UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.
20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

Commission file number: 0-9165

STRYKER CORPORATION
(Exact name of
registrant as specified in its charter)

Michigan	38-1239739
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or organization)

P.O. Box 4085, Kalamazoo, Michigan	49003-4085
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (269) 385-2600

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities and Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

YES [X]
NO [ ]

Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date:

199,144,729 shares of Common Stock, $.10 par value, as of July
31,
2003.

PART I. - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

Stryker Corporation and Subsidiaries

(in millions, except per share
amounts)

See accompanying notes to condensed
consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

Stryker Corporation and Subsidiaries

(in millions, except per share
amounts)

		June 30	December 31
		2003	2002
ASSETS
Current Assets
Cash and cash equivalents		$47.1	$37.8
Accounts receivable, less allowance of $48.9 ($43.7 in 2002)		446.7	406.7
Inventories		460.4	426.5
Deferred income taxes		254.0	227.5
Prepaid expenses and other current assets		70.7	52.8
	Total current assets	1,278.9	1,151.3

Property, Plant and Equipment, less allowance for depreciation of $446.9 ($405.5 in 2002)		555.2	519.2

Other Assets
Goodwill		476.5	460.0
Other intangibles, less accumulated amortization of $119.5 ($99.3 in 2002)		476.9	475.1
Deferred charges, less accumulated amortization of $326.4 ($274.1 in 2002)		141.2	123.7
Other		77.3	86.2
		1,171.9	1,145.0
		$3,006.0	$2,815.5

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable		$137.7	$106.0
Accrued compensation		146.0	161.4
Restructuring and acquisition-related liabilities		21.3	25.5
Income taxes		104.7	133.2
Accrued expenses and other liabilities		292.0	270.7
Current maturities of long-term debt		6.5	10.7
	Total current liabilities	708.2	707.5

Long-Term Debt, excluding current maturities		358.9	491.0
Other Liabilities		120.3	118.8
Stockholders' Equity
Common stock, $.10 par value:
	Authorized - 500.0 shares
	Outstanding - 198.8 shares (198.1 in 2002)	19.9	19.8
Additional paid-in capital		145.0	120.7
Retained earnings		1,654.2	1,442.6
Deferred stock-based compensation		(3.3)	-
Accumulated other comprehensive gain (loss)		2.8	(84.9)
Total stockholders' equity		1,818.6	1,498.2
		$3,006.0	$2,815.5

See accompanying notes to condensed
consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

Stryker Corporation and Subsidiaries

(in millions, except per share
amounts)

			Three Months Ended		Six Months Ended
			June 30		June 30
			2003	2002	2003	2002
Net sales			$891.7	$733.9	$1,738.6	$1,436.8
Cost of sales			326.9	267.1	627.7	522.0
Gross profit			564.8	466.8	1,110.9	914.8

Research, development and engineering expenses			44.9	34.4	88.1	68.0
Selling, general and administrative expenses			348.4	287.9	685.9	565.1
			393.3	322.3	774.0	633.1

Other expense (income):
	Interest expense		6.4	10.0	13.4	20.6
	Intangibles amortization		10.1	5.8	19.1	11.8
	Other		(0.8)	0.5	(2.3)	0.1
			15.7	16.3	30.2	32.5
Earnings before income taxes			155.8	128.2	306.7	249.2
Income taxes			48.3	42.3	95.1	82.2
Net earnings			$107.5	$85.9	$211.6	$167.0

Net earnings per share of common stock:
		Basic	$.54	$.44	$1.07	$.85
		Diluted	$.53	$.42	$1.04	$.82

Average outstanding shares for the period:
		Basic	198.6	197.4	198.4	197.2
		Diluted	203.1	203.6	202.9	203.7

					Accumulated
		Additional		Deferred	Other
	Common	Paid-In	Retained	Stock-Based	Comprehensive
	Stock	Capital	Earnings	Compensation	Gain (Loss)	Total
Balances at January 1, 2003	$19.8	$120.7	$1,442.6	$0.0	($84.9)	$1,498.2

Net earnings			211.6			211.6
Net unrealized losses on securities, net of income tax benefit					(0.2)	(0.2)
Net unrealized gains related to cash flow hedges					4.9	4.9
Foreign currency translation adjustments					83.0	83.0
Comprehensive earnings for the six months ended June 30, 2003						299.3
Issuance of 0.7 shares of common stock under stock option and
benefit plans, including $10.9 income tax benefit	0.1	20.9				21.0
Issuance of restricted stock		3.4		(3.4)		0.0
Amortization of deferred stock-based compensation				0.1		0.1
Balances at June 30, 2003	$19.9	$145.0	$1,654.2	($3.3)	$2.8	$1,818.6

See accompanying notes to condensed
consolidated financial statements.

