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and adjusted diluted net earnings per share (EPS). We believe that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures. To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current year results at prior year average foreign currency exchange rates. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates and acquisitions that affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year results at prior year average foreign currency exchange rates excluding the impact of acquisitions. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of our past and future performance and are therefore excluded to allow investors to better understand underlying operating trends. The following are examples of the types of adjustments that may be included in a period: 1. Acquisition and integration related costs. Costs related to integrating recently acquired businesses and specific costs related to the consummation of the acquisition process. 2. Amortization of intangible assets. Periodic amortization expense related to purchased intangible assets. 3. Restructuring related charges. Costs associated with focused workforce reductions, other restructuring activities and long- lived asset impairments. 4. Rejuvenate and recall matters. Our best estimate of the minimum of the range of probable loss to resolve certain product recalls. 5. Regulatory and legal matters. Our best estimate of the minimum of the range of probable loss to resolve certain regulatory matters and other legal settlements. 6. Tax matters. Certain significant and discrete tax items and adjustments to interest expense related to the settlement of certain tax matters. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling, general and administrative expenses, amortization of intangible assets, operating income, effective income tax rate, net earnings and diluted net earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Results of Operations below, provide a more complete understanding of our business. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following reconciles the non-GAAP financial measures: adjusted gross profit; adjusted selling, general and administrative expense; adjusted operating income; adjusted other income/ (expense); adjusted net earnings; adjusted effective tax rate; and adjusted diluted net earnings per share; with the most directly comparable GAAP financial measures: STRYKER CORPORATION 2014 Form 10-K 13 Dollar amounts in millions except per share amounts or as otherwise specified. Year Ended December 31, 2014 Gross Profit Selling, General & Administrative Expenses Intangible Amortization Operating Income Net Earnings Effective Tax Rate Diluted EPS AS REPORTED $ 6,384 $ 4,336 $ 188 $ 1,246 $ 515 55.6% $ 1.34 Acquisition and integration related charges Inventory stepped up to fair value 27 — — 27 15 0.5 0.04 Other acquisition and integration related — (75) — 75 50 0.7 0.13 Amortization of intangible assets — — (188) 188 133 1.1 0.35 Restructuring related charges 1 (116) — 117 78 1.1 0.20 Rejuvenate and other recall matters — (761) — 761 628 (3.1) 1.65 Tax matters — — — — 391 (33.6) 1.02 ADJUSTED $ 6,412 $ 3,384 $ — $ 2,414 $ 1,810 22.3 % $ 4.73 Year Ended December 31, 2013 Gross Profit Selling, General & Administrative Expenses Intangible Amortization Operating Income Net Earnings Effective Tax Rate Diluted EPS AS REPORTED $ 6,044 $ 4,114 $ 138 $ 1,256 $ 1,006 17.0 % $ 2.63 Acquisition and integration related charges Inventory stepped up to fair value 28 — — 28 21 0.1 0.06 Other acquisition and integration related — (70) — 70 51 0.3 0.13 Amortization of intangible assets — — (138) 138 98 0.4 0.26 Restructuring related charges 11 (52) — 63 46 0.3 0.12 Rejuvenate and other recall matters — (622) — 622 460 2.0 1.20 Regulatory and legal matters 7 (62) — 69 63 (0.6) 0.17 Donations — (25) — 25 15 0.3 0.04 Tax matters — — — — (46) 2.9 (0.12) ADJUSTED $ 6,090 $ 3,283 $ — $ 2,271 $ 1,714 22.7 % $ 4.49