St. Jude Medical (STJ) 10-Q 10 Nov 09 2009 Q3 Quarterly report Financial data

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (USD $)
In Thousands, except Per Share data	3 Months Ended Oct. 03, 2009	9 Months Ended Oct. 03, 2009	3 Months Ended Sep. 27, 2008 As Adjusted	9 Months Ended Sep. 27, 2008 As Adjusted
Net sales	$1,159,606	$3,477,811	$1,084,136	$3,230,634
Cost of sales before special charges	299,670	899,709	273,926	822,104
Special charges	6,061	6,061	0	0
Gross profit	853,875	2,572,041	810,210	2,408,530
Selling, general and administrative expense	427,227	1,276,071	401,325	1,184,702
Research and development expense	142,224	424,627	131,054	393,144
Special charges	42,394	42,394	0	0
Operating profit	242,030	828,949	277,831	830,684
Other income (expense), net	(23,594)	(35,867)	(18,105)	(46,552)
Earnings before income taxes	218,436	793,082	259,726	784,132
Income tax expense	51,501	205,506	75,030	229,955
Net earnings	$166,935	$587,576	$184,696	$554,177
Net earnings per share:
Basic	0.49	1.71	0.54	1.62
Diluted	0.48	1.69	0.53	1.58
Weighted average shares outstanding:
Basic	340,651	344,423	342,698	342,352
Diluted	344,298	348,242	349,728	349,984

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	9 Months Ended Oct. 03, 2009	12 Months Ended Jan. 03, 2009
Current Assets
Cash and cash equivalents	$798,281	$136,443
Accounts receivable, less allowance for doubtful accounts of $32,607 at October 3, 2009 and $28,971 at January 3, 2009	1,194,700	1,101,258
Inventories	681,732	546,499
Deferred income taxes, net	154,949	137,042
Other	202,331	158,821
Total current assets	3,031,993	2,080,063
Property, plant and equipment, at cost	1,925,893	1,675,979
Less: accumulated depreciation	(807,950)	(695,803)
Net property, plant and equipment	1,117,943	980,176
Other Assets
Goodwill	2,018,182	1,984,566
Other intangible assets, net	472,050	493,535
Other	229,573	184,164
Total other assets	2,719,805	2,662,265
TOTAL ASSETS	6,869,741	5,722,504
Current Liabilities
Current debt obligations	339,595	75,518
Accounts payable	177,970	238,310
Income taxes payable	0	17,608
Accrued Expenses
Employee compensation and related benefits	287,486	297,287
Other	428,499	399,801
Total current liabilities	1,233,550	1,028,524
Long-term debt	1,632,551	1,126,084
Deferred income taxes, net	136,046	112,231
Other liabilities	279,586	219,759
Total liabilities	3,281,733	2,486,598
Commitments and Contingencies (Note 7)	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; 336,602,506 and 345,332,272 shares issued and outstanding at October 3, 2009 and January 3, 2009, respectively)	33,660	34,533
Additional paid-in capital	19,882	219,041
Retained earnings	3,421,095	2,977,630
Accumulated other comprehensive income (loss):
Cumulative translation adjustment	104,518	(1,023)
Unrealized gain on available-for-sale securities	8,853	6,136
Unrealized loss on derivative financial instruments	0	(411)
Total shareholders' equity	3,588,008	3,235,906
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$6,869,741	$5,722,504

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)
In Thousands, except Share data, unless otherwise specified	Oct. 03, 2009	Jan. 03, 2009
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) [Abstract]
Allowance for Doubtful Accounts	$32,607	$28,971
Preferred Stock, Number of Shares, Par Value and Other Disclosures
Preferred Stock, Par Value	1	1
Preferred Stock, Shares Authorized	25,000,000	25,000,000
Preferred Stock, Shares Outstanding	0	0
Common Stock, Number of Shares, Par Value and Other Disclosures
Common Stock, Par Value	0.1	0.1
Common Stock, Shares Authorized	500,000,000	500,000,000
Common Stock, Shares Issued	336,602,506	345,332,272
Common Stock, Shares Outstanding	336,602,506	345,332,272