In 2002, the Company
declared a cash dividend of twelve cents per share to shareholders of record on
December 31, 2002, payable on January 31, 2003.
No cash dividends have been declared during 2003.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Stryker Corporation and Subsidiaries

(in millions)

See accompanying notes to condensed
consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Stryker Corporation and Subsidiaries

June 30, 2003

(in millions, except share and per share
amounts)

NOTE 1

BASIS OF PRESENTATION

The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The results of operations for the six-month
period ended June 30, 2003 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2003.

The
balance sheet at December 31, 2002 has been derived from the audited financial
statements at that date but does not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.

For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2002 (the "2002 Form 10-K").

NOTE 2

COMPREHENSIVE GAIN

The
Company follows Financial Accounting Standards Board (FASB) Statement No. 130, Reporting
Comprehensive Income, in accounting for comprehensive income and its
components. The comprehensive gain for
the six months ended June 30, 2003 and 2002 was $299.3 and $240.5,
respectively, and for the three months ended June 30, 2003 and 2002 was $163.8
and $173.6, respectively.

NOTE 3

ACCOUNTS RECEIVABLE
SECURITIZATION

The
Company's accounts receivable securitization facility is described in detail in
Note 1 to the consolidated financial statements included in the Company's 2002
Form 10-K. The amounts of accounts
receivable interests sold by Stryker Funding Corporation (SFC) under the facility,
net of SFC's retained interest, totaled $181.5 at June 30, 2003 and $130.0 at December
31, 2002 and are reflected in the condensed consolidated balance sheets as
reductions of accounts receivable.

On
April 24, 2003, the Company entered into an amended and restated accounts
receivable securitization facility pursuant to which it increased the aggregate
undivided percentage ownership interest in receivables that SFC may sell to bank
administered commercial paper conduits from $130.0 to $200.0. SFC had sold an additional $51.5 of undivided
percentage ownership interests in accounts receivable as of June 30, 2003. The proceeds from the sale of additional accounts
receivable interests were used to reduce outstanding borrowings under the
Company's unsecured credit facilities.

NOTE
4

INVENTORIES

Inventories are as follows:

			Three Months Ended		Six Months Ended
			June 30		June 30
			2003	2002	2003	2002
Operating Activities
Net earnings			$107.5	$85.9	$211.6	$167.0
Adjustments to reconcile net earnings to net cash
provided by operating activities:
	Depreciation		23.1	21.5	46.2	40.3
	Amortization		30.6	23.7	60.2	45.1
	Payments of restructuring and acquisition-related liabilities		(2.9)	(1.0)	(3.8)	(3.1)
	Other		1.3	0.5	4.0	1.0
	Changes in operating assets and liabilities, net of effects
	of business and product line acquisitions:
		Proceeds from accounts receivable securitization	51.5	-	51.5	-
		Accounts receivable	(54.3)	(14.3)	(67.1)	(27.1)
		Inventories	7.7	(7.8)	(15.6)	(19.1)
		Deferred charges	(25.3)	(24.2)	(53.5)	(45.3)
		Accounts payable	5.5	(5.9)	28.6	7.9
		Payments of acquisition purchase liabilities	(0.2)	-	(0.4)	(0.3)
		Accrued expenses	52.4	38.7	23.0	14.2
		Income taxes	(86.1)	(16.3)	(49.0)	5.1
		Other	10.3	9.3	(10.4)	(12.9)
Net cash provided by operating activities			121.1	110.1	225.3	172.8

