotechnology and Spine
|
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
|
Three Months
|
|
Six Months
|
||||||||||||||||||||||||||||||||||||||||
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
||||||||||||||||||||||||||||||||
Net sales
|
$
|
1,028
|
|
$
|
966
|
|
|
$
|
2,027
|
|
$
|
1,922
|
|
|
$
|
905
|
|
$
|
832
|
|
|
$
|
1,791
|
|
$
|
1,669
|
|
|
$
|
430
|
|
$
|
414
|
|
|
$
|
850
|
|
$
|
811
|
|
|
$
|
2,363
|
|
$
|
2,212
|
|
|
$
|
4,668
|
|
$
|
4,402
|
|
Segment net earnings
|
228
|
|
231
|
|
|
477
|
|
465
|
|
|
151
|
|
161
|
|
|
296
|
|
322
|
|
|
79
|
|
73
|
|
|
165
|
|
151
|
|
|
$
|
458
|
|
$
|
465
|
|
|
$
|
938
|
|
$
|
938
|
|
||||||||||||
Less: other (net of income taxes)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(43
|
)
|
(59
|
)
|
|
(119
|
)
|
(115
|
)
|
||||||||||||||||||||||||||||
Acquisition and integration related charges
|
|
|
|
|
|
|
|
|
|
|
|
|
(17
|
)
|
(15
|
)
|
|
(30
|
)
|
(32
|
)
|
||||||||||||||||||||||||||||||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
(26
|
)
|
|
(64
|
)
|
(49
|
)
|
||||||||||||||||||||||||||||||||
Restructuring and related charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(20
|
)
|
(10
|
)
|
|
(30
|
)
|
(21
|
)
|
||||||||||||||||||||||||||||||||
Recall charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(217
|
)
|
(120
|
)
|
|
(489
|
)
|
(152
|
)
|
||||||||||||||||||||||||||||||||
Regulatory matter charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
(22
|
)
|
|
—
|
|
(52
|
)
|
||||||||||||||||||||||||||||||||
Tax matters
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
(8
|
)
|
—
|
|
||||||||||||||||||||||||||||
Net earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
128
|
|
$
|
213
|
|
|
$
|
198
|
|
$
|
517
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
10
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
11
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
Three Months
|
|
Six Months
|
||||||||||||||
|
|
2014
|
2013
|
% Change
|
|
2014
|
2013
|
% Change
|
||||||||||
Net Sales
|
|
$
|
2,363
|
|
$
|
2,212
|
|
6.8
|
|
|
$
|
4,668
|
|
$
|
4,402
|
|
6.0
|
|
Gross profit
|
|
1,555
|
1,482
|
4.9
|
|
|
3,091
|
2,959
|
4.5
|
|
||||||||
Research, development and engineering expenses
|
|
158
|
|
132
|
19.7
|
|
|
308
|
261
|
18.0
|
|
|||||||
Selling, general and administrative expenses
|
|
1,148
|
1,015
|
13.1
|
|
|
2,353
|
1,931
|
21.9
|
|
||||||||
Amortization of intangible assets
|
|
47
|
36
|
30.6
|
|
|
92
|
68
|
35.3
|
|
||||||||
Restructuring charges
|
|
5
|
9
|
|
(44.4
|
)
|
|
10
|
23
|
|
(56.5
|
)
|
||||||
Other income (expense)
|
|
(30)
|
(21)
|
42.9
|
|
|
(54)
|
(32)
|
68.8
|
|
||||||||
Income taxes
|
|
39
|
56
|
(30.4
|
)
|
|
76
|
127
|
(40.2
|
)
|
||||||||
Net earnings
|
|
$
|
128
|
|
$
|
213
|
|
(39.9
|
)
|
|
$
|
198
|
|
$
|
517
|
|
(61.7
|
)
|
Diluted net earnings per share
|
|
$
|
0.33
|
|
$
|
0.56
|
|
(41.1
|
)
|