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Thousands	9 Months Ended Oct. 03, 2009	9 Months Ended Sep. 27, 2008 As Adjusted
OPERATING ACTIVITIES
Net earnings	$587,576	$554,177
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation	111,813	97,206
Amortization of intangible assets	44,829	55,528
Amortization of debt discount	158	39,172
Stock-based compensation	44,133	37,929
Excess tax benefits from stock-based compensation	(19,133)	(43,495)
Investment impairment charges	8,300	0
Deferred income taxes	1,115	12,640
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(53,945)	(123,601)
Inventories	(118,268)	(44,883)
Other current assets	(22,685)	(14,077)
Accounts payable and accrued expenses	(35,401)	59,963
Income taxes payable	4,885	17,815
Net cash provided by operating activities	553,377	648,374
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(236,326)	(219,884)
Business acquisition payments, net of cash acquired	(14,793)	(93,661)
Other, net	(15,348)	(33,914)
Net cash used in investing activities	(266,467)	(347,459)
FINANCING ACTIVITIES
Proceeds from exercise of stock options and stock issued	87,385	146,760
Excess tax benefits from stock-based compensation	19,133	43,495
Common stock repurchased, including related costs	(500,000)	(300,000)
Proceeds from borrowings under debt facilities	9,801,754	0
Principal payments on debt facilities	(9,041,775)	0
Net cash provided by (used in) financing activities	366,497	(109,745)
Effect of currency exchange rate changes on cash and cash equivalents	8,431	(1,022)
Net increase in cash and cash equivalents	661,838	190,148
Cash and cash equivalents at beginning of period	136,443	389,094
Cash and cash equivalents at end of period	$798,281	$579,242

BASIS OF PRESENTATION

BASIS OF PRESENTATION
	9 Months Ended Oct. 03, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation	NOTE 1 BASIS OF PRESENTATION 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. GAAP) for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Companys consolidated results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. Preparation of the Companys financial statements in conformity with accounting principles generally accepted in the United States 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 Companys consolidated financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended January 3, 2009 (2008 Annual Report on Form 10-K), as revised by its Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2009.

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS
	9 Months Ended Oct. 03, 2009 USD / shares
New Accounting Pronouncements [Abstract]
New Accounting Pronouncements	NOTE 2 NEW ACCOUNTING PRONOUNCEMENTS In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (SFAS No. 168) which establishes the FASB Accounting Standards Codification (ASC or the Codification) as the source of authoritative accounting principles to be applied by U.S. nongovernmental entities in the preparation of financial statements. The Company adopted SFAS No. 168 in the third quarter of 2009. Accordingly, the Company now references U.S. GAAP by using the numbering system prescribed by the Codification. The Codification did not change existing U.S. GAAP, and the adoption of SFAS No. 168 did not have an impact on the Companys consolidated financial statements. In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS No. 161). This legacy accounting standard is now included as part of the authoritative accounting guidance of FASB ASC Topic 815, Derivatives and Hedging (ASC Topic 815). The updated accounting guidance incorporated into ASC Topic 815 expands disclosures about derivative instruments and hedging activities to provide a better understanding of a companys use of derivatives and their effect on the financial statements. The Companys adoption of this standard at the beginning of fiscal year 2009 (see Note 15) did not have a material impact to the Companys consolidated financial statements. In April 2009, the FASB issued two related FASB Staff Positions (FSPs): (i) FSP SFAS No. 115-2 and SFAS No. 124-2, Recognitionand Presentation of Other-Than-Temporary Impairments and (ii) FSP SFAS No. 107-1 and APB Opinion No. 28-1, Interim Disclosures about Fair Value of Financial Instruments. These legacy FSPs are now included as part of the authoritative accounting guidance of FASB ASC Topic 320, Investments Debt and Equity Securities (ASC Topic 320) and FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC Topic 820), respectively. The updated accounting guidance incorporated into ASC Topic 320 modifies the requirement for recognizing other-than-temporary impairments, changes the existing impairment model, and modifies the presentation and frequency of related disclosures. The updated accounting guidance incorporated into ASC Topic 820 requires fair value disclosures at interim reporting periods for financial instruments not reflected in the Condensed Consolidated Balance Sheets at fair value, which are similar to the fair value disclosures required in annual financial statements for those same assets and liabilities. The Companys adoption of this accounting guidance in the second quarter of 2009 (see Note 14) did not have a material impact to the Companys consolidated financial statements. In May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS No. 165), which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued or available to be issued. This legacy accounting standar

