Filed: 26 Apr 19

Document and Entity Information

Document and Entity Information - shares shares in Millions3 Months Ended
Mar. 31, 2019Apr. 18, 2019
Document and Entity Information [Abstract]
Entity Registrant NameIllumina Inc
Entity Central Index Key0001110803
Current Fiscal Year End Date--12-29
Entity Filer CategoryLarge Accelerated Filer
Document Type10-Q
Document Period End DateMar. 31,
2019
Document Fiscal Year Focus2019
Document Fiscal Period FocusQ1
Amendment Flagfalse
Entity Common Stock, Shares Outstanding147
Entity Emerging Growth Companyfalse
Entity Small Businessfalse

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Current assets:
Cash and cash equivalents $ 2,270 $ 1,144
Short-term investments1,345 2,368
Accounts receivable, net457 514
Inventory412 386
Prepaid expenses and other current assets61 78
Total current assets4,545 4,490
Property and equipment, net852 1,075
Operating lease right-of-use assets574
Goodwill831 831
Intangible assets, net175 185
Deferred tax assets, net87 70
Other assets326 308
Total assets7,390 6,959
Current liabilities:
Accounts payable137 184
Accrued liabilities473 513
Long-term debt, current portion631 1,107
Total current liabilities1,241 1,804
Operating lease liabilities718
Long-term debt1,112 890
Other long-term liabilities212 359
Redeemable noncontrolling interests37 61
Stockholders’ equity:
Common stock2 2
Additional paid-in capital3,385 3,290
Accumulated other comprehensive income (loss)2 (1)
Retained earnings3,298 3,083
Treasury stock, at cost(2,702)(2,616)
Total Illumina stockholders’ equity3,985 3,758
Noncontrolling interests85 87
Total stockholders’ equity4,070 3,845
Total liabilities and stockholders’ equity $ 7,390 $ 6,959

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Revenue:
Total revenue $ 846 $ 782
Cost of revenue:
Amortization of acquired intangible assets9 8
Total cost of revenue262 244
Gross profit584 538
Operating expense:
Research and development169 137
Selling, general and administrative211 183
Total operating expense380 320
Income from operations204 218
Other income (expense):
Interest income23 5
Interest expense(15)(11)
Other income, net21 9
Total other income, net29 3
Income before income taxes233 221
Provision for income taxes9 24
Consolidated net income224 197
Add: Net loss attributable to noncontrolling interests9 11
Net Income (Loss) Attributable to Parent $ 233 $ 208
Earnings per share attributable to Illumina stockholders:
Basic (in dollars per share) $ 1.58 $ 1.42
Diluted (in dollars per share) $ 1.57 $ 1.41
Shares used in computing earnings per share:
Basic (in shares)147 147
Diluted (in shares)149 148
Product revenue
Revenue:
Total revenue $ 667 $ 628
Cost of revenue:
Cost of revenue182 174
Service and other revenue
Revenue:
Total revenue179 154
Cost of revenue:
Cost of revenue $ 71 $ 62

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Statement of Comprehensive Income [Abstract]
Consolidated net income $ 224 $ 197
Unrealized gain on available-for-sale debt securities, net of deferred tax3
Total consolidated comprehensive income227 197
Add: Comprehensive loss attributable to noncontrolling interests9 11
Comprehensive income attributable to Illumina stockholders $ 236 $ 208

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity Statement - USD ($) shares in Millions, $ in MillionsTotalCommon StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss) IncomeRetained EarningsTreasury StockNoncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2017191 44
Beginning balance at Dec. 31, 2017 $ 2,749 $ 2 $ 2,833 $ (1) $ 2,256 $ (2,341) $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)207 208 (1)
Issuance of common stock, net of repurchases8 21 $ (13)
Share-based compensation48 48
Adjustment to the carrying value of redeemable noncontrolling interests(5)(5)
Contributions from noncontrolling interest owners61 61
Issuance of subsidiary shares in business combination5 5
Ending balance (in shares) at Apr. 01, 2018191 44
Ending balance at Apr. 01, 20183,073 $ 2 2,897 (1)2,464 $ (2,354)65
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)207 209 (2)
Issuance of common stock, net of repurchases(1)1 $ (2)
Share-based compensation50 50
Vesting of redeemable equity awards(1)(1)
Adjustment to the carrying value of redeemable noncontrolling interests(8)(8)
Contributions from noncontrolling interest owners31 31
Ending balance (in shares) at Jul. 01, 2018191 44
Ending balance at Jul. 01, 20183,351 $ 2 2,939 (1)2,673 $ (2,356)94
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)196 199 (3)
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax(1)(1)
Issuance of common stock, net of repurchases(83)23 $ (106)
Share-based compensation47 47
Vesting of redeemable equity awards(1)(1)
Adjustment to the carrying value of redeemable noncontrolling interests(8)(8)
Issuance of convertible senior notes, net of tax impact93 93
Ending balance (in shares) at Sep. 30, 2018191 44
Ending balance at Sep. 30, 20183,594 $ 2 3,093 (2)2,872 $ (2,462)91
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)206 210 (4)
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax1 1
Issuance of common stock, net repurchases (in shares)1 (1)
Issuance of common stock, net of repurchases(153)1 $ (154)
Share-based compensation48 48
Adjustment to the carrying value of redeemable noncontrolling interests148 148
Cumulative-effect adjustment from adoption of ASU1 1
Ending balance (in shares) at Dec. 30, 2018192 45
Ending balance at Dec. 30, 20183,845 $ 2 3,290 (1)3,083 $ (2,616)87
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)231 233 (2)
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax3 3
Issuance of common stock, net of repurchases(59)27 $ (86)
Share-based compensation51 51
Vesting of redeemable equity awards(1)(1)
Adjustment to the carrying value of redeemable noncontrolling interests18 18
Cumulative-effect adjustment from adoption of ASU(18)(18)
Ending balance (in shares) at Mar. 31, 2019192 45
Ending balance at Mar. 31, 2019 $ 4,070 $ 2 $ 3,385 $ 2 $ 3,298 $ (2,702) $ 85

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Cash flows from operating activities:
Consolidated net income $ 224 $ 197
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense37 30
Amortization of intangible assets10 9
Share-based compensation expense51 48
Accretion of debt discount14 8
Deferred income taxes(11)(11)
Gain on deconsolidation of GRAIL(15)
Other(5)(6)
Changes in operating assets and liabilities:
Accounts receivable56 11
Inventory(26)(17)
Prepaid expenses and other current assets6 (2)
Operating lease right-of-use assets and liabilities, net(1)
Other assets(8)(1)
Accounts payable(47)2
Accrued liabilities(70)(18)
Other long-term liabilities(17)5
Net cash provided by operating activities198 255
Cash flows from investing activities:
Purchases of available-for-sale securities(117)(598)
Sales of available-for-sale securities118 288
Maturities of available-for-sale securities1,031 415
Proceeds from deconsolidation of GRAIL15
Net purchases of strategic investments(3)(3)
Purchases of property and equipment(56)(90)
Net cash provided by investing activities988 12
Cash flows from financing activities:
Payments on financing obligations(1)(2)
Common stock repurchases(63)
Taxes paid related to net share settlement of equity awards(23)(13)
Proceeds from issuance of common stock27 21
Contributions from noncontrolling interest owners61
Net cash (used in) provided by financing activities(60)67
Effect of exchange rate changes on cash and cash equivalents1
Net increase in cash and cash equivalents1,126 335
Cash and cash equivalents at beginning of period1,144 1,225
Cash and cash equivalents at end of period2,270 $ 1,560
Supplemental Cash Flow Information [Abstract]
Cash paid for operating lease liabilities $ 21

