|   |
|---|
|   |  |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

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|------------------------------------------------------------------|
|                                                                  |  |  |
|                                                             |   |   |
| Minnesota                                                        |   | 41-1276891 |
| (State or other jurisdiction of                                  |   | (I.R.S. Employer Identification No.) |
| incorporation or organization)                                   |   |   |
|                                                             |   |   |
| One St. Jude Medical Drive                                       |   | (651) 756-2000 |
| St. Paul, Minnesota 55117                                        |   | (Registrant’s telephone number, |
| (Address of principal executive                                  |   | including area code) |
| offices, including zip code)                                     |   |   |
|                                                             |   |   |
|                                                             |   |   |
| Securities registered pursuant to Section 12(b) of the Act:      |
|                                                             |   |   |
| Common Stock ($.10 par value)                                    |   | New York Stock Exchange |
| (Title of class)                                                 |   | (Name of exchange on which registered) |
|                                                             |
| Securities registered pursuant to Section 12(g) of the Act: None |
|                                                             |   |   |

|                                |
|--------------------------------|
|                                |  |  |
| Large accelerated filer x |   | Accelerated filer o |
| Non-accelerated filer o   | (Do not check if a smaller reporting company) | Smaller reporting company o |

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|        |
|--------|
|        |  |  |
| ITEM   | DESCRIPTION | PAGE |
|   |   |   |
|   | PART I |   |
|   |   |   |
| 1.     | Business | 3 |
| 1A.    | Risk Factors | 13 |
| 1B.    | Unresolved Staff Comments | 24 |
| 2.     | Properties | 24 |
| 3.     | Legal Proceedings | 24 |
| 4.     | Mine Safety Disclosures | 24 |
|   |   |   |
|   | PART II |   |
|   |   |   |
| 5.     | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 25 |
| 6.     | Selected Financial Data | 26 |
| 7.     | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
| 7A.    | Quantitative and Qualitative Disclosures About Market Risk | 46 |
| 8.     | Financial Statements and Supplementary Data | 48 |
| 9.     | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 97 |
| 9A.    | Controls and Procedures | 97 |
| 9B.    | Other Information | 97 |
|   |   |   |
|   | PART III |   |
|   |   |   |
| 10.    | Directors, Executive Officers and Corporate Governance | 97 |
| 11.    | Executive Compensation | 98 |
| 12.    | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 98 |
| 13.    | Certain Relationships and Related Transactions, and Director Independence | 98 |
| 14.    | Principal Accountant Fees and Services | 98 |
|   |   |   |
|   | PART IV |   |
|   |   |   |
| 15.    | Exhibits and Financial Statement Schedules | 99 |
|   |   |   |
|   | Signatures | 105 |

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|         |          |
|---------|----------|
| Item 1. | BUSINESS |

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|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales                    | 2015 |   | 2014 |   | 2013 |
| ICD Systems                  | $ | 1,582 |  |   | $ | 1,746 |  |   | $ | 1,741 |  |
| Atrial Fibrillation Products | 1,096 |  |   | 1,044 |  |   | 957 |  |
| Pacemaker Systems            | 941 |  |   | 1,047 |  |   | 1,042 |  |
| Vascular Products            | 716 |  |   | 709 |  |   | 704 |  |
| Structural Heart Products    | 595 |  |   | 639 |  |   | 631 |  |
| Neuromodulation Products     | 475 |  |   | 437 |  |   | 426 |  |
| Thoratec Products            | 136 |  |   | — |  |   | — |  |
|    Net sales  | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |

----

----

|         |                                                              |
|---------|--------------------------------------------------------------|
| • | Establishment registration and product listing requirements; |

|         |                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Quality System Regulation (QSR) requires manufacturers, including third-party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process; |

|         |                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and against making false and misleading product claims; and |

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|         |                                                                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur. |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Fines, injunctions, consent decrees and civil penalties; |

|         |                                    |
|---------|------------------------------------|
| • | Recall or seizure of our products; |

|         |                                                                             |
|---------|-----------------------------------------------------------------------------|
| • | Operating restrictions, partial suspension or total shutdown of production; |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | Refusing our requests for 510(k) clearance or PMA of new products or new intended uses; |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Refusing to provide documents needed to export products; |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | Withdrawing 510(k) clearance or PMAs that are already granted; and |

|         |                       |
|---------|-----------------------|
| • | Criminal prosecution. |

----

----

|         |                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Portico Re-sheathable Transcatheter Aortic Valve System US IDE Trial: The objective of this clinical trial is to evaluate the safety and effectiveness of the Portico Transcatheter Heart Valve and Delivery Systems (Portico) via transfemoral and alternative delivery methods. The clinical study will analyze the high risk |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Thoratec Corporation MOMENTUM 3, Multi-center Study of MagLev Technology in Patients Undergoing MCS Therapy With HeartMate 3™ (HM3) IDE Clinical Study Protocol: The objective of this clinical study is to evaluate the safety and effectiveness of the HM3 Left Ventricular Assist System (LVAS) by demonstrating non-inferiority to the HeartMate 2™ (HMII) LVAS when used for the treatment of advanced, refractory, left ventricular HF. The HM3 LVAS is intended to provide hemodynamic support in patients with advanced, refractory left ventricular HF; either for short term support, such as a bridge to cardiac transplantation or myocardial recovery, or as long term support, such as destination therapy. The HM3 is intended for use inside or outside the hospital. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Thoratec Corporation HeartMate PHP™ Coronary InterventionS in HIgh-Risk PatiEnts Using a Novel Percutaneous Left Ventricular Support Device (SHIELD II) study protocol: The HeartMate PHP™ System is a temporary (less than 6 hour procedure) ventricular assist device indicated for use during high risk percutaneous coronary interventions (PCI) performed in elective or urgent, hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction. The trial objective is to assess the safety and efficacy of the HeartMate PHP™ in supporting patients with severe symptomatic coronary artery disease with diminished but stable cardiovascular function, who are undergoing elective or urgent high risk percutaneous coronary interventions (PCI) but are not candidates for coronary artery bypass graft (CABG) surgery. The trial is designed as a prospective, randomized, multi-center, open-label non-inferiority trial in the U.S. comparing HeartMate PHP™ to Abiomed® Impella® 2.5 percutaneous cardiac support system. |

----

|                     |
|---------------------|
|                     |  |  |  |  |  |
| Name                |   | Age |   | Present Position | Other Positions Held 2011-2015 |
| Michael T. Rousseau |   | 60 |   | President and Chief Executive Officer (2016) | Chief Operating Officer (2014-2015) |
|                |   |   |   |   | Group President, Cardiovascular and Ablation Technologies Division, Implantable Electronic Systems Division and U.S. Division (2012-2014) |
|                |   |   |   |   | Group President, Cardiac Rhythm Management Division, Neuromodulation Division, Atrial Fibrillation Division, Cardiovascular Division and U.S. Division (2009-2012) |

----

|                       |
|-----------------------|
|                       |  |  |  |  |  |
| Daniel J. Starks      |   | 61 |   | Executive Chairman of the Board (2016) | Chairman (2004-2015), President (2001-2015) and Chief Executive Officer (2004-2015) |
| John C. Heinmiller    |   | 61 |   | Executive Vice President (2004) | Chief Financial Officer (1998-2012) |
| Lisa M. Andrade       |   | 44 |   | Vice President, Chief Marketing Officer (2014) | Senior Vice President, Global Strategy and Market Development (2013-2014) |
|                  |   |   |   |   | Senior Vice President, Marketing, U.S. Division (2011-2013) |
|                  |   |   |   |   | Vice President, Education and Market Development, U.S. Division (2011) |
|                  |   |   |   |   | Vice President, Connectivity, U.S. Division (2010-2011) |
| I. Paul Bae           |   | 51 |   | Vice President, Global Human Resources (2015) and Chief Compliance Officer (2012) | Deputy General Counsel, Labor and Employment (2012-2015) |
|                  |   |   |   |   | Senior Vice President, Administration and General Counsel, Americas Division (2009-2012) |
| Joel D. Becker        |   | 48 |   | President, Americas Division (2014) | President, U.S. Division (2011-2014) |
|                  |   |   |   |   | Senior Vice President, Marketing, U.S. Division (2011) |
|                  |   |   |   |   | Vice President, Program Management & Business Development, Atrial Fibrillation Division (2004-2011) |
| Mark D. Carlson, M.D. |   | 60 |   | Vice President, Global Clinical Affairs and Chief Medical Officer (2013) | Chief Medical Officer and Senior Vice President, Research and Clinical Affairs, Implantable Electronic Systems Division (2012-2013) |
|                  |   |   |   |   | Chief Medical Officer and Senior Vice President, Research and Clinical Affairs, Cardiac Rhythm Management Division (2007-2012) |
| Jeffrey A. Dallager   |   | 41 |   | Vice President and Corporate Controller (2014) | Senior Vice President, Finance and Supply Chain, International Division (2012-2014) |
|                  |   |   |   |   | Senior Vice President, Finance, U.S. Division (2009-2012) |
| Philip J. Ebeling     |   | 45 |   | Vice President, Chief Technology Officer (2016) | Senior Vice President, Research and Development (2014-2015) |
|                  |   |   |   |   | Senior Vice President, Research and Development, Cardiovascular and Ablation Technologies Division (2012-2014) |
|                  |   |   |   |   | Vice President, Research and Development, Cardiovascular Division (2011-2012) |
| Rachel H. Ellingson   |   | 46 |   | Vice President, Corporate Strategy (2016) | Vice President, Global Communications (2014-2015) |
|                  |   |   |   |   | Vice President, Corporate Relations (2012-2014) |
|                  |   |   |   |   | Vice President, Corporate Communications and Investor Relations (2011-2012) |
| Eric S. Fain, M.D.    |   | 55 |   | Group President (2014) | President, Implantable Electronic Systems Division (2012-2014) |
|                  |   |   |   |   | President, Cardiac Rhythm Management Division (2007-2012) |
| Jeff A. Fecho         |   | 55 |   | Vice President, Global Quality (2012) | Vice President, Quality, Cardiovascular Division (2008-2012) |
| Denis M. Gestin       |   | 52 |   | President, International Division (2008) |   |

----

|                  |
|------------------|
|                  |  |  |  |  |  |
| Mark W. Murphy   |   | 47 |   | Vice President, Information Technology and Chief Information Officer (2013) | Senior Director, Enterprise Applications (2009-2013) |
| Scott P. Thome   |   | 53 |   | Vice President, Global Operations and Supply Chain (2014) | Senior Vice President, Cardiovascular and Ablation Technologies Division (2012-2014) |
|             |   |   |   |   | Senior Vice President, Cardiovascular Division (2010-2012) |
| Jason A. Zellers |   | 50 |   | Vice President, General Counsel and Corporate Secretary (2011) | Vice President, General Counsel, International Division (2006-2011) |
| Donald J. Zurbay |   | 48 |   | Vice President, Finance (2006) and Chief Financial Officer (2012) | Corporate Controller (2006-2012) |

|          |              |
|----------|--------------|
| Item 1A. | RISK FACTORS |

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|         |                                    |
|---------|------------------------------------|
| • | take a significant amount of time, |

|         |                                                   |
|---------|---------------------------------------------------|
| • | require the expenditure of substantial resources, |

|         |                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------|
| • | involve rigorous pre-clinical and clinical testing, as well as increased post-market surveillance, |

|         |                                                                     |
|---------|---------------------------------------------------------------------|
| • | involve modifications, repairs or replacements of our products, and |

|         |                                                              |
|---------|--------------------------------------------------------------|
| • | result in limitations on the indicated uses of our products. |

|         |                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|
| • | require us to notify health professionals and others that the devices present unreasonable risk of substantial harm to public health; |

|         |                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------|
| • | order us to recall, repair, replace or refund the cost of any medical device that we manufactured or distributed; |

|         |                                                                 |
|---------|-----------------------------------------------------------------|
| • | detain, seize or ban adulterated or misbranded medical devices; |

|         |                                                                       |
|---------|-----------------------------------------------------------------------|
| • | refuse to provide us with documents necessary to export our products; |

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | refuse requests for 510(k) clearance or PMA of new products or new intended uses; |

|         |                                                              |
|---------|--------------------------------------------------------------|
| • | withdraw 510(k) clearances or PMAs that are already granted; |

|         |                                                                                               |
|---------|-----------------------------------------------------------------------------------------------|
| • | impose operating restrictions, including requiring a partial or total shutdown of production; |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | enjoin or restrain conduct resulting in violations of applicable law pertaining to medical devices; and/or |

|         |                                                                              |
|---------|------------------------------------------------------------------------------|
| • | assess criminal or civil penalties against us or our officers and employees. |

----

----

|         |                                                                                                |
|---------|------------------------------------------------------------------------------------------------|
| • | the imposition of or increase in import or export duties, surtaxes, tariffs or customs duties; |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | the imposition of import or export quotas or other trade restrictions; |

|         |                                                                                            |
|---------|--------------------------------------------------------------------------------------------|
| • | foreign tax laws and potential increased costs associated with overlapping tax structures; |

|         |                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
| • | compliance with various U.S. and foreign laws, including the Foreign Corrupt Practices Act, the UK Anti-Bribery Act and import/export laws; |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| • | longer accounts receivable cycles in certain foreign countries, whether due to cultural, economic or other factors; |

|         |                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------|
| • | changes in medical reimbursement programs and regulatory requirements in international markets in which we operate; and |

----

|         |                                                                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | economic and political instability in international markets, including concerns over excessive levels of sovereign debt and budget deficits in countries where we market our products that could result in an inability to pay or timely pay outstanding payables. |

----

----

|         |                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------|
| • | the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies; |

|         |                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------|
| • | adverse developments arising out of investigations by governmental entities of the business practices of acquired companies; |

|         |                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | any decrease in customer loyalty and product orders caused by dissatisfaction with the combined companies' product lines and sales and marketing practices, including price increases; |

|         |                                          |
|---------|------------------------------------------|
| • | our ability to retain key employees; and |

|         |                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the ability of the combined company to achieve synergies among its constituent companies, such as increasing sales of the combined company's products, achieving cost savings and effectively combining technologies to develop new products. |

----

----

----

----

----

|          |
|----------|
|          |  |
|     |   |
| Item 1B. | UNRESOLVED STAFF COMMENTS |

|         |
|---------|
|         |  |
|    |   |
| Item 2. | PROPERTIES |

|         |
|---------|
|         |  |
|    |   |
| Item 3. | LEGAL PROCEEDINGS |

|         |
|---------|
|         |  |
|    |   |
| Item 4. | MINE SAFETY DISCLOSURES |

----

|         |
|---------|
|         |  |
|    |   |
| Item 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |

|         |
|---------|
|         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|    |   | Fiscal Year |
|    |   | 2015 |   | 2014 |
| Quarter |   | High |   | Low |   | High |   | Low |
| First   |   | $ | 68.99 |  |   | $ | 63.93 |  |   | $ | 68.79 |  |   | $ | 59.16 |  |
| Second  |   | $ | 76.33 |  |   | $ | 64.96 |  |   | $ | 70.59 |  |   | $ | 59.85 |  |
| Third   |   | $ | 80.84 |  |   | $ | 61.01 |  |   | $ | 71.90 |  |   | $ | 61.00 |  |
| Fourth  |   | $ | 68.97 |  |   | $ | 59.88 |  |   | $ | 70.24 |  |   | $ | 54.80 |  |

