Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Apr. 04, 2015 | 1-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 4-Apr-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | ST JUDE MEDICAL INC | |
Entity Central Index Key | 203077 | |
Current Fiscal Year End Date | -1 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 281,177,315 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements Of Earnings (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Income Statement [Abstract] | ||
Net sales | $1,345 | $1,363 |
Cost of sales: | ||
Cost of sales before special charges | 393 | 382 |
Special charges | 2 | 1 |
Total cost of sales | 395 | 383 |
Gross profit | 950 | 980 |
Selling, general and administrative expense | 430 | 444 |
Research and development expense | 167 | 170 |
Amortization of intangible assets | 24 | 21 |
Special charges | 4 | 33 |
Operating profit | 325 | 312 |
Interest income | -1 | -1 |
Interest expense | 21 | 21 |
Other (income) expense | -3 | 0 |
Other expense, net | 17 | 20 |
Earnings before income taxes and noncontrolling interest | 308 | 292 |
Income tax expense | 52 | 53 |
Net earnings before noncontrolling interest | 256 | 239 |
Less: Net loss attributable to noncontrolling interest | -6 | -10 |
Net earnings attributable to St. Jude Medical, Inc. | $262 | $249 |
Net earnings per share attributable to St. Jude Medical, Inc.: | ||
Basic | $0.93 | $0.88 |
Diluted | $0.91 | $0.86 |
Cash dividends declared per share: | $0.29 | $0.27 |
Weighted average shares outstanding: | ||
Basic | 283 | 284.4 |
Diluted | 287.1 | 289.3 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements Of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net earnings before noncontrolling interest | $256 | $239 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized gain (loss) on available-for-sale securities | 1 | 0 |
Unrealized gain (loss) on derivative financial instruments, net of taxes of $5 million | 29 | 0 |
Foreign currency translation adjustment | -127 | 10 |
Other comprehensive income (loss), net of tax | -97 | 10 |
Total comprehensive income before noncontrolling interest | 159 | 249 |
Total comprehensive loss attributable to noncontrolling interest | -6 | -10 |
Total comprehensive income attributable to St. Jude Medical, Inc. | $165 | $259 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Apr. 04, 2015 |
Statement of Comprehensive Income [Abstract] | |
Tax expense (benefit) on related to increase (decrease) in accumulated gain (loss) from derivative instruments designated and qualifying as the effective portion of cash flow hedges | $5 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $695 | $1,442 |
Accounts receivable, less allowance for doubtful accounts of $52 million and $53 million at April 4, 2015 and January 3, 2015, respectively | 1,194 | 1,215 |
Finished goods | 536 | 543 |
Work in process | 82 | 77 |
Raw materials | 190 | 164 |
Inventories | 808 | 784 |
Other current assets | 496 | 473 |
Total current assets | 3,193 | 3,914 |
Property, plant and equipment, at cost | 2,741 | 2,775 |
Less: Accumulated depreciation | -1,433 | -1,432 |
Net property, plant and equipment | 1,308 | 1,343 |
Goodwill | 3,509 | 3,532 |
Intangible assets, net | 825 | 851 |
Other assets | 579 | 567 |
TOTAL ASSETS | 9,414 | 10,207 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Current debt obligations | 1,737 | 1,593 |
Accounts payable | 208 | 151 |
Income taxes payable | 72 | 60 |
Other current liabilities | 749 | 862 |
Total current liabilities | 2,766 | 2,666 |
Long-term debt | 1,767 | 2,273 |
Other liabilities | 999 | 1,024 |
Total liabilities | 5,532 | 5,963 |
Commitments and Contingencies (Note 4) | 0 | 0 |
Shareholders’ Equity | ||
Preferred stock ($1.00 par value; 25,000,000 shares authorized; none outstanding) | 0 | 0 |
Common stock ($0.10 par value; 500,000,000 shares authorized; 280,199,780 and 286,659,901 shares issued and outstanding at April 4, 2015 and January 3, 2015, respectively) | 28 | 29 |
Additional paid-in capital | 10 | 118 |
Retained earnings | 4,075 | 4,225 |
Accumulated other comprehensive income (loss) | -270 | -173 |
Total shareholders' equity before noncontrolling interest | 3,843 | 4,199 |
Noncontrolling interest | 39 | 45 |
Total shareholders’ equity | 3,882 | 4,244 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $9,414 | $10,207 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for doubtful accounts | $52 | $53 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred Stock Shares Outstanding | 0 | 0 |
Common stock, par value | $0.10 | $0.10 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 280,199,780 | 286,659,901 |
Common stock, shares outstanding | 280,199,780 | 286,659,901 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
OPERATING ACTIVITIES | ||
Net earnings before noncontrolling interest | $256 | $239 |
Adjustments to reconcile net earnings before noncontrolling interest to net cash from operating activities: | ||
Depreciation of property, plant and equipment | 54 | 55 |
Amortization of intangible assets | 24 | 21 |
Stock-based compensation | 17 | 17 |
Deferred income taxes | -13 | 16 |
Other, net | -32 | -8 |
Changes in operating assets and liabilities, net of business combinations: | ||
Accounts receivable | -47 | 67 |
Inventories | -46 | -65 |
Other current and noncurrent assets | 2 | 13 |
Accounts payable and accrued expenses | -6 | -103 |
Income taxes payable | 25 | 21 |
Net cash provided by operating activities | 234 | 273 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | -33 | -46 |
Proceeds from sale of investments | 0 | 4 |
Other investing activities, net | -1 | 0 |
Net cash used in investing activities | -34 | -42 |
FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options and stock issued, net | 38 | 60 |
Excess tax benefits from stock issued under employee stock plans | 5 | 9 |
Common stock repurchased, including related costs | -500 | -476 |
Dividends paid | -77 | -72 |
Issuances (payments) of commercial paper borrowings, net | 390 | 326 |
Payments under debt facilities | -750 | 0 |
Other financing activities, net | -6 | -6 |
Net cash used in financing activities | -900 | -159 |
Effect of currency exchange rate changes on cash and cash equivalents | -47 | 1 |
Net increase (decrease) in cash and cash equivalents | -747 | 73 |
Cash and cash equivalents at beginning of period | 1,442 | 1,373 |
Cash and cash equivalents at end of period | $695 | $1,446 |
Basis_Of_Presentation
Basis Of Presentation | 3 Months Ended |
Apr. 04, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | BASIS OF PRESENTATION |
Principles of Consolidation: The accompanying unaudited Condensed Consolidated Financial Statements of St. Jude Medical, Inc. (St. Jude Medical or the Company) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (U.S. generally accepted accounting principles) for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company’s consolidated results of operations, financial position and cash flows. The Condensed Consolidated Balance Sheet at January 3, 2015 was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. Preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the financial statements and footnotes. Actual results could differ from those estimates. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended January 3, 2015. | |
The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries for which St. Jude Medical has a controlling financial interest and variable interest entities (VIEs) where St. Jude Medical is the primary beneficiary. The Company operates as a single operating segment and derives its revenues from six principal product categories. | |
Fiscal Year: We utilize a 52/53-week fiscal year ending on the Saturday nearest December 31st. Each of the three-month periods ended April 4, 2015 and March 29, 2014 included 13 weeks. | |
Reclassifications: Certain prior period amounts have been reclassified to conform to current year presentation. | |
New Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance will supersede the current revenue recognition requirements. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are evaluating our approach to the adoption and the potential impact to our results of operations and financial position. The Company will adopt the new guidance beginning in fiscal year 2017. | |
In February 2015, the FASB issued ASU No. 2015-02 (ASU 2015-02), Consolidation (Topic 810): Amendments to the Consolidation Analysis, which affects both the variable interest entity and voting interest entity consolidation models. The amendments in ASU 2015-02 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is, however, permitted. The Company is evaluating its approach to the adoption and the potential impact to its results of operations and financial position. | |
In April 2015, the FASB issued ASU No. 2015-03 (ASU 2015-03), Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-03 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with retrospective application required. Early adoption is, however, permitted. The Company is evaluating the timing of adoption and the potential impact to its financial position. | |
In April 2015, the FASB issued ASU No. 2015-04 (ASU 2015-04), Compensation-Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets, which permits entities to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. The amendments in ASU 2015-04 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with prospective application required. Early adoption is, however, permitted. The Company plans to elect the accounting policy prospectively in accordance with ASU 2015-04 by using December 31 when it performs its measurements as of January 2, 2016 and for all fiscal years thereafter. The Company does not expect the adoption of this ASU to have a material impact on the Company’s results of operations or financial condition. | |
In April 2015, the FASB issued ASU No. 2015-05 (ASU 2015-05), Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to customers about how to account for cloud computing arrangements when such arrangements include software licenses. The amendments in ASU 2015-05 are effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years, with either retrospective application or prospective transition permitted. Early adoption is, however, permitted. The Company is evaluating the timing of adoption and the potential impact to its results of operations and financial condition. |
Business_Combinations_and_Vari
Business Combinations and Variable Interest Entities | 3 Months Ended | ||||
Apr. 04, 2015 | |||||
Business Combinations [Abstract] | |||||
Business Combinations and Variable Interest Entities | BUSINESS COMBINATIONS AND VARIABLE INTEREST ENTITIES | ||||
Spinal Modulation: In June 2013, the Company made an equity investment of $40 million in Spinal Modulation, Inc. (Spinal Modulation) a privately-held company that is focused on the development of an intraspinal neuromodulation therapy that delivers spinal cord stimulation targeting the dorsal root ganglion to manage chronic pain. The investment agreement resulted in a 19% voting equity interest and provided the Company with the exclusive right, but not the obligation, to acquire Spinal Modulation for payments of up to $300 million during the period that extends through the completion of certain regulatory milestones. Additionally, in connection with the investment and contingent acquisition agreement, the Company also entered into an exclusive international distribution agreement, and obtained significant decision-making rights over Spinal Modulation's operations and economic performance. At the time of the initial agreement, the Company also committed to providing additional debt financing to Spinal Modulation of up to $15 million. Accordingly, effective June 7, 2013, the Company determined that Spinal Modulation was a VIE for which St. Jude Medical was the primary beneficiary with the financial condition and results of operations of Spinal Modulation included in St. Jude Medical's Condensed Consolidated Financial Statements. Through April 4, 2015, the Company had increased the available financing to Spinal Modulation to $25 million, and as of April 4, 2015, Spinal Modulation had utilized $20 million of the total available financing. The following table summarizes Spinal Modulation’s assets and liabilities included in St. Jude Medical Inc.'s consolidated balance sheet as of April 4, 2015 after elimination of all intercompany balances and transactions (in millions): | |||||
4-Apr-15 | |||||
Cash and cash equivalents | $ | 9 | |||
Other current assets | 7 | ||||
Goodwill | 46 | ||||
In-process research and development (IPR&D) | 45 | ||||
Other intangible assets | 7 | ||||
Total assets | $ | 114 | |||
Current liabilities | $ | 7 | |||
Deferred income taxes | 19 | ||||
Total liabilities | $ | 26 | |||
Non-controlling interest | $ | 39 | |||
The Company has had a 19% voting equity interest in Spinal Modulation and allocated the losses attributable to Spinal Modulation's noncontrolling shareholders to noncontrolling interest in St. Jude Medical's Condensed Consolidated Statements of Earnings and Condensed Consolidated Balance Sheets. On May 1, 2015, the Company exercised its exclusive option to acquire the remaining ownership interest in Spinal Modulation (see Notes 3 and 7). |
Debt
Debt | 3 Months Ended | ||||||||||||||||||
Apr. 04, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Debt | DEBT | ||||||||||||||||||
The carrying value of the Company’s debt, including discounts, the fair value of an interest rate swap agreement and the remaining deferred gain from a terminated interest rate swap agreement, consisted of the following (in millions): | |||||||||||||||||||
April 4, 2015 | January 3, 2015 | ||||||||||||||||||