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting PoliciesBasis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended December 30, 2018 , from which the prior year balance sheet information herein was derived. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expense, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. The unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, majority-owned or controlled companies, and variable interest entities (VIEs) for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, 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 perform this assessment, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of a VIE. See note “10. Subsequent Event.” We use the equity method to account for investments through which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded in other assets, and our share of net income or loss is recognized on a one quarter lag in other income, net. Redeemable Noncontrolling Interests Noncontrolling interests represent the portion of equity (net assets) in Helix, our consolidated but not wholly-owned entity, that is neither directly nor indirectly attributable to us. Noncontrolling interests with embedded contingent redemption features, such as put rights, that are not solely within our control are considered redeemable noncontrolling interests, and are presented outside of stockholders’ equity on the condensed consolidated balance sheets. Fiscal Year Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. The three months ended March 31, 2019 and April 1, 2018 were both 13 weeks. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Significant Accounting Policies During the three months ended March 31, 2019 , there have been no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 30, 2018 , except as described below. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use assets and to disclose key information about leasing arrangements. We adopted Topic 842 on its effective date in the first quarter of 2019 using a modified retrospective approach by recognizing a cumulative-effect adjustment to retained earnings as of December 31, 2018. We elected the available package of practical expedients upon adoption, which allowed us to carry forward our historical assessment of whether existing agreements contained a lease and the classification of our existing operating leases. We continue to report our financial position as of December 30, 2018 under the former lease accounting standard (Topic 840) in our condensed consolidated balance sheet. The following table summarizes the impact of Topic 842 on our condensed consolidated balance sheet upon adoption on December 31, 2018 (in millions): December 31, 2018 (unaudited) Pre-adoption Adoption Impact Post-adoption ASSETS Prepaid expenses and other current assets $ 78 $ (8 ) $ 70 Property and equipment, net 1,075 (241 ) 834 Operating lease right-of-use assets — 579 579 Deferred tax assets, net 70 6 76 Total assets $ 1,223 $ 336 $ 1,559 LIABILITIES AND STOCKHOLDERS’ EQUITY Accrued liabilities $ 513 $ 36 $ 549 Operating lease liabilities — 722 722 Long-term debt 1,107 (269 ) 838 Other long-term liabilities 359 (135 ) 224 Retained earnings 3,083 (18 ) 3,065 Total liabilities and stockholders’ equity $ 5,062 $ 336 $ 5,398 The adoption impact summarized above was primarily due to the recognition of operating lease liabilities with corresponding right-of-use assets based on the present value of our remaining minimum lease payments, and the derecognition of existing fixed assets and financing obligations related to build-to-suit leasing arrangements that, under Topic 840, did not qualify for sale-leaseback accounting. The difference between these amounts, net of deferred tax, was recorded as a cumulative-effective adjustment to retained earnings. Recently Issued Accounting Pronouncements 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. 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 March 31, 2019 , the aggregate amount of the transaction price allocated to remaining performance obligations was $1,083 million , of which approximately 85% is expected to be converted to revenue in the next twelve months, 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 March 31, 2019 and December 30, 2018 were $201 million and $206 million , respectively, of which the short-term portions of $169 million and $175 million , respectively, were recorded in accrued liabilities and the remaining long-term portions were recorded in other long-term liabilities. Revenue recorded during the three months ended March 31, 2019 included $64 million of previously deferred revenue that was included in contract liabilities as of December 30, 2018 . Contract assets as of March 31, 2019 and December 30, 2018 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): Three Months Ended March 31, April 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 481 $ 75 $ 556 $ 422 $ 88 $ 510 Instruments 105 6 111 112 6 118 Total product revenue 586 81 667 534 94 628 Service and other revenue 113 66 179 96 58 154 Total revenue $ 699 $ 147 $ 846 $ 630 $ 152 $ 782 Revenue related to our consolidated VIE, Helix, is included in sequencing service and other revenue. The following table represents revenue by geographic area, based on region of destination (in millions): Three Months Ended March 31, April 1, Americas $ 473 $ 440 Europe, Middle East, and Africa 210 194 Greater China (1) 88 78 Asia-Pacific 75 70 Total revenue $ 846 $ 782 ____________________________________ (1) Region includes revenue from China, Taiwan, and Hong Kong. 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 consolidated VIE, Helix, are included in the consolidated basic and diluted earnings per share computations based on our share of Helix’s securities. Potentially dilutive common shares consist of shares issuable under convertible senior notes and equity awards. Convertible senior notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercise of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares. The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended March 31, April 1, Weighted average shares outstanding 147 147 Effect of potentially dilutive common shares from: Convertible senior notes 1 — Equity awards 1 1 Weighted average shares used in calculating diluted earnings per share 149 148 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 1 —

