Fair Value Measurements (Tables)

6 Months Ended

Jul. 04, 2015

Summary Of Components Of Available-For-Sale Securities

The following table summarizes the components of the balance of the Company’s available-for-sale securities at July 4, 2015 and January 3, 2015 (in millions):



	July 4, 2015		January 3, 2015
Adjusted cost	$	5	$	6
Gross unrealized gains	19		24
Fair value	$	24	$	30

Summary Of Financial Assets and Liabilities Measured At Fair Value On A Recurring Basis

A summary of assets and liabilities measured at fair value on a recurring basis at July 4, 2015 and January 3, 2015 is as follows (in millions):



	Balance Sheet Classification	July 4, 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	$	462	$	462	$	—	$	—
Available-for-sale securities	Other current assets	24		24		—		—
Foreign currency forward contracts	Other current assets	15		—		15		—
Trading securities	Other assets	318		318		—		—
Foreign currency forward contracts	Other assets	3		—		3		—
Total assets		$	822	$	804	$	18	$	—

Liabilities
Foreign currency forward contracts	Other current liabilities	$	3	$	—	$	3	$	—
Contingent consideration	Other current liabilities	119		—		—		119
Foreign currency forward contracts	Other liabilities	2		—		2		—
Contingent consideration	Other liabilities	45		—		—		45
Total liabilities		$	169	$	—	$	5	$	164



	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

Summary of Level 3 Fair Value Measurements of Contingent Consideration Liability

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



Contingent Consideration Liabilities	Fair Value as of July 4, 2015		Valuation Technique	Unobservable Input	Value or Range

Spinal Modulation regulatory-based milestone	$	117	Probability Weighted Discounted Cash Flow	Discount Rate			1.9%
				Probability of Payment			95%
				Projected Year of Payment			2016

Spinal Modulation revenue-based milestone	43		Monte Carlo Simulation	Discount Rates	1.1%	-	17.0%
				Expected Revenue Volatility			25.0%
				Projected Years of Payments	2017, 2018

Nanostim, Inc. (Nanostim) revenue-based milestone	4		Probability Weighted Discounted Cash Flow	Discount Rate			5.0%
				Probability of Payment			10%
				Projected Years of Three Annual Payments	2016, 2017, 2018
Total contingent consideration liabilities	$	164

Unobservable Input Reconciliation of Contingent Consideration Liability

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



	Spinal Modulation		Nanostim			Total
Balance as of January 3, 2015	$	—	$	50		$	50
Change in fair value of contingent consideration	—		(23		)	(23		)
Balance as of April 4, 2015	—		27			27
Initial fair value measurement of contingent consideration	155		—			155
Change in fair value of contingent consideration	5		(23		)	(18		)
Balance as of July 4, 2015	$	160	$	4		$	164