RETROSPECTIVE ADOPTION OF ACCOU

RETROSPECTIVE ADOPTION OF ACCOUNTING PRONOUNCEMENT
	9 Months Ended Oct. 03, 2009 USD / shares
Retrospective Adoption of Accounting Pronouncement [Abstract]
Retrospective Adoption of Accounting Pronouncement	NOTE 3 RETROSPECTIVE ADOPTION OF ACCOUNTING PRONOUNCEMENT In May 2008, the FASB issued Staff Position (FSP) Accounting Principles Board (APB) Opinion No. 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement). This legacy accounting change is now included as part of the authoritative accounting guidance of FASB ASC Topic 470, Debt, (ASC Topic 470) and requires the proceeds from the issuance of certain convertible debt instruments to be allocated between a liability and an equity component in a manner that reflects the entitys nonconvertible debt borrowing rate when interest expense is recognized in subsequent periods. The resulting debt discount is amortized over the period the convertible debt is expected to be outstanding as additional non-cash interest expense. The Companys historical financial statements presented in this Quarterly Report on Form 10-Q have been adjusted to conform to this accounting treatment. The application of the retrospective convertible debt accounting guidance resulted in the following adjustments to the Companys condensed consolidated statement of earnings for the third quarter of 2008 and the first nine months of 2008 (in thousands): Three Months Ended September 27, 2008 Nine Months Ended September 27, 2008 As Originally Reported As Adjusted Effect of Change As Originally Reported As Adjusted Effect of Change Operating profit $ 277,831 $ 277,831 $ $ 830,684 $ 830,684 $ Other income (expense), net (4,941 ) (18,105 ) (13,164 ) (7,380 ) (46,552 ) (39,172 ) Earnings before income taxes 272,890 259,726 (13,164 ) 823,304 784,132 (39,172 ) Income tax expense 79,947 75,030 (4,917 ) 244,521 229,955 (14,566 ) Net earnings $ 192,943 $ 184,696 $ (8,247 ) $ 578,783 $ 554,177 $ (24,606 ) Net earnings per share: Basic $ 0.56 $ 0.54 $ (0.02 ) $ 1.69 $ 1.62 $ (0.07 ) Diluted $ 0.55 $ 0.53 $ (0.02 ) $ 1.65 $ 1.58 $ (0.07 ) Weighted average shares outstanding: Basic 342,698 342,698 342,352 342,352 Diluted 349,728 349,728 349,984 349,984 Additionally, the application of this retrospective convertible debt accounting guidance resulted in an increase of $10,801 to the Companys fourth quarter 2008 interest expense and a decrease of $4,098 to the Companys fourth quarter 2008 income tax expense. The application of the retrospective convertible debt accounting guidance resulted in the following adjustments to the Companys condensed consolidated statement of cash flows for the first nine months of 2008 (in thousands): September 27, 2008 Nine Months Ended As Originally Reported As Adjusted Effect of Change OPERATING ACTIVITIES Net earnings

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS
	9 Months Ended Oct. 03, 2009 USD / shares
Goodwill and Other Intangible Assets [Abstract]
Goodwill and Other Intangible Assets	NOTE 4 GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for each of the Companys reportable segments (see Note 16) for the nine months ended October 3, 2009 were as follows (in thousands): CRM/NMD CV/AF Total Balance at January 3, 2009 $ 1,211,538 $ 773,028 $ 1,984,566 Foreign currency translation 33,706 415 34,121 Other 2,756 (3,261 ) (505 ) Balance at October 3, 2009 $ 1,248,000 $ 770,182 $ 2,018,182 During the second quarter of 2009, the Company finalized the purchase price allocation relating to the acquisition of EP MedSystems, Inc. The impacts of finalizing the purchase price allocation, individually and in the aggregate, were not material. Overall, the Company recorded a $3.3 million net decrease to goodwill upon finalization of the purchase accounting. The following table provides the gross carrying amount of other intangible assets and related accumulated amortization (in thousands): October 3, 2009 January 3, 2009 Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Purchased technology and patents $ 508,171 $ 161,881 $ 494,796 $ 124,749 Customer lists and relationships 182,134 76,650 166,637 63,385 Trademarks and tradenames 24,222 5,949 22,651 4,789 Licenses, distribution agreements and other 5,727 3,724 5,529 3,155 $ 720,254 $ 248,204 $ 689,613 $ 196,078

