Document and Entity Information
Document and Entity Information Document - USD ($) shares in Millions, $ in Billions | 12 Months Ended | ||
Dec. 30, 2018 | Feb. 08, 2019 | Jul. 01, 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-K | ||
Document Period End Date | Dec. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 147 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 35.9 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,144 | $ 1,225 |
Short-term investments | 2,368 | 920 |
Accounts receivable, net | 514 | 411 |
Inventory | 386 | 333 |
Prepaid expenses and other current assets | 78 | 91 |
Total current assets | 4,490 | 2,980 |
Property and equipment, net | 1,075 | 931 |
Goodwill | 831 | 771 |
Intangible assets, net | 185 | 175 |
Deferred tax assets, net | 70 | 88 |
Other assets | 308 | 312 |
Total assets | 6,959 | 5,257 |
Current liabilities: | ||
Accounts payable | 184 | 160 |
Accrued liabilities | 513 | 432 |
Build-to-suit lease liability | 144 | |
Long-term debt, current portion | 1,107 | 10 |
Total current liabilities | 1,804 | 746 |
Long-term debt | 890 | 1,182 |
Other long-term liabilities | 359 | 360 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 61 | 220 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 10 million shares authorized; no shares issued and outstanding at December 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value, 320 million shares authorized; 192 million shares issued and 147 million outstanding at December 30, 2018; 191 million shares issued and 147 million outstanding at December 31, 2017 | 2 | 2 |
Additional paid-in capital | 3,290 | 2,833 |
Accumulated other comprehensive loss | (1) | (1) |
Retained earnings | 3,083 | 2,256 |
Treasury stock, 45 million shares and 44 million shares at cost at December 30, 2018 and December 31, 2017, respectively | (2,616) | (2,341) |
Total Illumina stockholders’ equity | 3,758 | 2,749 |
Noncontrolling interests | 87 | |
Total stockholders’ equity | 3,845 | 2,749 |
Total liabilities and stockholders’ equity | $ 6,959 | $ 5,257 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10 | 10 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 320 | 320 |
Common stock, shares issued | 192 | 191 |
Common stock, shares outstanding | 147 | 147 |
Treasury stock, shares | 45 | 44 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Revenue: | |||
Total revenue | $ 3,333 | $ 2,752 | $ 2,398 |
Cost of revenue: | |||
Amortization of acquired intangible assets | 35 | 39 | 43 |
Total cost of revenue | 1,033 | 926 | 732 |
Gross profit | 2,300 | 1,826 | 1,666 |
Operating expense: | |||
Research and development | 623 | 546 | 504 |
Selling, general and administrative | 794 | 674 | 584 |
Legal contingencies | (9) | ||
Total operating expense | 1,417 | 1,220 | 1,079 |
Income from operations | 883 | 606 | 587 |
Other income (expense): | |||
Interest income | 44 | 19 | 10 |
Interest expense | (57) | (37) | (33) |
Other income (expense), net | 24 | 455 | (3) |
Total other income (expense), net | 11 | 437 | (26) |
Income before income taxes | 894 | 1,043 | 561 |
Provision for income taxes | 112 | 365 | 133 |
Consolidated net income | 782 | 678 | 428 |
Add: Net loss attributable to noncontrolling interests | 44 | 48 | 35 |
Net income attributable to Illumina stockholders | 826 | 726 | 463 |
Net income attributable to Illumina stockholders for earnings per share | $ 826 | $ 725 | $ 454 |
Earnings per share attributable to Illumina stockholders: | |||
Basic (in dollars per share) | $ 5.63 | $ 4.96 | $ 3.09 |
Diluted (in dollars per share) | $ 5.56 | $ 4.92 | $ 3.07 |
Shares used in computing earnings per share: | |||
Basic (in shares) | 147 | 146 | 147 |
Diluted (in shares) | 149 | 148 | 148 |
Product revenue | |||
Revenue: | |||
Total revenue | $ 2,749 | $ 2,289 | $ 2,032 |
Cost of revenue: | |||
Cost of revenue | 738 | 679 | 534 |
Service and other revenue | |||
Revenue: | |||
Total revenue | 584 | 463 | 366 |
Cost of revenue: | |||
Cost of revenue | $ 260 | $ 208 | $ 155 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Consolidated net income | $ 782 | $ 678 | $ 428 |
Unrealized loss on available-for-sale debt securities, net of deferred tax | (1) | ||
Total consolidated comprehensive income | 782 | 678 | 427 |
Add: Comprehensive loss attributable to noncontrolling interests | 44 | 48 | 35 |
Comprehensive income attributable to Illumina stockholders | $ 826 | $ 726 | $ 462 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interests |
Beginning balance (in shares) at Jan. 03, 2016 | 187 | 40 | |||||
Beginning balance at Jan. 03, 2016 | $ 1,849 | $ 2 | $ 2,498 | $ 0 | $ 1,022 | $ (1,673) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 449 | 463 | (14) | ||||
Unrealized loss on available-for-sale securities, net of deferred tax | (1) | (1) | |||||
Issuance of common stock, net of repurchases (in shares) | 2 | (3) | |||||
Issuance of common stock, net of repurchases | (302) | 47 | $ (349) | ||||
Share-based compensation | 129 | 129 | |||||
Net incremental tax benefit related to share-based compensation | 87 | 87 | |||||
Adjustment to the carrying value of redeemable noncontrolling interests | (21) | (21) | |||||
Vesting of redeemable equity awards | (2) | (2) | |||||
Issuance of subsidiary shares in business combination | 2 | 2 | |||||
Issuance of treasury stock | 3 | 3 | |||||
Contributions from noncontrolling interest owners | 80 | 80 | |||||
Proceeds from early exercise of equity awards from a subsidiary | 7 | 7 | |||||
Tax impact of deemed dividend from GRAIL | (10) | (10) | |||||
Ending balance (in shares) at Jan. 01, 2017 | 189 | 43 | |||||
Ending balance at Jan. 01, 2017 | 2,270 | $ 2 | 2,733 | (1) | 1,485 | $ (2,022) | 73 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 719 | 726 | (7) | ||||
Issuance of common stock, net of repurchases (in shares) | 2 | (1) | |||||
Issuance of common stock, net of repurchases | (248) | 71 | $ (319) | ||||
Share-based compensation | 164 | 164 | |||||
Adjustment to the carrying value of redeemable noncontrolling interests | (136) | (136) | |||||
Vesting of redeemable equity awards | (13) | (13) | |||||
Cumulative-effect adjustment from adoption of new accounting standard | 48 | 3 | 45 | ||||
Deconsolidation of GRAIL | (55) | 11 | (66) | ||||
Ending balance (in shares) at Dec. 31, 2017 | 191 | 44 | |||||
Ending 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) | 816 | 826 | (10) | ||||
Issuance of common stock, net of repurchases (in shares) | 1 | (1) | |||||
Issuance of common stock, net of repurchases | (229) | 46 | $ (275) | ||||
Share-based compensation | 193 | 193 | |||||
Adjustment to the carrying value of redeemable noncontrolling interests | 127 | 127 | |||||
Vesting of redeemable equity awards | (2) | (2) | |||||
Cumulative-effect adjustment from adoption of new accounting standard | 1 | 1 | |||||
Issuance of subsidiary shares in business combination | 5 | 5 | |||||
Contributions from noncontrolling interest owners | 92 | 92 | |||||
Issuance of convertible senior notes, net of tax impact | 93 | 93 | |||||
Ending balance (in shares) at Dec. 30, 2018 | 192 | 45 | |||||
Ending balance at Dec. 30, 2018 | $ 3,845 | $ 2 | $ 3,290 | $ (1) | $ 3,083 | $ (2,616) | $ 87 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Cash flows from operating activities: | |||
Consolidated net income | $ 782 | $ 678 | $ 428 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on deconsolidation of GRAIL | (453) | ||
Depreciation expense | 140 | 110 | 90 |
Amortization of intangible assets | 39 | 46 | 51 |
Share-based compensation expense | 193 | 164 | 129 |
Accretion of debt discount | 41 | 30 | 30 |
Deferred income taxes | (18) | 81 | 94 |
Impairment of intangible assets | 23 | ||
Other | (17) | 1 | 2 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (105) | (26) | 3 |
Inventory | (53) | (33) | (30) |
Prepaid expenses and other current assets | 5 | 8 | (1) |
Other assets | (9) | (5) | (7) |
Accounts payable | 45 | 10 | (2) |
Accrued liabilities | 103 | 81 | (24) |
Other long-term liabilities | (4) | 160 | 16 |
Net cash provided by operating activities | 1,142 | 875 | 779 |
Cash flows from investing activities: | |||
Purchases of available-for-sale securities | (2,859) | (742) | (895) |
Sales of available-for-sale securities | 597 | 322 | 543 |
Maturities of available-for-sale securities | 860 | 321 | 140 |
Net cash paid for acquisitions | (100) | (18) | |
Proceeds from sale of GRAIL securities | 278 | ||
Deconsolidation of GRAIL cash | (52) | ||
Net purchases of strategic investments | (15) | (29) | (14) |
Purchases of property and equipment | (296) | (310) | (260) |
Cash paid for intangible assets | (2) | (11) | |
Net cash used in investing activities | (1,813) | (214) | (515) |
Cash flows from financing activities: | |||
Net proceeds from issuance of debt | 735 | 5 | 5 |
Common stock repurchases | (201) | (251) | (249) |
Proceeds from issuance of common stock | 46 | 71 | 47 |
Taxes paid related to net share settlement of equity awards | (74) | (68) | (100) |
Payments on financing obligations | (4) | (9) | (66) |
Contributions from noncontrolling interest owners | 92 | 79 | 89 |
Payments on acquisition related contingent consideration liability | (3) | (29) | |
Proceeds from early exercise of equity awards from a subsidiary | 7 | ||
Net cash provided by (used in) financing activities | 594 | (176) | (296) |
Effect of exchange rate changes on cash and cash equivalents | (4) | 5 | (2) |
Net (decrease) increase in cash and cash equivalents | (81) | 490 | (34) |
Cash and cash equivalents at beginning of year | 1,225 | 735 | 769 |
Cash and cash equivalents at end of year | 1,144 | 1,225 | 735 |
Supplemental cash flow information: | |||
Cash paid for income taxes | $ 99 | $ 149 | $ 60 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization and Business We are a provider of sequencing- and array-based solutions, serving customers in the research, clinical and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture and other emerging segments. Our customers include a broad range of academic, government, pharmaceutical, biotechnology, and other leading institutions around the globe. Basis of Presentation The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and 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. 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, we apply a qualitative approach 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 year ended December 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 over which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded within other assets, and the share of net income or losses of equity investments is recognized on a one quarter lag in other income (expense), 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 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 years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 were all 52 weeks. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Use of Estimates The preparation of the consolidated financial statements requires that management make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates. Accounting Pronouncements Adopted in 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The new standard is based on the principle that revenue should be recognized in an amount that reflects the consideration to which we expect to be entitled in exchange for the transfer of promised goods or services. We adopted Topic 606 using the modified retrospective transition method. The cumulative effect of applying the new revenue standard to all incomplete contracts as of January 1, 2018 was not material and, therefore, did not result in an adjustment to retained earnings. There was no material difference to the consolidated financial statements for the year ended December 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 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. This measurement alternative was applied prospectively to such equity securities and did not result in an adjustment to retained earnings. Accounting Pronouncements Adopted in 2017 In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) , which aims to simplify the accounting for share-based payment transactions, including accounting for income taxes, classification on the statement of cash flows, accounting for forfeitures, and classification of awards as either liabilities or equity. This ASU was effective for us beginning in the first quarter of 2017. This new standard increases the volatility of net income by requiring excess tax benefits from share-based payment arrangements to be classified as discrete items within the provision for income taxes, rather than recognizing excess tax benefits in additional paid-in capital. Upon adoption in Q1 2017, we recorded $45 million , net, to retained earnings, primarily related to unrealized tax benefits associated with share-based compensation. As a result of the adoption of this new standard, we made an accounting policy election to recognize forfeitures as they occur and no longer estimate expected forfeitures. In addition, ASU 2016-09 requires that excess income tax benefits from share-based compensation arrangements be classified as cash flow from operations, rather than cash flow from financing activities. We elected to apply the cash flow classification guidance retrospectively and reclassified $91 million from financing activity to operating activity for the year ended January 1, 2017. Recently Issued Accounting Pronouncements In February 2016, the FASB issued 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 and disclose key information about leasing arrangements. ASU 2016-02 is effective for us beginning in the first quarter of 2019 and will be adopted using a modified retrospective approach by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on December 31, 2018. We will continue to report financial information for fiscal years ending before December 31, 2018 under the current lease accounting standard. We elected 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 as either operating or capital leases (referred to as operating and financing leases in the new standard). We did not elect the standard’s available hindsight practical expedient on adoption. The standard also provides practical expedients for ongoing lessee accounting after adoption. We expect to elect the practical expedient to not separate lease and non-lease components for our real-estate leases and will therefore allocate all fixed lease payments, which may include management fees and common-area-maintenance charges, to our operating lease liabilities and corresponding right-of-use assets. We have finalized the changes to our systems, processes, policies, and controls for lease accounting, including implementation of a third-party software application, to facilitate our adoption of the lease standard effective December 31, 2018. We expect the most significant impacts of adoption to result from the recognition of our operating and build-to-suit lease commitments as lease liabilities with corresponding right-of-use assets, and the derecognition of existing assets and liabilities for our build-to-suit arrangements that do not qualify for sale-leaseback accounting. We currently expect this will result in the net recognition of additional total assets and liabilities of approximately $329 million and $354 million , respectively, and the difference between these amounts will be recorded as a cumulative-effect adjustment to retained earnings upon adoption in the first quarter of 2019. We also expect the classification of a portion of lease expense for our build-to-suit arrangements to change from interest expense to operating expense going forward. During the year ended December 30, 2018, the interest portion of lease expense for our build-to-suit arrangements was $13 million . In June 2016, the FASB issued 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. Concentrations of Risk We operate in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive products or services with new capabilities, and other factors could negatively impact our operating results. A portion of our customers consist of university and research institutions that management believes are, to some degree, directly or indirectly supported by the United States Government. A significant change in current research funding, particularly with respect to the U.S. National Institutes of Health, could have an adverse impact on future revenues and results of operations. We are also subject to risks related to our financial instruments, including cash and cash equivalents, investments, and accounts receivable. Most of our cash and cash equivalents as of December 30, 2018 were deposited with U.S. financial institutions, either domestically or with their foreign branches. Our investment policy restricts the amount of credit exposure to any one issuer to 5% of the portfolio or 5% of the total issue size outstanding at the time of purchase and to any one industry sector, as defined by Clearwater Analytics (Industry Sector Report), to 30% of the portfolio at the time of purchase. There is no limit to the percentage of the portfolio that may be maintained in debt securities, U.S. government-sponsored entities, U.S. Treasury securities, and money market funds. We require customized products and components that currently are available from a limited number of sources. We source certain key products and components included in our products from single vendors. We perform regular reviews of customer activity and associated credit risks and do not require collateral or enter into netting arrangements. Shipments to customers outside the United States comprised 47% , 45% , and 46% of total revenue for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. Customers outside the United States represented 44% and 48% of our gross trade accounts receivable balance as of December 30, 2018 and December 31, 2017 , respectively. International sales entail a variety of risks, including currency exchange fluctuations, longer payment cycles, and greater difficulty in accounts receivable collection. We are also subject to general geopolitical risks, such as political, social and economic instability, and changes in diplomatic and trade relations. The risks of international sales are mitigated in part by the extent to which sales are geographically distributed. Historically, we have not experienced significant credit losses from investments and accounts receivable. Fair Value Measurements The fair value of assets and liabilities are based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate the related fair values due to the short-term maturities of these instruments. Functional Currency The U.S. dollar is the functional currency of our international operations. We re-measure foreign subsidiaries’ monetary assets and liabilities to the U.S. dollar and record the net gains or losses resulting from re-measurement in other income (expense), net in the consolidated statements of income. Acquisitions All assets acquired and liabilities assumed are measured at fair value as of the acquisition date. We record the excess of purchase price over the aggregate value assigned to the net tangible and identifiable intangible assets acquired as goodwill. Acquired intangible assets other than goodwill are amortized over their useful lives. Post-acquisition adjustments in deferred tax asset valuation allowances and liabilities for uncertain tax positions are recorded in current period income tax expense. Cash Equivalents and