Investing Activities
Business and product line acquisitions, net of cash acquired			(4.5)	(6.2)	(8.8)	(11.3)
Purchases of property, plant and equipment			(30.9)	(31.7)	(60.1)	(53.3)
Proceeds from sales of property, plant and equipment			0.1	-	0.2	0.2
Net cash used in investing activities			(35.3)	(37.9)	(68.7)	(64.4)

Financing Activities
Proceeds from borrowings			183.0	82.7	351.9	288.2
Payments on borrowings			(267.5)	(178.4)	(489.4)	(399.4)
Dividends paid			-	-	(23.8)	(19.7)
Proceeds from exercise of stock options			7.5	5.1	13.6	18.8
Other			0.2	0.3	0.3	0.2
Net cash used in financing activities			(76.8)	(90.3)	(147.4)	(111.9)
Effect of exchange rate changes on cash and cash equivalents			(1.5)	9.4	0.1	5.6
Increase (decrease) in cash and cash equivalents			$7.5	($8.7)	$9.3	$2.1

	June 30	December 31
	2003	2002
Finished goods	$353.8	$319.2
Work-in-process	43.6	51.8
Raw material	68.2	60.7
FIFO Cost	465.6	431.7
Less LIFO reserve	5.2	5.2
	$460.4	$426.5
	====	====

NOTE
5

RESTRUCTURING AND ACQUISITION-RELATED LIABILITIES

Note 6 in the Company's 2002 Form
10-K describes restructuring and acquisition-related pretax charges (credits)
recorded by the Company in 2002, 2001 and 2000.

The
following table provides a rollforward from December 31, 2002 to June 30, 2003
of the remaining liabilities associated with business acquisition purchase
liabilities and restructuring and acquisition-related charges recorded by the
Company:

			Facility
			Closures and
	Distributor	Severance and	Contractual
	Conversions	Related Costs	Obligations	Total
Balances at December 31, 2002	$3.0	$21.9	$0.6	$25.5
Payments	(0.3)	(3.7)	(0.2)	(4.2)
Balances at June 30, 2003	$2.7	$18.2	$0.4	$21.3
	===	===	===	===

NOTE
6

STOCK
OPTIONS AND RESTRICTED STOCK AWARDS

The
Company has key employee and director stock option plans which are described
more fully in Note 8 of the Company's 2002 Form 10-K. The Company follows Accounting Principles
Board (APB) Opinion No. 25, Accounting
for Stock Issued to Employees, in accounting for its stock option
plans. Under APB Opinion No. 25, no
compensation expense is recognized because the exercise price of the Company's
stock options equals the market price of the underlying stock on the measurement
date (date of grant). Had compensation
expense for the Company's stock-based compensation plans been determined based
on the fair value at the grant dates for awards under those plans consistent
with the method of FASB Statement No. 123, Accounting
for Stock-Based Compensation, the Company's net earnings and net earnings
per share would have been as follows:

	Three Months Ended June 30		Six Months Ended June 30
	2003	2002	2003	2002
Net earnings:
As reported	$107.5	$85.9	$211.6	$167.0
Deduct: Compensation expense
--fair value method	4.6	4.3	9.2	7.9
Pro forma	$102.9	$81.6	$202.4	$159.1
	====	====	====	====
Basic net earnings per share:
As reported	$.54	$.44	$1.07	$.85
Pro forma	.52	.41	1.02	.81

Diluted net earnings per share:
As reported	$.53	$.42	$1.04	$.82
Pro forma	.51	.41	1.00	.79

During the second
quarter of 2003, the Company issued 50,000 shares of restricted stock to its
newly appointed President and Chief Operating Officer. The stock vests ratably on the first five
anniversary dates of the grant, provided that the recipient is still employed
by the Company. The aggregate market
value of the restricted stock at the date of issuance of $3.4, as measured at
the quoted price of the Company's common stock, has been recorded as deferred
stock-based compensation, a separate component of stockholders' equity, and is
being amortized over the five-year vesting period.

NOTE
7

SEGMENT
INFORMATION

The
Company segregates its operations into two reportable business segments: Orthopaedic Implants and MedSurg
Equipment. The Orthopaedic Implants
segment sells orthopaedic reconstructive (hip, knee, and shoulder), trauma and
spinal implants, bone cement and the bone growth factor osteogenic protein-1
(OP-1). The MedSurg Equipment segment
sells powered surgical instruments, endoscopic systems, medical video imaging
equipment, hospital beds and stretchers, craniomaxillofacial implants and
image-guided surgical systems. Other includes
Physical Therapy Services and corporate administration, interest expense and
interest income.

