Financial Analysis

ACQUISITIONS We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. Cash paid for acquisitions, net of cash acquired was $4,960 and $1,628 in 2025 and 2024 . In February 2025 we completed the acquisition of Inari for $80 per share, or an aggregate purchase price of $4,810 , net of cash acquired. Inari's product portfolio includes minimally invasive products for the treatment of venous thromboembolism. Inari is part of our Peripheral Vascular business within MedSurg and Neurotechnology. The purchase price allocation for Inari is based on preliminary valuations, primarily related to developed technologies and customer relationships. Goodwill attributable to the acquisition reflects the strategic benefits of expanding our market presence, diversifying our product portfolio and advancing innovations. This goodwill is not deductible for tax purposes. Share-based awards for Inari employees vested upon our acquisition and a charge of $139 was recorded in selling, general and administrative expenses in 2025 . In 2024 we completed various acquisitions for total consideration that includes $1,628 in upfront payments, net of cash acquired, and $400 contingent upon the achievement of certain commercial or clinical milestones. The combined acquisition-date fair values of the contingent milestone payments totaled $208 . The acquired companies expand the product portfolios of our Instruments, Endoscopy, Medical an …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

CONTINGENCIES AND COMMITMENTS We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, tax, intellectual property and other matters, the most significant of which are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings the claimants seek damages as well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for certain claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, result …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT AND CREDIT FACILITIES We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on December 31, 2025 . In February 2025 we entered into a new revolving credit agreement that replaces our previous agreement dated October 2021. The primary chan ges included increasing the aggregate principal amount of the facility by $750 to $3,000 and extending the maturity date to February 25, 2030. On December 31, 2025 there were no borrowings outstanding under our revolving credit facility or our commercial paper program which allows for maturities up to 397 days from the date of issuance. The maximum amount of our commercial paper that can be outstanding at any time is $3,000 . In February 2025 we issued $500 of 4.550% senior unsecured notes due February 10, 2027, $700 of 4.700% senior unsecured notes due February 10, 2028, $800 of 4.850% senior unsecured notes due February 10, 2030 and $1,000 of 5.200% senior unsecured notes due February 10, 2035. In June 2025 we repaid $650 of 1.150% senior unsecured notes. In November 2025 we repaid $750 of 3.375% senior unsecured notes. The following table summarizes our total debt at December 31: Summary of Total Debt Rate Due 2025 2024 Senior unsecured notes: 1.150% June 15, 2025 $ $ 649 3.375% November 1, 2025 750 3.500% March 15, 2026 1,000 998 4.550 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Segment Net Sales MedSurg and Neurotechnology: 2025 2024 2023 Instruments $ 3,183 $ 2,834 $ 2,534 Endoscopy 3,807 3,389 3,068 Medical 4,204 3,852 3,459 Vascular 1,968 1,307 1,226 Neuro Cranial 2,485 2,136 1,876 $ 15,647 $ 13,518 $ 12,163 Orthopaedics: Knees $ 2,656 $ 2,447 $ 2,273 Hips 1,865 1,704 1,544 Trauma and Extremities 3,948 3,507 3,147 Spinal Implants 185 707 713 Other 815 712 658 $ 9,469 $ 9,077 $ 8,335 Total $ 25,116 $ 22,595 $ 20,498 United States Net Sales MedSurg and Neurotechnology: 2025 2024 2023 Instruments $ 2,562 $ 2,267 $ 2,016 Endoscopy 3,133 2,792 2,513 Medical 3,510 3,191 2,785 Vascular 1,048 506 483 Neuro Cranial 2,052 1,761 1,531 $ 12,305 $ 10,517 $ 9,328 Orthopaedics: Knees $ 1,924 $ 1,788 $ 1,676 Hips 1,137 1,059 988 Trauma and Extremities 2,926 2,586 2,297 Spinal Implants 118 489 500 Other 596 504 468 $ 6,701 $ 6,426 $ 5,929 Total $ 19,006 $ 16,943 $ 15,257 International Net Sales MedSurg and Neurotechnology: 2025 2024 2023 Instruments $ 621 $ 567 $ 518 Endoscopy 674 597 555 Medical 694 661 674 Vascular 920 801 743 Neuro Cranial 433 375 345 $ 3,342 $ 3,001 $ 2,835 Orthopaedics: Knees $ 732 $ 659 $ 597 Hips 728 645 556 Trauma and Extremities 1,022 921 850 Spinal Implants 67 218 213 Other 219 208 190 $ 2,768 $ 2,651 $ 2,406 Total $ 6,110 $ 5,652 $ 5,241

