Document and Entity Information
Document and Entity Information - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2018 | Oct. 19, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Illumina Inc | |
Entity Central Index Key | 1,110,803 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 147 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,346 | $ 1,225 |
Short-term investments | 2,043 | 920 |
Accounts receivable, net | 433 | 411 |
Inventory | 374 | 333 |
Prepaid expenses and other current assets | 66 | 91 |
Total current assets | 4,262 | 2,980 |
Property and equipment, net | 1,060 | 931 |
Goodwill | 831 | 771 |
Intangible assets, net | 195 | 175 |
Deferred tax assets | 86 | 88 |
Other assets | 325 | 312 |
Total assets | 6,759 | 5,257 |
Current liabilities: | ||
Accounts payable | 156 | 160 |
Accrued liabilities | 450 | 432 |
Build-to-suit lease liability | 22 | 144 |
Long-term debt, current portion | 1,107 | 10 |
Total current liabilities | 1,735 | 746 |
Long-term debt | 860 | 1,182 |
Other long-term liabilities | 352 | 360 |
Redeemable noncontrolling interests | 218 | 220 |
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Common stock | 2 | 2 |
Additional paid-in capital | 3,093 | 2,833 |
Accumulated other comprehensive loss | (2) | (1) |
Retained earnings | 2,872 | 2,256 |
Treasury stock, at cost | (2,462) | (2,341) |
Total Illumina stockholders’ equity | 3,503 | 2,749 |
Noncontrolling interests | 91 | |
Total stockholders’ equity | 3,594 | 2,749 |
Total liabilities and stockholders’ equity | $ 6,759 | $ 5,257 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Revenue: | ||||
Consolidated revenue | $ 853 | $ 714 | $ 2,466 | $ 1,975 |
Cost of revenue: | ||||
Amortization of acquired intangible assets | 10 | 9 | 26 | 30 |
Total cost of revenue | 256 | 232 | 756 | 691 |
Gross profit | 597 | 482 | 1,710 | 1,284 |
Operating expense: | ||||
Research and development | 159 | 134 | 447 | 409 |
Selling, general and administrative | 197 | 167 | 577 | 499 |
Total operating expense | 356 | 301 | 1,024 | 908 |
Income from operations | 241 | 181 | 686 | 376 |
Other income (expense): | ||||
Interest income | 14 | 4 | 31 | 13 |
Interest expense | (15) | (10) | (37) | (26) |
Other (expense) income, net | (8) | 5 | 457 | |
Total other (expense) income, net | (9) | (6) | (1) | 444 |
Income before income taxes | 232 | 175 | 685 | 820 |
Provision for income taxes | 44 | 23 | 100 | 199 |
Consolidated net income | 188 | 152 | 585 | 621 |
Add: Net loss attributable to noncontrolling interests | 11 | 11 | 31 | 37 |
Net income attributable to Illumina stockholders | 199 | 163 | 616 | 658 |
Net income attributable to Illumina stockholders for earnings per share | $ 199 | $ 163 | $ 616 | $ 657 |
Earnings per share attributable to Illumina stockholders: | ||||
Basic (in dollars per share) | $ 1.35 | $ 1.12 | $ 4.20 | $ 4.49 |
Diluted (in dollars per share) | $ 1.33 | $ 1.11 | $ 4.15 | $ 4.45 |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 147 | 146 | 147 | 146 |
Diluted (in shares) | 149 | 148 | 148 | 148 |
Product revenue | ||||
Revenue: | ||||
Consolidated revenue | $ 710 | $ 596 | $ 2,011 | $ 1,631 |
Cost of revenue: | ||||
Cost of revenue | 184 | 173 | 540 | 508 |
Service and other revenue | ||||
Revenue: | ||||
Consolidated revenue | 143 | 118 | 455 | 344 |
Cost of revenue: | ||||
Cost of revenue | $ 62 | $ 50 | $ 190 | $ 153 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Consolidated net income | $ 188 | $ 152 | $ 585 | $ 621 |
Unrealized (loss) gain on available-for-sale debt securities, net of deferred tax | (1) | 1 | (1) | 1 |
Total consolidated comprehensive income | 187 | 153 | 584 | 622 |
Add: Comprehensive loss attributable to noncontrolling interests | 11 | 11 | 31 | 37 |
Comprehensive income attributable to Illumina stockholders | $ 198 | $ 164 | $ 615 | $ 659 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity Statement - 9 months ended Sep. 30, 2018 - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling 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) | 610 | 616 | (6) | ||||
Unrealized loss on available-for-sale debt securities, net of deferred tax | (1) | (1) | |||||
Issuance of common stock, net of repurchases | (76) | 45 | (121) | ||||
Share-based compensation | 145 | 145 | |||||
Adjustment to the carrying value of redeemable noncontrolling interests | (21) | (21) | |||||
Issuance of convertible senior notes, net of tax impact | 93 | 93 | |||||
Contributions from noncontrolling interest owners | 92 | 92 | |||||
Issuance of subsidiary shares | 5 | 5 | |||||
Vesting of redeemable equity awards | (2) | (2) | |||||
Ending balance at Sep. 30, 2018 | $ 3,594 | $ 2 | $ 3,093 | $ (2) | $ 2,872 | $ (2,462) | $ 91 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Oct. 01, 2017 | |
Cash flows from operating activities: | ||
Consolidated net income | $ 585 | $ 621 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on deconsolidation of GRAIL | (453) | |
Depreciation expense | 100 | 81 |
Amortization of intangible assets | 29 | 36 |
Share-based compensation expense | 146 | 123 |
Accretion of debt discount | 26 | 23 |
Deferred income taxes | (32) | 53 |
Impairment of intangible assets | 23 | |
Other | (2) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (24) | 1 |
Inventory | (40) | (27) |
Prepaid expenses and other current assets | 7 | 14 |
Other assets | (9) | (3) |
Accounts payable | 13 | 12 |
Accrued liabilities | 45 | 56 |
Other long-term liabilities | (4) | 23 |
Net cash provided by operating activities | 842 | 581 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (2,352) | (359) |
Sales of available-for-sale securities | 520 | 314 |
Maturities of available-for-sale securities | 710 | 181 |
Net cash paid for acquisitions | (100) | |
Proceeds from sale of GRAIL securities | 278 | |
Deconsolidation of GRAIL cash | (52) | |
Net purchases of strategic investments | (12) | (25) |
Purchases of property and equipment | (231) | (234) |
Cash paid for intangible assets | (2) | |
Net cash (used in) provided by investing activities | (1,465) | 101 |
Cash flows from financing activities: | ||
Payments on financing obligations | (3) | (7) |
Payments on acquisition related contingent consideration liability | (3) | |
Proceeds from issuance of debt, net | 735 | 5 |
Common stock repurchases | (103) | (176) |
Taxes paid related to net share settlement of equity awards | (18) | (28) |
Proceeds from issuance of common stock | 45 | 63 |
Contributions from noncontrolling interest owners | 92 | 79 |
Net cash provided by (used in) financing activities | 748 | (67) |
Effect of exchange rate changes on cash and cash equivalents | (4) | 4 |
Net increase in cash and cash equivalents | 121 | 619 |
Cash and cash equivalents at beginning of period | 1,225 | 735 |
Cash and cash equivalents at end of period | $ 1,346 | $ 1,354 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis 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 nine months ended September 30, 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 continued to be a variable interest entity and that we remained the primary beneficiary. During the periods presented, we have not provided any other financial or other support to our VIEs that we were not 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 (expense) income, net. Redeemable Noncontrolling Interests Noncontrolling interests represent the portion of equity (net assets) in Helix, our consolidated but not wholly-owned entity, that is neither directly nor indirectly attributable 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 and nine months ended September 30, 2018 and October 1, 2017 were both 13 and 39 weeks, respectively. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Significant Accounting Policies During the three and nine months ended September 30, 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 condensed consolidated financial statements for the three and nine months ended September 30, 2018 due to the adoption of Topic 606. 