----

|         |
|---------|
|         |  |
|    |   |
| Item 6. | SELECTED FINANCIAL DATA |

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                  |   | 2015 |   | 2014 |   | 2013 |   | 2012 |   | 2011 |
| Summary of Operations for the Fiscal Year:                            |
| Net sales                                                             |   | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |   | $ | 5,503 |  |   | $ | 5,612 |  |
| Net earnings attributable to St. Jude Medical, Inc.                   |   | $ | 880 |  |   | $ | 1,002 |  |   | $ | 723 |  |   | $ | 752 |  |   | $ | 826 |  |
| Diluted net earnings per share attributable to St. Jude Medical, Inc. |   | $ | 3.07 |  | (a) | $ | 3.46 |  | (b) | $ | 2.49 |  | (c) | $ | 2.39 |  | (d) | $ | 2.52 |  |
| Cash dividends declared per share                                     |   | $ | 1.16 |  |   | $ | 1.08 |  |   | $ | 1.00 |  |   | $ | 0.92 |  |   | $ | 0.84 |  |
| Financial Position at Year End:                                       |
| Total assets (e)                                                      |   | $ | 13,064 |  |   | $ | 10,193 |  |   | $ | 10,232 |  |   | $ | 9,265 |  |   | $ | 9,109 |  |
| Long-term debt (e)                                                    |   | $ | 5,229 |  |   | $ | 2,259 |  |   | $ | 3,502 |  |   | $ | 2,544 |  |   | $ | 2,704 |  |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | 2015 diluted net earnings per share attributable to St. Jude Medical, Inc. included after-tax charges of $172 million, or $0.59 per diluted net earnings per share attributable to St. Jude Medical, Inc., related to acquisition-related charges, restructuring activities associated with our 2016 Initiatives, our Manufacturing and Supply Chain Optimization Plan, our 2012 Business Realignment Plan and 2011 Restructuring Plan, product field action costs and litigation costs, legal settlement expenses and intangible asset impairment charges, partially offset by an income tax benefit for discrete income tax adjustments and a net benefit related to insurance recoveries associated with a litigation case. See the Notes to the Consolidated Financial Statements in Item 8. "Financial Statements and Supplementary Data" for further detail. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | 2014 diluted net earnings per share attributable to St. Jude Medical, Inc. included after-tax charges of $150 million, or $0.52 per diluted net earnings per share attributable to St. Jude Medical, Inc., related to restructuring activities associated with our Manufacturing and Supply Chain Optimization Plan and our 2012 Business Realignment Plan, acquisition-related charges, intangible asset impairment charges, product field action costs and litigation costs and legal settlement expenses, partially offset by a favorable legal settlement and an income tax benefit for discrete income tax adjustments. See the Notes to the Consolidated Financial Statements in Item 8. "Financial Statements and Supplementary Data" for further detail. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) | 2013 diluted net earnings per share attributable to St. Jude Medical, Inc. included after-tax charges of $371 million, or $1.27 per diluted net earnings per share attributable to St. Jude Medical, Inc., related to restructuring activities associated with our 2012 Business Realignment Plan and 2011 Restructuring Plan, debt retirement costs primarily associated with make-whole redemption payments and the write-off of unamortized debt issuance costs, acquisition-related charges, intangible asset impairment charges, product field action costs and litigation costs and a legal settlement charge, partially offset by an income tax benefit from the enactment of a tax law and the settlement of domestic tax audits. See the Notes to the Consolidated Financial Statements in Item 8. "Financial Statements and Supplementary Data" for further detail. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) | 2012 diluted net earnings per share attributable to St. Jude Medical, Inc. included after-tax charges of $321 million, or $1.02 per diluted net earnings per share attributable to St. Jude Medical, Inc., related to restructuring activities associated with our 2012 Business Realignment Plan and 2011 Restructuring Plan, product field action and litigation charges, a legal settlement charge, intangible asset impairment charges, inventory write-offs and an additional income tax charge related to a settlement reserve for certain prior year tax positions. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (e) | Effective in 2015, we adopted Accounting Standards Update (ASU) No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs and used the retrospective application method to adjust the total assets and total debt balances. Prior period balances have been retrospectively adjusted to conform to the current year's presentation. |

----

|         |
|---------|
|         |  |
|    |   |
| Item 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |

|         |                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We benefited from incremental net sales associated with our ventricular assist devices, acquired through our acquisition of Thoratec Corporation (Thoratec) during the fourth quarter of 2015. |

|         |                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our AF Products continued to benefit from increased EP catheter ablation procedures, led by increased net sales from our TactiCath® irrigated ablation catheter that received U.S. Food and Drug Administration (FDA) approval in October 2014 and incremental net sales from our FlexAbility™ ablation catheter that received FDA approval in January 2015. |

|         |                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our CardioMEMS™ HF System has continued to penetrate the market resulting in increased net sales since receiving FDA approval in May 2014. |

|         |                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also continued to benefit from incremental net sales from our radiofrequency ablation products and related consumable items, acquired as part of our NeuroTherm acquisition in August 2014. |

|         |                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Finally, we continued to experience incremental net sales from our Quadra Allure MP™ cardiac resynchronization therapy pacemaker (CRT-P) device that received CE Mark approval in December 2014. |

----

|         |                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our AF Products benefited from increased EP catheter ablation procedures and increased sales volumes associated with our intracardiac echocardiography imaging product offerings. |

|         |                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also benefited from incremental net sales associated with our NeuroTherm acquisition and FDA approval of the CardioMEMS™ HF System. |

|         |                                                                                                                                                                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We continued to experience incremental net sales benefits from our 2013 acquisitions of Endosense and Nanostim, and sales volume increases associated with Spinal Modulation's Axium™ Neurostimulator System, a targeted therapy for chronic pain, for which, prior to exercising our purchase option in May 2015, we had been the exclusive distributor. |

|         |                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Finally, our increased sales volumes associated with our Fractional Flow Reserve (FFR) technology products and OCT imaging products, Trifecta™ pericardial stented tissue valve, transcatheter aortic heart valves and AMPLATZER™ occluder products also continued to benefit our 2014 net sales compared to 2013. |

|         |                                                                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized net after-tax charges of $0.35 per diluted share during 2015 for acquisition-related costs primarily associated with our acquisition of Thoratec, partially offset by contingent consideration fair value adjustments. |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| • | We recognized after-tax special charges of $0.30 per diluted share related to restructuring activities during 2015. |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized an after-tax income tax benefit of $0.07 per diluted share related to discrete income tax adjustments during 2015. |

|         |                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized net after-tax special charges of $0.02 per diluted share related to product field action costs and litigation costs during 2015. |

|         |                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized a net after-tax special benefit of $0.01 per diluted share associated with favorable legal settlements including insurance recoveries, partially offset by two unrelated unfavorable legal settlements and one unfavorable legal judgment associated with a product liability claim. |

|         |                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------|
| • | We recognized after-tax special charges of $0.34 per diluted share related to restructuring activities during 2014. |

|         |                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized after-tax special charges of $0.13 per diluted share associated with intangible asset impairment charges during 2014. |

|         |                                                                                                                                            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized after-tax special charges of $0.13 per diluted share related to product field action costs and litigation costs during 2014. |

|         |                                                                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized after-tax special charges of $0.12 per diluted share associated with acquisition-related charges during 2014, primarily associated with our acquisitions of Endosense, CardioMEMS, NeuroTherm and Nanostim. |

|         |                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------|
| • | We recognized an after-tax income tax benefit of $0.17 per diluted share related to discrete income tax adjustments. |

|         |                                                                                                                                                                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Additionally, we also recognized a net after-tax special benefit of $0.03 per diluted share associated with a legal settlement gain related to a favorable judgment and resolution in a patent infringement case, partially offset by legal settlement expenses associated with three unrelated legal cases. |

----

|         |                                                                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We generated $1,039 million of operating cash flows during 2015, compared to $1,304 million of operating cash flows during 2014 and $961 million of operating cash flows during 2013. |

|         |                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We acquired Thoratec for $3.3 billion in net cash consideration during 2015, compared to our business combination payments of $147 million in 2014 and $292 million in 2013. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We utilized proceeds of $2.1 billion from a 5-year, $2.6 billion term loan due 2020 (Term Loan Due 2020), together with $1.5 billion of proceeds from unsecured senior notes issued during 2015 to finance a portion of our Thoratec acquisition, and repaid term loans totaling $925 million. During 2014 and 2013, we had net debt issuances of $275 million and $554 million, respectively. |

|         |                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We also returned $822 million to shareholders in the form of common stock repurchases and dividends during 2015 compared to $779 million during 2014 and $1,115 million during 2013. |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              |   |   |   |   |   |   | % Change |   | % Change |
|                              | 2015 |   | 2014 |   | 2013 |   | 2015 vs. 2014 |   | 2014 vs. 2013 |
| ICD Systems                       | $ | 1,582 |  |   | $ | 1,746 |  |   | $ | 1,741 |  |   | (9.4 | )% |   | 0.3 | % |
| Atrial Fibrillation Products      | 1,096 |  |   | 1,044 |  |   | 957 |  |   | 5.0 |  |   | 9.1 |  |
| Pacemaker Systems                 | 941 |  |   | 1,047 |  |   | 1,042 |  |   | (10.0 | ) |   | 0.5 |  |
| Vascular Products                 | 716 |  |   | 709 |  |   | 704 |  |   | 0.9 |  |   | 0.7 |  |
| Structural Heart Products         | 595 |  |   | 639 |  |   | 631 |  |   | (6.7 | ) |   | 1.3 |  |
| Neuromodulation Products          | 475 |  |   | 437 |  |   | 426 |  |   | 8.6 |  |   | 2.6 |  |
| Thoratec Products                 | 136 |  |   | — |  |   | — |  |   | N/A |   | N/A |
|     Net sales | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |   | (1.4 | )% |   | 2.2 | % |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   |   |   |   |   |   | % Change |   | % Change |
|                                    | 2015 |   | 2014 |   | 2013 |   | 2015 vs. 2014 |   | 2014 vs. 2013 |
| United States                           | $ | 2,838 |  |   | $ | 2,657 |  |   | $ | 2,596 |  |   | 6.8 |  % |   | 2.4 |  % |
| Europe                                  | 1,384 |  |   | 1,531 |  |   | 1,458 |  |   | (9.6 | ) |   | 5.0 |  |
| Japan                                   | 456 |  |   | 526 |  |   | 567 |  |   | (13.2 | ) |   | (7.2 | ) |
| Other foreign countries                 | 863 |  |   | 908 |  |   | 880 |  |   | (5.0 | ) |   | 3.2 |  |
|      Net sales | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |   | (1.4 | )% |   | 2.2 |  % |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |
|                                           | 2015 |   | 2014 |
| Operational                                    | 2.9 |  % |   | 2.8 |  % |
| Acquisitions                                   | 3.0 |  |   | 0.7 |  |
| Translation                                    | (7.3 | ) |   | (1.3 | ) |
|      Net sales change | (1.4 | )% |   | 2.2 |  % |

----

----

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Gross profit            |   |  |   |   |  |   |   |   | 2015 vs. 2014 Change |   | 2014 vs. 2013Change |   |
| (in millions)           | 2015 |   | 2014 |   | 2013 |   |   |   |
| Gross profit            | $ | 3,796 |  |   | $ | 3,969 |  |   | $ | 3,927 |  |   | (4.4 | )% |   | 1.1 |  % |   |
| Percentage of net sales | 68.5 | % |   | 70.6 | % |   | 71.4 | % |   | (2.1 | ) | pts. | (0.8 | ) | pts. |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Selling, general and administrative (SG&A) expense |   |  |   |   |  |   |   |   | 2015 vs. 2014 Change |   | 2014 vs. 2013Change |   |
| (in millions)                                          | 2015 |   | 2014 |   | 2013 |   |   |   |
| Selling, general and administrative expense            | $ | 1,878 |  |   | $ | 1,856 |  |   | $ | 1,805 |  |   | 1.2 | % |   | 2.8 | % |   |
| Percentage of net sales                                | 33.9 | % |   | 33.0 | % |   | 32.8 | % |   | 0.9 |  | pts. | 0.2 |  | pts. |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Research and development (R&D) expense |   |  |   |   |  |   |   |   | 2015 vs. 2014 Change |   | 2014 vs. 2013Change |   |
| (in millions)                              | 2015 |   | 2014 |   | 2013 |   |   |   |
| Research and development expense           | $ | 676 |  |   | $ | 692 |  |   | $ | 691 |  |   | (2.3 | )% |   | 0.1 |  % |   |
| Percentage of net sales                    | 12.2 | % |   | 12.3 | % |   | 12.6 | % |   | (0.1 | ) | pts. | (0.3 | ) | pts. |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Amortization of intangible assets |   |   |   |   |   |   | 2015 vs. 2014 Change |   | 2014 vs. 2013Change |
| (in millions)                     | 2015 |   | 2014 |   | 2013 |   |
| Amortization of intangible assets | $ | 116 |  |   | $ | 89 |  |   | $ | 79 |  |   | 30.3 | % |   | 12.7 | % |

