ILMN Illumina

Document and Entity Information

Document and Entity Information - shares shares in Millions3 Months Ended
Apr. 01, 2018Apr. 20, 2018
Document and Entity Information [Abstract]
Entity Registrant NameIllumina Inc
Entity Central Index Key1110803
Current Fiscal Year End Date--12-30
Entity Filer CategoryLarge Accelerated Filer
Document Type10-Q
Document Period End DateApr. 1,
2018
Document Fiscal Year Focus2018
Document Fiscal Period FocusQ1
Amendment Flagfalse
Entity Common Stock, Shares Outstanding147

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017
Current assets:
Cash and cash equivalents $ 1,560 $ 1,225
Short-term investments813 920
Accounts receivable, net400 411
Inventory350 333
Prepaid expenses and other current assets71 91
Total current assets3,194 2,980
Property and equipment, net983 931
Goodwill775 771
Intangible assets, net168 175
Deferred tax assets100 88
Other assets322 312
Total assets5,542 5,257
Current liabilities:
Accounts payable151 160
Accrued liabilities388 432
Build-to-suit lease liability21 144
Long-term debt, current portion620 10
Total current liabilities1,180 746
Long-term debt710 1,182
Other long-term liabilities364 360
Redeemable noncontrolling interests215 220
Stockholders’ equity:
Common stock2 2
Additional paid-in capital2,897 2,833
Accumulated other comprehensive loss(1)(1)
Retained earnings2,464 2,256
Treasury stock, at cost(2,354)(2,341)
Total Illumina stockholders’ equity3,008 2,749
Noncontrolling interests65
Total stockholders’ equity3,073 2,749
Total liabilities and stockholders’ equity $ 5,542 $ 5,257

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Revenue:
Product revenue $ 628 $ 491
Service and other revenue154 107
Total revenue782 598
Cost of revenue:
Cost of product revenue174 166
Cost of service and other revenue62 53
Amortization of acquired intangible assets8 11
Total cost of revenue244 230
Gross profit538 368
Operating expense:
Research and development137 145
Selling, general and administrative183 171
Total operating expense320 316
Income from operations218 52
Other income (expense):
Interest income5 4
Interest expense(11)(8)
Other income, net9 455
Total other income, net3 451
Income before income taxes221 503
Provision for income taxes24 155
Consolidated net income197 348
Add: Net loss attributable to noncontrolling interests11 19
Net income attributable to Illumina stockholders208 367
Net income attributable to Illumina stockholders for earnings per share $ 208 $ 366
Earnings per share attributable to Illumina stockholders:
Basic (in dollars per share) $ 1.42 $ 2.50
Diluted (in dollars per share) $ 1.41 $ 2.48
Shares used in computing earnings per share:
Basic (in shares)147 146
Diluted (in shares)148 147

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Statement of Comprehensive Income [Abstract]
Total consolidated net income and comprehensive income $ 197 $ 348
Add: Comprehensive loss attributable to noncontrolling interests11 19
Comprehensive income attributable to Illumina stockholders $ 208 $ 367

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity Statement - 3 months ended Apr. 01, 2018 - USD ($) $ in MillionsTotalCommon StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossRetained EarningsTreasury StockNoncontrolling Interests
Beginning balance at Dec. 31, 2017 $ 2,749 $ 2 $ 2,833 $ (1) $ 2,256 $ (2,341) $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)207 208 (1)
Issuance of common stock, net of repurchases8 21 (13)
Share-based compensation48 48
Adjustment to the carrying value of redeemable noncontrolling interests(5)(5)
Contributions from noncontrolling interest owners61 61
Issuance of subsidiary shares5 5
Ending balance at Apr. 01, 2018 $ 3,073 $ 2 $ 2,897 $ (1) $ 2,464 $ (2,354) $ 65

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Cash flows from operating activities:
Consolidated net income $ 197 $ 348
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on deconsolidation of GRAIL(453)
Depreciation expense30 26
Amortization of intangible assets9 12
Share-based compensation expense48 50
Accretion of debt discount8 7
Deferred income taxes(11)86
Impairment of intangible assets23
Other(6)(2)
Changes in operating assets and liabilities:
Accounts receivable11 16
Inventory(17)1
Prepaid expenses and other current assets(2)2
Other assets(1)(1)
Accounts payable2 (3)
Accrued liabilities(18)52
Other long-term liabilities5 4
Net cash provided by operating activities255 168
Cash flows from investing activities:
Purchases of available-for-sale securities(598)(61)
Sales of available-for-sale securities288 40
Maturities of available-for-sale securities415 48
Proceeds from sale of GRAIL securities278
Deconsolidation of GRAIL cash(52)
Net purchases of strategic investments(3)(7)
Purchases of property and equipment(90)(83)
Net cash provided by investing activities12 163
Cash flows from financing activities:
Payments on financing obligations(2)(1)
Common stock repurchases(101)
Taxes paid related to net share settlement of equity awards(13)(22)
Proceeds from issuance of common stock21 22
Contributions from noncontrolling interest owners61 16
Net cash provided by (used in) financing activities67 (86)
Effect of exchange rate changes on cash and cash equivalents1 1
Net increase in cash and cash equivalents335 246
Cash and cash equivalents at beginning of period1,225 735
Cash and cash equivalents at end of period $ 1,560 $ 981

