STRYKER

Stryker 2014 Annual Report

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restricted stock unit and performance stock unit grants. Certain prior year amounts have been reclassified to conform with the current year presentation of our segments. Results for our reportable segments were: 2014 2013 2012 Orthopaedics 4,153 3,949 3,823 MedSurg 3,781 3,414 3,265 Neurotechnology & Spine 1,741 1,658 1,569 Net sales $ 9,675 $ 9,021 $ 8,657 Orthopaedics 319 273 271 MedSurg 113 84 85 Neurotechnology & Spine 134 135 122 Other 19 19 8 Depreciation and amortization $ 585 $ 511 $ 486 Orthopaedics 367 365 344 MedSurg 162 167 177 Neurotechnology & Spine 107 98 76 Other (118) (127) (75) Income taxes (credit) $ 518 $ 503 $ 522 Orthopaedics 1,033 988 971 MedSurg 677 638 631 Neurotechnology & Spine 364 333 326 Other (264) (245) (280) Segment net earnings (loss) $ 1,810 $ 1,714 $ 1,648 Less: Acquisition & integration-related charges (65) (72) (37) Amortization of intangible assets (133) (98) (88) Restructuring related charges (78) (46) (59) Rejuvenate and related charges (628) (460) (133) Regulatory and legal matters — (63) (33) Donation — (15) — Income tax related adjustments (391) 46 — Net earnings $ 515 $ 1,006 $ 1,298 Total assets and capital spending by reportable segments were: 2014 2013 2012 Orthopaedics 8,600 6,675 3,654 MedSurg 5,626 3,382 2,996 Neurotechnology & Spine 3,772 3,147 2,600 Other (285) 2,539 3,956 Total assets $ 17,713 $ 15,743 $ 13,206 Orthopaedics 80 89 87 MedSurg 77 59 51 Neurotechnology & Spine 20 16 53 Other 56 31 19 Capital spending $ 233 $ 195 $ 210 Our reportable segments are business units that offer different products and services and are managed separately because each business requires different manufacturing, technology and marketing strategies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements. We measure the financial results of our reportable segments using an internal performance measure that excludes acquisition and integration-related charges, restructuring related charges, reserves for certain product recall matters, reserves for certain legal and regulatory matters, a donation to an educational institution, and certain income tax adjustments. Identifiable assets are those assets used exclusively in the operations of each business segment or allocated when used jointly. Corporate assets are principally cash and cash equivalents, marketable securities and property, plant and equipment. The countries in which we have local revenue generating operations have been combined into the following geographic areas: the United States (including Puerto Rico); Europe, Middle East, Africa (EMEA); Asia Pacific; and other foreign countries, which include Canada and countries in the Latin American region. Sales are attributable to a geographic area based upon the customer's country of domicile. Net property, plant and equipment are based upon physical location of the assets. Geographic information follows: Net Sales Net Property, Plant & Equipment 2014 2013 2012 2014 2013 United States $ 6,558 $ 5,984 $ 5,658 $ 539 $ 506 Europe, Middle East, Africa 1,371 1,316 1,266 417 446 Asia Pacific 1,368 1,319 1,336 119 122 Other foreign countries 378 402 397 23 7 $ 9,675 $ 9,021 $ 8,657 $ 1,098 $ 1,081 STRYKER CORPORATION 2014 Form 10-K 34 Dollar amounts in millions except per share amounts or as otherwise specified. NOTE 13 - SUMMARY OF QUARTERLY DATA (UNAUDITED) 2014 Quarter Ended Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,305 $ 2,363 $ 2,389 $ 2,618 Gross profit 1,536 1,555 1,567 1,726 Earnings before income taxes 107 167 425 461 Net earnings 70 128 57 260 Net earnings per share of common stock: Basic 0.19 0.34 0.16 0.68 Diluted 0.18 0.33 0.16 0.67 Market price of common stock: High 83.86 86.93 85.91 98.24 Low 74.02 75.78 78.91 77.87 Dividends declared per share of common stock $ 0.305 $ 0.305 $ 0.305 $ 0.345 2013 Quarter Ended Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,190 $ 2,212 $ 2,151 $ 2,468 Gross profit 1,477 1,482 1,469 1,616 Earnings before income taxes 375 269 137 431 Net earnings 304 213 103 386 Net earnings per share of common stock: Basic 0.80 0.56 0.27 1.02 Diluted 0.79 0.56 0.27 1.01 Market price of common stock: High 66.92 70.00 71.94 75.55 Low 55.24 63.35 63.71 66.93 Dividends declared per share of common stock $ 0.265 $ 0.265 $ 0.265 $ 0.305 The price quotations reported above were supplied by the New York Stock Exchange.

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