ILLUMINA INC, 10-Q filed on 7/31/2019
Quarterly Report
v3.19.2
Cover Page - shares
shares in Millions
 6 Months Ended
Jun. 30, 2019
Jul. 26, 2019
Cover page.    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2019  
Document Transition Report false  
Entity File Number 001-35406  
Entity Address, Address Line One 5200 Illumina Way  
Entity Address, City or Town San Diego  
Entity Address, State or Province CA  
Entity Registrant Name Illumina Inc  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 33-0804655  
Entity Address, Postal Zip Code 92122  
City Area Code 858  
Local Phone Number 202-4500  
Title of 12(b) Security Common Stock, $0.01 par value  
Trading Symbol ILMN  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   147
Entity Central Index Key 0001110803  
Current Fiscal Year End Date --12-29  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2019  
Amendment Flag false  
v3.19.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Current assets:    
Cash and cash equivalents $ 1,943 $ 1,144
Short-term investments 1,230 2,368
Accounts receivable, net 470 514
Inventory 420 386
Prepaid expenses and other current assets 93 78
Total current assets 4,156 4,490
Property and equipment, net 854 1,075
Operating lease right-of-use assets 558  
Goodwill 824 831
Intangible assets, net 162 185
Deferred tax assets, net 69 70
Other assets 350 308
Total assets 6,973 6,959
Current liabilities:    
Accounts payable 139 184
Accrued liabilities 473 513
Long-term debt, current portion   1,107
Total current liabilities 612 1,804
Operating lease liabilities 698  
Long-term debt 1,120 890
Other long-term liabilities 211 359
Redeemable noncontrolling interests 0 61
Stockholders’ equity:    
Common stock 2 2
Additional paid-in capital 3,436 3,290
Accumulated other comprehensive income (loss) 5 (1)
Retained earnings 3,594 3,083
Treasury stock, at cost (2,705) (2,616)
Total Illumina stockholders’ equity 4,332 3,758
Noncontrolling interests   87
Total stockholders’ equity 4,332 3,845
Total liabilities and stockholders’ equity $ 6,973 $ 6,959
v3.19.2
Condensed Consolidated Statements of Income - USD ($)
shares in Millions, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Revenue:        
Total revenue $ 838 $ 830 $ 1,684 $ 1,612
Cost of revenue:        
Amortization of acquired intangible assets 10 9 19 17
Total cost of revenue 265 255 527 499
Gross profit 573 575 1,157 1,113
Operating expense:        
Research and development 166 151 335 288
Selling, general and administrative 202 197 412 380
Total operating expense 368 348 747 668
Income from operations 205 227 410 445
Other income (expense):        
Interest income 20 11 43 16
Interest expense (15) (11) (30) (22)
Other income, net 136 5 157 14
Total other income, net 141 5 170 8
Income before income taxes 346 232 580 453
Provision for income taxes 53 32 63 56
Consolidated net income 293 200 517 397
Add: Net loss attributable to noncontrolling interests 3 9 12 20
Net income attributable to Illumina stockholders $ 296 $ 209 $ 529 $ 417
Earnings per share attributable to Illumina stockholders:        
Basic (in dollars per share) $ 2.01 $ 1.42 $ 3.60 $ 2.84
Diluted (in dollars per share) $ 1.99 $ 1.41 $ 3.56 $ 2.82
Shares used in computing earnings per share:        
Basic (in shares) 147 147 147 147
Diluted (in shares) 149 148 149 148
Product revenue        
Revenue:        
Total revenue $ 704 $ 673 $ 1,372 $ 1,301
Cost of revenue:        
Cost of revenue 196 181 378 355
Service and other revenue        
Revenue:        
Total revenue 134 157 312 311
Cost of revenue:        
Cost of revenue $ 59 $ 65 $ 130 $ 127
v3.19.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Statement of Comprehensive Income [Abstract]        
Consolidated net income $ 293 $ 200 $ 517 $ 397
Unrealized gain on available-for-sale debt securities, net of deferred tax 3   6  
Total consolidated comprehensive income 296 200 523 397
Add: Comprehensive loss attributable to noncontrolling interests 3 9 12 20
Comprehensive income attributable to Illumina stockholders $ 299 $ 209 $ 535 $ 417
v3.19.2
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive (Loss) Income
Retained Earnings
Treasury Stock
Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2017   191       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 repurchases 8   21     $ (13)  
Share-based compensation 48   48        
Adjustment to the carrying value of redeemable noncontrolling interests (5)   (5)        
Contributions from noncontrolling interest owners 61           61
Issuance of subsidiary shares in business combination 5           5
Ending balance (in shares) at Apr. 01, 2018   191       44  
Ending balance at Apr. 01, 2018 3,073 $ 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 compensation 50   50        
Vesting of redeemable equity awards (1)   (1)        
