2014 annual review

To experience the online, interactive Annual Review,
which features a video message from the Chairman
and CEO, please visit www.stryker.com/2014.
2014 annual review
SYK CORP 2015-02-002
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
269 385 2600 | stryker.com
ADDITIONAL INFORMATION
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
Grand Rapids, Michigan
TRANSFER AGENT AND REGISTRAR
American Stock Transfer &
Trust Company, LLC
New York, New York
Shareholders needing information regarding
their certificates or dividends should contact:
“I have my surgeon,
Dr. Lewis; Toronto
Hospital for Sick Children;
and Stryker’s products,
technology and physician
technical support team
to thank.”
American Stock Transfer &
Trust Company, LLC
Operations Center
6201 15th Avenue
New York, NY 11219
800 937 5449
[email protected]
INVESTOR CONTACT
Katherine A. Owen
Vice President, Strategy and Investor Relations
Galina Gheihman
MEDIA CONTACT
Yin C. Becker
Vice President, Communications,
Public Affairs and Strategic Marketing
BUSINESS DEVELOPMENT CONTACT
Bryant S. Zanko
Vice President, Business Development
David Newman, Stryker
Sales Representative,
and Stephen Lewis, MD,
MSc, FRCSC
Design by Addison www.addison.com
ANNUAL MEETING
The Annual Meeting of Shareholders of Stryker
Corporation will be held at the Radisson Plaza
Hotel at the Kalamazoo Center in Kalamazoo,
Michigan, on Wednesday, April 29, 2015, at
2:00 p.m. ET.
STOCK LISTING
The Company’s common stock is traded on
the New York Stock Exchange under the
symbol SYK.
FORM 10-K
The Company files a Form 10-K with the
Securities and Exchange Commission.
Shareholders wanting a copy of the 2014
report may obtain it free of charge at:
www.stryker.com
or request a copy by writing to:
Investor Relations
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, MI 49002
TRADEMARKS
The following trademarks or service marks
of Stryker Corporation, its divisions or other
corporate affiliated entities appear in this
annual review: AGB, Berchtold, CoAlign
Innovations, Concentric, Gaymar, MAKO,
MAKO Surgical Corp., Memometal, Neptune,
Orthovita, OtisKnee, OtisMed, Porex, PowerLOAD, Power-PRO, Rejuvenate, Safety-Sponge,
Small Bone Innovations, Sonopet, STAR,
Stryker, Stryker Flex Financial, SurgiCount,
Surpass, Trevo ProVue, Trauson, Triathlon,
Xia. All other trademarks or service marks are
trademarks or service marks of their respective
owners or holders.
The products referenced within this Annual
Review may not all be approved or cleared for
sale, distribution or use in the U.S.
DIVERSITY AND INCLUSION
Stryker values an inclusive work environment
that hires and engages a talented and diverse
workforce. Achieving the full potential of
this diversity is a business priority that is
fundamental to our competitive success.
We encourage and expect each employee
to embrace our commitment to an inclusive
workplace that is free from any kind of
discrimination, retaliation or bias.
Xia 3 Spinal System
GALINA’S TIMELINE
PRE-2006
Galina Gheihman was a young athletic
girl from Toronto who enjoyed
basketball, springboard diving, ballroom
dancing and being an excellent student.
Unfortunately, she developed spondylolis­
thesis, which is a displacement of one or
more vertebral bodies out of the natural
alignment of the spine.
Over time, Galina says, “What had been
a dull, aching pain stretching across my
lower back was soon joined by shooting,
sharp nerve pain running down the backs
of my legs and a tingling numbness in
my calves.” This was no ordinary lower
back pain.
Dr. Stephen Lewis of Toronto Hospital
for Sick Children diagnosed Galina and
performed a delicate surgical procedure
using Stryker’s Xia 3 Spinal System,
which features a buttress thread blocker
that helps to eliminate cross-threading,
prevents screw head splaying and helps
ensure secure closure. With Dr. Lewis’
expertise and the Xia 3 Spinal System,
Galina fully recovered from what
had been a slow descent into pain and
immobility and a halt to all of the
activities she loved.
Active childhood — enjoyed basketball and
springboard diving.
EARLY 2006
First signs of pain.
As she recuperated and regained her life,
she flourished. In fact, today, inspired by
her personal experience, Galina is a firstyear medical student.
LATE 2006
“It’s been a dream come true,” she says,
“and I have my surgeon, Dr. Lewis;
Toronto Hospital for Sick Children; and
Stryker’s products, technology and
physician technical support team to
thank for it — ​not only for inspiring me
to pursue medicine, but also for making
it physically possible for me to do so.”
2008
Chronic pain developed — ​
affected ability to participate
in activities.
Sharp shooting pain and
numbness. First appointment
with Dr. Lewis.
EARLY 2010
Surgery performed using
Xia 3 Spinal System.
