Stryker Corp. (NYSE:SYK)

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Stryker Corp., adjusted total assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total assets	34,631)	34,330)	30,167)	27,229)	22,197)
Adjustments
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	308)	296)
Add: Allowance for doubtful accounts	167)	131)	88)	64)	59)
Less: Noncurrent deferred income tax assets²	1,760)	1,530)	1,575)	1,678)	283)
After Adjustment
Adjusted total assets	33,038)	32,931)	28,680)	25,923)	22,269)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Operating lease right-of-use asset (before adoption of FASB Topic 842). See details »

² Noncurrent deferred income tax assets. See details »

Total assets and adjusted total assets exhibited a consistent upward trajectory from 2017 through 2021, characterized by significant expansion in the early years and a notable stabilization toward the end of the period.

Growth Trends in Total Assets: Total assets increased from 22,197 million USD in 2017 to 34,631 million USD in 2021. The most rapid growth occurred between 2017 and 2018, followed by sustained increases through 2020. Growth decelerated sharply in 2021, with a marginal year-over-year increase of approximately 0.9%.
Growth Trends in Adjusted Total Assets: Adjusted total assets followed a comparable expansion path, rising from 22,269 million USD in 2017 to 33,038 million USD in 2021. The growth pattern closely mirrors that of nominal assets, showing steady gains until 2020 and a plateau in 2021, where the increase was limited to 0.3%.
Analysis of Asset Adjustments: A distinct divergence between nominal and adjusted assets emerged after 2017. In 2017, the figures were nearly identical, with adjusted assets slightly exceeding total assets. However, from 2018 onward, a consistent downward adjustment was applied. The gap between total and adjusted assets widened over time, increasing from 1,306 million USD in 2018 to 1,593 million USD by 2021, indicating a persistent systematic reduction in the valuation of assets for adjusted reporting purposes.

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Stryker Corp., adjusted total liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total liabilities	19,754)	21,246)	17,360)	15,499)	12,217)
Adjustments
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	308)	296)
Less: Noncurrent deferred income tax liabilities (included in Other noncurrent liabilities)²	68)	117)	108)	54)	47)
After Adjustment
Adjusted total liabilities	19,686)	21,129)	17,252)	15,753)	12,466)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Noncurrent deferred income tax liabilities (included in Other noncurrent liabilities). See details »

A comprehensive review of the liability structure from 2017 to 2021 reveals a period of significant expansion followed by a moderate contraction. Total liabilities grew consistently from 12,217 million US$ in 2017 to a peak of 21,246 million US$ in 2020, representing a total increase of approximately 73.9% over four years. This upward trajectory was interrupted in 2021, when total liabilities decreased to 19,754 million US$.

Liability Growth Trajectory: The most substantial year-over-year increases occurred between 2017 and 2018, and again between 2019 and 2020. The sharp rise in 2020, reaching over 21 billion US$, indicates a period of increased leverage or significant accrual of obligations prior to the reduction observed in the final year of the analysis.
Analysis of Adjustments: Adjusted total liabilities closely mirror the movement of reported total liabilities, though the nature of the adjustment shifted over the period. In 2017 and 2018, adjusted liabilities were higher than reported totals, with a positive variance of 249 million US$ and 254 million US$, respectively. Starting in 2019, this trend reversed, with adjusted liabilities becoming lower than reported total liabilities. The negative variances in 2019, 2020, and 2021 were 108 million US$, 117 million US$, and 68 million US$, respectively.
Magnitude of Variance: The absolute difference between reported and adjusted total liabilities remained minimal relative to the total balance sheet size. The variance consistently represented a small fraction of the total liability load, suggesting that the adjustments made to the financial statements did not materially alter the overall leverage profile of the organization.
2021 Deleveraging Trend: The period ending December 31, 2021, marks a shift toward deleveraging, as both total and adjusted liabilities declined by approximately 7% compared to the 2020 peak. This suggests a strategic reduction in debt or a significant settlement of outstanding obligations.

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Stryker Corp., adjusted total Stryker shareholders’ equity

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Total Stryker shareholders’ equity	14,877)	13,084)	12,807)	11,730)	9,966)
Adjustments
Less: Net deferred income tax assets (liabilities)¹	1,692)	1,413)	1,467)	1,624)	236)
Add: Allowance for doubtful accounts	167)	131)	88)	64)	59)
Add: Non-controlling interest	—)	—)	—)	—)	14)
After Adjustment
Adjusted total shareholders’ equity	13,352)	11,802)	11,428)	10,170)	9,803)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Net deferred income tax assets (liabilities). See details »

A consistent upward trajectory is observed in both total and adjusted shareholders' equity from 2017 through 2021. Total Stryker shareholders' equity increased from US$ 9,966 million to US$ 14,877 million, representing a cumulative growth of approximately 49.3% over the five-year period. Similarly, adjusted total shareholders' equity rose from US$ 9,803 million to US$ 13,352 million, reflecting a cumulative increase of approximately 36.2%.

Equity Growth Trajectory: The most significant single-year increase for total shareholders' equity occurred between 2017 and 2018, with a rise of US$ 1,764 million. Growth slowed during the 2019-2020 interval before accelerating again in 2021, where equity grew by US$ 1,793 million. Adjusted equity followed a similar general trajectory, although the growth rate was more tempered in the initial years of the observed period.
Analysis of Equity Adjustments: A widening divergence between total and adjusted shareholders' equity is evident beginning in 2018. While the variance in 2017 was relatively minimal at US$ 163 million, the gap expanded significantly to US$ 1,560 million by the end of 2018. This variance remained substantial through 2021, ending the period at US$ 1,525 million. This suggests that the adjustments made to the total equity figure became a significant and persistent factor in the financial reporting structure starting in 2018.
Comparative Performance: Adjusted total shareholders' equity grew at a slower overall pace than the total equity figure. The persistent gap between the two metrics indicates that specific components included in the total equity calculation, which are excluded from the adjusted figure, contributed positively to the overall growth of the equity base throughout the analyzed timeframe.