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |
| Special charges                               |   |  |   |   |  |   |   |
| (in millions)                                 | 2015 |   | 2014 |   | 2013 |
| Cost of sales special charges                 | $ | 39 |  |   | $ | 56 |  |   | $ | 45 |  |
| Special charges                               | 96 |  |   | 181 |  |   | 301 |  |
|     Total special charges | $ | 135 |  |   | $ | 237 |  |   | $ | 346 |  |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                             |   | For the Fiscal Year Ended |
|                                             |   | 2015 |   | 2014 |   | 2013 |
| Type of Special Charge                           |   | Cost of Sales Special Charges | Special Charges | Total Special Charges |   | Cost of Sales Special Charges | Special Charges | Total Special Charges |   | Cost of Sales Special Charges | Special Charges | Total Special Charges |
| Restructuring activities                         |   |   |   |   |   |   |   |   |   |   |   |   |
| 2016 Initiatives                                 |   | $ | 12 |  | $ | 22 |  | $ | 34 |  |   | $ | — |  | $ | — |  | $ | — |  |   | $ | — |  | $ | — |  | $ | — |  |
| Manufacturing and Supply Chain Optimization Plan |   | 29 |  | 49 |  | 78 |  |   | 7 |  | 25 |  | 32 |  |   | — |  | — |  | — |  |
| 2012 Business Realignment Plan                   |   | 5 |  | 9 |  | 14 |  |   | 30 |  | 78 |  | 108 |  |   | 35 |  | 185 |  | 220 |  |
| 2011 Restructuring Plan                          |   | — |  | (1 | ) | (1 | ) |   | — |  | — |  | — |  |   | — |  | 24 |  | 24 |  |
| Other restructuring related charges              |   | — |  | 2 |  | 2 |  |   | — |  | — |  | — |  |   | — |  | — |  | — |  |
| Intangible asset impairment charges              |   | — |  | 2 |  | 2 |  |   | — |  | 58 |  | 58 |  |   | — |  | 42 |  | 42 |  |
| Legal settlements                                |   | — |  | (6 | ) | (6 | ) |   | — |  | 10 |  | 10 |  |   | — |  | 22 |  | 22 |  |
| Product field action costs and litigation costs  |   | (7 | ) | 19 |  | 12 |  |   | 19 |  | 10 |  | 29 |  |   | 10 |  | 28 |  | 38 |  |
| Total special charges                            |   | $ | 39 |  | $ | 96 |  | $ | 135 |  |   | $ | 56 |  | $ | 181 |  | $ | 237 |  |   | $ | 45 |  | $ | 301 |  | $ | 346 |  |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |  |  |  |
| Other expense, net     |   |   |   |   |   |
| (in millions)          | 2015 |   | 2014 |   | 2013 |
| Interest income        | $ | (3 | ) |   | $ | (5 | ) |   | $ | (5 | ) |
| Interest expense       | 103 |  |   | 85 |  |   | 81 |  |
| Other (income) expense | 2 |  |   | 3 |  |   | 191 |  |
| Other expense, net     | $ | 102 |  |   | $ | 83 |  |   | $ | 267 |  |

|                                                                            |
|----------------------------------------------------------------------------|
|                                                                            |  |  |  |  |  |  |  |  |
| (as a percent of earnings before income taxes and noncontrolling interest) | 2015 |   | 2014 |   | 2013 |
| Effective tax rate                                                         | 6.7 | % |   | 10.6 | % |   | 11.7 | % |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                                    | 2015 |   | 2014 |   | 2013 |
| Net loss attributable to noncontrolling interest | $ | (14 | ) |   | $ | (47 | ) |   | $ | (31 | ) |

|         |                                                                                                                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | On September 14, 2015, in connection with our $1.5 billion unsecured senior notes issuance, Fitch Ratings downgraded our long term ratings to A- and downgraded our short term rating to F2 with stable outlook and assigned an A- rating to the $1.5 billion unsecured senior notes. |

|         |                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | On October 8, 2015, after completing our acquisition of Thoratec, Moody’s Investors Service downgraded our senior unsecured ratings to Baa2 with negative outlook and affirmed our Prime-2 short term rating; |

----

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |
|                                                                  | 2015 |   | 2014 |   | 2013 |
| Net cash provided by (used in):                                       |   |   |   |   |   |
| Operating activities                                                  | $ | 1,039 |  |   | $ | 1,304 |  |   | $ | 961 |  |
| Investing activities                                                  | (3,445 | ) |   | (339 | ) |   | (522 | ) |
| Financing activities                                                  | 1,692 |  |   | (827 | ) |   | (257 | ) |
| Effect of currency exchange rate changes on cash and cash equivalents | (61 | ) |   | (69 | ) |   | (3 | ) |
| Net (decrease) increase in cash and cash equivalents                  | $ | (775 | ) |   | $ | 69 |  |   | $ | 179 |  |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |
|                                                           | 2015 |   | 2014 |   | 2013 |
| Stock issued under employee stock plans, including tax benefit | $ | 163 |  |   | $ | 156 |  |   | $ | 458 |  |
| Common stock repurchases                                       | (500 | ) |   | (476 | ) |   | (833 | ) |
| Dividends paid                                                 | (322 | ) |   | (303 | ) |   | (282 | ) |
| Debt borrowings, net                                           | 2,562 |  |   | 275 |  |   | 554 |  |
| Purchase of shares from noncontrolling ownership interest      | (173 | ) |   | (344 | ) |   | — |  |
| Payment of contingent consideration                            | — |  |   | (128 | ) |   | — |  |
| Other, net                                                     | (38 | ) |   | (7 | ) |   | (154 | ) |
| Net cash provided by (used in) financing activities            | $ | 1,692 |  |   | $ | (827 | ) |   | $ | (257 | ) |

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                 | Payments Due by Period |
|                                 |   | Less than | 1-3 | 3-5 | More than |
|                                 | Total | 1 Year | Years | Years | 5 Years |
| Contractual obligations related to   |   |   |   |   |   |
| off-balance sheet arrangements:      |   |   |   |   |   |
|  Operating lease obligations    | $ | 190 |  | $ | 53 |  | $ | 62 |  | $ | 43 |  | $ | 32 |  |
|  Purchase obligations (a)       | 429 |  | 373 |  | 37 |  | 19 |  | — |  |
|    Total              | $ | 619 |  | $ | 426 |  | $ | 99 |  | $ | 62 |  | $ | 32 |  |
|                                 |   |   |   |   |   |
| Contractual obligations reflected    |   |   |   |   |   |
| in the balance sheet:                |   |   |   |   |   |
|  Long-term debt obligations (b) | $ | 7,463 |  | $ | 750 |  | $ | 1,025 |  | $ | 2,550 |  | $ | 3,138 |  |
|  Contingent consideration (c)   | 151 |  | 118 |  | 25 |  | 8 |  | — |  |
|  Uncertain tax positions (d)    | 150 |  | 150 |  | — |  | — |  | — |  |
|    Total              | $ | 7,764 |  | $ | 1,018 |  | $ | 1,050 |  | $ | 2,558 |  | $ | 3,138 |  |
|                                 |   |   |   |   |   |
| Grand Total (e)                      | $ | 8,383 |  | $ | 1,444 |  | $ | 1,149 |  | $ | 2,620 |  | $ | 3,170 |  |

|        |
|--------|
|        |  |  |  |
|   | (a) |   | These amounts include commitments for inventory purchases and capital expenditures that do not exceed our projected requirements and are in the normal course of business. The purchase commitment amounts do not represent the entire anticipated purchases and capital expenditures in the future, but only those for which we are contractually obligated (enforceable and legally binding with all significant terms). |

----

|        |
|--------|
|        |  |  |  |
|   | (b) |   | Includes scheduled maturities of long-term debt and scheduled interest payments. See Note 4 to the Consolidated Financial Statements within Item 8. "Financial Statements and Supplementary Data" for additional information on our debt obligations. Based on our anticipated future liquidity, we may make payments on our long-term debt in advance of our scheduled maturities. |

|        |
|--------|
|        |  |  |  |
|   | (c) |   | Generally, these amounts include our contingent consideration payments related to certain of our acquisitions. In connection with these acquisitions, we may have agreed, or companies that we acquired may have previously agreed, to provide additional consideration payments upon the achievement of certain product development milestones, which may include but are not limited to successful levels of achievement in clinical trials and certain product regulatory approvals. We may also provide for additional consideration payments to be made upon the achievement of certain levels of future product sales. While it is not certain if and/or when these payments will be made, we have included the current fair values of payments in the table based on our best estimates of the dates when we expect the milestones and/or contingencies will be met. |

|        |
|--------|
|        |  |  |  |
|   | (d) |   | The table includes the current portion of the liability for uncertain tax positions, which is expected to be paid in the next 12 months. The table does not include our noncurrent liability for uncertain tax positions of $208 million or our related accrual for gross interest and penalties of $38 million as of January 2, 2016, as we are uncertain as to if or when such amounts may be paid. |
|   |   |   |   |
|   | (e) |   | The table does not include other liabilities of $302 million pertaining to non-qualified deferred compensation because the timing of the future cash payments is uncertain. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | timing and amount of revenue and future cash flows, which often depend on estimates of relevant market sizes, expected market growth rates, trends in technology (including the impacts of anticipated product introductions by competitors, legal agreements and patent litigation), the expected useful lives of acquired technologies and the expected completion date of IPR&D projects; |

|         |                                                                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | expected costs to develop the IPR&D projects into commercially viable products, which include the stage of completion, the complexity of the work to complete, the contribution of core technologies and other acquired assets and the required clinical investment to obtain regulatory approval; |

|         |                                                                          |
|---------|--------------------------------------------------------------------------|
| • | the discount rate reflecting the risk inherent in future cash flows; and |

|         |                                                                               |
|---------|-------------------------------------------------------------------------------|
| • | perpetual growth rate used to calculate the terminal value, where applicable. |

----

----

|    |
|----|
|    |  |  |
| 1. |   | Competition, including product introductions by competitors that have advanced technology, better features or lower pricing. |
| 2. |   | Consolidation and other healthcare industry changes leading to demands for price concessions and/or limitations on, or the elimination of, our ability to sell in significant market segments. |
| 3. |   | Changes in laws, regulations or administrative practices affecting government regulation of our products, such as FDA regulations, including those that decrease the probability or increase the time and/or expense of obtaining approval for products or impose additional burdens on the manufacture and sale of medical devices. |

----

|     |
|-----|
|     |  |  |
| 4.  |   | Governmental legislation, including the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, and/or regulation that significantly impacts the healthcare system in the United States or in international markets and that results in lower reimbursement for procedures using our products or denies coverage for such procedures, reduces medical procedure volumes or otherwise adversely affects our business and results of operations, including the imposition of any medical device excise tax. |
| 5.  |   | Any changes to the U.S. Medicare or Medicaid systems or international reimbursement systems that significantly reduces reimbursement for procedures using our medical devices or denies coverage for such procedures, as well as adverse decisions relating to our products by administrators of such systems on coverage or reimbursement issues. |
| 6.  |   | Adverse developments in investigations and governmental proceedings. |
| 7.  |   | Changes in accounting rules or tax laws that adversely affect our results of operations, financial position or cash flows. |
| 8.  |   | Risks associated with our substantial international operations, including economic and political instability, currency fluctuations, changes in customs, tariffs and other trade restrictions and compliance with foreign laws. |
| 9.  |   | Disruptions in the financial markets or changes in economic conditions, including interest rates, inflation rates and exchange rates, that adversely impact the availability and cost of credit and customer purchasing and payment patterns, including the collectability of customer accounts receivable. |
| 10. |   | Our inability to realize the expected benefits from our restructuring initiatives and continuous improvement efforts and the negative unintended consequences such activity could have. |
| 11. |   | Our inability to maintain, protect and enhance our information and manufacturing systems and our products that incorporate information technology or to develop new systems and products as well as risks to the privacy and security of customer, patient, third-party payor, employee, supplier or company information from continually evolving cybersecurity threats. |
| 12. |   | Inability to successfully integrate the businesses that we have acquired in recent years, including our recent acquisition of Thoratec, and that we plan to acquire. |
| 13. |   | The substantial additional indebtedness we incurred to finance the Thoratec acquisition, which may decrease our business flexibility and increase our borrowing costs. |
| 14. |   | A reduction in the number of procedures using our devices caused by cost-containment pressures, publication of adverse study results, initiation of investigations of our customers related to our devices or the development of or preferences for alternative technologies or therapies. |
| 15. |   | Safety, performance or efficacy concerns about our products, many of which are expected to be implanted for many years, some of which may lead to recalls and/or advisories with the attendant expenses and declining sales. |
| 16. |   | Failure to successfully complete, or unfavorable data from, clinical trials for our products or new indications for our products and/or failure to successfully develop markets for such new indications. |
| 17. |   | Assertion, acquisition or grant of key patents by or to others that have the effect of excluding us from market segments or requiring us to pay royalties. |
| 18. |   | Declining industry-wide sales caused by product quality issues or recalls or advisories by us or our competitors that result in loss of physician and/or patient confidence in the safety, performance or efficacy of sophisticated medical devices in general and/or the types of medical devices recalled in particular. |
| 19. |   | Adverse developments in litigation, including product liability litigation, patent or other intellectual property litigation, qui tam litigation or shareholder litigation. |
| 20. |   | The loss of, or price increases by, suppliers of key components, some of which are sole-sourced. |
| 21. |   | Regulatory actions arising from concern over Bovine Spongiform Encephalopathy, sometimes referred to as “mad cow disease,” that have the effect of limiting our ability to market products using bovine collagen, such as Angio-Seal™, or products using bovine pericardial material, such as our Biocor®, Epic™, Trifecta™ and Portico™ tissue heart valves or that impose added costs on the procurement of bovine collagen or bovine pericardial material. |
| 22. |   | Conditions imposed in resolving, or any inability to timely resolve, any regulatory issues raised by the FDA, including Form 483 observations or warning letters, as well as risks generally associated with our health, safety and environmental regulatory compliance and quality systems. |
| 23. |   | Our ability to fund future product liability losses related to claims made subsequent to becoming self-insured. |

----

|     |
|-----|
|     |  |  |
| 24. |   | Severe weather or other natural disasters that can adversely impact customer purchasing patterns and/or patient implant procedures or cause damage to the facilities of our critical suppliers or one or more of our facilities, such as an earthquake affecting our facilities in California, Puerto Rico and Costa Rica or a hurricane affecting our facilities in Puerto Rico and Malaysia. |

----

|          |
|----------|
|          |  |
|     |   |
| Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |
|                                                           | Hypothetical | Hypothetical |
| Change in:                                                     | +1 percentage point | -1 percentage point |
| Estimated fair value of debt obligations as of January 2, 2016 | $ | (230 | ) | $ | 260 |  |
| Estimated 2016 interest expense                                | 26 |  | (24 | ) |

----

----

|         |
|---------|
|         |  |
|    |   |
| Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |

----

----

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                              | January 2, 2016 |   | January 3, 2015 |   | December 28, 2013 |
| Net sales                                                      | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |
| Cost of sales:                                                 |   |  |   |   |  |   |   |
| Cost of sales before special charges                           | 1,706 |  |   | 1,597 |  |   | 1,529 |  |
| Special charges                                                | 39 |  |   | 56 |  |   | 45 |  |
| Total cost of sales                                            | 1,745 |  |   | 1,653 |  |   | 1,574 |  |
| Gross profit                                                   | 3,796 |  |   | 3,969 |  |   | 3,927 |  |
| Selling, general and administrative expense                    | 1,878 |  |   | 1,856 |  |   | 1,805 |  |
| Research and development expense                               | 676 |  |   | 692 |  |   | 691 |  |
| Amortization of intangible assets                              | 116 |  |   | 89 |  |   | 79 |  |
| Special charges                                                | 96 |  |   | 181 |  |   | 301 |  |
| Operating profit                                               | 1,030 |  |   | 1,151 |  |   | 1,051 |  |
| Interest income                                                | (3 | ) |   | (5 | ) |   | (5 | ) |
| Interest expense                                               | 103 |  |   | 85 |  |   | 81 |  |
| Other (income) expense                                         | 2 |  |   | 3 |  |   | 191 |  |
|      Other expense, net               | 102 |  |   | 83 |  |   | 267 |  |
| Earnings before income taxes and noncontrolling interest       | 928 |  |   | 1,068 |  |   | 784 |  |
| Income tax expense                                             | 62 |  |   | 113 |  |   | 92 |  |
| Net earnings before noncontrolling interest                    | 866 |  |   | 955 |  |   | 692 |  |
| Less: Net loss attributable to noncontrolling interest         | (14 | ) |   | (47 | ) |   | (31 | ) |
| Net earnings attributable to St. Jude Medical, Inc.            | $ | 880 |  |   | $ | 1,002 |  |   | $ | 723 |  |
| Net earnings per share attributable to St. Jude Medical, Inc.: |   |   |  |   |   |
| Basic                                                          | $ | 3.11 |  |   | $ | 3.52 |  |   | $ | 2.52 |  |
| Diluted                                                        | $ | 3.07 |  |   | $ | 3.46 |  |   | $ | 2.49 |  |
| Cash dividends declared per share:                             | $ | 1.16 |  |   | $ | 1.08 |  |   | $ | 1.00 |  |
| Weighted average shares outstanding:                           |   |  |   |   |  |   |   |
| Basic                                                          | 282.2 |  |   | 285.0 |  |   | 287.0 |  |
| Diluted                                                        | 286.3 |  |   | 289.7 |  |   | 290.6 |  |