MID-2010
Resumed activities; began
hiking and camping.
2011
Completed a 50-mile sea
kayaking trip in Vancouver,
British Columbia.
NOW
A thriving and active
medical student.
1 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
PATIENT INSPIRED
TO PURSUE
MEDICAL SCHOOL
DREAM
2 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
FINANCIAL
HIGHLIGHTS
ADJUSTED DILUTED NET EARNINGS
$ PER SHARE 1, 2, 4
HISTORY OF REVENUE GROWTH
$ IN BILLIONS
5.0
4.73
4.0
10.0
3.0
9.7
2.0
1.0
2009
8.0
2014
DIVIDENDS PAID
$ PER SHARE OF COMMON STOCK
1.5
1.22
6.0
1.0
0.5
4.0
2009
2014
CASH FLOW PROVIDED BY OPERATING ACTIVITIES
$ IN BILLIONS
2.0
2.0
1.8
1.5
1.0
0.5
1994
2014
2009
2014
FINANCIAL OVERVIEW
2014
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2013
% CHANGE
NET SALES
EARNINGS BEFORE INCOME TAXES
INCOME TAXES
NET EARNINGS
ADJUSTED NET EARNINGS 2, 3
$9,675 1,160
645
515
1,810
$9,021
1,212
206
1,006
1,714
7.3
(4.3 )
213.1
(48.8 )
5.6
DILUTED NET EARNINGS PER SHARE OF COMMON STOCK:
REPORTED
ADJUSTED1, 2, 4
$1.34 4.73
$2.63
4.49
(49.0 )
5.3
$1.22 5,000
$1.06
3,980
15. 1
25.6
DIVIDENDS PAID PER SHARE OF COMMON STOCK
CASH, CASH EQUIVALENTS AND CURRENT MARKETABLE SECURITIES
non-GAAP financial measure. The most comparable GAAP financial measure is diluted net earnings per share, which were $2.77, $3.19, $3.45, $3.39, $2.63 and $1.34 in 2009, 2010, 2011, 2012, 2013 and 2014, respectively.
A
GAAP is defined as accounting principles generally accepted in the United States.
For a reconciliation between these non-GAAP financial measures and their most comparable GAAP financial measure, refer to our Annual Reports on Form 10-K, available on our website at www.stryker.com or at
the SEC’s website at www.sec.gov.
3
A non-GAAP financial measure. The most comparable GAAP financial measure is net earnings.
4
In 2014, we began excluding amortization of intangible assets from our adjusted diluted net earnings per share. Adjusted Diluted Net Earnings Per Share for 2013 and 2012 were restated in our Annual Report on Form
10-K for the year ended December 31, 2014.
1
2
KEVIN A. LOBO
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
We completed a number of acquisitions
in 2014 including Pivot Medical, Inc.;
Patient Safety Technologies, Inc.; CoAlign
Innovations, Inc.; Berchtold Holding AG;
and Small Bone Innovations, Inc.:
•Pivot and Berchtold add a premium
portfolio of innovative hip arthroscopy
products and operating room equipment
to our Endoscopy offering.
DEAR
SHAREHOLDERS
In 2014 we continued to build on
our legacy of above market performance
by strengthening our leadership in
Orthopaedics, Medical and Surgical
(MedSurg) and Neurotechnology &
Spine. We delivered solid growth and
financial results, completed a number
of acquisitions, opened a new European
Regional Headquarters (RHQ) and
articulated our unique culture through a
new mission statement and core values.
GROWTH & INNOVATION
Our organic growth of nearly 6% was
once again at the high end of the medical
technology industry. The return to
market of an improved Neptune Waste
Management System led to an impressive
13% growth in our Instruments business;
this contributed to an overall constant
currency growth of almost 12% for our
MedSurg business segment. In addition,
our Orthopaedics and Neurotechnology
& Spine segments both grew above 6% in
constant currency.
We had another strong year of double-digit
growth in emerging markets, although
there was volatility in several countries. We
delivered stellar results in China in both
the premium and lower-priced markets,
and our performance in India was strong.
However, tough macroeconomic conditions
in Russia, Turkey, Brazil and Mexico held
back performance in those countries.
We had a difficult year in Japan,
particularly in Hips, Knees and Trauma &
•Patient Safety adds a compliance
software solution to our portfolio of
Instruments products that prevents
foreign objects from being retained in
patients after surgery.
•CoAlign provides our Spine business
with unique inter-body devices for this
fast-growing segment of the market.
•Small Bone Innovations strengthens
our product offering in Trauma &
Extremities with a leading total ankle
implant and other extremity products.
$9.7B
net sales in 2014
3 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
Extremities, largely due to issues related
to the implementation of an enterprise
resource planning system early in
the year. The implementation issues have
been overcome and we are working to
recapture lost market share.