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies3 Months Ended
Apr. 01, 2018
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting PoliciesBasis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 , from which the prior year balance sheet information herein was derived. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expense, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, majority-owned or controlled companies, and variable interest entities (VIEs) for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. We evaluate our ownership, contractual, and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, a qualitative approach is applied that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. We continuously assess whether we are the primary beneficiary of a VIE as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the three months ended April 1, 2018, our consolidated VIE, Helix, received additional cash contributions from us and third-party investors in exchange for voting equity interests in Helix. Therefore, we reassessed and concluded that Helix continues to be a variable interest entity and that we remain the primary beneficiary. We have not provided financial or other support during the periods presented to our VIEs that we were not previously contractually required to provide. The equity method is used to account for investments in which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded within other assets, and the share of net income or losses of equity investments is recognized on a one quarter lag in other income, net. Redeemable Noncontrolling Interests Noncontrolling interests represent the portion of equity (net assets) in our consolidated entity, Helix, that is not wholly-owned by us that is not attributable, directly or indirectly, to us. Noncontrolling interests with embedded contingent redemption features, such as put rights, that are not solely within our control are considered redeemable noncontrolling interests. Redeemable noncontrolling interests are presented outside of stockholders’ equity on the condensed consolidated balance sheets. Fiscal Year Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. The three months ended April 1, 2018 and April 2, 2017 were both 13 weeks. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Significant Accounting Policies During the three months ended April 1, 2018 , there have been no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 , except as described below. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The new standard is based on the principle that revenue should be recognized in an amount that reflects the consideration to which we expect to be entitled in exchange for the transfer of promised goods or services. We adopted Topic 606 using the modified retrospective transition method. The cumulative effect of applying the new revenue standard to all incomplete contracts as of January 1, 2018 was not material and, therefore, did not result in an adjustment to retained earnings. There was no material difference to the consolidated financial statements for the period ended April 1, 2018 due to the adoption of Topic 606. Furthermore, we expect the impact to be immaterial to our consolidated financial statements going forward. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) , which requires equity investments (other than those accounted for under the equity method or those that result in consolidation) to be measured at fair value, with changes in fair value recognized in net income. This standard was effective for us beginning in the first quarter of 2018. Based on our elections, our strategic equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient for estimating fair value are measured at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The measurement alternative was applied prospectively and did not result in an adjustment to retained earnings. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842) . The new standard requires lessees to recognize most leases on their balance sheet as lease liabilities with corresponding right-of-use assets. ASU 2016-02 is effective for us beginning in the first quarter of 2019. Currently, the standard will be adopted on a modified retrospective transition basis for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The FASB has proposed an alternative method to adopt the lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. While we are continuing to assess the effects of adoption, we believe the new standard will have a material effect on our consolidated financial statements and disclosures. We expect substantially all of our real-estate operating lease commitments will be recognized as lease liabilities with corresponding right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet. We are currently evaluating the impact of Topic 842 on the consolidated financial statements as it relates to other aspects of our business. In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available for sale debt securities. The standard is effective for us beginning in the first quarter of 2020, with early adoption permitted. We are currently evaluating the impact of ASU 2016-13 on the consolidated financial statements. Revenue Our revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of instruments and consumables used in genetic analysis. Service and other revenue primarily consists of revenue generated from genotyping and sequencing services and instrument service contracts. We recognize revenue when control of our products and services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Revenue from product sales is recognized generally upon delivery to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs upon shipment and the term between invoicing and when payment is due is not significant. In instances where right of payment or transfer of title is contingent upon the customer’s acceptance of the product, revenue is deferred until all acceptance criteria have been met. Revenue from instrument service contracts is recognized as the services are rendered, typically evenly over the contract term. Revenue from genotyping and sequencing services is recognized when earned, which is generally at the time the genotyping or sequencing analysis data is made available to the customer or agreed-upon milestones are reached. Revenue is recorded net of discounts, distributor commissions, and sales taxes collected on behalf of governmental authorities. Employee sales commissions are recorded as selling, general and administrative expenses when incurred as the amortization period would have been one year or less. We regularly enter into contracts with multiple performance obligations. Such obligations are generally satisfied within a short time frame, approximately three to six months, after the contract execution date. Revenue recognition for contracts with multiple deliverables is based on the separate, distinct performance obligations within the contract. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The contract price is allocated to each performance obligation in proportion to its stand-alone selling price. We determine our best estimate of stand-alone selling price using average selling prices over a rolling 12-month period coupled with an assessment of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, we rely upon prices set by our pricing committee, adjusted for applicable discounts. Contract liabilities, which consists of deferred revenue and customer deposits, as of April 1, 2018 and December 31, 2017 were $184 million and $181 million , respectively, of which the short-term portions of $153 million and $150 million , respectively, were recorded in accrued liabilities and the remaining long-term portions were recorded in other long-term liabilities. Revenue recorded in the three months ended April 1, 2018 includes $68 million of previously deferred revenue that were included in contract liabilities as of December 31, 2017 . Contract assets as of April 1, 2018 and December 31, 2017 were not material. In certain markets, products and services are sold to customers through distributors. In most sales through distributors, the product is delivered directly to customers. The terms of sales transactions through distributors are consistent with the terms of direct sales to customers. The following table represents revenue by source (in millions): Three Months Ended April 1, 2018 April 2, 2017 Sequencing Microarray Total Sequencing Microarray Total Consumables $ 417 $ 87 $ 504 $ 318 $ 69 $ 387 Instruments 112 6 118 95 5 100 Other product 5 1 6 4 — 4 Total product revenue 534 94 628 417 74 491 Service and other 96 58 154 78 29 107 Total revenue $ 630 $ 152 $ 782 $ 495 $ 103 $ 598 Revenue related to our Consolidated VIEs is included in sequencing services and other revenue. The following table represents revenue by geographic area, based on region of destination (in millions): Three Months Ended April 1, April 2, United States $ 416 $ 325 Europe 184 126 Greater China (1) 78 56 Asia-Pacific (1) 70 67 Other markets 34 24 Total revenue $ 782 $ 598 ____________________________________ (1) Revenue for the Greater China region, which consists of China, Taiwan, and Hong Kong, is reported separately from the Asia-Pacific region. Earnings per Share Basic earnings per share attributable to Illumina stockholders is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to Illumina stockholders is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Per-share earnings of our VIEs are included in the consolidated basic and diluted earnings per share computations based on our share of the VIE’s securities. Potentially dilutive common shares consist of shares issuable under convertible senior notes and equity awards. Convertible senior notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercise of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares. The following is the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended April 1, April 2, Weighted average shares outstanding 147 146 Effect of potentially dilutive common shares from: Equity awards 1 1 Weighted average shares used in calculating diluted earnings per share 148 147 Potentially dilutive shares excluded from calculation due to anti-dilutive effect — 1

Balance Sheet Account Details

Balance Sheet Account Details3 Months Ended
Apr. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Balance Sheet Account DetailsBalance Sheet Account Details Short-Term Investments The following is a summary of short-term investments (in millions): April 1, 2018 December 31, 2017 Amortized Cost Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Losses Estimated Fair Value Available-for-sale debt securities: Debt securities in government sponsored entities $ 38 $ — $ 38 $ 67 $ — $ 67 Corporate debt securities 375 (2 ) 373 423 (2 ) 421 U.S. Treasury securities 403 (1 ) 402 433 (1 ) 432 Total available-for-sale debt securities $ 816 $ (3 ) $ 813 $ 923 $ (3 ) $ 920 Realized gains and losses are determined based on the specific identification method and are reported in interest income. Contractual maturities of available-for-sale debt securities as of April 1, 2018 were as follows (in millions): Estimated Fair Value Due within one year $ 353 After one but within five years 460 Total $ 813 We have the ability, if necessary, to liquidate any of our cash equivalents and short-term investments to meet our liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than one year from the date of purchase are classified as short-term on the accompanying condensed consolidated balance sheets. Strategic Investments The carrying amounts of our strategic equity investments without readily determinable fair values are initially measured at cost and are remeasured for impairment and observable price changes in orderly transactions for identifiable or similar investments of the same issuer. As of April 1, 2018 and December 31, 2017 , the aggregate carrying amounts of our strategic equity investments without readily determinable fair values were $256 million and $250 million , respectively, included in other assets. Revenue recognized from transactions with such companies for the three months ended April 1, 2018 and April 2, 2017 was $36 million and $23 million , respectively. We invest in a venture capital investment fund (the Fund) with a capital commitment of $100 million that is callable over ten years , of which $80 million remains as of April 1, 2018 . Our investment in the Fund is accounted for as an equity-method investment. The carrying amounts of the Fund included in other assets were $19 million and $16 million as of April 1, 2018 and December 31, 2017 , respectively. Inventory Inventory consists of the following (in millions): April 1, December 31, Raw materials $ 95 $ 93 Work in process 209 188 Finished goods 46 52 Total inventory $ 350 $ 333 Property and Equipment Property and equipment, net consists of the following (in millions): April 1, December 31, Leasehold improvements $ 477 $ 331 Machinery and equipment 331 316 Computer hardware and software 207 185 Furniture and fixtures 40 34 Buildings 269 155 Construction in progress 103 326 Total property and equipment, gross 1,427 1,347 Accumulated depreciation (444 ) (416 ) Total property and equipment, net $ 983 $ 931 Property and equipment, net included non-cash expenditures of $33 million and $60 million for the three months ended April 1, 2018 and April 2, 2017 , respectively, which were excluded from the condensed consolidated statements of cash flows. Such non-cash expenditures included $6 million and $27 million recorded under build-to-suit lease accounting for the three months ended April 1, 2018 and April 2, 2017 , respectively. Intangible Assets and Goodwill Changes to goodwill during the three months ended April 1, 2018 are as follows (in millions): Goodwill Balance as of December 31, 2018 $ 771 Current period acquisition 4 Balance as of April 1, 2018 $ 775 We perform regular reviews to determine if any event has occurred that may indicate our identifiable intangible assets are potentially impaired. During the three months ended April 2, 2017 , we performed a recoverability test when the planned use of a finite-lived acquired intangible asset changed, resulting in an impairment charge of $18 million recorded in cost of product revenue. Also during the three months ended April 2, 2017 , we recorded a $5 million impairment charge in research and development related to an in-process research and development project that was determined to have no future alternative use. Derivatives We are exposed to foreign exchange rate risks in the normal course of business. We enter into foreign exchange contracts to manage foreign currency risks related to monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. These foreign exchange contracts are carried at fair value in other current assets or accrued liabilities and are not designated as hedging instruments. Changes in the value of derivatives are recognized in other income, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities. As of April 1, 2018 , we had foreign exchange forward contracts in place to hedge exposures in the euro, Japanese yen, Australian dollar, and Canadian dollar. As of April 1, 2018 and December 31, 2017 , the total notional amounts of outstanding forward contracts in place for foreign currency purchases were $113 million and $88 million , respectively. Accrued Liabilities Accrued liabilities consist of the following (in millions): April 1, December 31, Contract liabilities, current portion $ 153 $ 150 Accrued compensation expenses 125 177 Accrued taxes payable 59 50 Other 51 55 Total accrued liabilities $ 388 $ 432 Warranties We generally provide a one -year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six to twelve months after the manufacture date. At the time revenue is recognized, an accrual is established for estimated warranty expenses based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. Changes in the reserve for product warranties during the three months ended April 1, 2018 and April 2, 2017 are as follows (in millions): Three Months Ended April 1, April 2, Balance at beginning of period $ 17 $ 13 Additions charged to cost of product revenue 6 4 Repairs and replacements (7 ) (5 ) Balance at end of period $ 16 $ 12 Investments in Consolidated VIEs Helix Holdings I, LLC In July 2015, we obtained a 50% voting equity ownership interest in Helix Holdings I, LLC (Helix), a limited liability company formed with unrelated third-party investors to pursue the development and commercialization of a marketplace for consumer genomics. We determined that Helix is a VIE as the holders of the at-risk equity investments as a group lack the power to direct the activities of Helix that most significantly impact Helix’s economic performance. Additionally, we determined that we have (a) unilateral power over one of the activities that most significantly impacts the economic performance of Helix through its contractual arrangements and no one individual party has unilateral power over the remaining significant activities of Helix and (b) the obligation to absorb losses of and the right to receive benefits from Helix that are potentially significant to Helix. As a result, we are deemed to be the primary beneficiary of Helix and are required to consolidate Helix. As contractually committed, in July 2015, we contributed certain perpetual licenses, instruments, intangibles, initial laboratory setup, and discounted supply terms in exchange for voting equity interests in Helix. Such contributions are recorded at their historical basis as they remain within our control. Helix is financed through cash contributions made by us and the third-party investors in exchange for voting equity interests in Helix. During the three months ended April 1, 2018, we made an additional investment of $68 million in exchange for voting equity interests in Helix. As of April 1, 2018 , the noncontrolling shareholders and Illumina each held 50% of Helix’s outstanding voting equity interests. Certain noncontrolling Helix investors may require us to redeem certain noncontrolling interests in cash at the then approximate fair market value. Such redemption right is exercisable at the option of certain noncontrolling interest holders after January 1, 2021, provided that a bona fide pursuit of the sale of Helix has occurred and an initial public offering of Helix has not been completed. As the contingent redemption is outside of our control, the redeemable noncontrolling interests in Helix are classified outside of stockholders’ equity on the accompanying condensed consolidated balance sheets. The balance of the redeemable noncontrolling interests is reported at the greater of its carrying value after receiving its allocation of Helix’s profits and losses or its estimated redemption fair value at each reporting date. The fair value of the redeemable noncontrolling interests is considered a Level 3 instrument. As of April 1, 2018 , the accompanying condensed consolidated balance sheet includes $121 million of cash and cash equivalents attributable to Helix that will be used to settle their respective obligations and will not be available to settle obligations of Illumina. The remaining assets and liabilities of Helix are not significant to our financial position as of April 1, 2018 . Helix has an immaterial impact on our condensed consolidated statements of income and cash flows for the three months ended April 1, 2018 . GRAIL, Inc. In 2016, we obtained a majority equity ownership interest in GRAIL, a company formed with unrelated third-party investors to develop a blood test for early-stage cancer detection. We determined that GRAIL was a VIE as the entity lacked sufficient equity to finance its activities without additional support. Additionally, we determined that we had (a) control of GRAIL’s board of directors, which had unilateral power over the activities that most significantly impacted the economic performance of GRAIL and (b) the obligation to absorb losses of and the right to receive benefits from GRAIL that were potentially significant to GRAIL. As a result, we were deemed to be the primary beneficiary of GRAIL and were required to consolidate GRAIL. On February 28, 2017, GRAIL completed the initial close of its Series B preferred stock financing. Concurrent with the financing, GRAIL repurchased from us 35 million shares of its Series A preferred stock and approximately 34 million shares of its Series A-1 preferred stock for an aggregate purchase price of $278 million . At this time, we ceased to have a controlling financial interest in GRAIL and our equity ownership was reduced from 52% to 19% . Additionally, our voting interest was reduced to 13% , and we no longer have representation on GRAIL’s board of directors. As a result, we deconsolidated GRAIL’s financial statements effective February 28, 2017 and recorded a pretax gain on deconsolidation of $453 million in other income, net. The carrying value of the remaining retained investment recorded in other assets was $185 million as of April 1, 2018 and December 31, 2017 . The operations of GRAIL from January 2, 2017 up to February 28, 2017, the date of deconsolidation, are included in the accompanying condensed consolidated statements of income for the three months ended April 2, 2017 . During this period, we absorbed approximately 50% of GRAIL’s losses based upon our proportional ownership of GRAIL’s common stock. Redeemable Noncontrolling Interests The activity of the redeemable noncontrolling interests during the three months ended April 1, 2018 is as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 31, 2017 $ 220 Net loss attributable to noncontrolling interests (10 ) Adjustment up to the redemption value 5 Balance as of April 1, 2018 $ 215

