St. Jude Medical (STJ) 10-Q 12 Aug 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	6 Months Ended Jul. 04, 2009	Jul. 30, 2009	Jun. 27, 2008
Document And Company Information [Abstract]
Entity Registrant Name	St. Jude Medical, Inc.
Entity Central Index Key	0000203077
Document Type	10-Q
Document Period End Date	2009-07-04
Amendment Flag	false
Current Fiscal Year End Date	--01-02
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			13.7
Entity Common Stock, Shares Outstanding		347,981,258

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings (USD $)
In Thousands, except Per Share data	3 Months Ended Jul. 04, 2009	6 Months Ended Jul. 04, 2009	3 Months Ended Jun. 28, 2008 As Adjusted	6 Months Ended Jun. 28, 2008 As Adjusted
Net sales	$1,184,412	$2,318,205	$1,135,760	$2,146,498
Cost of sales	305,544	600,039	287,691	548,178
Gross profit	878,868	1,718,166	848,069	1,598,320
Selling, general and administrative expense	431,169	848,844	416,261	783,377
Research and development expense	143,052	282,403	138,455	262,090
Operating profit	304,647	586,919	293,353	552,853
Other income (expense), net	(4,961)	(12,273)	(18,020)	(28,447)
Earnings before income taxes	299,686	574,646	275,333	524,406
Income tax expense	80,316	154,005	82,421	154,925
Net earnings	$219,370	$420,641	$192,912	$369,481
Net earnings per share:
Basic	0.63	1.21	0.57	1.08
Diluted	0.63	1.2	0.55	1.06
Weighted average shares outstanding:
Basic	346,767	346,308	340,699	342,178
Diluted	350,620	350,213	348,269	350,112

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	Jul. 04, 2009	Jan. 03, 2009
Current Assets
Cash and cash equivalents	$486,569	$136,443
Accounts receivable, less allowance for doubtful accounts of $30,942 at July 4, 2009 and $28,971 at January 3, 2009	1,177,067	1,101,258
Inventories	620,117	546,499
Deferred income taxes, net	135,454	137,042
Other	204,606	158,821
Total current assets	2,623,813	2,080,063
Property, plant and equipment, at cost	1,833,448	1,675,979
Less: accumulated depreciation	(762,109)	(695,803)
Net property, plant and equipment	1,071,339	980,176
Other Assets
Goodwill	1,985,966	1,984,566
Other intangible assets, net	474,256	493,535
Other	208,449	184,164
Total other assets	2,668,671	2,662,265
TOTAL ASSETS	6,363,823	5,722,504
Current Liabilities
Current portion of long-term debt	324,525	75,518
Accounts payable	229,243	238,310
Income taxes payable	18,357	17,608
Accrued expenses
Employee compensation and related benefits	284,375	297,287
Other	386,818	399,801
Total current liabilities	1,243,318	1,028,524
Long-term debt	961,022	1,126,084
Deferred income taxes, net	126,738	112,231
Other liabilities	254,387	219,759
Total liabilities	2,585,465	2,486,598
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; 347,640,007 and 345,332,272 shares issued and outstanding at July 4, 2009 and January 3, 2009, respectively)	34,764	34,533
Additional paid-in capital	302,675	219,041
Retained earnings	3,398,271	2,977,630
Accumulated other comprehensive income (loss):
Cumulative translation adjustment	35,958	(1,023)
Unrealized gain on available-for-sale securities	6,690	6,136
Unrealized loss on derivative financial instruments	0	(411)
Total shareholders' equity	3,778,358	3,235,906
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$6,363,823	$5,722,504

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data	Jul. 04, 2009	Jan. 03, 2009
Allowance for doubtful accounts	$30,942	$28,971
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	0.1	0.1
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	347,640,007	345,332,272
Common stock, shares outstanding	347,640,007	345,332,272

