Business Combinations Business Combinations

3 Months Ended

Mar. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATIONS

During 2010, the Company made a minority equity investment of $60 million in CardioMEMS, a privately-held company that is focused on the development of a wireless monitoring technology that can be placed directly into the pulmonary artery to assess cardiac performance via measurement of pulmonary artery pressure. The investment agreement resulted in a 19% ownership interest and provided the Company with the exclusive right, but not the obligation, to acquire CardioMEMS for an additional payment of $375 million during the period that extends through the completion of certain regulatory milestones.

In February 2013, the Company provided additional debt financing of $28 million to CardioMEMS which has been collateralized by substantially all the assets of CardioMEMS including its intellectual property. The Company has also committed to provide up to $12 million of additional debt financing to CardioMEMS. In connection with the debt financing, the Company also obtained additional significant decision-making rights over CardioMEMS' operations. If the Company were to exercise its option to acquire CardioMEMS, the Company would pay a total of $375 million less any net debt payable to St. Jude Medical in exchange for all the outstanding stock of CardioMEMS.

In accordance with the consolidation accounting guidance Accounting Standards Codification (ASC) Topic 810: Improvements to Financial Reporting By Enterprises Involved with Variable Interest Entities (VIEs), the Company reconsidered and determined that effective on February 27, 2013 CardioMEMS was a variable interest entity for which St. Jude Medical is now the primary beneficiary. As a result, as of February 27, 2013, the financial condition and results of operations of CardioMEMS were included in St. Jude Medical's consolidated financial statements. At the time of consolidation, the Company recognized a $29 million charge to other expense (see Note 10) to adjust the carrying value of the pre-existing equity investment and fixed price purchase option to fair value. The Company continues to have a 19% voting equity interest in CardioMEMS, and therefore, allocates the losses attributable to the noncontrolling CardioMEMS' shareholders to noncontrolling interest in the Condensed Consolidated Statements of Earnings and Condensed Consolidated Balance Sheets. The creditors of CardioMEMS do not have any recourse to the general credit of St. Jude Medical.

The following table summarizes the preliminary estimated fair values of CardioMEMS' assets and liabilities included in St. Jude Medical's Condensed Consolidated Balance Sheets as of February 27, 2013 in accordance with Business Combinations, (Topic 805), (in millions):

Current assets	$	8
Goodwill	84
Acquired in-process research and development (IPR&D)	69
Other long-term assets	2
Total assets	$	163
Current liabilities	$	13
Deferred income taxes, net	26
Other long-term liabilities	4
Total liabilities	$	43
Non-controlling interest	$	89

The goodwill recognized in connection with the CardioMEMS transaction was not deductible for income tax purposes and was allocated entirely to the Company's IESD segment. The goodwill represented the strategic benefits of growing the Company's cardiac rhythm management and heart failure therapy product portfolio and the expected revenue growth from increased market penetration. The Company recognized $69 million of indefinite-lived IPR&D intangible assets. Upon completion of the related development project (generally when regulatory approval to market the product is obtained), the IPR&D will be amortized over its estimated useful life.

The pro forma impact of the CardioMEMS business combination has not been presented since the impact to the Company's results of operations was not material.