Dec. 31, 2018 Dec. 31, 2017 Nonoperating items before tax LESS Tax shield at 22% Net nonoperating expense (NNE) STRYKER CORPORATION Consolidated Statements Of Earnings $ millions Dec. 31, 2018 Net sales $ 13,601 Cost of sales 4,663 Gross profit 8,938 Research, development and engineering expenses 862 Selling, general and administrative expenses 5,099 Recall charges, net of insurance proceeds 23 Amortization of intangible assets 417 Total operating expenses 6,401 Operating income 2,537 Nonoperating expense, net 181 Earnings before income taxes 2,356 Income tax expense (benefit) (1,197) Net earnings $ 3,553 Dec. 31, 2017 $ 12,444 4,264 8,180 787 4,552 173 371 5,883 2,297 234 2,063 1,043 $ 1,020 Top down approach: NOPAT = NOPBT - Tax on operating profit Income taxes PLUS Tax shield = Tax on operating profit NOPBT LESS Tax on operating profit NOPAT Bottom up approach: NOPAT = Net income + NNE Net income PLUS NNE NOPAT