Term loan due June 2015 | $ | — | $ | 500 | |||||||||||||||
Term loan due August 2015 | — | 250 | |||||||||||||||||
2.50% senior notes due 2016 | 504 | 506 | |||||||||||||||||
3.25% senior notes due 2023 | 897 | 896 | |||||||||||||||||
4.75% senior notes due 2043 | 696 | 696 | |||||||||||||||||
1.58% Yen-denominated senior notes due 2017 | 68 | 68 | |||||||||||||||||
2.04% Yen-denominated senior notes due 2020 | 106 | 107 | |||||||||||||||||
Yen-denominated credit facilities | 54 | 54 | |||||||||||||||||
Commercial paper borrowings | 1,179 | 789 | |||||||||||||||||
Total debt | 3,504 | 3,866 | |||||||||||||||||
Less: current debt obligations | 1,737 | 1,593 | |||||||||||||||||
Long-term debt | $ | 1,767 | $ | 2,273 | |||||||||||||||
Contractual maturities of the Company's debt for the next five fiscal years and thereafter, excluding discounts, the fair value of an interest rate swap agreement and the remaining deferred gain from a terminated interest rate swap agreement, as of April 4, 2015 are as follows (in million): | |||||||||||||||||||
Remainder of 2015 | 2016 | 2017 | 2018 | 2019 | After 2019 | ||||||||||||||
Expected future minimum principal payments | $ | 1,206 | $ | 527 | $ | 68 | $ | — | $ | — | $ | 1,707 | |||||||
During the first quarter of 2015, the Company repaid its 2-year, $500 million unsecured term loan due June 2015 and its 364-day, $250 million unsecured term loan due August 2015. The Company also increased its commercial paper balance to support the Company’s common stock repurchases during the first quarter of 2015. Refer to Note 7 for further information on the Company's common stock repurchase. | |||||||||||||||||||
The yen-denominated credit facility that expired in March 2015 for 3.25 billion Japanese Yen (the equivalent of $27 million as of April 4, 2015) was automatically extended for a one-year period bearing interest at Yen LIBOR plus 0.25%. | |||||||||||||||||||
On May 1, 2015, the Company entered into a 364-day, $175 million unsecured term loan that matures in April 2016, the proceeds of which were used to acquire the remaining ownership interest in Spinal Modulation. These borrowings bear interest at LIBOR plus 0.9% and the Company may repay the term loan at any time. |
Commitments_And_Contingencies
Commitments And Contingencies | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES | |||||||
Product Liability Litigation | ||||||||
Riata® Litigation: On December 17, 2014, the Company entered into an agreement that establishes a private settlement program to resolve the actions, disputes and claims-both filed and unfiled-of certain claimants against St. Jude Medical, Inc. relating to its Riata® and Riata® ST Silicone Defibrillation Leads. The agreement was entered into with a group of counsel representing plaintiffs in proceedings in jurisdictions around the country as well as claimants with Riata leads who have not initiated litigation. St. Jude Medical, Inc. accrued $15 million in the fourth quarter of 2014 to fund the settlement, which resolved approximately 950 of the outstanding, pending cases and claims. The terms of the agreement provide that, under certain circumstances, the Company can elect to terminate the settlement program and exercise its “walk away” right. The time period in which eligible claimants can submit their documentation to participate in the settlement closed during the first quarter of 2015. | ||||||||
Most of the resolved lawsuits were brought by single plaintiffs, but some of them named multiple individuals as plaintiffs. Among the resolved lawsuits are eight separate multi-plaintiff lawsuits filed from April 2013 through October 2014 in both the state and federal courts of California that involved 173 unrelated claimants. | ||||||||
Although the majority of the claimants in the aforementioned suits and claims identified no specific injuries, some of the claimants alleged bodily injuries as a result of surgical revision or removal and replacement of Riata® leads, or other complications, which they attribute to the leads. The majority of the claimants who sought recovery for implantation and/or surgical removal of Riata® leads sought compensatory damages in unspecified amounts, and declaratory judgments that the Company is liable to them for any past, present and future evaluative monitoring, and corrective medical, surgical and incidental expenses and losses. Several claimants also sought punitive damages. | ||||||||
As of May 1, 2015, the Company is aware of four lawsuits, of more than 70 filed as of December 17, 2014, which were filed by plaintiffs in the U.S. alleging injuries caused by, and asserting product liability claims concerning, Riata® and Riata® ST Silicone Defibrillation Leads where counsel for the claimant has advised that the claimant will not participate in the above-described settlement program. The four remaining lawsuits are pending in the state courts of Georgia, Illinois, Kentucky and South Carolina. | ||||||||
In November 2013, an amended claim was filed in a Canadian proposed class proceeding alleging that Riata® leads were prone to insulation abrasion and breach, failure to warn and conspiracy. The plaintiffs took no action between their 2008 filing and the amended claim they filed in November 2013. The Company has filed its statement of intent to defend in response to the amended claims, and the plaintiffs have not taken any further action. | ||||||||
The Company is financially responsible for legal costs incurred in the continued defense of the Riata product liability claims, including any potential settlements, judgments and other legal defense costs. The Company believes that a material loss in excess of the accrued amount is not probable and estimable and the Company is not able to estimate a possible loss or range of loss at this time. | ||||||||
Securities and Other Shareholder Litigation | ||||||||
March 2010 Securities Class Action Litigation: In March 2010, a securities lawsuit seeking class action status was filed in federal district court in Minnesota against the Company and certain officers (collectively, the defendants) on behalf of purchasers of St. Jude Medical common stock between April 22, 2009 and October 6, 2009. The lawsuit relates to the Company's earnings announcements for the first, second and third quarters of 2009, as well as a preliminary earnings release dated October 6, 2009. The complaint, which seeks unspecified damages and other relief as well as attorneys' fees, alleges that the defendants failed to disclose that it was experiencing a slowdown in demand for its products and was not receiving anticipated orders for cardiac rhythm management devices. Class members allege that the defendant's failure to disclose the above information resulted in the class purchasing St. Jude Medical stock at an artificially inflated price. In December 2011, the Court issued a decision denying a motion to dismiss filed by the defendants in October 2010. In October 2012, the Court granted plaintiffs' motion to certify the case as a class action and the discovery phase of the case closed in September 2013. In October 2013, the defendants filed a motion for summary judgment. In November 2014, the defendants filed a motion for leave to proceed with a motion to decertify the class, which the Court denied in December 2014. On February 18, 2015, the parties entered into a written settlement agreement resolving the case, pending notification to class members and subject to court approval. Under the settlement, the Company agreed to make a payment of $50 million to resolve all of the class claims and recorded a charge of that amount during the fourth quarter of 2014. The Company had estimated its damages exposure on the claims alleged to be approximately $475 million. A preliminary order approving the settlement was entered by the District Court on March 9, 2015. The final settlement approval hearing will take place on June 12, 2015. During the first quarter of 2015, the Company received insurance recoveries of $40 million. The Company intends to pursue collection of additional insurance recoveries from one of its insurance carriers. | ||||||||
December 2012 Securities Litigation: On December 7, 2012, a putative securities class action lawsuit was filed in federal district court in Minnesota against the Company and an officer (collectively, the defendants) for alleged violations of the federal securities laws, on behalf of all purchasers of the publicly traded securities of the defendants between October 17, 2012 and November 20, 2012. The complaint, which sought unspecified damages and other relief as well as attorneys' fees, challenges the Company’s disclosures concerning its high voltage cardiac rhythm lead products during the purported class period. On December 10, 2012, a second putative securities class action lawsuit was filed in federal district court in Minnesota against the Company and certain officers for alleged violations of the federal securities laws, on behalf of all purchasers of the publicly traded securities of the Company between October 19, 2011 and November 20, 2012. The second complaint alleged similar claims and sought similar relief. In March 2013, the Court consolidated the two cases and appointed a lead counsel and lead plaintiff. A consolidated amended complaint was served and filed in June 2013, alleging false or misleading representations made during the class period extending from February 5, 2010 through November 7, 2012. In September 2013, the defendants filed a motion to dismiss the consolidated amended complaint. On March 10, 2014, the Court ruled on the motion to dismiss, denying the motion in part and granting the motion in part. On October 7, 2014, the lead plaintiff filed a second amended complaint. Like the original consolidated amended complaint, the plaintiffs did not assert any specific amount of compensation in the second amended complaint. The plaintiffs filed their motion for class certification on January 15, 2015. The Company will file a response, and a hearing before the Court on the plaintiffs' class certification will be scheduled at some point in the future. The Company intends to continue to vigorously defend against the claims asserted in this matter. | ||||||||
The Company has not recorded an expense related to any potential damages in connection with the December 2012 Securities Litigation because any potential loss is not probable or reasonably estimable. Because, based on the Company’s historical experience, the amount ultimately paid, if any, often does not bear any relationship to the amount claimed, the Company cannot reasonably estimate a loss or range of loss, if any, that may result from these matters. | ||||||||
Governmental Investigations | ||||||||
In March 2010, the Company received a Civil Investigative Demand (CID) from the Civil Division of the Department of Justice (DOJ). The CID requests documents and sets forth interrogatories related to communications by and within the Company on various indications for implantable cardioverter defibrillator (ICD)s and a National Coverage Decision issued by Centers for Medicare and Medicaid Services. Similar requests were made of the Company's major competitors. The Company provided its response to the DOJ in June 2010 and no further activity involving the Company has occurred in this matter since then. | ||||||||
On September 20, 2012, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a subpoena requiring the Company to produce certain documents related to payments made by the Company to healthcare professionals practicing in California, Florida and Arizona, as well as policies and procedures related to payments made by the Company to non-employee healthcare professionals. The Company provided its response to the OIG in May 2013 and no further activity involving the Company has occurred in this matter since then. | ||||||||
In April 2014, the Company received a CID from the Civil Division of the DOJ stating that it was investigating the Company for potential False Claims Act violations relating to allegations that certain health care facilities and a physician group may have submitted false claims to federal health care programs as a result of alleged inducements paid by the Company to implant the Company’s cardiac devices. The Company provided its response to the OIG beginning in July 2014 and ending in October 2014. On April 1, 2015, the U.S. District Court for the Southern District of Alabama unsealed a qui tam complaint upon which the CID was based. The unsealed record revealed that the DOJ declined to intervene on February 13, 2015. Thereafter, the qui tam relator moved to dismiss the complaint without prejudice. On April 1, 2015, the Court granted the relator’s motion and dismissed the action. | ||||||||
As indicated, the Company has cooperated with these investigations and has responded to the requests received. However, the Company cannot predict when the outstanding investigations will be resolved, their outcome or their impact on the Company. Based on the Company’s historical experience, the amount paid, if any, in connection with any governmental investigation typically does not bear any relationship the nature or subject of the investigation, the Company cannot reasonably estimate a loss or range of loss, if any, that may result from these matters. The Company has not recorded an expense related to any potential damages in connection with these governmental matters because any potential loss is not probable or reasonably estimable. | ||||||||
Product Warranties | ||||||||