The
Company's reportable segments are business units that offer different products
and services and are managed separately because each business requires
different manufacturing, technology and marketing strategies.

Sales
and net earnings (loss) by business segment follow:

	Orthopaedic	MedSurg
	Implants	Equipment	Other	Total
Three Months Ended June 30, 2003
Net sales	$522.2	$312.9	$56.6	$891.7
Segment net earnings (loss)	70.9	40.6	(4.0)	107.5

Three Months Ended June 30, 2002
Net sales	$414.8	$267.8	$51.3	$733.9
Segment net earnings (loss)	60.5	30.9	(5.5)	85.9

Six Months Ended June 30, 2003
Net sales	$1,013.0	$617.0	$108.6	$1,738.6
Segment net earnings (loss)	141.8	80.4	(10.6)	211.6

Six Months Ended June 30, 2002
Net sales	$809.8	$526.4	$100.6	$1,436.8
Segment net earnings (loss)	119.4	60.9	(13.3)	167.0

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Results of Operations

The
tables below outline the components of the condensed consolidated statements of
earnings as a percentage of net sales and the period-to-period percentage
change in dollar amounts:

Percentage of Net Sales
	Six months ended		Percentage
	June 30		Change
	2003	2002	2003/2002
Net sales	100.0	100.0	21
Cost of sales	36.1	36.3	20
Gross profit	63.9	63.7	21
Research, development and engineering expenses	5.1	4.7	30
Selling, general and administrative expenses	39.5	39.3	21
Other expense (income)	1.7	2.3	(7)
Earnings before income taxes	17.6	17.3	23
Income taxes	5.5	5.7	16
Net earnings	12.2	11.6	27
	====	====

Percentage of Net Sales
	Three months ended		Percentage
	June 30		Change
	2003	2002	2003/2002
Net sales	100.0	100.0	22
Cost of sales	36.7	36.4	22
Gross profit	63.3	63.6	21
Research, development and engineering expenses	5.0	4.7	31
Selling, general and administrative expenses	39.1	39.2	21
Other expense (income)	1.8	2.2	(4)
Earnings before income taxes	17.5	17.5	22
Income taxes	5.4	5.8	14
Net earnings	12.1	11.7	25
	====	====

The tables below set
forth domestic/international and product line sales information (in millions):

	Six Months Ended		Percentage
	June 30		Change
	2003	2002	2003/2002
Domestic/international sales
Domestic	$1,113.4	$943.3	18
International	625.2	493.5	27
Total net sales	$1,738.6	$1,436.8	21
	=====	=====
Product line sales
Orthopaedic Implants	$1,013.0	$809.8	25
MedSurg Equipment	617.0	526.4	17
Physical Therapy Services	108.6	100.6	8
Total net sales	$1,738.6	$1,436.8	21
	=====	=====

	Three Months Ended		Percentage
	June 30		Change
	2003	2002	2003/2002
Domestic/international sales
Domestic	$567.2	$478.1	19
International	324.5	255.8	27
Total net sales	$891.7	$733.9	22
	=====	=====
Product line sales
Orthopaedic Implants	$522.2	$414.8	26
MedSurg Equipment	312.9	267.8	17
Physical Therapy Services	56.6	51.3	10
Total net sales	$891.7	$733.9	22
	=====	=====

Stryker Corporation's net
sales increased 21% in the first six months of 2003 to $1,738.6 million from $1,436.8
million in 2002. Net sales grew by 12%
as a result of increased unit volume and changes in product mix; 5% due to
changes in foreign currency exchange rates; 2% as a result of higher selling
prices; and 2% due to acquired businesses and product lines. For the second quarter of 2003, net sales
were $891.7 million representing a 22% increase over net sales of $733.9 million
in the second quarter of 2002. Net sales
grew by 12% as a result of increased unit volume and favorable product mix, 2%
as a result of higher selling prices, 2% due to acquired businesses and product
lines and 6% due to changes in foreign currency exchange rates.