INVENTORIES

INVENTORIES
	9 Months Ended Oct. 03, 2009 USD / shares
Inventories [Abstract]
Inventories	NOTE 5 INVENTORIES The Companys inventories consisted of the following (in thousands): October 3, 2009 January 3, 2009 Finished goods $ 501,563 $ 398,452 Work in process 61,242 39,143 Raw materials 118,927 108,904 $ 681,732 $ 546,499

DEBT

DEBT
	9 Months Ended Oct. 03, 2009 USD / shares
Debt [Abstract]
Debt	NOTE 6 DEBT The Companys debt consisted of the following (in thousands): October 3, 2009 January 3, 2009 Senior Notes due 2014 $ 698,982 $ Senior Notes due 2019 493,769 Term loan due 2011 459,000 360,000 1.02% Yen-denominated notes due 2010 231,595 230,088 Yen-denominated term loan due 2011 88,800 88,222 Credit Facility borrowings 500,000 Commercial paper borrowings 19,400 Other 3,892 Total debt 1,972,146 1,201,602 Less: current debt obligations 339,595 75,518 Long-term debt $ 1,632,551 $ 1,126,084 Senior Notes due 2014: On July 28, 2009, the Company issued $700.0 million principal amount, 5-year, 3.75% unsecured Senior Notes (2014 Senior Notes). The 2014 Senior Notes mature in July 2014. Interest payments are required on a semi-annual basis. The 2014 Senior Notes were issued at a discount, yielding an effective interest rate of 3.784% at issuance. The debt discount is being amortized as interest expense through maturity. The Company may redeem the 2014 Senior Notes at any time at the applicable redemption price. Senior Notes due 2019: On July 28, 2009, the Company issued $500.0 million principal amount, 10-year, 4.875% unsecured Senior Notes (2019 Senior Notes). The 2019 Senior Notes mature in July 2019. Interest payments are required on a semi-annual basis. The 2019 Senior Notes were issued at a discount, yielding an effective interest rate of 5.039% at issuance. The debt discount is being amortized as interest expense through maturity. The Company may redeem the 2019 Senior Notes at any time at the applicable redemption price. Term loan due 2011: In December 2008, the Company entered into a 3-year, unsecured term loan (2011 Term Loan). The Company initially borrowed $360.0 million in December 2008 and borrowed an additional $180.0 million in January 2009, resulting in total original borrowings of $540.0 million under the 2011 Term Loan. As of October 3, 2009, the Company had total borrowings of $459.0 million under the 2011 Term Loan. The Company is required to make quarterly principal payments in the amount of 5% ($27.0 million) of the total original borrowings. These borrowings bear interest at LIBOR plus 2.0%, although the Company may elect the Prime Rate plus 1.0%. The interest rates are subject to adjustment in the event of a change in the Companys credit ratings. Borrowings under the 2011 Term Loan incurred interest at weighted average interest rates of 2.1% and 2.3% during the third quarter and first nine months of 2009, respectively. 1.02% Yen-denominated notes due 2010: In May 2003, the Company issued 7-year, 1.02% unsecured notes in Japan (Yen Notes) totaling 20.9 billion Yen (the equivalent of $231.6 million at October 3, 2009 and $230.1 million at January 3, 2009). Interest payments are required on a semi-annual basis and the entire principal balance is due in May 2010. The principal amount of the Yen Notes recorded on the balance sheet fluctuates based on the effects of foreign currency translation. Yen-denominated term loan due 2011: In December 2008, the C