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 Standards 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 and will be adopted on a modified retrospective basis by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; we will continue to report comparative periods under the current lease accounting standard. We are currently designing and implementing changes to our systems, processes, policies, and controls for lease accounting, including implementation of a third-party software application, to help us comply with the standard. We expect to elect the standard’s package of practical expedients on adoption, which allows us to carry forward our historical assessment of whether existing agreements contain a lease and the classification of our existing lease agreements. We do not expect to elect the standard’s available hindsight practical expedient on adoption. While we continue to review our existing lease agreements and 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, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet upon adoption. 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 expected impact of ASU 2016-13 on our 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; 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 for such costs, if capitalized, 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 standalone selling price. We determine our best estimate of standalone 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 consist of deferred revenue and customer deposits, as of September 30, 2018 and December 31, 2017 were $181 million , of which the short-term portions of $154 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 and nine months ended September 30, 2018 included $26 million and $128 million of previously deferred revenue that was included in contract liabilities as of December 31, 2017 . Contract assets as of September 30, 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 tables represent revenue by source (in millions): Three Months Ended September 30, October 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 467 $ 83 $ 550 $ 380 $ 71 $ 451 Instruments 138 16 154 128 12 140 Other product 5 1 6 5 — 5 Total product revenue 610 100 710 513 83 596 Service and other revenue 109 34 143 80 38 118 Total revenue $ 719 $ 134 $ 853 $ 593 $ 121 $ 714 Nine Months Ended September 30, October 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,340 $ 255 $ 1,595 $ 1,036 $ 204 $ 1,240 Instruments 372 26 398 353 23 376 Other product 16 2 18 14 1 15 Total product revenue 1,728 283 2,011 1,403 228 1,631 Service and other revenue 312 143 455 235 109 344 Total revenue $ 2,040 $ 426 $ 2,466 $ 1,638 $ 337 $ 1,975 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 Nine Months Ended September 30, October 1, September 30, October 1, Americas (1) $ 474 $ 417 $ 1,380 $ 1,153 Europe, Middle East, and Africa 219 165 615 443 Greater China (2) 102 87 288 221 Asia-Pacific 58 45 183 158 Total revenue $ 853 $ 714 $ 2,466 $ 1,975 ____________________________________ (1) Revenue for the Americas region included United States revenue of $ 455 million and $ 1,316 million , respectively, for the three and nine months ended September 30, 2018 and $397 million and $1,096 million , respectively, for the three and nine months ended October 1, 2017 . (2) 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 Nine Months Ended September 30, October 1, September 30, October 1, Weighted average shares outstanding 147 146 147 146 Effect of potentially dilutive common shares from: Convertible senior notes 1 — — — Equity awards 1 2 1 2 Weighted average shares used in calculating diluted earnings per share 149 148 148 148 |
Balance Sheet Account Details
Balance Sheet Account Details | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Account Details | Balance Sheet Account Details Short-Term Investments The following is a summary of short-term investments (in millions): September 30, 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 $ 21 $ — $ 21 $ 67 $ — $ 67 Corporate debt securities 1,063 (3 ) 1,060 423 (2 ) 421 U.S. Treasury securities 964 (2 ) 962 433 (1 ) 432 Total available-for-sale debt securities $ 2,048 $ (5 ) $ 2,043 $ 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 September 30, 2018 were as follows (in millions): Estimated Fair Value Due within one year $ 1,253 After one but within five years 790 Total $ 2,043 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 September 30, 2018 and December 31, 2017 , the aggregate carrying amounts of our strategic equity investments without readily determinable fair values were $249 million and $250 million , respectively, included in other assets. Revenue recognized from transactions with such companies was $32 million and $104 million , respectively, for the three and nine months ended September 30, 2018 and $38 million and $96 million , respectively, for the three and nine months ended October 1, 2017 . 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 $73 million remained as of September 30, 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 $25 million and $16 million as of September 30, 2018 and December 31, 2017 , respectively. Inventory Inventory consisted of the following (in millions): September 30, December 31, Raw materials $ 98 $ 93 Work in process 224 188 Finished goods 52 52 Total inventory $ 374 $ 333 Property and Equipment Property and equipment, net consisted of the following (in millions): September 30, December 31, Leasehold improvements $ 505 $ 331 Machinery and equipment 352 316 Computer hardware and software 207 185 Furniture and fixtures 43 34 Buildings 279 155 Construction in progress 156 326 Total property and equipment, gross 1,542 1,347 Accumulated depreciation (482 ) (416 ) Total property and equipment, net $ 1,060 $ 931 Property and equipment, net included non-cash expenditures of $38 million and $94 million for the nine months ended September 30, 2018 and October 1, 2017 , respectively, which were excluded from the condensed consolidated statements of cash flows. Such non-cash expenditures included $18 million and $60 million recorded under build-to-suit lease accounting for the nine months ended September 30, 2018 and October 1, 2017 , respectively. Intangible Assets and Goodwill On May 14, 2018, we acquired Edico Genome, a provider of data analysis acceleration solutions for next-generation sequencing (NGS) for total cash consideration of $100 million , net of cash acquired. As a result of this transaction, we recorded $56 million as goodwill. In addition, we recorded developed technology of $45 million and a trade name of $1 million , with useful lives of 10 and 3 years, respectively. We test the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require us to estimate the fair value of each reporting unit annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment is required. We performed the annual assessment for goodwill impairment in the second quarter of 2018 , noting no impairment. Changes to goodwill during the nine months ended September 30, 2018 were as follows (in millions): Goodwill Balance as of December 31, 2017 $ 771 Current period acquisitions 60 Balance as of September 30, 2018 $ 831 We perform regular reviews to determine if any event has occurred that may indicate our identifiable intangible assets are potentially impaired. During the nine months ended October 1, 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 nine months ended October 1, 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 (expense) income, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities. As of September 30, 2018 , we had foreign exchange forward contracts in place to hedge exposures in the euro, Japanese yen, Australian dollar, and Canadian dollar. As of September 30, 2018 and December 31, 2017 , the total notional amounts of outstanding forward contracts in place for foreign currency purchases were $99 million and $88 million , respectively. Accrued Liabilities Accrued liabilities consisted of the following (in millions): September 30, December 31, Contract liabilities, current portion $ 154 $ 150 Accrued compensation expenses 154 177 Accrued taxes payable 94 50 Other 48 55 Total accrued liabilities $ 450 $ 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 and nine months ended September 30, 2018 and October 1, 2017 were as follows (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Balance at beginning of period $ 15 $ 14 $ 17 $ 13 Additions charged to cost of product revenue 8 7 20 18 Repairs and replacements (6 ) (5 ) (20 ) (15 ) Balance at end of period $ 17 $ 16 $ 17 $ 16 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 were recorded at their historical basis as they remained 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 nine months ended September 30, 2018 , we made additional investments of $100 million in exchange for voting equity interests in Helix. As of September 30, 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 September 30, 2018 , the accompanying condensed consolidated balance sheet included $149 million of cash, cash equivalents, and short-term investments attributable to Helix that will be used to settle its respective obligations and will not be available to settle obligations of Illumina. The remaining assets and liabilities of Helix were not significant to our financial position as of September 30, 2018 . Helix had an immaterial impact on our condensed consolidated statements of income and cash flows for the three and nine months ended September 30, 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. At that time, 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 were 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, 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 had 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 (expense) income, net. The operations of GRAIL from January 2, 2017 up to February 28, 2017, the date of deconsolidation, were included in the accompanying condensed consolidated statements of income for the nine months ended October 1, 2017 . During this period, we absorbed approximately 50% of GRAIL’s losses based upon our proportional ownership of GRAIL’s common stock. The carrying value of the investment recorded in other assets was $189 million and $185 million as of September 30, 2018 and December 31, 2017 , respectively. Redeemable Noncontrolling Interests The activity of the redeemable noncontrolling interests during the nine months ended September 30, 2018 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 31, 2017 $ 220 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (25 ) Adjustment up to the redemption value 21 Balance as of September 30, 2018 $ 218 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in millions): September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,053 $ — $ — $ 1,053 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 21 — 21 — 67 — 67 Corporate debt securities — 1,060 — 1,060 — 421 — 421 U.S. Treasury securities 962 — — 962 432 — — 432 Deferred compensation plan assets — 39 — 39 — 35 — 35 Total assets measured at fair value $ 2,015 $ 1,120 $ — $ 3,135 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation liability $ — $ 37 $ — $ 37 $ — $ 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 Commitments | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Other Commitments | Debt and Other Commitments Summary of debt obligations Debt obligations consisted of the following (dollars in millions): September 30, December 31, Principal amount of 2023 Notes outstanding $ 750 $ — Principal amount of 2021 Notes outstanding 517 517 Principal amount of 2019 Notes outstanding 633 633 Unamortized discount of liability component of convertible senior notes (190 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,710 1,075 Obligations under financing leases 254 113 Other 3 4 Less: current portion (1,107 ) (10 ) Long-term debt $ 860 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance cost $ 287 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 2,533 $ 1,305 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 4.1 years 2.8 years Convertible Senior Notes 0% Convertible Senior Notes due 2023 (2023 Notes) On August 21, 2018, we issued $750 million aggregate principal amount of convertible senior notes due 2023 (2023 Notes). The net proceeds from the issuance, after deducting the offering expenses payable by us, were $735 million . The 2023 Notes carry no coupon interest and mature on August 15, 2023. The 2023 Notes will be convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate, subject to adjustment, of 2.1845 shares of common stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $457.77 per share of common stock), only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price in effect on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2023 Notes for each trading day of the 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 trading day; (3) if we call any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events described in the indenture. Regardless of the foregoing circumstances, the holders may convert their notes on or after May 15, 2023 until August 13, 2023. It is our intent and policy to settle conversions, if any, through combination settlement; this involves repayment of an amount of cash equal to the principal amount and delivery of the excess of conversion value over the principal amount in shares of common stock. In general, the “principal amount” paid in cash upon settlement is the lesser of $1,000 and the sum of the daily conversion values during a 20 -day observation period. The daily conversion value is the product of the effective conversion rate (2.1845) and the daily volume weighted average price (VWAP) of our common stock divided by 20 . The “share amount” is the cumulative “daily share amount” during the observation period, which is calculated by dividing the daily VWAP into the difference between the daily conversion value (i.e., conversion rate x daily VWAP) and $1,000. We may redeem for cash all or any portion of the 2023 Notes, at our option, on or after August 20, 2021 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect (currently $595.10 ) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. The 2023 Notes are accounted for in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by estimating the fair value of a similar liability that does not have an associated conversion feature. Because we have no outstanding non-convertible public debt, we determined that market-traded senior, unsecured corporate bonds represent a similar liability without a conversion option. Based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in our industry, and with similar maturities to the 2023 Notes, we estimated an implied interest rate of 3.7% , assuming no conversion option. Assumptions used in the estimate represent what market participants would use in pricing the liability component, including market interest rates, credit standing, and yield curves, all of which are defined as Level 2 observable inputs. The estimated implied interest rate was applied to the 2023 Notes, which resulted in a fair value of the liability component in aggregate of $624 million upon issuance, calculated as the present value of implied future payments based on the $750 million aggregate principal amount. The $126 million difference ( $93 million , net of tax) between the aggregate principal amount of $750 million and the estimated fair value of the liability component was recorded in additional paid-in capital as the 2023 Notes are not considered redeemable. As a policy election under applicable guidance related to the calculation of diluted net income per share, we have elected the combination settlement method as our stated settlement policy and apply the treasury stock method in the calculation of the potential dilutive impact of the 2023 Notes on net income per share each period. The 2023 Notes were not convertible as of September 30, 2018 and had no dilutive impact during the three and nine months ended September 30, 2018. If the 2023 Notes were converted as of September 30, 2018, the if-converted value would not exceed the principal amount. 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 . During the three months ended September 30, 2018, the market price of our common stock met the stock trading price conversion requirement of $330.64 and the 2019 and 2021 Notes became convertible on October 1, 2018 and continue to be convertible through December 31, 2018. The potential dilutive impact of the 2019 and 2021 notes has been included in our calculation of diluted earnings per share for the three and nine months ended September 30, 2018. If the 2019 and 2021 Notes were converted as of September 30, 2018 , the if-converted value would exceed the principal amount by $452 million . During the nine months ended September 30, 2018 , the carrying values of the 2019 and 2021 Notes were reclassified to short-term as they are 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. As of September 30, 2018 , we were 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 September 30, 2018 , and December 31, 2017 , we recorded $22 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 nine months ended September 30, 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, $142 million of construction in progress and build-to-suit lease liability were reclassified to building asset and obligations under financing leases, respectively. |