|
$
|
0.51
|
|
$
|
1.35
|
|
(62.2
|
)
|
|
|
|
|
Percentage Change
|
|
|
|
Percentage Change
|
||||||||||||||||
|
|
Three Months
|
|
|
|
Constant
Currency |
|
Six Months
|
|
|
|
Constant
Currency |
||||||||||||
|
|
2014
|
|
2013
|
|
Reported
|
|
|
2014
|
|
2013
|
|
Reported
|
|
||||||||||
Geographic sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,569
|
|
|
$
|
1,458
|
|
|
7.6
|
|
7.6
|
|
$
|
3,111
|
|
|
$
|
2,899
|
|
|
7.3
|
|
7.3
|
International
|
|
794
|
|
|
754
|
|
|
5.4
|
|
5.4
|
|
1,557
|
|
|
1,503
|
|
|
3.6
|
|
5.3
|
||||
Total net sales
|
|
$
|
2,363
|
|
|
$
|
2,212
|
|
|
6.8
|
|
6.9
|
|
$
|
4,668
|
|
|
$
|
4,402
|
|
|
6.1
|
|
6.7
|
Segment sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconstructive
|
|
$
|
1,028
|
|
|
$
|
966
|
|
|
6.5
|
|
6.3
|
|
$
|
2,027
|
|
|
$
|
1,922
|
|
|
5.5
|
|
6.1
|
MedSurg
|
|
905
|
|
|
832
|
|
|
8.8
|
|
9.0
|
|
1,791
|
|
|
1,669
|
|
|
7.3
|
|
7.9
|
||||
Neurotechnology and Spine
|
|
430
|
|
|
414
|
|
|
3.8
|
|
3.9
|
|
850
|
|
|
811
|
|
|
4.8
|
|
5.4
|
||||
Total net sales
|
|
$
|
2,363
|
|
|
$
|
2,212
|
|
|
6.8
|
|
6.9
|
|
$
|
4,668
|
|
|
$
|
4,402
|
|
|
6.1
|
|
6.7
|
|
Three Months
|
|
Six Months
|
||||||||||||||||||||||||||||||
|
|
|
% Change
|
|
|
|
% Change
|
||||||||||||||||||||||||||
|
|
|
|
|
U.S.
|
International
|
|
|
|
|
|
U.S.
|
International
|
||||||||||||||||||||
|
2014
|
2013
|
As Reported
|
Constant Currency
|
As Reported
|
As Reported
|
Constant Currency
|
|
2014
|
2013
|
As Reported
|
Constant Currency
|
As Reported
|
As Reported
|
Constant Currency
|
||||||||||||||||||
Knees
|
$
|
350
|
|
$
|
340
|
|
2.7
|
|
2.7
|
|
7.1
|
|
(5.6
|
)
|
(5.6
|
)
|
|
$
|
698
|
|
$
|
685
|
|
1.9
|
|
2.5
|
|
5.7
|
|
(5.5
|
)
|
(3.7
|
)
|
Hips
|
326
|
|
319
|
|
2.3
|
|
2.2
|
|
6.3
|
|
(2.6
|
)
|
(2.7
|
)
|
|
644
|
|
627
|
|
2.7
|
|
3.5
|
|
6.1
|
|
(1.5
|
)
|
0.5
|
|
||||
Trauma and Extremities
|
298
|
|
266
|
|
11.8
|
|
11.3
|
|
13.2
|
|
10.3
|
|
9.2
|
|
|
586
|
|
532
|
|
10.1
|
|
10.3
|
|
12.4
|
|
7.6
|
|
8.1
|
|
||||
RECONSTRUCTIVE
|
1,028
|
|
966
|
|
6.5
|
|
6.3
|
|
10.7
|
|
0.5
|
|
0.2
|
|
|
2,027
|
|
1,922
|
|
5.5
|
|
6.1
|
|
9.3
|
|
—
|
|
1.5
|
|
||||
Instruments
|
340
|
|
315
|
|
7.6
|
|
7.5
|
|
7.0
|
|
9.4
|
|
8.9
|
|
|
683
|
|
627
|
|
8.9
|
|
9.2
|
|
9.8
|
|
6.3
|
|
7.7
|
|
||||
Endoscopy
|
336
|
|
287
|
|
17.3
|
|
17.6
|
|
16.8
|
|
18.5
|
|
19.7
|
|
|
648
|
|
578
|
|
12.1
|
|
12.8
|
|
11.3
|
|
13.9
|
|
16.5
|
|
||||
Medical
|
177
|
|
172
|
|
3.3
|
|
3.8
|
|
2.5
|
|
6.3
|
|
8.6
|
|
|
358
|
|
354
|
|
1.3
|
|
2.1
|
|
2.2
|
|
(1.7
|
)
|
1.8
|
|
||||
MEDSURG
|
905
|
|
832
|
|
8.8
|
|
9.0
|
|
7.6
|
|
12.5
|
|
13.2
|
|
|
1,791
|
|
1,669
|
|
7.3
|
|
7.9
|
|
7.1
|
|
7.9
|
|
10.1
|
|
||||
Neurotechnology
|
245
|
|
227
|
|
8.3
|
|
8.3
|
|
8.3
|
|
8.3
|
|
8.3
|
|
|
488
|
|
448
|
|
9.1
|
|
9.9
|
|
9.8
|
|
8.2
|
|
10.1
|
|
||||
Spine
|
185
|
|
187
|
|
(1.6
|
)
|
(1.5
|
)
|
(6.1
|
)
|
9.5
|
|
9.8