4 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
13%
increase in the dividend rate for 2014
Additionally, we completed our first
full year following the acquisition of
MAKO Surgical Corp. and its roboticarm assisted surgery technology. While
we had some initial challenges bringing
the two organizations together, I am
excited about our recent successes and
the product launches planned for 2015.
In our second year following the
acquisition of Trauson Holding Company
Limited, we continue to achieve excellent
growth in China. We have worked through
some product registration challenges
outside of China and now look forward to
launching Trauson products in India and
Brazil over the next two years.
Meanwhile, we have continued our focus
on internal research and development. Our
spending in this area has increased at a
compound annual growth rate in excess of
10% over the past three years. I am pleased
with these innovation efforts and the
strength of our product pipelines, as well
as service innovations like Flex Financial
financing solutions that help our customers
acquire capital equipment.
STRONG FINANCIAL RESULTS
A model of the Triathlon Knee System on display
at the European Regional Headquarters
We achieved net sales of $9.7 billion and
growth of 7% and delivered adjusted
diluted earnings per share1 of $4.73, an
increase of 5%. Sales and net earnings
were negatively impacted by the strong
U.S. dollar. Adjusting for the impact
of foreign exchange, we delivered solid
earnings leverage in 2014. Gross margins
as a percent of sales decreased due to
price pressure, product mix and the
impact of foreign exchange. However,
we had strong leverage in our selling,
general and administrative expenses and
increased our investments in research
and development as a percent of sales
to drive continued new product growth
into the future. Cash provided by
operations remained steady at $1.8 billion
and we increased our spending in
information technology systems and
plant automation.
Our balance sheet continues to be strong,
as we finished the year with $5 billion of
cash and current marketable securities and
$4 billion of debt. We announced a 13%
increase in our dividend rate and in March
2015 announced an additional $2 billion of
share repurchase authorization, increasing
our total remaining authorization to more
than $2.5 billion. In the fourth quarter we
announced a U.S. Settlement Program for
Rejuvenate and AGB II modular neck hip
stem product liability cases and settled our
OtisKnee litigation with the Department
of Justice. Finally, we opened a European
Regional Headquarters and announced
our intention to repatriate to the U.S.
approximately $2 billion in cash in 2015.
ORGANIZATION AND CULTURE
At the beginning of 2015, we went live
with our new Transatlantic Operating
Model that is designed to accelerate
growth in Europe where we have had
historically lower market share. We
spent 2014 preparing for this change — ​
ideally timed with the opening of our
European Regional Headquarters — ​and
have appointed new divisional leaders in
Europe to drive the businesses forward.
1 Please refer to footnotes 1, 2 and 4 on page 2.
I thank the entire Stryker team for its
efforts in an extremely busy year of
integrating acquisitions, preparing for
a new organizational model, launching
the new European Regional Headquarters
and driving large regulatory projects,
such as Unique Device Identification and
Physician Payment Reporting.
The Stryker culture remains our most
distinguishing characteristic, embodied in
our mission: Together with our customers,
we are driven to make healthcare better;
and in our values: Integrity, Accountability,
People and Performance.
Dr. Stryker, our founder,
was passionate about high
quality medical care,
improving outcomes and
enhancing the patient
experience. His drive and
passion live on in the hearts
and minds of Stryker
employees today.
Regardless of the business segment,
function or geography, there is a common
purpose that unites us and a work ethic
5 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
We are fortunate to have a talented
leadership team, which now includes
Michael Hutchinson, General Counsel,
and Bijoy Sagar, Chief Information
Officer. While we remain committed to
our decentralized model, we are working
hard to streamline our systems and
drive improved operational efficiency
and effectiveness.
that sets us apart. We were recognized
again by FORTUNE Magazine as among
the 100 Best Companies to Work For
in the U.S. and we received many other
accolades from organizations such as
Glassdoor and Gallup, as well as from
similar groups in other countries.
Exceptional performance is highly valued
at Stryker and we remain committed
to operating as a sustainable and socially
responsible business. We have achieved
U.S. LEED and European BREEAM
green building certifications in many
of our facilities and have contributed
millions of dollars’ worth of equipment,
personnel, training and funding for
medical missions that bring resources to
those in desperate need of care.
WELL POSITIONED FOR
THE FUTURE
While healthcare environments around
the world are challenged, there continue
to be opportunities for innovation
that drive long-term value. For example,
our Power-LOAD cot fastener system
is designed to prevent injuries to
ambulance workers and our SurgiCount
Safety-Sponge System is designed to
prevent foreign objects from being
retained in patients after surgery. We
will continue to focus on strengthening
our businesses, delivering improved
outcomes for patients, enhancing
A Power-PRO XT powered ambulance cot
demonstration at the European Regional
Headquarters
caregiver safety and providing economic
value. This focus, combined with our
financial and organizational strength
and our aligned leadership team and
Board of Directors, positions us well for
the future.