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands	6 Months Ended Jul. 04, 2009	6 Months Ended Jun. 28, 2008 As Adjusted
OPERATING ACTIVITIES
Net earnings	$420,641	$369,481
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation	71,413	62,708
Amortization	29,531	37,408
Amortization of discount on convertible debentures	0	26,008
Stock-based compensation	27,980	24,800
Excess tax benefits from stock-based compensation	(12,866)	(18,543)
Deferred income taxes	13,415	4,862
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(68,780)	(106,533)
Inventories	(64,864)	(16,125)
Other current assets	(41,360)	(14,507)
Accounts payable and accrued expenses	(34,076)	20,406
Income taxes payable	17,427	(9,666)
Net cash provided by operating activities	358,461	380,299
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(158,476)	(136,650)
Business acquisition payments, net of cash acquired	(9,065)	(6,359)
Other, net	1,330	(22,011)
Net cash used in investing activities	(166,211)	(165,020)
FINANCING ACTIVITIES
Proceeds from exercise of stock options and stock issued	39,588	63,263
Excess tax benefits from stock-based compensation	12,866	18,543
Common stock repurchased, including related costs	0	(300,000)
Borrowings under debt facilities	6,687,000	0
Payments under debt facilities	(6,583,775)	0
Net cash provided by (used in) financing activities	155,679	(218,194)
Effect of currency exchange rate changes on cash and cash equivalents	2,197	11,302
Net increase in cash and cash equivalents	350,126	8,387
Cash and cash equivalents at beginning of period	136,443	389,094
Cash and cash equivalents at end of period	$486,569	$397,481

Basis of Presentation

Basis of Presentation
	6 Months Ended Jul. 04, 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 Rule10-01 of RegulationS-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States 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 January3, 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 July22, 2009 to reflect the retrospective impact of the adoption of Financial Accounting Standards Board (FASB)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) (FSP APB No.14-1). All prior periods presented in this Quarterly Report on Form 10-Q have been retrospectively adjusted for the impact of the adoption of FSP APB No.14-1 (see Note 3).

New Accounting Pronouncements

New Accounting Pronouncements
	6 Months Ended Jul. 04, 2009 USD / shares
New Accounting Pronouncements [Abstract]
NEW ACCOUNTING PRONOUNCEMENTS	NOTE 2 NEW ACCOUNTING PRONOUNCEMENTS In April2009, the FASB issued two related FSPs: (i)FSP SFAS No.115-2 and SFAS No.124-2, Recognition of Presentation of Other-Than-Temporary Impairments (FSP SFAS No.115-2/SFAS No.124-2) and (ii)FSP SFAS No.107-1 and APB Opinion No.28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP SFAS No.107-1/APB No.28-1), which are effective for interim and annual reporting periods ending after June15, 2009. FSP SFAS No.115-2/SFAS No.124-2 modifies the requirement for recognizing other-than-temporary impairments, changes the existing impairment model, and modifies the presentation and frequency of related disclosures. FSP SFAS No.107-1/APB No.28-1 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. In May2009, the FASB issued Statement of Financial Accounting Standards (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. It requires the disclosure of the date through which the Company has evaluated its subsequent events and the basis for that date. The Company has evaluated its subsequent events through August12, 2009, the date of issuance of this Quarterly Report on Form 10-Q (see Note 15).