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	9 Months Ended Oct. 03, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	NOTE 7 COMMITMENTS AND CONTINGENCIES Litigation The Company accrues a liability for costs related to claims, including future legal costs, settlements and judgments, where it has assessed that a loss is probable and an amount can be reasonably estimated. The Company also records a receivable from its product liability insurance carriers for amounts expected to be recovered. Silzone Litigation and Insurance Receivables: The Company has been sued in various jurisdictions beginning in March 2000 by some patients who received a product with Silzone coating, and such cases are pending in the United States and Canada. Some of these claimants allege bodily injuries as a result of an explant or other complications, which they attribute to Silzone-coated products. Others, who have not had their Silzone-coated heart valve explanted, seek compensation for past and future costs of special monitoring they allege they need over and above the medical monitoring all other replacement heart valve patients receive. Some of the lawsuits seeking the cost of monitoring have been initiated by patients who are asymptomatic and who have no apparent clinical injury to date. The Company has vigorously defended against the claims that have been asserted and expects to continue to do so with respect to any remaining claims. In 2001, the U.S. Judicial Panel on Multi-District Litigation (MDL) ruled that certain lawsuits filed in U.S. federal district court involving products with Silzone coating should be part of MDL proceedings in the U.S. District Court in Minnesota (the District Court). As a result, actions in federal court involving products with Silzone coating have been and will likely continue to be transferred to the District Court for coordinated or consolidated pretrial proceedings. In October 2001, various class-action complaints were consolidated into one class action case by the District Court. The Company requested the Eighth Circuit Court of Appeals (the Eighth Circuit) to review the District Courts initial class certification orders and, in October 2005, the Eighth Circuit issued a decision reversing the District Courts class certification rulings and directed the District Court to undertake further proceedings. In October 2006, the District Court granted plaintiffs renewed motion to certify a nationwide consumer protection class under Minnesotas consumer protection statutes and Private Attorney General Act. The Company again requested the Eighth Circuit to review the District Courts class certification orders and, in April 2008, the Eighth Circuit again issued a decision reversing the District Courts October 2006 class certification rulings. The order by the Eighth Circuit returned the case to the District Court for continued proceedings. The plaintiffs requested the District Court to certify a new class, but on June 23, 2009, the District Court issued an order striking any remaining claims seeking class action status. As a result, the former class representative has only an individual claim at the present time. The Company will continue to vigorously defend against this and other Silzone claims. There are five individual Silzone cases pe

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY
	9 Months Ended Oct. 03, 2009 USD / shares
Shareholders' Equity [Abstract]
Shareholders' Equity	NOTE 8 SHAREHOLDERS EQUITY On July 21, 2009, the Companys Board of Directors authorized a share repurchase program of up to $500.0 million of the Companys outstanding common stock. The Company completed the repurchases under the program on September 15, 2009. In total, the Company repurchased 13.0 million shares for $500.0 million at an average repurchase price of $38.32 per share.

SPECIAL CHARGES

SPECIAL CHARGES
	9 Months Ended Oct. 03, 2009 USD / shares
Special Charges [Abstract]
Special Charges	NOTE 9 SPECIAL CHARGES During the third quarter of 2009, the Company incurred special charges totaling $48.5 million primarily related to severance and benefit costs for 469 employees. The terminations consisted of 229 employees in the Companys U.S. and International selling divisions relating to enhancing the efficiency and effectiveness of the sales and customer service operations in these organizations and 240 employees in its manufacturing divisions relating to the Companys continuing efforts to streamline its production activities.