Sincerely,
KEVIN A. LOBO
Chairman and Chief Executive Officer
NSE: 3%
CMF: 2%
KNEES: 14%
NEUROVASCULAR: 5%
HN
S PI N E
UR
C
Y&
OG
L
O
OR
SUSTAINABILITY
SOLUTIONS: 2%
OT
E
SPINE: 8%
NE
6 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
LEADING IN MEDTECH
THO
PA E D I C S
$9.7B
MEDICAL: 8%
HIPS: 13%
IN SALES
M
ED
S
U
R
G
ENDOSCOPY: 14%
TRAUMA &
EXTREMITIES: 13%
OTHER RECON: 3%
INSTRUMENTS: 15%
ORTHOPA E DICS | 43%
M E DSURG | 39%
This segment includes hips,
knees, robotic-arm assisted
technology, trauma &
extremities, foot & ankle,
bone cement and performance
solutions.
This segment includes power
tools and surgical equipment,
computer assisted surgery,
minimally invasive surgical
solutions, sports medicine,
infrastructure and integration,
patient care, patient handling
& EMS equipment and
reprocessing & remanufacturing.
N EUROTECH NOLOGY &
S PIN E | 18%
This segment includes
craniomaxillofacial,
interventional spine, neuro
powered instruments,
neurovascular and
spinal products.
Front row
RAMESH SUBRAHMANIAN
Group President, International
Middle row
BIJOY S.N. SAGAR
Vice President, Chief Information Officer
Back row
DAVID K. FLOYD
Group President, Orthopaedics
KEVIN A. LOBO
Chairman and Chief Executive Officer
KATHERINE A. OWEN
Vice President, Strategy and Investor
Relations
TIMOTHY J. SCANNELL
Group President, MedSurg and
Neurotechnology
MICHAEL D. HUTCHINSON
General Counsel
WILLIAM R. JELLISON
Vice President, Chief Financial Officer
LONNY J. CARPENTER
Group President, Global Quality and
Operations & European Business
Operations
STEVEN P. BENSCOTER
Vice President, Global Human Resources
YIN C. BECKER
Vice President, Communications,
Public Affairs and Strategic Marketing
7 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
STRYKER
LEADERSHIP TEAM
8 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
STRYKER
AT A GLANCE
Stryker is one of the world’s leading medical technology
companies and together with our customers, we are driven to
make healthcare better. The Company offers a diverse array
of innovative medical technologies, including orthopaedics,
medical and surgical, and neurotechnology & spine products to
help people lead more active and more satisfying lives. Stryker
products and services are available in over 100 countries around
the world. For more information, please visit our website at
www.stryker.com.
INNOVATION
AND ACQUISITIONS
We target our core markets and key adjacent
markets to drive innovation and acquisitions.
$614M
spent on Research & Development
in 2014, 6.3% of sales
9 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
PEOPLE
AND CULTURE
Stryker’s employees set high standards for
themselves and one another. This desire to achieve,
combined with hard work, has placed us
among the most admired companies in the
medical technology industry.
26,000 +
employees worldwide at the end of 2014
GROWTH
AND GLOBALIZATION
75+ years of innovation have led to a broad and
deep portfolio of
60,000 +
products and services, sold in over
100 countries worldwide
10 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
6,000
total knee replacements
completed as of January 2015
6,000 TOTAL KNEE REPLACEMENT
PROCEDURES…AND COUNTING
Around the globe, we have loyal customers who use Stryker
products, including Dr. Tadashi Kikuchi of Bange Kosei
Hospital in Japan. In January 2015 he performed his 6,000th
total knee replacement (TKR). What made it possible for
Dr. Kikuchi to perform so many TKRs? First, there’s his
drive and commitment to constantly improve his skills,
and then there’s his patient-first philosophy. But his strong
working relationship with his sales representative, Toshikazu
Shimazu, also plays a major role. As a sales partner, Shimazusan understands Dr. Kikuchi’s philosophy. The relationship
between Dr. Kikuchi and Shimazu-san is a model of
success as we work together with our customers to make
healthcare better.
SURGICOUNT SAFETY-SPONGE SYSTEM
IS DESIGNED TO REDUCE MISTAKES
Hospitals strive to eliminate the
possibility of mistakes in the operating
room (O.R.) to meet the industry’s
continuing demand for quality and safety,
while also reducing malpractice costs
and payment penalties. This is where the
Stryker SurgiCount Safety-Sponge System
comes in — ​a clinically proven approach
to eliminating one of the most common
yet preventable medical errors — ​foreign
objects remaining inside a patient after
surgery. The System, added to our
Instruments portfolio through the Patient
Safety Technologies acquisition, provides
real-time counts in the O.R., as well as an
auditable, postoperative documentation
system. “With SurgiCount, there is a
specific ID for each sponge. And that
allows you to completely rectify what
went into the surgical field and what
came off,” says Jeffrey Ashford, MSN, RN,
CNOR, Director of Surgery at Ochsner
Medical Center, in Louisiana. In fact,
with 376 customer hospitals at the end of
2014, the Safety-Sponge System is used
in more hospitals than all other sponge
technologies combined.