----

|                                                                                                                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                   |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                                                                                                                 | January 2, 2016 |   | January 3, 2015 |   | December 28, 2013 |
| Net earnings before noncontrolling interest                                                                                                       | $ | 866 |  |   | $ | 955 |  |   | $ | 692 |  |
| Other comprehensive income (loss), net of tax:                                                                                                    |   |  |   |   |  |   |   |
| Unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of $7 million, $4 million and $3 million, respectively      | (12 | ) |   | (2 | ) |   | (3 | ) |
| Unrealized gain (loss) on derivative financial instruments, net of tax (expense) benefit of ($6 million), $0 million and $0 million, respectively | 8 |  |   | — |  |   | 3 |  |
| Foreign currency translation adjustment                                                                                                           | (168 | ) |   | (217 | ) |   | — |  |
| Other comprehensive income (loss)                                                                                                                 | (172 | ) |   | (219 | ) |   | — |  |
| Total comprehensive income before noncontrolling interest                                                                                         | 694 |  |   | 736 |  |   | 692 |  |
| Total comprehensive loss attributable to noncontrolling interest                                                                                  | (14 | ) |   | (47 | ) |   | (31 | ) |
| Total comprehensive income attributable to St. Jude Medical, Inc.                                                                                 | $ | 708 |  |   | $ | 783 |  |   | $ | 723 |  |

----

|                                                                                                                                        |
|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                        |  |  |  |  |  |  |  |
|                                                                                                                                   | January 2, 2016 |   | January 3, 2015 |
| ASSETS                                                                                                                                 |   |  |   |   |  |
| Current Assets                                                                                                                         |   |  |   |   |  |
| Cash and cash equivalents                                                                                                              | $ | 667 |  |   | $ | 1,442 |  |
| Accounts receivable, less allowance for doubtful accounts of $46 million and $53 million, respectively                                 | 1,237 |  |   | 1,215 |  |
| Inventories                                                                                                                            | 909 |  |   | 784 |  |
| Deferred income taxes                                                                                                                  | 264 |  |   | 291 |  |
| Other current assets                                                                                                                   | 188 |  |   | 168 |  |
| Total current assets                                                                                                                   | 3,265 |  |   | 3,900 |  |
| Property, Plant and Equipment                                                                                                          |   |   |   |
| Land, building and improvements                                                                                                        | 729 |  |   | 709 |  |
| Machinery and equipment                                                                                                                | 1,597 |  |   | 1,616 |  |
| Diagnostic equipment                                                                                                                   | 441 |  |   | 450 |  |
| Property, plant and equipment, at cost                                                                                                 | 2,767 |  |   | 2,775 |  |
| Less: Accumulated depreciation                                                                                                         | (1,447 | ) |   | (1,432 | ) |
| Net property, plant and equipment                                                                                                      | 1,320 |  |   | 1,343 |  |
| Goodwill                                                                                                                               | 5,651 |  |   | 3,532 |  |
| Intangible assets, net                                                                                                                 | 2,226 |  |   | 851 |  |
| Deferred income taxes                                                                                                                  | 132 |  |   | 113 |  |
| Other assets                                                                                                                           | 470 |  |   | 454 |  |
| TOTAL ASSETS                                                                                                                           | $ | 13,064 |  |   | $ | 10,193 |  |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                             |   |  |   |   |  |
| Current Liabilities                                                                                                                    |   |  |   |   |  |
| Current debt obligations                                                                                                               | $ | 1,163 |  |   | $ | 1,593 |  |
| Accounts payable                                                                                                                       | 201 |  |   | 151 |  |
| Dividends payable                                                                                                                      | 82 |  |   | 77 |  |
| Income taxes payable                                                                                                                   | 201 |  |   | 60 |  |
| Employee compensation and related benefits                                                                                             | 309 |  |   | 292 |  |
| Other current liabilities                                                                                                              | 517 |  |   | 493 |  |
| Total current liabilities                                                                                                              | 2,473 |  |   | 2,666 |  |
| Long-term debt                                                                                                                         | 5,229 |  |   | 2,259 |  |
| Deferred income taxes                                                                                                                  | 738 |  |   | 240 |  |
| Other liabilities                                                                                                                      | 582 |  |   | 784 |  |
| Total liabilities                                                                                                                      | 9,022 |  |   | 5,949 |  |
| Commitments and Contingencies (Note 5)                                                                                                 | — |  |   | — |  |
| Shareholders’ Equity                                                                                                             |   |  |   |   |  |
| Preferred stock ($1.00 par value; 25,000,000 shares authorized; none outstanding)                                                      | — |  |   | — |  |
| Common stock ($0.10 par value; 500,000,000 shares authorized; 283,450,374 and 286,659,901 shares issued and outstanding, respectively) | 28 |  |   | 29 |  |
| Additional paid-in capital                                                                                                             | 148 |  |   | 118 |  |
| Retained earnings                                                                                                                      | 4,211 |  |   | 4,225 |  |
| Accumulated other comprehensive income (loss)                                                                                          | (345 | ) |   | (173 | ) |
| Total shareholders' equity before noncontrolling interest                                                                              | 4,042 |  |   | 4,199 |  |
| Noncontrolling interest                                                                                                                | — |  |   | 45 |  |
| Total shareholders' equity                                                                                                             | 4,042 |  |   | 4,244 |  |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                       | $ | 13,064 |  |   | $ | 10,193 |  |

----

|                                                                           |
|---------------------------------------------------------------------------|
|                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                      |   |   |   | Accumulated |   |   |
|                                                                      | Common Stock | Additional |   | Other | Non- | Total |
|                                                                      | Number of |   | Paid-In | Retained | Comprehensive | controlling | Shareholders' |
|                                                                      | Shares | Amount | Capital | Earnings | Income (Loss) | Interest | Equity |
| Balance as of December 29, 2012                                           | 295,648,327 |  | $ | 30 |  | $ | — |  | $ | 4,018 |  | $ | 46 |  | $ | — |  | $ | 4,094 |  |
| Net earnings                                                              |   |   |   | 723 |  |   | (31 | ) | 692 |  |
| Other comprehensive income (loss)                                         |   |   |   |   | — |  | — |  | — |  |
| Cash dividends declared                                                   |   |   |   | (286 | ) |   |   | (286 | ) |
| Repurchases of common stock                                               | (18,385,436 | ) | (2 | ) | (287 | ) | (519 | ) |   |   | (808 | ) |
| Stock-based compensation                                                  |   |   | 65 |  |   |   |   | 65 |  |
| Common stock issued under employee stock plans and other, net             | 11,854,461 |  | 1 |  | 442 |  |   |   |   | 443 |  |
| Additions in noncontrolling ownership interests                           |   |   |  |   |   | 204 |  | 204 |  |
| Balance as of December 28, 2013                                           | 289,117,352 |  | 29 |  | 220 |  | 3,936 |  | 46 |  | 173 |  | 4,404 |  |
| Net earnings                                                              |   |   |   | 1,002 |  |   | (47 | ) | 955 |  |
| Other comprehensive income (loss)                                         |   |   |   |   | (219 | ) | — |  | (219 | ) |
| Cash dividends declared                                                   |   |   |   | (309 | ) |   |   | (309 | ) |
| Repurchases of common stock                                               | (6,670,817 | ) | (1 | ) | (247 | ) | (186 | ) |   |   | (434 | ) |
| Stock-based compensation                                                  |   |   | 69 |  |   |   | 2 |  | 71 |  |
| Common stock issued under employee stock plans and other, net             | 4,213,366 |  | 1 |  | 134 |  |   |   |   | 135 |  |
| Tax benefit from stock plans                                              |   |   | 21 |  |   |   |   | 21 |  |
| Measurement period fair value adjustment to noncontrolling interest       |   |   |   |   |   | (36 | ) | (36 | ) |
| Purchase of shares from noncontrolling ownership interest                 |   |   | (79 | ) | (218 | ) |   | (47 | ) | (344 | ) |
| Balance as of January 3, 2015                                             | 286,659,901 |  | 29 |  | 118 |  | 4,225 |  | (173 | ) | 45 |  | 4,244 |  |
| Net earnings                                                              |   |   |   | 880 |  |   | (14 | ) | 866 |  |
| Other comprehensive income (loss)                                         |   |   |   |   | (172 | ) | — |  | (172 | ) |
| Cash dividends declared                                                   |   |   |   | (328 | ) |   |   | (328 | ) |
| Repurchases of common stock                                               | (7,467,660 | ) | (1 | ) | (168 | ) | (331 | ) |   |   | (500 | ) |
| Stock-based compensation                                                  |   |   | 84 |  |   |   | 2 |  | 86 |  |
| Common stock issued under employee stock plans and other, net             | 4,258,133 |  | — |  | 139 |  |   |   |   | 139 |  |
| Fair value of replacement equity awards exchanged in business combination |   |   | 17 |  |   |   |   | 17 |  |
| Tax benefit from stock plans                                              |   |   | 20 |  |   |   |   | 20 |  |
| Purchase of shares from noncontrolling ownership interest                 |   |   | (62 | ) | (235 | ) |   | (33 | ) | (330 | ) |
| Balance as of January 2, 2016                                             | 283,450,374 |  | $ | 28 |  | $ | 148 |  | $ | 4,211 |  | $ | (345 | ) | $ | — |  | $ | 4,042 |  |

----

|                                                                                                             |
|-------------------------------------------------------------------------------------------------------------|
|                                                                                                             |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                                                                           | January 2, 2016 |   | January 3, 2015 |   | December 28, 2013 |
| OPERATING ACTIVITIES                                                                                        |   |  |   |   |  |   |   |
| Net earnings before noncontrolling interest                                                                 | $ | 866 |  |   | $ | 955 |  |   | $ | 692 |  |
| Adjustments to reconcile net earnings before noncontrolling interest to net cash from operating activities: |   |  |   |   |  |   |   |
| Depreciation of property, plant and equipment                                                               | 218 |  |   | 221 |  |   | 218 |  |
| Amortization of intangible assets                                                                           | 116 |  |   | 89 |  |   | 79 |  |
| Amortization of debt premium, discounts and debt issue costs                                                | (2 | ) |   | (5 | ) |   | (6 | ) |
| Inventory step-up amortization                                                                              | 30 |  |   | 5 |  |   | 4 |  |
| Contingent consideration fair value adjustments                                                             | (87 | ) |   | 22 |  |   | 1 |  |
| Payment of contingent consideration                                                                         | — |  |   | (27 | ) |   | — |  |
| Stock-based compensation                                                                                    | 160 |  |   | 71 |  |   | 65 |  |
| Cash settlement of accelerated equity awards                                                                | (74 | ) |   | — |  |   | — |  |
| Excess tax benefits from stock issued under employee stock plans                                            | (24 | ) |   | (21 | ) |   | (15 | ) |
| Gain on sale of investments                                                                                 | (22 | ) |   | (3 | ) |   | (13 | ) |
| Loss on retirement of long-term debt                                                                        | — |  |   | — |  |   | 161 |  |
| Deferred income taxes                                                                                       | (37 | ) |   | (87 | ) |   | (124 | ) |
| Other, net                                                                                                  | 30 |  |   | 84 |  |   | 75 |  |
| Changes in operating assets and liabilities, net of business combinations:                                  |   |  |   |   |  |   |   |
| Accounts receivable                                                                                         | (39 | ) |   | 112 |  |   | (100 | ) |
| Inventories                                                                                                 | (39 | ) |   | (102 | ) |   | (99 | ) |
| Other current and noncurrent assets                                                                         | (4 | ) |   | (70 | ) |   | 13 |  |
| Accounts payable and accrued expenses                                                                       | (25 | ) |   | (60 | ) |   | 31 |  |
| Income taxes payable                                                                                        | (28 | ) |   | 120 |  |   | (21 | ) |
| Net cash provided by operating activities                                                                   | 1,039 |  |   | 1,304 |  |   | 961 |  |
| INVESTING ACTIVITIES                                                                                        |   |  |   |   |  |   |   |
| Purchases of property, plant and equipment                                                                  | (186 | ) |   | (190 | ) |   | (222 | ) |
| Business combination payments, net of cash acquired                                                         | (3,252 | ) |   | (147 | ) |   | (292 | ) |
| Proceeds from sale of investments                                                                           | 30 |  |   | 7 |  |   | 10 |  |
| Other investing activities, net                                                                             | (37 | ) |   | (9 | ) |   | (18 | ) |
| Net cash used in investing activities                                                                       | (3,445 | ) |   | (339 | ) |   | (522 | ) |
| FINANCING ACTIVITIES                                                                                        |   |  |   |   |  |   |   |
| Proceeds from exercise of stock options and stock issued, net                                               | 139 |  |   | 135 |  |   | 443 |  |
| Excess tax benefits from stock issued under employee stock plans                                            | 24 |  |   | 21 |  |   | 15 |  |
| Common stock repurchased, including related costs                                                           | (500 | ) |   | (476 | ) |   | (833 | ) |
| Dividends paid                                                                                              | (322 | ) |   | (303 | ) |   | (282 | ) |
| Issuances (payments) of commercial paper borrowings, net                                                    | (285 | ) |   | 75 |  |   | 121 |  |
| Proceeds from debt                                                                                          | 3,772 |  |   | 250 |  |   | 2,092 |  |
| Payments of debt                                                                                            | (925 | ) |   | (50 | ) |   | (1,659 | ) |
| Payments of debt issue costs and commitment fees                                                            | (33 | ) |   | — |  |   | (17 | ) |
| Purchase of shares from noncontrolling ownership interest                                                   | (173 | ) |   | (344 | ) |   | — |  |
| Payment of contingent consideration                                                                         | — |  |   | (128 | ) |   | — |  |
| Other financing activities, net                                                                             | (5 | ) |   | (7 | ) |   | (137 | ) |
| Net cash provided by (used in) financing activities                                                         | 1,692 |  |   | (827 | ) |   | (257 | ) |
| Effect of currency exchange rate changes on cash and cash equivalents                                       | (61 | ) |   | (69 | ) |   | (3 | ) |
| Net increase (decrease) in cash and cash equivalents                                                        | (775 | ) |   | 69 |  |   | 179 |  |
| Cash and cash equivalents at beginning of period                                                            | 1,442 |  |   | 1,373 |  |   | 1,194 |  |
| Cash and cash equivalents at end of period                                                                  | $ | 667 |  |   | $ | 1,442 |  |   | $ | 1,373 |  |
|                                                                                                        |   |   |   |   |   |
| Supplemental Cash Flow Information                                                                          |   |   |   |   |   |
| Cash paid during the year for:                                                                              |   |   |   |   |   |
|    Income taxes                                                                              | $ | 133 |  |   | $ | 140 |  |   | $ | 246 |  |
|    Interest                                                                                  | $ | 91 |  |   | $ | 85 |  |   | $ | 95 |  |
| Noncash investing and financing activities:                                                                 |   |   |   |   |   |
|    Additions in noncontrolling ownership interests                                           | $ | — |  |   | $ | (36 | ) |   | $ | 204 |  |
|    Fair value of acquisition contingent consideration                                        | $ | 155 |  |   | $ | — |  |   | $ | 188 |  |
|    Fair value of equity awards exchanged in business combination                             | $ | 35 |  |   | $ | — |  |   | $ | — |  |