Adjustment to the carrying value of redeemable noncontrolling interests (8)   (8)        
Contributions from noncontrolling interest owners 31           31
Ending balance (in shares) at Jul. 01, 2018   191       44  
Ending balance at Jul. 01, 2018 3,351 $ 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 compensation 47   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 impact 93   93        
Ending balance (in shares) at Sep. 30, 2018   191       44  
Ending balance at Sep. 30, 2018 3,594 $ 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 tax 1     1      
Issuance of common stock, net of repurchases (in shares)   1       (1)  
Issuance of common stock, net of repurchases (153)   1     $ (154)  
Share-based compensation 48   48        
Adjustment to the carrying value of redeemable noncontrolling interests 148   148        
Cumulative-effect adjustment from adoption of ASU 1       1    
Ending balance (in shares) at Dec. 30, 2018   192       45  
Ending balance at Dec. 30, 2018 3,845 $ 2 3,290 (1) 3,083 $ (2,616) 87
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 tax 3     3      
Issuance of common stock, net of repurchases (59)   27     $ (86)  
Share-based compensation 51   51        
Vesting of redeemable equity awards (1)   (1)        
Adjustment to the carrying value of redeemable noncontrolling interests 18   18        
Cumulative-effect adjustment from adoption of ASU (18)       (18)    
Ending balance (in shares) at Mar. 31, 2019   192       45  
Ending balance at Mar. 31, 2019 4,070 $ 2 3,385 2 3,298 $ (2,702) 85
Beginning balance (in shares) at Dec. 30, 2018   192       45  
Beginning balance at Dec. 30, 2018 3,845 $ 2 3,290 (1) 3,083 $ (2,616) 87
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax 6            
Ending balance (in shares) at Jun. 30, 2019   193       45  
Ending balance at Jun. 30, 2019 4,332 $ 2 3,436 5 3,594 $ (2,705) 0
Beginning balance (in shares) at Mar. 31, 2019   192       45  
Beginning balance at Mar. 31, 2019 4,070 $ 2 3,385 2 3,298 $ (2,702) 85
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 295       296   (1)
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax 3     3      
Issuance of common stock, net of repurchases (in shares)   1          
Issuance of common stock, net of repurchases 0   3     $ (3)  
Share-based compensation 48   48        
Adjustment to the carrying value of redeemable noncontrolling interests (2)   (2)        
Deconsolidation of Helix (82)   2       (84)
Ending balance (in shares) at Jun. 30, 2019   193       45  
Ending balance at Jun. 30, 2019 $ 4,332 $ 2 $ 3,436 $ 5 $ 3,594 $ (2,705) $ 0
v3.19.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Cash flows from operating activities:    
Consolidated net income $ 517 $ 397
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation expense 76 65
Amortization of intangible assets 20 19
Share-based compensation expense 99 98
Accretion of debt discount 27 16
Deferred income taxes 6 (22)
Unrealized gains on marketable equity securities (104)  
Payment of accreted debt discount (84)  
Gains on deconsolidation (54)  
Other (5) (6)
Changes in operating assets and liabilities:    
Accounts receivable 46 12
Inventory (36) (28)
Prepaid expenses and other current assets (11) 1
Operating lease right-of-use assets and liabilities, net (3)  
Other assets (11) (5)
Accounts payable (43) 1
Accrued liabilities (87) 17
Other long-term liabilities (12) (15)
Net cash provided by operating activities 341 550
Cash flows from investing activities:    
Maturities of available-for-sale securities 1,204 556
Purchases of available-for-sale securities (393) (1,137)
Sales of available-for-sale securities 386 332
Purchases of property and equipment (103) (167)
Deconsolidation of Helix cash (29)  
Proceeds from deconsolidation of GRAIL 15  
Net purchases of strategic investments (13) (9)
Net cash paid for acquisitions   (100)
Net cash provided by (used in) investing activities 1,067 (525)
Cash flows from financing activities:    
Payments on financing obligations (550) (2)
Common stock repurchases (63)  
Taxes paid related to net share settlement of equity awards (26) (15)
Proceeds from issuance of common stock 30 22
Contributions from noncontrolling interest owners   92
Net cash (used in) provided by financing activities (609) 97
Effect of exchange rate changes on cash and cash equivalents   (3)
Net increase in cash and cash equivalents 799 119
Cash and cash equivalents at beginning of period 1,144 1,225
Cash and cash equivalents at end of period 1,943 $ 1,344
Supplemental cash flow information:    
Cash paid for operating lease liabilities $ 42  
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended December 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. Effective April 25, 2019, we deconsolidated the financial statements of Helix Holdings I, LLC (Helix). See note “2. Balance Sheet Account Details” for further details.