|
|
|
362
|
|
363
|
|
(0.5
|
)
|
(0.1
|
)
|
(2.9
|
)
|
5.7
|
|
7.0
|
|
||||
NEUROTECHNOLOGY AND SPINE
|
430
|
|
414
|
|
3.8
|
|
3.9
|
|
1.1
|
|
8.7
|
|
8.9
|
|
|
850
|
|
811
|
|
4.8
|
|
5.4
|
|
3.5
|
|
7.3
|
|
9.0
|
|
12
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
13
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
14
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
1.
|
Acquisition and integration related costs
. These adjustments include costs related to integrating recently acquired businesses and specific costs related to the consummation of the acquisition process.
|
2.
|
Amortization of intangible assets
. These adjustments represent the periodic amortization expense related to purchased intangible assets.
|
3.
|
Restructuring and related charges
. These adjustments include costs associated with focused workforce reductions and other restructuring activities.
|
4.
|
Rejuvenate and recall matters
. These adjustments are our best estimate of the minimum of the range of probable loss to resolve certain product recalls, including the recall of Rejuvenate / ABG II modular-neck hip stems and certain matters pertaining to the recall of the Neptune Waste Management System.
|
5.
|
Regulatory and legal matters
. These adjustments represent our best estimate of the minimum of the range of probable
|
6.
|
Tax matters
. These adjustments represent certain discrete tax items and adjustments to interest expense related to the settlement of certain tax matters.
|
Three Months Ended June 30, 2014
|
Gross Profit
|
Selling, General & Administrative Expenses
|
Intangible Amortization
|
Operating Income
|
Net Earnings
|
Effective Tax Rate
|
Diluted EPS
|
|||||||||||||
AS REPORTED
|
$
|
1,555
|
|
$
|
1,148
|
|
$
|
47
|
|
$
|
197
|
|
$
|
128
|
|
23.5
|
%
|
$
|
0.33
|
|
Acquisition and integration related charges
|
|
|
|
|
|
|
|
|||||||||||||
Inventory stepped up to fair value
|
9
|
|
—
|
|
—
|
|
9
|
|
6
|
|
0.6
|
|
0.01
|
|
||||||
Other acquisition and integration related
|
—
|
|
(16
|
)
|
—
|
|
16
|
|
11
|
|
0.8
|
|
0.02
|
|
||||||
Amortization of intangible assets
|
—
|
|
—
|
|
(47
|
)
|
47
|
|
33
|
|
2.0
|
|
0.09
|
|
||||||
Restructuring and related charges
|
—
|
|
(15
|
)
|
—
|
|
20
|
|
20
|
|
(1.9
|
)
|
0.05
|
|
||||||
Rejuvenate and recall matters
|
—
|
|
(276
|
)
|
—
|
|
276
|
|
217
|
|
(2.6
|
)
|
0.58
|
|
||||||
ADJUSTED
|
$
|
1,564
|
|
$
|
841
|
|
$
|
—
|
|
$
|
565
|
|
$
|
415
|
|
22.4
|
%
|
$
|
1.08
|
|
Three Months Ended June 30, 2013
|
Gross Profit
|
Selling General & Administrative Expenses
|
Intangible Amortization
|
Operating Income
|
Net Earnings
|
Effective Tax Rate
|
Diluted EPS
|
|||||||||||||
AS REPORTED
|
$
|
1,482
|
|
$
|
1,015
|
|
$
|
36
|
|
$
|
290
|
|
$
|
213
|
|
20.8
|
%
|
$
|
0.56
|
|
Acquisition and integration related charges
|
|
|
|
|
|
|
|
|||||||||||||
Inventory stepped up to fair value
|
8
|
|
—