The Company offers a warranty on various products, the most significant of which relate to pacemaker and ICD systems. The Company estimates the costs it expects to incur under its warranties and records a liability for such costs at the time the product is sold. Factors that affect the Company's warranty liability include the number of units sold, historical and anticipated rates of warranty claims and cost per claim. The Company regularly assesses the adequacy of its warranty liabilities and adjusts the amounts as necessary. | ||||||||
Changes in the Company’s product warranty liability during the three months ended April 4, 2015 and March 29, 2014 were as follows (in millions): | ||||||||
Three Months Ended | ||||||||
April 4, 2015 | March 29, 2014 | |||||||
Balance at beginning of period | $ | 35 | $ | 37 | ||||
Warranty expense (income) recognized | (2 | ) | 1 | |||||
Warranty credits issued | (1 | ) | (1 | ) | ||||
Balance at end of period | $ | 32 | $ | 37 | ||||
Special_Charges
Special Charges | 3 Months Ended | |||||||||||||||||||
Apr. 04, 2015 | ||||||||||||||||||||
Special Charges [Abstract] | ||||||||||||||||||||
Special Charges | SPECIAL CHARGES | |||||||||||||||||||
The Company recognizes certain transactions and events as special charges in its Condensed Consolidated Financial Statements. These charges (such as restructuring charges, impairment charges, certain legal settlements or product field action costs and litigation costs) result from facts and circumstances that vary in frequency and impact on the Company's results of operations. | ||||||||||||||||||||
Manufacturing and Supply Chain Optimization Plan | ||||||||||||||||||||
During 2014, the Company initiated the Manufacturing and Supply Chain Optimization Plan to leverage economies of scale, streamline distribution methods, drive process improvements through global synergies, balance plant utilization levels, centralize certain vendor relationships and reduce overall costs. During 2014, the Company incurred charges of $32 million related to severance and other termination benefits, fixed assets associated with information technology assets no longer expected to be utilized and distributor and other contract termination costs. | ||||||||||||||||||||
During the first quarter of 2015, the Company incurred additional charges of $8 million primarily related to severance and other termination benefits as well as other contract termination costs associated with the elimination of certain operational, quality and hardware development activities at a research and development facility and continued exit costs related to a facility closure in the United States. The Company currently expects to incur approximately $40 million during the remainder of 2015 to complete the plan, but may incur additional charges in future periods. | ||||||||||||||||||||
A summary of the activity related to the Manufacturing and Supply Chain Optimization Plan accrual is as follows (in millions): | ||||||||||||||||||||
Employee | Inventory | Fixed | Other Restructuring Costs | Total | ||||||||||||||||
Termination | Charges | Asset | ||||||||||||||||||
Costs | Charges | |||||||||||||||||||
Balance at December 28, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Cost of sales special charges | 7 | — | — | — | 7 | |||||||||||||||
Special charges | 12 | — | 5 | 8 | 25 | |||||||||||||||
Non-cash charges used | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Cash payments | (5 | ) | — | — | (2 | ) | (7 | ) | ||||||||||||
Balance at January 3, 2015 | 14 | — | — | 6 | 20 | |||||||||||||||
Cost of sales special charges | 1 | 1 | — | — | 2 | |||||||||||||||
Special charges | 3 | — | — | 3 | 6 | |||||||||||||||
Non-cash charges used | — | (1 | ) | — | — | (1 | ) | |||||||||||||
Cash payments | (5 | ) | — | — | (5 | ) | (10 | ) | ||||||||||||
Foreign exchange rate impact | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Balance at April 4, 2015 | $ | 13 | $ | — | $ | — | $ | 3 | $ | 16 | ||||||||||
2012 Business Realignment Plan | ||||||||||||||||||||
During 2012, the Company realigned its product divisions into two new operating divisions: the Implantable Electronic Systems Division (combining its legacy Cardiac Rhythm Management and Neuromodulation product divisions) and the Cardiovascular and Ablation Technologies Division (combining its legacy Cardiovascular and Atrial Fibrillation product divisions). In addition, the Company centralized certain support functions, including information technology, human resources, legal, business development and certain marketing functions. The organizational changes have been part of a comprehensive plan to accelerate the Company's growth, reduce costs, leverage economies of scale and increase investment in product development. | ||||||||||||||||||||
During 2014, the Company announced additional organizational changes including the combination of its Implantable Electronic Systems Division and Cardiovascular and Ablation Technologies Division, resulting in an integrated research and development (R&D) organization and a consolidation of manufacturing and supply chain operations worldwide. The integration was conducted in a phased approach during 2014. In connection with these actions, the Company incurred $108 million of special charges associated with the 2012 Business Realignment Plan. These charges primarily included severance and other termination benefits and other restructuring costs, including distributor and other contract termination costs, costs associated with the discontinuation of a clinical trial and planned exit costs related to a facility in Europe. Additionally, the Company recognized inventory and fixed asset write-offs related to a discontinued clinical trial and fixed asset write-offs associated with projects abandoned under the new realigned structure. | ||||||||||||||||||||
During the first quarter of 2015, the Company incurred additional charges of $5 million primarily related to severance and other termination benefits and other restructuring costs, including contract termination costs, moving expenses and other exit costs predominately associated with the facility closure in Europe. The Company currently expects to incur approximately $4 million during the remainder of 2015 to complete the plan. | ||||||||||||||||||||
A summary of the activity related to the 2012 Business Realignment Plan accrual is as follows (in millions): | ||||||||||||||||||||
Employee | Inventory | Fixed | Other | Total | ||||||||||||||||
Termination | Charges | Asset | Restructuring | |||||||||||||||||
Costs | Charges | Costs | ||||||||||||||||||
Balance at December 28, 2013 | $ | 54 | $ | — | $ | — | $ | 33 | $ | 87 | ||||||||||
Cost of sales special charges | 8 | 8 | 13 | 1 | 30 | |||||||||||||||
Special charges | 36 | — | 7 | 35 | 78 | |||||||||||||||
Non-cash charges used | — | (8 | ) | (20 | ) | — | (28 | ) | ||||||||||||
Cash payments | (69 | ) | — | — | (56 | ) | (125 | ) | ||||||||||||
Balance at January 3, 2015 | 26 | — | — | 12 | 38 | |||||||||||||||
Cost of sales special charges | 1 | 1 | — | — | 2 | |||||||||||||||
Special charges | — | — | 1 | 2 | 3 | |||||||||||||||
Non-cash charges used | — | (1 | ) | (1 | ) | — | (2 | ) | ||||||||||||
Cash payments | (6 | ) | — | — | — | (6 | ) | |||||||||||||
Foreign exchange rate impact | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Balance at April 4, 2015 | $ | 19 | $ | — | $ | — | $ | 14 | $ | 33 | ||||||||||
2011 Restructuring Plan | ||||||||||||||||||||
During 2011, the Company incurred special charges to realign certain activities in the Company's legacy Cardiac Rhythm Management business and sales and selling support organizations. The restructuring actions included phasing out Cardiac Rhythm Management manufacturing and R&D operations in a country in Europe, reductions in the Company's workforce and rationalizing product lines. The 2011 Restructuring Plan was completed in 2013 and the remaining accrual balance is not material. | ||||||||||||||||||||
Other Special Charges | ||||||||||||||||||||
Legal settlements: In connection with the March 2010 Securities Class Action Litigation, the Company recognized $10 million in insurance recoveries as a special benefit during the first quarter of 2015 (see Note 4). | ||||||||||||||||||||
Product field action costs and litigation costs: During the first quarter of 2015, the Company recognized $5 million of litigation charges for expected future probable and estimable legal costs associated with outstanding legal matters related to the Company's product field actions. Charges in excess of the amounts accrued are reasonably possible and depend on a number of factors, such as the type of claims received and the cost to defend. Partially offsetting this special charge, the Company recognized a $2 million benefit in cost of sales special charges for salvaged inventory related to certain ICDs that were identified during 2014 as having a potential battery anomaly. |
Net_Earnings_Per_Share
Net Earnings Per Share | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Net Earnings Per Share | NET EARNINGS PER SHARE | |||||||
The table below sets forth the computation of basic and diluted net earnings per share attributable to St. Jude Medical, Inc. (in millions, except per share amounts): | ||||||||
Three Months Ended | ||||||||
April 4, 2015 | March 29, 2014 | |||||||
Numerator: | ||||||||
Net earnings attributable to St. Jude Medical, Inc. | $ | 262 | $ | 249 | ||||
Denominator: | ||||||||
Basic weighted average shares outstanding | 283 | 284.4 | ||||||
Dilution associated with stock-based compensation plans | 4.1 | 4.9 | ||||||
Diluted weighted average shares outstanding | 287.1 | 289.3 | ||||||
Basic net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.93 | $ | 0.88 | ||||
Diluted net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.91 | $ | 0.86 | ||||
Approximately 4.1 million and 2.7 million shares of common stock subject to stock options and restricted stock units were excluded from the diluted net earnings per share computation for the three months ended April 4, 2015 and March 29, 2014, respectively, because they were not dilutive. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income and Supplemental Equity Information | 3 Months Ended | ||||||||||||
Apr. 04, 2015 | |||||||||||||
Accumulated Comprehensive Income and Supplemental Equity [Abstract] | |||||||||||||
Accumulated Other Comprehensive Income and Supplemental Equity Information | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) AND SUPPLEMENTAL EQUITY INFORMATION | ||||||||||||
The tables below present the changes in each component of accumulated other comprehensive income, net of tax, including other comprehensive income and reclassifications out of accumulated other comprehensive income into net earnings for the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | |||||||||||||
Unrealized | |||||||||||||
Gain (Loss) On | Unrealized | Foreign | Accumulated | ||||||||||
Available-for- | Gain (Loss) On | Currency | Other | ||||||||||
For the three months ended | sale | Derivative Instruments | translation adjustment | Comprehensive Income (Loss) | |||||||||
4-Apr-15 | Securities | ||||||||||||
Accumulated other comprehensive income (loss) as of January 3, 2015 | $ | 15 | $ | 3 | $ | (191 | ) | $ | (173 | ) | |||
Other comprehensive income (loss) before reclassifications | 3 | 29 | (127 | ) | (95 | ) | |||||||
Amounts reclassified to net earnings from accumulated other comprehensive income | (2 | ) | — | — | (2 | ) | |||||||
Other comprehensive income (loss) | 1 | 29 | (127 | ) | (97 | ) | |||||||
Accumulated other comprehensive income (loss) as of April 4, 2015 | $ | 16 | $ | 32 | $ | (318 | ) | $ | (270 | ) | |||
Unrealized | |||||||||||||
Gain (Loss) On | Unrealized | Foreign | Accumulated | ||||||||||
Available-for- | Gain (Loss) On | Currency | Other | ||||||||||
For the three months ended | sale | Derivative Instruments | translation adjustment | Comprehensive Income (Loss) | |||||||||
29-Mar-14 | Securities | ||||||||||||
Accumulated other comprehensive income (loss) as of December 28, 2013 | $ | 17 | $ | 3 | $ | 26 | $ | 46 | |||||
Other comprehensive income (loss) before reclassifications | — | — | 10 | 10 | |||||||||
Amounts reclassified to net earnings from accumulated other comprehensive income | — | — | — | — | |||||||||
Other comprehensive income (loss) | — | — | 10 | 10 | |||||||||
Accumulated other comprehensive income (loss) as of March 29, 2014 | $ | 17 | $ | 3 | $ | 36 | $ | 56 | |||||
Income taxes are not provided for foreign translation related to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting items in comprehensive income items that are also recorded as part of net earnings. | |||||||||||||
The following table provides details about reclassifications out of accumulated other comprehensive income and the line items impacted in the Company's Condensed Consolidated Statements of Earnings during the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | |||||||||||||
Amount reclassified from accumulated other comprehensive income | |||||||||||||
Three Months Ended | |||||||||||||
Details about accumulated other | 4-Apr-15 | 29-Mar-14 | Statements of Earnings Classification | ||||||||||
comprehensive income components | |||||||||||||
Unrealized gain on available-for-sale securities: | |||||||||||||
Gain on sale of available-for-sale securities | $ | (4 | ) | $ | — | Other (income) expense | |||||||
Tax effect | 2 | — | Income tax expense | ||||||||||
Net of tax | $ | (2 | ) | $ | — | ||||||||
The Company's realized (gains) and losses on its available-for-sales securities are computed using the specific identification method. | |||||||||||||
Supplemental Equity Information | |||||||||||||
On January 13, 2015, the Company authorized a share repurchase program of up to $500 million of its outstanding common stock. The Company began repurchasing shares on January 30, 2015. From January 30, 2015 through March 2, 2015, the Company repurchased approximately 7.5 million shares for $500 million at an average repurchase price of $66.96 per share. | |||||||||||||