Fair Value Measurements

Fair Value Measurements3 Months Ended
Apr. 01, 2018
Fair Value Disclosures [Abstract]
Fair Value MeasurementsFair Value Measurements The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of April 1, 2018 and December 31, 2017 (in millions): April 1, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,282 $ — $ — $ 1,282 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 38 — 38 — 67 — 67 Corporate debt securities — 373 — 373 — 421 — 421 U.S. Treasury securities 402 — — 402 432 — — 432 Deferred compensation plan assets — 35 — 35 — 35 — 35 Total assets measured at fair value $ 1,684 $ 446 $ — $ 2,130 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation liability $ — $ 34 $ — $ 34 $ — $ 33 $ — $ 33 We hold available-for-sale securities that consist of highly-liquid, investment-grade debt securities. We consider information provided by our investment accounting and reporting service provider in the measurement of fair value of our debt securities. The investment service provider provides valuation information from an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. Our deferred compensation plan assets consist primarily of investments in life insurance contracts carried at cash surrender value, which reflects the net asset value of the underlying publicly traded mutual funds. We perform control procedures to corroborate the fair value of our holdings, including comparing valuations obtained from our investment service provider to valuations reported by our asset custodians, validation of pricing sources and models, and review of key model inputs, if necessary.

Debt and Other Commitments

Debt and Other Commitments3 Months Ended
Apr. 01, 2018
Debt Disclosure [Abstract]
Debt and Other CommitmentsDebt and Other Commitments Summary of debt obligations Debt obligations consist of the following (dollars in millions): April 1, December 31, Principal amount of 2019 Notes outstanding $ 633 $ 633 Principal amount of 2021 Notes outstanding 517 517 Unamortized discount of liability component of convertible senior notes (68 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,082 1,075 Obligations under financing leases 244 113 Other 4 4 Less: current portion (620 ) (10 ) Long-term debt $ 710 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance cost $ 161 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 1,333 $ 1,305 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 2.6 years 2.8 years Convertible Senior Notes 0% Convertible Senior Notes due 2019 (2019 Notes) and 0.5% Convertible Senior Notes due 2021 (2021 Notes) In June 2014, we issued $633 million aggregate principal amount of 2019 Notes and $517 million aggregate principal amount of 2021 Notes. We used the net proceeds plus cash on hand to repurchase outstanding debt. The 2019 and 2021 Notes mature on June 15, 2019 and June 15, 2021 , respectively, and the implied estimated effective rates of the liability components of the Notes were 2.9% and 3.5% , respectively, assuming no conversion. Both the 2019 and 2021 Notes will be convertible into cash, shares of common stock, or a combination of cash and shares of common stock, at our election, based on an initial conversion rate, subject to adjustment, of 3.9318 shares per $1,000 principal amount of the notes (which represents an initial conversion price of approximately $254.34 per share), only in the following circumstances and to the following extent: (1) during the five business-day period after any 10 consecutive trading day period (the measurement period) in which the trading price per 2019 and 2021 Notes for each day of such measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such day; (2) during any calendar quarter (and only during that quarter) after the calendar quarter ending September 30, 2014, if the last reported sale price of our common stock for 20 or more trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the applicable conversion price in effect on the last trading day of the immediately preceding calendar quarter; (3) upon the occurrence of specified events described in the indenture for the 2019 and 2021 Notes; and (4) at any time on or after March 15, 2019 for the 2019 Notes, or March 15, 2021 for the 2021 Notes, through the second scheduled trading day immediately preceding the maturity date . Neither the 2019 nor the 2021 Notes were convertible as of April 1, 2018 and had no dilutive impact during the three months ended April 1, 2018 . If the 2019 and 2021 Notes were converted as of April 1, 2018 , the if-converted value would not exceed the principal amount. During the three months ended April 1, 2018 , the carrying value of the 2019 Notes was reclassified to short-term as they become convertible within twelve months of the balance sheet date. Build-to-suit leases We evaluate whether we are the accounting owner of leased assets during the construction period when we are involved in the construction of leased assets. We are considered the owner of a construction project for accounting purposes only under build-to-suit lease accounting due to certain indemnification obligations related to the construction. As of April 1, 2018 , and December 31, 2017 , we recorded $21 million and $144 million , respectively, in project construction costs paid or reimbursed by the landlord as construction in progress and a corresponding build-to-suit lease liability. During the three months ended April 1, 2018 , construction of a build-to-suit property was completed. We concluded we did not qualify for “sale-leaseback” treatment and the lease is accounted for as a financing obligation. Accordingly, $132 million of construction in progress and build-to-suit lease liability were reclassified to building asset and obligations under financing lease, respectively.

