ABOUT STRYKER Stryker is one of the world's leading medical technology companies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes. We segregate our operations into three reportable business segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. Orthopaedics products consist primarily of implants used in hip and knee joint replacements and trauma and extremities surgeries. MedSurg products include surgical equipment and surgical navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), reprocessed and remanufactured medical devices (Sustainability) and other medical device products used in a variety of medical specialties. Neurotechnology and Spine products include neurosurgical, neurovascular and spinal implant devices. COVID-19 Pandemic The COVID-19 global pandemic has led to severe disruptions in the market and the global andUnited States economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown. In response, various governmental authorities and private enterprises have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns. A significant number of our global suppliers, vendors, distributors and manufacturing facilities are located in regions that have been affected by the pandemic. Those operations have been materially adversely affected by restrictive government and private enterprise measures implemented in response to the pandemic. Some of our products are particularly sensitive to reductions in deferrable medical procedures. Deferrable medical procedures were suspended in the first quarter of 2020 in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations. While we have seen progressive improvement in the second and third quarters, to the extent individuals are required to continue to de-prioritize or delay deferrable procedures as a result of the COVID-19 pandemic or otherwise, our business, cash flows, financial condition and results of operations could be negatively affected. Overview of the Three and Nine Months The response to the COVID-19 pandemic has included unprecedented measures to slow the spread of the virus taken by local governments and health care authorities globally, including the postponement of deferrable medical procedures and social contact restrictions, which have had, and we expect will continue to have, a significant negative impact on Stryker's operations and financial results. While we are still recovering from the impacts of the COVID-19 pandemic, most of our businesses reported overall increased unit volume during the third quarter. In the three months 2020 we achieved sales growth of 4.2%. Excluding the impact of acquisitions sales grew 3.3% in constant currency. We reported operating income margin of 23.0%, net earnings of$621 and net earnings per diluted share of$1.63 . Excluding the impact of certain items, we expanded adjusted operating income margin(1) by 260 bps to 28.0%, with adjusted net earnings(1) of$812 and growth of 12.0% in adjusted net earnings per diluted share(1). In the nine months 2020 we experienced sales declines of 6.2%. Excluding the impact of acquisitions sales decreased 6.3% in constant currency. We reported operating income margin of 14.6%, net earnings of$1,031 and net earnings per diluted share of$2.71 , including$170 of charges related to certain in-process asset impairments (primarily the portion of our investment in a new global ERP system that was in-process of being developed for future deployment) and product line and other exit costs resulting from our decision to suspend certain investments due to pandemic-related constraints. Excluding the impact of certain items, adjusted operating income margin(1) was 22.3%, with adjusted net earnings(1) of$1,756 and a reduction of 19.9% in adjusted net earnings per diluted share(1). Recent Developments InJanuary 2020 we repaid$500 of our senior unsecured notes with a coupon of 4.375% that were due onJanuary 15, 2020 . InJune 2020 we issued$650 of senior unsecured notes with a fixed interest rate of 1.150% due onJune 15, 2025 ,$1,000 of senior unsecured notes with a fixed interest rate of 1.950% due onJune 15, 2030 and$650 of senior unsecured notes with a fixed interest rate of 2.900% due onJune 15, 2050 . Refer to Note 8 to our Consolidated Financial Statements for further Information. In the nine months 2020 we did not repurchase any shares of our common stock under our authorized repurchase program. The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was$1,033 as ofSeptember 30, 2020 . As previously announced we intend to maintain the suspension of our share repurchase program through 2021.
(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-GAAP financial measures used in this report and a reconciliation to the most directly comparable GAAP financial measure.
Dollar amounts are in millions except per share amounts or as otherwise specified.
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