Balance Sheet Account Details

Balance Sheet Account Details3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Balance Sheet Account DetailsBalance Sheet Account Details Investments Debt Securities Available-for-sale debt securities, included in short-term investments, consisted of the following (in millions): March 31, 2019 December 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities in government sponsored entities $ 21 $ — $ — $ 21 $ 21 $ — $ — $ 21 Corporate debt securities 716 2 (1 ) 717 1,060 — (2 ) 1,058 U.S. Treasury securities 566 — — 566 1,250 1 (1 ) 1,250 Total $ 1,303 $ 2 $ (1 ) $ 1,304 $ 2,331 $ 1 $ (3 ) $ 2,329 Realized gains and losses are determined based on the specific identification method and are reported in interest income. Contractual maturities of available-for-sale debt securities, as of March 31, 2019 , were as follows (in millions): Estimated Fair Value Due within one year $ 711 After one but within five years 593 Total $ 1,304 We have the ability, if necessary, to liquidate any of our cash equivalents and short-term investments to meet our liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than one year from the date of purchase are classified as short-term on the accompanying condensed consolidated balance sheets. 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, net. As of March 31, 2019 and December 30, 2018 , the aggregate carrying amounts of our non-marketable equity investments without readily determinable fair values were $230 million and $231 million , respectively, included in other assets. One of our non-marketable equity investments is a VIE for which we have concluded that we are not the primary beneficiary, and therefore, we do not consolidate this VIE in our consolidated financial statements. We have determined our maximum exposure to loss, as a result of our involvement with the VIE, to be the carrying value of our investment, which was $189 million as of March 31, 2019 and December 30, 2018 . Our marketable equity security is measured at fair value. Unrealized gains and losses are recognized in other income, net. As of March 31, 2019 and December 30, 2018 , the fair value of our marketable equity investment was $41 million and $39 million , respectively, included in short-term investments. Revenue recognized from transactions with our strategic equity investees was $15 million and $36 million for the three months ended March 31, 2019 and April 1, 2018 , 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 $66 million remained callable as of March 31, 2019 . Our investment in the Fund is accounted for as an equity-method investment. The carrying amounts of the Fund, included in other assets, were $38 million and $29 million as of March 31, 2019 and December 30, 2018 , respectively. Inventory Inventory consisted of the following (in millions): March 31, December 30, Raw materials $ 115 $ 117 Work in process 234 218 Finished goods 63 51 Total inventory $ 412 $ 386 Property and Equipment Property and equipment, net consisted of the following (in millions): March 31, December 30, Leasehold improvements $ 622 $ 567 Machinery and equipment 390 382 Computer hardware and software 256 217 Furniture and fixtures 48 45 Buildings 44 285 Construction in progress 46 100 Total property and equipment, gross 1,406 1,596 Accumulated depreciation (554 ) (521 ) Total property and equipment, net $ 852 $ 1,075 Property and equipment, net included non-cash expenditures of $17 million and $33 million for the three months ended March 31, 2019 and April 1, 2018 , respectively, which were excluded from the condensed consolidated statements of cash flows. Such non-cash expenditures included $6 million recorded under build-to-suit lease accounting for the three months ended April 1, 2018 . As of December 30, 2018, property and equipment, net included $241 million of project construction costs paid or reimbursed by our landlord related to our build-to-suit leases that did not qualify for sale-leaseback accounting under Topic 840. Upon adoption of Topic 842 on December 31, 2018, we derecognized the Buildings related to our build-to-suit leasing arrangements and began to account for these leases as operating leases. See note “1. Basis of Presentation and Summary of Significant Accounting Policies” for further details on the adoption impact of Topic 842. Leases We lease approximately 2.7 million square feet of office, lab, and manufacturing facilities under various non-cancellable operating lease agreements (real estate leases). Our real estate leases have remaining lease terms of 1 to 20 years, which represent the non-cancellable periods of the leases and include extension options that we determined are reasonably certain to be exercised. We exclude extension options that are not reasonably certain to be exercised from our lease terms, ranging from 6 months to 20 years. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common-area-maintenance and administrative services. We often receive customary incentives from our landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Operating lease right-of-use assets and liabilities on our condensed consolidated balance sheets represent the present value of our remaining lease payments over the remaining lease terms. We do not allocate lease payments to non-lease components; therefore, fixed payments for common-area-maintenance and administrative services are included in our operating lease right-of-use assets and liabilities. We use our incremental borrowing rate to calculate the present value of our lease payments, as the implicit rates in our leases are not readily determinable. As of March 31, 2019 , the maturities of our operating lease liabilities were as follows (in millions): Remaining Lease Payments 2019 $ 64 2020 85 2021 82 2022 85 2023 86 Thereafter 621 Total remaining lease payments 1,023 Less: imputed interest (253 ) Total operating lease liabilities 770 Less: current portion (52 ) Long-term operating lease liabilities $ 718 Weighted-average remaining lease term 12 years Weighted-average discount rate 4.6 % The components of our lease costs included in our condensed consolidated statements of income were as follows (in millions): Three months ended March 31, 2019 Operating lease costs $ 22 Sublease income (3 ) Total lease costs $ 19 Operating lease costs consist of the fixed lease payments included in our operating lease liabilities and are recorded on a straight-line basis over the lease terms. We sublease certain real estate to third parties and this sublease income is also recorded on a straight-line basis. 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, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities. As of March 31, 2019 , we had foreign exchange forward contracts in place to hedge exposures in the euro, Japanese yen, Australian dollar, Canadian dollar, Singapore dollar, and British pound. As of March 31, 2019 and December 30, 2018 , the total notional amounts of outstanding forward contracts in place for foreign currency purchases were $272 million and $122 million , respectively. Accrued Liabilities Accrued liabilities consisted of the following (in millions): March 31, December 30, Contract liabilities, current portion $ 169 $ 175 Accrued compensation expenses 105 193 Accrued taxes payable 83 82 Operating lease liabilities, current portion 52 — Other, including warranties 64 63 Total accrued liabilities $ 473 $ 513 Warranties We generally provide a one -year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six to twelve months after the manufacture date. At the time revenue is recognized, an accrual is established for estimated warranty expenses based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue. Changes in the reserve for product warranties during the three months ended March 31, 2019 and April 1, 2018 were as follows (in millions): Three Months Ended March 31, April 1, Balance at beginning of period $ 19 $ 17 Additions charged to cost of product revenue 3 6 Repairs and replacements (6 ) (7 ) Balance at end of period $ 16 $ 16 Investment in Helix 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 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. During the three months ended March 31, 2019 , we did not provide any other financial or other support to Helix that we were not previously contractually required to provide. As of March 31, 2019 , 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 condensed consolidated balance sheets. The balance of the redeemable noncontrolling interests is reported at the greater of its carrying value after receiving its allocation of Helix’s profits and losses or its estimated redemption fair value at each reporting date. The fair value of the redeemable noncontrolling interests is considered a Level 3 instrument. As of March 31, 2019 , the accompanying condensed consolidated balance sheet included $106 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 March 31, 2019 . Helix had an immaterial impact on our condensed consolidated statements of income and cash flows for the three months ended March 31, 2019 . Refer to note “10. Subsequent Event.” Redeemable Noncontrolling Interests The activity of the redeemable noncontrolling interests during the three months ended March 31, 2019 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 30, 2018 $ 61 Vesting of redeemable equity awards 1 Net loss attributable to noncontrolling interests (7 ) Adjustment down to the redemption value (18 ) Balance as of March 31, 2019 $ 37

Pending Acquisition

Pending Acquisition3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Pending AcquisitionPending Acquisition 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 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 Measurements3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value MeasurementsFair Value Measurements The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 30, 2018 (in millions): March 31, 2019 December 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,805 $ — $ — $ 1,805 $ 832 $ — $ — $ 832 Debt securities in government-sponsored entities — 21 — 21 — 21 — 21 Corporate debt securities — 717 — 717 — 1,058 — 1,058 U.S. Treasury securities 566 — — 566 1,250 — — 1,250 Marketable equity security 41 — — 41 39 — — 39 Deferred compensation plan assets — 43 — 43 — 34 — 34 Total assets measured at fair value $ 2,412 $ 781 $ — $ 3,193 $ 2,121 $ 1,113 $ — $ 3,234 Liabilities: Deferred compensation plan liability $ — $ 41 $ — $ 41 $ — $ 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 Commitments3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]
Debt and Other CommitmentsDebt and Other Commitments Summary of debt obligations Debt obligations consisted of the following (dollars in millions): March 31, December 30, Principal amount of 2023 Notes outstanding $ 750 $ 750 Principal amount of 2021 Notes outstanding 517 517 Principal amount of 2019 Notes outstanding 632 633 Unamortized discount of liability component of convertible senior notes (160 ) (175 ) Net carrying amount of liability component of convertible senior notes 1,739 1,725 Obligations under financing leases — 269 Other 4 3 Less: current portion (631 ) (1,107 ) Long-term debt $ 1,112 $ 890 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 287 $ 287 Fair value of convertible senior notes outstanding (Level 2) $ 2,298 $ 2,222 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 3.8 years 3.9 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 2023 Notes mature on August 15, 2023, and the implied estimated effective rate of the liability component of the Notes was 3.7% , assuming no conversion option. 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. 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 were not convertible as of March 31, 2019 and had no dilutive impact during the three months ended March 31, 2019 . If the 2023 Notes were converted as of March 31, 2019 , the if-converted value would not exceed the principal amount. 0% Convertible Senior Notes due 2019 (2019 Notes) and 0.5% Convertible Senior Notes due 2021 (2021 Notes) In June 2014, we issued $633 million aggregate principal amount of 2019 Notes and $517 million aggregate principal amount of 2021 Notes. The 2019 and 2021 Notes mature on June 15, 2019 and June 15, 2021 , respectively, and the implied estimated effective rates of the liability components of the Notes were 2.9% and 3.5% , respectively, assuming no conversion option. 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. The potential dilutive impact of the 2019 and 2021 notes has been included in our calculation of diluted earnings per share for the three months ended March 31, 2019 . If the 2019 and 2021 Notes were converted as of March 31, 2019 , their if-converted values would exceed their principal amounts by $128 million and $105 million , respectively. The carrying values of the 2019 Notes were classified as current liabilities as they were convertible as of March 31, 2019 and mature within twelve months of the balance sheet date. Obligations under financing leases As of December 30, 2018, obligations under financing leases of $269 million represented project construction costs paid or reimbursed by our landlord related to our build-to-suit leases that did not qualify for sale-leaseback accounting under Topic 840. Upon adoption of Topic 842 on December 31, 2018, we derecognized the remaining financing obligations for our build-to-suit leasing arrangements and began to account for these leases as operating leases. See note “1. Basis of Presentation and Summary of Significant Accounting Policies” for further details on the adoption of Topic 842.