COMMITTED
TO O.R. SAFETY
In late 2013 Stryker announced the
FDA’s post-recall 510(k) clearance
of the Neptune 2 Waste Management
System, which reflected usability
testing and feedback from more than
1,000 customers. The Neptune System
combines the demonstrated performance
that customers expect and enhanced
features and functionality that support
best O.R. practices. Stryker’s ability to
overcome the challenge of a product recall
so successfully is due to the fierce
determination of the Neptune team and
customer loyalty. Our commitment to
the surgical waste management market as
well as to patient and caregiver safety has
never been stronger.
AS EASY AS:
1 2 3
Sponges are
scanned before
procedure
begins.
Sponges are
scanned
as they’re
removed.
SurgiCount
System
properly flags
all missing
sponges
and averts
patient harm.
Neptune 2 Waste
Management System
11 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
Stryker’s
SurgiCount360
software application
provides a complete
postoperative
documentation
solution.
12 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
M&A STRENGTHENS
KEY MARKET SEGMENTS
Stryker’s approach to mergers and acquisitions is based on a disciplined strategy that keeps
the Company focused on our three key market segments — ​Orthopaedics, MedSurg and
Neurotechnology & Spine. Through such acquisitions, we target our core markets and key
adjacent markets to drive innovation, improve operations and accelerate growth.
Porex
OtisMed
Sonopet
2009
Memometal
Gaymar
Orthovita
2010
Ascent
2011
Neurovascular
Concentric
Core Business
Adjacency
POWER-LOAD
REDUCES TRAUMA
INJURIES
CREATING FLEXIBLE
FINANCING OPTIONS
Stryker Flex Financial combines strategic
financial consulting with innovative and
flexible payment solutions to make it
easier for customers to purchase Stryker
products. With customized payment
options and competitive rates, customers
can upgrade or acquire Stryker
equipment easily, reducing the risk of
obsolescence and inefficiency while
stabilizing operating costs. For Stryker,
providing these customized programs
helps to strengthen customer loyalty.
After Stryker acquired MAKO Surgical
Corp. in late 2013, Flex Financial made
it possible for Lafayette General Health
Systems, based in southern Louisiana, to
acquire pioneering robotic-arm assisted
surgery technology that simplifies joint
reconstruction. Flex Financial was able
to secure a lower rate than a bank and
offer competitive terms and conditions
to Lafayette General for this purchase.
“We were able to help them acquire
the equipment they needed, while still
meeting their financial goals,” says
James Cress, Vice President and General
Manager for the Flex Financial business.
“We have the flexibility to customize
programs to create an optimal solution
for customers.”
The Power-LOAD cot fastener system
lifts and lowers cots into and out of
ambulances. As a result, it reduces
spinal loads and the risk of cumulative
injuries to operators, while improving
patient safety. Case in point: The EMS
team of the Norman Health System of
central Oklahoma, which responds to
16,000 calls per year, experienced three
cot lifting back injuries from 2012 to
2013. The next year, after implementing
the Power-LOAD system and the PowerPRO XT cot, the team decreased its back
injuries to zero.
Trauson
2012
Small Bone
Innovations
MAKO
2013
Surpass
2014
Pivot
Berchtold
CULTURE OF SERVICE
AND ACCOUNTABILITY
Surgeon Craig Cranford, DPM, in
Denison, Texas, and Bernie Diamond, a
Foot & Ankle sales representative for the
Dallas area, continue to build on their
relationship. “I’ve known him since he
was a resident,” explains Bernie, who
consistently provides Dr. Cranford and
his staff with information on studies,
Stryker products and continuing medical
education opportunities.
Bernie Diamond, Sales Representative (left)
and C. Craig Cranford, DPM
Bernie’s work ethic and knowledge
of procedures has strengthened the
relationship with Dr. Cranford and has
proven to be a win for both the surgeon
and his patients. In early 2015 Bernie
plans to introduce and offer medical
education on Small Bone Innovations’
STAR Ankle, a Stryker acquisition in
2014. “We’re committed to making sure
surgeons are educated about the latest
tools to help them improve the lives of
their patients,” says Bernie.
5,300
patents owned globally at the end of 2014
13 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
Patient Safety
CoAlign
14 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
Rendering of CMRP and
reconstructed mandible
A SECOND
CHANCE AT LIFE
In 2013 after struggling with an incorrect
cancer diagnosis and unnecessary radiation
therapy that damaged her jaw and left her
face disfigured, Lessya Kotelevskaya came
to Louisville, Kentucky, from Kazakhstan.
