STRYKER CORPORATION Dec. 31, 2018 Consolidated Statements Of Earnings \begin{tabular}{l|r|r} \$ millions & Dec. 31, 2018 & Dec. 31, 2017 \\ \cline { 2 - 3 } & $13,601 & $12,444 \\ Net sales & 4,663 & 4,264 \\ \hline Cost of sales & 8,938 & 8,180 \\ \hline Gross profit & 862 & 787 \\ \hline Research, development and engineering expenses & 5,099 & 4,552 \\ \hline Selling, general and administrative expenses & 23 & 173 \\ \hline Recall charges, net of insurance proceeds & 417 & 371 \\ \hline Amortization of intangible assets & 6,401 & 5,883 \\ \hline Total operating expenses & 2,537 & 2,297 \\ \hline Operating income & 181 & 234 \\ \hline Nonoperating expense, net & 2,356 & 2,063 \\ \hline Earnings before income taxes & (1,197) & 1,043 \\ \hline Income tax expense (benefit) & $3,553 & $1,020 \\ \hline Net earnings & & \end{tabular} Net operating profit before tax (NOPBT) 2537 Nonoperating items (expense) before tax LESS Tax shield at 22% Net nonoperating expense (NNE) 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