The
Company's domestic sales were $1,113.4 million for the first half of 2003 and
$567.2 million for the second quarter of 2003, representing increases of 18%
and 19%, respectively, as a result of strong shipments of Orthopaedic Implants
and MedSurg Equipment and higher revenue from Physical Therapy Services.

International
sales were $625.2 million for the first half of 2003 and $324.5 million for the
second quarter of 2003, representing increases of 27% in both periods as a
result of higher shipments of Orthopaedic Implants and MedSurg Equipment. The impact of foreign currency comparisons to
the dollar value of international sales was favorable by $76.0 million in the first
half and by $39.3 million in the second quarter. Excluding the impact of foreign currency,
international sales increased 11% in both the first half and second quarter of
2003.

Worldwide
sales of Orthopaedic Implants were $1,013.0 million for the first half of 2003
and $522.2 million for the second quarter of 2003, representing increases of 25%
and 26%, respectively, based on higher shipments of reconstructive (hip, knee,
and shoulder), trauma and spinal implants.
Excluding the impact of foreign currency, sales of Orthopaedic Implants
increased 18% in the first half of 2003 and 19% in the second quarter.

Worldwide sales of MedSurg
Equipment were $617.0 million for the first half of 2003 and $312.9 million for
the second quarter, representing increases of 17% in both periods based on
higher shipments of powered surgical instruments, endoscopic systems, hospital
beds and stretchers and craniomaxillofacial implants. Excluding the impact of foreign currency,
sales of MedSurg Equipment increased 14% in the first half of 2003 and 13% in
the second quarter.

Physical Therapy Services
revenues were $108.6 million for the first half of 2003 and $56.6 million for
the second quarter of 2003, representing increases of 8% and 10%, respectively,
as a result of new physical therapy centers and higher revenues from existing
centers.

Cost
of sales in the first half of 2003 represented 36.1% of sales compared to 36.3%
in the same period of 2002. In the
second quarter the cost of sales percentage increased to 36.7% from 36.4% in
the second quarter of 2002. The decrease
in the cost of sales percentage in the first half is due to the faster sales
growth in the higher margin Orthopaedic Implants business and increased sales
of non-royalty based products. The
higher cost of sales percentage in the second quarter is partially due to
redundant costs related to the transition of certain production facilities and higher
product obsolescence resulting from new product launches.

Research,
development and engineering expenses represented 5.1% of sales in the first half
of 2003 compared to 4.7% in the same period of 2002 and increased 30% to $88.1
million. In the second quarter, these
expenses increased 31% and represented 5.0% of sales in 2003 compared to 4.7 %
in 2002. The higher spending level in both periods is the result of the
Company's product launches in the first half of 2003 and continued focus on new
product development for anticipated product launches throughout the remainder
of the year.

Selling,
general and administrative expenses increased 21% in the first half of 2003 and
represented 39.5% of sales compared to 39.3% in the same period of 2002. In the second quarter, these expenses increased
21% and represented 39.1% of sales in 2003 compared to 39.2% in 2002. The increase in selling, general and
administrative expenses is partially due to an increase in sales commission
expense as a result of the 21% increase in net sales in the first half of 2003
and the 22% increase in net sales in the second quarter of 2003. In addition, the Company incurred $7.4 million
and $3.6 million increases in insurance costs in the first half and second
quarter, respectively, resulting from increased premiums charged by third-party
insurers and the establishment of a wholly-owned captive insurance company as
more fully described in Other Matters.
The increase in selling, general and administrative expenses as a
percentage of sales in the first half is primarily due to higher distribution
costs associated with the increased sales mix of Orthopaedic Implants and the
increase in insurance costs.

Interest expense declined to $13.4 million in the first half of
2003 from $20.6 million in 2002 and declined to $6.4 million in the second
quarter of 2003 from $10.0 million in 2002 as a result of lower outstanding debt
balances and lower interest rates. The increase in intangibles
amortization in the first half of 2003 to $19.1 million from $11.8 million in
the same period of 2002 and to $10.1 million in the second quarter from $5.8
million in the second quarter of 2002 is primarily the result of the increased
intangible assets recorded as a result of the July 1, 2002, acquisition of the
Surgical Dynamics Inc. spinal implant business (SDI) from Tyco International
Ltd. as more fully described in Other Matters. Other income was $2.3
million in the first half of 2003 compared to other expense of $0.1 million in
2002 due to higher foreign currency transaction gains in the current year
compared to 2002. Other income was $0.8 million in the second quarter
compared to other expense of $0.5 million in 2002 due to lower foreign currency
transaction losses in the current year compare to 2002.