Short-Term Investments Cash equivalents are comprised of short-term, highly-liquid investments with maturities of 90 days or less at the date of purchase. Short-term investments consist of debt securities in U.S. government-sponsored entities, corporate debt securities, U.S. Treasury securities, and equity securities. We classify short-term debt investments as available-for-sale at the time of purchase and evaluate such classification as of each balance sheet date. All short-term debt investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale debt securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. We evaluate our debt investments to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the securities will be sold before the recovery of their cost basis. Realized gains, losses, and declines in value judged to be other than temporary are determined based on the specific identification method and are recorded in interest income (expense), net in the consolidated statements of income. Equity investments with readily determinable fair values are classified as current or noncurrent based on the nature of the securities and their availability for use in current operations. All short-term equity investments are recorded at estimated fair value. Unrealized gains and losses for equity securities with readily determinable fair values are recorded in other income (expense), net in the consolidated statements of income. Accounts Receivable Trade accounts receivable are recorded at the net invoice value and are not interest-bearing. Receivables are considered past due based on the contractual payment terms. We reserve specific receivables if collectibility is no longer reasonably assured. We also reserve a percentage of our trade receivable balance based on collection history and current economic trends that might impact the level of future credit losses. These reserves are re-evaluated on a regular basis and adjusted as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. Inventory Inventory is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Inventory includes raw materials and finished goods that may be used in the research and development process, and such items are expensed as consumed or expired. Inventory write-downs for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, quality issues, historical experience, and usage forecasts. Property and Equipment Property and equipment are stated at cost, subject to review for impairment, and depreciated over the estimated useful lives of the assets, using the straight-line method. Depreciation of leasehold improvements is recorded over the shorter of the lease term or the estimated useful life of the related assets. Amortization of assets that are recorded under capital leases are included in depreciation expense. Maintenance and repairs are expensed as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense. Costs incurred to develop internal-use software during the application development stage are recorded as computer software costs, at cost. Costs incurred in the development of such internal-use software, including external direct costs of materials and services and applicable compensation costs of employees devoted to specific software application development, are capitalized. Cost incurred outside of the application development stage are expensed as incurred. The estimated useful lives of the major classes of property and equipment are generally as follows: Estimated Useful Lives Buildings and leasehold improvements 4 to 20 years Machinery and equipment 3 to 5 years Computer hardware and software 3 to 7 years Furniture and fixtures 7 years Leases Leases are reviewed and classified as capital or operating at their inception. When we are involved in the construction of leased assets, we evaluate whether we are the accounting owner during the construction period. For leases where we are the deemed accounting owner during the construction period, we record project construction costs paid or reimbursed by the landlord as construction in progress and a corresponding build-to-suit lease liability. For operating leases, rent expense is recorded on a straight-line basis over the term of the lease, which includes the construction build-out period and lease extension periods, if appropriate. The difference between rent payments and straight-line rent expense is recorded as deferred rent in accrued liabilities and other long-term liabilities. Lease incentives are amortized on a straight-line basis over the lease term as a reduction to rent expense. Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired in an acquisition. Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than the carrying amounts, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair values of our reporting units are less than the carrying amounts, then no additional assessment is deemed necessary. Otherwise, we proceed to perform the two-step test for goodwill impairment. The first step involves comparing the estimated fair values of the reporting units with the carrying values, including goodwill. If the carrying amounts of the reporting units exceed the fair values, the second step of the goodwill impairment test is performed to determine the amount of loss, which involves comparing the implied fair values of the goodwill to the carrying values of the goodwill. We may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the first step of the goodwill impairment test. We performed the annual assessment for goodwill impairment in the second quarter of 2018 , noting no impairment. Our identifiable intangible assets are typically comprised of acquired core technologies, licensed technologies, customer relationships, license agreements, and trade names. The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives. We perform regular reviews to determine if any event has occurred that may indicate that intangible assets with finite useful lives and other long-lived assets are potentially impaired. If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value. Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset. During the year ended December 31, 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 year ended December 31, 2017 , we recorded a $5 million impairment charge of in-process research and development as the project had no future alternative use. Such impairments were recorded within the Core Illumina reportable segment. See further discussion of our segments in note “10. Segment Information and Geographic Data.” 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 the derivatives are recognized in other income (expense), net, along with the re-measurement gain or loss on the foreign currency denominated assets or liabilities. As of December 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 December 30, 2018 , and December 31, 2017 , the total notional amounts of outstanding forward contracts in place for foreign currency purchases was $122 million and $88 million , respectively. Warranties We generally provide a one -year warranty on instruments. Additionally, a warranty on consumables is provided 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. Revenue Recognition 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. Revenue from product sales is recognized generally upon delivery to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs upon shipment and payment is typically due within 60 days from invoice. 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. 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. Revenue recognition for contracts with multiple deliverables is based on the separate satisfaction of each distinct performance obligation within the contract. Most performance obligations are generally satisfied within a short time frame, approximately three to six months, after the contract execution date. As of December 30, 2018 , the aggregate amount of the transaction price allocated to remaining performance obligations was $909 million , of which approximately 80% is expected to be converted to revenue through 2019, with the remainder thereafter. 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 management, adjusted for applicable discounts. Contract liabilities, which consist of deferred revenue and customer deposits, as of December 30, 2018 and December 31, 2017 were $206 million and $181 million , respectively, of which the short-term portions of $175 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 during the year ended December 30, 2018 included $146 million of previously deferred revenue that was included in contract liabilities as of December 31, 2017 . Contract assets as of December 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 by us. The terms of sales transactions through distributors are consistent with the terms of direct sales to customers. The following table represents revenue by source (in millions): Years Ended December 30, December 31, January 1, Sequencing Microarray Total Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,806 $ 350 $ 2,156 $ 1,468 $ 285 $ 1,753 $ 1,271 $ 272 $ 1,543 Instruments 532 37 569 484 31 515 450 19 469 Other product 21 3 24 19 2 21 18 2 20 Total product revenue 2,359 390 2,749 1,971 318 2,289 1,739 293 2,032 Service and other revenue 416 168 584 322 141 463 277 89 366 Total revenue $ 2,775 $ 558 $ 3,333 $ 2,293 $ 459 $ 2,752 $ 2,016 $ 382 $ 2,398 Revenue related to our Consolidated VIEs is included in sequencing service and other revenue. The majority of our revenue consists of sales of consumables and instruments. We also perform various services for our customers. For the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , consumable sales represented 65% , 64% , and 64% , respectively, of total revenue; instrument sales represented 17% , 19% , and 20% , respectively, of total revenue; and services represented 18% , 17% , and 15% , respectively, of total revenue. Our customers include leading genomic research centers, academic institutions, government laboratories, and hospitals, as well as pharmaceutical, biotechnology, commercial molecular diagnostic laboratories, and consumer genomics companies. We had no customers that provided more than 10% of total revenue in the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 . The following table represents revenue by geographic area, based on region of destination (in millions): Years Ended December 30, December 31, January 1, Americas (1) $ 1,864 $ 1,585 $ 1,367 Europe, Middle East, and Africa 851 653 575 Greater China (2) 365 292 — Asia-Pacific 253 222 456 Total revenue $ 3,333 $ 2,752 $ 2,398 ____________________________________ (1) Revenue for the Americas region included United States revenue of $1,779 million , $1,511 million , and $ 1,294 million for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017, respectively. (2) Revenue for the Greater China region, which includes China, Taiwan, and Hong Kong, is included in the Asia-Pacific region for the year ended January 1, 2017. Share-Based Compensation Share-based compensation expense is incurred related to restricted stock and Employee Stock Purchase Plan (ESPP). Restricted stock units (RSU) and performance stock units (PSU) are both considered restricted stock. The fair value of restricted stock is determined by the closing market price of our common stock on the date of grant. Share-based compensation expense is recognized based on the fair value on a straight-line basis over the requisite service periods of the awards. PSU represents a right to rece |
Balance Sheet Account Details
Balance Sheet Account Details | 12 Months Ended |
Dec. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Account Details | Balance Sheet Account Details Investments Debt Securities Available-for-sale debt securities, included in short-term investments, consisted of the following (in millions): December 30, 2018 December 31, 2017 Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Estimated Fair Value Amortized Cost Gross Unrealized Losses Estimated Fair Value Debt securities in government-sponsored entities $ 21 $ — $ — $ 21 $ 67 $ — $ 67 Corporate debt securities 1,060 (2 ) — 1,058 423 (2 ) 421 U.S. Treasury securities 1,250 (1 ) 1 1,250 433 (1 ) 432 Total $ 2,331 $ (3 ) $ 1 $ 2,329 $ 923 $ (3 ) $ 920 Contractual maturities of available-for-sale debt securities, as of December 30, 2018 , were as follows (in millions): Estimated Fair Value Due within one year $ 1,618 After one but within five years 711 Total $ 2,329 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 consolidated balance sheets. Equity Securities Our equity securities are strategic investments primarily in privately held companies. The carrying values of our non-marketable equity securities without readily determinable market values are initially measured at cost and adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment. Unrealized gains and losses on non-marketable equity securities are recognized in other income (expense), net. As of December 30, 2018 and December 31, 2017 , the aggregate carrying amounts of our non-marketable equity investments without readily determinable fair values were $231 million and $250 million , respectively, included in other assets. The decline was primarily due to the reclassification of an equity security that became marketable in 2018 to short-term investments. Our marketable equity security is measured at fair value. Unrealized gains and losses are recognized in other income (expense), net. As of December 30, 2018 , the fair value of our marketable equity investment was $39 million included in short-term investments. This included an unrealized gain of $21 million recorded in other income (expense), net during the year ended December 30, 2018 . Our equity investments are assessed for impairment quarterly. Impairment losses, equal to the difference between the carrying value and the fair value of the investment, are recorded in other income (expense), net. No material impairment losses were recorded during the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 . Revenue recognized from transactions with our strategic equity investees was $143 million , $127 million , and $56 million for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. Venture Fund We invest in a venture capital investment fund (the Fund) with a capital commitment of $100 million that is callable through April 2026 , of which $69 million remained as of December 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 $29 million and $16 million as of December 30, 2018 and December 31, 2017 , respectively. Accounts Receivable Accounts receivable, net consisted of the following (in millions): December 30, December 31, Trade accounts receivable, gross $ 516 $ 414 Allowance for doubtful accounts (2 ) (3 ) Total accounts receivable, net $ 514 $ 411 Inventory Inventory consisted of the following (in millions): December 30, December 31, Raw materials $ 117 $ 93 Work in process 218 188 Finished goods 51 52 Total inventory $ 386 $ 333 Property and Equipment Property and equipment, net consisted of the following (in millions): December 30, December 31, Leasehold improvements $ 567 $ 331 Machinery and equipment 382 316 Computer hardware and software 217 185 Furniture and fixtures 45 34 Buildings 285 155 Construction in progress 100 326 Total property and equipment, gross 1,596 1,347 Accumulated depreciation (521 ) (416 ) Total property and equipment, net $ 1,075 $ 931 Property and equipment, net included non-cash expenditures of $35 million , $117 million and $220 million for the years ended December 30, 2018 , December 31, 2017 and January 1, 2017 , respectively, which were excluded from the consolidated statements of cash flows. Such non-cash expenditures included $18 million , $79 million and $193 million recorded under build-to-suit lease accounting for the years ended December 30, 2018 , December 31, 2017 and January 1, 2017 , respectively. Accrued Liabilities Accrued liabilities consisted of the following (in millions): December 30, December 31, Contract liabilities, current portion $ 175 $ 150 Accrued compensation expenses 193 177 Accrued taxes payable 82 50 Other, including warranties (a) 63 55 Total accrued liabilities $ 513 $ 432 (a) Changes in the reserve for product warranties from January 3, 2016 through December 30, 2018 were as follows (in millions): Warranty Reserve Balance as of January 3, 2016 $ 17 Additions charged to cost of revenue 21 Repairs and replacements (25 ) Balance as of January 1, 2017 13 Additions charged to cost of revenue 26 Repairs and replacements (22 ) Balance as of December 31, 2017 17 Additions charged to cost of revenue 27 Repairs and replacements (25 ) Balance as of December 30, 2018 $ 19 Investments in Consolidated Variable Interest Entities 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 year ended December 30, 2018 , we made additional investments of $100 million in exchange for voting equity interests in Helix. As of December 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 redemption 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 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 value at each reporting date. The fair value of the redeemable noncontrolling interests is considered a Level 3 instrument. As of December 30, 2018 , the accompanying consolidated balance sheet included $127 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 December 30, 2018 . Helix had an immaterial impact on our consolidated statements of income and cash flows for the year ended December 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 income (expense), net, of which $159 million related to the remeasurement of our retained equity interest to its fair value. The fair value measurement of our remaining interest was derived using the market approach. Significant estimates and assumptions required for this valuation included, but were not limited to, various Black-Scholes option-pricing model assumptions as of the date of deconsolidation and estimated discounts for lack of marketability related to the equity securities. These unobservable inputs, which represent a Level 3 measurement, are supported by little or no market activity and reflect our own assumptions in measuring fair value. The operations of GRAIL up to February 28, 2017, the date of deconsolidation, were included in the accompanying consolidated statements of income for the years ended December 31, 2017 and January 1, 2017. During these periods, we absorbed approximately 50% of GRAIL’s losses based upon our proportional ownership of GRAIL’s common stock. The carrying value of our investment recorded in other assets was $189 million and $185 million as of December 30, 2018 and December 31, 2017, respectively. Redeemable Noncontrolling Interests The activity of the redeemable noncontrolling interests from January 3, 2016 through December 30, 2018 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of January 3, 2016 $ 33 Cash contributions 9 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (21 ) Adjustment up to the redemption value 21 Balance as of January 1, 2017 44 Amount released from escrow 79 Vesting of redeemable equity awards 13 Net loss attributable to noncontrolling interests (41 ) Adjustment up to the redemption value 136 Deconsolidation of GRAIL (11 ) Balance as of December 31, 2017 220 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (34 ) Adjustment down to the redemption value (127 ) Balance as of December 30, 2018 $ 61 |
Intangible Assets, Goodwill, an