Share-based Compensation Expens
Share-based Compensation Expense | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Expense | Share-based Compensation Expense Share-based compensation expense reported in our statements of income was as follows (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Cost of product revenue $ 4 $ 3 $ 12 $ 9 Cost of service and other revenue 1 1 3 2 Research and development 15 12 45 38 Selling, general and administrative 28 18 86 74 Share-based compensation expense before taxes 48 34 146 123 Related income tax benefits (8 ) (11 ) (29 ) (34 ) Share-based compensation expense, net of taxes $ 40 $ 23 $ 117 $ 89 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 nine months ended September 30, 2018 were as follows: Employee Stock Purchase Rights Risk-free interest rate 1.22% - 2.45% Expected volatility 29% - 39% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average fair value per share $ 61.59 As of September 30, 2018 , approximately $293 million of unrecognized compensation cost related to restricted stock and ESPP shares granted to date was expected to be recognized over a weighted-average period of approximately 2.1 years . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity As of September 30, 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 nine months ended September 30, 2018 was 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 80 211 $ 272.83 $ 177.93 Vested (139 ) — $ 162.89 — Cancelled (155 ) (30 ) $ 171.35 $ 162.54 Outstanding at September 30, 2018 1,871 723 $ 178.07 $ 169.73 ______________________________________ (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 nine months ended September 30, 2018 was as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 31, 2017 322 $ 46.93 Exercised (101 ) $ 35.32 Outstanding and exercisable at September 30, 2018 221 $ 52.22 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 nine months ended September 30, 2018 , approximately 0.3 million shares were issued under the ESPP. As of September 30, 2018 , there were approximately 13.7 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 year ended December 31, 2017, we repurchased 0.6 million shares for $101 million , completing the share repurchase program. On May 4, 2017, our Board of Directors authorized a share repurchase program to repurchase $250 million of outstanding common stock. During the year ended December 31, 2017, we repurchased 0.8 million shares for $150 million from this program. On May 1, 2018, our Board of Directors authorized an additional share repurchase program to repurchase $150 million of outstanding common stock. The repurchases may be completed under a 10b5-1 plan or at management’s discretion. During the three months ended September 30, 2018, we repurchased 0.3 million shares for $103 million concurrently with the offering of our 2023 Notes. Authorizations to repurchase $147 million of our common stock remained available as of September 30, 2018 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income 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 rates for the three and nine months ended September 30, 2018 were 19.0% and 14.6% , respectively. For the three and nine months ended September 30, 2018 , 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, offset partially by the discrete tax expense associated with updating prior year estimates of the impact of U.S. Tax Reform. For the nine months ended September 30, 2018 , the decrease from the federal statutory rate was also attributable to 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 is acceptable. 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 Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal 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
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have two reportable segments: Core Illumina and one segment related to the combined activities of our Consolidated VIEs. Our Consolidated VIEs currently include only the operations of Helix, whereas prior to the deconsolidation of GRAIL on February 28, 2017, our Consolidated VIEs included the combined operations of GRAIL and Helix. 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 Nine Months Ended September 30, October 1, September 30, October 1, Revenue: Core Illumina $ 855 $ 715 $ 2,467 $ 1,978 Consolidated VIEs 2 1 8 4 Elimination of intersegment revenue (4 ) (2 ) (9 ) (7 ) Consolidated revenue $ 853 $ 714 $ 2,466 $ 1,975 Income (loss) from operations: Core Illumina $ 264 $ 203 $ 748 $ 447 Consolidated VIEs (23 ) (22 ) (64 ) (72 ) Elimination of intersegment earnings — — 2 1 Consolidated income from operations $ 241 $ 181 $ 686 $ 376 The following table presents the total assets of each reportable segment (in millions): September 30, December 31, Core Illumina $ 6,691 $ 5,223 Consolidated VIEs 177 45 Elimination of intersegment assets (109 ) (11 ) Consolidated total assets $ 6,759 $ 5,257 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
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. |
Consolidation | 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. |
Variable Interest Entities | 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. |
Equity Method Investments | 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 (expense) income, net. |
Redeemable Noncontrolling Interests | Noncontrolling interests represent the portion of equity (net assets) in Helix, our consolidated but not wholly-owned entity, that is neither directly nor indirectly attributable 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. |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recently Adopted and Issued 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 condensed consolidated financial statements for the three and nine months ended September 30, 2018 due to the adoption of Topic 606. 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. In February 2016, the FASB issued Accounting Standards 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 and will be adopted on a modified retrospective basis by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; we will continue to report comparative periods under the current lease accounting standard. We are currently designing and implementing changes to our systems, processes, policies, and controls for lease accounting, including implementation of a third-party software application, to help us comply with the standard. We expect to elect the standard’s package of practical expedients on adoption, which allows us to carry forward our historical assessment of whether existing agreements contain a lease and the classification of our existing lease agreements. We do not expect to elect the standard’s available hindsight practical expedient on adoption. While we continue to review our existing lease agreements and 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, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet upon adoption. 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 expected impact of ASU 2016-13 on our 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; 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 for such costs, if capitalized, 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 standalone selling price. We determine our best estimate of standalone 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 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. |