Stockholders' Equity

Stockholders' Equity3 Months Ended
Mar. 31, 2019
Equity [Abstract]
Stockholders' EquityStockholders’ Equity As of March 31, 2019 , approximately 4.8 million shares remained available for future grants under the 2015 Stock Plan. Restricted Stock Restricted stock activity for the three months ended March 31, 2019 was as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 Awarded 24 — $ 291.79 $ — Vested (28 ) — $ 176.83 — Cancelled (43 ) (39 ) $ 204.64 $ 163.53 Outstanding at March 31, 2019 1,793 621 $ 229.18 $ 199.48 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Stock Options Stock option activity during the three months ended March 31, 2019 was as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 30, 2018 192 $ 54.52 Exercised (34 ) $ 47.86 Outstanding and exercisable at March 31, 2019 158 $ 55.95 ESPP The price at which common stock is purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first day of the offering period or purchase date, whichever is lower. During the three months ended March 31, 2019 , approximately 0.1 million shares were issued under the ESPP. As of March 31, 2019 , there were approximately 13.6 million shares available for issuance under the ESPP. Share Repurchases 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. During the three months ended March 31, 2019 , we repurchased 0.2 million shares for approximately $63 million . Authorizations to repurchase approximately $488 million of our common stock remained available as of March 31, 2019 . Share-based Compensation Share-based compensation expense reported in our condensed consolidated statements of income was as follows (in millions): Three Months Ended March 31, April 1, Cost of product revenue $ 5 $ 4 Cost of service and other revenue 1 1 Research and development 18 15 Selling, general and administrative 27 28 Share-based compensation expense before taxes 51 48 Related income tax benefits (10 ) (10 ) Share-based compensation expense, net of taxes $ 41 $ 38 The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the Employee Stock Purchase Plan (ESPP) during the three months ended March 31, 2019 were as follows: Employee Stock Purchase Rights Risk-free interest rate 1.89% - 2.56% Expected volatility 30% - 38% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average grant-date fair value per share $ 71.48 As of March 31, 2019 , approximately $433 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 2.3 years .

Legal Proceedings

Legal Proceedings3 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Legal ProceedingsLegal Proceedings We are involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the 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 Taxes3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income TaxesIncome Taxes Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. The effective tax rate for the three months ended March 31, 2019 was 3.9% . For the three months ended March 31, 2019 , the decrease from the U.S. federal statutory tax rate of 21% was primarily attributable to a discrete tax benefit related to uncertain tax positions, the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore and the United Kingdom, and excess tax benefits related to share-based compensation.

Segment Information

Segment Information3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]
Segment InformationSegment Information 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 VIE, Helix. Helix: Helix, our consolidated VIE, 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. 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 in accordance with contractual agreements between the entities. The following table presents the operating performance of each reportable segment (in millions): Three Months Ended March 31, April 1, Revenue: Core Illumina $ 846 $ 783 Helix 1 3 Elimination of intersegment revenue (1 ) (4 ) Consolidated revenue $ 846 $ 782 Income (loss) from operations: Core Illumina $ 221 $ 238 Helix (18 ) (21 ) Elimination of intersegment earnings 1 1 Consolidated income from operations $ 204 $ 218 The following table presents the total assets of each reportable segment (in millions): March 31, December 30, Core Illumina $ 7,362 $ 6,912 Helix 134 154 Elimination of intersegment assets (106 ) (107 ) Consolidated total assets $ 7,390 $ 6,959

Subsequent Event

Subsequent Event3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent EventSubsequent Event On April 25, 2019, we entered into an agreement to sell our interest in, and relinquish control over, our consolidated VIE, Helix. In connection with the transaction, the redeemable noncontrolling interest of $37 million as of March 31, 2019 was eliminated, and we will no longer consolidate Helix effective April 25, 2019.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.
ConsolidationThe unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, majority-owned or controlled companies, and variable interest entities (VIEs) for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented.
Variable Interest EntitiesWe evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, 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 perform this assessment, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of a VIE.
Equity Method InvestmentsWe use the equity method to account for investments through which we have the ability to exercise significant influence, but not control, over the investee. Such investments are recorded in other assets, and our share of net income or loss is recognized on a one quarter lag in other income, net.
Redeemable Noncontrolling InterestsNoncontrolling 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, and are presented outside of stockholders’ equity on the condensed consolidated balance sheets.
Fiscal YearOur fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31.
ReclassificationsCertain prior period amounts have been reclassified to conform to the current period presentation.
Recently Adopted and Issued Accounting PronouncementsRecently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use assets and to disclose key information about leasing arrangements. We adopted Topic 842 on its effective date in the first quarter of 2019 using a modified retrospective approach by recognizing a cumulative-effect adjustment to retained earnings as of December 31, 2018. We elected the available package of practical expedients upon adoption, which allowed us to carry forward our historical assessment of whether existing agreements contained a lease and the classification of our existing operating leases. We continue to report our financial position as of December 30, 2018 under the former lease accounting standard (Topic 840) in our condensed consolidated balance sheet. The following table summarizes the impact of Topic 842 on our condensed consolidated balance sheet upon adoption on December 31, 2018 (in millions): December 31, 2018 (unaudited) Pre-adoption Adoption Impact Post-adoption ASSETS Prepaid expenses and other current assets $ 78 $ (8 ) $ 70 Property and equipment, net 1,075 (241 ) 834 Operating lease right-of-use assets — 579 579 Deferred tax assets, net 70 6 76 Total assets $ 1,223 $ 336 $ 1,559 LIABILITIES AND STOCKHOLDERS’ EQUITY Accrued liabilities $ 513 $ 36 $ 549 Operating lease liabilities — 722 722 Long-term debt 1,107 (269 ) 838 Other long-term liabilities 359 (135 ) 224 Retained earnings 3,083 (18 ) 3,065 Total liabilities and stockholders’ equity $ 5,062 $ 336 $ 5,398 The adoption impact summarized above was primarily due to the recognition of operating lease liabilities with corresponding right-of-use assets based on the present value of our remaining minimum lease payments, and the derecognition of existing fixed assets and financing obligations related to build-to-suit leasing arrangements that, under Topic 840, did not qualify for sale-leaseback accounting. The difference between these amounts, net of deferred tax, was recorded as a cumulative-effective adjustment to retained earnings. Recently Issued Accounting Pronouncements 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.
Revenue RecognitionOur revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of instruments and consumables used in genetic analysis. Service and other revenue primarily consists of revenue generated from genotyping and sequencing services and instrument service contracts. We recognize revenue when control of our products and services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. 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 March 31, 2019 , the aggregate amount of the transaction price allocated to remaining performance obligations was $1,083 million , of which approximately 85% is expected to be converted to revenue in the next twelve months, 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 March 31, 2019 and December 30, 2018 were $201 million and $206 million , respectively, of which the short-term portions of $169 million and $175 million , respectively, were recorded in accrued liabilities and the remaining long-term portions were recorded in other long-term liabilities. Revenue recorded during the three months ended March 31, 2019 included $64 million of previously deferred revenue that was included in contract liabilities as of December 30, 2018 . Contract assets as of March 31, 2019 and December 30, 2018 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.
Earnings per ShareBasic earnings per share attributable to Illumina stockholders is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to Illumina stockholders is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Per-share earnings of our consolidated VIE, Helix, are included in the consolidated basic and diluted earnings per share computations based on our share of Helix’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.
Equity SecuritiesOur 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, net. As of March 31, 2019 and December 30, 2018 , the aggregate carrying amounts of our non-marketable equity investments without readily determinable fair values were $230 million and $231 million , respectively, included in other assets. One of our non-marketable equity investments is a VIE for which we have concluded that we are not the primary beneficiary, and therefore, we do not consolidate this VIE in our consolidated financial statements. We have determined our maximum exposure to loss, as a result of our involvement with the VIE, to be the carrying value of our investment, which was $189 million as of March 31, 2019 and December 30, 2018 . Our marketable equity security is measured at fair value. Unrealized gains and losses are recognized in other income, net. As of March 31, 2019 and December 30, 2018 , the fair value of our marketable equity investment was $41 million and $39 million , respectively, included in short-term investments.
DerivativesWe are exposed to foreign exchange rate risks in the normal course of business. We enter into foreign exchange contracts to manage foreign currency risks related to monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. These foreign exchange contracts are carried at fair value in other current assets or accrued liabilities and are not designated as hedging instruments. Changes in the value of the derivatives are recognized in other income, net, along with the remeasurement gain or loss on the foreign currency denominated assets or liabilities.
WarrantiesWe generally provide a one -year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six to twelve months after the manufacture date. At the time revenue is recognized, an accrual is established for estimated warranty expenses based on historical experience as well as anticipated product performance. We periodically review the warranty reserve for adequacy and adjust the warranty accrual, if necessary, based on actual experience and estimated costs to be incurred. Warranty expense is recorded as a component of cost of product revenue.