Intangible Assets, Goodwill, and Acquisitions | 12 Months Ended |
Dec. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Goodwill, and Acquisitions | Intangible Assets, Goodwill, and Acquisitions Intangible assets, excluding goodwill, include acquired licensed and core technologies, customer relationships, license agreements, and trade name. Amortization for intangible assets is generally recorded on a straight-line basis over their useful lives. Identifiable intangible assets consisted of the following (in millions): December 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangibles, Net Gross Carrying Amount Accumulated Amortization Intangibles, Net Licensed technologies $ 95 $ (83 ) $ 12 $ 95 $ (74 ) $ 21 Core technologies 331 (172 ) 159 300 (161 ) 139 Customer relationships 32 (27 ) 5 32 (25 ) 7 License agreements 14 (9 ) 5 14 (8 ) 6 Trade name 9 (5 ) 4 7 (5 ) 2 Total intangible assets, net $ 481 $ (296 ) $ 185 $ 448 $ (273 ) $ 175 The estimated annual amortization of intangible assets for the next five years is shown in the following table (in millions). Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors. Estimated Annual Amortization 2019 $ 37 2020 30 2021 26 2022 22 2023 20 Thereafter 50 Total $ 185 Changes to goodwill from January 1, 2017 through December 30, 2018 were as follows (in millions): Goodwill Balance as of January 1, 2017 $ 776 GRAIL deconsolidation (5 ) Balance as of December 31, 2017 771 Acquisitions 60 Balance as of December 30, 2018 $ 831 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 within the Core Illumina reportable segment. 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. On November 1, 2018, we entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire Pacific Biosciences of California, Inc. (PacBio) for an all-cash price of approximately $1.2 billion (or $8.00 per share). The transaction, which is expected to close mid-2019, is subject to certain customary closing conditions, including PacBio shareholder approval and the receipt of certain required antitrust approvals. The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under specified circumstances, including but not limited to, a termination of the Merger Agreement in connection with PacBio accepting a superior offer or due to the withdrawal by PacBio’s board of directors of its recommendation of the merger, PacBio will pay us a cash termination fee of $43 million . In certain other circumstances related to antitrust approvals, we may be required to pay PacBio a termination fee of $98 million assuming the other closing conditions not related to antitrust or competition laws have been satisfied. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 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 December 30, 2018 and December 31, 2017 (in millions): December 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) $ 832 $ — $ — $ 832 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 21 — 21 — 67 — 67 Corporate debt securities — 1,058 — 1,058 — 421 — 421 U.S. Treasury securities 1,250 — — 1,250 432 — — 432 Marketable equity security 39 — — 39 — — — — Deferred compensation plan assets — 34 — 34 — 35 — 35 Total assets measured at fair value $ 2,121 $ 1,113 $ — $ 3,234 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation plan liability $ — $ 33 $ — $ 33 — $ 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, validating pricing sources and models, and reviewing key model inputs, if necessary. |
Debt and Other Commitments
Debt and Other Commitments | 12 Months Ended |
Dec. 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): December 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 (175 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,725 1,075 Obligations under financing leases 269 113 Other 3 4 Less: current portion (1,107 ) (10 ) Long-term debt $ 890 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 287 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 2,222 $ 1,305 Weighted average remaining amortization period of discount on the liability component of convertible senior notes 3.9 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 11, 2023. It is our intent and policy to settle conversions through combination settlement; this involves repayment of an amount of cash equal to the “principal amount” and delivery of the “share amount” in excess of the conversion value over the principal amount in shares of common stock. In general, for each $1,000 in principal, the “principal amount” of cash upon settlement is defined as the lesser of $1,000 and the conversion value during the 20 -day observation period. The conversion value is the sum of the daily conversion value, which is the product of the effective conversion rate divided by 20 days and the daily volume weighted average price (VWAP) of our common stock. 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 December 30, 2018 and had no dilutive impact during the fiscal year ended December 30, 2018 . If the 2023 Notes were converted as of December 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 convertible senior notes due 2019 (2019 Notes) and $517 million aggregate principal amount of convertible senior notes due 2021 (2021 Notes). The net proceeds from the issuance, after deducting the offering expenses payable by us, were $1,132 million . The 2019 Notes carry no coupon interest and mature on June 15, 2019. We pay 0.5% interest per annum on the principal amount of the 2021 Notes, payable semiannually in arrears in cash on June 15 and December 15 of each year, beginning on December 15, 2014. The 2021 Notes mature on June 15, 2021. 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: (1) during any calendar quarter commencing after the calendar quarter ending September 30, 2014 (and only during such calendar quarter), 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; (2) 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 trading day; or (3) upon the occurrence of specified events described in the indenture for the 2019 and 2021 Notes. Regardless of the foregoing circumstances, the holders may convert their notes on or after March 15, 2019 until June 13, 2019 for the 2019 Notes and March 15, 2021 until June 11, 2021 for the 2021 Notes. It is our intent and policy to settle conversions through combination settlement; this involves repayment of an amount of cash equal to the “principal portion” and delivery of the “share amount” in excess of the conversion value over the principal portion in shares of common stock. In general, for each $1,000 in principal, the “principal portion” of cash upon settlement is defined as the lesser of $1,000 and the conversion value during the 20 -day observation period. The conversion value is the sum of the daily conversion value which is the product of the effective conversion rate divided by 20 days and the daily volume weighted average price (VWAP) of our common stock. 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 . The 2019 and 2021 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 the conversion option. Based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in the same industry as us, and with similar maturities to the 2019 and 2021 Notes, we estimated the implied interest rates of our 2019 and 2021 Notes to be 2.9% and 3.5% , respectively, 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 rates were applied to the 2019 and 2021 Notes, which resulted in a fair value of the liability component in aggregate of $972 million upon issuance, calculated as the present value of implied future payments based on the $1,150 million aggregate principal amount. The $161 million difference between the cash proceeds of $1,133 million and the estimated fair value of the liability component was recorded in additional paid-in capital as the 2019 and 2021 Notes are not considered redeemable. As a policy election under applicable guidance related to the calculation of diluted net income per share, we 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 2019 and 2021 Notes. During the year ended December 30, 2018, the market price of our common stock met the stock trading price conversion requirement and the 2019 and 2021 Notes became convertible on October 1, 2018 and continued to be convertible through December 31, 2018. However, effective January 1, 2019, these convertible senior notes were no longer convertible. The potential dilutive impact of the 2019 and 2021 notes has been included in our calculation of diluted earnings per share for the year ended December 30, 2018. If the 2019 and 2021 Notes were converted as of December 30, 2018, their if-converted values would exceed their principal amounts by $150 million and $122 million , respectively. The carrying values of the 2019 and 2021 Notes were classified as current liabilities as they were convertible within twelve months of the balance sheet date. Leases We lease office and manufacturing facilities under various non-cancellable lease agreements. Facility leases generally provide for periodic rent increases, and many contain escalation clauses and renewal options. Certain leases require us to pay property taxes and routine maintenance. When we are involved in the construction of leased assets, we evaluate whether we are the accounting owner of leased assets during the construction period. As of December 31, 2017 , we were considered the owner of two construction projects for accounting purposes only under build-to-suit lease accounting due to certain indemnification obligations related to the construction. During the year ended December 30, 2018 , construction of these build-to-suit properties was completed. We concluded we do not qualify for sale-leaseback treatment and the leases are accounted for as financing obligations. Accordingly, $165 million of construction in progress and build-to-suit lease liability were reclassified to building asset and obligations under financing leases during the year ended December 30, 2018 . On February 28, 2017, GRAIL was deconsolidated, as further described in note “2. Balance Sheet Account Details,” and $58 million of construction in progress and the corresponding build-to-suit lease liability were removed. As of December 30, 2018 , annual future minimum payments of our operating leases and build-to-suit leases, which include those leases accounted for as a financing obligation, were as follows (in millions): Operating Leases Sublease Income Net Operating Leases Build-to-suit Leases 2019 $ 59 $ (11 ) $ 48 $ 18 2020 64 (11 ) 53 21 2021 61 (11 ) 50 21 2022 61 (12 ) 49 22 2023 61 (11 ) 50 22 Thereafter 439 (12 ) 427 179 Total minimum lease payments $ 745 $ (68 ) $ 677 $ 283 Rent expense was $55 million , $46 million , and $46 million for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. During the year ended December 30, 2018, the interest portion of lease expense for our build-to-suit arrangements was $13 million . As of December 30, 2018 and December 31, 2017 , the deferred rent balance related to our operating leases was $123 million and $115 million , respectively, of which the long-term portion of $119 million and $113 million , respectively, was recorded in other long-term liabilities. Purchase Obligations In the normal course of business, we enter into agreements to purchase goods or services that are not cancelable without penalty, primarily related to licensing and supply arrangements. For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities or pricing as of the reporting date. Licensing agreements under which we commit to minimum royalty payments, some of which are subject to adjustment, may be terminated prior to the expiration of underlying intellectual property under certain circumstances. Annual minimum payments for noncancelable purchase obligations as of December 30, 2018 were as follows (in millions): Minimum Payments 2019 $ 93 2020 20 Total $ 113 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The 2015 Stock and Incentive Compensation Plan (the 2015 Stock Plan) and the New Hire Stock and Incentive Plan allow for the issuance of stock options, restricted stock units and awards, and performance stock units. As of December 30, 2018 , approximately 4.7 million shares remained available for future grants under the 2015 Stock Plan. There is no set number of shares reserved for issuance under the New Hire Stock and Incentive Plan. Restricted Stock We issue restricted stock units (RSU) and performance stock units (PSU), both of which are considered restricted stock. We grant restricted stock pursuant to the 2015 Stock Plan and satisfy such grants through the issuance of new shares. RSU are share awards that, upon vesting, will deliver to the holder shares of our common stock. RSU generally vest over a four -year period with equal vesting on anniversaries of the grant date. We issue PSU for which the number of shares issuable at the end of a three -year performance period can reach up to 150% of the shares approved in the award based on our performance relative to specified earnings per share targets and continued employment through the vesting period. Restricted stock activity from January 3, 2016 through December 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 January 3, 2016 2,206 583 $ 131.80 $ 169.41 Awarded 1,245 172 $ 132.47 $ 113.56 Vested (928 ) (199 ) $ 105.49 $ 148.99 Cancelled (230 ) (96 ) $ 139.74 $ 163.05 Outstanding at January 1, 2017 2,293 460 $ 141.80 $ 158.66 Awarded 879 238 $ 207.38 $ 191.53 Vested (861 ) (92 ) $ 131.62 $ 189.09 Cancelled (226 ) (64 ) $ 149.03 $ 173.83 Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 655 336 $ 322.04 $ 232.08 Vested (731 ) (188 ) $ 170.50 $ 176.15 Cancelled (169 ) (30 ) $ 172.30 $ 162.54 Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Pre-tax intrinsic values and fair value of vested restricted stock was as follows (in millions): Years Ended December 30, December 31, January 1, Pre-tax intrinsic value of outstanding restricted stock: RSU $ 549 $ 456 $ 294 PSU $ 197 $ 118 $ 59 Fair value of restricted stock vested: RSU $ 125 $ 113 $ 98 PSU $ 33 $ 17 $ 30 Stock Options Stock option activity from January 3, 2016 through December 30, 2018 was as follows: Options (in thousands) Weighted- Average Exercise Price Outstanding at January 3, 2016 1,599 $ 41.95 Exercised (552 ) $ 29.41 Cancelled (2 ) $ 46.35 Outstanding at January 1, 2017 1,045 $ 48.56 Exercised (723 ) $ 49.31 Outstanding at December 31, 2017 322 $ 46.93 Exercised (130 ) $ 35.68 Outstanding and exercisable at December 30, 2018 192 $ 54.52 The weighted-average remaining life of options outstanding and exercisable was 2.4 years as of December 30, 2018 . The aggregate intrinsic value of options outstanding and options exercisable as of December 30, 2018 was $47 million . Aggregate intrinsic value represents the product of the number of options outstanding multiplied by the difference between our closing stock price per share on the last trading day of the fiscal period, which was $298.23 as of December 28, 2018 , and the exercise price. Total intrinsic value of options exercised was $33 million , $101 million , and $71 million for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. Employee Stock Purchase Plan A total of 15.5 million shares of our common stock have been reserved for issuance under our 2000 Employee Stock Purchase Plan, or ESPP. The ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. The price at which stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first of the offering period or purchase date, whichever is lower. The initial offering period commenced in July 2000. Approximately 0.3 million , 0.3 million , and 0.2 million shares were issued under the ESPP during the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. As of December 30, 2018 and December 31, 2017 , there were approximately 13.7 million and 14.0 million shares available for issuance under the ESPP, respectively. Share Repurchases On July 28, 2016, our Board of Directors authorized a new share repurchase program, which superseded all prior and available repurchase authorizations, to repurchase $250 million of outstanding common stock. During Q1 2017, we repurchased the remaining shares, completing the program. On May 4, 2017, our Board of Directors authorized an additional share repurchase program to repurchase $250 million of outstanding common stock. 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 years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , we repurchased approximately 0.6 million shares for $201 million (of which 0.3 million shares for $103 million was repurchased concurrently with the offering of our 2023 Notes), 1.4 million shares for $251 million , and 1.8 million shares for $249 million , respectively. Authorizations to repurchase $49 million of our common stock remained available as of December 30, 2018 . On February 6, 2019, our Board of Directors authorized a new share repurchase program, which supersedes all prior and available repurchase authorizations, to repurchase $550 million of outstanding common stock. The repurchases may be completed under a 10b5-1 plan or at management’s discretion. Share-based Compensation Share-based compensation expense reported in our consolidated statements of income was as follows (in millions): Years Ended December 30, December 31, January 1, Cost of product revenue $ 16 $ 12 $ 9 Cost of service and other revenue 3 2 2 Research and development 60 51 42 Selling, general and administrative 114 99 76 Share-based compensation expense, before taxes 193 164 129 Related income tax benefits (39 ) (48 ) (41 ) Share-based compensation expense, net of taxes $ 154 $ 116 $ 88 The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the ESPP were as follows: Years Ended December 30, December 31, January 1, Risk-free interest rate 1.22% - 2.45% 0.50% - 1.22% 0.40% - 0.50% Expected volatility 29% - 39% 29% - 44% 40% - 44% Expected term 0.5 - 1.0 year 0.5 - 1.0 year 0.5 - 1.0 year Expected dividends 0 % 0 % 0 % Weighted-average grant-date fair value per share $ 61.59 $ 46.81 $ 48.29 As of December 30, 2018 , approximately $474 million of total unrecognized compensation cost related to restricted stock and ESPP shares issued to date was expected to be recognized over a weighted-average period of approximately 2.5 years . |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 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 consolidated 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 resolutions 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 in consideration of many factors, which include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter. We may change our estimates if our assessment of the various factors changes and the amount of ultimate loss may differ from our estimates, resulting in a material effect on our business, financial condition, results of operations, and/or cash flows. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes summarized by region was as follows (in millions): Years Ended December 30, December 31, January 1, United States $ 54 $ 458 $ 120 Foreign 840 585 441 Total income before income taxes $ 894 $ 1,043 $ 561 The provision for income taxes consisted of the following (in millions): Years Ended December 30, December 31, January 1, Current: Federal $ 47 $ 259 $ 71 State 15 21 10 Foreign 68 51 45 Total current provision 130 331 126 Deferred: Federal — 36 16 State (16 ) — (5 ) Foreign (2 ) (2 ) (4 ) Total deferred (benefit) expense (18 ) 34 7 Total tax provision $ 112 $ 365 $ 133 The provision for income taxes reconciles to the amount computed by applying the federal statutory rate to income before taxes as follows (in millions): Years Ended December 30, December 31, January 1, Tax at federal statutory rate $ 188 $ 365 $ 196 State, net of federal benefit 13 19 10 Research and other credits (23 ) (12 ) (13 ) Change in valuation allowance (12 ) 12 5 Impact of foreign operations (59 ) (130 ) (86 ) Cost sharing adjustment — — (7 ) Investments in consolidated variable interest entities 9 (3 ) 25 Impact of U.S. Tax Reform 11 150 — Stock compensation (24 ) (41 ) 3 Other 9 5 — Total tax provision $ 112 $ 365 $ 133 In accordance with the Tax Cuts and Jobs Act that was enacted on December 22, 2017 (U.S. Tax Reform), we recorded a provision for income taxes of $150 million , which we increased by $11 million in 2018, upon completion of our 2017 tax returns. The impact of U.S. Tax Reform primarily represented our estimate of the one-time transition tax on earnings of certain foreign subsidiaries, of which $108 million is included in other long-term liabilities as of December 30, 2018; and the impact of revaluing our U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. For U.S. federal purposes the corporate statutory income tax rate was reduced from 35% to 21%, effective for our 2018 tax year. Although the Company no longer considers these items to be provisional, under Staff Accounting Bulletin 118, the determination of the U.S. Tax Reform’s income tax effects may change following future legislation or further interpretation of the U.S. Tax Reform based on the publication of recently proposed U.S. Treasury regulations and guidance from the Internal Revenue Service and state tax authorities. 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. We have elected to account for GILTI as a period cost in our consolidated financial statements. The impact of foreign operations primarily represents the difference between the actual provision for income taxes for our legal entities that operate primarily in jurisdictions that have statutory tax rates lower than the U.S. federal statutory tax rate of 21%. The most significant tax benefits from foreign operations were from our earnings in Singapore and the United Kingdom, which had statutory tax rates of 17% and 19% , respectively, in the year ended December 30, 2018 . The impact of foreign operations also includes the U.S. foreign tax credit impact of non-U.S. earnings and uncertain tax positions related to foreign items. Significant components of deferred tax assets and liabilities were as follows (in millions): December 30, December 31, Deferred tax assets: Net operating losses $ 26 $ 18 Tax credits 63 57 Other accruals and reserves 28 25 Stock compensation 20 19 Deferred rent 30 28 Cost sharing adjustment 21 21 Other amortization 13 12 Lease obligation 70 27 Investments 1 13 Other 28 26 Total gross deferred tax assets 300 246 Valuation allowance on deferred tax assets (15 ) (25 ) Total deferred tax assets 285 221 Deferred tax liabilities: Purchased intangible amortization (32 ) (26 ) Convertible debt (41 ) (18 ) Property and equipment (94 ) (44 ) Investments (45 ) (40 ) Other (3 ) (5 ) Total deferred tax liabilities (215 ) (133 ) Deferred tax assets, net $ 70 $ 88 A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis and includes a review of all available positive and negative evidence. Based on the available evidence as of December 30, 2018 , we were not able to conclude it is more likely than not certain deferred tax assets will be realized. Therefore, a valuation allowance of $15 million was recorded against certain U.S. and foreign deferred tax assets. As of December 30, 2018 , we had net operating loss carryforwards for federal and state tax purposes of $39 million and $156 million , respectively, which will begin to expire in 2019 , unless utilized prior. We also had federal and state tax credit carryforwards of $1 million and $103 million , which will begin to expire in 2037 and 2022 , respectively, unless utilized prior. Pursuant to Section 382 and 383 of the Internal Revenue Code, utilization of net operating losses and credits may be subject to annual limitations in the event of any significant future changes in its ownership structure. These annual limitations may result in the expiration of net operating losses and credits prior to utilization. The deferred tax assets as of December 30, 2018 are net of any previous limitations due to Section 382 and 383. Our manufacturing operations in Singapore operate under various tax holidays and incentives that begin to expire in 2023. These tax holidays and incentives resulted in a $36 million , $49 million , and $32 million decrease to the provision for income taxes for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. These tax holidays and incentives resulted in an increase in diluted earnings per share attributable to Illumina stockholders of $0.24 , $0.33 , and $0.22 , for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively. It is our intention to indefinitely reinvest the historical earnings of our foreign subsidiaries generated prior to 2017 to ensure sufficient working capital and to expand existing operations outside the United States. Accordingly, state and foreign income and withholding taxes have not been provided on $973 million of undistributed earnings of foreign subsidiaries as of December 30, 2018 . In the event we are required to repatriate funds from outside of the United States, such repatriation would be subject to local laws, customs, and tax consequences. As of December 30, 2018 , we asserted that $63 million of foreign earnings would not be indefinitely reinvested, and accordingly, recorded a deferred tax liability of $2 million . The following table summarizes the gross amount of our uncertain tax positions (in millions): December 30, December 31, January 1, Balance at beginning of year $ 79 $ 65 $ 56 Increases related to prior year tax positions 1 2 — Decreases related to prior year tax positions (1 ) — (2 ) Increases related to current year tax positions 12 14 13 Decreases related to lapse of statute of limitations (3 ) (2 ) (2 ) Balance at end of year $ 88 $ 79 $ 65 Included in the balance of uncertain tax positions as of December 30, 2018 and December 31, 2017 , were $78 million and $70 million , respectively, of net unrecognized tax benefits that, if recognized, would reduce the effective income tax rate in future periods. Any interest and penalties related to uncertain tax positions are reflected in the provision for income taxes. We recognized expense of $3 million , $1 million , and $1 million during the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , respectively, related to potential interest and penalties on uncertain tax positions. We recorded a liability for potential interest and penalties of $11 million and $8 million as of December 30, 2018 and December 31, 2017 , respectively. Tax years 1997 to 2017 remain subject to future examination by the major tax jurisdictions in which we are subject to tax. Given the uncertainty of potential adjustments from examination as well as the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could change significantly over the next 12 months. Due to the number of years remaining that are subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 30, 2018 | |
Deferred Compensation Arrangements [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Retirement Plan We have a 401(k) savings plan covering substantially all of our employees in the United States. Our contributions to the plan are discretionary. During the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 , we made matching contributions of $20 million , $17 million , and $14 million , respectively. Deferred Compensation Plan The Illumina, Inc. Deferred Compensation Plan (the Plan) allows senior level employees to contribute up to 60% of their base salary and 100% of their variable cash compensation, and members of the board of directors to contribute up to 100% of their director fees and equity awards. Under the Plan, we credit the participants’ contributions with earnings that reflect the performance of certain independent investment funds. On a discretionary basis, we may also make employer contributions to participant accounts in any amount determined by us. The vesting schedules of employer contributions are at the sole discretion of the Compensation Committee. However, all employer contributions shall become 100% vested upon the occurrence of the participant’s disability, death or retirement or a change in control of Illumina. The benefits under this plan are unsecured. Participants are generally eligible to receive payment of their vested benefit at the end of their elected deferral period or after termination of their employment for any reason or at a later date to comply with the restrictions of Section 409A. We also established a rabbi trust for the benefit of the participants under the Plan and have included the assets of the rabbi trust in the consolidated balance sheets. As of December 30, 2018 and December 31, 2017 , the assets of the trust were $34 million and $35 million , respectively, and our liabilities were $33 million in both years. The assets and liabilities are classified as other assets and accrued liabilities, respectively, on the consolidated balance sheets. Changes in the values of the assets held by the rabbi trust are recorded in other income (expense), net in the consolidated statements of income, and changes in the values of the deferred compensation liabilities are recorded in cost of revenue or operating expenses. |
Segment Information and Geograp
Segment Information and Geographic Data | 12 Months Ended |
Dec. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Geographic Data | Segment Information and Geographic Data 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 Helix and GRAIL. We report segment information based on the management approach. This approach designates the internal reporting used by the Chief Operating Decision Maker (CODM) for making decisions and assessing performance as the source of our reportable segments. The CODM allocates resources and assesses the performance of each operating segment using information about its revenue and income (loss) from operations. Based on the information used by the CODM, we have determined our reportable segments as follows: Core Illumina : Core Illumina’s products and services serve customers in the research, clinical and applied markets, and enable the adoption of a variety of genomic solutions. Core Illumina includes all of our operations, excluding the results of our 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 reportable segments based upon income (loss) from operations. We do not allocate expenses between segments. Core Illumina sells products and provides services to Helix and GRAIL in accordance with contractual agreements between the entities. The following table presents the operating performance of each reportable segment (in millions): Years Ended December 30, December 31, January 1, Revenue: Core Illumina $ 3,334 $ 2,754 $ 2,428 Consolidated VIEs 10 6 — Eliminations (11 ) (8 ) (30 ) Consolidated revenue $ 3,333 $ 2,752 $ 2,398 Depreciation and amortization: Core Illumina $ 175 $ 153 $ 138 Consolidated VIEs 6 6 4 Eliminations (2 ) (3 ) (1 ) Consolidated depreciation and amortization $ 179 $ 156 $ 141 Income (loss) from operations: Core Illumina $ 970 $ 696 $ 684 Consolidated VIEs (90 ) (92 ) (81 ) Eliminations 3 2 (16 ) Consolidated income from operations $ 883 $ 606 $ 587 Other income (expense), net primarily relates to Core Illumina and we do not allocate income taxes to our segments. The following table presents the total assets and capital expenditures of each reportable segment (in millions): Years Ended December 30, December 31, January 1, Total assets: Core Illumina $ 6,912 $ 5,223 $ 4,167 Consolidated VIEs 154 45 180 Eliminations (107 ) (11 ) (66 ) Consolidated total assets $ 6,959 $ 5,257 $ 4,281 Capital expenditures: Core Illumina $ 294 $ 306 $ 238 Consolidated VIEs 2 4 22 Consolidated capital expenditures $ 296 $ 310 $ 260 Net long-lived assets exclude goodwill and other intangible assets since they are not allocated on a geographic basis. We had net long-lived assets, consisting of property and equipment, in the following regions as of December 30, 2018 and December 31, 2017 (in millions): December 30, December 31, United States $ 907 $ 828 Singapore 96 54 United Kingdom 62 43 Other countries 10 6 Total $ 1,075 $ 931 Refer to note “1. Organization and Summary of Significant Accounting Policies” for revenue by geographic area. |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (unaudited) | Quarterly Financial Information (unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results and cash flows of interim periods. All quarters for fiscal years 2018 and 2017 , ended December 30, 2018 and December 31, 2017 , respectively, were 13 weeks. Summarized quarterly data for fiscal years 2018 and 2017 are as follows (in millions, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2018 Total revenue $ 782 $ 830 $ 853 $ 867 Gross profit $ 538 $ 575 $ 597 $ 590 Consolidated net income $ 197 $ 200 $ 188 $ 198 Net income attributable to Illumina stockholders $ 208 $ 209 $ 199 $ 210 Earnings per share attributable to Illumina stockholders: Basic $ 1.42 $ 1.42 $ 1.35 $ 1.43 Diluted $ 1.41 $ 1.41 $ 1.33 $ 1.41 2017 Total revenue $ 598 $ 662 $ 714 $ 778 Gross profit $ 368 $ 434 $ 482 $ 542 Consolidated net income $ 348 $ 120 $ 152 $ 58 Net income attributable to Illumina stockholders (a) $ 367 $ 128 $ 163 $ 68 Earnings per share attributable to Illumina stockholders: Basic $ 2.50 $ 0.87 $ 1.12 $ 0.47 Diluted $ 2.48 $ 0.87 $ 1.11 $ 0.46 Certain amounts may not recalculate using the rounded amounts provided . (a) First quarter of 2017 includes the results of GRAIL through February 28, 2017, the date of deconsolidation. Refer to note “2. Balance Sheet Account Details” for further discussion. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and 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. |
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, we apply a qualitative approach 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 year ended December 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. |
Equity Method Investments | The equity method is used to account for investments over which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded within other assets, and the share of net income or losses of equity investments is recognized on a one quarter lag in other income (expense), 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 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 years ended December 30, 2018 , December 31, 2017 , and January 1, 2017 were all 52 weeks. |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation. |
Use of Estimates | The preparation of the consolidated financial statements requires that management make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. Actual results could differ from those estimates. |
Recently Adopted and Issued Accounting Pronouncements | Accounting Pronouncements Adopted in 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The new standard is based on the principle that revenue should be recognized in an amount that reflects the consideration to which we expect to be entitled in exchange for the transfer of promised goods or services. We adopted Topic 606 using the modified retrospective transition method. The cumulative effect of applying the new revenue standard to all incomplete contracts as of January 1, 2018 was not material and, therefore, did not result in an adjustment to retained earnings. There was no material difference to the consolidated financial statements for the year ended December 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 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. This measurement alternative was applied prospectively to such equity securities and did not result in an adjustment to retained earnings. Accounting Pronouncements Adopted in 2017 In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) , which aims to simplify the accounting for share-based payment transactions, including accounting for income taxes, classification on the statement of cash flows, accounting for forfeitures, and classification of awards as either liabilities or equity. This ASU was effective for us beginning in the first quarter of 2017. This new standard increases the volatility of net income by requiring excess tax benefits from share-based payment arrangements to be classified as discrete items within the provision for income taxes, rather than recognizing excess tax benefits in additional paid-in capital. Upon adoption in Q1 2017, we recorded $45 million , net, to retained earnings, primarily related to unrealized tax benefits associated with share-based compensation. As a result of the adoption of this new standard, we made an accounting policy election to recognize forfeitures as they occur and no longer estimate expected forfeitures. In addition, ASU 2016-09 requires that excess income tax benefits from share-based compensation arrangements be classified as cash flow from operations, rather than cash flow from financing activities. We elected to apply the cash flow classification guidance retrospectively and reclassified $91 million from financing activity to operating activity for the year ended January 1, 2017. Recently Issued Accounting Pronouncements In February 2016, the FASB issued 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 and disclose key information about leasing arrangements. ASU 2016-02 is effective for us beginning in the first quarter of 2019 and will be adopted using a modified retrospective approach by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on December 31, 2018. We will continue to report financial information for fiscal years ending before December 31, 2018 under the current lease accounting standard. We elected 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 as either operating or capital leases (referred to as operating and financing leases in the new standard). We did not elect the standard’s available hindsight practical expedient on adoption. The standard also provides practical expedients for ongoing lessee accounting after adoption. We expect to elect the practical expedient to not separate lease and non-lease components for our real-estate leases and will therefore allocate all fixed lease payments, which may include management fees and common-area-maintenance charges, to our operating lease liabilities and corresponding right-of-use assets. We have finalized the changes to our systems, processes, policies, and controls for lease accounting, including implementation of a third-party software application, to facilitate our adoption of the lease standard effective December 31, 2018. We expect the most significant impacts of adoption to result from the recognition of our operating and build-to-suit lease commitments as lease liabilities with corresponding right-of-use assets, and the derecognition of existing assets and liabilities for our build-to-suit arrangements that do not qualify for sale-leaseback accounting. We currently expect this will result in the net recognition of additional total assets and liabilities of approximately $329 million and $354 million , respectively, and the difference between these amounts will be recorded as a cumulative-effect adjustment to retained earnings upon adoption in the first quarter of 2019. We also expect the classification of a portion of lease expense for our build-to-suit arrangements to change from interest expense to operating expense going forward. During the year ended December 30, 2018, the interest portion of lease expense for our build-to-suit arrangements was $13 million . In June 2016, the FASB issued 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. |