The supplemental equity schedules below present changes in the Company's noncontrolling interest for the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | |||||||||||||
Total | |||||||||||||
Shareholders' | |||||||||||||
Equity | |||||||||||||
Before | Total | ||||||||||||
Noncontrolling | Noncontrolling | Shareholders' | |||||||||||
For the three months ended April 4, 2015 | Interest | Interest | Equity | ||||||||||
Balance at January 3, 2015 | $ | 4,199 | $ | 45 | $ | 4,244 | |||||||
Net earnings | 262 | (6 | ) | 256 | |||||||||
Other comprehensive income (loss) | (97 | ) | — | (97 | ) | ||||||||
Cash dividends declared | (81 | ) | — | (81 | ) | ||||||||
Repurchases of common stock | (500 | ) | — | (500 | ) | ||||||||
Stock-based compensation | 17 | — | 17 | ||||||||||
Common stock issued under employee stock plans and other, net | 38 | — | 38 | ||||||||||
Tax benefit from stock plans | 5 | — | 5 | ||||||||||
Balance at April 4, 2015 | $ | 3,843 | $ | 39 | $ | 3,882 | |||||||
Total | |||||||||||||
Shareholders' | |||||||||||||
Equity | |||||||||||||
Before | Total | ||||||||||||
Noncontrolling | Noncontrolling | Shareholders' | |||||||||||
For the three months ended March 29, 2014 | Interest | Interest | Equity | ||||||||||
Balance at December 28, 2013 | $ | 4,231 | $ | 173 | $ | 4,404 | |||||||
Net earnings | 249 | (10 | ) | 239 | |||||||||
Other comprehensive income (loss) | 10 | — | 10 | ||||||||||
Cash dividends declared | (77 | ) | — | (77 | ) | ||||||||
Repurchases of common stock | (434 | ) | — | (434 | ) | ||||||||
Stock-based compensation | 17 | — | 17 | ||||||||||
Common stock issued under employee stock plans and other, net | 60 | — | 60 | ||||||||||
Tax benefit from stock plans | 9 | — | 9 | ||||||||||
Balance at March 29, 2014 | $ | 4,065 | $ | 163 | $ | 4,228 | |||||||
During the second quarter of 2015, the Company exercised its exclusive option and paid $175 million to Spinal Modulation’s shareholders to obtain the remaining 81% ownership interest in the company that it did not previously own. In accordance with the terms of the original investment agreement, the Company will record estimates for additional payments due upon certain regulatory milestones and achievement of certain revenue targets. |
Income_Taxes
Income Taxes | 3 Months Ended |
Apr. 04, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES |
As of April 4, 2015, the Company had $335 million accrued for uncertain tax positions, all of which would affect the Company’s effective tax rate if recognized. Additionally, the Company had $47 million accrued for gross interest and penalties as of April 4, 2015. At January 3, 2015, the liability for uncertain tax positions was $328 million and the accrual for gross interest and penalties was $44 million. | |
The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The Company has substantially concluded all material U.S. federal, state, foreign and local income tax matters for all tax years through 2004. In April 2015, the U.S. Internal Revenue Service (IRS) completed an audit of the Company’s 2010 and 2011 tax returns and proposed adjustments in an audit report. In February 2014, the IRS completed an audit of the Company’s 2008 and 2009 tax returns and also proposed adjustments in an audit report. The Company has begun and intends to vigorously defend certain of its positions and initiated defense of these adjustments at the IRS appellate level. An unfavorable outcome could have a material negative impact on the Company's effective income tax rate in future periods. The Company does not expect its uncertain tax positions to change significantly over the next 12 months. | |
The Company's effective income tax rate was 16.9% and 18.2% for the first quarter of 2015 and 2014, respectively. The Company’s effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate. In addition, the effective tax rate can be impacted each period by discrete factors and events. The effective income tax rate decreased during the three months ended April 4, 2015 compared to the prior year period primarily as a result of changes in the mix of income before income taxes between U.S. and foreign countries. |
Fair_Value_Measurements_And_Fi
Fair Value Measurements And Financial Instruments | 3 Months Ended | ||||||||||||||||
Apr. 04, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements And Financial Instruments | FAIR VALUE MEASUREMENTS | ||||||||||||||||
The fair value measurement accounting standard provides a framework for measuring fair value and defines fair value as the price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. The standard establishes a valuation hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on independent market data sources. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available. The valuation hierarchy is composed of three categories. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. | |||||||||||||||||
The categories within the valuation hierarchy are described as follows: | |||||||||||||||||
• | Level 1 – Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
• | Level 2 – Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. | ||||||||||||||||
• | Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. | ||||||||||||||||
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | |||||||||||||||||
The fair value measurement standard applies to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). These financial assets and liabilities include money-market securities, trading marketable securities, available-for-sale marketable securities, derivative instruments and contingent consideration liabilities. The Company continues to record these items at fair value on a recurring basis. The Company does not have any material nonfinancial assets or liabilities that are measured at fair value on a recurring basis. A summary of the valuation methodologies used for the respective financial assets and liabilities measured at fair value on a recurring basis is as follows: | |||||||||||||||||
Money-market securities: The Company’s money-market securities include funds that are traded in active markets and are recorded at fair value based upon the quoted market prices. The Company classifies these securities as level 1. | |||||||||||||||||
Available-for-sale securities: The Company’s available-for-sale securities include publicly-traded equity securities that are traded in active markets and are recorded at fair value based upon the closing stock prices. The Company classifies these securities as level 1. | |||||||||||||||||
Trading securities: The Company’s trading securities include publicly-traded mutual funds that are traded in active markets and are recorded at fair value based upon quoted market prices of the net asset values of the funds. The Company classifies these securities as level 1. | |||||||||||||||||
The following table summarizes the components of the balance of the Company’s available-for-sale securities at April 4, 2015 and January 3, 2015 (in millions): | |||||||||||||||||
April 4, 2015 | January 3, 2015 | ||||||||||||||||
Adjusted cost | $ | 5 | $ | 6 | |||||||||||||
Gross unrealized gains | 26 | 24 | |||||||||||||||
Fair value | $ | 31 | $ | 30 | |||||||||||||
Derivative instruments: Fair values for the Company’s derivative financial instruments are based on quoted market prices of comparable instruments, if available, or more commonly on standard pricing models that use as their basis readily observable market parameters from industry standard data providers. These models reflect contractual terms of the derivatives, including period to maturity and market-based parameters such as foreign currency exchange rates. They do not contain a high level of subjectivity as the techniques used in the models do not require significant judgment and inputs are readily observable from actively quoted markets. The Company classifies these instruments as level 2 (see Note 10). | |||||||||||||||||
Contingent consideration: The acquisition date fair value is measured based on the consideration expected to be transferred (probability-weighted), discounted back to present value. The discount rate used is determined at the time of measurement in accordance with accepted valuation methods. The Company measures the liability on a recurring basis using Level 3 inputs including projected revenues or cash flows, growth rates, discount rates, probabilities of payment and projected payment dates. Projected revenues are based on the Company's most recent internal operating budgets and long-term strategic plans. Increases or decreases to any of the inputs may result in significantly higher or lower fair value measurements. | |||||||||||||||||
A summary of assets and liabilities measured at fair value on a recurring basis at April 4, 2015 and January 3, 2015 is as follows (in millions): | |||||||||||||||||
Balance Sheet | April 4, 2015 | Quoted Prices | Significant | Significant | |||||||||||||
Classification | In Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Money-market securities | Cash and cash equivalents | $ | 219 | $ | 219 | $ | — | $ | — | ||||||||
Available-for-sale | Other current assets | 31 | 31 | — | — | ||||||||||||
securities | |||||||||||||||||
Foreign currency forward | Other current assets | 28 | — | 28 | — | ||||||||||||
contracts | |||||||||||||||||
Trading securities | Other assets | 315 | 315 | — | — | ||||||||||||
Foreign currency forward | Other assets | 5 | — | 5 | — | ||||||||||||
contracts | |||||||||||||||||
Total assets | $ | 598 | $ | 565 | $ | 33 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | Other liabilities | $ | 27 | $ | — | $ | — | $ | 27 | ||||||||
Total liabilities | $ | 27 | $ | — | $ | — | $ | 27 | |||||||||
Balance Sheet | January 3, 2015 | Quoted Prices | Significant | Significant | |||||||||||||
Classification | In Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Money-market securities | Cash and cash equivalents | $ | 729 | $ | 729 | $ | — | $ | — | ||||||||
Available-for-sale securities | Other current assets | 30 | 30 | — | — | ||||||||||||
Trading securities | Other assets | 301 | 301 | — | — | ||||||||||||
Total assets | $ | 1,060 | $ | 1,060 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | Other liabilities | $ | 50 | $ | — | $ | — | $ | 50 | ||||||||
Total liabilities | $ | 50 | $ | — | $ | — | $ | 50 | |||||||||
The recurring Level 3 fair value measurements of the Company's contingent consideration liability include the following significant unobservable inputs (in millions): | |||||||||||||||||
Contingent Consideration Liability | Fair Value as of April 4, 2015 | Valuation Technique | Unobservable Input | Range | |||||||||||||
Nanostim revenue-based milestone | $ | 27 | Probability Weighted Discounted Cash Flow | Discount Rate | 5.00% | ||||||||||||
Probability of Payment | 90% | ||||||||||||||||
Projected Years of Three Annual Payments | 2016, 2017, 2018 | ||||||||||||||||
Total contingent consideration liability | $ | 27 | |||||||||||||||
Additionally, the following table provides a reconciliation of the beginning and ending balances of the Company' contingent consideration liability associated with its Nanostim acquisition since January 3, 2015 as of April 4, 2015 (in millions): | |||||||||||||||||
Nanostim | |||||||||||||||||
Balance as of January 3, 2015 | $ | 50 | |||||||||||||||
Change in fair value of contingent consideration | (23 | ) | |||||||||||||||
Balance as of April 4, 2015 | $ | 27 | |||||||||||||||
Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis | |||||||||||||||||
Disclosures are required for certain assets and liabilities that are measured at fair value but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For St. Jude Medical, such measurements of fair value primarily relate to long-lived assets, goodwill, indefinite-lived intangible assets and cost method investments. | |||||||||||||||||
Other than the long-lived asset impairment discussed as follows, there were no other material impairments that were measured at fair value on a nonrecurring basis for the three months ended April 4, 2015. | |||||||||||||||||
Long-lived assets: During the first quarter of both 2015 and 2014, the Company recognized $1 million of fixed asset write-offs associated with projects abandoned under the new realigned structure. Typically the Company measures the fair value of its long-lived assets, such as its definite-lived intangible assets and property, plant and equipment using independent appraisals, market models and discounted cash flow models. However, as the fixed assets had no alternative future use and therefore no discrete future cash flows, the assets were fully impaired. | |||||||||||||||||
Cost method investments: The Company also holds investments in equity securities that are accounted for as cost method investments, which are classified as other assets and measured at fair value on a nonrecurring basis. The carrying value of these investments was $72 million and $71 million as of April 4, 2015 and January 3, 2015, respectively. The fair value of the Company’s cost method investments was not estimated during the first quarter of 2015 since there were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of these investments. | |||||||||||||||||
Fair Value Measurements of Other Financial Instruments | |||||||||||||||||