Share-based Compensation Expens

Share-based Compensation Expense3 Months Ended
Apr. 01, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation ExpenseShare-based Compensation Expense Share-based compensation expense is reported in our statements of income as follows (in millions): Three Months Ended April 1, April 2, Cost of product revenue $ 4 $ 3 Cost of service and other revenue 1 — Research and development 15 14 Selling, general and administrative 28 33 Share-based compensation expense before taxes 48 50 Related income tax benefits (10 ) (11 ) Share-based compensation expense, net of taxes $ 38 $ 39 The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the Employee Stock Purchase Plan (ESPP) during the three months ended April 1, 2018 are as follows: Employee Stock Purchase Rights Risk-free interest rate 0.83% - 1.89% Expected volatility 28% - 44% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average fair value per share $ 55.83 As of April 1, 2018 , approximately $360 million of unrecognized compensation cost related to restricted stock and ESPP shares granted to date is expected to be recognized over a weighted-average period of approximately 2.5 years .

Stockholders' Equity

Stockholders' Equity3 Months Ended
Apr. 01, 2018
Equity [Abstract]
Stockholders' EquityStockholders’ Equity As of April 1, 2018 , approximately 5.5 million shares remained available for future grants under the 2015 Stock Plan. Restricted Stock Restricted stock activity and related information for the three months ended April 1, 2018 is as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 17 45 $ 228.79 $ 164.36 Vested (61 ) — $ 151.01 — Cancelled (70 ) (15 ) $ 168.15 $ 161.84 Outstanding at April 1, 2018 1,971 572 $ 174.23 $ 166.12 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Stock Options Stock option activity during the three months ended April 1, 2018 is as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 31, 2017 322 $ 46.93 Exercised (17 ) $ 41.91 Outstanding and exercisable at April 1, 2018 305 $ 47.20 ESPP The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first day of the offering period or purchase date, whichever is lower. During the three months ended April 1, 2018 , approximately 0.1 million shares were issued under the ESPP. As of April 1, 2018 , there were approximately 13.9 million shares available for issuance under the ESPP. Share Repurchases On July 28, 2016, our Board of Directors authorized a share repurchase program, which superseded all prior and available repurchase authorizations, to repurchase $250 million of outstanding common stock. During the three months ended April 2, 2017, we repurchased 0.6 million shares for $101 million , completing the share repurchase program. On May 4, 2017, our Board of Directors authorized an additional share repurchase program to repurchase $250 million of outstanding common stock. The repurchases may be completed under a 10b5-1 plan or at management’s discretion. Authorizations to repurchase $100 million of our common stock remained available as of April 1, 2018 .

Income Taxes

Income Taxes3 Months Ended
Apr. 01, 2018
Income Tax Disclosure [Abstract]
Income TaxesIncome Taxes Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. The effective tax rate for the three months ended April 1, 2018 was 10.6% . The variance from the U.S. federal statutory tax rate of 21% was primarily attributable to the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore and the United Kingdom, and the discrete tax benefit associated with the recognition of prior year losses from our investment in Helix. We continue to evaluate the impacts of U.S. Tax Reform as we interpret the legislation, including the newly-enacted global intangible low-taxed income (GILTI) provisions which subject our foreign earnings to a minimum level of tax. Because of the complexities of the new legislation, we have not yet elected an accounting policy for GILTI and therefore have only included GILTI related to current year operations in our estimated provision for income taxes. Recent FASB guidance indicates that accounting for GILTI either as part of deferred taxes or as a period cost are both acceptable methods. Once further information is gathered and interpretation and analysis of the tax legislation evolves we will make an appropriate accounting method election.

Legal Proceedings

Legal Proceedings3 Months Ended
Apr. 01, 2018
Commitments and Contingencies Disclosure [Abstract]
Legal ProceedingsLegal Proceedings We are involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable results could occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures. The amount of ultimate loss may differ from these estimates. Each matter presents its own unique circumstances, and prior litigation does not necessarily provide a reliable basis on which to predict the outcome, or range of outcomes, in any individual proceeding. Because of the uncertainties related to the occurrence, amount, and range of loss on any pending litigation or claim, we are currently unable to predict their ultimate outcome, and, with respect to any pending litigation or claim where no liability has been accrued, to make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. In the event opposing litigants in outstanding litigations or claims ultimately succeed at trial and any subsequent appeals on their claims, any potential loss or charges in excess of any established accruals, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows in the period in which the unfavorable outcome occurs or becomes probable, and potentially in future periods.

Segment Information (Notes)

Segment Information (Notes)3 Months Ended
Apr. 01, 2018
Segment Reporting [Abstract]
Segment InformationSegment Information We have two reportable segments: Core Illumina and one segment related to the combined activities of our consolidated VIEs, GRAIL and Helix (Consolidated VIEs). Following the GRAIL deconsolidation on February 28, 2017, our Consolidated VIEs no longer include GRAIL. We report segment information based on the management approach. This approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of our reportable segments. The CODM allocates resources and assesses the performance of each operating segment using information about its revenue and income (loss) from operations. Based on the information used by the CODM, we have determined our reportable segments as follows: Core Illumina : Core Illumina’s products and services serve customers in the research, clinical and applied markets, and enable the adoption of a variety of genomic solutions. Core Illumina includes all operations, excluding the results of the consolidated VIEs. Consolidated VIEs: Helix : Helix was established to enable individuals to explore their genetic information by providing affordable sequencing and database services for consumers through third-party partners, driving the creation of an ecosystem of consumer applications. GRAIL : GRAIL was created to develop a blood test for early-stage cancer detection. GRAIL was in the early stages of developing this test and as such, had no revenues through the date of deconsolidation. Management evaluates the performance of our operating segments based upon income (loss) from operations. We do not allocate expenses between segments. Core Illumina sells products and provides services to GRAIL and Helix in accordance with contractual agreements between the entities. The following table presents the operating performance of each reportable segment (in millions): Three Months Ended April 1, April 2, Revenue: Core Illumina $ 783 $ 598 Consolidated VIEs 3 1 Elimination of intersegment revenue (4 ) (1 ) Consolidated revenue $ 782 $ 598 Income (loss) from operations: Core Illumina $ 238 $ 84 Consolidated VIEs (21 ) (34 ) Elimination of intersegment earnings 1 2 Consolidated income from operations $ 218 $ 52 The following table presents the total assets of each reportable segment (in millions): April 1, December 31, Core Illumina $ 5,465 $ 5,223 Consolidated VIEs 155 45 Elimination of intersegment assets (78 ) (11 ) Consolidated total assets $ 5,542 $ 5,257