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.

Fiscal Year

Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. The three and six months ended June 30, 2019 and July 1, 2018 were both 13 and 26 weeks, respectively.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Significant Accounting Policies

During the three and six months ended June 30, 2019, there were 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-effect adjustment to retained earnings.

Accounting Pronouncements Pending Adoption

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. We expect to adopt the standard on its effective date in the first quarter of 2020 using a modified retrospective approach.  We currently do not expect the adoption to have a material impact 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 June 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,146 million, of which approximately 67% is expected to be converted to revenue in the next twelve months, approximately 13% in the following twelve months, and 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 June 30, 2019 and December 30, 2018 were $201 million and $206 million, respectively, of which the short-term portions of $167 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 and six months ended June 30, 2019 included $42 million and $106 million of previously deferred revenue that was included in contract liabilities as of December 30, 2018. Contract assets as of June 30, 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
 
June 30,
2019
 
July 1,
2018
 
Sequencing
 
Microarray
 
Total
 
Sequencing
 
Microarray
 
Total
Consumables
$
497

 
$
74

 
$
571

 
$
460

 
$
85

 
$
545

Instruments
129

 
4

 
133

 
124

 
4

 
128

Total product revenue
626

 
78

 
704

 
584

 
89

 
673

Service and other revenue
102

 
32

 
134

 
106

 
51

 
157

Total revenue
$
728

 
$
110

 
$
838

 
$
690

 
$
140

 
$
830



 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
Sequencing
 
Microarray
 
Total
 
Sequencing
 
Microarray
 
Total
Consumables
$
978

 
$
149

 
$
1,127

 
$
882

 
$
173

 
$
1,055

Instruments
234

 
11

 
245

 
237

 
9

 
246

Total product revenue
1,212

 
160

 
1,372

 
1,119

 
182

 
1,301

Service and other revenue
215

 
97

 
312

 
202

 
109

 
311

Total revenue
$
1,427

 
$
257

 
$
1,684

 
$
1,321

 
$
291

 
$
1,612


Revenue related to our previously consolidated VIE, Helix, is included in sequencing service and other revenue up to April 25, 2019, the date of Helix’s deconsolidation.

The following table represents revenue by geographic area, based on region of destination (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Americas
$
476

 
$
466

 
$
949

 
$
906

Europe, Middle East, and Africa
208

 
202

 
418

 
396

Greater China (1)
97

 
107

 
185

 
185

Asia-Pacific
57

 
55

 
132

 
125

Total revenue
$
838

 
$
830

 
$
1,684

 
$
1,612

____________________________________
(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. Up to April 25, 2019, the date of Helix’s deconsolidation, per-share earnings of Helix were 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
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Weighted average shares outstanding
147

 
147

 
147

 
147

Effect of potentially dilutive common shares from:
 
 
 
 
 
 
 
Convertible senior notes
1

 
—

 
1

 
—

Equity awards
1

 
1

 
1

 
1

Weighted average shares used in calculating diluted earnings per share
149

 
148

 
149

 
148
v3.19.2
Balance Sheet Account Details
 6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Account Details Balance Sheet Account Details

Short-term investments

Our short-term investments are primarily available-for-sale debt securities that consisted of the following (in millions):
 
June 30, 2019
 
December 30, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Debt securities in government sponsored entities
$
26