----

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |
|                    | January 2, 2016 |   | January 3, 2015 |
| Adjusted cost           | $ | 5 |  |   | $ | 6 |  |
| Gross unrealized gains  | 6 |  |   | 24 |  |
| Gross unrealized losses | (1 | ) |   | — |  |
| Fair value              | $ | 10 |  |   | $ | 30 |  |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |
|                                | January 2, 2016 |   | January 3, 2015 |
| Finished goods                      | $ | 609 |  |   | $ | 543 |  |
| Work in process                     | 102 |  |   | 77 |  |
| Raw materials                       | 198 |  |   | 164 |  |
|     Inventories | $ | 909 |  |   | $ | 784 |  |

----

|         |                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| • | Level 1 – Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities. |

|         |                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 – Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. |

----

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |
|                                         | 2015 |   | 2014 |
| Balance at beginning of period               | $ | 35 |  |   | $ | 37 |  |
| Assumed from Thoratec Corporation (Thoratec) | 7 |  |   | — |  |
| Warranty (benefit) expense recognized        | (4 | ) |   | 3 |  |
| Warranty credits issued                      | (7 | ) |   | (5 | ) |
| Balance at end of period                     | $ | 31 |  |   | $ | 35 |  |

----

|         |                                                                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Expected Term: The Company analyzes historical employee exercise and termination data to estimate the expected term assumption.  Annually, the Company updates these assumptions unless circumstances would indicate a more frequent update is necessary. |

|         |                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Risk-free Interest Rate: The rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity equal to or approximating the expected term of the options. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Volatility: The Company calculates its expected volatility assumption by weighting historical and implied volatilities. The historical volatility is based on the daily closing prices of the Company's common stock over a period equal to the expected term of the option. Market-based implied volatility is based on utilizing market data of actively traded options on the Company's stock, from options at- or near-the-money, at a point in time as close to the grant date of the employee options as reasonably practical and with similar terms to the employee share option, or a remaining maturity of at least six months if no similar terms are available. The historical volatility of the Company's common stock price over the expected term of the option is a strong indicator of the expected future volatility. In addition, implied volatility takes into consideration market expectations of how future volatility will differ from historical volatility. The Company does not believe that one estimate is more reliable than the other, and as a result, the Company uses an equal weighting of historical volatility and market-based implied volatility. |

|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | Dividend Yield: The Company's dividend yield assumption is based on the expected annual dividend yield on the grant date. |

----

----

|                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                          |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                     | 2015 |   | 2014 |   | 2013 |
| Numerator:                                                                                                               |   |   |   |   |   |  |
| Net earnings attributable to St. Jude Medical, Inc.                                                                      | $ | 880 |  |   | $ | 1,002 |  |   | $ | 723 |  |
| Denominator:                                                                                                             |   |   |   |   |   |  |
| Basic weighted average shares outstanding                                                                                | 282.2 |  |   | 285.0 |  |   | 287.0 |  |
|   Dilution associated with stock-based compensation plans                                                      | 4.1 |  |   | 4.7 |  |   | 3.6 |  |
| Diluted weighted average shares outstanding                                                                              | 286.3 |  |   | 289.7 |  |   | 290.6 |  |
| Basic net earnings per share attributable to St. Jude Medical, Inc.                                                      | $ | 3.11 |  |   | $ | 3.52 |  |   | $ | 2.52 |  |
| Diluted net earnings per share attributable to St. Jude Medical, Inc.                                                    | $ | 3.07 |  |   | $ | 3.46 |  |   | $ | 2.49 |  |
| Anti-dilutive shares of common stock excluded from diluted net earnings per share attributable to St. Jude Medical, Inc. | 3.8 |  |   | 3.3 |  |   | 4.8 |  |

|                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                |  |  |  |  |  |  |
| Standard                                                                                                                                                                       |   | Description |   | Required adoption timing and approach |   | Impact of adoption or other significant matters |
| Standards recently adopted                                                                                                                                                     |   |   |   |   |
| Accounting Standards Update (ASU) No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs                          |   | The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. |   | Annual and interim periods beginning after December 15, 2015, with retrospective application required. Early adoption is permitted. |   | The Company early adopted this ASU as of January 2, 2016. The January 3, 2015, balances of other current assets and long-term debt were reduced by $14 million to conform to the current periods presentation. |
|                                                                                                                                                                           |   |   |   |   |   |   |
| ASU No. 2015-04, Compensation-Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets  |   | The standard permits entities to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply that practical expedient consistently from year to year. |   | Annual and interim periods beginning after December 15, 2015, with prospective application required. Early adoption is permitted. |   | The Company early adopted this ASU prospectively by using December 31 when it performed its measurements as of January 2, 2016. The adoption did not have a material impact on the Company’s results of operations or financial position. |
|                                                                                                                                                                           |   |   |   |   |   |   |
| ASU No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements |   | The standard adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015, Emerging Issues Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. |   | Not applicable. |   | The Company adopted this ASU concurrently with ASU No. 2015-03. The adoption did not have a material impact on the Company’s results of operations or financial position. |
|                                                                                                                                                                           |   |   |   |   |   |   |

----

|                                                                                                                                                                     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                     |  |  |  |  |  |  |
| ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments                                                   |   | The standard changes the manner in which an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period. It also includes certain presentation and disclosure requirements relating to such adjustments. |   | Annual and interim periods beginning after December 15, 2015, with prospective application required.  Early adoption is permitted. |   | The Company adopted this ASU in the quarter ended October 3, 2015. Since the Company did not have any measurement period adjustments relating to prior acquisitions during the 2015 period prior to the adoption, the adoption did not have a material impact on the Company’s results of operations or financial position. |
| Standards not yet adopted                                                                                                                                           |   |   |   |   |
| ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606)                                                                                                  |   | The standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance will supersede the current revenue recognition requirements. |   | See discussion of ASU No. 2015-14 regarding the adoption timing.  Either retrospective or modified retrospective application is permitted. |   | The Company plans to adopt this ASU for interim and annual periods beginning after December 15, 2017. The Company is evaluating its approach to the adoption and the potential impact to its results of operations and financial position. |
|                                                                                                                                                                |   |   |   |   |   |   |
| ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis                                                                           |   | The standard affects both the variable interest entity and voting interest entity consolidation models. |   | Annual and interim periods beginning after December 15, 2015, with either retrospective or modified retrospective application permitted. Early adoption is permitted. |   | The Company plans to adopt this ASU for annual and interim periods beginning after December 15, 2015 using the modified retrospective method. The Company does not expect the adoption of this ASU to have a material impact on the Company's results of operations or financial position. |
|                                                                                                                                                                |   |   |   |   |   |   |
| ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement |   | The standard provides guidance to customers about how to account for cloud computing arrangements when such arrangements include software licenses. |   | Annual and interim periods beginning after December 15, 2015, with either prospective or retrospective application permitted. Early adoption is permitted. |   | The Company plans to adopt this ASU for annual and interim periods beginning after December 15, 2015 using the prospective method. The Company does not expect the adoption of this ASU to have a material impact on the Company's results of operations or financial position. |
|                                                                                                                                                                |   |   |   |   |   |   |
| ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory                                                                               |   | The standard requires that inventory within the scope of the guidance be measured at the lower of cost or net realizable value. |   | Annual and interim periods beginning after December 15, 2016, with prospective application required. Early adoption is permitted. |   | The Company plans to adopt this ASU for annual and interim periods beginning after January 2, 2016 (the Company's first quarter of 2016). The Company does not expect the adoption of this ASU to have a material impact on the Company's results of operations or financial position. |
|                                                                                                                                                                |   |   |   |   |   |   |

----

|                                                                                                                                             |
|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                             |  |  |  |  |  |  |
| ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date                                          |   | The standard defers the effective date of ASU No. 2014-09 to annual and interim periods beginning after December 15, 2017. Early adoption is permitted only as of annual and interim reporting periods beginning after December 15, 2016. |   | Not applicable. |   | Not applicable. |
|                                                                                                                                        |   |   |   |   |
| ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes                                                   |   | The standard requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. |   | Annual and interim periods beginning after December 15, 2016, with either prospective or retrospective application permitted. Early adoption is permitted. |   | The Company plans to adopt this ASU for annual and interim periods beginning after January 2, 2016 (the Company's first quarter of 2016) using retrospective application. The Company is evaluating the potential impact to its financial position and currently expects to reclassify material amounts of deferred income tax balances from current to noncurrent. The adoption of this standard will not impact its results of operations. |
|                                                                                                                                        |   |   |   |   |   |   |
| ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities |   | Among other things, the standard requires certain equity investments to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable fair values, and eliminates certain disclosure requirements. |   | Annual and interim periods beginning after December 15, 2017. Early adoption of certain guidance is permitted. |   | The Company is evaluating the timing of adoption and the potential impact to its results of operations and financial position. |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Timing and amount of revenue and future cash flows, which often depend on estimates of relevant market sizes, expected market growth rates, trends in technology (including the impacts of anticipated product introductions by competitors, legal agreements and patent litigation), the expected useful lives of acquired technologies and the expected completion date of IPR&D projects; |

|         |                                                                                                                                                                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Expected costs to develop the IPR&D projects into commercially viable products, which include the stage of completion, the complexity of the work to complete, the contribution of core technologies and other acquired assets and the required clinical investment to obtain regulatory approval; |

|         |                                                                          |
|---------|--------------------------------------------------------------------------|
| • | The discount rate reflecting the risk inherent in future cash flows; and |

|         |                                                                               |
|---------|-------------------------------------------------------------------------------|
| • | Perpetual growth rate used to calculate the terminal value, where applicable. |

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |
|                                                          |   | Thoratec |
| Accounts receivable                                           |   | $ | 76 |  |
| Inventories                                                   |   | 150 |  |
| Other current and noncurrent assets                           |   | 44 |  |
| Property, plant and equipment                                 |   | 57 |  |
| Goodwill                                                      |   | 2,142 |  |
| Intangible assets                                             |   | 1,490 |  |
| Accounts payable                                              |   | (22 | ) |
| Other current and noncurrent liabilities                      |   | (69 | ) |
| Contingent consideration liabilities                          |   | (33 | ) |
| Deferred income tax assets/(liabilities)                      |   | (548 | ) |
| Net assets                                                    |   | $ | 3,287 |  |
|                                                          |   |   |
| Cash consideration paid to Thoratec shareholders              |   | $ | 3,484 |  |
| Cash consideration paid for vested Thoratec share awards      |   | 30 |  |
| Total cash paid                                               |   | $ | 3,514 |  |
| Less: cash acquired                                           |   | (262 | ) |
| Net cash consideration                                        |   | $ | 3,252 |  |
| Fair value of equity awards exchanged in business combination |   | 35 |  |
| Total purchase consideration                                  |   | $ | 3,287 |  |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |  |  |  |
| (unaudited)                                                   |   | 2015 |   | 2014 |
| Pro forma net sales                                           |   | $ | 5,919 |  |   | $ | 6,099 |  |
| Pro forma net earnings attributable to St. Jude Medical, Inc. |   | $ | 970 |  |   | $ | 767 |  |

----

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |
|                                     |   | NeuroTherm |
| Current assets                           |   | $ | 22 |  |
| Property, plant and equipment            |   | 2 |  |
| Goodwill                                 |   | 125 |  |
| Intangible assets                        |   | 89 |  |
| Current liabilities                      |   | (13 | ) |
| Deferred income tax assets/(liabilities) |   | (28 | ) |
| Long-term debt                           |   | (50 | ) |
| Net assets                               |   | $ | 147 |  |
|                                     |   |   |
| Cash paid                                |   | $ | 148 |  |
| Less: Cash acquired                      |   | (1 | ) |
| Net cash consideration                   |   | $ | 147 |  |

----

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                            |   | Endosense | Nanostim | Spinal Modulation | CardioMEMS |
| Cash and cash equivalents                                       |   | $ | — |  | $ | — |  | $ | 41 |  | $ | 33 |  |
| Current assets                                                  |   | 2 |  | 1 |  | 9 |  | 3 |  |
| Goodwill                                                        |   | 258 |  | 149 |  | 46 |  | 83 |  |
| In-process research and development (IPR&D)                 |   | 33 |  | 27 |  | 45 |  | 63 |  |
| Other intangible assets                                         |   | 20 |  | 34 |  | 7 |  | — |  |
| Other assets                                                    |   | 1 |  | 1 |  | 1 |  | 2 |  |
| Current liabilities                                             |   | (11 | ) | (2 | ) | (6 | ) | (13 | ) |
| Deferred income tax assets/(liabilities)                        |   | — |  | — |  | (19 | ) | (23 | ) |
| Other liabilities                                               |   | — |  | — |  | — |  | (5 | ) |
| Net assets                                                      |   | $ | 303 |  | $ | 210 |  | $ | 124 |  | $ | 143 |  |
|                                                            |   |   |   |   |   |
| Cash paid                                                       |   | $ | 180 |  | $ | 124 |  | $ | — |  | $ | — |  |
| Less: Cash acquired                                             |   | (9 | ) | (3 | ) | — |  | — |  |
| Net cash consideration                                          |   | $ | 171 |  | $ | 121 |  | $ | — |  | $ | — |  |
| Contingent consideration                                        |   | 132 |  | 56 |  | — |  | — |  |
| Fair value of St. Jude Medical, Inc.'s previously held interest |   | — |  | 33 |  | — |  | 31 |  |
| Acquisition of controlling ownership interest                   |   | — |  | — |  | 40 |  | — |  |
| Debt financing                                                  |   | — |  | — |  | — |  | 28 |  |
| Additions in noncontrolling ownership interest                  |   | — |  | — |  | 84 |  | 84 |  |
| Total purchase consideration                                    |   | $ | 303 |  | $ | 210 |  | $ | 124 |  | $ | 143 |  |

----

|                                        |
|----------------------------------------|
|                                        |  |  |  |
| Balance as of December 28, 2013        | $ | 3,524 |  |
| NeuroTherm                             | 125 |  |
| Spinal Modulation                      | (36 | ) |
| Foreign currency translation and other | (81 | ) |
| Balance as of January 3, 2015          | 3,532 |  |
| Thoratec                               | 2,142 |  |
| Foreign currency translation and other | (23 | ) |
| Balance as of January 2, 2016          | $ | 5,651 |  |