Concentrations of Risk | International sales entail a variety of risks, including currency exchange fluctuations, longer payment cycles, and greater difficulty in accounts receivable collection. We are also subject to general geopolitical risks, such as political, social and economic instability, and changes in diplomatic and trade relations. The risks of international sales are mitigated in part by the extent to which sales are geographically distributed. Historically, we have not experienced significant credit losses from investments and accounts receivable. We operate in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive products or services with new capabilities, and other factors could negatively impact our operating results. A portion of our customers consist of university and research institutions that management believes are, to some degree, directly or indirectly supported by the United States Government. A significant change in current research funding, particularly with respect to the U.S. National Institutes of Health, could have an adverse impact on future revenues and results of operations. We are also subject to risks related to our financial instruments, including cash and cash equivalents, investments, and accounts receivable. Most of our cash and cash equivalents as of December 30, 2018 were deposited with U.S. financial institutions, either domestically or with their foreign branches. Our investment policy restricts the amount of credit exposure to any one issuer to 5% of the portfolio or 5% of the total issue size outstanding at the time of purchase and to any one industry sector, as defined by Clearwater Analytics (Industry Sector Report), to 30% of the portfolio at the time of purchase. There is no limit to the percentage of the portfolio that may be maintained in debt securities, U.S. government-sponsored entities, U.S. Treasury securities, and money market funds. We require customized products and components that currently are available from a limited number of sources. We source certain key products and components included in our products from single vendors. We perform regular reviews of customer activity and associated credit risks and do not require collateral or enter into netting arrangements. |
Fair Value Measurements | The fair value of assets and liabilities are based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of financial instruments such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate the related fair values due to the short-term maturities of these instruments. |
Functional Currency | The U.S. dollar is the functional currency of our international operations. We re-measure foreign subsidiaries’ monetary assets and liabilities to the U.S. dollar and record the net gains or losses resulting from re-measurement in other income (expense), net in the consolidated statements of income. |
Acquisitions | All assets acquired and liabilities assumed are measured at fair value as of the acquisition date. We record the excess of purchase price over the aggregate value assigned to the net tangible and identifiable intangible assets acquired as goodwill. Acquired intangible assets other than goodwill are amortized over their useful lives. Post-acquisition adjustments in deferred tax asset valuation allowances and liabilities for uncertain tax positions are recorded in current period income tax expense. |
Cash Equivalents | Cash equivalents are comprised of short-term, highly-liquid investments with maturities of 90 days or less at the date of purchase. |
Short-Term Investments | Short-term investments consist of debt securities in U.S. government-sponsored entities, corporate debt securities, U.S. Treasury securities, and equity securities. We classify short-term debt investments as available-for-sale at the time of purchase and evaluate such classification as of each balance sheet date. All short-term debt investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale debt securities are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. We evaluate our debt investments to assess whether those with unrealized loss positions are other than temporarily impaired. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the securities will be sold before the recovery of their cost basis. Realized gains, losses, and declines in value judged to be other than temporary are determined based on the specific identification method and are recorded in interest income (expense), net in the consolidated statements of income. Equity investments with readily determinable fair values are classified as current or noncurrent based on the nature of the securities and their availability for use in current operations. All short-term equity investments are recorded at estimated fair value. Unrealized gains and losses for equity securities with readily determinable fair values are recorded in other income (expense), net in the consolidated statements of income. |
Accounts Receivable | Trade accounts receivable are recorded at the net invoice value and are not interest-bearing. Receivables are considered past due based on the contractual payment terms. We reserve specific receivables if collectibility is no longer reasonably assured. We also reserve a percentage of our trade receivable balance based on collection history and current economic trends that might impact the level of future credit losses. These reserves are re-evaluated on a regular basis and adjusted as needed. Once a receivable is deemed to be uncollectible, such balance is charged against the reserve. |
Inventory | Inventory is stated at the lower of cost or net realizable value, on a first-in, first-out basis. Inventory includes raw materials and finished goods that may be used in the research and development process, and such items are expensed as consumed or expired. Inventory write-downs for slow-moving, excess, and obsolete inventories are estimated based on product life cycles, quality issues, historical experience, and usage forecasts. |
Property and Equipment | Property and equipment are stated at cost, subject to review for impairment, and depreciated over the estimated useful lives of the assets, using the straight-line method. Depreciation of leasehold improvements is recorded over the shorter of the lease term or the estimated useful life of the related assets. Amortization of assets that are recorded under capital leases are included in depreciation expense. Maintenance and repairs are expensed as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense. Costs incurred to develop internal-use software during the application development stage are recorded as computer software costs, at cost. Costs incurred in the development of such internal-use software, including external direct costs of materials and services and applicable compensation costs of employees devoted to specific software application development, are capitalized. Cost incurred outside of the application development stage are expensed as incurred. The estimated useful lives of the major classes of property and equipment are generally as follows: Estimated Useful Lives Buildings and leasehold improvements 4 to 20 years Machinery and equipment 3 to 5 years Computer hardware and software 3 to 7 years Furniture and fixtures 7 years |
Leases | Leases are reviewed and classified as capital or operating at their inception. When we are involved in the construction of leased assets, we evaluate whether we are the accounting owner during the construction period. For leases where we are the deemed accounting owner during the construction period, we record project construction costs paid or reimbursed by the landlord as construction in progress and a corresponding build-to-suit lease liability. For operating leases, rent expense is recorded on a straight-line basis over the term of the lease, which includes the construction build-out period and lease extension periods, if appropriate. The difference between rent payments and straight-line rent expense is recorded as deferred rent in accrued liabilities and other long-term liabilities. Lease incentives are amortized on a straight-line basis over the lease term as a reduction to rent expense. |
Goodwill, Intangible Assets and Other Long-Lived Assets | Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired in an acquisition. Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than the carrying amounts, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance. If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair values of our reporting units are less than the carrying amounts, then no additional assessment is deemed necessary. Otherwise, we proceed to perform the two-step test for goodwill impairment. The first step involves comparing the estimated fair values of the reporting units with the carrying values, including goodwill. If the carrying amounts of the reporting units exceed the fair values, the second step of the goodwill impairment test is performed to determine the amount of loss, which involves comparing the implied fair values of the goodwill to the carrying values of the goodwill. We may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the first step of the goodwill impairment test. We performed the annual assessment for goodwill impairment in the second quarter of 2018 , noting no impairment. Our identifiable intangible assets are typically comprised of acquired core technologies, licensed technologies, customer relationships, license agreements, and trade names. The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives. We perform regular reviews to determine if any event has occurred that may indicate that intangible assets with finite useful lives and other long-lived assets are potentially impaired. If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows. If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value. Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset. |
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 the derivatives are recognized in other income (expense), net, along with the re-measurement gain or loss on the foreign currency denominated assets or liabilities. |
Warranties | We generally provide a one -year warranty on instruments. Additionally, a warranty on consumables is provided 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. |
Revenue Recognition and Shipping and Handling Expenses | Shipping and handling expenses are included in cost of product 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. Revenue from product sales is recognized generally upon delivery to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs upon shipment and payment is typically due within 60 days from invoice. 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. 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. Revenue recognition for contracts with multiple deliverables is based on the separate satisfaction of each distinct performance obligation within the contract. Most performance obligations are generally satisfied within a short time frame, approximately three to six months, after the contract execution date. As of December 30, 2018 , the aggregate amount of the transaction price allocated to remaining performance obligations was $909 million , of which approximately 80% is expected to be converted to revenue through 2019, with the remainder thereafter. 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 management, adjusted for applicable discounts. Contract liabilities, which consist of deferred revenue and customer deposits, as of December 30, 2018 and December 31, 2017 were $206 million and $181 million , respectively, of which the short-term portions of $175 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 during the year ended December 30, 2018 included $146 million of previously deferred revenue that was included in contract liabilities as of December 31, 2017 . Contract assets as of December 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 by us. The terms of sales transactions through distributors are consistent with the terms of direct sales to customers. |
Share-Based Compensation | Share-based compensation expense is incurred related to restricted stock and Employee Stock Purchase Plan (ESPP). Restricted stock units (RSU) and performance stock units (PSU) are both considered restricted stock. The fair value of restricted stock is determined by the closing market price of our common stock on the date of grant. Share-based compensation expense is recognized based on the fair value on a straight-line basis over the requisite service periods of the awards. PSU represents a right to receive a certain number of shares of common stock based on the achievement of corporate performance goals and continued employment during the vesting period. At each reporting period, we reassess the probability of the achievement of such corporate performance goals and any additional expenses resulting from an adjustment in the estimated shares to be released are treated as a cumulative catch-up in the period of adjustment. The Black-Scholes-Merton option-pricing model is used to estimate the fair value of stock purchased under our ESPP. The model assumptions include expected volatility, term, dividends, and the risk-free interest rate. The expected volatility is determined by equally weighing the historical and implied volatility of our common stock. The historical volatility is generally commensurate with the estimated expected term, adjusted for the impact of unusual fluctuations and other relevant factors. The implied volatility is calculated from the implied market volatility of exchange-traded call options on our common stock. The expected term is based on historical forfeiture experience and the terms and conditions of the ESPP. The expected dividend yield is determined to be 0% given that we have never declared or paid cash dividends on our common stock and do not anticipate paying such cash dividends. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards. Forfeitures are accounted for as incurred as reversal of any share-based compensation expense related to awards that will not vest. |
Research and Development | Research and development expenses include personnel expenses, contractor fees, license fees, facilities costs, and utilities. Expenditures relating to research and development are expensed in the period incurred. |
Advertising Costs | Advertising costs are expensed as incurred. |
Income Taxes | The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for the expected future tax benefit to be derived from tax loss and credit carryforwards. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. Deferred tax assets are regularly assessed to determine the likelihood they will be recovered from future taxable income. A valuation allowance is established when we believe it is more likely than not the future realization of all or some of a deferred tax asset will not be achieved. In evaluating the ability to recover deferred tax assets within the jurisdiction which they arise, we consider all available positive and negative evidence. Factors reviewed include the cumulative pre-tax book income for the past three years, scheduled reversals of deferred tax liabilities, history of earnings and reliable forecasting, projections of pre-tax book income over the foreseeable future, and the impact of any feasible and prudent tax planning strategies. The impact of a tax position is recognized in the consolidated financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions will be reflected in income tax expense. |
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. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Major Classes of Property and Equipment | The estimated useful lives of the major classes of property and equipment are generally as follows: Estimated Useful Lives Buildings and leasehold improvements 4 to 20 years Machinery and equipment 3 to 5 years Computer hardware and software 3 to 7 years Furniture and fixtures 7 years Property and equipment, net consisted of the following (in millions): December 30, December 31, Leasehold improvements $ 567 $ 331 Machinery and equipment 382 316 Computer hardware and software 217 185 Furniture and fixtures 45 34 Buildings 285 155 Construction in progress 100 326 Total property and equipment, gross 1,596 1,347 Accumulated depreciation (521 ) (416 ) Total property and equipment, net $ 1,075 $ 931 |
Disaggregation of Revenue | The following table represents revenue by source (in millions): Years Ended December 30, December 31, January 1, Sequencing Microarray Total Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,806 $ 350 $ 2,156 $ 1,468 $ 285 $ 1,753 $ 1,271 $ 272 $ 1,543 Instruments 532 37 569 484 31 515 450 19 469 Other product 21 3 24 19 2 21 18 2 20 Total product revenue 2,359 390 2,749 1,971 318 2,289 1,739 293 2,032 Service and other revenue 416 168 584 322 141 463 277 89 366 Total revenue $ 2,775 $ 558 $ 3,333 $ 2,293 $ 459 $ 2,752 $ 2,016 $ 382 $ 2,398 The following table represents revenue by geographic area, based on region of destination (in millions): Years Ended December 30, December 31, January 1, Americas (1) $ 1,864 $ 1,585 $ 1,367 Europe, Middle East, and Africa 851 653 575 Greater China (2) 365 292 — Asia-Pacific 253 222 456 Total revenue $ 3,333 $ 2,752 $ 2,398 ____________________________________ (1) Revenue for the Americas region included United States revenue of $1,779 million , $1,511 million , and $ 1,294 million for the years ended December 30, 2018 , December 31, 2017 , and January 1, 2017, respectively. (2) Revenue for the Greater China region, which includes China, Taiwan, and Hong Kong, is included in the Asia-Pacific region for the year ended January 1, 2017. |
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Earnings Per Share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Years Ended December 30, December 31, January 1, Weighted average shares outstanding 147 146 147 Effect of potentially dilutive common shares from: Convertible senior notes 1 — — Equity awards 1 2 1 Weighted average shares used in calculating diluted earnings per share 149 148 148 |
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Antidilutive Securities | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Years Ended December 30, December 31, January 1, Weighted average shares outstanding 147 146 147 Effect of potentially dilutive common shares from: Convertible senior notes 1 — — Equity awards 1 2 1 Weighted average shares used in calculating diluted earnings per share 149 148 148 |
Summary of Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss were as follows (in millions): December 30, December 31, Foreign currency translation adjustments $ 1 $ 1 Unrealized loss on available-for-sale debt securities, net of deferred tax (2 ) (2 ) Total accumulated other comprehensive loss $ (1 ) $ (1 ) |
Balance Sheet Account Details (