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies (Tables)3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]
Summary of Impact of Topic 842The following table summarizes the impact of Topic 842 on our condensed consolidated balance sheet upon adoption on December 31, 2018 (in millions): December 31, 2018 (unaudited) Pre-adoption Adoption Impact Post-adoption ASSETS Prepaid expenses and other current assets $ 78 $ (8 ) $ 70 Property and equipment, net 1,075 (241 ) 834 Operating lease right-of-use assets — 579 579 Deferred tax assets, net 70 6 76 Total assets $ 1,223 $ 336 $ 1,559 LIABILITIES AND STOCKHOLDERS’ EQUITY Accrued liabilities $ 513 $ 36 $ 549 Operating lease liabilities — 722 722 Long-term debt 1,107 (269 ) 838 Other long-term liabilities 359 (135 ) 224 Retained earnings 3,083 (18 ) 3,065 Total liabilities and stockholders’ equity $ 5,062 $ 336 $ 5,398
Disaggregation of Revenue from External CustomersThe following table represents revenue by source (in millions): Three Months Ended March 31, April 1, Sequencing Microarray Total Sequencing Microarray Total Consumables $ 481 $ 75 $ 556 $ 422 $ 88 $ 510 Instruments 105 6 111 112 6 118 Total product revenue 586 81 667 534 94 628 Service and other revenue 113 66 179 96 58 154 Total revenue $ 699 $ 147 $ 846 $ 630 $ 152 $ 782 Revenue related to our consolidated VIE, Helix, is included in sequencing service and other revenue. The following table represents revenue by geographic area, based on region of destination (in millions): Three Months Ended March 31, April 1, Americas $ 473 $ 440 Europe, Middle East, and Africa 210 194 Greater China (1) 88 78 Asia-Pacific 75 70 Total revenue $ 846 $ 782 ____________________________________ (1) Region includes revenue from China, Taiwan, and Hong Kong.
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Earnings Per ShareThe following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions): Three Months Ended March 31, April 1, Weighted average shares outstanding 147 147 Effect of potentially dilutive common shares from: Convertible senior notes 1 — Equity awards 1 1 Weighted average shares used in calculating diluted earnings per share 149 148 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 1 —

Balance Sheet Account Details (

Balance Sheet Account Details (Tables)3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Short-term InvestmentsAvailable-for-sale debt securities, included in short-term investments, consisted of the following (in millions): March 31, 2019 December 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities in government sponsored entities $ 21 $ — $ — $ 21 $ 21 $ — $ — $ 21 Corporate debt securities 716 2 (1 ) 717 1,060 — (2 ) 1,058 U.S. Treasury securities 566 — — 566 1,250 1 (1 ) 1,250 Total $ 1,303 $ 2 $ (1 ) $ 1,304 $ 2,331 $ 1 $ (3 ) $ 2,329
Summary of Contractual Maturities of Available-for-sale Debt SecuritiesContractual maturities of available-for-sale debt securities, as of March 31, 2019 , were as follows (in millions): Estimated Fair Value Due within one year $ 711 After one but within five years 593 Total $ 1,304
Summary of InventoryInventory consisted of the following (in millions): March 31, December 30, Raw materials $ 115 $ 117 Work in process 234 218 Finished goods 63 51 Total inventory $ 412 $ 386
Summary of Property and EquipmentProperty and equipment, net consisted of the following (in millions): March 31, December 30, Leasehold improvements $ 622 $ 567 Machinery and equipment 390 382 Computer hardware and software 256 217 Furniture and fixtures 48 45 Buildings 44 285 Construction in progress 46 100 Total property and equipment, gross 1,406 1,596 Accumulated depreciation (554 ) (521 ) Total property and equipment, net $ 852 $ 1,075
Summary of LeasesAs of March 31, 2019 , the maturities of our operating lease liabilities were as follows (in millions): Remaining Lease Payments 2019 $ 64 2020 85 2021 82 2022 85 2023 86 Thereafter 621 Total remaining lease payments 1,023 Less: imputed interest (253 ) Total operating lease liabilities 770 Less: current portion (52 ) Long-term operating lease liabilities $ 718 Weighted-average remaining lease term 12 years Weighted-average discount rate 4.6 %
Components of Lease CostsThe components of our lease costs included in our condensed consolidated statements of income were as follows (in millions): Three months ended March 31, 2019 Operating lease costs $ 22 Sublease income (3 ) Total lease costs $ 19
Summary of Accrued LiabilitiesAccrued liabilities consisted of the following (in millions): March 31, December 30, Contract liabilities, current portion $ 169 $ 175 Accrued compensation expenses 105 193 Accrued taxes payable 83 82 Operating lease liabilities, current portion 52 — Other, including warranties 64 63 Total accrued liabilities $ 473 $ 513
Summary of Changes in Reserve for Product WarrantiesChanges in the reserve for product warranties during the three months ended March 31, 2019 and April 1, 2018 were as follows (in millions): Three Months Ended March 31, April 1, Balance at beginning of period $ 19 $ 17 Additions charged to cost of product revenue 3 6 Repairs and replacements (6 ) (7 ) Balance at end of period $ 16 $ 16
Summary of Activity of Redeemable Noncontrolling InterestsThe activity of the redeemable noncontrolling interests during the three months ended March 31, 2019 was as follows (in millions): Redeemable Noncontrolling Interests Balance as of December 30, 2018 $ 61 Vesting of redeemable equity awards 1 Net loss attributable to noncontrolling interests (7 ) Adjustment down to the redemption value (18 ) Balance as of March 31, 2019 $ 37

Fair Value Measurements (Tables

Fair Value Measurements (Tables)3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]
Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring BasisThe following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 30, 2018 (in millions): March 31, 2019 December 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 1,805 $ — $ — $ 1,805 $ 832 $ — $ — $ 832 Debt securities in government-sponsored entities — 21 — 21 — 21 — 21 Corporate debt securities — 717 — 717 — 1,058 — 1,058 U.S. Treasury securities 566 — — 566 1,250 — — 1,250 Marketable equity security 41 — — 41 39 — — 39 Deferred compensation plan assets — 43 — 43 — 34 — 34 Total assets measured at fair value $ 2,412 $ 781 $ — $ 3,193 $ 2,121 $ 1,113 $ — $ 3,234 Liabilities: Deferred compensation plan liability $ — $ 41 $ — $ 41 $ — $ 33 $ — $ 33

Debt and Other Commitments (Tab

Debt and Other Commitments (Tables)3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]
Summary of Debt ObligationsDebt obligations consisted of the following (dollars in millions): March 31, December 30, Principal amount of 2023 Notes outstanding $ 750 $ 750 Principal amount of 2021 Notes outstanding 517 517 Principal amount of 2019 Notes outstanding 632 633 Unamortized discount of liability component of convertible senior notes (160 ) (175 ) Net carrying amount of liability component of convertible senior notes 1,739 1,725 Obligations under financing leases — 269 Other 4 3 Less: current portion (631 ) (1,107 ) Long-term debt $ 1,112 $ 890 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 287 $ 287 Fair value of convertible senior notes outstanding (Level 2) $ 2,298 $ 2,222 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 3.8 years 3.9 years