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | January 2, 2016 |   | January 3, 2015 |
|                                        | GrossCarryingAmount |   | AccumulatedAmortization |   | GrossCarryingAmount |   | AccumulatedAmortization |
| Definite-lived intangible assets:           |   |  |   |   |  |   |   |  |   |   |  |
| Purchased technology and patents            | $ | 1,840 |  |   | $ | 578 |  |   | $ | 1,162 |  |   | $ | 473 |  |
| Trademarks and tradenames                   | 115 |  |   | 16 |  |   | 22 |  |   | 13 |  |
| Customer lists and relationships            | 21 |  |   | 16 |  |   | 19 |  |   | 14 |  |
| Licenses, distribution agreements and other | 6 |  |   | 2 |  |   | 7 |  |   | 2 |  |
|                                        | $ | 1,982 |  |   | $ | 612 |  |   | $ | 1,210 |  |   | $ | 502 |  |
| Indefinite-lived intangible assets:         |   |  |   |   |  |   |   |  |   |   |  |
| Acquired IPR&D                          | $ | 829 |  |   |   |  |   | $ | 116 |  |   |   |  |
| Trademarks and tradenames                   | 27 |  |   |   |  |   | 27 |  |   |   |  |
|                                        | $ | 856 |  |   |   |  |   | $ | 143 |  |   |   |  |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             |   |   |   |   |   |   |   |   |   |   | After |
|                             | 2016 |   | 2017 |   | 2018 |   | 2019 |   | 2020 |   | 2020 |
|   Amortization expense | $ | 184 |  |   | $ | 222 |  |   | $ | 237 |  |   | $ | 231 |  |   | $ | 220 |  |   | $ | 1,105 |  |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |
|                                  | January 2, 2016 |   | January 3, 2015 |
| Term Loan Due June 2015               | $ | — |  |   | $ | 500 |  |
| Term Loan Due August 2015             | — |  |   | 250 |  |
| Term Loan Due 2020                    | 2,093 |  |   | — |  |
| 2016 Senior Notes                     | 500 |  |   | 505 |  |
| 2018 Senior Notes                     | 496 |  |   | — |  |
| 2020 Senior Notes                     | 496 |  |   | — |  |
| 2023 Senior Notes                     | 892 |  |   | 890 |  |
| 2025 Senior Notes                     | 494 |  |   | — |  |
| 2043 Senior Notes                     | 689 |  |   | 689 |  |
| Yen-denominated Senior Notes Due 2017 | 68 |  |   | 68 |  |
| Yen-denominated Senior Notes Due 2020 | 106 |  |   | 107 |  |
| Yen-denominated credit facilities     | 54 |  |   | 54 |  |
| Commercial paper borrowings           | 504 |  |   | 789 |  |
| Total debt                            | 6,392 |  |   | 3,852 |  |
| Less: current debt obligations        | 1,163 |  |   | 1,593 |  |
| Long-term debt                        | $ | 5,229 |  |   | $ | 2,259 |  |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              | 2016 | 2017 | 2018 | 2019 | 2020 | After 2020 |
| Future minimum principal payments | $ | 1,163 |  | $ | 172 |  | $ | 579 |  | $ | 210 |  | $ | 2,101 |  | $ | 2,206 |  |

----

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   |   |   |   |   |   |   |   |   |   | After |
|                                    | 2016 |   | 2017 |   | 2018 |   | 2019 |   | 2020 |   | 2020 |
| Future minimum operating lease payments | $ | 53 |  |   | $ | 36 |  |   | $ | 26 |  |   | $ | 22 |  |   | $ | 21 |  |   | $ | 32 |  |

----

----

----

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                             | Unrealized | Unrealized | Foreign | Accumulated |
|                                                                             | Gain (Loss) On | Gain (Loss) On | Currency | Other |
|                                                                             | Available-for-sale | Derivative | Translation | Comprehensive |
|                                                                             | Securities | Instruments | Adjustment | Income |
| Accumulated other comprehensive income (loss) as of December 29, 2012            | $ | 20 |  | $ | — |  | $ | 26 |  | $ | 46 |  |
| Other comprehensive income (loss) before reclassifications                       | 5 |  | 3 |  | — |  | 8 |  |
| Amounts reclassified to net earnings from accumulated other comprehensive income | (8 | ) | — |  | — |  | (8 | ) |
| Other comprehensive income (loss)                                                | (3 | ) | 3 |  | — |  | — |  |
| Accumulated other comprehensive income (loss) as of December 28, 2013            | 17 |  | 3 |  | 26 |  | 46 |  |
| Other comprehensive income (loss) before reclassifications                       | — |  | — |  | (217 | ) | (217 | ) |
| Amounts reclassified to net earnings from accumulated other comprehensive income | (2 | ) | — |  | — |  | (2 | ) |
| Other comprehensive income (loss)                                                | (2 | ) | — |  | (217 | ) | (219 | ) |
| Accumulated other comprehensive income (loss) as of January 3, 2015              | 15 |  | 3 |  | (191 | ) | (173 | ) |
| Other comprehensive income (loss) before reclassifications                       | 2 |  | 17 |  | (168 | ) | (149 | ) |
| Amounts reclassified to net earnings from accumulated other comprehensive income | (14 | ) | (9 | ) | — |  | (23 | ) |
| Other comprehensive income (loss)                                                | (12 | ) | 8 |  | (168 | ) | (172 | ) |
| Accumulated other comprehensive income (loss) as of January 2, 2016              | $ | 3 |  | $ | 11 |  | $ | (359 | ) | $ | (345 | ) |

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |
|                                                            | Amounts reclassified from accumulated other comprehensive income |
| Details about accumulated other comprehensive income components | 2015 | 2014 | 2013 | Statements of Earnings Classification |
| Unrealized (gain) loss on available-for-sale securities:        |   |
| (Gain) loss on sale of available-for-sale securities            | $ | (22 | ) | $ | (3 | ) | $ | (13 | ) | Other (income) expense |
| Tax effect                                                      | 8 |  | 1 |  | 5 |  | Income tax expense |
| Net of tax                                                      | $ | (14 | ) | $ | (2 | ) | $ | (8 | ) |   |
|                                                            |   |   |   |   |
| Unrealized (gain) loss on derivative financial instruments:     |   |
| (Gain) loss on derivative financial instruments                 | $ | (10 | ) | $ | — |  | $ | — |  | Cost of sales |
| Tax effect                                                      | 1 |  | — |  | — |  | Income tax expense |
| Net of tax                                                      | $ | (9 | ) | $ | — |  | $ | — |  |   |

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                         | 2015 |   | 2014 |   | 2013 |
| Cost of sales                                | $ | 6 |  |   | $ | 6 |  |   | $ | 5 |  |
| Selling, general and administrative expense  | 137 |  |   | 49 |  |   | 45 |  |
| Research and development expense             | 17 |  |   | 16 |  |   | 15 |  |
|   Stock-based compensation expense | $ | 160 |  |   | $ | 71 |  |   | $ | 65 |  |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |
|                                     | 2015 |   | 2014 |   | 2013 |
| Weighted average grant date fair values: |   |   |   |   |   |
|   Restricted stock awards      | $ | 71.77 |  |   | $ | 63.48 |  |   | $ | 42.26 |  |
|   Restricted stock units       | $ | 61.79 |  |   | $ | 69.08 |  |   | $ | 59.04 |  |
|   ESPP purchase rights         | $ | 16.91 |  |   | $ | 15.46 |  |   | $ | 13.06 |  |

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                | 2015 |   | 2014 |   | 2013 |
| Fair value of options granted       | $ | 12.54 |  |   | $ | 14.56 |  |   | $ | 13.83 |  |
| Assumptions:                        |   |   |   |   |   |
|   Expected term (years)   | 5.4 |  |   | 5.4 |  |   | 5.4 |  |
|   Risk-free interest rate | 1.7 | % |   | 1.7 | % |   | 1.6 | % |
|   Volatility              | 24.7 | % |   | 24.9 | % |   | 28.6 | % |
|   Dividend yield          | 1.8 | % |   | 1.6 | % |   | 1.8 | % |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |
|                              |   |   |   |   | Weighted |   |   |
|                              |   |   | Weighted |   | Average |   | Aggregate |
|                              |   |   | Average |   | Remaining |   | Intrinsic |
|                              | Options |   | Exercise |   | Contractual |   | Value |
|                              | (shares in millions) |   | Price |   | Term (in years) |   | (in millions) |
| Outstanding as of January 3, 2015 | 17.7 |  |   | $ | 44.70 |  |   |   |   |   |
|   Granted               | 2.7 |  |   | 61.76 |  |   |   |   |   |
|   Exercised             | (3.1 | ) |   | 39.06 |  |   |   |   |   |
|   Forfeited and expired | (0.5 | ) |   | 53.75 |  |   |   |   |   |
| Outstanding as of January 2, 2016 | 16.8 |  |   | $ | 48.22 |  |   | 4.9 |   | $ | 247 |  |
| Vested and expected to vest       | 16.1 |  |   | $ | 47.59 |  |   | 4.8 |   | $ | 245 |  |
| Exercisable as of January 2, 2016 | 10.3 |  |   | $ | 40.76 |  |   | 3.6 |   | $ | 221 |  |

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |
|                                   | Restricted Stock |   | Weighted Average |
|                                   | Units and Awards |   | Grant Date |
|                                   | (shares in millions) |   | Fair Value |
| Unvested balance as of January 3, 2015 | 1.5 |  |   | $ | 56.36 |  |
| Granted                                | 0.6 |  |   | 62.10 |  |
| Vested                                 | (0.5 | ) |   | 51.56 |  |
| Forfeited                              | (0.1 | ) |   | 57.30 |  |
| Unvested balance as of January 2, 2016 | 1.5 |  |   | $ | 60.65 |  |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at January 3, 2015    | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Cost of sales special charges | 9 |  |   | 1 |  |   | 1 |  |   | 1 |  |   | 12 |  |
| Special charges               | 22 |  |   | — |  |   | — |  |   | — |  |   | 22 |  |
| Non-cash charges used         | — |  |   | (1 | ) |   | (1 | ) |   | — |  |   | (2 | ) |
| Cash payments                 | (2 | ) |   | — |  |   | — |  |   | (1 | ) |   | (3 | ) |
| Balance at January 2, 2016    | $ | 29 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 29 |  |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at December 28, 2013  | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Cost of sales special charges | 7 |  |   | — |  |   | — |  |   | — |  |   | 7 |  |
| Special charges               | 12 |  |   | — |  |   | 5 |  |   | 8 |  |   | 25 |  |
| Non-cash charges used         | — |  |   | — |  |   | (5 | ) |   | — |  |   | (5 | ) |
| Cash payments                 | (5 | ) |   | — |  |   | — |  |   | (2 | ) |   | (7 | ) |
| Balance at January 3, 2015    | 14 |  |   | — |  |   | — |  |   | 6 |  |   | 20 |  |
| Cost of sales special charges | 4 |  |   | 3 |  |   | 15 |  |   | 7 |  |   | 29 |  |
| Special charges               | 20 |  |   | — |  |   | — |  |   | 29 |  |   | 49 |  |
| Non-cash charges used         | — |  |   | (3 | ) |   | (15 | ) |   | — |  |   | (18 | ) |
| Cash payments                 | (27 | ) |   | — |  |   | — |  |   | (35 | ) |   | (62 | ) |
| Foreign exchange rate impact  | — |  |   | — |  |   | — |  |   | (1 | ) |   | (1 | ) |
| Balance at January 2, 2016    | $ | 11 |  |   | $ | — |  |   | $ | — |  |   | $ | 6 |  |   | $ | 17 |  |

----

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at December 29, 2012  | $ | 58 |  |   | $ | — |  |   | $ | — |  |   | $ | 8 |  |   | $ | 66 |  |
| Cost of sales special charges | — |  |   | 30 |  |   | — |  |   | 5 |  |   | 35 |  |
| Special charges               | 75 |  |   | — |  |   | 13 |  |   | 97 |  |   | 185 |  |
| Non-cash charges used         | — |  |   | (30 | ) |   | (13 | ) |   | (4 | ) |   | (47 | ) |
| Cash payments                 | (79 | ) |   | — |  |   | — |  |   | (73 | ) |   | (152 | ) |
| Balance at December 28, 2013  | 54 |  |   | — |  |   | — |  |   | 33 |  |   | 87 |  |
| Cost of sales special charges | 8 |  |   | 8 |  |   | 13 |  |   | 1 |  |   | 30 |  |
| Special charges               | 36 |  |   | — |  |   | 7 |  |   | 35 |  |   | 78 |  |
| Non-cash charges used         | — |  |   | (8 | ) |   | (20 | ) |   | — |  |   | (28 | ) |
| Cash payments                 | (69 | ) |   | — |  |   | — |  |   | (56 | ) |   | (125 | ) |
| Foreign exchange rate impact  | (3 | ) |   | — |  |   | — |  |   | (1 | ) |   | (4 | ) |
| Balance at January 3, 2015    | 26 |  |   | — |  |   | — |  |   | 12 |  |   | 38 |  |
| Cost of sales special charges | 2 |  |   | 3 |  |   | — |  |   | — |  |   | 5 |  |
| Special charges               | 2 |  |   | — |  |   | 2 |  |   | 5 |  |   | 9 |  |
| Non-cash charges used         | — |  |   | (3 | ) |   | (2 | ) |   | — |  |   | (5 | ) |
| Cash payments                 | (25 | ) |   | — |  |   | — |  |   | (10 | ) |   | (35 | ) |
| Foreign exchange rate impact  | (2 | ) |   | — |  |   | — |  |   | — |  |   | (2 | ) |
| Balance at January 2, 2016    | $ | 3 |  |   | $ | — |  |   | $ | — |  |   | $ | 7 |  |   | $ | 10 |  |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                         | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at December 29, 2012 | $ | 25 |  |   | $ | — |  |   | $ | — |  |   | $ | 17 |  |   | $ | 42 |  |
| Special charges              | 5 |  |   | — |  |   | 1 |  |   | 18 |  |   | 24 |  |
| Non-cash charges used        | — |  |   | — |  |   | (1 | ) |   | — |  |   | (1 | ) |
| Cash payments                | (21 | ) |   | — |  |   | — |  |   | (29 | ) |   | (50 | ) |
| Balance at December 28, 2013 | 9 |  |   | — |  |   | — |  |   | 6 |  |   | 15 |  |
| Cash payments                | (9 | ) |   | — |  |   | — |  |   | (4 | ) |   | (13 | ) |
| Balance at January 3, 2015   | — |  |   | — |  |   | — |  |   | 2 |  |   | 2 |  |
| Special charges              | — |  |   | — |  |   | — |  |   | (1 | ) |   | (1 | ) |
| Cash payments                | — |  |   | — |  |   | — |  |   | (1 | ) |   | (1 | ) |
| Balance at January 2, 2016   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |
|                                                     | 2015 |   | 2014 |   | 2013 |
| U.S.                                                     | $ | (107 | ) |   | $ | 157 |  |   | $ | (17 | ) |
| International                                            | 1,035 |  |   | 911 |  |   | 801 |  |
| Earnings before income taxes and noncontrolling interest | $ | 928 |  |   | $ | 1,068 |  |   | $ | 784 |  |