Retrospective Adoption Of Accou

Retrospective Adoption Of Accounting Pronouncement
	6 Months Ended Jul. 04, 2009 USD / shares
Retrospective Adoption Of Accounting Pronouncement [Abstract]
RETROSPECTIVE ADOPTION OF ACCOUNTING PRONOUNCEMENT	NOTE 3 RETROSPECTIVE ADOPTION OF ACCOUNTING PRONOUNCEMENT In May2008, the FASB issued FSP APB No.14-1, which 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 2009 adoption of FSP APB No.14-1 did not impact 2009 financial statements; however, it required retrospective application to all prior periods presented. As a result, the Companys historical financial statements presented in this Quarterly Report on Form 10-Q have been adjusted to conform to the new accounting treatment. The application of this new accounting treatment results in the following adjustments to the Companys condensed consolidated statement of earnings for the second quarter of 2008 and the first six months of 2008 (in thousands): Three Months Ended Six Months Ended June 28, 2008 June 28, 2008 As Originally As Effect of As Originally As Effect of Reported Adjusted Change Reported Adjusted Change Operating profit $ 293,353 $ 293,353 $ $ 552,853 $ 552,853 $ Other income (expense), net (5,040 ) (18,020 ) (12,980 ) (2,439 ) (28,447 ) (26,008 ) Earnings before income taxes 288,313 275,333 (12,980 ) 550,414 524,406 (26,008 ) Income tax expense 87,254 82,421 (4,833 ) 164,574 154,925 (9,649 ) Net earnings $ 201,059 $ 192,912 $ (8,147 ) $ 385,840 $ 369,481 $ (16,359 ) Net earnings per share: Basic $ 0.59 $ 0.57 $ (0.02 ) $ 1.13 $ 1.08 $ (0.05 ) Diluted $ 0.58 $ 0.55 $ (0.03 ) $ 1.10 $ 1.06 $ (0.04 ) Weighted average shares outstanding: Basic 340,699 340,699 342,178 342,178 Diluted 348,269 348,269 350,112 350,112 Additionally, the application of this new accounting treatment results in increases of $13,164 and $10,801 to the Companys third and fourth quarter 2008 interest expense, respectively, and decreases of $4,917 and $4,098 to the Companys third and fourth quarter 2008 income tax expense, respectively. The application of this new accounting treatment results in the following adjustments to the Companys condensed consolidated statement of cash flows for the first six months of 2008 (in thousands): June 28, 2008 As Originally As Effect of Six Months

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets
	6 Months Ended Jul. 04, 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 14) for the six months ended July4, 2009 were as follows (in thousands): CRM/NMD CV/AF Total Balance at January3, 2009 $ 1,211,538 $ 773,028 $ 1,984,566 Foreign currency translation 1,981 (89 ) 1,892 Other 2,756 (3,248 ) (492 ) Balance at July4, 2009 $ 1,216,275 $ 769,691 $ 1,985,966 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 $3.3million 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): July 4, 2009 January 3, 2009 Gross Gross carrying Accumulated carrying Accumulated amount amortization amount amortization Purchased technology and patents $ 503,281 $ 151,528 $ 494,796 $ 124,749 Customer lists and relationships 173,370 71,692 166,637 63,385 Trademarks and tradenames 24,263 5,562 22,651 4,789 Licenses, distribution agreements and other 5,486 3,362 5,529 3,155 $ 706,400 $ 232,144 $ 689,613 $ 196,078

Inventories

Inventories
	6 Months Ended Jul. 04, 2009 USD / shares
Inventories [Abstract]
INVENTORIES	NOTE 5 INVENTORIES The Companys inventories consisted of the following (in thousands): July 4, 2009 January 3, 2009 Finished goods $ 448,366 $ 398,452 Work in process 62,704 39,143 Raw materials 109,047 108,904 $ 620,117 $ 546,499