Balance Sheet Account Details (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Debt Securities | Available-for-sale debt securities, included in short-term investments, consisted of the following (in millions): December 30, 2018 December 31, 2017 Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Estimated Fair Value Amortized Cost Gross Unrealized Losses Estimated Fair Value Debt securities in government-sponsored entities $ 21 $ — $ — $ 21 $ 67 $ — $ 67 Corporate debt securities 1,060 (2 ) — 1,058 423 (2 ) 421 U.S. Treasury securities 1,250 (1 ) 1 1,250 433 (1 ) 432 Total $ 2,331 $ (3 ) $ 1 $ 2,329 $ 923 $ (3 ) $ 920 |
Summary of Contractual Maturities of Available-for-sale Debt Securities | Contractual maturities of available-for-sale debt securities, as of December 30, 2018 , were as follows (in millions): Estimated Fair Value Due within one year $ 1,618 After one but within five years 711 Total $ 2,329 |
Summary of Accounts Receivable | Accounts receivable, net consisted of the following (in millions): December 30, December 31, Trade accounts receivable, gross $ 516 $ 414 Allowance for doubtful accounts (2 ) (3 ) Total accounts receivable, net $ 514 $ 411 |
Summary of Inventory | Inventory consisted of the following (in millions): December 30, December 31, Raw materials $ 117 $ 93 Work in process 218 188 Finished goods 51 52 Total inventory $ 386 $ 333 |
Summary of Property and Equipment | The estimated useful lives of the major classes of property and equipment are generally as follows: Estimated Useful Lives Buildings and leasehold improvements 4 to 20 years Machinery and equipment 3 to 5 years Computer hardware and software 3 to 7 years Furniture and fixtures 7 years Property and equipment, net consisted of the following (in millions): December 30, December 31, Leasehold improvements $ 567 $ 331 Machinery and equipment 382 316 Computer hardware and software 217 185 Furniture and fixtures 45 34 Buildings 285 155 Construction in progress 100 326 Total property and equipment, gross 1,596 1,347 Accumulated depreciation (521 ) (416 ) Total property and equipment, net $ 1,075 $ 931 |
Summary of Accrued Liabilities | Accrued liabilities consisted of the following (in millions): December 30, December 31, Contract liabilities, current portion $ 175 $ 150 Accrued compensation expenses 193 177 Accrued taxes payable 82 50 Other, including warranties (a) 63 55 Total accrued liabilities $ 513 $ 432 (a) Changes in the reserve for product warranties from January 3, 2016 through December 30, 2018 were as follows (in millions): Warranty Reserve Balance as of January 3, 2016 $ 17 Additions charged to cost of revenue 21 Repairs and replacements (25 ) Balance as of January 1, 2017 13 Additions charged to cost of revenue 26 Repairs and replacements (22 ) Balance as of December 31, 2017 17 Additions charged to cost of revenue 27 Repairs and replacements (25 ) Balance as of December 30, 2018 $ 19 |
Summary of Changes in Reserve for Product Warranties | Changes in the reserve for product warranties from January 3, 2016 through December 30, 2018 were as follows (in millions): Warranty Reserve Balance as of January 3, 2016 $ 17 Additions charged to cost of revenue 21 Repairs and replacements (25 ) Balance as of January 1, 2017 13 Additions charged to cost of revenue 26 Repairs and replacements (22 ) Balance as of December 31, 2017 17 Additions charged to cost of revenue 27 Repairs and replacements (25 ) Balance as of December 30, 2018 $ 19 |
Summary of Activity of Redeemable Noncontrolling Interests | The activity of the redeemable noncontrolling interests from January 3, 2016 through December 30, 2018 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of January 3, 2016 $ 33 Cash contributions 9 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (21 ) Adjustment up to the redemption value 21 Balance as of January 1, 2017 44 Amount released from escrow 79 Vesting of redeemable equity awards 13 Net loss attributable to noncontrolling interests (41 ) Adjustment up to the redemption value 136 Deconsolidation of GRAIL (11 ) Balance as of December 31, 2017 220 Vesting of redeemable equity awards 2 Net loss attributable to noncontrolling interests (34 ) Adjustment down to the redemption value (127 ) Balance as of December 30, 2018 $ 61 |
Intangible Assets, Goodwill, _2
Intangible Assets, Goodwill, and Acquisitions (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-lived Intangible Assets | Identifiable intangible assets consisted of the following (in millions): December 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Intangibles, Net Gross Carrying Amount Accumulated Amortization Intangibles, Net Licensed technologies $ 95 $ (83 ) $ 12 $ 95 $ (74 ) $ 21 Core technologies 331 (172 ) 159 300 (161 ) 139 Customer relationships 32 (27 ) 5 32 (25 ) 7 License agreements 14 (9 ) 5 14 (8 ) 6 Trade name 9 (5 ) 4 7 (5 ) 2 Total intangible assets, net $ 481 $ (296 ) $ 185 $ 448 $ (273 ) $ 175 |
Summary of the Estimated Annual Amortization of Finite-lived Intangible Assets | The estimated annual amortization of intangible assets for the next five years is shown in the following table (in millions). Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, and asset impairments, among other factors. Estimated Annual Amortization 2019 $ 37 2020 30 2021 26 2022 22 2023 20 Thereafter 50 Total $ 185 |
Schedule of Goodwill | Changes to goodwill from January 1, 2017 through December 30, 2018 were as follows (in millions): Goodwill Balance as of January 1, 2017 $ 776 GRAIL deconsolidation (5 ) Balance as of December 31, 2017 771 Acquisitions 60 Balance as of December 30, 2018 $ 831 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value 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 December 30, 2018 and December 31, 2017 (in millions): December 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) $ 832 $ — $ — $ 832 $ 957 $ — $ — $ 957 Debt securities in government-sponsored entities — 21 — 21 — 67 — 67 Corporate debt securities — 1,058 — 1,058 — 421 — 421 U.S. Treasury securities 1,250 — — 1,250 432 — — 432 Marketable equity security 39 — — 39 — — — — Deferred compensation plan assets — 34 — 34 — 35 — 35 Total assets measured at fair value $ 2,121 $ 1,113 $ — $ 3,234 $ 1,389 $ 523 $ — $ 1,912 Liabilities: Deferred compensation plan liability $ — $ 33 $ — $ 33 — $ 33 $ — $ 33 |
Debt and Other Commitments (Tab
Debt and Other Commitments (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | Debt obligations consisted of the following (dollars in millions): December 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 (175 ) (75 ) Net carrying amount of liability component of convertible senior notes 1,725 1,075 Obligations under financing leases 269 113 Other 3 4 Less: current portion (1,107 ) (10 ) Long-term debt $ 890 $ 1,182 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 287 $ 161 Fair value of convertible senior notes outstanding (Level 2) $ 2,222 $ 1,305 Weighted average remaining amortization period of discount on the liability component of convertible senior notes 3.9 years 2.8 years |
Summary of Annual Future Minimum Payments under Leases | As of December 30, 2018 , annual future minimum payments of our operating leases and build-to-suit leases, which include those leases accounted for as a financing obligation, were as follows (in millions): Operating Leases Sublease Income Net Operating Leases Build-to-suit Leases 2019 $ 59 $ (11 ) $ 48 $ 18 2020 64 (11 ) 53 21 2021 61 (11 ) 50 21 2022 61 (12 ) 49 22 2023 61 (11 ) 50 22 Thereafter 439 (12 ) 427 179 Total minimum lease payments $ 745 $ (68 ) $ 677 $ 283 |
Summary of Annual Future Minimum Payments for Noncancelable Purchase Obligations | Annual minimum payments for noncancelable purchase obligations as of December 30, 2018 were as follows (in millions): Minimum Payments 2019 $ 93 2020 20 Total $ 113 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Equity [Abstract] | |
Summary of Restricted Stock Activity and Related Information, Restricted Stock | Restricted stock activity from January 3, 2016 through December 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 January 3, 2016 2,206 583 $ 131.80 $ 169.41 Awarded 1,245 172 $ 132.47 $ 113.56 Vested (928 ) (199 ) $ 105.49 $ 148.99 Cancelled (230 ) (96 ) $ 139.74 $ 163.05 Outstanding at January 1, 2017 2,293 460 $ 141.80 $ 158.66 Awarded 879 238 $ 207.38 $ 191.53 Vested (861 ) (92 ) $ 131.62 $ 189.09 Cancelled (226 ) (64 ) $ 149.03 $ 173.83 Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 655 336 $ 322.04 $ 232.08 Vested (731 ) (188 ) $ 170.50 $ 176.15 Cancelled (169 ) (30 ) $ 172.30 $ 162.54 Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 ______________________________________ (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 from January 3, 2016 through December 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 January 3, 2016 2,206 583 $ 131.80 $ 169.41 Awarded 1,245 172 $ 132.47 $ 113.56 Vested (928 ) (199 ) $ 105.49 $ 148.99 Cancelled (230 ) (96 ) $ 139.74 $ 163.05 Outstanding at January 1, 2017 2,293 460 $ 141.80 $ 158.66 Awarded 879 238 $ 207.38 $ 191.53 Vested (861 ) (92 ) $ 131.62 $ 189.09 Cancelled (226 ) (64 ) $ 149.03 $ 173.83 Outstanding at December 31, 2017 2,085 542 $ 172.92 $ 166.15 Awarded 655 336 $ 322.04 $ 232.08 Vested (731 ) (188 ) $ 170.50 $ 176.15 Cancelled (169 ) (30 ) $ 172.30 $ 162.54 Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. |
Summary of Pre-tax Intrinsic Values of Vested Restricted Stock | Pre-tax intrinsic values and fair value of vested restricted stock was as follows (in millions): Years Ended December 30, December 31, January 1, Pre-tax intrinsic value of outstanding restricted stock: RSU $ 549 $ 456 $ 294 PSU $ 197 $ 118 $ 59 Fair value of restricted stock vested: RSU $ 125 $ 113 $ 98 PSU $ 33 $ 17 $ 30 |
Summary of Total Fair Value of Vested Restricted Stock | Pre-tax intrinsic values and fair value of vested restricted stock was as follows (in millions): Years Ended December 30, December 31, January 1, Pre-tax intrinsic value of outstanding restricted stock: RSU $ 549 $ 456 $ 294 PSU $ 197 $ 118 $ 59 Fair value of restricted stock vested: RSU $ 125 $ 113 $ 98 PSU $ 33 $ 17 $ 30 |
Summary of Stock Option Activity Under all Stock Option Plans | Stock option activity from January 3, 2016 through December 30, 2018 was as follows: Options (in thousands) Weighted- Average Exercise Price Outstanding at January 3, 2016 1,599 $ 41.95 Exercised (552 ) $ 29.41 Cancelled (2 ) $ 46.35 Outstanding at January 1, 2017 1,045 $ 48.56 Exercised (723 ) $ 49.31 Outstanding at December 31, 2017 322 $ 46.93 Exercised (130 ) $ 35.68 Outstanding and exercisable at December 30, 2018 192 $ 54.52 |
Summary of Share-based Compensation Expense for all Stock Awards | Share-based compensation expense reported in our consolidated statements of income was as follows (in millions): Years Ended December 30, December 31, January 1, Cost of product revenue $ 16 $ 12 $ 9 Cost of service and other revenue 3 2 2 Research and development 60 51 42 Selling, general and administrative 114 99 76 Share-based compensation expense, before taxes 193 164 129 Related income tax benefits (39 ) (48 ) (41 ) Share-based compensation expense, net of taxes $ 154 $ 116 $ 88 |
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 ESPP were as follows: Years Ended December 30, December 31, January 1, Risk-free interest rate 1.22% - 2.45% 0.50% - 1.22% 0.40% - 0.50% Expected volatility 29% - 39% 29% - 44% 40% - 44% Expected term 0.5 - 1.0 year 0.5 - 1.0 year 0.5 - 1.0 year Expected dividends 0 % 0 % 0 % Weighted-average grant-date fair value per share $ 61.59 $ 46.81 $ 48.29 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Income before Income Taxes by Region | Income before income taxes summarized by region was as follows (in millions): Years Ended December 30, December 31, January 1, United States $ 54 $ 458 $ 120 Foreign 840 585 441 Total income before income taxes $ 894 $ 1,043 $ 561 |
Summary of Provision for Income Taxes | The provision for income taxes consisted of the following (in millions): Years Ended December 30, December 31, January 1, Current: Federal $ 47 $ 259 $ 71 State 15 21 10 Foreign 68 51 45 Total current provision 130 331 126 Deferred: Federal — 36 16 State (16 ) — (5 ) Foreign (2 ) (2 ) (4 ) Total deferred (benefit) expense (18 ) 34 7 Total tax provision $ 112 $ 365 $ 133 |
Summary of Reconciliation of Provision for Income Taxes to Amount Computed by Applying the Federal Statutory Rate | The provision for income taxes reconciles to the amount computed by applying the federal statutory rate to income before taxes as follows (in millions): Years Ended December 30, December 31, January 1, Tax at federal statutory rate $ 188 $ 365 $ 196 State, net of federal benefit 13 19 10 Research and other credits (23 ) (12 ) (13 ) Change in valuation allowance (12 ) 12 5 Impact of foreign operations (59 ) (130 ) (86 ) Cost sharing adjustment — — (7 ) Investments in consolidated variable interest entities 9 (3 ) 25 Impact of U.S. Tax Reform 11 150 — Stock compensation (24 ) (41 ) 3 Other 9 5 — Total tax provision $ 112 $ 365 $ 133 |
Summary of Significant Components of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets and liabilities were as follows (in millions): December 30, December 31, Deferred tax assets: Net operating losses $ 26 $ 18 Tax credits 63 57 Other accruals and reserves 28 25 Stock compensation 20 19 Deferred rent 30 28 Cost sharing adjustment 21 21 Other amortization 13 12 Lease obligation 70 27 Investments 1 13 Other 28 26 Total gross deferred tax assets 300 246 Valuation allowance on deferred tax assets (15 ) (25 ) Total deferred tax assets 285 221 Deferred tax liabilities: Purchased intangible amortization (32 ) (26 ) Convertible debt (41 ) (18 ) Property and equipment (94 ) (44 ) Investments (45 ) (40 ) Other (3 ) (5 ) Total deferred tax liabilities (215 ) (133 ) Deferred tax assets, net $ 70 $ 88 |
Summary of the Gross Amount of Uncertain Tax Positions | The following table summarizes the gross amount of our uncertain tax positions (in millions): December 30, December 31, January 1, Balance at beginning of year $ 79 $ 65 $ 56 Increases related to prior year tax positions 1 2 — Decreases related to prior year tax positions (1 ) — (2 ) Increases related to current year tax positions 12 14 13 Decreases related to lapse of statute of limitations (3 ) (2 ) (2 ) Balance at end of year $ 88 $ 79 $ 65 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 12 Months Ended |
Dec. 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): Years Ended December 30, December 31, January 1, Revenue: Core Illumina $ 3,334 $ 2,754 $ 2,428 Consolidated VIEs 10 6 — Eliminations (11 ) (8 ) (30 ) Consolidated revenue $ 3,333 $ 2,752 $ 2,398 Depreciation and amortization: Core Illumina $ 175 $ 153 $ 138 Consolidated VIEs 6 6 4 Eliminations (2 ) (3 ) (1 ) Consolidated depreciation and amortization $ 179 $ 156 $ 141 Income (loss) from operations: Core Illumina $ 970 $ 696 $ 684 Consolidated VIEs (90 ) (92 ) (81 ) Eliminations 3 2 (16 ) Consolidated income from operations $ 883 $ 606 $ 587 Other income (expense), net primarily relates to Core Illumina and we do not allocate income taxes to our segments. The following table presents the total assets and capital expenditures of each reportable segment (in millions): Years Ended December 30, December 31, January 1, Total assets: Core Illumina $ 6,912 $ 5,223 $ 4,167 Consolidated VIEs 154 45 180 Eliminations (107 ) (11 ) (66 ) Consolidated total assets $ 6,959 $ 5,257 $ 4,281 Capital expenditures: Core Illumina $ 294 $ 306 $ 238 Consolidated VIEs 2 4 22 Consolidated capital expenditures $ 296 $ 310 $ 260 |
Summary of Net Long-lived Assets Consisting of Property and Equipment by Region | Net long-lived assets exclude goodwill and other intangible assets since they are not allocated on a geographic basis. We had net long-lived assets, consisting of property and equipment, in the following regions as of December 30, 2018 and December 31, 2017 (in millions): December 30, December 31, United States $ 907 $ 828 Singapore 96 54 United Kingdom 62 43 Other countries 10 6 Total $ 1,075 $ 931 |
Quarterly Financial Informati_2
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Data | Summarized quarterly data for fiscal years 2018 and 2017 are as follows (in millions, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2018 Total revenue $ 782 $ 830 $ 853 $ 867 Gross profit $ 538 $ 575 $ 597 $ 590 Consolidated net income $ 197 $ 200 $ 188 $ 198 Net income attributable to Illumina stockholders $ 208 $ 209 $ 199 $ 210 Earnings per share attributable to Illumina stockholders: Basic $ 1.42 $ 1.42 $ 1.35 $ 1.43 Diluted $ 1.41 $ 1.41 $ 1.33 $ 1.41 2017 Total revenue $ 598 $ 662 $ 714 $ 778 Gross profit $ 368 $ 434 $ 482 $ 542 Consolidated net income $ 348 $ 120 $ 152 $ 58 Net income attributable to Illumina stockholders (a) $ 367 $ 128 $ 163 $ 68 Earnings per share attributable to Illumina stockholders: Basic $ 2.50 $ 0.87 $ 1.12 $ 0.47 Diluted $ 2.48 $ 0.87 $ 1.11 $ 0.46 Certain amounts may not recalculate using the rounded amounts provided . (a) First quarter of 2017 includes the results of GRAIL through February 28, 2017, the date of deconsolidation. Refer to note “2. Balance Sheet Account Details” for further discussion. |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative - Recently Adopted and Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2018 | Jan. 01, 2017 | Dec. 31, 2018 | Apr. 02, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Unrealized tax benefits associated with share-based compensation | $ 45 | |||
Increase in cash flows from operating activities due to adoption of ASU 2016-09 | $ 91 | |||
Interest portion of lease expense | $ 13 | |||
Subsequent Event | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net recognition of additional total assets due to the adoption of ASU 2016-02 | $ 329 | |||
Net recognition of additional total liabilities due to the adoption of ASU 2016-02 | $ 354 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Narrative - Concentrations of Risk (Details) | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Credit concentration risk | Investment portfolio | |||
Concentration Risk [Line Items] | |||
Maximum investment portfolio credit exposure | 5.00% | ||
Credit concentration risk | Issue size | |||
Concentration Risk [Line Items] | |||
Maximum investment portfolio credit exposure | 5.00% | ||
Industry credit concentration risk | Investment portfolio | |||
Concentration Risk [Line Items] | |||
Maximum investment portfolio credit exposure | 30.00% | ||
Geographic concentration risk | Sales revenue, net | Outside the United States | |||
Concentration Risk [Line Items] | |||
Concentration percent | 47.00% | 45.00% | 46.00% |
Geographic concentration risk | Accounts receivable | Outside the United States | |||
Concentration Risk [Line Items] | |||
Concentration percent | 44.00% | 48.00% |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Major Classes of Property and Equipment (Details) | 12 Months Ended |
Dec. 30, 2018 | |
Building and leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 4 years |
Building and leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 20 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Narrative - Goodwill, Intangible Assets and Other Long-Lived Assets (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of in-process research and development | $ 5 |
Cost of Sales | |
Finite-Lived Intangible Assets [Line Items] | |
Impairment of finite-lived intangible assets | $ 18 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Narrative - Derivatives (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Foreign exchange forward | Not designated as hedging instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount of outstanding forward contracts | $ 122 | $ 88 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Narrative - Warranties (Details) | 12 Months Ended |