|
|
—
|
|
8
|
|
6
|
|
—
|
|
0.02
|
|
||||||
Other acquisition and integration related
|
—
|
|
(10
|
)
|
—
|
|
10
|
|
9
|
|
(0.2
|
)
|
0.02
|
|
||||||
Amortization of intangible assets
|
—
|
|
—
|
|
(36
|
)
|
36
|
|
26
|
|
0.2
|
|
0.07
|
|
||||||
Restructuring and related charges
|
7
|
|
(3
|
)
|
—
|
|
19
|
|
10
|
|
1.5
|
|
0.03
|
|
||||||
Rejuvenate and recall matters
|
—
|
|
(170
|
)
|
—
|
|
170
|
|
120
|
|
3.8
|
|
0.31
|
|
||||||
Regulatory and legal matters
|
—
|
|
(19
|
)
|
—
|
|
19
|
|
22
|
|
(2.6
|
)
|
0.06
|
|
||||||
ADJUSTED
|
$
|
1,497
|
|
$
|
813
|
|
$
|
—
|
|
$
|
552
|
|
$
|
406
|
|
23.5
|
%
|
$
|
1.07
|
|
15
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
Six Months Ended June 30, 2014
|
Gross Profit
|
Selling, General & Administrative Expenses
|
Intangible Amortization
|
Operating Income
|
Net Earnings
|
Effective Tax Rate
|
Diluted EPS
|
|||||||||||||
AS REPORTED
|
$
|
3,091
|
|
$
|
2,353
|
|
$
|
92
|
|
$
|
328
|
|
$
|
198
|
|
27.8
|
%
|
$
|
0.51
|
|
Acquisition and integration related charges
|
|
|
|
|
|
|
|
|||||||||||||
Inventory stepped up to fair value
|
14
|
|
—
|
|
—
|
|
14
|
|
9
|
|
0.7
|
|
0.02
|
|
||||||
Other acquisition and integration related
|
—
|
|
(32
|
)
|
—
|
|
32
|
|
21
|
|
1.3
|
|
0.05
|
|
||||||
Amortization of intangible assets
|
—
|
|
—
|
|
(92
|
)
|
92
|
|
64
|
|
2.2
|
|
0.17
|
|
||||||
Restructuring and related charges
|
1
|
|
(24
|
)
|
—
|
|
35
|
|
30
|
|
(0.7
|
)
|
0.08
|
|
||||||
Rejuvenate and recall matters
|
—
|
|
(620
|
)
|
—
|
|
620
|
|
489
|
|
(5.2
|
)
|
1.29
|
|
||||||
Tax matters
|
—
|
|
—
|
|
—
|
|
—
|
|
8
|
|
(2.9
|
)
|
0.02
|
|
||||||
ADJUSTED
|
$
|
3,106
|
|
$
|
1,677
|
|
$
|
—
|
|
$
|
1,121
|
|
$
|
819
|
|
23.2
|
%
|
$
|
2.14
|
|
Six Months Ended June 30, 2013
|
Gross Profit
|
Selling General & Administrative Expenses
|
Intangible Amortization
|
Operating Income
|
Net Earnings
|
Effective Tax Rate
|
Diluted EPS
|
|||||||||||||
AS REPORTED
|
$
|
2,959
|
|
$
|
1,931
|
|
$
|
68
|
|
$
|
676
|
|
$
|
517
|
|
19.7
|
%
|
$
|
1.35
|
|
Acquisition and integration related charges
|
|
|
|
|
|
|
|
|||||||||||||
Inventory stepped up to fair value
|
8
|
|
—
|
|
—
|
|
8
|
|
6
|
|
—
|
|
0.02
|
|
||||||
Other acquisition and integration related
|
—
|
|
(32
|
)
|
—
|
|
32
|
|
26
|
|
(0.1
|
)
|
0.07
|
|
||||||
Amortization of intangible assets
|
—
|
|
—
|
|
(68
|
)
|
68
|
|
49
|
|
0.4
|
|
0.13
|
|
||||||
Restructuring and related charges
|
7
|
|
(3
|
)
|
—
|
|
33
|
|
21
|
|
0.6
|
|
0.06
|
|
||||||
Rejuvenate and recall matters
|
—
|
|
(210
|
)
|
—
|
|
210
|
|
152
|
|
2.0
|
|
0.40
|
|
||||||
Regulatory and legal matters
|
—
|
|
(59
|
)
|
—
|
|
59
|
|
52
|
|
(0.7
|
)
|
0.13
|
|
||||||
ADJUSTED
|
$
|
2,974
|
|
$
|
1,627
|
|
$
|
—
|
|
$
|
1,086
|
|
$
|
823
|
|
21.9
|
%
|
$
|
2.16
|
|
16
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
17
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4.