Dr. Jarrod Little, a renowned plastic and
reconstructive surgeon with University of
Louisville Physicians, agreed to help pro
bono. After a long preparatory process,
Dr. Little reconstructed her face and jaw in
a procedure that lasted over 24 hours. A key
product used in the surgery was Stryker’s
Customized Mandible Reconstruction
Plate (CMRP), which is used in atypical
and challenging cases. Based on a patient’s
anatomical data and the surgeon’s analysis,
the Customized Mandible Reconstruction
Plate can be designed specifically for
each patient — ​right down to the number
and position of its screw holes. It’s also
manufactured according to the planned
patient outcome, which eliminates the need
for intraoperative adaptation. Released
from the hospital this past July, Lessya
continues to do well and is excited to begin
a new stage of her life.
Jarrod Little, MD, Division of Plastic &
Reconstructive Surgery, Division of
Otolaryngology — ​Head & Neck Surgery,
University of Louisville
ENGAGED
EMPLOYEES MAKE
HEALTHCARE BETTER
Jerry Rudzinski, Senior Area Director of Sales,
accepts the Gallup Great Manager Award
#19
ON FORTUNE MAGAZINE’S
2015 100 BEST COMPANIES
TO WORK FOR LIST
Stryker employees come to work every day
to make healthcare better. They are the
reason why our Company is a great place to
work and why we have earned outstanding
customer loyalty. Third-party recognition,
such as LinkedIn’s Most InDemand
Employers, Gallup’s Great Workplace
Award (which we have won seven times),
our 2015 #19 ranking on FORTUNE
Magazine’s 100 Best Companies to
Work For list, and Great Place to Work
awards in other countries, are notable
evidence of our engaging workplace
culture. Additional evidence includes
our employees’ individual achievements,
such as the 2014 Gallup Great Manager
Award won by Jerry Rudzinski, senior
area director of sales, which celebrates a
manager who consistently performs in
the 90th percentile or above in employee
engagement measurements, shows high
levels of performance and maintains high
employee retention levels.
15 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
STRYKER’S NEW
EUROPEAN REGIONAL
HEADQUARTERS
After evaluating a range of operating
models, Stryker implemented a
Transatlantic Operating Model in 2015,
aligning our businesses in Europe
and the U.S. The goal is to build on
the success of the European team,
accelerate growth through greater product
line focus, and build global leadership
capabilities. To support the strategy
around the Transatlantic Operating Model,
and to ensure that internal resources
and teams are aligned with customer
needs, Stryker established a European
Regional Headquarters in 2014. Based
in Amsterdam, this hub was designed to
increase communication and collaboration
and help the Company achieve greater
operational efficiencies. “The Regional
Headquarters is the next logical step
to continue fueling Stryker’s growth in
Europe and to bring the best of Stryker
to our customers,” says Xavier Berling,
President, Europe.
AMSTERDAM,
THE NETHERLANDS
16 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
TAKING
RESPONSIBILITY
Our business is built on making long-term contributions, in a responsible way,
to our customers and their patients, to our employees, to our communities and to
our shareholders.
PROVIDING
REGULATORY
TRAINING IN CHINA
In 2014 Jiangsu Food and Drug
Administration (JSFDA) and Trauson
agreed to jointly develop the JSFDA
Education Training Center, a site
providing regulatory and quality
assurance training to JSFDA officials
in Jiangsu Province. The first training
session took place in December for
21 regulatory officials. Yingnian Wu, the
team leader of the Jiangsu Provincial
Discipline Inspection Commission,
called Trauson a pioneering enterprise
in the Chinese orthopaedic industry
with its high standard of quality control
and said Trauson has laid a solid
foundation for the future success of the
training center. Trauson signed a fiveyear agreement with JSFDA, reinforcing
its commitment to assist JSFDA in
promoting the sound development
of the medical device industry in
Jiangsu Province.
SUSTAINABILITY STATS
Stryker helped hospitals
divert over
10.5M
pounds of medical waste from
landfills in 2014. That’s an increase
of 1.6 million pounds over 2013.
Sustainability Solutions helped
customers save a record-setting
$258M
in supply expenses.
During the past 20 years Stryker’s
customers have collectively
eliminated an estimated
35 million pounds of waste and
reduced more than
$1B
in supply costs.
Stryker Orthopaedics’ business and the
PGA TOUR formed a relationship in 2014
that designated Stryker’s products as
the “Official Joint Replacement Products
of the PGA TOUR and Champions
Tour.” The agreement advanced Stryker’s
commitment to educating golf fans
about joint health by enhancing the fan
experience at tournaments with its
premier on-site joint health destination,
the Stryker Mobility Zone. At this exhibit,
orthopaedic surgeons educate attendees
about hip and knee treatment options and
about how Stryker’s products may help
them regain their mobility and return to
their everyday activities.
The Stryker Mobility Zone appeared at
key PGA TOUR and Champions Tour
events across the U.S. “We enjoyed a
great response from golf fans across
the country who were really interested
in learning more about their joint pain
and treatment options. We’re excited to
continue the momentum and bring the
Stryker Mobility Zone to PGA TOUR
and Champions Tour events in 2015,”
said Bill Huffnagle, President of Stryker’s
Reconstructive Division.