Debt

Debt
	6 Months Ended Jul. 04, 2009 USD / shares
Debt [Abstract]
DEBT	NOTE 6 DEBT The Companys total long-term debt consisted of the following (in thousands): July 4, 2009 January 3, 2009 Credit facility borrowings $ 500,000 $ 500,000 Commercial paper borrowings 19,400 Term loan due 2011 486,000 360,000 1.02% Yen-denominated notes due 2010 216,525 230,088 Yen-denominated term loan due 2011 83,022 88,222 Other 3,892 Total long-term debt 1,285,547 1,201,602 Less: current portion of long-term debt 324,525 75,518 Long-term debt $ 961,022 $ 1,126,084 Credit facility borrowings:In December2006, the Company entered into a 5-year, $1.0billion committed credit facility (Credit Facility) that it may draw on for general corporate purposes and to support its commercial paper program. Borrowings under the Credit Facility bear interest at the United States Prime Rate (Prime Rate) or United States Dollar London InterBank Offered Rate (LIBOR) plus 0.235%, at the election of the Company. In the event that over half of the Credit Facility is drawn upon, an additional five basis points is added to the elected Prime Rate or LIBOR rate. The interest rates are subject to adjustment in the event of a change in the Companys credit ratings. In October2008, the Company borrowed $500.0million under the Credit Facility to partially fund the retirement of the Companys 1.22% Convertible Debentures in December2008. In November2008, the Company entered into an interest rate swap contract to convert $400.0million of variable-rate borrowings under the Credit Facility into fixed-rate borrowings. The Company designated this interest rate swap as a cash flow hedge under SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, as amended (SFAS No.133). This contract terminated in February2009 and payments made or received under this interest rate swap contract were recorded to interest expense. Inclusive of the interest rate swap, borrowings under the Credit Facility incurred interest at a weighted average interest rate of 0.7% and 1.1% during the second quarter and first six months of 2009, respectively. Commercial paper borrowings:The Companys commercial paper program provides for the issuance of short-term, unsecured commercial paper with maturities up to 270days. The Company had no commercial paper borrowings outstanding as of July4, 2009. Any future commercial paper borrowings would bear interest at the applicable then-current market rates. The Company classifies all of its commercial paper borrowings as long-term debt, as the Company has the ability to repay any short-term maturity with available cash from its existing long-term, committed Credit Facility. Term loan due 2011: In December2008, the Company entered into a 3-year, unsecured term loan (2011 Term Loan). The Company initially borrowed $360.0million in December2008 and borrowed an additional $180.0million in January2009, resulting in total original borrowings of $540.0million under the 2011 Term Loan. As of July4, 2009, the Company had total borrowings of $486.0million under the 2011 Term Loan. The Co

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jul. 04, 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 March2000 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 October2001, 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 October2005, the Eighth Circuit issued a decision reversing the District Courts class certification rulings and directed the District Court to undertake further proceedings. In October2006, 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 April2008, the Eighth Circuit again issued a decision reversing the District Courts October2006 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 June23, 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

Net Earnings Per Share

Net Earnings Per Share
	6 Months Ended Jul. 04, 2009 USD / shares
Net Earnings Per Share [Abstract]
NET EARNINGS PER SHARE	NOTE 8 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 Six Months Ended June 28, June 28, July 4, 2008 July 4, 2008 2009 (As adjusted) 2009 (As adjusted) Numerator: Net earnings $ 219,370 $ 192,912 $ 420,641 $ 369,481 Denominator: Basic weighted average shares outstanding 346,767 340,699 346,308 342,178 Effect of dilutive securities: Stock options 3,837 7,507 3,868 7,854 Restricted shares 16 63 37 80 Diluted weighted average shares outstanding 350,620 348,269 350,213 350,112 Basic net earnings per share $ 0.63 $ 0.57 $ 1.21 $ 1.08 Diluted net earnings per share $ 0.63 $ 0.55 $ 1.20 $ 1.06 The Companys 2009 adoption of FSP APB No.14-1 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 second quarter of 2008 have been adjusted by $0.02 and $0.03, respectively, decreasing 2008 basic and diluted net earnings per share to conform to the new accounting treatment. Additionally, basic net earnings per share and diluted net earnings per share for the first six months of 2008 have been adjusted by $0.05 and $0.04, respectively, decreasing 2008 basic and diluted net earnings per share to conform to the new accounting treatment. Approximately 24.1million and 13.3million 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 July4, 2009 and June28, 2008, respectively, because they were not dilutive. Additionally, approximately 24.3million and 13.4million shares of common stock subject to stock options and restricted stock were excluded from the diluted net earnings per share computation for the six months ended July4, 2009 and June28, 2008, respectively, because they were not dilutive. In connection with the issuance of its 1.22% Convertible Senior Debentures in April2007, the Company sold warrants for 23.1million shares. Over a two-month period beginning in April2009, 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 June2009, 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
	6 Months Ended Jul. 04, 2009 USD / shares
Comprehensive Income [Abstract]
COMPREHENSIVE INCOME	NOTE 9 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 Six Months Ended June 28, June 28, July 4, 2008 July 4, 2008 2009 (As adjusted) 2009 (As adjusted) Net earnings $ 219,370 $ 192,912 $ 420,641 $ 369,481 Other comprehensive income (loss): Cumulative translation adjustment 75,122 (9,697 ) 36,981 52,378 Unrealized gain (loss)on available-for-sale securities 3,208 3,296 554 (4,305 ) Unrealized gain on derivative financial instruments 411 Reclassification of realized loss to net earnings (411 ) Total comprehensive income $ 297,700 $ 186,511 $ 458,176 $ 417,554 Reclassification adjustments are reflected to avoid double counting items in other comprehensive income that are also recorded in net earnings. In November2008, the Company entered into an interest rate swap contract to convert $400.0million of variable-rate borrowings under the Companys long-term committed Credit Facility into fixed-rate borrowings (see Note 6). This contract terminated in February2009, and the Company recognized a realized after-tax loss of $0.4 million. The total pre-tax loss of $0.7million was recognized as interest expense.