|
CONTROLS AND PROCEDURES.
|
18
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
Period
|
|
Total No.
of Shares
Purchased (millions)
|
|
Average Price
Paid
Per Share
|
|
Total No. of
Shares Purchased as
Part of Public
Announced Plans (millions)
|
|
Maximum
Dollar Value
of Shares that may
yet be Purchased
Under the Plans (millions)
|
||||||
April 1 - 30, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
278
|
|
May 1 - 31, 2014
|
|
0.8
|
|
|
79.45
|
|
|
0.8
|
|
|
$
|
218
|
|
|
June 1 - 30, 2014
|
|
—
|
|
|
|
|
—
|
|
|
$
|
218
|
|
||
Total
|
|
0.8
|
|
|
$
|
79.45
|
|
|
0.8
|
|
|
|
ITEM 6.
|
EXHIBITS
|
19
|
|
Dollar amounts in millions except per share amounts or as otherwise specified
|
|
|
STRYKER CORPORATION
|
|
|
(Registrant)
|
|
|
|
July 24, 2014
|
|
/s/ KEVIN A. LOBO
|
Date
|
|
Kevin A. Lobo, President and Chief Executive Officer
|
|
|
|
|
|
|
July 24, 2014
|
|
/s/ WILLIAM R. JELLISON
|
Date
|
|
William R. Jellison, Vice President, Chief Financial Officer
|
20
|
|
|
Exhibit 4
|
|
Instruments defining the rights of security holders, including indentures - The Company agrees to furnish the Commission upon request a copy of each instrument pursuant to which long-term debt of the Company and its subsidiaries not exceeding 10% of the total assets of the Company and its consolidated subsidiaries is authorized.
|
(i)
|
|
Sixth Supplemental Indenture (including the form of 2024 note), dated May 1, 2014, between Stryker Corporation and U.S. Bank National Association. - Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K, dated May 1, 2014 (Commission File No. 000-09165).
|
(ii)
|
|
Seventh Supplemental Indenture (including the form of 2044 note), dated May 1, 2014, between Stryker Corporation and U.S. Bank National association. - Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K, dated May 1, 2014 (Commission File No. 000-09165).
|
Exhibit 31
|
|
Rule 13a-14(a) Certifications
|
(i)
|
|
Certification of Principal Executive Officer of Stryker Corporation
|
(ii)
|
|
Certification of Principal Financial Officer of Stryker Corporation
|
|
|
|
Exhibit 32
|
|
18 U.S.C. Section 1350 Certifications
|
(i)*
|
|
Certification of Principal Executive Officer of Stryker Corporation
|
(ii)*
|
|
Certification of Principal Financial Officer of Stryker Corporation
|
|
|
|
Exhibit 101
|
|
XBRL (Extensible Business Reporting Language) Documents
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Schema Document
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
101.LAB
|
|
XBRL Label Linkbase Document
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
*
|
Furnished with this Form 10-Q
|
21
|
|
|
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