The aggregate fair value of the Company’s fixed-rate senior notes at April 4, 2015 (measured using quoted prices in active markets) was $2,386 million compared to the aggregate carrying value of $2,271 million (inclusive of the terminated interest rate swaps and unamortized debt discounts). The fair value of the Company’s variable-rate debt obligations at April 4, 2015 approximated its aggregate $1,233 million carrying value due to the variable interest rate and short-term nature of these instruments. The Company also had $476 million and $713 million of cash equivalents invested in short-term deposits and interest and non-interest bearing bank accounts at April 4, 2015 and January 3, 2015, respectively. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | |||||||||||||
Apr. 04, 2015 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||
As a matter of policy, the Company uses derivatives for risk management purposes and it does not use derivatives for trading or speculative purposes. A key risk management objective is to mitigate foreign exchange rate volatility and the associated impact on earnings. The Company's primary way of meeting this objective is for certain of its subsidiaries to enter into derivative contracts with the same critical terms as those subsidiaries’ forecasted amounts of foreign currency costs. | ||||||||||||||
Cash Flow Hedges | ||||||||||||||
In the first quarter of 2015, the Company began to enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications from accumulated other comprehensive income to earnings in the period during which the hedged transactions affect earnings and in the same financial statement line item with the earnings effects of the hedged transaction. The Company may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs. Changes in the value of derivative instruments after dedesignation, but before settlement of the forward contract, are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments section below. Hedge ineffectiveness and the amount excluded from effectiveness testing recognized in earnings on cash flow hedges were not material for the three months ended April 4, 2015. The Company hedges its exposure to the variability in future cash flows of forecasted transactions for periods of up to 24 months. The dollar equivalent gross notional amount of the Company’s foreign exchange forward contracts designated as cash flow hedges at April 4, 2015 was approximately $1.1 billion. | ||||||||||||||
As of April 4, 2015, the Company had a balance of $29 million associated with the after-tax net unrealized gain related to foreign currency forward contracts recorded in accumulated other comprehensive income. Based on exchange rates as of April 4, 2015, the Company expects to reclassify approximately $22 million (after-tax) to earnings over the next 12 months contemporaneously with the earnings effects of the related forecasted transactions (with the impact offset by cash flows from the underlying hedged items). | ||||||||||||||
The following table provides the (gains) losses related to derivative instruments designated as cash flow hedges, including the location in the Condensed Consolidated Statements of Earnings and the Condensed Consolidated Statements of Comprehensive Income (in millions): | ||||||||||||||
Pre-tax (Gain) Loss | ||||||||||||||
Recognized in | Pre-tax (Gain) Loss Recognized | |||||||||||||
Other | in Earnings on Effective Portion | Ineffective Portion of (Gain) Loss | ||||||||||||
Comprehensive | of Derivative as a Result of | on Derivative and Amount | ||||||||||||
Three | Income on Effective | Reclassification from | Excluded from Effectiveness | |||||||||||
months | Portion of | Accumulated Other | Testing Recognized | |||||||||||
ended | Derivative | Comprehensive Income | in Earnings | |||||||||||
4-Apr-15 | Amount | Amount | Location | Amount | Location | |||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||
Foreign currency forward contracts | $ | (34 | ) | $ | — | Cost of sales | $ | — | Cost of sales | |||||
Reclassifications from accumulated other comprehensive income into earnings include accumulated (gains) losses on dedesignated hedges at the time earnings are impacted. | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||
Derivatives not designated as hedging instruments include dedesignated foreign currency forward contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, the Company enters into foreign currency forward contracts to economically hedge the foreign currency impact of assets and liabilities (including intercompany assets and liabilities) denominated in nonfunctional currencies. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The dollar equivalent gross notional amount of these forward contracts not designated as hedging instruments totaled $190 million as of April 4, 2015. The fair value of the Company's outstanding contracts was immaterial as of April 4, 2015 and January 3, 2015. | ||||||||||||||
The following table provides the (gains) losses related to derivative instruments not designated as hedging instruments, including the location in the Condensed Consolidated Statements of Earnings (in millions): | ||||||||||||||
Three months ended April 4, 2015 | ||||||||||||||
(Gain) Loss on Derivatives | ||||||||||||||
Recognized in Earnings | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | Amount | Location | ||||||||||||
Foreign currency forward contracts | $ | (9 | ) | Other (income) expense | ||||||||||
The net (gains) losses were almost entirely offset by corresponding net (losses) gains on the foreign currency exposures being managed. | ||||||||||||||
Location and Fair Value Amount of Derivative Instruments | ||||||||||||||
The following table summarizes the fair value of the Company’s derivative instruments and their locations in the Condensed Consolidated Balance Sheets as of April 4, 2015 (in millions): | ||||||||||||||
Assets | ||||||||||||||
Fair Value of Derivative Instruments | Amount | Location | ||||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||||
Foreign currency forward contracts | $ | 24 | Other current assets | |||||||||||
Foreign currency forward contracts | 5 | Other assets | ||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||
Foreign currency forward contracts | 4 | Other current assets | ||||||||||||
Total | $ | 33 | ||||||||||||
Additional information with respect to the fair values of derivative instruments is included in Note 9. | ||||||||||||||
Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments | ||||||||||||||
Fair values of the Company's derivatives can change significantly from period to period based on, among other factors, market movements and changes in the Company's positions. However, the Company’s risk is limited to the fair value of the instruments. The Company monitors its exposure to counterparty credit risk (the risk that counterparties will default and not make payments to the Company according to the terms of the agreements) by selecting major international banks and financial institutions as counterparties and by entering into master netting arrangements with counterparties when possible. A master netting arrangement may allow each counterparty to net settle amounts owed between a St. Jude Medical entity and the counterparty as a result of multiple, separate derivative transactions. As of April 4, 2015, St. Jude Medical had International Swaps and Derivatives Association agreements with three applicable banks and financial institutions that contain netting provisions. | ||||||||||||||
The Company has elected to present the fair values of derivative assets and liabilities within the Company’s Condensed Consolidated Balance Sheets on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following table provides information as though the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of the netting arrangements with each of the counterparties as of April 4, 2015 (in millions): | ||||||||||||||
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||
Gross Amount of | ||||||||||||||
Eligible Offsetting | ||||||||||||||
Gross Amount of | Recognized | |||||||||||||
Derivative Assets | Derivative Liabilities | Net | ||||||||||||
Presented in the | Presented in the | Cash | Amount of | |||||||||||
Condensed Consolidated | Condensed Consolidated | Collateral | Derivative | |||||||||||
Derivatives as of April 4, 2015 | Balance Sheet | Balance Sheet | Received | Assets | ||||||||||
Derivatives subject to master netting agreements | $ | 9 | $ | — | $ | — | $ | 9 | ||||||
Derivatives not subject to master netting agreements | 24 | 24 | ||||||||||||
Total | $ | 33 | $ | — | $ | — | $ | 33 | ||||||
For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period. Derivatives not subject to master netting agreements are not eligible for net presentation. As of April 4, 2015, no cash collateral had been received or pledged related to these derivative instruments. |
Business_Combinations_and_Vari1
Business Combinations and Variable Interest Entities (Tables) (Spinal Modulation [Member]) | 3 Months Ended | ||||
Apr. 04, 2015 | |||||
Spinal Modulation [Member] | |||||
Schedule of Variable Interest Entities [Table Text Block] | The following table summarizes Spinal Modulation’s assets and liabilities included in St. Jude Medical Inc.'s consolidated balance sheet as of April 4, 2015 after elimination of all intercompany balances and transactions (in millions): | ||||
4-Apr-15 | |||||
Cash and cash equivalents | $ | 9 | |||
Other current assets | 7 | ||||
Goodwill | 46 | ||||
In-process research and development (IPR&D) | 45 | ||||
Other intangible assets | 7 | ||||
Total assets | $ | 114 | |||
Current liabilities | $ | 7 | |||
Deferred income taxes | 19 | ||||
Total liabilities | $ | 26 | |||
Non-controlling interest | $ | 39 | |||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||||
Apr. 04, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Schedule Of Long-Term Debt | The carrying value of the Company’s debt, including discounts, the fair value of an interest rate swap agreement and the remaining deferred gain from a terminated interest rate swap agreement, consisted of the following (in millions): | ||||||||||||||||||
April 4, 2015 | January 3, 2015 | ||||||||||||||||||
Term loan due June 2015 | $ | — | $ | 500 | |||||||||||||||
Term loan due August 2015 | — | 250 | |||||||||||||||||
2.50% senior notes due 2016 | 504 | 506 | |||||||||||||||||
3.25% senior notes due 2023 | 897 | 896 | |||||||||||||||||
4.75% senior notes due 2043 | 696 | 696 | |||||||||||||||||
1.58% Yen-denominated senior notes due 2017 | 68 | 68 | |||||||||||||||||
2.04% Yen-denominated senior notes due 2020 | 106 | 107 | |||||||||||||||||
Yen-denominated credit facilities | 54 | 54 | |||||||||||||||||
Commercial paper borrowings | 1,179 | 789 | |||||||||||||||||
Total debt | 3,504 | 3,866 | |||||||||||||||||
Less: current debt obligations | 1,737 | 1,593 | |||||||||||||||||
Long-term debt | $ | 1,767 | $ | 2,273 | |||||||||||||||
Schedule of Maturities of Long-term Debt | Contractual maturities of the Company's debt for the next five fiscal years and thereafter, excluding discounts, the fair value of an interest rate swap agreement and the remaining deferred gain from a terminated interest rate swap agreement, as of April 4, 2015 are as follows (in million): | ||||||||||||||||||
Remainder of 2015 | 2016 | 2017 | 2018 | 2019 | After 2019 | ||||||||||||||
Expected future minimum principal payments | $ | 1,206 | $ | 527 | $ | 68 | $ | — | $ | — | $ | 1,707 | |||||||
Commitments_And_Contingencies_
Commitments And Contingencies (Tables) | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Schedule Of Product Warranty Liability | Changes in the Company’s product warranty liability during the three months ended April 4, 2015 and March 29, 2014 were as follows (in millions): | |||||||
Three Months Ended | ||||||||
April 4, 2015 | March 29, 2014 | |||||||
Balance at beginning of period | $ | 35 | $ | 37 | ||||
Warranty expense (income) recognized | (2 | ) | 1 | |||||
Warranty credits issued | (1 | ) | (1 | ) | ||||
Balance at end of period | $ | 32 | $ | 37 | ||||
Special_Charges_Tables
Special Charges (Tables) | 3 Months Ended | |||||||||||||||||||
Apr. 04, 2015 | ||||||||||||||||||||
Manufacturing and Supply Chain Optimization Plan | ||||||||||||||||||||
Restructuring Cost and Reserve | ||||||||||||||||||||
Summary Of Activity Related To Special Charge Restructuring Accrual | A summary of the activity related to the Manufacturing and Supply Chain Optimization Plan accrual is as follows (in millions): | |||||||||||||||||||
Employee | Inventory | Fixed | Other Restructuring Costs | Total | ||||||||||||||||
Termination | Charges | Asset | ||||||||||||||||||
Costs | Charges | |||||||||||||||||||
Balance at December 28, 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Cost of sales special charges | 7 | — | — | — | 7 | |||||||||||||||
Special charges | 12 | — | 5 | 8 | 25 | |||||||||||||||
Non-cash charges used | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Cash payments | (5 | ) | — | — | (2 | ) | (7 | ) | ||||||||||||
Balance at January 3, 2015 | 14 | — | — | 6 | 20 | |||||||||||||||
Cost of sales special charges | 1 | 1 | — | — | 2 | |||||||||||||||
Special charges | 3 | — | — | 3 | 6 | |||||||||||||||
Non-cash charges used | — | (1 | ) | — | — | (1 | ) | |||||||||||||
Cash payments | (5 | ) | — | — | (5 | ) | (10 | ) | ||||||||||||
Foreign exchange rate impact | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Balance at April 4, 2015 | $ | 13 | $ | — | $ | — | $ | 3 | $ | 16 | ||||||||||
2012 Business Realignment Restructuring Plan | ||||||||||||||||||||
Restructuring Cost and Reserve | ||||||||||||||||||||
Summary Of Activity Related To Special Charge Restructuring Accrual | A summary of the activity related to the 2012 Business Realignment Plan accrual is as follows (in millions): | |||||||||||||||||||
Employee | Inventory | Fixed | Other | Total | ||||||||||||||||
Termination | Charges | Asset | Restructuring | |||||||||||||||||