Basis of Presentation and Sum16

Basis of Presentation and Summary of Significant Accounting Policies (Policies)3 Months Ended
Apr. 01, 2018
Accounting Policies [Abstract]
Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.
ConsolidationThe unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, majority-owned or controlled companies, and variable interest entities (VIEs) for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented.
Variable Interest EntitiesWe evaluate our ownership, contractual, and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, a qualitative approach is applied that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. We continuously assess whether we are the primary beneficiary of a VIE as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of such VIE. During the three months ended April 1, 2018, our consolidated VIE, Helix, received additional cash contributions from us and third-party investors in exchange for voting equity interests in Helix. Therefore, we reassessed and concluded that Helix continues to be a variable interest entity and that we remain the primary beneficiary. We have not provided financial or other support during the periods presented to our VIEs that we were not previously contractually required to provide.
Equity Method InvestmentsThe equity method is used to account for investments in which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded within other assets, and the share of net income or losses of equity investments is recognized on a one quarter lag in other income, net.
Redeemable Noncontrolling InterestsNoncontrolling interests represent the portion of equity (net assets) in our consolidated entity, Helix, that is not wholly-owned by us that is not attributable, directly or indirectly, to us. Noncontrolling interests with embedded contingent redemption features, such as put rights, that are not solely within our control are considered redeemable noncontrolling interests. Redeemable noncontrolling interests are presented outside of stockholders’ equity on the condensed consolidated balance sheets.
Fiscal YearOur fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. The three months ended April 1, 2018 and April 2, 2017 were both 13 weeks.
ReclassificationsCertain prior period amounts have been reclassified to conform to the current period presentation.
Recently Adopted Accounting PronouncementsIn May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The new standard is based on the principle that revenue should be recognized in an amount that reflects the consideration to which we expect to be entitled in exchange for the transfer of promised goods or services. We adopted Topic 606 using the modified retrospective transition method. The cumulative effect of applying the new revenue standard to all incomplete contracts as of January 1, 2018 was not material and, therefore, did not result in an adjustment to retained earnings. There was no material difference to the consolidated financial statements for the period ended April 1, 2018 due to the adoption of Topic 606. Furthermore, we expect the impact to be immaterial to our consolidated financial statements going forward. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10) , which requires equity investments (other than those accounted for under the equity method or those that result in consolidation) to be measured at fair value, with changes in fair value recognized in net income. This standard was effective for us beginning in the first quarter of 2018. Based on our elections, our strategic equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient for estimating fair value are measured at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The measurement alternative was applied prospectively and did not result in an adjustment to retained earnings.
Recently Issued Accounting PronouncementsIn February 2016, the FASB issued Accounting Standard Update (ASU) 2016-02, Leases (Topic 842) . The new standard requires lessees to recognize most leases on their balance sheet as lease liabilities with corresponding right-of-use assets. ASU 2016-02 is effective for us beginning in the first quarter of 2019. Currently, the standard will be adopted on a modified retrospective transition basis for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The FASB has proposed an alternative method to adopt the lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. While we are continuing to assess the effects of adoption, we believe the new standard will have a material effect on our consolidated financial statements and disclosures. We expect substantially all of our real-estate operating lease commitments will be recognized as lease liabilities with corresponding right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet. We are currently evaluating the impact of Topic 842 on the consolidated financial statements as it relates to other aspects of our business. In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available for sale debt securities. The standard is effective for us beginning in the first quarter of 2020, with early adoption permitted. We are currently evaluating the impact of ASU 2016-13 on the consolidated financial statements.
Revenue RecognitionOur revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of instruments and consumables used in genetic analysis. Service and other revenue primarily consists of revenue generated from genotyping and sequencing services and instrument service contracts. We recognize revenue when control of our products and services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. Revenue from product sales is recognized generally upon delivery to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs upon shipment and the term between invoicing and when payment is due is not significant. In instances where right of payment or transfer of title is contingent upon the customer’s acceptance of the product, revenue is deferred until all acceptance criteria have been met. Revenue from instrument service contracts is recognized as the services are rendered, typically evenly over the contract term. Revenue from genotyping and sequencing services is recognized when earned, which is generally at the time the genotyping or sequencing analysis data is made available to the customer or agreed-upon milestones are reached. Revenue is recorded net of discounts, distributor commissions, and sales taxes collected on behalf of governmental authorities. Employee sales commissions are recorded as selling, general and administrative expenses when incurred as the amortization period would have been one year or less. We regularly enter into contracts with multiple performance obligations. Such obligations are generally satisfied within a short time frame, approximately three to six months, after the contract execution date. Revenue recognition for contracts with multiple deliverables is based on the separate, distinct performance obligations within the contract. We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The contract price is allocated to each performance obligation in proportion to its stand-alone selling price. We determine our best estimate of stand-alone selling price using average selling prices over a rolling 12-month period coupled with an assessment of current market conditions. If the product or service has no history of sales or if the sales volume is not sufficient, we rely upon prices set by our pricing committee, adjusted for applicable discounts.
Earnings per ShareBasic earnings per share attributable to Illumina stockholders is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to Illumina stockholders is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Per-share earnings of our VIEs are included in the consolidated basic and diluted earnings per share computations based on our share of the VIE’s securities. Potentially dilutive common shares consist of shares issuable under convertible senior notes and equity awards. Convertible senior notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercise of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares.
DerivativesWe are exposed to foreign exchange rate risks in the normal course of business. We enter into foreign exchange contracts to manage foreign currency risks related to monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. These foreign exchange contracts are carried at fair value in other current assets or accrued liabilities and are not designated as hedging instruments. Changes in the value of derivatives are recognized in other income, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities.
WarrantiesWe generally provide a one -year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six to twelve months after the manufacture date. At the time revenue is recognized, an accrual is established for estimated warranty expenses based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue.
Strategic InvestmentsThe carrying amounts of our strategic equity investments without readily determinable fair values are initially measured at cost and are remeasured for impairment and observable price changes in orderly transactions for identifiable or similar investments of the same issuer.

Basis of Presentation and Sum17

Basis of Presentation and Summary of Significant Accounting Policies (Tables)3 Months Ended
Apr. 01, 2018
Accounting Policies [Abstract]
Disaggregation of Revenue from External CustomersThe following table represents revenue by source (in millions): Three Months Ended April 1, 2018 April 2, 2017 Sequencing Microarray Total Sequencing Microarray Total Consumables $ 417 $ 87 $ 504 $ 318 $ 69 $ 387 Instruments 112 6 118 95 5 100 Other product 5 1 6 4 — 4 Total product revenue 534 94 628 417 74 491 Service and other 96 58 154 78 29 107 Total revenue $ 630 $ 152 $ 782 $ 495 $ 103 $ 598 Revenue related to our Consolidated VIEs is included in sequencing services and other revenue. The following table represents revenue by geographic area, based on region of destination (in millions): Three Months Ended April 1, April 2, United States $ 416 $ 325 Europe 184 126 Greater China (1) 78 56 Asia-Pacific (1) 70 67 Other markets 34 24 Total revenue $ 782 $ 598 ____________________________________ (1) Revenue for the Greater China region, which consists of China, Taiwan, and Hong Kong, is reported separately from the Asia-Pacific region.
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Earnings Per ShareThe following is the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended April 1, April 2, Weighted average shares outstanding 147 146 Effect of potentially dilutive common shares from: Equity awards 1 1 Weighted average shares used in calculating diluted earnings per share 148 147 Potentially dilutive shares excluded from calculation due to anti-dilutive effect — 1
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Antidilutive SecuritiesThe following is the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended April 1, April 2, Weighted average shares outstanding 147 146 Effect of potentially dilutive common shares from: Equity awards 1 1 Weighted average shares used in calculating diluted earnings per share 148 147 Potentially dilutive shares excluded from calculation due to anti-dilutive effect — 1

Balance Sheet Account Details (

Balance Sheet Account Details (Tables)3 Months Ended
Apr. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Short-term InvestmentsThe following is a summary of short-term investments (in millions): April 1, 2018 December 31, 2017 Amortized Cost Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Losses Estimated Fair Value Available-for-sale debt securities: Debt securities in government sponsored entities $ 38 $ — $ 38 $ 67 $ — $ 67 Corporate debt securities 375 (2 ) 373 423 (2 ) 421 U.S. Treasury securities 403 (1 ) 402 433 (1 ) 432 Total available-for-sale debt securities $ 816 $ (3 ) $ 813 $ 923 $ (3 ) $ 920
Summary of Contractual Maturities of Available-for-sale Debt SecuritiesContractual maturities of available-for-sale debt securities as of April 1, 2018 were as follows (in millions): Estimated Fair Value Due within one year $ 353 After one but within five years 460 Total $ 813
Summary of InventoryInventory consists of the following (in millions): April 1, December 31, Raw materials $ 95 $ 93 Work in process 209 188 Finished goods 46 52 Total inventory $ 350 $ 333
Summary of Property and EquipmentProperty and equipment, net consists of the following (in millions): April 1, December 31, Leasehold improvements $ 477 $ 331 Machinery and equipment 331 316 Computer hardware and software 207 185 Furniture and fixtures 40 34 Buildings 269 155 Construction in progress 103 326 Total property and equipment, gross 1,427 1,347 Accumulated depreciation (444 ) (416 ) Total property and equipment, net $ 983 $ 931
Summary of Changes in GoodwillChanges to goodwill during the three months ended April 1, 2018 are as follows (in millions): Goodwill Balance as of December 31, 2018 $ 771 Current period acquisition 4 Balance as of April 1, 2018 $ 775
Summary of Accrued LiabilitiesAccrued liabilities consist of the following (in millions): April 1, December 31, Contract liabilities, current portion $ 153 $ 150 Accrued compensation expenses 125 177 Accrued taxes payable 59 50 Other 51 55 Total accrued liabilities $ 388 $ 432
Summary of Changes in Reserve for Product WarrantiesChanges in the reserve for product warranties during the three months ended April 1, 2018 and April 2, 2017 are as follows (in millions): Three Months Ended April 1, April 2, Balance at beginning of period $ 17 $ 13 Additions charged to cost of product revenue 6 4 Repairs and replacements (7 ) (5 ) Balance at end of period $ 16 $ 12
Summary of Activity of Redeemable Noncontrolling InterestsThe activity of the redeemable noncontrolling interests during the three months ended April 1, 2018 is as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 31, 2017 $ 220 Net loss attributable to noncontrolling interests (10 ) Adjustment up to the redemption value 5 Balance as of April 1, 2018 $ 215