11
The Stryker Mobility Zone made
its debut in 2014 with 11 stops on the
PGA TOUR and Champions Tour.
17 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
STRYKER MOBILITY ZONE PROMOTES
JOINT HEALTH EDUCATION
18 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
BOARD OF DIRECTORS
RONDA E. STRYKER ‡
Vice Chair and Director,
Greenleaf Trust; Vice Chair,
Spelman College; Trustee,
Kalamazoo College; Member,
Harvard Medical School Board
of Fellows; granddaughter of the
founder of the Company and
daughter of a former president
of the Company
HOWARD E. COX, JR.**
Partner, Greylock; Director
Secretary, Defense Business
Board; Member, Harvard
Medical School Board of
Fellows; Member, investment
committees of the Dana Farber
Cancer Institute, Partners
Healthcare System, Inc. and the
Boston Museum of Fine Arts
*Lead Independent Director
**Audit Committee
†Compensation Committee
‡Governance and Nominating Committee
From left to right
ALLAN C. GOLSTON**
President, United States
Program for the Bill & Melinda
Gates Foundation
ROCH DOLIVEUX, D.V.M.† ‡
Former Chief Executive Officer
and Chairman of the Executive
Committee, UCB S.A.
KEVIN A. LOBO
Chairman and Chief Executive
Officer, Stryker Corporation;
Director, Parker Hannifin
Corporation
ANDREW K. SILVERNAIL**
WILLIAM U. PARFET*
Chairman and Chief Executive
Officer, MPI Research,
Inc.; Director, Monsanto
Company; Director, Taubman
Centers, Inc.
†‡
Chairman, President and
Chief Executive Officer,
IDEX Corporation; Trustee,
Manufacturers Alliance for
Productivity and Innovation
LOUISE L. FRANCESCONI † ‡
Former President, Raytheon
Missile Systems; Former Vice
President, Raytheon Company;
Chair, Tucson Medical
Center Healthcare Board of
Trustees; Director, UNS
Energy Corporation
SRIKANT M. DATAR, PH.D.**
Arthur Lowes Dickinson
Professor at the Graduate School
of Business Administration,
Harvard University; Director,
Novartis AG; Director, ICF
International, Inc.; Director,
T-Mobile US, Inc.
OTHER CORPORATE
OFFICERS
JOHN W. BROWN
Chairman Emeritus and
former Chairman, President
and Chief Executive Officer
DEAN H. BERGY
VP, Corporate Secretary
IRENE B. CORBE
VP, Internal Audit
WILLIAM E. BERRY, JR.
VP, Corporate Controller
DAVID G. FURGASON
VP, Tax
JEANNE M. BLONDIA
VP, Finance and Treasurer
ELIZABETH A. STAUB
VP, Regulatory Affairs and
Quality Assurance
BRONWEN R. TAYLOR
VP, Compliance and
Risk Management
DIVISION PRESIDENTS
Businesses
Regions
WAYNE D. DAHLBERG
Performance Solutions
J. ANDREW PIERCE
Endoscopy
MAURICE BEN-MAYOR
South Pacific
GRAHAM A. MCLEAN
Japan
JAMES N. HEATH
Instruments
BRADFORD L. SAAR
Medical
XAVIER BERLING
Europe
DAVID A. MURPHY
Americas
WILLIAM J. HUFFNAGLE
Reconstructive
SPENCER S. STILES
Spine
M. BRENT SCOTT
Asia
VIVIAN MASSON
Trauma & Extremities
BRIAN J. WHITE
Sustainability Solutions
LAURENCE F.I. HIPKIN
Eastern Europe, Middle East,
Africa
MARK H. PAUL
Neurovascular
WITH APPRECIATION
CURTIS E. HALL, ESQ.
The Board of Directors and Management
of Stryker acknowledge Curtis Hall
as he stepped down as Vice President
and Chief Legal Officer, following a
remarkable 20-year career with the
Company. Mr. Hall was the first attorney
and General Counsel hired by Stryker
in 1994 and helped guide the Company
through an extraordinary period of
growth. When he joined Stryker, sales
were $682 million and have since
grown to $9.7 billion. During his tenure,
Mr. Hall’s judgment was relied upon
time and time again to navigate complex
legal matters and provide our leadership
with strategic advice and counsel. The
acquisition of Howmedica in 1998 was
a defining moment, as the Company
doubled in size and there were only two
attorneys on staff at the time, including
Mr. Hall. Over the next 15 years he
built an excellent Legal & Compliance
organization that is valued by our
divisions as a true business partner.