Costs | Charges | Costs | ||||||||||||||||||
Balance at December 28, 2013 | $ | 54 | $ | — | $ | — | $ | 33 | $ | 87 | ||||||||||
Cost of sales special charges | 8 | 8 | 13 | 1 | 30 | |||||||||||||||
Special charges | 36 | — | 7 | 35 | 78 | |||||||||||||||
Non-cash charges used | — | (8 | ) | (20 | ) | — | (28 | ) | ||||||||||||
Cash payments | (69 | ) | — | — | (56 | ) | (125 | ) | ||||||||||||
Balance at January 3, 2015 | 26 | — | — | 12 | 38 | |||||||||||||||
Cost of sales special charges | 1 | 1 | — | — | 2 | |||||||||||||||
Special charges | — | — | 1 | 2 | 3 | |||||||||||||||
Non-cash charges used | — | (1 | ) | (1 | ) | — | (2 | ) | ||||||||||||
Cash payments | (6 | ) | — | — | — | (6 | ) | |||||||||||||
Foreign exchange rate impact | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Balance at April 4, 2015 | $ | 19 | $ | — | $ | — | $ | 14 | $ | 33 | ||||||||||
Net_Earnings_Per_Share_Tables
Net Earnings Per Share (Tables) | 3 Months Ended | |||||||
Apr. 04, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Schedule Of Computation Of Basic And Diluted Net Earnings Per Share | The table below sets forth the computation of basic and diluted net earnings per share attributable to St. Jude Medical, Inc. (in millions, except per share amounts): | |||||||
Three Months Ended | ||||||||
April 4, 2015 | March 29, 2014 | |||||||
Numerator: | ||||||||
Net earnings attributable to St. Jude Medical, Inc. | $ | 262 | $ | 249 | ||||
Denominator: | ||||||||
Basic weighted average shares outstanding | 283 | 284.4 | ||||||
Dilution associated with stock-based compensation plans | 4.1 | 4.9 | ||||||
Diluted weighted average shares outstanding | 287.1 | 289.3 | ||||||
Basic net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.93 | $ | 0.88 | ||||
Diluted net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.91 | $ | 0.86 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income and Supplemental Equity Information (Tables) | 3 Months Ended | ||||||||||||
Apr. 04, 2015 | |||||||||||||
Accumulated Comprehensive Income and Supplemental Equity [Abstract] | |||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The tables below present the changes in each component of accumulated other comprehensive income, net of tax, including other comprehensive income and reclassifications out of accumulated other comprehensive income into net earnings for the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | ||||||||||||
Unrealized | |||||||||||||
Gain (Loss) On | Unrealized | Foreign | Accumulated | ||||||||||
Available-for- | Gain (Loss) On | Currency | Other | ||||||||||
For the three months ended | sale | Derivative Instruments | translation adjustment | Comprehensive Income (Loss) | |||||||||
4-Apr-15 | Securities | ||||||||||||
Accumulated other comprehensive income (loss) as of January 3, 2015 | $ | 15 | $ | 3 | $ | (191 | ) | $ | (173 | ) | |||
Other comprehensive income (loss) before reclassifications | 3 | 29 | (127 | ) | (95 | ) | |||||||
Amounts reclassified to net earnings from accumulated other comprehensive income | (2 | ) | — | — | (2 | ) | |||||||
Other comprehensive income (loss) | 1 | 29 | (127 | ) | (97 | ) | |||||||
Accumulated other comprehensive income (loss) as of April 4, 2015 | $ | 16 | $ | 32 | $ | (318 | ) | $ | (270 | ) | |||
Unrealized | |||||||||||||
Gain (Loss) On | Unrealized | Foreign | Accumulated | ||||||||||
Available-for- | Gain (Loss) On | Currency | Other | ||||||||||
For the three months ended | sale | Derivative Instruments | translation adjustment | Comprehensive Income (Loss) | |||||||||
29-Mar-14 | Securities | ||||||||||||
Accumulated other comprehensive income (loss) as of December 28, 2013 | $ | 17 | $ | 3 | $ | 26 | $ | 46 | |||||
Other comprehensive income (loss) before reclassifications | — | — | 10 | 10 | |||||||||
Amounts reclassified to net earnings from accumulated other comprehensive income | — | — | — | — | |||||||||
Other comprehensive income (loss) | — | — | 10 | 10 | |||||||||
Accumulated other comprehensive income (loss) as of March 29, 2014 | $ | 17 | $ | 3 | $ | 36 | $ | 56 | |||||
Reclassification out of Accumulated Other Comprehensive Income | The following table provides details about reclassifications out of accumulated other comprehensive income and the line items impacted in the Company's Condensed Consolidated Statements of Earnings during the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | ||||||||||||
Amount reclassified from accumulated other comprehensive income | |||||||||||||
Three Months Ended | |||||||||||||
Details about accumulated other | 4-Apr-15 | 29-Mar-14 | Statements of Earnings Classification | ||||||||||
comprehensive income components | |||||||||||||
Unrealized gain on available-for-sale securities: | |||||||||||||
Gain on sale of available-for-sale securities | $ | (4 | ) | $ | — | Other (income) expense | |||||||
Tax effect | 2 | — | Income tax expense | ||||||||||
Net of tax | $ | (2 | ) | $ | — | ||||||||
Stockholders' Equity Note Disclosure | The supplemental equity schedules below present changes in the Company's noncontrolling interest for the three months ended April 4, 2015 and March 29, 2014, respectively (in millions): | ||||||||||||
Total | |||||||||||||
Shareholders' | |||||||||||||
Equity | |||||||||||||
Before | Total | ||||||||||||
Noncontrolling | Noncontrolling | Shareholders' | |||||||||||
For the three months ended April 4, 2015 | Interest | Interest | Equity | ||||||||||
Balance at January 3, 2015 | $ | 4,199 | $ | 45 | $ | 4,244 | |||||||
Net earnings | 262 | (6 | ) | 256 | |||||||||
Other comprehensive income (loss) | (97 | ) | — | (97 | ) | ||||||||
Cash dividends declared | (81 | ) | — | (81 | ) | ||||||||
Repurchases of common stock | (500 | ) | — | (500 | ) | ||||||||
Stock-based compensation | 17 | — | 17 | ||||||||||
Common stock issued under employee stock plans and other, net | 38 | — | 38 | ||||||||||
Tax benefit from stock plans | 5 | — | 5 | ||||||||||
Balance at April 4, 2015 | $ | 3,843 | $ | 39 | $ | 3,882 | |||||||
Total | |||||||||||||
Shareholders' | |||||||||||||
Equity | |||||||||||||
Before | Total | ||||||||||||
Noncontrolling | Noncontrolling | Shareholders' | |||||||||||
For the three months ended March 29, 2014 | Interest | Interest | Equity | ||||||||||
Balance at December 28, 2013 | $ | 4,231 | $ | 173 | $ | 4,404 | |||||||
Net earnings | 249 | (10 | ) | 239 | |||||||||
Other comprehensive income (loss) | 10 | — | 10 | ||||||||||
Cash dividends declared | (77 | ) | — | (77 | ) | ||||||||
Repurchases of common stock | (434 | ) | — | (434 | ) | ||||||||
Stock-based compensation | 17 | — | 17 | ||||||||||
Common stock issued under employee stock plans and other, net | 60 | — | 60 | ||||||||||
Tax benefit from stock plans | 9 | — | 9 | ||||||||||
Balance at March 29, 2014 | $ | 4,065 | $ | 163 | $ | 4,228 | |||||||
During the second quarter of 2015, the Company exercised its exclusive option and paid $175 million to Spinal Modulation’s shareholders to obtain the remaining 81% ownership interest in the company that it did not previously own. In accordance with the terms of the original investment agreement, the Company will record estimates for additional payments due upon certain regulatory milestones and achievement of certain revenue targets. |
Fair_Value_Measurements_And_Fi1
Fair Value Measurements And Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Apr. 04, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Summary Of Components Of Available-For-Sale Securities | The following table summarizes the components of the balance of the Company’s available-for-sale securities at April 4, 2015 and January 3, 2015 (in millions): | ||||||||||||||||
April 4, 2015 | January 3, 2015 | ||||||||||||||||
Adjusted cost | $ | 5 | $ | 6 | |||||||||||||
Gross unrealized gains | 26 | 24 | |||||||||||||||
Fair value | $ | 31 | $ | 30 | |||||||||||||
Summary Of Financial Assets and Liabilities Measured At Fair Value On A Recurring Basis | A summary of assets and liabilities measured at fair value on a recurring basis at April 4, 2015 and January 3, 2015 is as follows (in millions): | ||||||||||||||||
Balance Sheet | April 4, 2015 | Quoted Prices | Significant | Significant | |||||||||||||
Classification | In Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Money-market securities | Cash and cash equivalents | $ | 219 | $ | 219 | $ | — | $ | — | ||||||||
Available-for-sale | Other current assets | 31 | 31 | — | — | ||||||||||||
securities | |||||||||||||||||
Foreign currency forward | Other current assets | 28 | — | 28 | — | ||||||||||||
contracts | |||||||||||||||||
Trading securities | Other assets | 315 | 315 | — | — | ||||||||||||
Foreign currency forward | Other assets | 5 | — | 5 | — | ||||||||||||
contracts | |||||||||||||||||
Total assets | $ | 598 | $ | 565 | $ | 33 | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | Other liabilities | $ | 27 | $ | — | $ | — | $ | 27 | ||||||||
Total liabilities | $ | 27 | $ | — | $ | — | $ | 27 | |||||||||
Balance Sheet | January 3, 2015 | Quoted Prices | Significant | Significant | |||||||||||||
Classification | In Active | Other | Unobservable | ||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Money-market securities | Cash and cash equivalents | $ | 729 | $ | 729 | $ | — | $ | — | ||||||||
Available-for-sale securities | Other current assets | 30 | 30 | — | — | ||||||||||||
Trading securities | Other assets | 301 | 301 | — | — | ||||||||||||
Total assets | $ | 1,060 | $ | 1,060 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration | Other liabilities | $ | 50 | $ | — | $ | — | $ | 50 | ||||||||
Total liabilities | $ | 50 | $ | — | $ | — | $ | 50 | |||||||||
Summary of Level 3 Fair Value Measurements of Contingent Consideration Liability | The recurring Level 3 fair value measurements of the Company's contingent consideration liability include the following significant unobservable inputs (in millions): | ||||||||||||||||
Contingent Consideration Liability | Fair Value as of April 4, 2015 | Valuation Technique | Unobservable Input | Range | |||||||||||||
Nanostim revenue-based milestone | $ | 27 | Probability Weighted Discounted Cash Flow | Discount Rate | 5.00% | ||||||||||||
Probability of Payment | 90% | ||||||||||||||||
Projected Years of Three Annual Payments | 2016, 2017, 2018 | ||||||||||||||||
Total contingent consideration liability | $ | 27 | |||||||||||||||
Unobservable Input Reconciliation of Contingent Consideration Liability | Additionally, the following table provides a reconciliation of the beginning and ending balances of the Company' contingent consideration liability associated with its Nanostim acquisition since January 3, 2015 as of April 4, 2015 (in millions): | ||||||||||||||||
Nanostim | |||||||||||||||||
Balance as of January 3, 2015 | $ | 50 | |||||||||||||||
Change in fair value of contingent consideration | (23 | ) | |||||||||||||||
Balance as of April 4, 2015 | $ | 27 | |||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | |||||||||||||
Apr. 04, 2015 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||
Summary of Derivative Instruments (Gain) Loss | The following table provides the (gains) losses related to derivative instruments designated as cash flow hedges, including the location in the Condensed Consolidated Statements of Earnings and the Condensed Consolidated Statements of Comprehensive Income (in millions): | |||||||||||||
Pre-tax (Gain) Loss | ||||||||||||||
Recognized in | Pre-tax (Gain) Loss Recognized | |||||||||||||
Other | in Earnings on Effective Portion | Ineffective Portion of (Gain) Loss | ||||||||||||
Comprehensive | of Derivative as a Result of | on Derivative and Amount | ||||||||||||
Three | Income on Effective | Reclassification from | Excluded from Effectiveness | |||||||||||
months | Portion of | Accumulated Other | Testing Recognized | |||||||||||
ended | Derivative | Comprehensive Income | in Earnings | |||||||||||
4-Apr-15 | Amount | Amount | Location | Amount | Location | |||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||
Foreign currency forward contracts | $ | (34 | ) | $ | — | Cost of sales | $ | — | Cost of sales | |||||
The following table provides the (gains) losses related to derivative instruments not designated as hedging instruments, including the location in the Condensed Consolidated Statements of Earnings (in millions): | ||||||||||||||
Three months ended April 4, 2015 | ||||||||||||||
(Gain) Loss on Derivatives | ||||||||||||||
Recognized in Earnings | ||||||||||||||
Derivatives Not Designated as Hedging Instruments | Amount | Location | ||||||||||||
Foreign currency forward contracts | $ | (9 | ) | Other (income) expense | ||||||||||
Schedule of Fair Value of Derivative Instruments in Statement of Financial Position | The following table summarizes the fair value of the Company’s derivative instruments and their locations in the Condensed Consolidated Balance Sheets as of April 4, 2015 (in millions): | |||||||||||||
Assets | ||||||||||||||
Fair Value of Derivative Instruments | Amount | Location | ||||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||||
Foreign currency forward contracts | $ | 24 | Other current assets | |||||||||||
Foreign currency forward contracts | 5 | Other assets | ||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||
Foreign currency forward contracts | 4 | Other current assets | ||||||||||||
Total | $ | 33 | ||||||||||||
Schedule of Offsetting Derivative Assets | However, the following table provides information as though the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of the netting arrangements with each of the counterparties as of April 4, 2015 (in millions): | |||||||||||||
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet that are Subject to Master Netting Agreements | ||||||||||||||