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)3 Months Ended
Mar. 31, 2019
Equity [Abstract]
Summary of Restricted Stock Activity and Related Information, Restricted StockRestricted stock activity for the three months ended March 31, 2019 was as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 Awarded 24 — $ 291.79 $ — Vested (28 ) — $ 176.83 — Cancelled (43 ) (39 ) $ 204.64 $ 163.53 Outstanding at March 31, 2019 1,793 621 $ 229.18 $ 199.48 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Restricted Stock Activity and Related Information, Performance UnitsRestricted stock activity for the three months ended March 31, 2019 was as follows (units in thousands): Restricted Stock Units (RSU) Performance Stock Units (PSU)(1) Weighted-Average Grant-Date Fair Value per Share RSU PSU Outstanding at December 30, 2018 1,840 660 $ 227.00 $ 196.99 Awarded 24 — $ 291.79 $ — Vested (28 ) — $ 176.83 — Cancelled (43 ) (39 ) $ 204.64 $ 163.53 Outstanding at March 31, 2019 1,793 621 $ 229.18 $ 199.48 ______________________________________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Stock Option Activity Under all Stock Option PlansStock option activity during the three months ended March 31, 2019 was as follows: Options (in thousands) Weighted-Average Exercise Price Outstanding at December 30, 2018 192 $ 54.52 Exercised (34 ) $ 47.86 Outstanding and exercisable at March 31, 2019 158 $ 55.95
Summary of Share-based Compensation Expense for all Stock AwardsShare-based compensation expense reported in our condensed consolidated statements of income was as follows (in millions): Three Months Ended March 31, April 1, Cost of product revenue $ 5 $ 4 Cost of service and other revenue 1 1 Research and development 18 15 Selling, general and administrative 27 28 Share-based compensation expense before taxes 51 48 Related income tax benefits (10 ) (10 ) Share-based compensation expense, net of taxes $ 41 $ 38
Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase PlanThe assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the Employee Stock Purchase Plan (ESPP) during the three months ended March 31, 2019 were as follows: Employee Stock Purchase Rights Risk-free interest rate 1.89% - 2.56% Expected volatility 30% - 38% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average grant-date fair value per share $ 71.48

Segment Information (Tables)

Segment Information (Tables)3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]
Summary of Operating Performance and Assets by SegmentThe following table presents the operating performance of each reportable segment (in millions): Three Months Ended March 31, April 1, Revenue: Core Illumina $ 846 $ 783 Helix 1 3 Elimination of intersegment revenue (1 ) (4 ) Consolidated revenue $ 846 $ 782 Income (loss) from operations: Core Illumina $ 221 $ 238 Helix (18 ) (21 ) Elimination of intersegment earnings 1 1 Consolidated income from operations $ 204 $ 218 The following table presents the total assets of each reportable segment (in millions): March 31, December 30, Core Illumina $ 7,362 $ 6,912 Helix 134 154 Elimination of intersegment assets (106 ) (107 ) Consolidated total assets $ 7,390 $ 6,959

Basis of Presentation and Sum_4

Basis of Presentation and Summary of Significant Accounting Policies - Summary of Impact of Topic 842 (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 31, 2018Dec. 30, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets $ 61 $ 70 $ 78
Property and equipment, net852 834 1,075
Operating lease right-of-use assets574 579
Deferred tax assets, net87 76 70
Total assets1,559
Accrued liabilities473 549 513
Total operating lease liabilities770 722
Long-term debt838
Other long-term liabilities212 224 359
Retained earnings $ 3,298 3,065 $ 3,083
Total liabilities and stockholders’ equity5,398
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets(8)
Property and equipment, net(241)
Operating lease right-of-use assets579
Deferred tax assets, net6
Total assets336
Accrued liabilities36
Total operating lease liabilities722
Long-term debt(269)
Other long-term liabilities(135)
Retained earnings(18)
Total liabilities and stockholders’ equity336
Pre Adoption of ASU [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets78
Property and equipment, net1,075
Deferred tax assets, net70
Total assets1,223
Accrued liabilities513
Long-term debt1,107
Other long-term liabilities359
Retained earnings3,083
Total liabilities and stockholders’ equity $ 5,062

Basis of Presentation and Sum_5

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Dec. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Period of time average selling prices are observed12 months
Contract liability $ 201 $ 206
Contract liabilities, current portion169 $ 175
Revenue recognized, previously deferred $ 64
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Product or service delivery period3 months
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Product or service delivery period6 months

Basis of Presentation and Sum_6

Basis of Presentation and Summary of Significant Accounting Policies - Narrative - Revenue, Remaining Performance Obligation (Details) $ in MillionsMar. 31, 2019USD ($)
Accounting Policies [Abstract]
Remaining performance obligation $ 1,083
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percent of remaining performance obligation85.00%
Expected timing of remaining performance obligation12 months

Basis of Presentation and Sum_7

Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Principles (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Disaggregation of Revenue [Line Items]
Revenue $ 846 $ 782
Americas
Disaggregation of Revenue [Line Items]
Revenue473 440
Europe, Middle East, and Africa
Disaggregation of Revenue [Line Items]
Revenue210 194
Greater China
Disaggregation of Revenue [Line Items]
Revenue88 78
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue75 70
Sequencing
Disaggregation of Revenue [Line Items]
Revenue699 630
Microarray
Disaggregation of Revenue [Line Items]
Revenue147 152
Total product revenue
Disaggregation of Revenue [Line Items]
Revenue667 628
Total product revenue | Sequencing
Disaggregation of Revenue [Line Items]
Revenue586 534
Total product revenue | Microarray
Disaggregation of Revenue [Line Items]
Revenue81 94
Consumables
Disaggregation of Revenue [Line Items]
Revenue556 510
Consumables | Sequencing
Disaggregation of Revenue [Line Items]
Revenue481 422
Consumables | Microarray
Disaggregation of Revenue [Line Items]
Revenue75 88
Instruments
Disaggregation of Revenue [Line Items]
Revenue111 118
Instruments | Sequencing
Disaggregation of Revenue [Line Items]
Revenue105 112
Instruments | Microarray
Disaggregation of Revenue [Line Items]
Revenue6 6
Service and other revenue
Disaggregation of Revenue [Line Items]
Revenue179 154
Service and other revenue | Sequencing
Disaggregation of Revenue [Line Items]
Revenue113 96
Service and other revenue | Microarray
Disaggregation of Revenue [Line Items]
Revenue $ 66 $ 58

Basis of Presentation and Sum_8

Basis of Presentation and Summary of Significant Accounting Policies - Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share (Details) - shares shares in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Weighted average shares used to calculate basic and diluted earnings per share
Weighted average shares outstanding147 147
Effect of potentially dilutive common shares from:
Convertible senior notes1
Equity awards1 1
Weighted average shares used in calculating diluted earnings per share149 148
Potentially dilutive shares excluded from calculation due to anti-dilutive effect1

Balance Sheet Account Details -

Balance Sheet Account Details - Summary of Short-term Investments (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Available-for-sale debt securities:
Amortized Cost $ 1,303 $ 2,331
Gross Unrealized Gains2 1
Gross Unrealized Losses(1)(3)
Estimated Fair Value1,304 2,329
Debt securities in government sponsored entities
Available-for-sale debt securities:
Amortized Cost21 21
Gross Unrealized Losses
Estimated Fair Value21 21
Corporate debt securities
Available-for-sale debt securities:
Amortized Cost716 1,060
Gross Unrealized Gains2
Gross Unrealized Losses(1)(2)
Estimated Fair Value717 1,058
U.S. Treasury securities
Available-for-sale debt securities:
Amortized Cost566 1,250
Gross Unrealized Gains1
Gross Unrealized Losses(1)
Estimated Fair Value $ 566 $ 1,250