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. |
Intangible Assets and Goodwill | We test the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require us to estimate the fair value of each reporting unit annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment is required. |
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 (expense) income, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities. |
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. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue from External Customers | The following tables represent revenue by source (in millions): Three Months Ended September 30, October 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 467 $ 83 $ 550 $ 380 $ 71 $ 451 Instruments 138 16 154 128 12 140 Other product 5 1 6 5 — 5 Total product revenue 610 100 710 513 83 596 Service and other revenue 109 34 143 80 38 118 Total revenue $ 719 $ 134 $ 853 $ 593 $ 121 $ 714 Nine Months Ended September 30, October 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,340 $ 255 $ 1,595 $ 1,036 $ 204 $ 1,240 Instruments 372 26 398 353 23 376 Other product 16 2 18 14 1 15 Total product revenue 1,728 283 2,011 1,403 228 1,631 Service and other revenue 312 143 455 235 109 344 Total revenue $ 2,040 $ 426 $ 2,466 $ 1,638 $ 337 $ 1,975 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 Nine Months Ended September 30, October 1, September 30, October 1, Americas (1) $ 474 $ 417 $ 1,380 $ 1,153 Europe, Middle East, and Africa 219 165 615 443 Greater China (2) 102 87 288 221 Asia-Pacific 58 45 183 158 Total revenue $ 853 $ 714 $ 2,466 $ 1,975 ____________________________________ (1) Revenue for the Americas region included United States revenue of $ 455 million and $ 1,316 million , respectively, for the three and nine months ended September 30, 2018 and $397 million and $1,096 million , respectively, for the three and nine months ended October 1, 2017 . (2) 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 Share | The following is the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Weighted average shares outstanding 147 146 147 146 Effect of potentially dilutive common shares from: Convertible senior notes 1 — — — Equity awards 1 2 1 2 Weighted average shares used in calculating diluted earnings per share 149 148 148 148 |
Balance Sheet Account Details (
Balance Sheet Account Details (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Short-term Investments | The following is a summary of short-term investments (in millions): September 30, 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 $ 21 $ — $ 21 $ 67 $ — $ 67 Corporate debt securities 1,063 (3 ) 1,060 423 (2 ) 421 U.S. Treasury securities 964 (2 ) 962 433 (1 ) 432 Total available-for-sale debt securities $ 2,048 $ (5 ) $ 2,043 $ 923 $ (3 ) $ 920 |
Summary of Contractual Maturities of Available-for-sale Debt Securities | Contractual maturities of available-for-sale debt securities as of September 30, 2018 were as follows (in millions): Estimated Fair Value Due within one year $ 1,253 After one but within five years 790 Total $ 2,043 |
Summary of Inventory | Inventory consisted of the following (in millions): September 30, December 31, Raw materials $ 98 $ 93 Work in process 224 188 Finished goods 52 52 Total inventory $ 374 $ 333 |
Summary of Property and Equipment | Property and equipment, net consisted of the following (in millions): September 30, December 31, Leasehold improvements $ 505 $ 331 Machinery and equipment 352 316 Computer hardware and software 207 185 Furniture and fixtures 43 34 Buildings 279 155 Construction in progress 156 326 Total property and equipment, gross 1,542 1,347 Accumulated depreciation (482 ) (416 ) Total property and equipment, net $ 1,060 $ 931 |
Summary of Changes in Goodwill | Changes to goodwill during the nine months ended September 30, 2018 were as follows (in millions): Goodwill Balance as of December 31, 2017 $ 771 Current period acquisitions 60 Balance as of September 30, 2018 $ 831 |
Summary of Accrued Liabilities | Accrued liabilities consisted of the following (in millions): September 30, December 31, Contract liabilities, current portion $ 154 $ 150 Accrued compensation expenses 154 177 Accrued taxes payable 94 50 Other 48 55 Total accrued liabilities $ 450 $ 432 |
Summary of Changes in Reserve for Product Warranties | Changes in the reserve for product warranties during the three and nine months ended September 30, 2018 and October 1, 2017 were as follows (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Balance at beginning of period $ 15 $ 14 $ 17 $ 13 Additions charged to cost of product revenue 8 7 20 18 Repairs and replacements (6 ) (5 ) (20 ) (15 ) Balance at end of period $ 17 $ 16 $ 17 $ 16 |
Summary of Activity of Redeemable Noncontrolling Interests | The activity of the redeemable noncontrolling interests during the nine months ended September 30, 2018 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 31, 2017 $ 220 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (25 ) Adjustment up to the redemption value 21 Balance as of September 30, 2018 $ 218 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in millions): September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,053 $ — $ — $ 1,053 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 21 — 21 — 67 — 67 Corporate debt securities — 1,060 — 1,060 — 421 — 421 U.S. Treasury securities 962 — — 962 432 — — 432 Deferred compensation plan assets — 39 — 39 — 35 — 35 Total assets measured at fair value $ 2,015 $ 1,120 $ — $ 3,135 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation liability $ — $ 37 $ — $ 37 $ — $ 33 $ — $ 33 |
Debt and Other Commitments (Tab
Debt and Other Commitments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt obligations consisted of the following (dollars in millions): September 30, December 31, Principal amount of 2023 Notes outstanding $ 750 $ — Principal amount of 2021 Notes outstanding 517 517 Principal amount of 2019 Notes outstanding 633 633 Unamortized discount of liability component of convertible senior notes (190 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,710 1,075 Obligations under financing leases 254 113 Other 3 4 Less: current portion (1,107 ) (10 ) Long-term debt $ 860 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance cost $ 287 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 2,533 $ 1,305 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 4.1 years 2.8 years |
Share-based Compensation Expe_2
Share-based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-based Compensation Expense for all Stock Awards | Share-based compensation expense reported in our statements of income was as follows (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Cost of product revenue $ 4 $ 3 $ 12 $ 9 Cost of service and other revenue 1 1 3 2 Research and development 15 12 45 38 Selling, general and administrative 28 18 86 74 Share-based compensation expense before taxes 48 34 146 123 Related income tax benefits (8 ) (11 ) (29 ) (34 ) Share-based compensation expense, net of taxes $ 40 $ 23 $ 117 $ 89 |
Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase Plan | 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 nine months ended September 30, 2018 were as follows: Employee Stock Purchase Rights Risk-free interest rate 1.22% - 2.45% Expected volatility 29% - 39% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average fair value per share $ 61.59 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of Restricted Stock Activity and Related Information, Restricted Stock | Restricted stock activity and related information for the nine months ended September 30, 2018 was 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 80 211 $ 272.83 $ 177.93 Vested (139 ) — $ 162.89 — Cancelled (155 ) (30 ) $ 171.35 $ 162.54 Outstanding at September 30, 2018 1,871 723 $ 178.07 $ 169.73 ______________________________________ (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 Units | Restricted stock activity and related information for the nine months ended September 30, 2018 was 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 80 211 $ 272.83 $ 177.93 Vested (139 ) — $ 162.89 — Cancelled (155 ) (30 ) $ 171.35 $ 162.54 Outstanding at September 30, 2018 1,871 723 $ 178.07 $ 169.73 ______________________________________ (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 Plans | Stock option activity during the nine months ended September 30, 2018 was as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 31, 2017 322 $ 46.93 Exercised (101 ) $ 35.32 Outstanding and exercisable at September 30, 2018 221 $ 52.22 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Operating Performance and Assets by Segment | The following table presents the operating performance of each reportable segment (in millions): Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Revenue: Core Illumina $ 855 $ 715 $ 2,467 $ 1,978 Consolidated VIEs 2 1 8 4 Elimination of intersegment revenue (4 ) (2 ) (9 ) (7 ) Consolidated revenue $ 853 $ 714 $ 2,466 $ 1,975 Income (loss) from operations: Core Illumina $ 264 $ 203 $ 748 $ 447 Consolidated VIEs (23 ) (22 ) (64 ) (72 ) Elimination of intersegment earnings — — 2 1 Consolidated income from operations $ 241 $ 181 $ 686 $ 376 The following table presents the total assets of each reportable segment (in millions): September 30, December 31, Core Illumina $ 6,691 $ 5,223 Consolidated VIEs 177 45 Elimination of intersegment assets (109 ) (11 ) Consolidated total assets $ 6,759 $ 5,257 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Revenue, remaining obligation, expected timing of satisfaction | three to six months, | ||
Contract liability | $ 181 | $ 181 | $ 181 |
Contract liabilities, current portion | 154 | 154 | $ 150 |
Revenue recognized, previously recorded as deferred revenue | $ 26 | $ 128 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Principles (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 853 | $ 714 | $ 2,466 | $ 1,975 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 474 | 417 | 1,380 | 1,153 |
Europe, Middle East, and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 219 | 165 | 615 | 443 |
Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 102 | 87 | 288 | 221 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 58 | 45 | 183 | 158 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 455 | 397 | 1,316 | 1,096 |
Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 719 | 593 | 2,040 | 1,638 |
Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 134 | 121 | 426 | 337 |
Consumables | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 550 | 451 | 1,595 | 1,240 |
Consumables | Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 467 | 380 | 1,340 | 1,036 |
Consumables | Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 83 | 71 | 255 | 204 |
Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 154 | 140 | 398 | 376 |
Instruments | Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 138 | 128 | 372 | 353 |
Instruments | Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 16 | 12 | 26 | 23 |
Other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6 | 5 | 18 | 15 |
Other products | Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5 | 5 | 16 | 14 |
Other products | Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1 | 2 | 1 | |
Total product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 710 | 596 | 2,011 | 1,631 |
Total product revenue | Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 610 | 513 | 1,728 | 1,403 |
Total product revenue | Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 100 | 83 | 283 | 228 |
Service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 143 | 118 | 455 | 344 |
Service and other revenue | Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 109 | 80 | 312 | 235 |
Service and other revenue | Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 34 | $ 38 | $ 143 | $ 109 |
Basis of Presentation and Sum_6
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 Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Weighted average shares used to calculate basic and diluted earnings per share | ||||
Weighted average shares outstanding (in shares) | 147 | 146 | 147 | 146 |
Effect of potentially dilutive common shares from: | ||||
Convertible senior notes (in shares) | 1 | |||
Equity awards (in shares) | 1 | 2 | 1 | 2 |
Weighted average shares used in calculating diluted earnings per share (in shares) | 149 | 148 | 148 | 148 |
Balance Sheet Account Details -
Balance Sheet Account Details - Summary of Short-term Investments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Available-for-sale debt securities: | ||
Amortized Cost | $ 2,048 | $ 923 |
Gross Unrealized Losses | (5) | (3) |
Estimated Fair Value | 2,043 | 920 |
Debt securities in government sponsored entities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 21 | 67 |
Gross Unrealized Losses | ||
Estimated Fair Value | 21 | 67 |
Corporate debt securities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 1,063 | 423 |
Gross Unrealized Losses | (3) | (2) |
Estimated Fair Value | 1,060 | 421 |
U.S. Treasury securities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 964 | 433 |
Gross Unrealized Losses | (2) | (1) |
Estimated Fair Value | $ 962 | $ 432 |
Balance Sheet Account Details_2
Balance Sheet Account Details - Summary of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Estimated Fair Value | ||
Due within one year | $ 1,253 | |
After one but within five years | 790 | |
Total | $ 2,043 | $ 920 |
Balance Sheet Account Details_3
Balance Sheet Account Details - Narrative - Strategic Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | Dec. 31, 2017 | |
Schedule of Investments [Line Items] | |||||
Commitment in new venture capital investment fund | $ 100 | $ 100 | |||
Callable period | 10 years | ||||
Remaining capital commitment | 73 | $ 73 | |||
Other Assets | |||||
Schedule of Investments [Line Items] | |||||
Strategic equity investments, without readily determinable fair values | 249 | 249 | $ 250 | ||
Equity method investments | 25 | 25 | $ 16 | ||
Investee | |||||
Schedule of Investments [Line Items] | |||||
Revenue from transactions with Company's cost-method investments in non-publicly traded companies | $ 32 | $ 38 | $ 104 | $ 96 |
Balance Sheet Account Details_4
Balance Sheet Account Details - Summary of Inventory (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 98 | $ 93 |
Work in process | 224 | 188 |
Finished goods | 52 | 52 |
Total inventory | $ 374 | $ 333 |
Balance Sheet Account Details_5
Balance Sheet Account Details - Summary of Property and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 1,542 | $ 1,347 |
Accumulated depreciation | (482) | (416) |
Total property and equipment, net | 1,060 | 931 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 505 | 331 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 352 | 316 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 207 | 185 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 43 | 34 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 279 | 155 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 156 | $ 326 |
Balance Sheet Account Details_6
Balance Sheet Account Details - Narrative - Property and Equipment (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Oct. 01, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Non-cash expenditures included in capital expenditures | $ 38 | $ 94 |
Construction In Progress And Build to Suit Lease Liability | ||
Property, Plant and Equipment [Line Items] | ||
Non-cash expenditures included in capital expenditures | $ 18 | $ 60 |
Balance Sheet Account Details_7