DisaggregationOfRevenueTableTextBlock

FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified in their entirety based on the lowest level of input and disclosed in one of the following three categories: Level 1 Quoted market prices in active markets for identical assets or liabilities. Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Unobservable inputs reflecting our assumptions or external inputs from active markets. Use of observable market data, when available, is required in making fair value measurements. When inputs used fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. We determine fair value for Level 1 instruments using exchange- traded prices for identical instruments. We determine fair value of Level 2 instruments using exchange-traded prices of similar instruments, where available, or utilizing other observable inputs that take into account our credit risk and that of our counterparties. Foreign currency exchange contracts and interest rate hedges, when outstanding, are included in Level 2 and are primarily valued using standard calculations and models that use readily observab …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS In our annual impairment test of goodwill as of October 31, 2024 we performed a quantitative assessment of the Spine reporting unit using a discounted cash flow analysis to estimate the fair value. The carrying value of the Spine reporting unit exceeded its fair value and a charge of $273 was recognized in goodwill and other impairments in the Consolidated Statements of Earnings. The impairment charge for the Spine reporting unit was driven by a decrease in future product demand due to the competitive environment and an increase in the Spine reporting units weighted average cost of capital . Subsequent to the annual goodwill impairment test management committed to a plan to sell certain assets associated withthe Spinal Implants business (disposal group).Goodwill was allocated to the disposal group based on the relative fair values of the disposal group and the portion of the Spine reporting unit that will be retained. Goodwill allocated to the disposal group was tested for impairment which resulted in an impairment charge of $183 recognized in goodwill and other impairments in the Consolidated Statements of Earnings. Refer to Note 16 for additional information on the sale of the Spinal Implants business. In our annual impairment test as of October 31, 2025 we performed a quantitative impairment test for our Peripheral Vascular reporting unit and determined that its fair value exceeded its carrying amount by 12% . At October 31, 2025, goodw …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES On January 1, 2025 we prospectively adopted ASU 2023-09 (Topic 740): Income Taxes: Improvements to Income Tax Disclosures which expands the existing rules on income tax disclosures. This update requires entities to disclose specific categories in the tax rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold and disclose additional information about income taxes paid on an annual basis. In determining the reconciling items we considered the effect of tax rulings as part of the statutory tax rate. Our effective tax rate was 28.1% , 14.3% and 13.8% for 2025 , 2024 and 2023 . The effective income tax rate for 2025 increased from 2024 due to the 2025 tax effect of transfers of intellectual property between tax jurisdictions and the 2024 tax effect of the sale of the Spinal Implants business. The effective income tax rate for 2024 increased from 2023 due to the 2023 tax effect of transfers of intellectual property between tax jurisdictions offset by the 2024 tax effect of the sale of the Spinal Implants business. Effective Income Tax Rate Reconciliation 2025 Amount Percent United States federal statutory rate $ 948 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) 173 3.8 Foreign Tax Effects Ireland Statutory tax rate difference (177) (3.9) Other 17 0.4 Puerto Rico Statutory tax rate difference (49) (1.1) Withholding Tax 60 1.3 Expiration of credits carryforward 78 1.7 Change in valuation al …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

N e w Accounting Pronouncements Not Yet Adopted In December 2025 the Financial Accounting Standards Board (FASB) issued ASU 2025-10 (Topic 832): Accounting for Government Grants Received by Business Entities . This update establishes guidance on the recognition, measurement and presentation of government grants received by business entities including grants related to the purchase, construction or acquisition of an asset and grants related to income. The update is effective for fiscal years beginning after December 15, 2028 including interim periods within those fiscal years. Early adoption is permitted. We do not expect this ASU to have a significant impact on our Consolidated Financial Statements. In September 2025 the FASB issued ASU 2025-07 (Topics 815 and 606): Derivatives and Hedging: Derivatives Scope Refinements and Revenue from Contracts with Customers: Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract . This update expands the scope exception in Topic 815 to certain nonexchange-traded contracts for which settlement is based on operations or activities specific to one of the parties to the contract. The update is effective for fiscal years beginning after December 15, 2026 including interim periods within those fiscal years. Early adoption is permitted. We are evaluating if the ASU will have an impact on our Consolidated Financial Statements. In September 2025 the FASB issued ASU 2025-06 (Subtopic 350-40): Intangibles - G …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