NET EARNINGS PER SHARE

NET EARNINGS PER SHARE
	9 Months Ended Oct. 03, 2009 USD / shares
Net earnings per share:
Net Earnings Per Share	NOTE 10 NET EARNINGS PER SHARE The table below sets forth the computation of basic and diluted net earnings per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended October 3, 2009 September 27, 2008 (As adjusted) October 3, 2009 September 27, 2008 (As adjusted) Numerator: Net earnings $ 166,935 $ 184,696 $ 587,576 $ 554,177 Denominator: Basic weighted average shares outstanding 340,651 342,698 344,423 342,352 Effect of dilutive securities: Stock options 3,640 6,976 3,792 7,561 Restricted shares 7 54 27 71 Diluted weighted average shares outstanding 344,298 349,728 348,242 349,984 Basic net earnings per share $ 0.49 $ 0.54 $ 1.71 $ 1.62 Diluted net earnings per share $ 0.48 $ 0.53 $ 1.69 $ 1.58 The Companys 2009 adoption of the convertible debt accounting guidance of ASC Topic 470 required retrospective application to all prior periods presented (see Note 3). As a result, basic net earnings per share and diluted net earnings per share for the third quarter of 2008 have both been adjusted by $0.02, decreasing 2008 basic and diluted net earnings per share. Additionally, basic net earnings per share and diluted net earnings per share for the first nine months of 2008 have both been adjusted by $0.07, decreasing 2008 basic and diluted net earnings per share. Approximately 13.0 million and 8.9 million shares of common stock subject to stock options and restricted stock were excluded from the diluted net earnings per share computation for the three months ended October 3, 2009 and September 27, 2008, respectively, because they were not dilutive. Additionally, approximately 20.5 million and 11.9 million shares of common stock subject to stock options and restricted stock were excluded from the diluted net earnings per share computation for the nine months ended October 3, 2009 and September 27, 2008, respectively, because they were not dilutive. In April 2007, the Company sold warrants for 23.1 million shares. Over a two-month period beginning in April 2009, the Company was required to issue shares of its common stock if the average price of the Companys common stock during a defined period exceeded the warrants exercise price of approximately $60.73 per share. The last warrant expired in June 2009, and no shares were issued by the Company related to the exercise of these warrants. Because the Companys average stock price during the defined period was never greater than the warrants exercise price of $60.73, these warrants did not result in a dilutive impact to the Companys dilutive net earnings per share computation.

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME
	9 Months Ended Oct. 03, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income	NOTE 11 COMPREHENSIVE INCOME The table below sets forth the amounts in other comprehensive income, net of the related income tax impact (in thousands): Three Months Ended Nine Months Ended October 3, 2009 September 27, 2008 (As adjusted) October 3, 2009 September 27, 2008 (As adjusted) Net earnings $ 166,935 $ 184,696 $ 587,576 $ 554,177 Other comprehensive income (loss): Cumulative translation adjustment 68,560 (64,102 ) 105,541 (11,724 ) Unrealized gain (loss) on available-for-sale securities 2,163 (2,022 ) 2,717 (6,327 ) Unrealized gain on derivative financial instruments 411 Reclassification of realized loss to net earnings (411 ) Total comprehensive income $ 237,658 $ 118,572 $ 695,834 $ 536,126 Reclassification adjustments are reflected to avoid double counting items in other comprehensive income that are also recorded in net earnings. In November 2008, the Company entered into an interest rate swap contract to convert $400.0 million of variable-rate borrowings under the Companys long-term committed Credit Facility into fixed-rate borrowings (see Note 6). This contract terminated in February 2009, and the Company recognized a realized after-tax loss of $0.4 million. The total pre-tax loss of $0.7 million was recognized as interest expense.

OTHER INCOME

OTHER INCOME (EXPENSE), NET
	9 Months Ended Oct. 03, 2009 USD / shares
Other Income (Expense), Net [Abstract]
Other Income (Expense), Net	NOTE 12 OTHER INCOME (EXPENSE), NET The Companys other income (expense) consisted of the following (in thousands): Three Months Ended Nine Months Ended October 3, 2009 September 27, 2008 (As adjusted) October 3, 2009 September 27, 2008 (As adjusted) Interest income $ 643 $ 3,258 $ 1,720 $ 10,605 Interest expense (14,855 ) (18,284 ) (27,425 ) (54,410 ) Other (9,382 ) (3,079 ) (10,162 ) (2,747 ) Total other income (expense), net $ (23,594 ) $ (18,105 ) $ (35,867 ) $ (46,552 ) During the third quarter of 2009, the Company determined that the fair value of a cost method investment was below its carrying value and that this impairment was other-than-temporary. As a result, the Company recognized an $8.3 million investment impairment charge in other income/(expense). The Companys 2009 adoption of the convertible debt accounting guidance of ASC Topic 470 required retrospective application to all prior periods presented (see Note 3). As a result, interest expense for the third quarter and first nine months of 2008 were adjusted by $13.2 million and $39.2 million, respectively, increasing 2008 interest expense.