Balance Sheet Account Details - Narrative - Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | May 14, 2018 | Oct. 01, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of in-process research and development | $ 5 | |
Edico Genome | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cash consideration, net of cash acquired | $ 100 | |
Goodwill, acquired during period | 56 | |
Developed technology | Edico Genome | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 45 | |
Useful life | 10 years | |
Trade Name | Edico Genome | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 1 | |
Useful life | 3 years | |
Cost of Sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of finite-lived intangible assets | $ 18 |
Balance Sheet Account Details_8
Balance Sheet Account Details - Summary of Changes in Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2017 | $ 771 |
Current period acquisitions | 60 |
Balance as of September 30, 2018 | $ 831 |
Balance Sheet Account Details_9
Balance Sheet Account Details - Narrative - Derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Not Designated as Hedging Instrument | Foreign Exchange Forward | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 99 | $ 88 |
Balance Sheet Account Detail_10
Balance Sheet Account Details - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract liabilities, current portion | $ 154 | $ 150 |
Accrued compensation expenses | 154 | 177 |
Accrued taxes payable | 94 | 50 |
Other | 48 | 55 |
Total accrued liabilities | $ 450 | $ 432 |
Balance Sheet Account Detail_11
Balance Sheet Account Details - Narrative - Warranties (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Instruments | |
Product Warranty Liability [Line Items] | |
Warranty period | 1 year |
Consumables | Minimum | |
Product Warranty Liability [Line Items] | |
Warranty period | 6 months |
Consumables | Maximum | |
Product Warranty Liability [Line Items] | |
Warranty period | 12 months |
Balance Sheet Account Detail_12
Balance Sheet Account Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Reserve for product warranties [Roll Forward] | ||||
Balance at beginning of period | $ 15 | $ 14 | $ 17 | $ 13 |
Additions charged to cost of product revenue | 8 | 7 | 20 | 18 |
Repairs and replacements | (6) | (5) | (20) | (15) |
Balance at end of period | $ 17 | $ 16 | $ 17 | $ 16 |
Balance Sheet Account Detail_13
Balance Sheet Account Details - Narrative - Investments in Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jan. 01, 2017 | Jul. 31, 2015 | |
Variable Interest Entity [Line Items] | |||||
Cash and Cash Equivalents, at Carrying Value | $ 1,346 | $ 1,225 | $ 1,354 | $ 735 | |
Additional investment in exchange for voting equity interests | $ 100 | ||||
Helix Holdings I, LLC | Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Equity ownership interest percentage | 50.00% | 50.00% | |||
Helix Holdings I, LLC | Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Ownership percentage by noncontrolling interest owners | 50.00% | ||||
Cash, cash equivalents, and short-term investments | $ 149 |
Balance Sheet Account Detail_14
Balance Sheet Account Details - Narrative - Deconsolidation of GRAIL, Inc. (Details) - USD ($) $ in Millions | Feb. 28, 2017 | Feb. 28, 2017 | Oct. 01, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Feb. 27, 2017 |
Variable Interest Entity [Line Items] | ||||||
Gain on deconsolidation of GRAIL | $ 453 | |||||
Other Assets | ||||||
Variable Interest Entity [Line Items] | ||||||
Strategic equity investments, without readily determinable fair values | $ 249 | $ 250 | ||||
GRAIL, Inc. | ||||||
Variable Interest Entity [Line Items] | ||||||
Equity ownership interest percentage | 19.00% | 19.00% | ||||
Cost-method investment voting interest percentage | 13.00% | 13.00% | ||||
Gain on deconsolidation of GRAIL | $ 453 | |||||
GRAIL, Inc. | Other Assets | ||||||
Variable Interest Entity [Line Items] | ||||||
Strategic equity investments, without readily determinable fair values | $ 189 | $ 185 | ||||
GRAIL, Inc. | Variable Interest Entity, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Equity ownership interest percentage | 52.00% | |||||
Percentage of GRAIL's losses absorbed | 50.00% |
Balance Sheet Account Detail_15
Balance Sheet Account Details - Summary of Activity of Redeemable Noncontrolling Interests (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward] | |
Balance as of December 31, 2017 | $ 220 |
Vesting of redeemable equity awards | 2 |
Net loss attributable to noncontrolling interests | (25) |
Adjustment up to the redemption value | 21 |
Balance as of September 30, 2018 | $ 218 |
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 Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Available-for-sale securities | $ 2,043 | $ 920 |
Debt securities in government sponsored entities | ||
Assets: | ||
Available-for-sale securities | 21 | 67 |
Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 1,060 | 421 |
U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 962 | 432 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Deferred compensation plan assets | 39 | 35 |
Total assets measured at fair value | 3,135 | 1,912 |
Liabilities: | ||
Deferred compensation liability | 37 | 33 |
Fair Value, Measurements, Recurring | Debt securities in government sponsored entities | ||
Assets: | ||
Available-for-sale securities | 21 | 67 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 1,060 | 421 |
Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 962 | 432 |
Fair Value, Measurements, Recurring | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 1,053 | 957 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total assets measured at fair value | 2,015 | 1,389 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 962 | 432 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 1,053 | 957 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Deferred compensation plan assets | 39 | 35 |
Total assets measured at fair value | 1,120 | 523 |
Liabilities: | ||
Deferred compensation liability | 37 | 33 |
Fair Value, Measurements, Recurring | Level 2 | Debt securities in government sponsored entities | ||
Assets: | ||
Available-for-sale securities | 21 | 67 |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | $ 1,060 | $ 421 |
Debt and Other Commitments - Su
Debt and Other Commitments - Summary of Debt Obligations (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Aug. 21, 2018 | Jun. 29, 2014 | |
Debt Instrument [Line Items] | ||||
Obligations under financing leases | $ 254 | $ 113 | ||
Other | 3 | 4 | ||
Less: current portion | (1,107) | (10) | ||
Long-term debt | 860 | 1,182 | ||
Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount of liability component of convertible senior notes | (190) | (75) | ||
Net carrying amount of liability component of convertible senior notes | 1,710 | 1,075 | ||
Carrying value of equity component, net of debt issuance cost | $ 287 | $ 161 | ||
Weighted-average remaining amortization period of discount on the liability component of convertible senior notes | 4 years 1 month | 2 years 9 months | ||
Level 2 | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Fair value of convertible senior notes outstanding (Level 2) | $ 2,533 | $ 1,305 | ||
2023 Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | 750 | $ 750 | ||
2021 Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | 517 | 517 | $ 517 | |
2019 Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | $ 633 | $ 633 | $ 633 |
Debt and Other Commitments - Na
Debt and Other Commitments - Narrative (Details) $ / shares in Units, $ in Millions | Aug. 21, 2018USD ($)day$ / shares | Jun. 29, 2014USD ($)day$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Additional paid-in capital, net of tax | $ | $ 3,093 | $ 2,833 | ||
Convertible Senior Notes | 2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Stated rate | 0.00% | |||
Principal amount of notes outstanding | $ | $ 750 | $ 750 | ||
Proceeds from issuance, net of offering expenses | $ | $ 735 | |||
Conversion rate | 0.0021845 | |||
Conversion price (in dollars per share) | $ / shares | $ 457.77 | |||
Threshold common stock trading days | 20 | |||