 
$
—

 
$
26

 
$
21

 
$
—

 
$
—

 
$
21

Corporate debt securities
553

 
4

 
557

 
1,060

 
—

 
(2
)
 
1,058

U.S. Treasury securities
488

 
2

 
490

 
1,250

 
1

 
(1
)
 
1,250

Total
$
1,067

 
$
6

 
$
1,073

 
$
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 June 30, 2019, were as follows (in millions):
 
Estimated
Fair Value
Due within one year
$
516

After one but within five years
557

Total
$
1,073



We have the ability, if necessary, to liquidate any of our cash equivalents and short-term investments to meet our liquidity needs in the next 12 months. Accordingly, those investments with contractual maturities greater than one year from the date of purchase are classified as short-term on the accompanying condensed consolidated balance sheets.

Strategic Investments

We have strategic investments in privately held companies (non-marketable equity securities) and companies that have completed initial public offerings (marketable equity securities).

Our marketable equity securities are measured at fair value. As of June 30, 2019 and December 30, 2018, the fair value of our marketable equity securities, included in short-term investments, totaled $157 million and $39 million, respectively. Total unrealized gains on our marketable equity securities, included in other income, net, were $102 million and $104 million for the three and six months ended June 30, 2019, respectively.

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. As of June 30, 2019 and December 30, 2018, the aggregate carrying amounts of our non-marketable equity investments without readily determinable fair values, included in other assets, were $217 million and $231 million, respectively.

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 June 30, 2019 and December 30, 2018.

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 $57 million remained callable as of June 30, 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 $47 million and $29 million as of June 30, 2019 and December 30, 2018, respectively. In July 2019, we invested in a second venture capital investment fund with a maximum capital commitment of up to $160 million that is callable through July 2029.

Revenue recognized from transactions with our strategic investees was $18 million and $34 million, respectively, for the three and six months ended June 30, 2019 and $36 million and $72 million, respectively, for the three and six months ended July 1, 2018.

Inventory

Inventory consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Raw materials
$
124

 
$
117

Work in process
271

 
218

Finished goods
25

 
51

Total inventory
$
420

 
$
386



Property and Equipment

Property and equipment, net consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Leasehold improvements
$
596

 
$
567

Machinery and equipment
400

 
382

Computer hardware and software
263

 
217

Furniture and fixtures
47

 
45

Buildings
44

 
285

Construction in progress
59

 
100

Total property and equipment, gross
1,409

 
1,596

Accumulated depreciation
(555
)
 
(521
)
Total property and equipment, net
$
854

 
$
1,075



Property and equipment, net included non-cash expenditures of $18 million and $42 million for the six months ended June 30, 2019 and July 1, 2018, respectively, which were excluded from the condensed consolidated statements of cash flows. Such non-cash expenditures included $16 million recorded under build-to-suit lease accounting for the six months ended July 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 2.5 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 June 30, 2019, the maturities of our operating lease liabilities were as follows (in millions):
 
Remaining Lease Payments
2019
$
35

2020
82

2021
81

2022
83

2023
85

Thereafter
619

Total remaining lease payments (1)
985

Less: imputed interest
(243
)
Total operating lease liabilities
742

Less: current portion
(44
)
Long-term operating lease liabilities
$
698

Weighted-average remaining lease term
11.5 years

Weighted-average discount rate
4.6
%

____________________________________
(1) Total remaining lease payments exclude $53 million of legally binding minimum lease payments for leases signed but not yet commenced.

The components of our lease costs included in our condensed consolidated statements of income were as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2019
Operating lease costs
$
21

 
$
43

Sublease income
(3
)
 
(6
)
Total lease costs
$
18

 
$
37



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.

Goodwill

We test the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require us to estimate the fair value of each reporting unit annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment is required. We performed the annual assessment for goodwill impairment in the second quarter of 2019, noting no impairment. 

