Fair Value Measurements (Tables)

9 Months Ended

Oct. 03, 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 October 3, 2015 and January 3, 2015 (in millions):



	October 3, 2015		January 3, 2015
Adjusted cost	$	4	$	6
Gross unrealized gains	7		24
Fair value	$	11	$	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 October 3, 2015 and January 3, 2015 is as follows (in millions):



	Balance Sheet Classification	October 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	$	505	$	505	$	—	$	—
Available-for-sale securities	Other current assets	11		11		—		—
Foreign currency forward contracts	Other current assets	6		—		6		—
Trading securities	Other assets	298		298		—		—
Foreign currency forward contracts	Other assets	1		—		1		—
Total assets		$	821	$	814	$	7	$	—

Liabilities
Foreign currency forward contracts	Other current liabilities	$	6	$	—	$	6	$	—
Contingent consideration	Other current liabilities	118		—		—		118
Foreign currency forward contracts	Other liabilities	2		—		2		—
Contingent consideration	Other liabilities	30		—		—		30
Total liabilities		$	156	$	—	$	8	$	148



	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 October 3, 2015		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	28		Monte Carlo Simulation	Discount Rates	0.9%	-	16.5%
				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 Payment			10%
				Projected Years of Payments	2017, 2018
Total contingent consideration liabilities	$	148

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
Change in fair value of contingent consideration	(14		)	(2		)	(16		)
Balance as of October 3, 2015	$	146		$	2		$	148