Threshold consecutive common stock trading days | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | 5 | |||
Threshold consecutive note trading days | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Observation period for the observation value | 20 days | |||
Effective interest rate used to measure fair value of converted notes upon conversion | 3.70% | |||
Debt, fair value | $ | $ 624 | |||
Additional paid in capital, before tax | $ | 126 | |||
Additional paid-in capital, net of tax | $ | $ 93 | |||
Stock trading price conversion requirement | $ / shares | $ 595.10 | |||
Convertible Senior Notes | 2019 Notes | ||||
Debt Instrument [Line Items] | ||||
Stated rate | 0.00% | |||
Principal amount of notes outstanding | $ | $ 633 | $ 633 | 633 | |
Conversion rate | 0.0039318 | |||
Conversion price (in dollars per share) | $ / shares | $ 254.34 | |||
Threshold common stock trading days | 20 | |||
Threshold consecutive common stock trading days | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | 5 | |||
Threshold consecutive note trading days | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Effective interest rate used to measure fair value of converted notes upon conversion | 2.90% | |||
Convertible Senior Notes | 2021 Notes | ||||
Debt Instrument [Line Items] | ||||
Stated rate | 0.50% | |||
Principal amount of notes outstanding | $ | $ 517 | $ 517 | $ 517 | |
Conversion rate | 0.0039318 | |||
Conversion price (in dollars per share) | $ / shares | $ 254.34 | |||
Threshold common stock trading days | 20 | |||
Threshold consecutive common stock trading days | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | 5 | |||
Threshold consecutive note trading days | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Effective interest rate used to measure fair value of converted notes upon conversion | 3.50% | |||
Convertible Senior Notes | Convertible Senior Notes Due 2019 and 2021 | ||||
Debt Instrument [Line Items] | ||||
Stock trading price conversion requirement | $ / shares | $ 330.64 | |||
If-converted value in excess of principal | $ | $ 452 |
Debt and Other Commitments - Bu
Debt and Other Commitments - Build-to-suit leases Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Build-to-suit lease liability | $ 22 | $ 144 |
Build-to-suit lease, asset under construction | 22 | 144 |
Obligations under financing leases | 254 | $ 113 |
Construction In Progress And Build to Suit Lease Liability | ||
Debt Instrument [Line Items] | ||
Obligations under financing leases | $ 142 |
Share-based Compensation Expe_3
Share-based Compensation Expense - Summary of Share-based Compensation Expense for all Stock Awards (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense before taxes | $ 48 | $ 34 | $ 146 | $ 123 |
Related income tax benefits | (8) | (11) | (29) | (34) |
Share-based compensation expense, net of taxes | 40 | 23 | 117 | 89 |
Cost of product revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense before taxes | 4 | 3 | 12 | 9 |
Cost of service and other revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense before taxes | 1 | 1 | 3 | 2 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense before taxes | 15 | 12 | 45 | 38 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense before taxes | $ 28 | $ 18 | $ 86 | $ 74 |
Share-based Compensation Expe_4
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 Stock | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility, minimum | 29.00% |
Expected volatility, maximum | 39.00% |
Expected dividends | 0.00% |
Weighted-average fair value per share (in dollars per share) | $ 61.59 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.22% |
Expected term | 6 months |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.45% |
Expected term | 1 year |
Share-based Compensation Expe_5
Share-based Compensation Expense - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 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 | $ 293 |
Weighted-average period of unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date | 2 years 1 month |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) shares in Millions | Sep. 30, 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 Thousands | 9 Months Ended |
Sep. 30, 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) | shares | 2,085 |
Awarded (in shares) | shares | 80 |
Vested (in shares) | shares | (139) |
Cancelled (in shares) | shares | (155) |
Outstanding at period end (in shares) | shares | 1,871 |
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) | $ / shares | 272.83 |
Weighted-Average Grant Date Fair Value per Share, Vested (in dollars per share) | $ / shares | 162.89 |
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares | 171.35 |
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares | $ 178.07 |
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) | shares | 542 |
Awarded (in shares) | shares | 211 |
Cancelled (in shares) | shares | (30) |
Outstanding at period end (in shares) | shares | 723 |
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) | $ / shares | 177.93 |
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares | 162.54 |
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares | $ 169.73 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options, Outstanding at period start (in shares) | shares | 322 |
Options, Exercised (in shares) | shares | (101) |
Options, Outstanding at period end (in shares) | shares | 221 |
Options, Exercisable (in shares) | shares | 221 |
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) | $ / shares | 35.32 |
Weighted-Average Exercise Price, Options, Outstanding at period end (in dollars per share) | $ / shares | 52.22 |
Weighted-Average Exercise Price, Options, Exercisable (in dollars per share) | $ / shares | $ 52.22 |
Stockholders' Equity - Narrat_2
Stockholders' Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee Stock shares in Millions | 9 Months Ended |
Sep. 30, 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 purchased | 85.00% |
Total shares issued under the ESPP (in shares) | 0.3 |
Shares available for issuance (in shares) | 13.7 |
Stockholders' Equity - Narrat_3
Stockholders' Equity - Narrative - Share Repurchases (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2018 | Oct. 01, 2017 | Dec. 31, 2017 | May 01, 2018 | May 04, 2017 | Jul. 28, 2016 | |
Class of Stock [Line Items] | |||||||
Common stock repurchases | $ 103 | $ 176 | |||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Dollar amount remaining in authorized stock repurchase program | $ 147 | $ 147 | |||||
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 | ||||||
Repurchase of common shares (in shares) | 0.8 | ||||||
Common stock repurchases | $ 150 | ||||||
Common Stock | May 2018 Share Repurchase Plan | |||||||
Class of Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 150 | ||||||
Repurchase of common shares (in shares) | 0.3 | ||||||
Common stock repurchases | $ 103 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 19.00% | 14.60% |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Oct. 01, 2017USD ($) | Sep. 30, 2018USD ($)segment | Oct. 01, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Consolidated revenue | $ 853 | $ 714 | $ 2,466 | $ 1,975 | |
Consolidated income from operations | 241 | 181 | 686 | 376 | |
Consolidated total assets | 6,759 | 6,759 | $ 5,257 | ||
Operating Segments | Core Illumina | |||||
Segment Reporting Information [Line Items] | |||||
Consolidated revenue | 855 | 715 | 2,467 | 1,978 | |
Consolidated income from operations | 264 | 203 | 748 | 447 | |
Consolidated total assets | 6,691 | 6,691 | 5,223 | ||
Operating Segments | Consolidated VIEs | |||||
Segment Reporting Information [Line Items] | |||||
Consolidated revenue | 2 | 1 | 8 | 4 | |
Consolidated income from operations | (23) | (22) | (64) | (72) | |
Consolidated total assets | 177 | 177 | 45 | ||
Elimination of intersegment | |||||
Segment Reporting Information [Line Items] | |||||
Consolidated revenue | (4) | $ (2) | (9) | (7) | |
Consolidated income from operations | 2 | $ 1 | |||
Consolidated total assets | $ (109) | $ (109) | $ (11) |