Changes to goodwill during the six months ended June 30, 2019 were as follows (in millions):
 
Goodwill
Balance as of December 30, 2018
$
831

Helix deconsolidation
(7
)
Balance as of June 30, 2019
$
824



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 June 30, 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 June 30, 2019 and December 30, 2018, the total notional amounts of outstanding forward contracts in place for foreign currency purchases were $256 million and $122 million, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Contract liabilities, current portion
$
167

 
$
175

Accrued compensation expenses
132

 
193

Accrued taxes payable
66

 
82

Operating lease liabilities, current portion
44

 
—

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 and six months ended June 30, 2019 and July 1, 2018 were as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Balance at beginning of period
$
16

 
$
16

 
$
19

 
$
17

Additions charged to cost of product revenue
6

 
6

 
9

 
12

Repairs and replacements
(6
)
 
(7
)
 
(12
)
 
(14
)
Balance at end of period
$
16

 
$
15

 
$
16

 
$
15



Deconsolidation of Helix    

In July 2015, we obtained a 50% voting equity ownership interest in Helix. We determined that we had unilateral power over one of the activities that most significantly impacts the economic performance of Helix through its contractual arrangements and, as a result, we were deemed to be the primary beneficiary of Helix and were required to consolidate Helix.

On April 25, 2019, we entered into an agreement to sell our interest in, and relinquish control over, Helix. As part of the agreement, (i) Helix repurchased all outstanding equity interests previously issued to us in exchange for a contingent value right, (ii) we ceased having a controlling financial interest in Helix, including unilateral power over one of the activities that most significantly impacts the economic performance of Helix, (iii) we were relieved of any potential obligation to redeem
certain noncontrolling interests, and (iv) we no longer have representation on Helix’s board of directors. As a result, we deconsolidated Helix’s financial statements effective April 25, 2019 and recorded a gain on deconsolidation of $39 million in other income, net. The gain on deconsolidation includes (i) the contingent value right received from Helix for its repurchase of our ownership interest, recorded at its fair value of $30 million, (ii) the derecognition of the carrying amounts of Helix’s assets and liabilities, and (iii) the derecognition of the noncontrolling interests related to Helix. The operations of Helix, up to the date of deconsolidation, are included in the accompanying condensed consolidated statements of income for the three and six months ended June 30, 2019 and July 1, 2018. During these periods, we absorbed 50% of Helix’s losses.

The contingent value right entitles us to receive consideration in an amount dependent upon the outcome of future financing and/or liquidity events related to Helix and has a term of seven years. We elected the fair value option to measure the contingent value right, which is included in other assets. During the three months ended June 30, 2019, the fair value measurement resulted in a $3 million unrealized loss, included in other income, net. The fair value of the contingent value right is derived using a Monte Carlo simulation. Significant estimates and assumptions required for this valuation include, but are not limited to, probabilities related to the timing and outcome of future financing and/or liquidity events and an assumption regarding collectibility. These unobservable inputs, which represent a Level 3 measurement, are supported by little or no market activity and reflect our own assumptions in measuring fair value.

Concurrent with the agreement to sell all of our outstanding equity interests, we also amended our long-term supply and license agreements with Helix, including the discounted supply terms. Because these agreements were entered into concurrently, we consider them to be one arrangement with multiple elements, as defined under the respective authoritative accounting guidance. We determined that each of the elements, which include the contingent value right and services to be provided in accordance with the long-term supply and license agreements, were at, or approximated, fair value on a stand-alone basis. Therefore, none of the deconsolidation gain was allocated to these elements.

Redeemable Noncontrolling Interests

The activity of the redeemable noncontrolling interests during the six months ended June 30, 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
(9
)
Adjustment down to the redemption value
(16
)
Release of potential obligation to noncontrolling interests
(37
)
Balance as of June 30, 2019
$
—
v3.19.2
Pending Acquisition
 6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Pending Acquisition Pending 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 now expected to close in Q4 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.
v3.19.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements

The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 30, 2018 (in millions):
 
June 30, 2019
 
December 30, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds (cash equivalents)
$
1,631

