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STRYKER CORPORATION 2017 FORM 10-K Dollar amounts in millions except per share amounts or as otherwise specified. 9 Supplemental Net Sales Growth Information Percentage Change Percentage Change United States International United States International 2017 2016 As Reported Constant Currency As Reported As Reported Constant Currency 2016 2015 As Reported Constant Currency As Reported As Reported Constant Currency Orthopaedics: Knees $ 1,595 $ 1,490 7.0% 6.9% 7.4% 5.9% 5.5% $ 1,490 $ 1,403 6.2% 6.7% 6.8% 4.6% 6.5% Hips 1,303 1,283 1.6 1.8 2.0 0.9 1.4 1,283 1,263 1.5 2.3 2.0 0.8 2.9 Trauma and Extremities 1,478 1,364 8.3 8.2 11.0 3.8 3.5 1,364 1,291 5.7 5.7 9.1 0.4 0.4 Other 337 285 18.0 17.6 17.9 18.6 16.4 285 266 7.3 7.6 8.1 4.1 5.6 $ 4,713 $ 4,422 6.6% 6.5% 7.8% 4.0% 3.8% $ 4,422 $ 4,223 4.7% 5.1% 6.2% 1.8% 3.1% MedSurg: Instruments $ 1,678 $ 1,553 8.1% 8.0% 8.1% 7.9% 7.5% $ 1,553 $ 1,466 5.9% 6.3% 7.2% 1.5% 3.1% Endoscopy 1,652 1,470 12.4 12.0 14.2 6.3 5.0 1,470 1,390 5.8 6.3 8.8 (3.1) (1.0) Medical 1,969 1,633 20.5 20.4 17.7 31.4 30.4 1,633 823 98.4 99.9 92.4 125.3 133.4 Sustainability 258 238 8.9 8.9 8.9 26.2 24.4 238 216 9.9 9.9 9.8 33.3 37.6 $ 5,557 $ 4,894 13.6% 13.4% 13.2% 15.1% 14.1% $ 4,894 $ 3,895 25.6% 26.3% 26.8% 21.6% 24.6% Neurotechnology and Spine: Neurotechnology $ 1,423 $ 1,255 13.4% 13.4% 11.2% 17.4% 17.3% $ 1,255 $ 1,088 15.4% 15.1% 14.5% 17.0% 16.2% Spine 751 754 (0.4) (0.4) (0.6) 0.1 0.2 754 740 1.8 2.0 3.9 (4.1) (3.5) $ 2,174 $ 2,009 8.2% 8.3% 6.3% 12.4% 12.4% $ 2,009 $ 1,828 9.9% 9.8% 9.8% 9.9% 9.6% Total $12,444 $11,325 9.9% 9.8% 10.1% 9.4% 9.0% $11,325 $ 9,946 13.9% 14.3% 15.6% 9.4% 10.8% Consolidated Net Sales Consolidated net sales in 2017 increased 9.9% as reported and 9.8% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.1%. Excluding the 2.7% impact of acquisitions, net sales increased in constant currency by 8.2% from increased unit volume partially offset by 1.1% lower prices. The unit volume increase was primarily due to higher shipments of neurotechnology, endoscopy, knees, trauma and extremities and instruments products. Consolidated net sales in 2016 increased 13.9% as reported and 14.3% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.4%. Excluding the 7.9% impact of acquisitions, net sales increased in constant currency by 7.8% from increased unit volume partially offset by 1.4% lower prices. The unit volume increase was primarily due to higher shipments of knees, instruments, endoscopy, neurotechnology, trauma and extremities and medical products. Orthopaedics Net Sales Orthopaedics net sales in 2017 increased 6.6% as reported and 6.5% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.1%. Excluding the 0.3% impact of acquisitions, net sales increased in constant currency by 8.6% from increased unit volume partially offset by 2.4% lower prices. The unit volume increase was led primarily by higher shipments of knees and trauma and extremities products. Orthopaedics net sales in 2016 increased 4.7% as reported and 5.1% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.4%. Excluding the 0.3% impact of acquisitions, net sales increased in constant currency by 6.9% from increased unit volume partially offset by 2.1% lower prices. The unit volume increase was led primarily by higher shipments of knees and trauma and extremities products. MedSurg Net Sales MedSurg net sales in 2017 increased 13.6% as reported and 13.4% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.2%. Excluding the 5.6% impact of acquisitions, net sales increased in constant currency by 7.5% from increased unit volume and 0.2% higher prices. The unit volume increase was led primarily by higher shipments of endoscopy, instruments and medical products. MedSurg net sales in 2016 increased 25.6% as reported and 26.3% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.7%. Excluding the 19.1% impact of acquisitions, net sales increased in constant currency by 7.8% from increased unit volume partially offset by 0.6% lower prices. The unit volume increase was led primarily by higher shipments of instruments, endoscopy and medical products. Neurotechnology and Spine Net Sales Neurotechnology and Spine net sales in 2017 increased 8.2% as reported and 8.3% in constant currency, as foreign currency exchange rates impacted net sales nominally. Excluding the 0.7% impact of acquisitions, net sales in constant currency increased by 9.1% from increased unit volume partially offset by 1.5% lower prices. The unit volume increase was led primarily by higher shipments of neurotechnology products. Neurotechnology and Spine net sales in 2016 increased 9.9% as reported and 9.8% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.1%. Excluding the 1.4% impact of acquisitions, net sales in constant currency increased by 9.8% from increased unit volume partially offset by 1.4% lower prices. The unit volume increase was led primarily by higher shipments of neurotechnology products. Gross Profit Gross profit in 2017 as a percentage of net sales decreased to 65.7% from 66.2% in 2016 primarily due to the impact from restructuring-related charges, the impact of hurricanes, unfavorable mix and inflation, partially offset by higher sales volumes, increased productivity and favorable impact of foreign currency exchange. Gross profit as a percentage of net sales decreased to 66.2% in 2016 from 66.4% in 2015 as the benefit from the suspension of the medical device excise tax and favorable productivity was more than offset by unfavorable mix, including the impact of acquisitions and the unfavorable impact of foreign currency exchange.