Dec. 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 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Narrative - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Revenue from External Customer [Line Items] | ||
Expected timing of satisfaction, period | 1 year | |
Remaining performance obligations | $ 909 | |
Percent of remaining performance obligations | 80.00% | |
Period of time average selling prices are observed to establish best estimate of selling price | 12 months | |
Contract liabilities | $ 206 | $ 181 |
Contract liabilities, current portion | 175 | $ 150 |
Recognized revenue, previously deferred | $ 146 | |
Minimum | ||
Revenue from External Customer [Line Items] | ||
Product or service delivery period | 3 months | |
Maximum | ||
Revenue from External Customer [Line Items] | ||
Product or service delivery period | 6 months |
Organization and Summary of _11
Organization and Summary of Significant Accounting Policies - Summary of Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 867 | $ 853 | $ 830 | $ 782 | $ 778 | $ 714 | $ 662 | $ 598 | $ 3,333 | $ 2,752 | $ 2,398 |
Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 2,775 | 2,293 | 2,016 | ||||||||
Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 558 | 459 | 382 | ||||||||
Consumables | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 2,156 | 1,753 | 1,543 | ||||||||
Consumables | Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 1,806 | 1,468 | 1,271 | ||||||||
Consumables | Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 350 | 285 | 272 | ||||||||
Instruments | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 569 | 515 | 469 | ||||||||
Instruments | Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 532 | 484 | 450 | ||||||||
Instruments | Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 37 | 31 | 19 | ||||||||
Other product | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 24 | 21 | 20 | ||||||||
Other product | Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 21 | 19 | 18 | ||||||||
Other product | Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 3 | 2 | 2 | ||||||||
Product revenue | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 2,749 | 2,289 | 2,032 | ||||||||
Product revenue | Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 2,359 | 1,971 | 1,739 | ||||||||
Product revenue | Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 390 | 318 | 293 | ||||||||
Service and other revenue | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 584 | 463 | 366 | ||||||||
Service and other revenue | Sequencing | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 416 | 322 | 277 | ||||||||
Service and other revenue | Microarray | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 168 | 141 | 89 | ||||||||
Americas | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 1,864 | 1,585 | 1,367 | ||||||||
Europe, Middle East, and Africa | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 851 | 653 | 575 | ||||||||
Greater China | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 365 | 292 | |||||||||
Asia-Pacific | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 253 | 222 | 456 | ||||||||
United States | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 1,779 | $ 1,511 | $ 1,294 | ||||||||
Sales revenue, net | Product concentration risk | Consumables | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Concentration percent | 65.00% | 64.00% | 64.00% | ||||||||
Sales revenue, net | Product concentration risk | Instruments | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Concentration percent | 17.00% | 19.00% | 20.00% | ||||||||
Sales revenue, net | Product concentration risk | Services | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Concentration percent | 18.00% | 17.00% | 15.00% |
Organization and Summary of _12
Organization and Summary of Significant Accounting Policies - Narrative - Share-Based Compensation (Details) | 12 Months Ended |
Dec. 30, 2018 | |
Accounting Policies [Abstract] | |
Expected dividends | 0.00% |
Organization and Summary of _13
Organization and Summary of Significant Accounting Policies - Narrative - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 38 | $ 30 | $ 20 |
Organization and Summary of _14
Organization 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 | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Weighted average shares used to calculate basic and diluted net income per share [Line Items] | |||
Weighted average shares outstanding | 147 | 146 | 147 |
Effect of potentially dilutive common shares from: | |||
Convertible senior notes | 1 | ||
Equity awards | 1 | 2 | 1 |
Weighted average shares used in calculating diluted net income per share | 149 | 148 | 148 |
Organization and Summary of _15
Organization and Summary of Significant Accounting Policies - Summary of Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Accumulated Other Comprehensive Income [Line Items] | ||
Total accumulated other comprehensive loss | $ 3,758 | $ 2,749 |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income [Line Items] | ||
Total accumulated other comprehensive loss | 1 | 1 |
Unrealized loss on available-for-sale debt securities, net of deferred tax | ||
Accumulated Other Comprehensive Income [Line Items] | ||
Total accumulated other comprehensive loss | (2) | (2) |
AOCI attributable to parent | ||
Accumulated Other Comprehensive Income [Line Items] | ||
Total accumulated other comprehensive loss | $ (1) | $ (1) |
Balance Sheet Account Details -
Balance Sheet Account Details - Summary of Investments (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Available-for-sale debt securities: | ||
Amortized Cost | $ 2,331 | $ 923 |
Gross Unrealized Losses | (3) | (3) |
Gross Unrealized Gains | 1 | |
Estimated Fair Value | 2,329 | 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 | 1,060 | 423 |
Gross Unrealized Losses | (2) | (2) |
Estimated Fair Value | 1,058 | 421 |
U.S. Treasury securities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 1,250 | 433 |
Gross Unrealized Losses | (1) | (1) |
Gross Unrealized Gains | 1 | |
Estimated Fair Value | $ 1,250 | $ 432 |
Balance Sheet Account Details_2
Balance Sheet Account Details - Summary of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due within one year | $ 1,618 | |
After one but within five years | 711 | |
Total | $ 2,329 | $ 920 |
Balance Sheet Account Details_3
Balance Sheet Account Details - Narrative - Equity Securities and Venture Fund (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Schedule of Investments [Line Items] | |||
Marketable equity security | $ 39 | ||
Marketable equity securities, unrealized gain | 21 | ||
Other commitment | 100 | ||
Remaining callable capital commitment | 69 | ||
Other Assets | |||
Schedule of Investments [Line Items] | |||
Equity investments without readily determinable fair value | 231 | $ 250 | |
Equity method investments | 29 | 16 | |
Investee | |||
Schedule of Investments [Line Items] | |||
Revenue from transactions with Company's strategic equity investees | 143 | $ 127 | $ 56 |
Fair value, measurements, recurring | |||
Schedule of Investments [Line Items] | |||
Marketable equity security | 39 | ||
Level 1 | Fair value, measurements, recurring | |||
Schedule of Investments [Line Items] | |||
Marketable equity security | $ 39 |
Balance Sheet Account Details_4
Balance Sheet Account Details - Summary of Accounts Receivable (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Accounts Receivable, Net [Abstract] | ||
Trade accounts receivable, gross | $ 516 | $ 414 |
Allowance for doubtful accounts | (2) | (3) |
Total accounts receivable, net | $ 514 | $ 411 |
Balance Sheet Account Details_5
Balance Sheet Account Details - Summary of Inventory (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Inventory [Abstract] | ||
Raw materials | $ 117 | $ 93 |
Work in process | 218 | 188 |
Finished goods | 51 | 52 |
Total inventory | $ 386 | $ 333 |
Balance Sheet Account Details_6
Balance Sheet Account Details - Summary of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 1,596 | $ 1,347 |
Accumulated depreciation | (521) | (416) |
Total property and equipment, net | 1,075 | 931 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 567 | 331 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 382 | 316 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 217 | 185 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 45 | 34 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 285 | 155 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 100 | $ 326 |
Balance Sheet Account Details_7
Balance Sheet Account Details - Narrative - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Non-cash expenditures included in property and equipment, net | $ 35 | $ 117 | $ 220 |
Build to suit lease liability | |||
Property, Plant and Equipment [Line Items] | |||
Non-cash expenditures included in property and equipment, net | $ 18 | $ 79 | $ 193 |
Balance Sheet Account Details_8
Balance Sheet Account Details - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Contract liabilities, current portion | $ 175 | $ 150 |
Accrued compensation expenses | 193 | 177 |
Accrued taxes payable | 82 | 50 |
Other, including warranties | 63 | 55 |
Total accrued liabilities | $ 513 | $ 432 |
Balance Sheet Account Details_9
Balance Sheet Account Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Changes in Reserve for Product Warranties [Roll Forward] | |||
Balance as of beginning of period | $ 17 | $ 13 | $ 17 |
Additions charged to cost of revenue | 27 | 26 | 21 |
Repairs and replacements | (25) | (22) | (25) |
Balance as of end of period | $ 19 | $ 17 | $ 13 |
Balance Sheet Account Detail_10
Balance Sheet Account Details - Narrative - Investment in Consolidated Variable Interest Entities (Details) - USD ($) $ in Millions | Feb. 28, 2017 | Feb. 28, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Feb. 27, 2017 | Jan. 03, 2016 | Jul. 31, 2015 |
Variable Interest Entity [Line Items] | ||||||||
Payments to acquire additional interest in subsidiaries | $ 100 | |||||||
Cash and cash equivalents attributable to variable interest entities | $ 1,144 | $ 1,225 | $ 735 | $ 769 | ||||
Gain on deconsolidation of GRAIL | 453 | |||||||
Variable Interest Entity, Primary Beneficiary | Helix Holdings I, LLC | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Equity ownership interest percentage | 50.00% | 50.00% | ||||||
Cash and cash equivalents attributable to variable interest entities | $ 127 | |||||||
Helix Holdings I, LLC | Variable Interest Entity, Primary Beneficiary | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Ownership percentage by noncontrolling interest owners | 50.00% | |||||||
GRAIL, Inc. | Variable Interest Entity, Primary Beneficiary | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Equity ownership interest percentage | 52.00% | |||||||
Other Assets | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Equity investments without readily determinable fair value | $ 231 | 250 | ||||||
Other Assets | GRAIL, Inc. | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Equity investments without readily determinable fair value | $ 189 | $ 185 | ||||||
GRAIL, Inc. | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Ownership percentage | 19.00% | 19.00% | ||||||
Investment voting interest percentage | 13.00% | 13.00% | ||||||
Gain on deconsolidation of GRAIL | $ 453 | |||||||
Remeasurement of retained equity | $ 159 | |||||||
GRAIL, Inc. | Variable Interest Entity, Primary Beneficiary | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Percentage of entity's losses absorbed | 50.00% | 50.00% |
Balance Sheet Account Detail_11
Balance Sheet Account Details - Summary of Activity of Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward] | |||
Beginning balance | $ 220 | $ 44 | $ 33 |
Cash contributions | 9 | ||
Amount released from escrow | 79 | ||
Vesting of redeemable equity awards | 2 | 13 | 2 |
Net loss attributable to noncontrolling interests | (34) | (41) | (21) |
Adjustment up to the redemption value | 136 | 21 | |
Deconsolidation of GRAIL | (11) | ||
Adjustment down to the redemption value | (127) | ||
Ending balance | $ 61 | $ 220 | $ 44 |
Intangible Assets, Goodwill, _3
Intangible Assets, Goodwill, and Acquisitions - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 481 | $ 448 |
Accumulated Amortization | (296) | (273) |
Intangibles, Net | 185 | 175 |
Licensed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 95 | 95 |
Accumulated Amortization | (83) | (74) |
Intangibles, Net | 12 | 21 |
Core technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 331 | 300 |
Accumulated Amortization | (172) | (161) |
Intangibles, Net | 159 | 139 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 32 | 32 |
Accumulated Amortization | (27) | (25) |
Intangibles, Net | 5 | 7 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 14 | 14 |
Accumulated Amortization | (9) | (8) |
Intangibles, Net | 5 | 6 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9 | 7 |
Accumulated Amortization | (5) | (5) |
Intangibles, Net | $ 4 | $ 2 |
Intangible Assets, Goodwill, _4
Intangible Assets, Goodwill, and Acquisitions - Summary of the Estimated Annual Amortization of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 37 | |
2,020 | 30 | |
2,021 | 26 | |
2,022 | 22 | |
2,023 | 20 | |
Thereafter | 50 | |
Intangibles, Net | $ 185 | $ 175 |
Intangible Assets, Goodwill, _5
Intangible Assets, Goodwill, and Acquisitions - Summary of Changes in Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 771 | $ 776 |
GRAIL deconsolidation | (5) | |
Acquisitions | 60 | |
Ending balance | $ 831 | $ 771 |
Intangible Assets, Goodwill, _6
Intangible Assets, Goodwill, and Acquisitions - Goodwill Narrative (Details) - USD ($) $ in Millions | May 14, 2018 | Dec. 30, 2018 |
Goodwill [Line Items] | ||
Goodwill, acquired | $ 60 | |
Edico Genome | ||
Goodwill [Line Items] | ||
Business acquisition total consideration | $ 100 | |
Goodwill, acquired | 56 | |
Developed technology | Edico Genome | ||
Goodwill [Line Items] | ||
Value of intangible assets acquired | $ 45 | |
Weighted-average useful lives (in years) | 10 years | |
Trade name | Edico Genome | ||
Goodwill [Line Items] | ||
Value of intangible assets acquired | $ 1 | |
Weighted-average useful lives (in years) | 3 years |
Intangible Assets, Goodwill, _7
Intangible Assets, Goodwill, and Acquisitions - Merger Agreement (Details) - PacBio $ / shares in Units, $ in Millions | Nov. 01, 2018USD ($)$ / shares |
Business Acquisition [Line Items] | |
Expected business acquisition total consideration | $ 1,200 |
Expected share price in dollars per share) | $ / shares | $ 8 |
Potential fee paid to Illumina if contract terminates | $ 43 |
Potential fee paid by Illumina if contract terminates | $ 98 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Debt securities | $ 2,329 | $ 920 |
Marketable equity security | 39 | |
Debt securities in government sponsored entities [Member] | ||
Assets: | ||
Debt securities | 21 | 67 |
Corporate debt securities | ||
Assets: | ||
Debt securities | 1,058 | 421 |
U.S. Treasury securities | ||
Assets: | ||
Debt securities | 1,250 | 432 |
Fair value, measurements, recurring | ||
Assets: | ||
Marketable equity security | 39 | |
Deferred compensation plan assets | 34 | 35 |
Total assets measured at fair value | 3,234 | 1,912 |
Liabilities: | ||
Deferred compensation plan liability | 33 | 33 |
Fair value, measurements, recurring | Debt securities in government sponsored entities [Member] | ||
Assets: | ||
Debt securities | 21 | 67 |
Fair value, measurements, recurring | Corporate debt securities | ||
Assets: | ||
Debt securities | 1,058 | 421 |
Fair value, measurements, recurring | U.S. Treasury securities | ||
Assets: | ||
Debt securities | 1,250 | 432 |
Fair value, measurements, recurring | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 832 | 957 |
Fair value, measurements, recurring | Level 1 | ||
Assets: | ||
Marketable equity security | 39 | |
Total assets measured at fair value | 2,121 | 1,389 |
Fair value, measurements, recurring | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Debt securities | 1,250 | 432 |
Fair value, measurements, recurring | Level 1 | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 832 | 957 |
Fair value, measurements, recurring | Level 2 | ||
Assets: | ||
Deferred compensation plan assets | 34 | 35 |
Total assets measured at fair value | 1,113 | 523 |
Liabilities: | ||
Deferred compensation plan liability | 33 | 33 |
Fair value, measurements, recurring | Level 2 | Debt securities in government sponsored entities [Member] | ||
Assets: | ||
Debt securities | 21 | 67 |
Fair value, measurements, recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Debt securities | $ 1,058 | $ 421 |
Debt and Other Commitments - Su
Debt and Other Commitments - Summary of Debt Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Aug. 21, 2018 | Jun. 29, 2014 | |
Debt Instrument [Line Items] | ||||
Obligations under financing leases | $ 269 | $ 113 | ||
Other | 3 | 4 | ||
Less: current portion | (1,107) | (10) | ||
Long-term debt | 890 | 1,182 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount of liability component of convertible senior notes | (175) | (75) | ||
Net carrying amount of liability component of convertible senior notes | 1,725 | 1,075 | ||
Carrying value of equity component of convertible senior notes, net of debt issuance costs | $ 287 | $ 161 | ||
Weighted average remaining amortization period of discount on the liability component of convertible senior notes | 3 years 11 months | 2 years 9 months | ||
Convertible Debt | 2023 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | $ 750 | $ 750 | ||
Convertible Debt | 2021 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | 517 | $ 517 | $ 517 | |
Convertible Debt | 2019 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | 633 | 633 | $ 633 | |
Level 2 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Fair value of convertible senior notes outstanding (Level 2) | $ 2,222 | $ 1,305 |
Debt and Other Commitments - De
Debt and Other Commitments - Debt Narrative (Details) $ / shares in Units, $ in Millions | Aug. 21, 2018USD ($)day$ / shares | Jun. 29, 2014USD ($)day$ / shares | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Additional paid in capital, net of tax | $ 3,290 | $ 2,833 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Carrying value of equity component of convertible senior notes, net of debt issuance costs | $ 287 | 161 | ||
Convertible Debt | 2023 | ||||
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 | day | 20 | |||
Threshold consecutive common stock trading days | day | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | day | 5 | |||
Threshold consecutive note trading days | day | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Observation period for the observation value | 20 days | |||
Convertible stock, conversion price (in dollars per share) | $ / shares | $ 595.10 | |||
Effective interest rate used to measure fair value of convertible senior note | 3.70% | |||
Debt, fair value | $ 624 | |||
Additional paid in capital, before tax | 126 | |||
Additional paid in capital, net of tax | $ 93 | |||
Convertible Debt | 2019 | ||||
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 | day | 20 | |||