RETIREMENT PLANS Defined Contribution Plans We provide certain employees with defined contribution plans and other types of retirement plans. A portion of our retirement plan expense under the defined contribution plans is funded with Stryker common stock. The use of Stryker common stock represents a non-cash operating activity that is not reflected in our Consolidated Statements of Cash Flows. 2025 2024 2023 Plan expense $ 399 $ 376 $ 327 Expense funded with Stryker common stock 72 62 57 Stryker common stock held by plan: Dollar amount $ 763 $ 781 $ 649 Shares (in millions) 2.2 2.2 2.2 Value as a percentage of total plan assets 8 % 10 % 10 % Defined Benefit Plans Certain of our subsidiaries have both funded and unfunded defined benefit pension plans covering some or all of their employees. The majority of our defined benefit pension plans have projected benefit obligations in excess of plan assets. Discount Rate The discount rates were selected using a hypothetical portfolio of high quality bonds on December 31 that would provide the necessary cash flows to match our projected benefit payments. Expected Return on Plan Assets The expected return on plan assets is determined by applying the target allocation in each asset category of plan investments to the anticipated return for each asset category based on historical and projected returns. Components of Net Periodic Pension Cost Net periodic benefit cost: 2025 2024 2023 Service cost $ (42) $ (39) $ (32) Interest cost (24) (2 …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

"REVENUE RECOGNITION We disaggregate our net sales by business and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors. Products and services are primarily transferred to customers at a point in time, with some transfers of services taking place over time. In 2025 less than 10% of our sales were recognized as services transferred over time. Refer to Note 1 for further discussion on our revenue recognition policies. Segment Net Sales MedSurg and Neurotechnology: 2025 2024 2023 Instruments $ 3,183 $ 2,834 $ 2,534 Endoscopy 3,807 3,389 3,068 Medical 4,204 3,852 3,459 Vascular 1,968 1,307 1,226 Neuro Cranial 2,485 2,136 1,876 $ 15,647 $ 13,518 $ 12,163 Orthopaedics: Knees $ 2,656 $ 2,447 $ 2,273 Hips 1,865 1,704 1,544 Trauma and Extremities 3,948 3,507 3,147 Spinal Implants 185 707 713 Other 815 712 658 $ 9,469 $ 9,077 $ 8,335 Total $ 25,116 $ 22,595 $ 20,498 United States Net Sales MedSurg and Neurotechnology: 2025 2024 2023 Instruments $ 2,562 $ 2,267 $ 2,016 Endoscopy 3,133 2,792 2,513 Medical 3,510 3,191 2,785 Vascular 1,048 506 483 Neuro Cranial 2,052 1,761 1,531 $ 12,305 $ 10,517 $ 9,328 Orthopaedics: Knees $ 1,924 $ 1,788 $ 1,676 Hips 1,137 1,059 988 Trauma and Extremities 2,926 2,586 2,297 Spinal Implants 118 489 500 Other 596 504 468 $ 6,701 $ 6,426 $ 5,929 Total $ 19,006 $ 16,943 $ 15,257 International Net Sales MedSurg and Neurotechnology …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT AND GEOGRAPHIC DATA We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics which aligns to our internal reporting structure and how our Chief Operating Decision Maker (CODM) assesses performance and allocates resources. The CODM is the Chief Executive Officer. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using segment operating income. The Corporate and Other category shown in the table below includes corporate and administration, corporate initiatives and share-based compensation, which includes compensation related to employee stock options, restricted stock units and performance stock unit grants and director stock options and restricted stock unit grants. Segment Results 2025 2024 2023 MedSurg and Neurotechnology $ 15,647 $ 13,518 $ 12,163 Orthopaedics $ 9,469 9,077 8,335 Net sales $ 25,116 $ 22,595 $ 20,498 MedSurg and Neurotechnology $ 5,859 $ 5,320 $ 4,876 Orthopaedics $ 2,570 2,400 2,254 Cost of sales $ 8,429 $ 7,720 $ 7,130 MedSurg and Neurotechnology $ 948 $ 784 $ 702 Orthopaedics $ 524 540 508 Segment research, development and engineering expenses $ 1,472 $ 1,324 $ 1,210 MedSurg and Neurotechnology $ 3,931 $ 3,203 $ 2,934 Orthopaedics $ 3,132 3,111 2,922 Segment selling, general and administrative expenses $ 7,063 $ 6,314 $ 5,856 MedSurg and Neurotechnology $ 237 $ 208 $ 181 Orthopaedics 423 433 386 Segment de …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Stryker (the ""Company,"" ""we,"" ""us,"" or ""our"") is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology and Orthopaedics that help improve patient and healthcare outcomes. Our products include surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment and intensive care disposable products; clinical communication and artificial intelligence-assisted virtual care platform technology; products for traditional brain and open skull- based surgical procedures; minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke and venous thromboembolism; implants used in joint replacement and trauma surgeries; Mako robotic-arm assisted technology; as well as other products used in a variety of medical specialties. Basis of Presentation and Consolidation: The Consolidated Financial Statements include the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. We have no material interests in variable interest entities. Certain prior year amounts have been reclassified to conform with current year presentation in our Consolidated Financial Statements. Use of Estimates : The preparation of financial statements in conformity with accountin …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