The Company's
effective income tax rate was 31.0% for the six month and second quarter
periods of 2003 compared to a 33.0% effective income tax rate for the same periods
of 2002 and an effective annual income tax rate of 31.8% for the year ended
December 31, 2002. The income tax rate
reduction results primarily from increased manufacturing in lower tax
jurisdictions.

Net earnings for the first half
of 2003 were $211.6 million, an increase of 27% when compared to net earnings
of $167.0 million in the first half of 2002.
Basic net earnings per share increased 26% in 2003 to $1.07 from $.85 in
2002, and diluted net earnings per share increased 27% to $1.04 in 2003 from $.82
in 2002. Net earnings for the second
quarter of 2003 were $107.5 million representing a 25% increase over net
earnings of $85.9 million in the second quarter of 2002. Basic net earnings per share increased 23% in
the second quarter to $.54 in 2003 from $.44 in 2002, and diluted net earnings
per share increased 26% in the second quarter to $.53 in 2003 from $.42 in 2002.

Liquidity and Capital Resources

The
Company's working capital at June 30, 2003, increased $126.9 million to $570.7
million from $443.8 million at December 31, 2002 including the effect of the
sale of an additional $51.5 million of accounts receivable pursuant to the
accounts receivable securitization facility, as more fully described below.
The increase in working capital resulted from growth in the Company's
overall business and the use of strong cash earnings to fund increases in
accounts receivable, inventory and prepaid expenses and to pay current liabilities
due in the first six months of 2003, primarily for accrued bonuses, income
taxes and dividends. Accounts receivable
days sales outstanding, excluding the effect of the Company's accounts
receivable securitization program, increased 5 days to 63 days at June 30, 2003
from 58 days at December 31, 2002. Days
sales in inventory increased 2 days to 128 days at June 30, 2003 from 126 days
at December 31, 2002. The higher days
sales outstanding and days sales in inventory at June 30, 2003 are due in part
to higher international balances attributable to the weakening of the U.S.
dollar relative to the local foreign currency balances during the second
quarter. In addition, the higher days
sales outstanding at June 30, 2003 is due to an increase in the aging of
certain international accounts receivable, particularly in Europe and Canada.

The
Company generated cash of $225.3 million from operations in the first six
months of 2003 compared to $172.8 million in 2002. In the second quarter, the Company generated
cash from operations of $121.1 million compared to $110.1 million in 2002. The increase in cash provided by operating
activities in the first six months and second quarter of 2003 compared to the
same periods in 2002 is primarily due to strong cash earnings and the expansion
of the accounts receivable securitization facility, described below, which
provided $51.5 million of proceeds.
These increases were partially offset by increases in trade accounts
receivable and higher required income tax payments primarily in the United
States, Europe and Japan.

In
the first half of 2003, the Company used cash of $60.1 million for capital
expenditures, $8.8 million for business and product line acquisitions, and $23.8
million for the payment of dividends.
The Company also borrowed an additional $351.9 million under its
existing credit facilities to fund cash flow needs during the first half of
2003 and made repayments of $489.4 million against the credit facilities. Total borrowings declined by $136.3 million
during the first half of 2003.

The
Company had $47.1 million in cash and cash equivalents at June 30, 2003. The Company had outstanding borrowings
totaling $365.4 million at the end of the first half of 2003. Current maturities of long-term debt at June
30, 2003 were $6.5 million and will decrease to $0.2 million for the twelve
months ending June 30, 2004 and 2005. The
Company's $250.0 million 364-day revolving credit agreement expires in December
2003 and is renewable at the Company's and the lenders' discretion. The Company's $750.0 million five-year,
non-amortizing, revolving credit agreement expires in December 2006. The Company believes its cash on hand as well
as anticipated cash flows from operations will be sufficient to fund future
operating and investing activities and required debt repayments. Should additional funds be required, the
Company had $720.0 million of additional borrowing capacity available under its
existing credit facilities at June 30, 2003.

