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STRYKER CORPORATION 2017 FORM 10-K Dollar amounts in millions except per share amounts or as otherwise specified. 20 Stryker Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS 2017 2016 2015 Operating activities Net earnings $ 1,020 $ 1,647 $ 1,439 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 271 227 187 Amortization of intangible assets 371 319 210 Share-based compensation 113 97 86 Recall charges 173 158 349 Sale of inventory stepped up to fair value at acquisition 22 36 7 Deferred income tax benefit (expense) 36 (46) 87 Changes in operating assets and liabilities: Accounts receivable (162) (192) (151) Inventories (320) (299) (115) Accounts payable 21 (16) 35 Accrued expenses and other liabilities 90 241 129 Recall-related payments (526) (190) (1,206) Income taxes 704 (128) (238) Other, net (254) 61 162 Net cash provided by operating activities $ 1,559 $ 1,915 $ 981 Investing activities Acquisitions, net of cash acquired (831) (4,332) (153) Purchases of marketable securities (270) (151) (1,715) Proceeds from sales of marketable securities 87 785 4,094 Purchases of property, plant and equipment (598) (490) (270) Other investing, net (1) (3) — Net cash (used in) provided by investing activities $ (1,613) $ (4,191) $ 1,956 Financing activities Proceeds from borrowings 733 1,094 1,576 Payments on borrowings (933) (1,635) (2,272) Proceeds from issuance of long-term debt, net 499 3,453 744 Dividends paid (636) (568) (521) Repurchase of common stock (230) (13) (700) Cash paid for taxes from withheld shares (95) (67) (56) Payments to purchase noncontrolling interest (99) — — Other financing, net (33) (6) 6 Net cash (used in) provided by financing activities $ (794) $ 2,258 $ (1,223) Effect of exchange rate changes on cash and cash equivalents 74 (45) (130) Change in cash and cash equivalents $ (774) $ (63) $ 1,584 Cash and cash equivalents at beginning of year 3,316 3,379 1,795 Cash and cash equivalents at end of year $ 2,542 $ 3,316 $ 3,379 Supplemental cash flow disclosure: Cash paid for income taxes, net of refunds $ 312 $ 510 $ 497 Cash paid for interest on debt $ 264 $ 180 $ 101 See accompanying notes to Consolidated Financial Statements.