Other Income

Other Income (Expense), Net
	6 Months Ended Jul. 04, 2009 USD / shares
Other Income Expense Net [Abstract]
OTHER INCOME (EXPENSE), NET	NOTE 10 OTHER INCOME (EXPENSE), NET The Companys other income (expense)consisted of the following (in thousands): Three Months Ended Six Months Ended June 28, June 28, July 4, 2008 July 4, 2008 2009 (As adjusted) 2009 (As adjusted) Interest income $ 518 $ 3,091 $ 1,077 $ 7,347 Interest expense (5,619 ) (18,101 ) (12,570 ) (36,126 ) Other 140 (3,010 ) (780 ) 332 Total other income (expense), net $ (4,961 ) $ (18,020 ) $ (12,273 ) $ (28,447 ) The Companys 2009 adoption of FSP APB No.14-1 required retrospective application to all prior periods presented (see Note 3). As a result, interest expense for the second quarter and first six months of 2008 were adjusted by $13.0million and $26.0million, respectively, increasing 2008 interest expense to conform to the new accounting treatment.

Income Taxes

Income Taxes
	6 Months Ended Jul. 04, 2009 USD / shares
Income Taxes [Abstract]
INCOME TAXES	NOTE 11 INCOME TAXES As of July4, 2009, the Company had approximately $88.1million of unrecognized tax benefits, all of which would affect the Companys effective tax rate if recognized. The Company had $24.9million accrued for interest and penalties as of July4, 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 12months. 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 November2008. The Company intends to vigorously defend its positions and initiated defense of these adjustments at the IRS appellate level in January2009. 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
	6 Months Ended Jul. 04, 2009 USD / shares
Fair Value Measurements And Financial Instruments [Abstract]
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS	NOTE 12 FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS SFAS No.157, Fair Value Measurements (SFAS No.157) establishes a framework for measuring fair value, clarifies the definition of fair value and expands disclosures about fair-value measurements. SFAS No.157 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. SFAS No.157 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 Level 1 financial instruments consist of publicly-traded equity securities that are classified as available-for-sale securities and investments in mutual funds that are classified as trading securities. The Companys investments in mutual funds 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. Available-for-sale securities and trading securities are classified as other current assets and other assets, respectively. 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 include foreign currency exchange contracts. 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 that are classified as Level 3 financial instruments. A summary of financial assets and liabilities measured at fair value on a recurring basis at July 4, 2009 is as follows (in thousands): Significant Quoted Prices Other Significant In Active Observable Unobservable Markets Inputs Inputs July 4, 2009 (Level 1) (Level 2) (Level 3) Assets Trading marketable securities $ 133,271 $ 133,271 $ $ Available-for-sale marketable securities 22,809 22,809 Total $ 156,080 $ 156,080 $ $ Liabilities Foreign currency exchange contracts $ 19 $ $ 19 $ The following table summarizes the components of the balance of the Companys available-for-sale securities (in thousands):