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |
|                                              | 2015 |   | 2014 |   | 2013 |
| Current:                                          |   |   |   |   |   |
|   U.S. federal                          | $ | 41 |  |   | $ | 150 |  |   | $ | 101 |  |
|   U.S. state and other                  | 2 |  |   | 11 |  |   | 7 |  |
|   International                         | 56 |  |   | 39 |  |   | 108 |  |
|       Total current | 99 |  |   | 200 |  |   | 216 |  |
| Deferred                                          | (37 | ) |   | (87 | ) |   | (124 | ) |
| Income tax expense                                | $ | 62 |  |   | $ | 113 |  |   | $ | 92 |  |

----

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |
|                                                | 2015 |   | 2014 |
| Deferred income tax assets:                         |   |   |   |
| Net operating loss carryforwards                    | $ | 350 |  |   | $ | 415 |  |
| Tax credit carryforwards                            | 144 |  |   | 119 |  |
| Inventories                                         | 115 |  |   | 134 |  |
| Stock-based compensation                            | 56 |  |   | 46 |  |
| Compensation and benefits                           | 143 |  |   | 131 |  |
| R&D expenditures, capitalized for tax           | 80 |  |   | 92 |  |
| Accrued liabilities and other                       | 124 |  |   | 129 |  |
|                                                | 1,012 |  |   | 1,066 |  |
| Less: valuation allowance                           | (337 | ) |   | (400 | ) |
| Deferred income tax assets, net                     | 675 |  |   | 666 |  |
| Deferred income tax liabilities:                    |   |   |   |
| Unrealized gain on available-for-sale securities    | (1 | ) |   | (9 | ) |
| Unrealized gain on derivative financial instruments | (4 | ) |   | — |  |
| Property, plant and equipment                       | (166 | ) |   | (171 | ) |
| Intangible assets                                   | (853 | ) |   | (322 | ) |
| Deferred income tax liabilities                     | (1,024 | ) |   | (502 | ) |
| Net deferred income tax assets (liabilities)        | $ | (349 | ) |   | $ | 164 |  |

----

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |  |  |  |  |
|                                                | 2015 |   | 2014 |   | 2013 |
| U.S. federal statutory tax rate                     | 35.0 |  % |   | 35.0 |  % |   | 35.0 |  % |
| Increase (decrease) in tax rate resulting from:     |   |   |   |   |   |
| U.S. state income taxes, net of federal tax benefit | (0.1 | ) |   | 0.2 |  |   | 0.6 |  |
| International taxes at lower rates                  | (22.6 | ) |   | (19.6 | ) |   | (13.6 | ) |
| Tax benefits from domestic manufacturer's deduction | (1.0 | ) |   | (1.2 | ) |   | (1.9 | ) |
| Research and development credits                    | (2.7 | ) |   | (2.8 | ) |   | (4.6 | ) |
| Puerto Rico excise tax                              | (2.4 | ) |   | (1.7 | ) |   | (3.0 | ) |
| Reversal of excess tax accruals                     | (2.8 | ) |   | — |  |   | (1.9 | ) |
| Noncontrolling interest                             | 0.5 |  |   | 1.8 |  |   | 3.6 |  |
| Restructuring and acquisition-related items         | 3.0 |  |   | (0.3 | ) |   | — |  |
| Other                                               | (0.2 | ) |   | (0.8 | ) |   | (2.5 | ) |
| Effective income tax rate                           | 6.7 |  % |   | 10.6 |  % |   | 11.7 |  % |

|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |  |  |  |
|                                                                 | 2015 |   | 2014 |   | 2013 |
| Balance at beginning of year                                         | $ | 328 |  |   | $ | 315 |  |   | $ | 314 |  |
| Increases related to current year tax positions                      | 48 |  |   | 67 |  |   | 74 |  |
| Increases related to prior year tax positions                        | — |  |   | 6 |  |   | 33 |  |
| Increases related to positions assumed from Thoratec                 | 7 |  |   | — |  |   | — |  |
| Reductions related to prior year tax positions                       | (24 | ) |   | (27 | ) |   | (16 | ) |
| Reductions related to settlements / payments                         | (16 | ) |   | (27 | ) |   | (90 | ) |
| Expiration of the statute of limitations for the assessment of taxes | (5 | ) |   | (6 | ) |   | — |  |
| Balance at end of year                                               | $ | 338 |  |   | $ | 328 |  |   | $ | 315 |  |

----

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               | Balance SheetClassification | January 2, 2016 |   | Quoted PricesIn ActiveMarkets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(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 |  |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | Balance SheetClassification | January 3, 2015 |   | Quoted PricesIn ActiveMarkets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(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 |  |

----

|                                                                     |
|---------------------------------------------------------------------|
|                                                                     |  |  |  |  |  |  |  |  |  |  |
| Contingent Consideration Liabilities                                | Fair Value as of January 2, 2016 | 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            | 4 |  | Monte Carlo Simulation |   | Discount Rates |   | 1.3% | - | 17.0% |
|                                                                |   |   |   | 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 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 |   |   |   | 5.5% |
|                                                                |   |   |   | Probability of Payments |   | —% | - | 90.0% |
|                                                                |   |   |   | Projected Years of Payments |   | 2017 | - | 2020 |
| Total contingent consideration liabilities                          | $ | 151 |  |   |   |   |   |   |   |   |

----

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                       | Endosense | Nanostim | Spinal Modulation | Assumed from Thoratec | Total |
| Balance as of December 29, 2012                            | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |
| Initial fair value measurement of contingent consideration | 132 |  | 56 |  | — |  | — |  | 188 |  |
| Change in fair value of contingent consideration           | 1 |  | — |  | — |  | — |  | 1 |  |
| Foreign currency translation                               | 6 |  | — |  | — |  | — |  | 6 |  |
| Balance as of December 28, 2013                            | 139 |  | 56 |  | — |  | — |  | 195 |  |
| Change in fair value of contingent consideration           | 28 |  | (6 | ) | — |  | — |  | 22 |  |
| Payment of contingent consideration                        | (155 | ) | — |  | — |  | — |  | (155 | ) |
| Foreign currency translation                               | (12 | ) | — |  | — |  | — |  | (12 | ) |
| 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 |  |

|                                                |
|------------------------------------------------|
|                                                |  |  |  |
|                                           | Auction Rate Securities |
| Balance as of January 3, 2015                  | $ | — |  |
| Auction rate securities acquired from Thoratec | 5 |  |
| Sale of auction rate securities                | (5 | ) |
| Balance as of January 2, 2016                  | $ | — |  |

----

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   |   | Pre-tax (Gain) Loss Recognized |   | Ineffective Portion of |
|                                           | Pre-tax (Gain) Loss |   | in Earnings on Effective Portion |   | (Gain) Loss on Derivative |
|                                           | Recognized in Other |   | of Derivative as a Result of |   | and Amount Excluded from |
|                                           | Comprehensive |   | Reclassification from |   | Effectiveness Testing |
| For the                                        | Income on Effective |   | Accumulated Other |   | Recognized |
| year ended                                     | Portion of Derivative |   | Comprehensive Income |   | in Earnings |
| January 2, 2016                                | Amount |   | Amount | Location |   | Amount | Location |
| Derivatives in Cash Flow Hedging Relationships |   |   |   |   |   |   |   |
| Foreign currency forward contracts             | $ | (23 | ) |   | $ | (10 | ) | Cost of sales |   | $ | — |  | Cost of sales |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |
| Derivatives Not Designated as      |   | (Gain) Loss Recognized in Earnings |   |
| Hedging Instruments                |   | 2015 | 2014 | 2013 | Location |
| Foreign currency forward contracts |   | $ | (10 | ) | $ | (9 | ) | $ | (15 | ) | Other (income) expense |

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |
| Fair Value of Derivative Instruments              |   | Amount | Location |
| Derivatives Designated as Hedging Instruments     |   |   |   |
| Foreign currency forward contracts                |   | $ | 14 |  | Other current assets |
|                                              |   | 2 |  | Other assets |
|                                              |   | (6 | ) | Other current liabilities |
|                                              |   | (3 | ) | Other liabilities |
| Derivatives Not Designated as Hedging Instruments |   |   |   |
| Foreign currency forward contracts                |   | — |  | Other current assets |
|                                              |   | — |  | Other current liabilities |
| Total                                             |   | $ | 7 |  |   |

----

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                 |   |   | Gross Amounts not Offset in the Consolidated Balance Sheets that are Subject to Master Netting Agreements |   |
|                                                 |   |   | Gross Amount of |   |   |
|                                                 |   |   | Eligible Offsetting |   |   |
|                                                 |   | Gross Amount of | Recognized |   |   |
|                                                 |   | Derivative Assets | Derivative Liabilities |   | Net |
|                                                 |   | Presented in the | Presented in the | Cash | Amount of |
|                                                 |   | Consolidated | Consolidated | Collateral | Derivative |
| Derivatives as of January 2, 2016                    |   | Balance Sheets | Balance Sheets | Received | Assets |
| Derivatives subject to master netting agreements     |   | $ | 3 |  | $ | 1 |  | $ | — |  | $ | 2 |  |
| Derivatives not subject to master netting agreements |   | 13 |  |   |   | 13 |  |
| Total                                                |   | $ | 16 |  | $ | 1 |  | $ | — |  | $ | 15 |  |
|                                                 |   |   |   |   |   |
|                                                 |   |   | Gross Amounts not Offset in the Consolidated Balance Sheets that are Subject to Master Netting Agreements |   |
|                                                 |   |   | Gross Amount of |   |   |
|                                                 |   |   | Eligible Offsetting |   |   |
|                                                 |   | Gross Amount of | Recognized |   |   |
|                                                 |   | Derivative Liabilities | Derivative Assets |   | Net |
|                                                 |   | Presented in the | Presented in the | Cash | Amount of |
|                                                 |   | Consolidated | Consolidated | Collateral | Derivative |
| Derivatives as of January 2, 2016                    |   | Balance Sheets | Balance Sheets | Pledged | Liabilities |
| Derivatives subject to master netting agreements     |   | $ | 1 |  | $ | 1 |  | $ | — |  | $ | — |  |
| Derivatives not subject to master netting agreements |   | 8 |  |   |   | 8 |  |
| Total                                                |   | $ | 9 |  | 1 |  | $ | — |  | $ | 8 |  |

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales                    | 2015 |   | 2014 |   | 2013 |
| ICD Systems                  | $ | 1,582 |  |   | $ | 1,746 |  |   | $ | 1,741 |  |
| Atrial Fibrillation Products | 1,096 |  |   | 1,044 |  |   | 957 |  |
| Pacemaker Systems            | 941 |  |   | 1,047 |  |   | 1,042 |  |
| Vascular Products            | 716 |  |   | 709 |  |   | 704 |  |
| Structural Heart Products    | 595 |  |   | 639 |  |   | 631 |  |
| Neuromodulation Products     | 475 |  |   | 437 |  |   | 426 |  |
| Thoratec Products            | 136 |  |   | — |  |   | — |  |
|     Net sales           | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales                         | 2015 |   | 2014 |   | 2013 |
| United States                     | $ | 2,838 |  |   | $ | 2,657 |  |   | $ | 2,596 |  |
| Japan                             | 456 |  |   | 526 |  |   | 567 |  |
| Other foreign countries           | 2,247 |  |   | 2,439 |  |   | 2,338 |  |
|     Net sales | $ | 5,541 |  |   | $ | 5,622 |  |   | $ | 5,501 |  |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |
| Long-Lived Assets                               | January 2, 2016 |   | January 3, 2015 |   | December 28, 2013 |
| United States                                   | $ | 1,011 |  |   | $ | 1,005 |  |   | $ | 1,045 |  |
| Other foreign countries                         | 309 |  |   | 338 |  |   | 365 |  |
|     Total long-lived assets | $ | 1,320 |  |   | $ | 1,343 |  |   | $ | 1,410 |  |

----

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                  | First |   | Second |   | Third |   | Fourth |   |
| (in millions, except per share amounts)                               | Quarter |   | Quarter |   | Quarter |   | Quarter |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Fiscal Year 2015:                                                     |   |   |   |   |   |   |   |   |
| Net sales                                                             | $ | 1,345 |  |   | $ | 1,410 |  |   | $ | 1,339 |  |   | $ | 1,447 |  |   |
| Gross profit                                                          | 950 |  |   | 986 |  |   | 914 |  |   | 946 |  |   |
| Net earnings attributable to St. Jude Medical, Inc.                   | 262 |  |  | 290 |  |  | 215 |  |  | 113 |  |  |
| Basic net earnings per share attributable to St. Jude Medical, Inc.   | $ | 0.93 |  |   | $ | 1.03 |  |   | $ | 0.76 |  |   | $ | 0.40 |  |   |
| Diluted net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.91 |  |   | $ | 1.02 |  |   | $ | 0.75 |  |   | $ | 0.39 |  |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Fiscal Year 2014:                                                     |   |   |   |   |   |   |   |   |
| Net sales                                                             | $ | 1,363 |  |   | $ | 1,448 |  |   | $ | 1,372 |  |   | $ | 1,439 |  |   |
| Gross profit                                                          | 980 |  |   | 1,015 |  |   | 960 |  |   | 1,014 |  |   |
| Net earnings attributable to St. Jude Medical, Inc.                   | 249 |  |  | 270 |  |   | 238 |  |  | 245 |  |  |
| Basic net earnings per share attributable to St. Jude Medical, Inc.   | $ | 0.88 |  |   | $ | 0.95 |  |   | $ | 0.83 |  |   | $ | 0.86 |  |   |
| Diluted net earnings per share attributable to St. Jude Medical, Inc. | $ | 0.86 |  |   | $ | 0.93 |  |   | $ | 0.82 |  |   | $ | 0.84 |  |   |

----

|         |
|---------|
|         |  |
|    |   |
| Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |

|          |
|----------|
|          |  |
|     |   |
| Item 9A. | CONTROLS AND PROCEDURES |

|          |
|----------|
|          |  |
|     |   |
| Item 9B. | OTHER INFORMATION |

|          |
|----------|
|          |  |
|     |   |
| Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |

----

|          |
|----------|
|          |  |
|     |   |
| Item 11. | EXECUTIVE COMPENSATION |

|          |
|----------|
|          |  |
|     |   |
| Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |

|          |
|----------|
|          |  |
|     |   |
| Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |

|          |
|----------|
|          |  |
|     |   |
| Item 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |

----

|          |
|----------|
|          |  |
|     |   |
| Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |

|        |
|--------|
|        |  |  |  |  |  |  |
| (a)    |   | List of documents filed as part of this Report | Page |
|   |   | (1 | ) |   | Financial Statements |   |
|   |   |   |   | Reports of Independent Registered Public Accounting Firm | 49 |
|   |   |   |   | Consolidated Statements of Earnings – Fiscal Years ended January 2, 2016, January 3, 2015 and December 28, 2013 | 51 |
|   |   |   |   | Consolidated Statements of Comprehensive Income – Fiscal Years ended January 2, 2016, January 3, 2015 and December 28, 2013 | 52 |
|   |   |   |   | Consolidated Balance Sheets – January 2, 2016 and January 3, 2015 | 53 |
|   |   |   |   | Consolidated Statements of Shareholders’ Equity – Fiscal Years ended January 2, 2016, January 3, 2015 and December 28, 2013 | 54 |
|   |   |   |   | Consolidated Statements of Cash Flows – Fiscal Years ended January 2, 2016, January 3, 2015 and December 29, 2012 | 55 |
|   |   |   |   | Notes to the Consolidated Financial Statements | 56 |
|   |   | (2 | ) |   | Financial Statement Schedules |   |
|   |   |   |   | Schedule II – Valuation and Qualifying Accounts | 99 |
|   |   |   |   | All other financial statement schedules not listed above have been omitted because the required information is included in the Consolidated Financial Statements or Notes thereto, or is not applicable. |   |
|   |   | (3 | ) |   | Exhibits |   |
|   |   |   |   | Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of certain instruments defining the rights of holders of certain long-term debt of St. Jude Medical are not filed, and in lieu thereof, we agree to furnish copies thereof to the SEC upon request. |   |