INCOME TAXES

INCOME TAXES
	9 Months Ended Oct. 03, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	NOTE 13 INCOME TAXES As of October 3, 2009, the Company had approximately $95.2 million of unrecognized tax benefits, all of which would affect the Companys effective tax rate if recognized. The Company had $26.4 million accrued for interest and penalties as of October 3, 2009. The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. 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 U.S. federal income tax matters for all tax years through 2001. Additionally, substantially all material foreign, state, and local income tax matters have been concluded for all tax years through 1999. The U.S. Internal Revenue Service (IRS) completed an audit of the Companys 2002-2005 tax returns and proposed adjustments in its audit report issued in November 2008. The Company intends to vigorously defend its positions and initiated defense of these adjustments at the IRS appellate level in January 2009. An unfavorable outcome could have a material negative impact on the Companys effective income tax rate in future periods.

FAIR VALUE MEASUREMENTS AND FIN

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
	9 Months Ended Oct. 03, 2009 USD / shares
Fair Value Measurements and Financial Instruments [Abstract]
Fair Value Measurements and Financial Instruments	NOTE 14 FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS ASC Topic 820 provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures about fair-value measurements. FASB ASC Topic 820 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. ASC Topic 820 also establishes a valuation hierarchy for disclosure of fair value measurements. 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 Financial instruments with quoted prices in active markets for identical assets or liabilities. The Companys Leve1 1 financial instruments consist of money market funds classified as cash and cash equivalents, publicly-traded equity securities classified as available-for-sale securities and mutual fund investments classified as trading securities. Level 2 Financial instruments with quoted prices in active markets for similar assets or liabilities. Level 2 fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as forward foreign currency rates. The Companys Level 2 financial instruments measured on a recurring basis include foreign currency exchange contracts, the fair value of which was immaterial at October 3, 2009. Level 3 Inputs to the fair value measurement are unobservable inputs or valuation techniques. The Company does not have any financial assets or liabilities being measured at fair value on a recurring basis. A summary of financial assets measured at fair value on a recurring basis at October 3, 2009 is as follows (in thousands): October 3, 2009 Quoted Prices In Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market securities $ 662,412 $ 662,412 $ $ Trading marketable securities 149,541 149,541 Available-for-sale marketable securities 26,711 26,711 Total $ 838,664 $ 838,664 $ $ The Companys money market securities are highly liquid and readily convertible into known amounts of cash. The Company also has $135.9 million of cash equivalents invested in short-term time deposits and interest and non-interest bearing bank accounts. The Companys trading securities consist of investments in mutual funds that are specifically designated as available to the Company solely for the purpose of paying benefits under the Companys non-qualified deferred compensation plan. The Company holds these investments in a rabbi trust which is not available for general corporate purposes and is subject to creditor claims in the event of insolvency. These trading securities are classified as other assets. Available-for-sale securities are clas

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS
	9 Months Ended Oct. 03, 2009 USD / shares
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments	NOTE 15 DERIVATIVE FINANCIAL INSTRUMENTS The Company follows the provisions of ASC Topic 815 in accounting for and disclosing derivative instruments and hedging activities. All derivative financial instruments are recognized on the balance sheet at fair value. Changes in the fair value of derivatives are recognized in net earnings or other comprehensive income depending on whether the derivative is designated as part of a qualifying hedging transaction. Derivative assets and derivative liabilities are classified as other current assets and other current liabilities, respectively. The Company hedges a portion of its foreign currency exchange rate risk through the use of forward exchange contracts. The Company uses forward exchange contracts to manage foreign currency exposures related to intercompany receivables and payables arising from intercompany purchases of manufactured products. These forward contracts are not designated as qualifying hedging relationships under ASC Topic 815. The Company measures its foreign currency exchange contracts at fair value on a recurring basis. The fair value of outstanding contracts was immaterial as of October 3, 2009. For the three and nine months ended October 3, 2009, the net amount of gains (losses) the Company recorded to other income (expense) for its forward currency exchange contracts not designated as hedging instruments under ASC Topic 815 was a net loss of $3.8 million and a net loss of $7.2 million, respectively. These net losses were almost entirely offset by corresponding net gains on the foreign currency exposures being managed. The Company does not enter into contracts for trading or speculative purposes. The Companys policy is to enter into hedging contracts with major financial institutions that have at least an A (or equivalent) credit rating. In November 2008, the Company entered into an interest rate swap contract to convert $400.0 million of variable-rate borrowings under the Credit Facility into fixed-rate borrowings (see Note 6). The Company designated this interest rate swap as a cash flow hedge under ASC Topic 815. This contract terminated in February 2009. The ineffective portion of the amount of gains (losses) recognized in net earnings was immaterial. The Company recorded the $0.4 million after-tax loss on the settlement of the interest rate swap contract to interest expense.