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Jul. 04, 2009 USD / shares
Derivative Financial Instruments [Abstract]
DERIVATIVE FINANCIAL INSTRUMENTS	NOTE 13 DERIVATIVE FINANCIAL INSTRUMENTS The Company follows the provisions of SFAS No.133 and SFAS No.161, Disclosures about Derivative Instruments and Hedging Activities (SFAS No.161) in accounting for and disclosing derivative instruments and hedging activities. SFAS No.133 requires all derivative financial instruments to be 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 SFAS No.133 hedging transaction. Derivative assets and derivative liabilities are classified as other current assets and other current liabilities, respectively. SFAS No.161 requires certain disclosures for derivative instruments and hedging activities to explain their use and impact on the financial statements. In November2008, 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 SFAS No.133. This contract terminated in February2009. The ineffective portion of the amount of gains (losses) recognized in net earnings was immaterial. The Company recorded the $0.4million after-tax loss on the settlement of the interest rate swap contract to interest expense. 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 SFAS No.133. For the three and six months ended July4, 2009, the net amount of gains (losses)the Company recorded to other income (expense)for forward currency exchange contracts not designated as hedging instruments under SFAS No.133 was a net loss of $5.3million and a net loss of $3.4million, respectively. These net losses were almost entirely offset by corresponding net gains on the foreign currency exposures being managed. The Company had outstanding foreign currency forward contracts of approximately 25million Euros, 1.5billion Japanese Yen and 12million Australian Dollars at July4, 2009. 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.

Segment and Geographic Informat

Segment and Geographic Information
	6 Months Ended Jul. 04, 2009 USD / shares
Segment And Geographic Information [Abstract]
SEGMENT AND GEOGRAPHIC INFORMATION	NOTE 14 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 and navigation systems and ablation systems; 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, are not 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 July4, 2009: Net sales $ 784,913 $ 399,499 $ $ 1,184,412 Operating profit 486,024 211,987 (393,364 ) 304,647 Three Months ended June28, 2008: Net sales $ 772,404 $ 363,356 $ $ 1,135,760 Operating profit 479,399 194,379 (380,425 ) 293,353 Six Months ended July4, 2009: Net sales $ 1,533,681 $ 784,524 $ $ 2,318,205 Operating profit 947,054 402,872 (763,007 ) 586,919 Six Months ended June28, 2008: Net sales $ 1,455,716 $ 690,782 $ $ 2,146,498 Operating profit 899,673 368,297

Subsequent Events

Subsequent Events
	6 Months Ended Jul. 04, 2009 USD / shares
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 15 SUBSEQUENT EVENTS Share repurchases: On July21, 2009, the Companys Board of Directors authorized a share repurchase program of up to $500.0million of the Companys outstanding common stock. As of August 11, 2009, the Company had repurchased 9.1 million shares for $347.6million at an average repurchase price of $38.40 per share. Issuance and retirement of long-term debt: On July28, 2009, the Company issued $700.0million aggregate principal amount of 5-year, 3.75% Senior Notes that mature on July15, 2014 and $500.0 million aggregate principal amount of 10-year, 4.875% Senior Notes that mature on July15, 2019 (collectively, the Senior Notes). Interest payments are required on a semi-annual basis. The Company may redeem the Senior Notes at any time at the applicable redemption price. On August10, 2009, the Company repaid $500.0million of borrowings under its Credit Facility with proceeds from the issuance of the Senior Notes.