Balance Sheet Account Details_2

Balance Sheet Account Details - Summary of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Estimated Fair Value
Due within one year $ 711
After one but within five years593
Total $ 1,304 $ 2,329

Balance Sheet Account Details_3

Balance Sheet Account Details - Narrative - Strategic Investments (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018Dec. 30, 2018
Schedule of Investments [Line Items]
Carrying Value $ 189 $ 189
Marketable equity security41 39
Commitment in new venture capital investment fund100
Remaining capital commitment66
Other Assets
Schedule of Investments [Line Items]
Strategic equity investments, without readily determinable fair values230 231
Equity method investments38 $ 29
Investee
Schedule of Investments [Line Items]
Revenue from transactions with Company's strategic equity investees $ 15 $ 36

Balance Sheet Account Details_4

Balance Sheet Account Details - Summary of Inventory (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials $ 115 $ 117
Work in process234 218
Finished goods63 51
Total inventory $ 412 $ 386

Balance Sheet Account Details_5

Balance Sheet Account Details - Summary of Property and Equipment (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 31, 2018Dec. 30, 2018
Property, Plant and Equipment [Line Items]
Total property and equipment, gross $ 1,406 $ 1,596
Accumulated depreciation(554)(521)
Total property and equipment, net852 $ 834 1,075
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, gross622 567
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross390 382
Computer hardware and software
Property, Plant and Equipment [Line Items]
Total property and equipment, gross256 217
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment, gross48 45
Buildings
Property, Plant and Equipment [Line Items]
Total property and equipment, gross44 285
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment, gross $ 46 $ 100

Balance Sheet Account Details_6

Balance Sheet Account Details - Narrative - Property and Equipment (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018Dec. 31, 2018Dec. 30, 2018
Property, Plant and Equipment [Line Items]
Non-cash expenditures included in capital expenditures $ 17 $ 33
Property and equipment, net $ 852 $ 834 $ 1,075
Construction In Progress And Build to Suit Lease Liability
Property, Plant and Equipment [Line Items]
Non-cash expenditures included in capital expenditures $ 6
ASU 2016-02
Property, Plant and Equipment [Line Items]
Property and equipment, net $ (241)

Balance Sheet Account Details_7

Balance Sheet Account Details - Narrative - Leases (Details) ft² in Millions3 Months Ended
Mar. 31, 2019ft²
Lessee, Lease, Description [Line Items]
Leased office space (in square feet)2.7
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms1 year
Terms of extension options6 months
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms20 years
Terms of extension options20 years

Balance Sheet Account Details_8

Balance Sheet Account Details - Summary of Leases (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2019 $ 64
202085
202182
202285
202386
Thereafter621
Total remaining lease payments1,023
Less: imputed interest(253)
Total operating lease liabilities770 $ 722
Less: current portion(52)
Long-term operating lease liabilities $ 718
Weighted-average remaining lease term12 years
Weighted-average discount rate4.60%

Balance Sheet Account Details_9

Balance Sheet Account Details - Summary of Lease Costs (Details) $ in Millions3 Months Ended
Mar. 31, 2019USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating lease costs $ 22
Sublease income(3)
Total lease costs $ 19

Balance Sheet Account Detail_10

Balance Sheet Account Details - Narrative - Derivatives (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Not Designated as Hedging Instrument | Foreign Exchange Forward
Derivative [Line Items]
Derivative, notional amount $ 272 $ 122

Balance Sheet Account Detail_11

Balance Sheet Account Details - Summary of Accrued Liabilities (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 31, 2018Dec. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Contract liabilities, current portion $ 169 $ 175
Accrued compensation expenses105 193
Accrued taxes payable83 82
Operating lease liabilities, current portion52
Other, including warranties64 63
Total accrued liabilities $ 473 $ 549 $ 513

Balance Sheet Account Detail_12

Balance Sheet Account Details - Narrative - Warranties (Details)3 Months Ended
Mar. 31, 2019
Instruments
Product Warranty Liability [Line Items]
Warranty period1 year
Consumables | Minimum
Product Warranty Liability [Line Items]
Warranty period6 months
Consumables | Maximum
Product Warranty Liability [Line Items]
Warranty period12 months

Balance Sheet Account Detail_13

Balance Sheet Account Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Reserve for product warranties [Roll Forward]
Balance at beginning of period $ 19 $ 17
Additions charged to cost of product revenue3 6
Repairs and replacements6 7
Balance at end of period $ 16 $ 16

Balance Sheet Account Detail_14

Balance Sheet Account Details - Narrative - Investment in Helix (Details) - Helix Holdings I, LLC - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Millions12 Months Ended
Dec. 30, 2018Mar. 31, 2019Jul. 31, 2015
Variable Interest Entity [Line Items]
Equity ownership interest percentage50.00%50.00%
Additional investment in exchange for voting equity interests $ 100
Cash and cash equivalents $ 106

Balance Sheet Account Detail_15

Balance Sheet Account Details - Summary of Activity of Redeemable Noncontrolling Interests (Details) $ in Millions3 Months Ended
Mar. 31, 2019USD ($)
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward]
Balance as of December 30, 2018 $ 61
Vesting of redeemable equity awards1
Net loss attributable to noncontrolling interests(7)
Adjustment down to the redemption value(18)
Balance as of March 31, 2019 $ 37

Pending Acquisition (Details)

Pending Acquisition (Details) - Pacific Biosciences of California, Inc (PacBio) $ / shares in Units, $ in MillionsNov. 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 Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Assets:
Available-for-sale securities $ 1,304 $ 2,329
Marketable equity security41 39
Debt securities in government sponsored entities
Assets:
Available-for-sale securities21 21
Corporate debt securities
Assets:
Available-for-sale securities717 1,058
U.S. Treasury securities
Assets:
Available-for-sale securities566 1,250
Fair Value, Measurements, Recurring
Assets:
Marketable equity security41 39
Deferred compensation plan assets43 34
Total assets measured at fair value3,193 3,234
Liabilities:
Deferred compensation plan liability41 33
Fair Value, Measurements, Recurring | Debt securities in government sponsored entities
Assets:
Available-for-sale securities21 21
Fair Value, Measurements, Recurring | Corporate debt securities
Assets:
Available-for-sale securities717 1,058
Fair Value, Measurements, Recurring | U.S. Treasury securities
Assets:
Available-for-sale securities566 1,250
Fair Value, Measurements, Recurring | Money market funds (cash equivalents)
Assets:
Money market funds (cash equivalents)1,805 832
Fair Value, Measurements, Recurring | Level 1
Assets:
Marketable equity security41 39
Total assets measured at fair value2,412 2,121
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities
Assets:
Available-for-sale securities566 1,250
Fair Value, Measurements, Recurring | Level 1 | Money market funds (cash equivalents)
Assets:
Money market funds (cash equivalents)1,805 832
Fair Value, Measurements, Recurring | Level 2
Assets:
Deferred compensation plan assets43 34
Total assets measured at fair value781 1,113
Liabilities:
Deferred compensation plan liability41 33
Fair Value, Measurements, Recurring | Level 2 | Debt securities in government sponsored entities
Assets:
Available-for-sale securities21 21
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities
Assets:
Available-for-sale securities $ 717 $ 1,058