Gross Amount of | ||||||||||||||
Eligible Offsetting | ||||||||||||||
Gross Amount of | Recognized | |||||||||||||
Derivative Assets | Derivative Liabilities | Net | ||||||||||||
Presented in the | Presented in the | Cash | Amount of | |||||||||||
Condensed Consolidated | Condensed Consolidated | Collateral | Derivative | |||||||||||
Derivatives as of April 4, 2015 | Balance Sheet | Balance Sheet | Received | Assets | ||||||||||
Derivatives subject to master netting agreements | $ | 9 | $ | — | $ | — | $ | 9 | ||||||
Derivatives not subject to master netting agreements | 24 | 24 | ||||||||||||
Total | $ | 33 | $ | — | $ | — | $ | 33 | ||||||
Business_Combinations_and_Vari2
Business Combinations and Variable Interest Entities - Schedule of Variable Interest Entities (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, unless otherwise specified | ||
Variable Interest Entity [Line Items] | ||
Goodwill | $3,509 | $3,532 |
Spinal Modulation [Member] | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | 9 | |
Other current assets | 7 | |
Goodwill | 46 | |
In-process research and development (IPR&D) | 45 | |
Other intangible assets | 7 | |
Total assets | 114 | |
Current liabilities | 7 | |
Deferred income taxes | 19 | |
Total liabilities | 26 | |
Non-controlling interest | $39 |
Business_Combinations_and_Vari3
Business Combinations and Variable Interest Entities (Details) (Spinal Modulation [Member], USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Apr. 04, 2015 | Jun. 29, 2013 | Jun. 07, 2013 |
Equity Security Ownership Interest And Allocated Value For Purchase Option | $40 | ||
Noncontrolling Interest, Ownership Percentage by Parent | 19.00% | ||
Additional Payment For Acquisition At Company Option | 300 | ||
Variable Interest Entity, Financial or Other Support, Amount | 20 | ||
Maximum [Member] | |||
Variable Interest Entity, Financial or Other Support, Amount | 25 | ||
Revolving Credit Facility [Member] | |||
Variable Interest Entity, Financial or Other Support, Amount | $15 |
Debt_Schedule_Of_LongTerm_Debt
Debt - Schedule Of Long-Term Debt (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, unless otherwise specified | ||
Debt Instrument | ||
Total debt | $3,504 | $3,866 |
Less: current debt obligations | 1,737 | 1,593 |
Long-term debt | 1,767 | 2,273 |
Term loan due June 2015 | Loans Payable | ||
Debt Instrument | ||
Total debt | 0 | 500 |
Term loan due August 2015 | Loans Payable | ||
Debt Instrument | ||
Total debt | 0 | 250 |
2.50% senior notes due 2016 | Senior Notes | ||
Debt Instrument | ||
Total debt | 504 | 506 |
Debt Instrument, Interest Rate, Stated Percentage | 2.50% | |
3.25% senior notes due 2023 | Senior Notes | ||
Debt Instrument | ||
Total debt | 897 | 896 |
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
4.75% senior notes due 2043 | Senior Notes | ||
Debt Instrument | ||
Total debt | 696 | 696 |
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |
1.58% Yen-denominated senior notes due 2017 | Senior Notes | ||
Debt Instrument | ||
Total debt | 68 | 68 |
Debt Instrument, Interest Rate, Stated Percentage | 1.58% | |
2.04% Yen-denominated senior notes due 2020 | Senior Notes | ||
Debt Instrument | ||
Total debt | 106 | 107 |
Debt Instrument, Interest Rate, Stated Percentage | 2.04% | |
Yen-denominated credit facilities | Line of Credit | ||
Debt Instrument | ||
Total debt | 54 | 54 |
Commercial paper borrowings | Commercial Paper | ||
Debt Instrument | ||
Total debt | $1,179 | $789 |
Debt_Schedule_of_Maturities_of
Debt - Schedule of Maturities of Long-term Debt (Details) (USD $) | Apr. 04, 2015 |
In Millions, unless otherwise specified | |
Debt Disclosure [Abstract] | |
Remainder of 2015 | $1,206 |
2016 | 527 |
2017 | 68 |
2018 | 0 |
2019 | 0 |
After 2019 | $1,707 |
Debt_Details
Debt (Details) | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Apr. 04, 2015 | Apr. 04, 2015 | Apr. 04, 2015 | Apr. 04, 2015 | Apr. 04, 2015 | Apr. 04, 2015 | Apr. 04, 2015 |
Loans Payable | Loans Payable | Loans Payable | Line of Credit | Line of Credit | Japan, Yen | London Interbank Offered Rate (LIBOR) [Member] | |
Term loan due June 2015 | Term loan due August 2015 | Term loan due April 2016 [Member] | Yen-denominated credit facilities | Yen-denominated credit facilities | Line of Credit | Loans Payable | |
USD ($) | USD ($) | USD ($) | USD ($) | JPY (¥) | Term loan due April 2016 [Member] | ||
Debt Instrument | |||||||
Debt instrument term, years | 2 years | 364 days | 364 days | ||||
Debt Instrument, Face Amount | $500 | $250 | $175 | ||||
Long-term Line of Credit | $27 | ¥ 3,250 | |||||
Debt Instrument, Description of Variable Rate Basis | Yen LIBOR | LIBOR | |||||
Debt Instrument, Basis Spread on Variable Rate | 0.90% | 0.25% | 0.25% |
Commitments_And_Contingencies_1
Commitments And Contingencies - Schedule Of Product Warranty Liability (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ||
Balance at beginning of period | $35 | $37 |
Warranty expense (income) recognized | -2 | 1 |
Warranty credits issued | -1 | -1 |
Balance at end of period | $32 | $37 |
Commitments_And_Contingencies_2
Commitments And Contingencies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||
In Millions, unless otherwise specified | Apr. 04, 2015 | Jan. 03, 2015 | Jan. 03, 2015 | Mar. 30, 2013 | Dec. 17, 2014 | 1-May-15 |
March 2010 Securities Class Action | ||||||
Commitments And Contingencies | ||||||
Litigation Settlement, Expense | $50 | |||||
Minimum damage loss claimed | 475 | |||||
Proceeds from Insurance Settlement, Operating Activities | 40 | |||||
December 2012 Securities Litigation | ||||||
Commitments And Contingencies | ||||||
Number of cases consolidated | 2 | |||||
Riata Litigation | ||||||
Commitments And Contingencies | ||||||
Litigation Settlement, Expense | $15 | |||||
Loss Contingency, Claims Settled, Number | 950 | |||||
Number of resolved multi-plaintiff lawsuits, excluding class action lawsuits | 8 | 8 | ||||
Riata Litigation | Minimum | ||||||
Commitments And Contingencies | ||||||
Number of lawsuits outstanding | 70 | |||||
Riata Litigation | Subsequent Event | ||||||
Commitments And Contingencies | ||||||
Number of lawsuits outstanding | 4 | |||||
Riata Litigation | State and Federal Courts of California | ||||||
Commitments And Contingencies | ||||||
Number of claimants in lawsuit | 173 | 173 |
Special_Charges_Summary_Of_Act
Special Charges - Summary Of Activity Related To Special Charge Restructuring Accrual (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 | Jan. 03, 2015 |
Manufacturing and Supply Chain Optimization Plan | |||
Restructuring Cost and Reserve | |||
Balance at beginning | $20 | $0 | $0 |
Special charges | 8 | 32 | |
Non-cash charges used | -1 | -5 | |
Cash payments | -10 | -7 | |
Restructuring Reserve, Translation Adjustment | -1 | ||
Balance at ending | 16 | 20 | |
Manufacturing and Supply Chain Optimization Plan | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 14 | 0 | 0 |
Non-cash charges used | 0 | 0 | |
Cash payments | -5 | -5 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 13 | 14 | |
Manufacturing and Supply Chain Optimization Plan | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 0 | 0 | 0 |
Non-cash charges used | -1 | 0 | |
Cash payments | 0 | 0 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 0 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 0 | 0 | 0 |
Non-cash charges used | 0 | -5 | |
Cash payments | 0 | 0 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 0 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 6 | 0 | 0 |
Non-cash charges used | 0 | 0 | |
Cash payments | -5 | -2 | |
Restructuring Reserve, Translation Adjustment | -1 | ||
Balance at ending | 3 | 6 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | |||
Restructuring Cost and Reserve | |||
Special charges | 2 | 7 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Special charges, severance and benefit costs | 1 | 7 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Special charges, inventory obsolescence charges | 1 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Special charges, fixed asset impairment charges | 0 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Restructuring reserve period expense | 0 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | |||
Restructuring Cost and Reserve | |||
Special charges | 6 | 25 | |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Special charges, severance and benefit costs | 3 | 12 | |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Special charges, inventory obsolescence charges | 0 | 0 | |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Special charges, fixed asset impairment charges | 0 | 5 | |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Restructuring reserve period expense | 3 | 8 | |
2012 Business Realignment Restructuring Plan | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 38 | 87 | 87 |
Special charges | 5 | 108 | |
Non-cash charges used | -2 | -28 | |
Cash payments | -6 | -125 | |
Restructuring Reserve, Translation Adjustment | -2 | ||
Balance at ending | 33 | 38 | |
2012 Business Realignment Restructuring Plan | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 26 | 54 | 54 |
Non-cash charges used | 0 | 0 | |
Cash payments | -6 | -69 | |
Restructuring Reserve, Translation Adjustment | -2 | ||
Balance at ending | 19 | 26 | |
2012 Business Realignment Restructuring Plan | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 0 | 0 | 0 |
Non-cash charges used | -1 | -8 | |
Cash payments | 0 | 0 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 0 | 0 | |
2012 Business Realignment Restructuring Plan | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 0 | 0 | 0 |
Special charges, fixed asset impairment charges | 1 | 1 | |
Non-cash charges used | -1 | -20 | |
Cash payments | 0 | 0 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 0 | 0 | |
2012 Business Realignment Restructuring Plan | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Balance at beginning | 12 | 33 | 33 |
Non-cash charges used | 0 | 0 | |
Cash payments | 0 | -56 | |
Restructuring Reserve, Translation Adjustment | 0 | ||
Balance at ending | 14 | 12 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | |||
Restructuring Cost and Reserve | |||
Special charges | 2 | 30 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Special charges, severance and benefit costs | 1 | 8 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Special charges, inventory obsolescence charges | 1 | 8 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Special charges, fixed asset impairment charges | 0 | 13 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Restructuring reserve period expense | 0 | 1 | |
2012 Business Realignment Restructuring Plan | Operating Expense | |||
Restructuring Cost and Reserve | |||
Special charges | 3 | 78 | |
2012 Business Realignment Restructuring Plan | Operating Expense | Employee Termination Costs | |||
Restructuring Cost and Reserve | |||
Special charges, severance and benefit costs | 0 | 36 | |
2012 Business Realignment Restructuring Plan | Operating Expense | Inventory Valuation Reserve | |||
Restructuring Cost and Reserve | |||
Special charges, inventory obsolescence charges | 0 | 0 | |
2012 Business Realignment Restructuring Plan | Operating Expense | Fixed Asset Write-offs | |||
Restructuring Cost and Reserve | |||
Special charges, fixed asset impairment charges | 1 | 7 | |
2012 Business Realignment Restructuring Plan | Operating Expense | Other Restructuring | |||
Restructuring Cost and Reserve | |||
Restructuring reserve period expense | $2 | $35 |
Special_Charges_Details
Special Charges (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Jan. 03, 2015 | Dec. 28, 2013 |
Field Action Costs | Operating Expense | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Legal Fees | $5 | ||
March 2010 Securities Class Action | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Unusual or Infrequent Item, Insurance Proceeds | 10 | ||
Manufacturing and Supply Chain Optimization Plan | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 8 | 32 | |
Restructuring and Related Cost, Expected Cost Remaining | 40 | ||
Restructuring Reserve | 16 | 20 | 0 |
Manufacturing and Supply Chain Optimization Plan | Operating Expense | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 6 | 25 | |
Manufacturing and Supply Chain Optimization Plan | Cost of Sales | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 2 | 7 | |
Manufacturing and Supply Chain Optimization Plan | Other Restructuring | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Restructuring Reserve | 3 | 6 | 0 |
Manufacturing and Supply Chain Optimization Plan | Other Restructuring | Operating Expense | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Other Restructuring Costs | 3 | 8 | |
Manufacturing and Supply Chain Optimization Plan | Other Restructuring | Cost of Sales | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Other Restructuring Costs | 0 | 0 | |
2012 Business Realignment Restructuring Plan | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 5 | 108 | |
Restructuring and Related Cost, Expected Cost Remaining | 4 | ||
Restructuring Reserve | 33 | 38 | 87 |
2012 Business Realignment Restructuring Plan | Operating Expense | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 3 | 78 | |
2012 Business Realignment Restructuring Plan | Cost of Sales | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Special charges | 2 | 30 | |
2012 Business Realignment Restructuring Plan | Other Restructuring | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Restructuring Reserve | 14 | 12 | 33 |
2012 Business Realignment Restructuring Plan | Other Restructuring | Operating Expense | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Other Restructuring Costs | 2 | 35 | |