SEGMENT AND GEOGRAPHIC INFORMAT

SEGMENT AND GEOGRAPHIC INFORMATION
	9 Months Ended Oct. 03, 2009 USD / shares
Segment and Geographic Information [Abstract]
Segment and Geographic Information	NOTE 16 SEGMENT AND GEOGRAPHIC INFORMATION Segment Information The Company develops, manufactures and distributes cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas and implantable neurostimulation devices for the management of chronic pain and neurological disorders. The Companys four operating segments are Cardiac Rhythm Management (CRM), Cardiovascular (CV), Atrial Fibrillation (AF) and Neuromodulation (NMD). Each operating segment focuses on developing and manufacturing products for its respective therapy area. The primary products produced by each operating segment are: CRM ICDs and pacemakers; CV vascular closure devices, heart valve replacement and repair products and pressure measurement guidewires; AF electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems, ablation systems and implantable cardiac monitors; and NMD neurostimulation devices. The Company has aggregated the four operating segments into two reportable segments based upon their similar operational and economic characteristics: CRM/NMD and CV/AF. Net sales of the Companys reportable segments include end-customer revenue from the sale of products they each develop and manufacture or distribute. The costs included in each of the reportable segments operating results include the direct costs of the products sold to end-customers and operating expenses managed by each reportable segment. Certain operating expenses managed by the Companys selling and corporate functions, including all stock-based compensation expense, impairment charges and special charges, have not been included in the reportable segments operating profit. As a result, reportable segment operating profit is not representative of the operating profit of the products in these reportable segments. Additionally, certain assets are managed by the Companys selling and corporate functions, principally including end-customer receivables, inventory, corporate cash and cash equivalents and deferred income taxes. For management reporting purposes, the Company does not compile capital expenditures by reportable segment and, therefore, this information has not been presented as it is impracticable to do so. The following table presents net sales and operating profit by reportable segment (in thousands): CRM/NMD CV/AF Other Total Three Months ended October 3, 2009: Net sales $ 773,651 $ 385,955 $ $ 1,159,606 Operating profit 481,658 207,842 (447,470 ) 242,030 Three Months ended September 27, 2008: Net sales $ 742,668 $ 341,468 $ $ 1,084,136 Operating profit 462,957 178,096 (363,222 ) 277,831 Nine Months ended October 3, 2009: Net sales $ 2,307,332 $ 1,170,479 $ $ 3,477,811 Operating profit 1,428,712 610,714 (1,210,477 ) 828,949 Nine Months ended September 27, 2008: Net sales $ 2,198,384 $ 1,032,250 $ $ 3,230,634 Operating profit

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS
	9 Months Ended Oct. 03, 2009 USD / shares
Subsequent Events [Abstract]
Subsequent Events	NOTE 17 SUBSEQUENT EVENT On October 22, 2009, the Companys Board of Directors authorized a share repurchase program of up to $500.0 million of the Companys outstanding common stock. As of November 9, 2009, the Company had repurchased 6.2 million shares for $214.3 million at an average repurchase price of $34.65 per share.

Document Information

Document Information
	9 Months Ended Oct. 03, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-10-03

Entity Information

Entity Information (USD $)
	9 Months Ended Oct. 03, 2009	Oct. 30, 2009
Entity Information [Line Items]
Entity Registrant Name	St Jude Medical Inc
Entity Central Index Key	0000203077
Current Fiscal Year End Date	--01-02
Entity Filer Category	Large Accelerated Filer
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		334,255,249