CAPITAL STOCK The aggregate number of shares of all classes of stock which we are authorized to issue is up to 1,000,500,000 , divided into two classes consisting of 500,000 shares of $1 par value preferred stock and 1,000,000,000 shares of common stock with a par value of $0.10 . No shares of preferred stock were outstanding on December 31, 2025 . We made no repurchases of shares in 2025 . The manner, timing and amount of repurchases are determined by management based on an evaluation of market conditions, stock price and other factors and are subject to regulatory considerations. Purchases are made from time-to-time in the open market, in privately negotiated transactions or otherwise. On December 31, 2025 the total dollar value of shares of our common stock that could be purchased under our authorized repurchase program was $1,033 . Shares reserved for future compensation grants of our common stock were 31 million and 18 million on December 31, 2025 and 2024 . Stock Options W e measure the cost of employee stock options based on the grant-date fair value and recognize that cost using the straight- line method over the period in which a recipient is required to provide services in exchange for the options, typically the vesting period. The weighted-average fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. Option Value and Assumptions 2025 2024 2023 Weighted-average fair value per share $ 141.40 $ 118.22 $ 83.59 A …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

ACQUISITIONS We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. In the six months 2026 and 2025 cash paid for acquisitions, net of cash acquired was $459 and $4,814 . In May 2026 we completed the acquisition of AVS for net cash consideration of $435 and up to $400 in future milestone payments that had a fair value of $271 at the acquisition date. AVS is developing a next-generation intravascular lithotripsy platform designed to treat complex peripheral arterial disease. AVS is part of our Peripheral Vascular business within MedSurg and Neurotechnology. A cquired i n-process research and development intangible assets represent projects where the related product has not yet received regulatory approval. The purchase price allocation for AVS is based on preliminary valuations, primarily related to in-process research and development. Goodwill attributable to the acquisition reflects the strategic benefits of expanding our peripheral vascular portfolio. This goodwill is not deductible for tax purposes. In February 2025 we completed the acquisition of Inari for $80 per share, or an aggregate purchase price of $4,810 , net of cash acquired. Inari's product portfolio includes minimally invasive products for the treatment of venous thromboembolism. Inari is part of our Peripheral Vascular business within MedSurg and Neurotechnology. Goodwill attributable to the acquisition reflects the strategic benefit …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