Fair Value Measurements (Tables

Fair Value Measurements (Tables)3 Months Ended
Apr. 01, 2018
Fair Value Disclosures [Abstract]
Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring BasisThe following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of April 1, 2018 and December 31, 2017 (in millions): April 1, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,282 $ — $ — $ 1,282 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 38 — 38 — 67 — 67 Corporate debt securities — 373 — 373 — 421 — 421 U.S. Treasury securities 402 — — 402 432 — — 432 Deferred compensation plan assets — 35 — 35 — 35 — 35 Total assets measured at fair value $ 1,684 $ 446 $ — $ 2,130 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation liability $ — $ 34 $ — $ 34 $ — $ 33 $ — $ 33

Debt and Other Commitments (Tab

Debt and Other Commitments (Tables)3 Months Ended
Apr. 01, 2018
Debt Disclosure [Abstract]
Convertible DebtDebt obligations consist of the following (dollars in millions): April 1, December 31, Principal amount of 2019 Notes outstanding $ 633 $ 633 Principal amount of 2021 Notes outstanding 517 517 Unamortized discount of liability component of convertible senior notes (68 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,082 1,075 Obligations under financing leases 244 113 Other 4 4 Less: current portion (620 ) (10 ) Long-term debt $ 710 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance cost $ 161 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 1,333 $ 1,305 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 2.6 years 2.8 years

Share-based Compensation Expe21

Share-based Compensation Expense (Tables)3 Months Ended
Apr. 01, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Share-based Compensation Expense for all Stock AwardsShare-based compensation expense is reported in our statements of income as follows (in millions): Three Months Ended April 1, April 2, Cost of product revenue $ 4 $ 3 Cost of service and other revenue 1 — Research and development 15 14 Selling, general and administrative 28 33 Share-based compensation expense before taxes 48 50 Related income tax benefits (10 ) (11 ) Share-based compensation expense, net of taxes $ 38 $ 39
Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase PlanThe assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the Employee Stock Purchase Plan (ESPP) during the three months ended April 1, 2018 are as follows: Employee Stock Purchase Rights Risk-free interest rate 0.83% - 1.89% Expected volatility 28% - 44% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average fair value per share $ 55.83

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)3 Months Ended
Apr. 01, 2018
Equity [Abstract]
Summary of Restricted Stock Activity and Related Information, Restricted StockRestricted stock activity and related information for the three months ended April 1, 2018 is as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 17 45 $ 228.79 $ 164.36 Vested (61 ) — $ 151.01 — Cancelled (70 ) (15 ) $ 168.15 $ 161.84 Outstanding at April 1, 2018 1,971 572 $ 174.23 $ 166.12 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Restricted Stock Activity and Related Information, Performance UnitsRestricted stock activity and related information for the three months ended April 1, 2018 is as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 17 45 $ 228.79 $ 164.36 Vested (61 ) — $ 151.01 — Cancelled (70 ) (15 ) $ 168.15 $ 161.84 Outstanding at April 1, 2018 1,971 572 $ 174.23 $ 166.12 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Stock Option Activity Under all Stock Option PlansStock option activity during the three months ended April 1, 2018 is as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 31, 2017 322 $ 46.93 Exercised (17 ) $ 41.91 Outstanding and exercisable at April 1, 2018 305 $ 47.20

Segment Information (Tables)

Segment Information (Tables)3 Months Ended
Apr. 01, 2018
Segment Reporting [Abstract]
Summary of Operating Performance and Assets by SegmentThe following table presents the operating performance of each reportable segment (in millions): Three Months Ended April 1, April 2, Revenue: Core Illumina $ 783 $ 598 Consolidated VIEs 3 1 Elimination of intersegment revenue (4 ) (1 ) Consolidated revenue $ 782 $ 598 Income (loss) from operations: Core Illumina $ 238 $ 84 Consolidated VIEs (21 ) (34 ) Elimination of intersegment earnings 1 2 Consolidated income from operations $ 218 $ 52 The following table presents the total assets of each reportable segment (in millions): April 1, December 31, Core Illumina $ 5,465 $ 5,223 Consolidated VIEs 155 45 Elimination of intersegment assets (78 ) (11 ) Consolidated total assets $ 5,542 $ 5,257

Basis of Presentation and Sum24

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Dec. 31, 2017Apr. 02, 2017
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liability $ 184 $ 181
Contract liabilities, current portion153 $ 150 $ 150
Revenue recognized, previously recorded as deferred revenue $ 68
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction, period3 months
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction, period6 months

Basis of Presentation and Sum25

Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Principles (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Disaggregation of Revenue [Line Items]
Revenue $ 782 $ 598
United States
Disaggregation of Revenue [Line Items]
Revenue416 325
Europe
Disaggregation of Revenue [Line Items]
Revenue184 126
Greater China
Disaggregation of Revenue [Line Items]
Revenue78 56
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue70 67
Other markets
Disaggregation of Revenue [Line Items]
Revenue34 24
Sequencing
Disaggregation of Revenue [Line Items]
Revenue630 495
Microarray
Disaggregation of Revenue [Line Items]
Revenue152 103
Consumables
Disaggregation of Revenue [Line Items]
Revenue504 387
Consumables | Sequencing
Disaggregation of Revenue [Line Items]
Revenue417 318
Consumables | Microarray
Disaggregation of Revenue [Line Items]
Revenue87 69
Instruments
Disaggregation of Revenue [Line Items]
Revenue118 100
Instruments | Sequencing
Disaggregation of Revenue [Line Items]
Revenue112 95
Instruments | Microarray
Disaggregation of Revenue [Line Items]
Revenue6 5
Other products
Disaggregation of Revenue [Line Items]
Revenue6 4
Other products | Sequencing
Disaggregation of Revenue [Line Items]
Revenue5 4
Other products | Microarray
Disaggregation of Revenue [Line Items]
Revenue1 0
Total product revenue
Disaggregation of Revenue [Line Items]
Revenue628 491
Total product revenue | Sequencing
Disaggregation of Revenue [Line Items]
Revenue534 417
Total product revenue | Microarray
Disaggregation of Revenue [Line Items]
Revenue94 74
Services and other
Disaggregation of Revenue [Line Items]
Revenue154 107
Services and other | Sequencing
Disaggregation of Revenue [Line Items]
Revenue96 78
Services and other | Microarray
Disaggregation of Revenue [Line Items]
Revenue $ 58 $ 29

Basis of Presentation and Sum26

Basis of Presentation and Summary of Significant Accounting Policies - Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share (Details) - shares shares in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Weighted average shares used to calculate basic and diluted earnings per share
Weighted average shares outstanding147 146
Effect of potentially dilutive common shares from:
Equity awards1 1
Weighted average shares used in calculating diluted earnings per share148 147
Potentially dilutive shares excluded from calculation due to anti-dilutive effect1

Balance Sheet Account Details -

Balance Sheet Account Details - Summary of Short-term Investments (Details) - USD ($) $ in MillionsApr. 01, 2018Apr. 02, 2017
Available-for-sale securities:
Amortized Cost $ 816 $ 923
Gross Unrealized Losses3 3
Estimated Fair Value813 920
Debt securities in government sponsored entities
Available-for-sale securities:
Amortized Cost38 67
Gross Unrealized Losses0 0
Estimated Fair Value38 67
Corporate debt securities
Available-for-sale securities:
Amortized Cost375 423
Gross Unrealized Losses2 2
Estimated Fair Value373 421
U.S. Treasury securities
Available-for-sale securities:
Amortized Cost403 433
Gross Unrealized Losses1 1
Estimated Fair Value $ 402 $ 432

Balance Sheet Account Details28

Balance Sheet Account Details - Summary of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($) $ in MillionsApr. 01, 2018Apr. 02, 2017
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due within one year $ 353
After one but within five years460
Total $ 813 $ 920