On
April 24, 2003, the Company entered into an amended and restated accounts
receivable securitization facility pursuant to which it increased the aggregate
undivided percentage ownership interest in receivables that Stryker Funding
Corporation (SFC) may sell to bank administered commercial paper conduits from
$130.0 million to $200.0 million. SFC had
sold an additional $51.5 million of undivided percentage ownership interests in
accounts receivable as of June 30, 2003.
The proceeds from the sale of additional accounts receivable interests
were used to reduce outstanding borrowings under the Company's unsecured credit
facilities.

Other Matters

On July 1, 2002, the Company acquired SDI from Tyco
International Ltd. for $135.0 million in cash.
The acquisition expanded the Company's spinal product line by adding interbody
spinal cages for the United States market as well as other thoracolumbar and
cervical spinal fixation devices. The
acquisition was funded using existing credit facilities.

The
acquisition of SDI was accounted for using the purchase method of
accounting. The results of operations
for the acquired business are included in the Company's Consolidated Financial
Statements beginning July 1, 2002. The
purchase price of $135.0 million in cash, less a contractually required
adjustment based on the decrease in SDI's working capital between April 30,
2002 and closing, and liabilities assumed have been allocated to the assets
acquired based on their estimated fair value at the date of acquisition. The purchase price allocation was finalized
in the second quarter of 2003. Based on
the final purchase price allocation (as adjusted for the determined working
capital adjustment amount), $84.5 million of the purchase price was allocated
to patent licensing agreements to be amortized over their remaining life of 8
years, $9.4 million to inventory, $36.9 million to deferred tax assets related
to future tax deductions, $5.2 million to other tangible assets and $7.6
million to liabilities assumed.
Immediately after the acquisition was consummated, management of the
Company began to implement an integration plan to combine Stryker and SDI. In conjunction with the integration plan, the
Company recorded additional purchase liabilities of $3.6 million, which were
included in the preliminary purchase price allocation. The additional purchase liabilities include
$3.1 million for severance and related costs and $0.5 million for contractual
obligations. The severance and related
costs were provided for workforce reductions covering 37 SDI employees. The workforce reductions were completed during
the fourth quarter of 2002 with severance payments to be made through the third
quarter of 2003. The Company's pro forma
consolidated financial results did not differ significantly as a result of the
SDI acquisition.

The Company is partially self-insured for product
liability claims. In January 2003, the
Company established a wholly-owned captive insurance company to manage its
self-insured retention limits. The
captive insurance company provides insurance reserves for estimated liabilities
for product claims incurred but not reported based on actuarially determined
liabilities. The actuarial valuations
are based on historical information along with certain assumptions about future
events.

During the second quarter of 2003, the Company issued 50,000
shares of restricted stock to its newly appointed President and Chief Operating
Officer. The stock vests ratably on the
first five anniversary dates of the grant, provided that the recipient is still
employed by the Company. The aggregate
market value of the restricted stock at the date of issuance of $3.4 million,
as measured at the quoted price of the Company's common stock, has been
recorded as deferred stock-based compensation, a separate component of
stockholders' equity, and is being amortized over the five-year vesting period.

The Company has certain investments in net assets in international
locations that are not hedged that are subject to translation gains and losses
due to changes in foreign currencies. In the first half of 2003, the
strengthening of foreign currencies relative to the U.S. dollar increased the
value of these investments in net assets by $83.0 million. This gain
eliminated the previously-recorded cumulative loss of $68.6 million that had been recorded as a separate component of stockholders'
equity at December 31,2002.

Forward-Looking Statements

The information contained in this report may contain
information that includes or is based on forward-looking statements within the
meaning of the federal securities laws that are subject to risks and
uncertainties. These statements may be
identified by the use of words such as "anticipates,"
"expects," "estimates," "projects,"
"intends" and "believes" and variations thereof and other
terms of similar meaning. Factors that
could cause the Company's actual results and financial condition to differ from
the Company's expectations include, but are not limited to: regulatory actions,
including cost-containment measures, that could adversely affect the price of
or demand for the Company's products; changes in reimbursement levels from
third-party payors; a significant increase in product liability claims; changes
in economic conditions that adversely affect the level of demand for the
Company's products; changes in foreign exchange markets; changes in financial
markets; and changes in the competitive environment.