CONTINGENCIES AND COMMITMENTS We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, tax, intellectual property and other matters. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings the claimants seek damages as well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for certain claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows. Leases June 30 December 31 202 …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT AND CREDIT FACILITIES We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on June 30, 2026 . On June 30, 2026 we had $250 outstanding under our commercial paper programs which allows for maturities up to 397 days from the date of issuance. The maximum amount of our commercial paper that can be outstanding at any time is $3,000 . In March 2026 we repaid $1,000 of 3.500% senior unsecured notes. The following table summarizes our total debt at June 30 : Summary of Total Debt June 30 December 31 Rate Due 2026 2025 Senior unsecured notes: 3.500% March 15, 2026 1,000 4.550% February 10, 2027 499 498 2.125% November 30, 2027 854 881 4.700% February 10, 2028 698 697 3.650% March 7, 2028 599 599 4.850% December 8, 2028 597 597 3.375% December 11, 2028 683 704 0.750% March 1, 2029 911 939 4.250% September 11, 2029 745 744 4.850% February 10, 2030 794 794 1.950% June 15, 2030 995 995 2.625% November 30, 2030 737 759 1.000% December 3, 2031 850 876 3.375% September 11, 2032 906 934 4.625% September 11, 2034 741 741 5.200% February 10, 2035 990 990 3.625% September 11, 2036 675 695 4.100% April 1, 2043 393 393 4.375% May 15, 2044 396 396 4.625% March 15, 2046 985 984 2.900% June 15, 2050 643 643 Commercial paper 250 Other 1 Total debt $ 14,942 $ 15,859 Less current maturities 750 1,00 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Net Sales by Business Three Months Six Months 2026 2025 2026 2025 MedSurg and Neurotechnology: Instruments $ 1,003 $ 918 $ 1,923 $ 1,756 Endoscopy 1,004 899 1,872 1,766 Medical 1,122 990 2,024 1,935 Vascular 496 498 1,013 904 $ 3,625 $ 3,305 $ 6,832 $ 6,361 Orthopaedics: Knees $ 693 $ 640 $ 1,363 $ 1,279 Hips 479 466 939 909 Trauma and Extremities 1,072 957 2,107 1,902 Ortho Tech 717 649 1,363 1,266 Spinal Implants 3 5 5 $ 171 $ 2,964 $ 2,717 $ 5,777 $ 5,527 Total $ 6,589 $ 6,022 $ 12,609 $ 11,888 Net Sales by Geography Three Months Six Months 2026 2025 2026 2025 United States $ 4,959 $ 4,554 $ 9,435 $ 8,994 International 1,630 1,468 3,174 2,894 Total $ 6,589 $ 6,022 $ 12,609 $ 11,888

DisaggregationOfRevenueTableTextBlock

FAIR VALUE MEASUREMENTS Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for 2025 . In the six months 2026 we recorded $271 of contingent consideration related to the acquisition of Amplitude Vascular Systems, Inc. (AVS) described in Note 7. In 2025 we assumed contingent consideration liabilities with a fair value of $90 related to previous acquisitions made by Inari Medical, Inc. (Inari). Refer to Note 7 for further information on the acquisition of Inari. There were no significant transfers into or out of any level of the fair value hierarchy in 2026 . Assets Measured at Fair Value June 30 December 31 2026 2025 Cash and cash equivalents $ 3,391 $ 4,011 Trading marketable securities 336 307 Level 1 - Assets $ 3,727 $ 4,318 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ 47 $ 52 United States treasury debt securities 38 37 Total available-for-sale marketable securities $ 85 $ 89 Foreign currency exchange forward contracts 81 46 Level 2 - Assets $ 166 $ 135 Total assets measured at fair value $ 3,893 $ 4,453 Liabilities Measured at Fair Value June 30 December 31 2026 2025 Deferred compensation arrangements $ 336 $ 307 Level 1 - Liabilities $ 336 $ 307 Foreign currency exchange forward contracts $ 107 $ 170 Level 2 - Liabilities $ 107 $ 170 Contingent consideration: Beginning $ 518 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS In the first quarter 2026 we changed our organizational structure as further described in Note 1. Following this reorganization we continue to have two reportable segments, MedSurg and Neurotechnology and Orthopaedics. The reorganization impacts the composition of the Instruments and Joint Replacement reporting units and results in a new reporting unit representing the Ortho Tech business. In connection with this reorganization we reallocated the goodwill associated with the impacted businesses using the relative fair value approach, resulting in a reallocation of $518 of goodwill from the MedSurg and Neurotechnology segment to the Orthopaedics segment.