 
$
—

 
$
—

 
$
1,631

 
$
832

 
$
—

 
$
—

 
$
832

Debt securities in government-sponsored entities
—

 
26

 
—

 
26

 
—

 
21

 
—

 
21

Corporate debt securities
—

 
557

 
—

 
557

 
—

 
1,058

 
—

 
1,058

U.S. Treasury securities
490

 
—

 
—

 
490

 
1,250

 
—

 
—

 
1,250

Marketable equity securities
157

 
—

 
—

 
157

 
39

 
—

 
—

 
39

Contingent value right
—

 
—

 
27

 
27

 
—

 
—

 
—

 
—

Deferred compensation plan assets
—

 
44

 
—

 
44

 
—

 
34

 
—

 
34

Total assets measured at fair value
$
2,278

 
$
627

 
$
27

 
$
2,932

 
$
2,121

 
$
1,113

 
$
—

 
$
3,234

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan liability
$
—

 
$
42

 
$
—

 
$
42

 
$
—

 
$
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. Our marketable equity securities are measured at fair value based on quoted trade prices in active markets.
v3.19.2
Debt and Other Commitments
 6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Debt and Other Commitments Debt and Other Commitments

Summary of debt obligations

Debt obligations consisted of the following (dollars in millions):
 
June 30,
2019
 
December 30,
2018
Principal amount of 2023 Notes outstanding
$
750

 
$
750

Principal amount of 2021 Notes outstanding
517

 
517

Principal amount of 2019 Notes outstanding
—

 
633

Unamortized discount of liability component of convertible senior notes
(147
)
 
(175
)
Net carrying amount of liability component of convertible senior notes
1,120

 
1,725

Obligations under financing leases
—

 
269

Other
—

 
3

Less: current portion
—

 
(1,107
)
Long-term debt
$
1,120

 
$
890

Carrying value of equity component of convertible senior notes, net of debt issuance costs
$
213

 
$
287

Fair value of convertible senior notes outstanding (Level 2)
$
1,658

 
$
2,222

Weighted-average remaining amortization period of discount on the liability component of convertible senior notes
3.7 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 June 30, 2019 and had no dilutive impact during the six months ended June 30, 2019. If the 2023 Notes were converted as of June 30, 2019, the if-converted value would not exceed the principal amount.

0.5% Convertible Senior Notes due 2021 (2021 Notes)

In June 2014, we issued $517 million aggregate principal amount of 2021 Notes. The 2021 Notes mature on June 15, 2021, and the implied estimated effective rates of the liability component of the Notes was 3.5%, assuming no conversion option.

The 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 5 business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per 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 2021 Notes. Regardless of the foregoing circumstances, the holders of the 2021 Notes may convert their notes on or after March 15, 2021 until June 11, 2021.

The potential dilutive impact of the 2021 Notes has been included in our calculation of diluted earnings per share for the three and six months ended June 30, 2019. If the 2021 Notes were converted as of June 30, 2019, the if-converted value would exceed the principal amount by $182 million.

0% Convertible Senior Notes due 2019 (2019 Notes)

In June 2014, we issued $633 million aggregate principal amount of 2019 Notes, and the implied estimated effective rate of the liability component of the Notes was 2.9%, assuming no conversion option. The 2019 Notes were convertible into cash, shares of common stock, or a combination of common stock, at our election, based on conversion rates as defined in the indenture. The 2019 Notes matured on June 15, 2019, by which time the principal had been converted and was repaid in cash. The excess of the conversion value over the principal amount was paid in shares of common stock.

The following table summarizes information about the conversion of the 2019 Notes during the six months ended June 30, 2019 (in millions):
 
2019 Notes
Cash paid for principal of notes converted
$
633

Conversion value over principal amount, paid in shares of common stock
$
153

Number of shares of common stock issued upon conversion
0.4


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.
v3.19.2
Stockholders' Equity
 6 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity

As of June 30, 2019, approximately 4.9 million shares remained available for future grants under the 2015 Stock Plan.

Restricted Stock

Restricted stock activity for the six months ended June 30, 2019 was as follows (units in thousands):
 
Restricted
Stock Units
(RSU)
 
Performance
Stock Units
(PSU)(1)
 
 
 
 
 
RSU
 
PSU
Outstanding at December 30, 2018
1,840

 
660

 
$
227.00

 
$
196.99

Awarded
52

 
(42
)
 
$
305.68

 
$
258.92

Vested
(65
)
 
—

 
$
195.44

 
—

Cancelled
(83
)
 
(49
)
 
$
215.41

 
$
167.43

Outstanding at June 30, 2019
1,744

 
569

 
$
231.06

 
$
194.97


______________________________________
(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 six months ended June 30, 2019 was as follows:
 
Options
(in thousands)
 
Weighted-Average
Exercise Price
Outstanding at December 30, 2018
192

 
$
54.52

Exercised
(85
)
 
$
49.82

Outstanding and exercisable at June 30, 2019
107

 
$
58.26



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 six months ended June 30, 2019, approximately 0.1 million shares were issued under the ESPP. As of June 30, 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 six months ended June 30, 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 June 30, 2019.




