Fair Value Measurements and Financial Instruments (Tables)

12 Months Ended

Jan. 02, 2016

Schedule of Financial Assets Measured at Fair Value on a Recurring Basis

A summary of assets and liabilities measured at fair value on a recurring basis at January 2, 2016 and January 3, 2015 is as follows (in millions):



	Balance Sheet Classification	January 2, 2016		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Money-market securities	Cash and cash equivalents	$	273	$	273	$	—	$	—
Available-for-sale securities	Other current assets	10		10		—		—
Foreign currency forward contracts	Other current assets	14		—		14		—
Trading securities	Other assets	302		302		—		—
Foreign currency forward contracts	Other assets	2		—		2		—
Total assets		$	601	$	585	$	16	$	—

Liabilities
Contingent consideration	Other current liabilities	$	118	$	—	$	—	$	118
Foreign currency forward contracts	Other current liabilities	6		—		6		—
Contingent consideration	Other liabilities	33		—		—		33
Foreign currency forward contracts	Other liabilities	3		—		3		—
Total liabilities		$	160	$	—	$	9	$	151



	Balance Sheet Classification	January 3, 2015		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
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

Schedule of Significant Unobservable Inputs

The recurring Level 3 fair value measurements of the Company's contingent consideration liabilities include the following significant unobservable inputs (in millions):



Contingent Consideration Liabilities	Fair Value as of January 2, 2016		Valuation Technique	Unobservable Input	Value or Range

Spinal Modulation regulatory-based milestone	$	118	Probability Weighted Discounted Cash Flow	Discount Rate			2.1%
				Probability of Payment			95%
				Projected Year of Payment			2016

Spinal Modulation revenue-based milestones and earn-outs	4		Monte Carlo Simulation	Discount Rates	1.3%	-	17.0%
				Expected Revenue Volatility			25.0%
				Projected Years of Payments	2017, 2018

Nanostim, Inc. (Nanostim) revenue-based milestones	2		Probability Weighted Discounted Cash Flow	Discount Rate			5.0%
				Probability of Payments			10.0%
				Projected Years of Payments	2017, 2018

Assumed from Thoratec regulatory-based and revenue-based milestones	27		Probability Weighted Discounted Cash Flow	Discount Rate			5.5%
				Probability of Payments	—%	-	90.0%
				Projected Years of Payments	2017	-	2020
Total contingent consideration liabilities	$	151

Schedule of Contingent Consideration Liabilities

Additionally, the following table provides a reconciliation of the beginning and ending balances of the Company's contingent consideration liabilities (in millions):



	Endosense			Nanostim			Spinal Modulation			Assumed from Thoratec			Total
Balance as of December 29, 2012	$	—		$	—		$	—		$	—		$	—
Initial fair value measurement of contingent consideration	132			56			—			—			188
Change in fair value of contingent consideration	1			—			—			—			1
Foreign currency translation	6			—			—			—			6
Balance as of December 28, 2013	139			56			—			—			195
Change in fair value of contingent consideration	28			(6		)	—			—			22
Payment of contingent consideration	(155		)	—			—			—			(155		)
Foreign currency translation	(12		)	—			—			—			(12		)
Balance as of January 3, 2015	—			50			—			—			50
Initial fair value measurement of contingent consideration	—			—			155			—			155
Liabilities assumed from Thoratec acquisition	—			—			—			33			33
Change in fair value of contingent consideration	—			(48		)	(33		)	(6		)	(87		)
Balance as of January 2, 2016	$	—		$	2		$	122		$	27		$	151

Schedule of Auction Rate Securities

The following table provides a reconciliation of the beginning and ending balances of the Company's auction rate securities (in millions):



	Auction Rate Securities
Balance as of January 3, 2015	$	—
Auction rate securities acquired from Thoratec	5
Sale of auction rate securities	(5		)
Balance as of January 2, 2016	$	—