Fair Value Measurements (Tables)

9 Months Ended

Oct. 01, 2016

Fair Value Disclosures [Abstract]

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 1, 2016 and January 2, 2016 (in millions):

	October 1, 2016		January 2, 2016
Adjusted cost	$	4	$	5
Gross unrealized gains	5		6
Gross unrealized losses	—		(1		)
Fair value	$	9	$	10

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 1, 2016 and January 2, 2016 is as follows (in millions):

	Balance Sheet Classification	October 1, 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	$	22	$	22	$	—	$	—
Available-for-sale      securities	Other current assets	9		9		—		—
Foreign currency forward contracts	Other current assets	1		—		1		—
Trading securities	Other assets	322		322		—		—
Total assets		$	354	$	353	$	1	$	—
Liabilities
Foreign currency forward contracts	Other current liabilities	$	32	$	—	$	32	$	—
Contingent consideration	Other liabilities	40		—		—		40
Foreign currency forward contracts	Other liabilities	3		—		3		—
Total liabilities		$	75	$	—	$	35	$	40

	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

Summary of Level 3 Fair Value Measurements of Contingent Consideration Liability

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 October 1, 2016		Valuation Technique	Unobservable Input	Value or Range
Spinal Modulation revenue-based milestones and earn-outs	$	7	Monte Carlo Simulation	Discount Rates	0.8%	-	15.5%
				Expected Revenue Volatility			25.0%
				Projected Years of Payments	2017, 2018
Nanostim, Inc. 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			4.3%
				Probabilities of Payments	—%	-	90.0%
				Projected Years of Payments	2018	-	2022
U.S. Distributor revenue-based milestones	4		Probability Weighted Discounted Cash Flow	Discount Rates	0.9%	-	1.1%
				Probabilities of Payments	—%	-	100.0%
				Projected Years of Payments	2019, 2021
Total contingent consideration liabilities	$	40

Unobservable Input Reconciliation of Contingent Consideration Liability

Additionally, the following table provides a reconciliation of the beginning and ending balances of the Company's recurring Level 3 fair value measurements (in millions):

	Nanostim			Spinal Modulation			Assumed from Thoratec			U.S. Distributor		Total
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
Change in fair value of contingent consideration	—			8			1			—		9
Transfer out of Level 3 fair value measurement due to contractual settlement	—			(124		)	—			—		(124		)
Balance as of April 2, 2016	2			6			28			—		36
Change in fair value of contingent consideration	—			(4		)	(1		)	—		(5		)
Balance as of July 2, 2016	2			2			27			—		31
Initial fair value measurement of contingent consideration	—			—			—			4		4
Change in fair value of contingent consideration	—			5			—			—		5
Balance as of October 1, 2016	$	2		$	7		$	27		$	4	$	40