While the Company believes that the assumptions
underlying such forward-looking statements are reasonable, there can be no
assurance that future events or developments will not cause such statements to
be inaccurate. All forward-looking
statements contained in this report are qualified in their entirety by this
cautionary statement.

ITEM 3.

QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISKS

There
have been no material changes from the information provided in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002.

ITEM 4.

CONTROLS AND PROCEDURES

An
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures was carried out under the supervision and
with the participation of the Company's management, including the Chairman of
the Board and Chief Executive Officer and the Vice President and Chief
Financial Officer ("the Certifying Officers") as of June 30, 2003. Based on that evaluation, the Certifying
Officers concluded that the Company's disclosure controls and procedures are
effective to bring to the attention of the Company's management the relevant
information necessary to permit an assessment of the need to disclose material
developments and risks pertaining to the Company's business in its periodic
filings with the Securities and Exchange Commission. There was no change to the Company's internal
control over financial reporting during the quarter ended June 30, 2003 that
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

PART II. -
OTHER INFORMATION

ITEM 2.

CHANGES IN SECURITIES AND
USE OF PROCEEDS

On June 2,
2003 the Company issued 50,000 shares of restricted stock to its newly
appointed President and Chief Operating Officer as an inducement to his
employment with the Company. See Note 6
to Notes to Condensed Consolidated Financial Statements (Unaudited). The issuance of the restricted stock was a
transaction not involving any public offering and, accordingly, was exempt from
the registration requirements of the Securities Act of 1933 by virtue of the
provisions of Section 4(2) thereof.

width=98>

ITEM 6.

EXHIBITS AND REPORTS ON
FORM 8-K

Exhibits

10.1* Executive employment agreement dated as of April 22, 2003 between Stryker
Corporation and Stephen P. MacMillan

10.2* Restricted stock agreement made as of June 1, 2003 by Stryker
Corporation with Stephen P. MacMillan

31.1    Certification
of Principal Executive Officer of Stryker Corporation pursuant to Rule
13a-14(a)

31.2    Certification
of Principal Financial Officer of Stryker Corporation pursuant to Rule
13a-14(a)

32.1    Certification by Chief Executive Officer of
Stryker Corporation pursuant to 18 U.S.C. Section 1350

32.2    Certification by Chief Financial Officer of Stryker
Corporation pursuant to 18 U.S.C. Section 1350

*
compensation arrangement

Reports on Form 8-K

		Reports on Form 8-K filed during the second quarter of 2003.

		Form 8-K dated April 16, 2003
		Item 7. Financial Statements and Exhibits - Press release dated April 16, 2003.

		Item 9. Regulation FD Disclosure

		Form 8-K dated April 22, 2003
		Item 7. Financial Statements and Exhibits - Press release dated April 22, 2003.

		Item 9. Regulation FD Disclosure

SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

	STRYKER CORPORATION
	(Registrant)

August 11, 2003	/s/ JOHN W. BROWN
Date	John W. Brown, Chairman
	and Chief Executive Officer
	(Principal Executive Officer)


August 11, 2003	/s/ DEAN H. BERGY
Date	Dean H. Bergy, Vice President,
	Chief Financial Officer and Secretary
	(Principal Financial Officer)

EXHIBIT INDEX

10.1* Executive employment
agreement dated as of April 22, 2003 between Stryker Corporation and Stephen P.
MacMillan

10.2* Restricted stock
agreement made as of June 1, 2003 by Stryker Corporation with Stephen P.
MacMillan

31.1 Certification
of Principal
Executive Officer of Stryker Corporation pursuant to Rule 13a-14(a)

31.2 Certification
of Principal
Financial Officer of Stryker Corporation pursuant to Rule 13a-14(a)

32.1 Certification
by Chief Executive Officer of Stryker Corporation pursuant to 18 U.S.C.
Section 1350

32.2 Certification
by Chief Financial Officer of Stryker Corporation pursuant to 18 U.S.C.
Section 1350

* compensation
arrangement