Threshold consecutive common stock trading days | day | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | day | 5 | |||
Threshold consecutive note trading days | day | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Effective interest rate used to measure fair value of convertible senior note | 2.90% | |||
If-converted value in excess of principal | $ 150 | |||
Convertible Debt | 2021 | ||||
Debt Instrument [Line Items] | ||||
Stated rate | 0.50% | 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 | day | 20 | |||
Threshold consecutive common stock trading days | day | 30 | |||
Threshold percentage of common stock price trigger | 130.00% | |||
Threshold note trading days | day | 5 | |||
Threshold consecutive note trading days | day | 10 | |||
Threshold percentage of note price trigger | 98.00% | |||
Effective interest rate used to measure fair value of convertible senior note | 3.50% | |||
If-converted value in excess of principal | $ 122 | |||
Convertible Debt | 2019 and 2021 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | $ 1,150 | |||
Proceeds from issuance, net of offering expenses | $ 1,132 | |||
Observation period for the observation value | 20 days | |||
Fair value of liability component, upon issuance | $ 972 | |||
Carrying value of equity component of convertible senior notes, net of debt issuance costs | 161 | |||
Cash proceeds | $ 1,133 |
Debt and Other Commitments - Le
Debt and Other Commitments - Leases Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Feb. 28, 2017 | |
Other Commitments [Line Items] | ||||
Obligations under financing leases | $ 269 | $ 113 | ||
Build-to-suit lease liability | 144 | |||
Rent expense | 55 | 46 | $ 46 | |
Interest portion of lease expense | 13 | |||
Deferred rent | 123 | 115 | ||
Long-term portion, deferred rent | 119 | $ 113 | ||
Construction in Progress and Build to Suit Lease Liability | ||||
Other Commitments [Line Items] | ||||
Obligations under financing leases | $ 165 | |||
GRAIL, Inc. | ||||
Other Commitments [Line Items] | ||||
Build-to-suit lease liability | $ 58 | |||
Build to suit lease, asset under construction | $ 58 |
Debt and Other Commitments - _2
Debt and Other Commitments - Summary of Annual Future Minimum Payments under Leases (Details) $ in Millions | Dec. 30, 2018USD ($) |
Operating Leases | |
2,019 | $ 59 |
2,020 | 64 |
2,021 | 61 |
2,022 | 61 |
2,023 | 61 |
Thereafter | 439 |
Total minimum lease payments | 745 |
Sublease Income | |
2,019 | (11) |
2,020 | (11) |
2,021 | (11) |
2,022 | (12) |
2,023 | (11) |
Thereafter | (12) |
Total minimum lease payments | (68) |
Net Operating Leases | |
2,019 | 48 |
2,020 | 53 |
2,021 | 50 |
2,022 | 49 |
2,023 | 50 |
Thereafter | 427 |
Total minimum lease payments | 677 |
Build-to-suit Leases | |
2,019 | 18 |
2,020 | 21 |
2,021 | 21 |
2,022 | 22 |
2,023 | 22 |
Thereafter | 179 |
Total minimum lease payments | $ 283 |
Debt and Other Commitments - _3
Debt and Other Commitments - Summary of Annual Minimum Payments for Noncancelable Purchase Obligations (Details) $ in Millions | Dec. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 93 |
2,020 | 20 |
Total | $ 113 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative - Stockholders' Equity (Details) shares in Millions | Dec. 30, 2018shares |
2015 Stock and Incentive Compensation Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for issuance | 4.7 |
Stockholders' Equity - Narrat_2
Stockholders' Equity - Narrative - Restricted Stock (Details) | 12 Months Ended |
Dec. 30, 2018 | |
RSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
PSU | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
PSU | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percent | 150.00% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Activity and Related Information (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
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) | 2,085 | 2,293 | 2,206 |
Awarded (in shares) | 655 | 879 | 1,245 |
Vested (in shares) | (731) | (861) | (928) |
Cancelled (in shares) | (169) | (226) | (230) |
Outstanding at period end (in shares) | 1,840 | 2,085 | 2,293 |
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) | $ 172.92 | $ 141.80 | $ 131.80 |
Weighted-Average Grant Date Fair Value per Share, Awarded (in dollars per share) | 322.04 | 207.38 | 132.47 |
Weighted-Average Grant Date Fair Value per Share, Vested (in dollars per share) | 170.50 | 131.62 | 105.49 |
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | 172.30 | 149.03 | 139.74 |
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ 227 | $ 172.92 | $ 141.80 |
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) | 542 | 460 | 583 |
Awarded (in shares) | 336 | 238 | 172 |
Vested (in shares) | (188) | (92) | (199) |
Cancelled (in shares) | (30) | (64) | (96) |
Outstanding at period end (in shares) | 660 | 542 | 460 |
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) | $ 166.15 | $ 158.66 | $ 169.41 |
Weighted-Average Grant Date Fair Value per Share, Awarded (in dollars per share) | 232.08 | 191.53 | 113.56 |
Weighted-Average Grant Date Fair Value per Share, Vested (in dollars per share) | 176.15 | 189.09 | 148.99 |
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | 162.54 | 173.83 | 163.05 |
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ 196.99 | $ 166.15 | $ 158.66 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Pre-tax Intrinsic Values and Total Fair Value of Vested Restricted Stock (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Restricted stock units (RSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax intrinsic value of outstanding restricted stock | $ 549 | $ 456 | $ 294 |
Fair value of restricted stock vested | 125 | 113 | 98 |
Performance stock units (PSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pre-tax intrinsic value of outstanding restricted stock | 197 | 118 | 59 |
Fair value of restricted stock vested | $ 33 | $ 17 | $ 30 |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options, Outstanding at period start (in shares) | 322 | 1,045 | 1,599 |
Options, Exercised (in shares) | (130) | (723) | (552) |
Options, Cancelled (in shares) | (2) | ||
Options, Outstanding at period end (in shares) | 192 | 322 | 1,045 |
Options, Exercisable at period end (in shares) | 192 | ||
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) | $ 46.93 | $ 48.56 | $ 41.95 |
Weighted-Average Exercise Price, Options, Exercised (in dollars per share) | 35.68 | 49.31 | 29.41 |
Weighted-Average Exercise Price, Options, Cancelled (in dollars per share) | 46.35 | ||
Weighted-Average Exercise Price, Options, Outstanding at period end (in dollars per share) | 54.52 | $ 46.93 | $ 48.56 |
Weighted-Average Exercise Price, Options, Exercisable at period end (in dollars per share) | $ 54.52 |
Stockholders' Equity - Narrat_3
Stockholders' Equity - Narrative - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Equity [Abstract] | |||
Weighted average remaining life in years of options outstanding | 2 years 5 months | ||
Weighted average remaining life in years of options exercisable | 2 years 5 months | ||
Aggregate intrinsic value of options outstanding | $ 47 | ||
Aggregate intrinsic value of options exercisable | $ 47 | ||
Share price (in dollars per share) | $ 298.23 | ||
Total intrinsic value of options exercised | $ 33 | $ 101 | $ 71 |
Stockholders' Equity - Narrat_4
Stockholders' Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee stock - shares shares in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
ESPP number of shares reserved for issuance | 15.5 | ||
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 | 0.3 | 0.3 | 0.2 |
Shares available for issuance | 13.7 | 14 |
Stockholders' Equity - Narrat_5
Stockholders' Equity - Narrative - Share Repurchases (Details) - USD ($) shares in Millions, $ in Millions | Aug. 21, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Feb. 05, 2019 | May 01, 2018 | May 04, 2017 | Jul. 28, 2016 |
Class of Stock [Line Items] | ||||||||
Common stock repurchases | $ 201 | $ 251 | $ 249 | |||||
Common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Repurchase of common shares (in shares) | 0.3 | 0.6 | 1.4 | 1.8 | ||||
Common stock repurchases | $ 103 | $ 201 | $ 251 | $ 249 | ||||
Dollar amount remaining in authorized stock repurchase program | $ 49 | |||||||
Common stock | July 2016 Share Repurchase Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase program authorized amount | $ 250 | |||||||
Common stock | May 2017 Share Repurchase Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase program authorized amount | $ 250 | |||||||
Common stock | May 2018 Share Repurchase Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase program authorized amount | $ 150 | |||||||
Subsequent Event | Common stock | February 2019 Share Repurchase Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchase program authorized amount | $ 550 |
Stockholders' Equity - Summar_4
Stockholders' Equity - Summary of Share-based Compensation Expense for all Stock Awards (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Share-based Compensation | |||
Share-based compensation expense before taxes | $ 193 | $ 164 | $ 129 |
Related income tax benefits | (39) | (48) | (41) |
Share-based compensation expense, net of taxes | 154 | 116 | 88 |
Cost of product revenue | |||
Share-based Compensation | |||
Share-based compensation expense before taxes | 16 | 12 | 9 |
Cost of service and other revenue | |||
Share-based Compensation | |||
Share-based compensation expense before taxes | 3 | 2 | 2 |
Research and development | |||
Share-based Compensation | |||
Share-based compensation expense before taxes | 60 | 51 | 42 |
Selling, general and administrative | |||
Share-based Compensation | |||
Share-based compensation expense before taxes | $ 114 | $ 99 | $ 76 |
Stockholders' Equity - Summar_5
Stockholders' Equity - Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase Plan (Details) - $ / shares | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Assumptions used to estimate the fair value per share of employee stock purchase rights granted | |||
Expected dividends | 0.00% | ||
Employee stock | |||
Assumptions used to estimate the fair value per share of employee stock purchase rights granted | |||
Expected volatility, minimum | 29.00% | 29.00% | 40.00% |
Expected volatility, maximum | 39.00% | 44.00% | 44.00% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Weighted-average grant-date fair value per share (in dollars per share) | $ 61.59 | $ 46.81 | $ 48.29 |
Employee stock | Minimum | |||
Assumptions used to estimate the fair value per share of employee stock purchase rights granted | |||
Risk-free interest rate | 1.22% | 0.50% | 0.40% |
Expected term | 6 months | 6 months | 6 months |
Employee stock | Maximum | |||
Assumptions used to estimate the fair value per share of employee stock purchase rights granted | |||
Risk-free interest rate | 2.45% | 1.22% | 0.50% |
Expected term | 1 year | 1 year | 1 year |
Stockholders' Equity - Narrat_6
Stockholders' Equity - Narrative - Share-based Compensation Expense (Details) $ in Millions | 12 Months Ended |
Dec. 30, 2018USD ($) | |
Equity [Abstract] | |
Unrecognized compensation cost related to restricted stock units and ESPP shares issued to date | $ 474 |
Weighted-average period of unrecognized compensation cost related to restricted stock and ESPP shares issued to date | 2 years 6 months |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income before Income Taxes by Region (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 54 | $ 458 | $ 120 |
Foreign | 840 | 585 | 441 |
Income before income taxes | $ 894 | $ 1,043 | $ 561 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Current: | |||
Federal | $ 47 | $ 259 | $ 71 |
State | 15 | 21 | 10 |
Foreign | 68 | 51 | 45 |
Total current provision | 130 | 331 | 126 |
Deferred: | |||
Federal | 36 | 16 | |
State | (16) | (5) | |
Foreign | (2) | (2) | (4) |
Total deferred (benefit) expense | (18) | 34 | 7 |
Total tax provision | $ 112 | $ 365 | $ 133 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Provision for Income Taxes to Amount Computed by Applying the Federal Statutory Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | $ 188 | $ 365 | $ 196 |
State, net of federal benefit | 13 | 19 | 10 |
Research and other credits | (23) | (12) | (13) |
Change in valuation allowance | (12) | 12 | 5 |
Impact of foreign operations | (59) | (130) | (86) |
Cost sharing adjustment | (7) | ||
Investments in consolidated variable interest entities | 9 | (3) | 25 |
Impact of U.S. Tax Reform | 11 | 150 | |
Stock compensation | (24) | (41) | 3 |
Other | 9 | 5 | |
Total tax provision | $ 112 | $ 365 | $ 133 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Income Taxes [Line Items] | |||
Impact of U.S. tax reform | $ 11 | $ 150 | |
Increase in provision for income taxes | 11 | ||
Transition tax for earnings of certain foreign subsidiaries | 108 | ||
Valuation allowance on deferred tax assets | 15 | 25 | |
Undistributed earnings of foreign subsidiaries | 973 | ||
Deferred tax liability | 3 | 5 | |
Uncertain tax positions that would reduce annual effective tax rate, if recognized | 78 | 70 | |
Potential interest penalties on uncertain tax positions | 3 | 1 | $ 1 |
Liability recorded for potential interest and penalties | $ 11 | 8 | |
Foreign | Singapore | |||
Income Taxes [Line Items] | |||
Statutory tax rate | 17.00% | ||
Decrease to the provision for income taxes | $ 36 | $ 49 | $ 32 |
Increase to net income per diluted share | $ 0.24 | $ 0.33 | $ 0.22 |
Foreign | United Kingdom | |||
Income Taxes [Line Items] | |||
Statutory tax rate | 19.00% | ||
Federal | IRS | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 39 | ||
Tax credit carryforwards | 1 | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 156 | ||
Tax credit carryforwards | 103 | ||
Tax Year 2017 | |||
Income Taxes [Line Items] | |||
Undistributed earnings of foreign subsidiaries | 63 | ||
Deferred tax liability | $ 2 |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating losses | $ 26 | $ 18 |
Tax credits | 63 | 57 |
Other accruals and reserves | 28 | 25 |
Stock compensation | 20 | 19 |
Deferred rent | 30 | 28 |
Cost sharing adjustment | 21 | 21 |
Other amortization | 13 | 12 |
Lease obligation | 70 | 27 |
Investments | 1 | 13 |
Other | 28 | 26 |
Total gross deferred tax assets | 300 | 246 |
Valuation allowance on deferred tax assets | (15) | (25) |
Total deferred tax assets | 285 | 221 |
Deferred tax liabilities: | ||
Purchased intangible amortization | (32) | (26) |
Convertible debt | (41) | (18) |
Property and equipment | (94) | (44) |
Investments | (45) | (40) |
Other | (3) | (5) |
Total deferred tax liabilities | (215) | (133) |
Deferred tax assets, net | $ 70 | $ 88 |
Income Taxes - Summary of the G
Income Taxes - Summary of the Gross Amount of Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 79 | $ 65 | $ 56 |
Increases related to prior year tax positions | 1 | 2 | |
Decreases related to prior year tax positions | (1) | (2) | |
Increases related to current year tax positions | 12 | 14 | 13 |
Decreases related to lapse of statute of limitations | (3) | (2) | (2) |
Balance at end of year | $ 88 | $ 79 | $ 65 |
Employee Benefit Plans - Retire
Employee Benefit Plans - Retirement Plan Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Retirement Benefits [Abstract] | |||
Matching contributions | $ 20 | $ 17 | $ 14 |
Employee Benefit Plans - Deferr
Employee Benefit Plans - Deferred Comp Narrative (Details) - Deferred compensation plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2018 | Dec. 31, 2017 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Employer contribution vesting percent upon the occurrence of participant's disability, death or retirement or change in control of the Company | 100.00% | |
Deferred compensation plan assets | $ 34 | $ 35 |
Deferred compensation liability | $ 33 | $ 33 |
Senior level employee | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Percent of base salary available for contribution to the deferred compensation plan | 60.00% | |
Percent of all other forms of compensation available for contribution to the deferred compensation plan | 100.00% | |
Director | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Percent of all other forms of compensation available for contribution to the deferred compensation plan | 100.00% |
Segment Information and Geogr_3
Segment Information and Geographic Data - Narrative (Details) | 12 Months Ended |
Dec. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information and Geogr_4
Segment Information and Geographic Data - Summary of Operating Performance and Assets by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | $ 867 | $ 853 | $ 830 | $ 782 | $ 778 | $ 714 | $ 662 | $ 598 | $ 3,333 | $ 2,752 | $ 2,398 |
Consolidated depreciation and amortization | 179 | 156 | 141 | ||||||||
Consolidated income from operations | 883 | 606 | 587 | ||||||||
Consolidated total assets | 6,959 | 5,257 | 6,959 | 5,257 | 4,281 | ||||||
Consolidated capital expenditures | 296 | 310 | 260 | ||||||||
Operating Segments | Core Illumina | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 3,334 | 2,754 | 2,428 | ||||||||
Consolidated depreciation and amortization | 175 | 153 | 138 | ||||||||
Consolidated income from operations | 970 | 696 | 684 | ||||||||
Consolidated total assets | 6,912 | 5,223 | 6,912 | 5,223 | 4,167 | ||||||
Consolidated capital expenditures | 294 | 306 | 238 | ||||||||
Operating Segments | Consolidated VIEs | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | 10 | 6 | |||||||||
Consolidated depreciation and amortization | 6 | 6 | 4 | ||||||||
Consolidated income from operations | (90) | (92) | (81) | ||||||||
Consolidated total assets | 154 | 45 | 154 | 45 | 180 | ||||||
Consolidated capital expenditures | 2 | 4 | 22 | ||||||||
Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Consolidated revenue | (11) | (8) | (30) | ||||||||
Consolidated depreciation and amortization | (2) | (3) | (1) | ||||||||
Consolidated income from operations | 3 | 2 | (16) | ||||||||
Consolidated total assets | $ (107) | $ (11) | $ (107) | $ (11) | $ (66) |
Segment Information and Geogr_5
Segment Information and Geographic Data - Summary of Net Long-lived Assets Consisting of Property and Equipment by Region (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,075 | $ 931 |
United States | ||
Long-Lived Assets [Line Items] | ||
Long-lived assets | 907 | 828 |
Singapore | ||
Long-Lived Assets [Line Items] | ||
Long-lived assets | 96 | 54 |
United Kingdom | ||
Long-Lived Assets [Line Items] | ||
Long-lived assets | 62 | 43 |
Other countries | ||
Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 10 | $ 6 |
Quarterly Financial Informati_3
Quarterly Financial Information (unaudited) - Summary of Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 867 | $ 853 | $ 830 | $ 782 | $ 778 | $ 714 | $ 662 | $ 598 | $ 3,333 | $ 2,752 | $ 2,398 |
Gross profit | 590 | 597 | 575 | 538 | 542 | 482 | 434 | 368 | 2,300 | 1,826 | 1,666 |
Consolidated net income | 198 | 188 | 200 | 197 | 58 | 152 | 120 | 348 | 782 | 678 | 428 |
Net income attributable to Illumina stockholders | $ 210 | $ 199 | $ 209 | $ 208 | $ 68 | $ 163 | $ 128 | $ 367 | $ 826 | $ 726 | $ 463 |
Earnings per share attributable to Illumina stockholders: | |||||||||||
Basic (in dollars per share) | $ 1.43 | $ 1.35 | $ 1.42 | $ 1.42 | $ 0.47 | $ 1.12 | $ 0.87 | $ 2.50 | $ 5.63 | $ 4.96 | $ 3.09 |
Diluted (in dollars per share) | $ 1.41 | $ 1.33 | $ 1.41 | $ 1.41 | $ 0.46 | $ 1.11 | $ 0.87 | $ 2.48 | $ 5.56 | $ 4.92 | $ 3.07 |