Balance Sheet Account Details29

Balance Sheet Account Details - Narrative - Strategic Investments (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017Dec. 31, 2017
Schedule of Investments [Line Items]
Commitment in new venture capital investment fund $ 100
Callable period10 years
Remaining capital commitment $ 80
Other Assets
Schedule of Investments [Line Items]
Strategic equity investments, without readily determinable fair values256 $ 250
Equity method investments19 $ 16
Investee
Schedule of Investments [Line Items]
Revenue from transactions with Company's cost-method investments in non-publicly traded companies $ 36 $ 23

Balance Sheet Account Details30

Balance Sheet Account Details - Summary of Inventory (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017
Inventory [Abstract]
Raw materials $ 95 $ 93
Work in process209 188
Finished goods46 52
Total inventory $ 350 $ 333

Balance Sheet Account Details31

Balance Sheet Account Details - Summary of Property and Equipment (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment, gross $ 1,427 $ 1,347
Accumulated depreciation(444)(416)
Total property and equipment, net983 931
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, gross477 331
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross331 316
Computer hardware and software
Property, Plant and Equipment [Line Items]
Total property and equipment, gross207 185
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment, gross40 34
Buildings
Property, Plant and Equipment [Line Items]
Total property and equipment, gross269 155
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment, gross $ 103 $ 326

Balance Sheet Account Details32

Balance Sheet Account Details - Narrative - Property and Equipment (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Property, Plant and Equipment [Line Items]
Non-cash expenditures included in capital expenditures $ 33 $ 60
Construction In Progress And Build to Suit Lease Liability
Property, Plant and Equipment [Line Items]
Non-cash expenditures included in capital expenditures $ 6 $ 27

Balance Sheet Account Details33

Balance Sheet Account Details - Summary of Changes in Goodwill (Details) $ in Millions3 Months Ended
Apr. 01, 2018USD ($)
Goodwill [Roll Forward]
Beginning balance $ 771
Current period acquisition4
Ending balance $ 775

Balance Sheet Account Details34

Balance Sheet Account Details - Narrative - Intangible Assets and Goodwill (Details) $ in Millions3 Months Ended
Apr. 02, 2017USD ($)
Finite-Lived Intangible Assets [Line Items]
Impairment of in-process research and development $ 5
Cost of Sales
Finite-Lived Intangible Assets [Line Items]
Impairment of finite-lived intangible assets $ 18

Balance Sheet Account Details35

Balance Sheet Account Details - Narrative - Derivatives (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017
Not Designated as Hedging Instrument | Foreign Exchange Forward
Derivative [Line Items]
Derivative, notional amount $ 113 $ 88

Balance Sheet Account Details36

Balance Sheet Account Details - Summary of Accrued Liabilities (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017Apr. 02, 2017
Accrued Liabilities, Current [Abstract]
Contract liabilities, current portion $ 153 $ 150 $ 150
Accrued compensation expenses125 177
Accrued taxes payable59 50
Other51 55
Total accrued liabilities $ 388 $ 432

Balance Sheet Account Details37

Balance Sheet Account Details - Narrative - Warranties (Details)3 Months Ended
Apr. 01, 2018
Instruments
Product Warranty Liability [Line Items]
Warranty period1 year
Consumables | Minimum
Product Warranty Liability [Line Items]
Warranty period6 months
Consumables | Maximum
Product Warranty Liability [Line Items]
Warranty period12 months

Balance Sheet Account Details38

Balance Sheet Account Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Reserve for product warranties [Roll Forward]
Balance at beginning of period $ 17 $ 13
Additions charged to cost of product revenue6 4
Repairs and replacements(7)(5)
Balance at end of period $ 16 $ 12

Balance Sheet Account Details39

Balance Sheet Account Details - Narrative - Investment in Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Dec. 31, 2017Apr. 02, 2017Jan. 01, 2017Jul. 31, 2015
Variable Interest Entity [Line Items]
Additional investment in exchange for voting equity interests $ 68
Cash and cash equivalents attributable to variable interest entities $ 1,560 $ 1,225 $ 981 $ 735
Helix Holdings I, LLC | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Ownership percentage by noncontrolling interest owners50.00%
Equity ownership interest percentage50.00%50.00%
Cash and cash equivalents attributable to variable interest entities $ 121

Balance Sheet Account Details40

Balance Sheet Account Details - Narrative - Deconsolidation of GRAIL, Inc. (Details) - USD ($) shares in Millions, $ in MillionsFeb. 28, 2017Feb. 28, 2017Apr. 02, 2017Apr. 01, 2018Dec. 31, 2017Feb. 27, 2017
Variable Interest Entity [Line Items]
Proceeds from sale of GRAIL preferred stock $ 278
Gain on deconsolidation of GRAIL $ 453
GRAIL, Inc.
Variable Interest Entity [Line Items]
Cost-method investment ownership percentage19.00%19.00%
Cost-method investment voting interest percentage13.00%13.00%
Gain on deconsolidation of GRAIL $ 453
GRAIL, Inc. | Other Assets
Variable Interest Entity [Line Items]
Cost-method investments $ 185 $ 185
Variable Interest Entity, Primary Beneficiary | GRAIL, Inc.
Variable Interest Entity [Line Items]
Proceeds from sale of GRAIL preferred stock $ 278
Equity ownership interest percentage52.00%
Noncontrolling Interest, Loss Percentage Attributable to Parent50.00%
Variable Interest Entity, Primary Beneficiary | GRAIL, Inc. | GRAIL Class A Preferred
Variable Interest Entity [Line Items]
Shares repurchased by GRAIL from Illumina35
Variable Interest Entity, Primary Beneficiary | GRAIL, Inc. | GRAIL Class A-1 Convertible
Variable Interest Entity [Line Items]
Shares repurchased by GRAIL from Illumina34

Balance Sheet Account Details41

Balance Sheet Account Details - Summary of Activity of Redeemable Noncontrolling Interests (Details) $ in Millions3 Months Ended
Apr. 01, 2018USD ($)
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward]
Balance as of December 31, 2017 $ 220
Net loss attributable to noncontrolling interests(10)
Adjustment up to the redemption value5
Balance as of April 1, 2018 $ 215

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017Apr. 02, 2017
Assets:
Available-for-sale securities $ 813 $ 920
Debt securities in government sponsored entities
Assets:
Available-for-sale securities38 67
Corporate debt securities
Assets:
Available-for-sale securities373 421
U.S. Treasury securities
Assets:
Available-for-sale securities402 $ 432
Fair Value, Measurements, Recurring
Assets:
Deferred compensation plan assets35 $ 35
Total assets measured at fair value2,130 1,912
Liabilities:
Deferred compensation liability34 33
Fair Value, Measurements, Recurring | Debt securities in government sponsored entities
Assets:
Available-for-sale securities38 67
Fair Value, Measurements, Recurring | Corporate debt securities
Assets:
Available-for-sale securities373 421
Fair Value, Measurements, Recurring | U.S. Treasury securities
Assets:
Available-for-sale securities402 432
Fair Value, Measurements, Recurring | Money market funds (cash equivalents)
Assets:
Money market funds (cash equivalents)1,282 957
Fair Value, Measurements, Recurring | Level 1
Assets:
Deferred compensation plan assets0
Total assets measured at fair value1,684 1,389
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities
Assets:
Available-for-sale securities402 432
Fair Value, Measurements, Recurring | Level 1 | Money market funds (cash equivalents)
Assets:
Money market funds (cash equivalents)1,282 957
Fair Value, Measurements, Recurring | Level 2
Assets:
Deferred compensation plan assets35 35
Total assets measured at fair value446 523
Liabilities:
Deferred compensation liability34 33
Fair Value, Measurements, Recurring | Level 2 | Debt securities in government sponsored entities
Assets:
Available-for-sale securities38 67
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities
Assets:
Available-for-sale securities $ 373 $ 421

Debt and Other Commitments - Su

Debt and Other Commitments - Summary of Information about Equity and Liability Components of Convertible Senior Notes Outstanding (Details) - USD ($) $ in Millions3 Months Ended12 Months Ended
Apr. 01, 2018Dec. 31, 2017Jun. 29, 2014
Summarized information about equity and liability components of convertible senior notes
Obligations under financing leases $ 244 $ 113
Other4 4
Less: current portion(620)(10)
Long-term debt710 1,182
Convertible Senior Notes
Summarized information about equity and liability components of convertible senior notes
Unamortized discount of liability component of convertible senior notes(68)(75)
Net carrying amount of liability component of convertible senior notes1,082 1,075
Carrying value of equity component, net of debt issuance cost $ 161 $ 161
Weighted-average remaining amortization period of discount on the liability component2 years 7 months2 years 9 months
Level 2 | Convertible Senior Notes
Summarized information about equity and liability components of convertible senior notes
Fair value of convertible senior notes outstanding (Level 2) $ 1,333 $ 1,305
2019 Notes | Convertible Senior Notes
Summarized information about equity and liability components of convertible senior notes
Principal amount of notes outstanding633 633 $ 633
2021 Notes | Convertible Senior Notes
Summarized information about equity and liability components of convertible senior notes
Principal amount of notes outstanding $ 517 $ 517 $ 517