2012 Business Realignment Restructuring Plan | Other Restructuring | Cost of Sales | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Other Restructuring Costs | 0 | 1 | |
Field Action Costs | Cost of Sales | |||
Purchased In-Process Research And Development (IPR&D) And Special Charges | |||
Loss Contingency, Loss in Period | ($2) |
Net_Earnings_Per_Share_Schedul
Net Earnings Per Share - Schedule of Computation of Basic and Diluted Net Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Earnings Per Share [Abstract] | ||
Net earnings attributable to St. Jude Medical, Inc. | $262 | $249 |
Basic weighted average shares outstanding | 283 | 284.4 |
Dilution associated with stock-based compensation plans | 4.1 | 4.9 |
Diluted weighted average shares outstanding | 287.1 | 289.3 |
Basic net earnings per share attributable to St. Jude Medical, Inc. | $0.93 | $0.88 |
Diluted net earnings per share attributable to St. Jude Medical, Inc. | $0.91 | $0.86 |
Net_Earnings_Per_Share_Details
Net Earnings Per Share (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4.1 | 2.7 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income and Supplemental Equity Information - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, Beginning Balance | ($173) | $46 |
Other comprehensive income (loss) before reclassifications | -95 | 10 |
Amounts reclassified to net earnings from accumulated other comprehensive income | -2 | 0 |
Other comprehensive income (loss), net of tax | -97 | 10 |
Accumulated other comprehensive income (loss), net of tax, Ending Balance | -270 | 56 |
Unrealized gain (loss) on available-for-sale securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, Beginning Balance | 15 | 17 |
Other comprehensive income (loss) before reclassifications | 3 | 0 |
Amounts reclassified to net earnings from accumulated other comprehensive income | -2 | 0 |
Other comprehensive income (loss), net of tax | 1 | 0 |
Accumulated other comprehensive income (loss), net of tax, Ending Balance | 16 | 17 |
Unrealized gain (loss) on derivative instruments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, Beginning Balance | 3 | 3 |
Other comprehensive income (loss) before reclassifications | 29 | 0 |
Amounts reclassified to net earnings from accumulated other comprehensive income | 0 | 0 |
Other comprehensive income (loss), net of tax | 29 | 0 |
Accumulated other comprehensive income (loss), net of tax, Ending Balance | 32 | 3 |
Foreign Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, Beginning Balance | -191 | 26 |
Other comprehensive income (loss) before reclassifications | -127 | 10 |
Amounts reclassified to net earnings from accumulated other comprehensive income | 0 | 0 |
Other comprehensive income (loss), net of tax | -127 | 10 |
Accumulated other comprehensive income (loss), net of tax, Ending Balance | ($318) | $36 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income and Supplemental Equity Information - Schedule of Reclassification out of Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Other (income) expense | ($3) | $0 |
Income tax expense | 52 | 53 |
Net earnings attributable to St. Jude Medical, Inc. | -262 | -249 |
Available-for-sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Other (income) expense | -4 | 0 |
Income tax expense | 2 | 0 |
Net earnings attributable to St. Jude Medical, Inc. | ($2) | $0 |
Accumulated_Other_Comprehensiv4
Accumulated Other Comprehensive Income and Supplemental Equity Information - Supplemental Equity Schedule (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $4,244 | $4,404 |
Net earnings | 256 | 239 |
Other comprehensive income (loss) | -97 | 10 |
Cash dividends declared | -81 | -77 |
Repurchases of common stock | -500 | -434 |
Stock-based compensation | 17 | 17 |
Common stock issued under employee stock plans and other, net | 38 | 60 |
Tax benefit from stock plans | 5 | 9 |
Ending Balance | 3,882 | 4,228 |
Treasury Stock Acquired, Average Cost Per Share | $66.96 | |
Parent [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 4,199 | 4,231 |
Net earnings | 262 | 249 |
Other comprehensive income (loss) | -97 | 10 |
Cash dividends declared | -81 | -77 |
Repurchases of common stock | -500 | -434 |
Stock-based compensation | 17 | 17 |
Common stock issued under employee stock plans and other, net | 38 | 60 |
Tax benefit from stock plans | 5 | 9 |
Ending Balance | 3,843 | 4,065 |
Noncontrolling Interest [Member] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 45 | 173 |
Net earnings | -6 | -10 |
Other comprehensive income (loss) | 0 | 0 |
Cash dividends declared | 0 | 0 |
Repurchases of common stock | 0 | 0 |
Stock-based compensation | 0 | 0 |
Common stock issued under employee stock plans and other, net | 0 | 0 |
Tax benefit from stock plans | 0 | 0 |
Ending Balance | $39 | $163 |
Accumulated_Other_Comprehensiv5
Accumulated Other Comprehensive Income and Supplemental Equity Information (Details) (USD $) | 3 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 | Jul. 04, 2015 | Jan. 13, 2015 | Jun. 07, 2013 |
Stock Repurchase Program, Authorized Amount | $500 | ||||
Stock Repurchased During Period, Shares | 7.5 | ||||
Stock Repurchased During Period, Value | 500 | 434 | |||
Treasury Stock Acquired, Average Cost Per Share | $66.96 | ||||
Spinal Modulation [Member] | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 19.00% | ||||
Subsequent Event | Spinal Modulation [Member] | |||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $175 | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 81.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 | Jan. 03, 2015 |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits | $335 | $328 | |
Accrued interest and penalties | $47 | $44 | |
Effective Income Tax Rate Reconciliation, Percent | 16.90% | 18.20% |
Fair_Value_Measurements_And_Fi2
Fair Value Measurements And Financial Instruments - Summary Of Components Of Available-For-Sale Securities (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, unless otherwise specified | ||
Fair Value Disclosures [Abstract] | ||
Adjusted cost | $5 | $6 |
Gross unrealized gains | 26 | 24 |
Fair value | $31 | $30 |
Fair_Value_Measurements_And_Fi3
Fair Value Measurements And Financial Instruments - Summary of Financial Assets Measured at Fair Value, Recurring Basis (Details) (USD $) | Apr. 04, 2015 | Jan. 03, 2015 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $31 | $30 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 598 | 1,060 |
Total liabilities | 27 | 50 |
Recurring | Cash and cash equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market securities | 219 | 729 |
Recurring | Other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 31 | 30 |
Foreign currency forward contracts | 28 | |
Recurring | Other assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 5 | |
Trading securities | 315 | 301 |
Recurring | Other liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 27 | 50 |
Recurring | Quoted Prices In Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 565 | 1,060 |
Total liabilities | 0 | 0 |
Recurring | Quoted Prices In Active Markets (Level 1) | Cash and cash equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market securities | 219 | 729 |
Recurring | Quoted Prices In Active Markets (Level 1) | Other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 31 | 30 |
Foreign currency forward contracts | 0 | |
Recurring | Quoted Prices In Active Markets (Level 1) | Other assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 0 | |
Trading securities | 315 | 301 |
Recurring | Quoted Prices In Active Markets (Level 1) | Other liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 33 | 0 |
Total liabilities | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Cash and cash equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market securities | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Foreign currency forward contracts | 28 | |
Recurring | Significant Other Observable Inputs (Level 2) | Other assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 5 | |
Trading securities | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Other liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 27 | 50 |
Recurring | Significant Unobservable Inputs (Level 3) | Cash and cash equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money-market securities | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Foreign currency forward contracts | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Other assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency forward contracts | 0 | |
Trading securities | 0 | 0 |
Recurring | Significant Unobservable Inputs (Level 3) | Other liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $27 | $50 |
Fair_Value_Measurements_And_Fi4
Fair Value Measurements And Financial Instruments - Summary of Level 3 Fair Value Measurements of Contingent Consideration (Details) (Fair Value, Inputs, Level 3, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 04, 2015 | Jan. 03, 2015 |
Nanostim | ||
Fair Value Inputs, Discount Rate | 5.00% | |
Probability of Payment | 90.00% | |
Nanostim | Contingent Consideration Liability | ||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 27 | $50 |
Income Approach Valuation Technique | Contingent Consideration Liability | ||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 27 | |
Income Approach Valuation Technique | Nanostim | Contingent Consideration Liability | ||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 27 |
Recovered_Sheet1
Fair Value Measurements and Financial Instruments - Unobservable Input Reconciliation of Contingent Consideration Liability (Details) (Nanostim, Fair Value, Inputs, Level 3, Contingent Consideration Liability, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Apr. 04, 2015 |
Nanostim | Fair Value, Inputs, Level 3 | Contingent Consideration Liability | |
Contingent Consideration Liability [Roll Forward] | |
Beginning balance | $50 |
Change in Fair Value of Contingent Consideration | -23 |
Ending balance | $27 |
Recovered_Sheet2
Fair Value Measurements and Financial Instruments (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Apr. 04, 2015 | Mar. 29, 2014 | Jan. 03, 2015 |
Fair Value Inputs, Liabilities, Quantitative Information | |||
Fair Value, Estimate Not Practicable, Cost Method Investments | $72 | $71 | |
Fixed rate debt obligations fair value disclosure | 2,386 | ||
Fixed rate debt obligations carrying value | 2,271 | ||
Other debt carrying value | 1,233 | ||
cash equivalents at carrying value excluding money market securities | 476 | 713 | |
Fixed Asset Write-offs | 2012 Business Realignment Restructuring Plan | |||
Fair Value Inputs, Liabilities, Quantitative Information | |||
Other Asset Impairment Charges | $1 | $1 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments Summary of Derivative Instruments (Gain) Loss (Details) (Foreign Exchange Forward [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Apr. 04, 2015 |
Cost of Sales | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |
Derivative Instruments, (Gain) Loss [Line Items] | |
(Gain) loss recognized in Other Comprehensive Income | ($34) |
(Gain) loss reclassified from Accumulated Other Comprehensive Income | 0 |
(Gain) loss on derivatives excluded from effectiveness testing | 0 |
Other Nonoperating (Income) Expense [Member] | Not Designated as Hedging Instrument [Member] | |
Derivative Instruments, (Gain) Loss [Line Items] | |
Derivative Instruments Not Designated as Hedging Instruments, (Gain) Loss, Net | ($9) |
Derivative_Financial_Instrumen3
Derivative Financial Instruments Schedule of Fair Value of Derivative Instruments (Details) (USD $) | Apr. 04, 2015 |
In Millions, unless otherwise specified | |
Derivatives, Fair Value [Line Items] | |
Fair value of derivative instruments | $33 |
Foreign Exchange Forward [Member] | |
Derivatives, Fair Value [Line Items] | |
Fair value of derivative instruments | 33 |
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | |
Derivatives, Fair Value [Line Items] | |
Fair value of derivative instruments | 24 |
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | |
Derivatives, Fair Value [Line Items] | |
Fair value of derivative instruments | 5 |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Other current assets [Member] | |
Derivatives, Fair Value [Line Items] | |
Fair value of derivative instruments | $4 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments Schedule of Offsetting Derivative Assets (Details) (USD $) | Apr. 04, 2015 |
In Millions, unless otherwise specified | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gross amount of derivatives subject to master netting agreements | $9 |
Gross amount of derivatives not subject to master netting agreements | 24 |
Gross amount of derivatives | 33 |
Gross amount of eligible offsetting derivative liabilities | 0 |
Gross amount of cash collateral received not offset | 0 |
Net amount of derivatives subject to master netting agreements | 9 |
Net amount of derivatives not subject to master netting agreements | 24 |
Net amount of derivatives | $33 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Apr. 04, 2015 |
Derivatives, Fair Value [Line Items] | |
Unrealized gains expected to be reclassed to earnings over the next 12 months | $22 |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | |
Derivatives, Fair Value [Line Items] | |
Gross notional amount of derivative | 190 |
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | |
Derivatives, Fair Value [Line Items] | |
Gross notional amount of derivative | 1,100 |
After-tax net unrealized gain related to foreign currency forward contracts recorded in accumulated other comprehensive income | $29 |