Debt and Other Commitments - Su

Debt and Other Commitments - Summary of Debt Obligations (Details) - USD ($) $ in Millions3 Months Ended12 Months Ended
Mar. 31, 2019Dec. 30, 2018Aug. 21, 2018Jun. 29, 2014
Debt Instrument [Line Items]
Obligations under financing leases $ 269
Other $ 4 3
Less: current portion(631)(1,107)
Long-term debt1,112 890
Convertible Senior Notes
Debt Instrument [Line Items]
Unamortized discount of liability component of convertible senior notes(160)(175)
Net carrying amount of liability component of convertible senior notes1,739 1,725
Carrying value of equity component, net of debt issuance cost $ 287 $ 287
Weighted-average remaining amortization period of discount on the liability component of convertible senior notes3 years 9 months3 years 11 months
Level 2 | Convertible Senior Notes
Debt Instrument [Line Items]
Fair value of convertible senior notes outstanding (Level 2) $ 2,298 $ 2,222
2023 | Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount of notes outstanding750 750 $ 750
2021 | Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount of notes outstanding517 517 $ 517
2019 | Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount of notes outstanding $ 632 $ 633 $ 633

Debt and Other Commitments - Na

Debt and Other Commitments - Narrative (Details) - Convertible Senior Notes $ / shares in Units, $ in MillionsAug. 21, 2018USD ($)day$ / sharesJun. 29, 2014USD ($)day$ / sharesMar. 31, 2019USD ($)Dec. 30, 2018USD ($)
2023
Debt Instrument [Line Items]
Stated rate0.00%
Principal amount of notes outstanding | $ $ 750 $ 750 $ 750
Effective interest rate used to measure fair value of convertible senior note3.70%
Conversion rate0.0021845
Conversion price (in dollars per share) | $ / shares $ 457.77
Threshold common stock trading days20
Threshold consecutive common stock trading days30
Threshold percentage of common stock price trigger130.00%
Threshold note trading days5
Threshold consecutive note trading days10
Threshold percentage of note price trigger98.00%
Convertible stock price trigger | $ / shares $ 595.10
2019
Debt Instrument [Line Items]
Stated rate0.00%
Principal amount of notes outstanding | $ $ 633 $ 632 633
Effective interest rate used to measure fair value of convertible senior note2.90%
If-converted value in excess of principal | $ $ 128
2021
Debt Instrument [Line Items]
Stated rate0.50%
Principal amount of notes outstanding | $ $ 517 $ 517 $ 517
Effective interest rate used to measure fair value of convertible senior note3.50%
If-converted value in excess of principal | $ $ 105
2019 and 2021
Debt Instrument [Line Items]
Conversion rate0.0039318
Conversion price (in dollars per share) | $ / shares $ 254.34
Threshold common stock trading days20
Threshold consecutive common stock trading days30
Threshold percentage of common stock price trigger130.00%
Threshold note trading days5
Threshold consecutive note trading days10
Threshold percentage of note price trigger98.00%

Debt and Other Commitments - _2

Debt and Other Commitments - Narrative - Obligations Under Financing Leases (Details) $ in MillionsDec. 30, 2018USD ($)
Debt Disclosure [Abstract]
Obligations under financing leases $ 269

Stockholders' Equity - Narrativ

Stockholders' Equity - Narrative (Details) shares in MillionsMar. 31, 2019shares
2015 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance (in shares)4.8

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Restricted Stock Activity and Related Information (Details) shares in Thousands3 Months Ended
Mar. 31, 2019$ / sharesshares
Restricted Stock Units (RSU)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at period start (in shares) | shares1,840
Awarded (in shares) | shares24
Vested (in shares) | shares(28)
Cancelled (in shares) | shares(43)
Outstanding at period end (in shares) | shares1,793
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-Average Grant Date Fair Value per Share, Outstanding at period start (in dollars per share) | $ / shares $ 227
Weighted-Average Fair Value Per Share, Awarded (in dollars per share) | $ / shares291.79
Weighted-Average Grant Date Fair Value per Share, Vested (in dollars per share) | $ / shares176.83
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares204.64
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares $ 229.18
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) | shares660
Cancelled (in shares) | shares(39)
Outstanding at period end (in shares) | shares621
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-Average Grant Date Fair Value per Share, Outstanding at period start (in dollars per share) | $ / shares $ 196.99
Weighted-Average Grant Date Fair Value per Share, Cancelled (in dollars per share) | $ / shares163.53
Weighted-Average Grant Date Fair Value per Share, Outstanding at period end (in dollars per share) | $ / shares $ 199.48

Stockholders' Equity - Summar_2

Stockholders' Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details) shares in Thousands3 Months Ended
Mar. 31, 2019$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, Outstanding at period start (in shares) | shares192
Options, Exercised (in shares) | shares(34)
Options, Outstanding at period end (in shares) | shares158
Options, Exercisable (in shares) | shares158
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted-Average Exercise Price, Options, Outstanding at period start (in dollars per share) | $ / shares $ 54.52
Weighted-Average Exercise Price, Options, Exercised (in dollars per share) | $ / shares47.86
Weighted-Average Exercise Price, Options, Outstanding at period end (in dollars per share) | $ / shares55.95
Weighted-Average Exercise Price, Options, Exercisable (in dollars per share) | $ / shares $ 55.95

Stockholders' Equity - Narrat_2

Stockholders' Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee Stock shares in Millions3 Months Ended
Mar. 31, 2019shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Specified percentage of the fair market value of the common stock on the first or last day of the offering period whichever is lower at which stock is purchased85.00%
Total shares issued under the ESPP (in shares)0.1
Shares available for issuance (in shares)13.6

Stockholders' Equity - Narrat_3

Stockholders' Equity - Narrative - Share Repurchases (Details) - USD ($) shares in Millions, $ in Millions3 Months Ended
Mar. 31, 2019Feb. 06, 2019
Class of Stock [Line Items]
Common stock repurchases $ 63
Common Stock
Class of Stock [Line Items]
Repurchased common stock (in shares)0.2
Common stock repurchases $ 63
Dollar amount remaining in authorized stock repurchase program $ 488
Common Stock | February 2019 Share Repurchase Plan
Class of Stock [Line Items]
Stock repurchase program, authorized amount $ 550

Stockholders' Equity - Summar_3

Stockholders' Equity - Summary of Share-based Compensation Expense for all Stock Awards (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before taxes $ 51 $ 48
Related income tax benefits(10)(10)
Share-based compensation expense, net of taxes41 38
Cost of product revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before taxes5 4
Cost of service and other revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before taxes1 1
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before taxes18 15
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense before taxes $ 27 $ 28

Stockholders' Equity - Summar_4

Stockholders' Equity - Summary of Assumptions Used to Estimate the Weighted Average Fair Value Per Share (Details) $ / shares in Units, $ in Millions3 Months Ended
Mar. 31, 2019USD ($)$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date | $ $ 433
Weighted-average period of unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date2 years 3 months
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum30.00%
Expected volatility, maximum38.00%
Expected dividends0.00%
Weighted-average fair value per share (in dollars per share) | $ / shares $ 71.48
Minimum | Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate1.89%
Expected term6 months
Maximum | Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate2.56%
Expected term1 year

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details)3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]
Effective tax rate3.90%

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2019Apr. 01, 2018Dec. 30, 2018
Segment Reporting Information [Line Items]
Consolidated revenue $ 846 $ 782
Consolidated income from operations204 218
Consolidated total assets7,390 $ 6,959
Operating Segments | Core Illumina
Segment Reporting Information [Line Items]
Consolidated revenue846 783
Consolidated income from operations221 238
Consolidated total assets7,362 6,912
Operating Segments | Helix
Segment Reporting Information [Line Items]
Consolidated revenue1 3
Consolidated income from operations(18)(21)
Consolidated total assets134 154
Elimination of intersegment
Segment Reporting Information [Line Items]
Consolidated revenue(1)(4)
Consolidated income from operations1 $ 1
Consolidated total assets $ (106) $ (107)

Subsequent Event Narrative (Det

Subsequent Event Narrative (Details) - USD ($) $ in MillionsMar. 31, 2019Dec. 30, 2018
Subsequent Event [Line Items]
Redeemable noncontrolling interest in VIE $ 37 $ 61
Helix Holdings I, LLC
Subsequent Event [Line Items]
Redeemable noncontrolling interest in VIE $ 37