----

|         |
|---------|
|         |  |  |
|    |   |   |
| Exhibit |   | Exhibit Index |
|    |   |   |
| 3.1     |   | Articles of Incorporation, as amended on May 9, 2008, are incorporated by reference to Exhibit 3.1 of St. Jude Medical’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2008. |
|    |   |   |
| 3.2     |   | Bylaws, as amended and restated as of February 25, 2005, are incorporated by reference to Exhibit 3.1 to St. Jude Medical’s Current Report on Form 8-K filed on March 2, 2005. |
|    |   |   |
| 4.1     |   | Specimen Common Stock Certificate is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Registration Statement on Form S-4 filed October 20, 2010 (Commission File No. 333-170045). |
|    |   |   |
| 4.2     |   | Indenture, dated as of July 28, 2009, between St. Jude Medical, Inc. and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Current Report on Form 8-K filed on July 28, 2009. |
|    |   |   |
| 4.3     |   | First Supplemental Indenture, dated as of July 28, 2009, between St. Jude Medical, Inc. and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.2 to St. Jude Medical’s Current Report on Form 8-K filed on July 28, 2009. |
|    |   |   |
| 4.4     |   | Second Supplemental Indenture, dated as of March 17, 2010, between the Company and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Current Report on Form 8-K filed on March 19, 2010. |
|    |   |   |
| 4.5     |   | Third Supplemental Indenture, dated as of December 6, 2010, between the Company and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Current Report on Form 8-K filed on December 6, 2010. |
|    |   |   |
| 4.6     |   | Fourth Supplemental Indenture of Trust, dated as of April 2, 2013, between the Company and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Current Report on Form 8-K filed on April 2, 2013. |
|    |   |   |
| 4.7     |   | Fifth Supplemental Indenture, dated as of September 23, 2015, between the Company and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to St. Jude Medical’s Current Report on Form 8-K filed on September 23, 2015. |
|    |   |   |
| 10.1    |   | Form of Indemnification Agreement that St. Jude Medical has entered into with executive officers is incorporated by reference to Exhibit 10.1 to St. Jude Medical’s Annual Report on Form 10-K for the year ended January 1, 2011.* |
|    |   |   |
| 10.2    |   | Form of Indemnification Agreement that St. Jude Medical has entered into with directors is incorporated by reference to Exhibit 10.2 to St. Jude Medical’s Annual Report on Form 10-K for the year ended January 1, 2011.* |
|    |   |   |
| 10.3    |   | St. Jude Medical, Inc. Amended and Restated Management Incentive Compensation Plan is incorporated by reference to Exhibit 10.1 to St. Jude Medical’s Current Report on Form 8-K filed on May 8, 2015. * |
|    |   |   |
| 10.4    |   | St. Jude Medical, Inc. Management Savings Plan, as amended and restated effective January 1, 2016. *# |
|    |   |   |
| 10.5    |   | St. Jude Medical, Inc. 2007 Employee Stock Purchase Plan, as amended effective August 1, 2013, is incorporated by reference to Exhibit 10.2 to St. Jude Medical’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2013. * |
|    |   |   |

----

|         |
|---------|
|         |  |  |
|    |   |   |
| Exhibit |   | Exhibit Index |
|    |   |   |
| 10.6    |   | St. Jude Medical, Inc. 2002 Stock Plan, as amended and restated (2014) is incorporated by reference to Exhibit 10.11 to St. Jude Medical's Annual Report on Form 10-K for the year ended January 3, 2015. * |
|    |   |   |
| 10.7    |   | Form of Non-Qualified Stock Option Agreement (amended 2011) and related Notice of Non-Qualified Stock Option Grant under the St. Jude Medical, Inc. 2002 Stock Plan, as amended, is incorporated by reference to Exhibit 10.1 to St. Jude Medical’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2011.* |
|    |   |   |
| 10.8    |   | St. Jude Medical, Inc. 2006 Stock Plan, as amended and restated (2014) is incorporated by reference to Exhibit 10.13 to St. Jude Medical's Annual Report on Form 10-K for the year ended January 3, 2015. * |
|    |   |   |
| 10.9    |   | Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (amended 2011) and related Notice of Non-Qualified Stock Option Grant for options granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2006 Stock Plan is incorporated by reference to Exhibit 10.2 to St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011. * |
|    |   |   |
| 10.10   |   | Form of Non-Qualified Stock Option Agreement for Employees (amended 2011) and the related Notice of Non-Qualified Stock Option Grant for options granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2006 Stock Plan is incorporated by reference to Exhibit 10.3 of St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011.* |
|    |   |   |
| 10.11   |   | Form of Non-Qualified Stock Option Agreement (amended 2011) and related Notice of Non-Qualified Stock Option Grant for options granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan, is incorporated by reference to Exhibit 10.4 of St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011. * |
|    |   |   |
| 10.12   |   | Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (amended 2011) and related Notice of Non-Qualified Stock Option Grant for options granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan, is incorporated by reference to Exhibit 10.5 of St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011. * |
|    |   |   |
| 10.13   |   | Form of Restricted Stock Award Agreement (amended 2011) and related Restricted Stock Award Certificate for restricted stock granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan, is incorporated by reference to Exhibit 10.6 to St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011. * |
|    |   |   |
| 10.14   |   | Form of Restricted Stock Units Award Agreement (amended 2011) and related Restricted Stock Units Award Certificate for restricted stock units granted prior to December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan, is incorporated by reference to Exhibit 10.7 to St. Jude Medical's Quarterly Report on Form 10-Q for the quarter ended July 2, 2011. * |
|    |   |   |
| 10.15   |   | Form of Non-Qualified Stock Option Agreement for Non-Employee Directors and related Notice of Non-Qualified Stock Option Grant for stock options granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2006 Stock Plan is incorporated by reference to Exhibit 10.21 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012. * |

----

|         |
|---------|
|         |  |  |
|    |   |   |
| Exhibit |   | Exhibit Index |
|    |   |   |
| 10.16   |   | Form of Non-Qualified Stock Option Agreement for Employees and the related Notice of Non-Qualified Stock Option Grant for stock options granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2006 Stock Plan is incorporated by reference to Exhibit 10.22 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012. * |
|    |   |   |
| 10.17   |   | St. Jude Medical, Inc. 2007 Stock Incentive Plan, as amended and restated (2014) is incorporated by reference to Exhibit 10.22 to St. Jude Medical's Annual Report on Form 10-K for the year ended January 3, 2015. * |
|    |   |   |
| 10.18   |   | Form of Non-Qualified Stock Option Agreement (Global) and related Notice of Non-Qualified Stock Option Grant for stock options granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan is incorporated by reference to Exhibit 10.24 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012.* |
|    |   |   |
| 10.19   |   | Form of Non-Qualified Stock Option Agreement for Non-Employee Directors and related Notice of Non-Qualified Stock Option Grant for stock options granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan is incorporated by reference to Exhibit 10.25 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012. * |
|    |   |   |
| 10.20   |   | Form of Restricted Stock Award Agreement and related Restricted Stock Award Certificate for restricted stock granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan is incorporated by reference to Exhibit 10.26 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012. * |
|    |   |   |
| 10.21   |   | Form of Restricted Stock Units Award Agreement (Global) and related Restricted Stock Units Award Certificate for restricted stock units granted on or after December 10, 2012 under the St. Jude Medical, Inc. 2007 Stock Incentive Plan is incorporated by reference to Exhibit 10.27 of St. Jude Medical, Inc.'s Annual Report on Form 10-K for the year ended December 29, 2012. * |
|    |   |   |
| 10.22   |   | Form of Severance Agreement between St. Jude Medical, Inc. and executive officers hired prior to December 10, 2012 is incorporated by reference to Exhibit 10.1 to St. Jude Medical’s Current Report on Form 8-K filed on January 7, 2009. * |
|    |   |   |
| 10.23   |   | Form of First Amendment to Severance Agreement between St. Jude Medical, Inc. and executive officers hired prior to December 10, 2012 is incorporated by reference to Exhibit 10.1 to St. Jude Medical, Inc.'s Current Report on Form 8-K filed on December 14, 2015. * |
|    |   |   |
| 10.24   |   | Form of Severance Agreement between St. Jude Medical, Inc. and executive officers hired on or after December 10, 2012 is incorporated by reference to Exhibit 10.35 to St. Jude Medical’s Annual Report on Form 10-K filed for the year ended December 29, 2012. * |
|    |   |   |
| 10.25   |   | St. Jude Medical, Inc. Executive Severance Plan, effective January 1, 2016, is incorporated by reference to Exhibit 10.2 to St. Jude Medical's Current Report on Form 8-K filed on December 14, 2015. * |
|    |   |   |
| 10.26   |   | Five-Year $2,600,000,000 Term Loan Agreement dated as of August 21, 2015 among St. Jude Medical, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent and Lender, and the other Lenders party thereto, is incorporated by reference to Exhibit 10.1 to St. Jude Medical's Current Report on Form 8-K filed on August 24, 2015. |
|    |   |   |
| 10.27   |   | Amendment No. 1 to Five-Year $2,600,000,000 Term Loan Agreement dated as of February 19, 2016 among St. Jude Medical, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent and Lender, and the other Lenders party thereto. # |

----

|         |
|---------|
|         |  |  |
|    |   |   |
| Exhibit |   | Exhibit Index |
|    |   |   |
| 10.28   |   | Multi-Year $1,500,000,000 Credit Agreement dated as of August 21, 2015 among St. Jude Medical, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent, L/C Issuer and Lender, and the other Lenders party thereto, is incorporated by reference to Exhibit 10.2 to St. Jude Medical's Current Report on Form 8-K filed on August 24, 2015. |
|    |   |   |
| 10.29   |   | Amendment No. 1 to Multi-Year $1,500,000,000 Credit Agreement dated as of February 19, 2016 among St. Jude Medical, Inc., as the Borrower, Bank of America, N.A., as Administrative Agent, L/C Issuer and Lender, and the other Lenders party thereto. # |
|    |   |   |
| 12      |   | Computation of Ratio of Earnings to Fixed Charges. # |
|    |   |   |
| 21      |   | Subsidiaries of the Registrant. # |
|    |   |   |
| 23      |   | Consent of Independent Registered Public Accounting Firm. # |
|    |   |   |
| 24      |   | Power of Attorney. # |
|    |   |   |
| 31.1    |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. # |
|    |   |   |
| 31.2    |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. # |
|    |   |   |
| 32.1    |   | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. # |
|    |   |   |
| 32.2    |   | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. # |
|    |   |   |
| 101     |   | Financial statements from the Annual Report on Form 10-K of St. Jude Medical, Inc. for the year ended January 2, 2016, formatted in XBRL: (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements. |

|        |
|--------|
|        |  |  |
|   |   |
| *      | Management contract or compensatory plan or arrangement. |
| #      | Filed as an exhibit to this Annual Report on Form 10-K. |

----

|     |                                               |
|-----|-----------------------------------------------|
| (b) | Exhibits: Reference is made to Item 15(a)(3). |

|     |            |
|-----|------------|
| (c) | Schedules: |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             |   |   |   | Additions |   |   |   |   |   |   |
| Description                      |   | Balance at Beginning of Year |   | Charged toExpense |   | Deductions Write-offs (1) |   | Other (2) |   | Balance atEnd of Year |
| Allowance for doubtful accounts: |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| Fiscal year ended                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| January 2, 2016                  |   | $ | 53 |  |   | $ | 9 |  |   | $ | (10 | ) |   | $ | (6 | ) |   | $ | 46 |  |
| January 3, 2015                  |   | $ | 45 |  |   | $ | 14 |  |   | $ | (6 | ) |   | $ | — |  |   | $ | 53 |  |
| December 28, 2013                |   | $ | 47 |  |   | $ | 14 |  |   | $ | (16 | ) |   | $ | — |  |   | $ | 45 |  |

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Description                                |   | Balance at Beginning of Year |   | Additions |   | Deductions |   | Other (3) |   | Balance atEnd of Year |
| Valuation allowance - Deferred tax assets: |   |   |  |   |   |  |   |   |   |   |  |   |   |  |
| Fiscal year ended                          |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| January 2, 2016                            |   | $ | 400 |  |   | $ | 277 |  |   | $ | (349 | ) |   | $ | 9 |  |   | $ | 337 |  |
| January 3, 2015                            |   | $ | 368 |  |   | $ | 44 |  |   | $ | (13 | ) |   | $ | 1 |  |   | $ | 400 |  |
| December 28, 2013                          |   | $ | 228 |  |   | $ | 140 |  |   | $ | (7 | ) |   | $ | 7 |  |   | $ | 368 |  |

|     |                                                        |
|-----|--------------------------------------------------------|
| (1) | Uncollectible accounts written off, net of recoveries. |

|     |                                                                              |
|-----|------------------------------------------------------------------------------|
| (2) | Primarily represents the effects of changes in foreign currency translation. |

|     |                                                                                                                                     |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Primarily represents the effects of changes in foreign currency translation and tax adjustments for changes in statutory tax rates. |

----

|             |
|-------------|
|             |  |  |  |
|        |   |   |   |
|        |   | ST. JUDE MEDICAL, INC. |
|        |   |   |   |
| Date:  | February 23, 2016 | By:  | /s/ MICHAEL T. ROUSSEAU |
|        |   |   | Michael T. Rousseau |
|        |   |   | President and Chief Executive Officer |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |
|                                                    |   |   |
| /s/ MICHAEL T. ROUSSEAU                            |   | President and Chief Executive Officer |
| Michael T. Rousseau                                     |   | (Principal Executive Officer) |
|                                                    |   |   |
|                                                    |   |   |
| /s/ DONALD J. ZURBAY                                    |   | Vice President, Finance and Chief Financial Officer |
| Donald J. Zurbay                                        |   | (Principal Financial and Accounting Officer) |
|                                                    |   |   |
| *                                                       |   | Executive Chairman of the Board |
| Daniel J. Starks                                        |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| John W. Brown                                           |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Richard R. Devenuti                                     |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| David C. Dvorak                                         |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Stuart M. Essig                                         |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Barbara B. Hill                                         |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Michael A. Rocca                                        |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Stefan K. Widensohler                                   |   |   |
|                                                    |   |   |
| *                                                       |   | Director |
| Wendy L. Yarno                                          |   |   |
|                                                    |   |   |
| * By:     /s/ JASON A. ZELLERS |   |   |
| Jason A. Zellers                                        |   |   |
| Attorney-in-Fact                                        |   |   |