Debt and Other Commitments - Na

Debt and Other Commitments - Narrative (Details) - Convertible Senior Notes $ / shares in Units, $ in Millions1 Months Ended
Jun. 29, 2014USD ($)day$ / sharesApr. 01, 2018USD ($)Dec. 31, 2017USD ($)
2019 Notes
Debt Instrument [Line Items]
Stated rate0.00%
Principal amount of notes outstanding | $ $ 633 $ 633 $ 633
Effective interest rate used to measure fair value of converted notes upon conversion2.90%
Conversion rate0.0039318
Conversion price (in dollars per share) | $ / shares $ 254.34
Threshold note trading days5
Threshold consecutive note trading days10
Threshold percentage of note price trigger98.00%
Threshold common stock trading days20
Threshold consecutive common stock trading days30
Threshold percentage of common stock price trigger130.00%
2021 Notes
Debt Instrument [Line Items]
Stated rate0.50%
Principal amount of notes outstanding | $ $ 517 $ 517 $ 517
Effective interest rate used to measure fair value of converted notes upon conversion3.50%
Conversion rate0.0039318
Conversion price (in dollars per share) | $ / shares $ 254.34
Threshold note trading days5
Threshold consecutive note trading days10
Threshold percentage of note price trigger98.00%
Threshold common stock trading days20
Threshold consecutive common stock trading days30
Threshold percentage of common stock price trigger130.00%

Debt and Other Commitments - Bu

Debt and Other Commitments - Build-to-suit leases Narrative (Details) - USD ($) $ in MillionsApr. 01, 2018Dec. 31, 2017
Debt Instrument [Line Items]
Build-to-suit lease liability $ 21 $ 144
Build-to-suit lease, asset under construction21 144
Obligations under financing leases244 $ 113
Construction In Progress And Build to Suit Lease Liability
Debt Instrument [Line Items]
Obligations under financing leases $ 132

Share-based Compensation Expe46

Share-based Compensation Expense - Summary of Share-based Compensation Expense for all Stock Awards (Details) - USD ($) $ in Millions3 Months Ended
Apr. 01, 2018Apr. 02, 2017
Share-based Compensation
Share-based compensation expense before taxes $ 48 $ 50
Related income tax benefits(10)(11)
Share-based compensation expense, net of taxes38 39
Cost of product revenue
Share-based Compensation
Share-based compensation expense before taxes4 3
Cost of service and other revenue
Share-based Compensation
Share-based compensation expense before taxes1
Research and development
Share-based Compensation
Share-based compensation expense before taxes15 14
Selling, general and administrative
Share-based Compensation
Share-based compensation expense before taxes $ 28 $ 33

Share-based Compensation Expe47

Share-based Compensation Expense - Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase Plan (Details) - Employee Stock3 Months Ended
Apr. 01, 2018$ / shares
Assumptions used to estimate the fair value per share of employee stock purchase rights granted
Expected volatility, minimum28.00%
Expected volatility, maximum44.00%
Expected dividends0.00%
Weighted-average fair value per share (in dollars per share) $ 55.83
Minimum
Assumptions used to estimate the fair value per share of employee stock purchase rights granted
Risk-free interest rate0.83%
Expected term6 months
Maximum
Assumptions used to estimate the fair value per share of employee stock purchase rights granted
Risk-free interest rate1.89%
Expected term1 year

Share-based Compensation Expe48

Share-based Compensation Expense - Narrative (Details) $ in Millions3 Months Ended
Apr. 01, 2018USD ($)
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date $ 360
Weighted-average period of unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date2 years 6 months

Stockholders' Equity - Narrativ

Stockholders' Equity - Narrative (Details) shares in MillionsApr. 01, 2018shares
2015 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance (in shares)5.5

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Restricted Stock Activity and Related Information (Details) shares in Thousands3 Months Ended
Apr. 01, 2018$ / sharesshares
Restricted Stock Units (RSU)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at period start (in shares) | shares2,085
Awarded (in shares) | shares17
Vested (in shares) | shares(61)
Cancelled (in shares) | shares(70)
Outstanding at period end (in shares) | shares1,971
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-Average Grant Date Fair Value per Share, Outstanding at period start (in dollars per share) | $ / shares $ 172.92
Weighted-Average Grant Date Fair Value per Share, Awarded (in dollars per share) | $ / shares228.79
Weighted-Average Grant Date Fair Value per Share, Vested (in dollars per share) | $ / shares151.01
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares168.15
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares $ 174.23
Performance Stock Units (PSU)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at period start (in shares) | shares542
Awarded (in shares) | shares45
Cancelled (in shares) | shares(15)
Outstanding at period end (in shares) | shares572
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-Average Grant Date Fair Value per Share, Outstanding at period start (in dollars per share) | $ / shares $ 166.15
Weighted-Average Grant Date Fair Value per Share, Awarded (in dollars per share) | $ / shares164.36
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares161.84
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares $ 166.12

Stockholders' Equity - Summar51

Stockholders' Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details) shares in Thousands3 Months Ended
Apr. 01, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, Outstanding at period start (in shares) | shares322
Options, Exercised (in shares) | shares(17)
Options, Outstanding at period end (in shares) | shares305
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted-Average Exercise Price, Options, Outstanding at period start (in dollars per share) | $ / shares $ 46.93
Weighted-Average Exercise Price, Options, Exercised (in dollars per share) | $ / shares41.91
Weighted-Average Exercise Price, Options, Outstanding at period end (in dollars per share) | $ / shares $ 47.20

Stockholders' Equity - Narrat52

Stockholders' Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee Stock shares in Millions3 Months Ended
Apr. 01, 2018shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Specified percentage of the fair market value of the common stock on the first or last day of the offering period whichever is lower at which stock is purchased85.00%
Total shares issued under the ESPP (in shares)0.1
Shares available for issuance (in shares)13.9

Stockholders' Equity - Narrat53

Stockholders' Equity - Narrative - Share Repurchases (Details) - USD ($) shares in Millions, $ in Millions3 Months Ended
Apr. 02, 2017Apr. 01, 2018May 04, 2017Jul. 28, 2016
Class of Stock [Line Items]
Common stock repurchases $ 101
Common Stock
Class of Stock [Line Items]
Dollar amount remaining in authorized stock repurchase program $ 100
Common Stock | July 2016 Share Repurchase Plan
Class of Stock [Line Items]
Stock repurchase program, authorized amount $ 250
Repurchase of common shares (in shares)0.6
Common stock repurchases $ 101
Common Stock | May 2017 Share Repurchase Plan
Class of Stock [Line Items]
Stock repurchase program, authorized amount $ 250

Stockholders' Equity - Stockhol

Stockholders' Equity - Stockholders Equity - Phantom (Details) shares in ThousandsApr. 01, 2018$ / sharesshares
Equity [Abstract]
Options, Exercisable at period end (in shares) | shares305
Weighted Average Exercise Price, Options, Exercisable at period end (in dollars per share) | $ / shares $ 47.20

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details)3 Months Ended
Apr. 01, 2018
Income Tax Disclosure [Abstract]
Effective tax rate10.60%

Segment Information (Details)

Segment Information (Details) $ in Millions3 Months Ended
Apr. 01, 2018USD ($)segmentsApr. 02, 2017USD ($)Dec. 31, 2017USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segments2
Segment revenue $ 782 $ 598
Segment income (loss) from operations218 52
Segment assets5,542 $ 5,257
Operating Segments | Core Illumina
Segment Reporting Information [Line Items]
Segment revenue783 598
Segment income (loss) from operations238 84
Segment assets5,465 5,223
Operating Segments | Consolidated VIEs
Segment Reporting Information [Line Items]
Segment revenue3 1
Segment income (loss) from operations(21)(34)
Segment assets155 45
Elimination of intersegment revenue
Segment Reporting Information [Line Items]
Segment revenue(4)(1)
Segment income (loss) from operations1 $ 2
Segment assets $ (78) $ (11)