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Stryker Corp., adjusted capitalization table

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Current maturities of debt	7)	761)	859)	1,373)	632)
Long-term debt, excluding current maturities	12,472)	13,230)	10,231)	8,486)	6,590)
Total reported debt	12,479)	13,991)	11,090)	9,859)	7,222)
Total Stryker shareholders’ equity	14,877)	13,084)	12,807)	11,730)	9,966)
Total reported capital	27,356)	27,075)	23,897)	21,589)	17,188)
Adjustments to Debt
Add: Operating lease liability (before adoption of FASB Topic 842)¹	—)	—)	—)	308)	296)
Add: Current operating lease liabilities (recorded in Accrued expenses and other liabilities)²	112)	109)	86)	—)	—)
Add: Noncurrent operating lease liabilities (recorded in Other noncurrent liabilities)³	310)	325)	301)	—)	—)
Adjusted total debt	12,901)	14,425)	11,477)	10,167)	7,518)
Adjustments to Equity
Less: Net deferred income tax assets (liabilities)⁴	1,692)	1,413)	1,467)	1,624)	236)
Add: Allowance for doubtful accounts	167)	131)	88)	64)	59)
Add: Non-controlling interest	—)	—)	—)	—)	14)
Adjusted total shareholders’ equity	13,352)	11,802)	11,428)	10,170)	9,803)
After Adjustment
Adjusted total capital	26,253)	26,227)	22,905)	20,337)	17,321)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Operating lease liability (before adoption of FASB Topic 842). See details »

² Current operating lease liabilities (recorded in Accrued expenses and other liabilities). See details »

³ Noncurrent operating lease liabilities (recorded in Other noncurrent liabilities). See details »

⁴ Net deferred income tax assets (liabilities). See details »

An analysis of the capitalization structure from 2017 to 2021 reveals a period of significant expansion in both leverage and equity, followed by a modest deleveraging in the final year of the period.

Debt Trends and Adjustments: Total reported debt experienced a sustained increase from 2017 through 2020, rising from 7,222 million US$ to 13,991 million US$. A reduction is observed in 2021, with debt declining to 12,479 million US$. Across the entire timeframe, adjusted total debt remained consistently higher than reported debt. The variance between these two metrics expanded over time, growing from a difference of 296 million US$ in 2017 to 422 million US$ in 2021, indicating that additional liabilities were integrated into the adjusted debt figures.
Shareholders' Equity Evolution: Reported shareholders' equity demonstrated consistent growth, increasing from 9,966 million US$ in 2017 to 14,877 million US$ by 2021. Conversely, adjusted shareholders' equity was systematically lower than reported equity. This gap widened significantly after 2017; while the difference was only 163 million US$ in the first year, it escalated to a range between 1,282 million US$ and 1,560 million US$ from 2018 to 2021, suggesting a substantial downward adjustment of the equity base.
Total Capitalization Dynamics: Total reported capital grew from 17,188 million US$ in 2017 to 27,356 million US$ in 2021. Adjusted total capital followed a similar upward trajectory but exhibited a plateauing effect toward the end of the period, moving from 26,227 million US$ in 2020 to 26,253 million US$ in 2021. The application of adjustments resulted in a more conservative capitalization profile, characterized by a simultaneous increase in recognized debt and a decrease in recognized equity compared to the reported figures.

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Stryker Corp., adjusted net earnings

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Net earnings	1,994)	1,599)	2,083)	3,553)	1,020)
Adjustments
Add: Deferred income tax expense (benefit)¹	(237)	48)	126)	(1,582)	36)
Add: Increase (decrease) in allowance for doubtful accounts	36)	43)	24)	5)	3)
Add: Other comprehensive income (loss), net of tax	626)	(551)	25)	(78)	208)
After Adjustment
Adjusted net earnings	2,419)	1,139)	2,258)	1,898)	1,267)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Deferred income tax expense (benefit). See details »

An analysis of the financial results from 2017 to 2021 reveals significant volatility in reported net earnings when compared to the more consistent trajectory of adjusted net earnings. While reported net earnings experienced a substantial spike in 2018, adjusted figures demonstrate a more stable growth pattern through 2019, a sharp contraction in 2020, and a strong recovery by the end of 2021.

Reported Net Earnings Volatility: Net earnings exhibited extreme fluctuations, rising from 1,020 million US$ in 2017 to a peak of 3,553 million US$ in 2018. This was followed by a downward trend, declining to 2,083 million US$ in 2019 and further to 1,599 million US$ in 2020, before recovering to 1,994 million US$ in 2021.
Adjusted Net Earnings Performance: Adjusted net earnings followed a more linear progression during the first three years, increasing from 1,267 million US$ in 2017 to 2,258 million US$ in 2019. Similar to the reported figures, a decline occurred in 2020, dropping to 1,139 million US$, followed by a significant surge to 2,419 million US$ in 2021, marking the highest value in the analyzed period.
Variance Between Reported and Adjusted Metrics: The divergence between reported and adjusted earnings suggests the impact of significant non-recurring items. In 2018, reported earnings substantially exceeded adjusted earnings, indicating a large one-time gain. Conversely, in 2017, 2019, and 2021, adjusted earnings were higher than reported earnings, suggesting the exclusion of non-cash charges or one-time expenses to reflect underlying operational performance.

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