He also developed a successor for his
role and has helped ensure a seamless
transition. Mr. Hall is a role model of
Integrity (one of our core values) and
has consistently demonstrated the
courage to make difficult decisions. We
are fortunate that Mr. Hall has chosen
to stay involved with Stryker on a parttime basis to continue assisting us with
legal and compliance matters.
19 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
The Stryker Leadership Team,
who are also Corporate Officers,
are pictured on page 7.
CHAIRMAN
EMERITUS
2 0 | S T R Y K E R 2 0 14 A N N U A L R E V I E W
GLOBAL RECOGNITION
FORTUNE WORLD’S
MOST ADMIRED
COMPANIES IN
MEDICAL EQUIPMENT
#6 in 2015; recipient for the
fourteenth consecutive year
GALLUP’S GREAT
WORKPLACE AWARD
Recipient for the seventh time
in 2014
FORTUNE 100 BEST
COMPANIES TO WORK
FOR (U.S.)
FORTUNE 500
LARGEST U.S.-BASED
COMPANIES
#19 in 2015; recipient for the fifth
consecutive year — moved up
23 places from 2014
#306 in 2014; joined the list in 2003
GREAT PLACE TO
WORK INSTITUTE — ​
Australia, Canada
& Mexico
THE SUNDAY TIMES
100 BEST COMPANIES
TO WORK FOR
#25 for Australia in 2014
#30 for Canada in 2014
#69 for Mexico in 2014
TOP EMPLOYERS
SCHWEIZ SUISSE
2014 certification; recipient for the
first time
#31 in 2015; Stryker UK recipient
for the ninth consecutive year
2014 PRIX GALIEN
AWARD FOR BEST
MEDICAL TECHNOLOGY
WOMAN ENGINEER
MAGAZINE’S
TOP 50 EMPLOYERS
For the Trevo ProVue Retriever
#26 in 2014
“This is an amazing place to work!
Our culture is a result of our employees’
dedication and passion.”
Kevin A. Lobo, Chairman and CEO
ADDITIONAL INFORMATION
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
Grand Rapids, Michigan
TRANSFER AGENT AND REGISTRAR
American Stock Transfer &
Trust Company, LLC
New York, New York
Shareholders needing information regarding
their certificates or dividends should contact:
“I have my surgeon,
Dr. Lewis; Toronto
Hospital for Sick Children;
and Stryker’s products,
technology and physician
technical support team
to thank.”
American Stock Transfer &
Trust Company, LLC
Operations Center
6201 15th Avenue
New York, NY 11219
800 937 5449
[email protected]
INVESTOR CONTACT
Katherine A. Owen
Vice President, Strategy and Investor Relations
Galina Gheihman
MEDIA CONTACT
Yin C. Becker
Vice President, Communications,
Public Affairs and Strategic Marketing
BUSINESS DEVELOPMENT CONTACT
Bryant S. Zanko
Vice President, Business Development
David Newman, Stryker
Sales Representative,
and Stephen Lewis, MD,
MSc, FRCSC
Design by Addison www.addison.com
ANNUAL MEETING
The Annual Meeting of Shareholders of Stryker
Corporation will be held at the Radisson Plaza
Hotel at the Kalamazoo Center in Kalamazoo,
Michigan, on Wednesday, April 29, 2015, at
2:00 p.m. ET.
STOCK LISTING
The Company’s common stock is traded on
the New York Stock Exchange under the
symbol SYK.
FORM 10-K
The Company files a Form 10-K with the
Securities and Exchange Commission.
Shareholders wanting a copy of the 2014
report may obtain it free of charge at:
www.stryker.com
or request a copy by writing to:
Investor Relations
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, MI 49002
TRADEMARKS
The following trademarks or service marks
of Stryker Corporation, its divisions or other
corporate affiliated entities appear in this
annual review: AGB, Berchtold, CoAlign
Innovations, Concentric, Gaymar, MAKO,
MAKO Surgical Corp., Memometal, Neptune,
Orthovita, OtisKnee, OtisMed, Porex, PowerLOAD, Power-PRO, Rejuvenate, Safety-Sponge,
Small Bone Innovations, Sonopet, STAR,
Stryker, Stryker Flex Financial, SurgiCount,
Surpass, Trevo ProVue, Trauson, Triathlon,
Xia. All other trademarks or service marks are
trademarks or service marks of their respective
owners or holders.
The products referenced within this Annual
Review may not all be approved or cleared for
sale, distribution or use in the U.S.
DIVERSITY AND INCLUSION
Stryker values an inclusive work environment
that hires and engages a talented and diverse
workforce. Achieving the full potential of
this diversity is a business priority that is
fundamental to our competitive success.
We encourage and expect each employee
to embrace our commitment to an inclusive
workplace that is free from any kind of
discrimination, retaliation or bias.
To experience the online, interactive Annual Review,
which features a video message from the Chairman
and CEO, please visit www.stryker.com/2014.
2014 annual review
SYK CORP 2015-02-002
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, Michigan 49002
269 385 2600 | stryker.com