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INCOME TAXES Our effective tax rates were 18.4% and 16.3% in the three and six months 2026 and 13.0% and 13.6% in the three and six months 2025 . The effective tax rates for the three and six months 2026 increased from the three and six months 2025 due to the 2025 tax benefit related to the sale of the Spinal Implants business. The effective tax rates for the three and six months 2026 and 2025 reflect the continued lower effective income tax rates as a result of our European operations and certain discrete tax items.

IncomeTaxDisclosureTextBlock

New Accounting Pronouncements Not Yet Adopted In September 2025 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-07 (Topics 815 and 606): Derivatives and Hedging: Derivatives Scope Refinements and Revenue from Contracts with Customers: Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This update expands the scope exception in Topic 815 to certain non- exchange-traded contracts for which settlement is based on operations or activities specific to one of the parties to the contract. The update is effective for fiscal years beginning after December 15, 2026 including interim periods within those fiscal years. Early adoption is permitted. We are evaluating if the ASU will have an impact on our Consolidated Financial Statements. In September 2025 the FASB issued ASU 2025-06 (Subtopic 350-40): Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal- Use Software. This update clarifies and modernizes the accounting for costs related to internal-use software by removing all references to project stages and clarifying that the probable- to-complete threshold is not met if significant development uncertainty exists. The update is effective for fiscal years beginning after December 15, 2027 including interim periods within those fiscal years. Early adoption is permitted. We are evaluating if the ASU will have an impact on our Consolidated Fi …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

REVENUE RECOGNITION Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2025 . We disaggregate our net sales by business and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors. In the first quarter 2026 we announced a change in our organizational structure. Our new Ortho Tech business combines the orthopaedic instruments portfolio (Orthopaedic Instruments) from Instruments with Other Orthopaedics. In addition, Neuro Cranial and the spine enabling technologies portfolio (Enabling Technologies) from Other Orthopaedics were combined with the remaining Instruments business to align with our internal reporting structure. Ortho Tech includes sales related to Orthopaedic Instruments of $523 and $501 and Other Orthopaedics of $194 and $148 for the three months 2026 and 2025 . For the six months 2026 and 2025 Ortho Tech includes sales related to Orthopaedic Instruments of $1,012 and $985 and Other Orthopaedics of $351 and $281 . Instruments includes sales related to Neuro Cranial of $681 and $616 and Enabling Technologies of $28 and $34 for the three months 2026 and 2025 . For the six months 2026 and 2025 Instruments includes sales related to Neuro Cranial of $1,287 and $1,179 and Enabling Technologies of $54 and $63 . We have reflected these changes in all historical periods presented. Net Sale …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics which aligns to our internal reporting structure and how our Chief Operating Decision Maker (CODM) assesses the performance and allocates resources. The CODM is the Chief Executive Officer. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using segment operating income. Information about total assets by segment is not disclosed because such information is not regularly provided to, or used by, our CODM. Segment Results Three Months Six Months 2026 2025 2026 2025 MedSurg and Neurotechnology $ 3,625 $ 3,305 $ 6,832 $ 6,361 Orthopaedics 2,964 2,717 5,777 5,527 Net sales $ 6,589 $ 6,022 $ 12,609 $ 11,888 MedSurg and Neurotechnology $ 1,343 $ 1,264 $ 2,634 $ 2,438 Orthopaedics 822 767 1,661 1,556 Cost of sales $ 2,165 $ 2,031 $ 4,295 $ 3,994 MedSurg and Neurotechnology $ 255 $ 228 $ 486 $ 437 Orthopaedics 155 153 309 318 Segment research, development and engineering expenses $ 410 $ 381 $ 795 $ 755 MedSurg and Neurotechnology $ 945 $ 909 $ 1,873 $ 1,768 Orthopaedics 850 781 1,695 1,669 Segment selling, general and administrative expenses $ 1,795 $ 1,690 $ 3,568 $ 3,437 MedSurg and Neurotechnology $ 63 $ 58 $ 120 $ 114 Orthopaedics 129 116 258 230 Segment depreciation and amortization $ 192 $ 174 $ 378 $ 344 Corporate and Other $ 37 $ 26 $ 66 $ 53 Amortization of i …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing