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):

	April 4, 2015
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).