Share-based Compensation

Share-based compensation expense reported in our condensed consolidated statements of income was as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Cost of product revenue
$
5

 
$
4

 
$
10

 
$
8

Cost of service and other revenue
1

 
1

 
2

 
2

Research and development
16

 
15

 
34

 
30

Selling, general and administrative
26

 
30

 
53

 
58

Share-based compensation expense before taxes
48

 
50

 
99

 
98

Related income tax benefits
(11
)
 
(11
)
 
(21
)
 
(21
)
Share-based compensation expense, net of taxes
$
37

 
$
39

 
$
78

 
$
77



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 six months ended June 30, 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 June 30, 2019, approximately $372 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 2.1 years.
v3.19.2
Legal Proceedings
 6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Legal Proceedings Legal Proceedings

We are involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the consolidated financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures in consideration of many factors, which include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter. We may change our estimates if our assessment of the various factors changes and the amount of ultimate loss may differ from our estimates, resulting in a material effect on our business, financial condition, results of operations, and/or cash flows.
v3.19.2
Income Taxes
 6 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. The effective tax rates for the three and six months ended June 30, 2019 were 15.4% and 10.8%, respectively. For the three and six months ended June 30, 2019, the decrease from the U.S. federal statutory tax rate of 21% was primarily attributable to the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore and the United Kingdom. For the six months ended June 30, 2019, the decrease from the U.S. federal statutory tax rate was also attributable to a discrete tax benefit related to uncertain tax positions recorded in Q1 2019 and excess tax benefits related to share-based compensation.
v3.19.2
Segment Information
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segment Information Segment 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 we have one reportable segment, Core Illumina, which relates to Illumina’s core operations. Prior to the Helix deconsolidation on April 25, 2019, our reportable segments included both Core Illumina and Helix.

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 previously consolidated VIE Helix.

Helix:

Helix was established to enable individuals to explore their genetic information by providing affordable sequencing and database services for consumers through third-party partners, driving the creation of an ecosystem of consumer applications. Helix was deconsolidated on April 25, 2019. See note “2. Balance Sheet Account Details” for further details.

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
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Revenue:
 
 
 
 
 
 
 
Core Illumina
$
838

 
$
829

 
$
1,684

 
$
1,612

Helix
—

 
3

 
1

 
6

Elimination of intersegment revenue
—

 
(2
)
 
(1
)
 
(6
)
Consolidated revenue
$
838

 
$
830

 
$
1,684

 
$
1,612

 
 
 
 
 
 
 
 
Income (loss) from operations:
 
 
 
 
 
 
 
Core Illumina
$
211

 
$
246

 
$
433

 
$
484

Helix
(6
)
 
(20
)
 
(24
)
 
(41
)
Elimination of intersegment earnings
—

 
1

 
1

 
2

Consolidated income from operations
$
205

 
$
227

 
$
410

 
$
445


The following table presents the total assets of each reportable segment (in millions):
 
June 30,
2019
 
December 30,
2018
Core Illumina
$
6,973

 
$
6,912

Helix
—

 
154

Elimination of intersegment assets
—

 
(107
)
Consolidated total assets
$
6,973

 
$
6,959
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.
Consolidation
The unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, majority-owned or controlled companies, and variable interest entities (VIEs) for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In management’s opinion, the accompanying 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 Entities We evaluate our ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether we are the primary beneficiary of the VIE. In determining whether we are the primary beneficiary of a VIE and therefore required to consolidate the VIE, we apply a qualitative approach that determines whether we have both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. We continuously perform this assessment, as changes to existing relationships or future transactions may result in the consolidation or deconsolidation of a VIE.
Equity Method Investments
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.
Fiscal Year Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Pending Adoption
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-effect adjustment to retained earnings.

Accounting Pronouncements Pending Adoption

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. We expect to adopt the standard on its effective date in the first quarter of 2020 using a modified retrospective approach.  We currently do not expect the adoption to have a material impact 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 June 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,146 million, of which approximately 67% is expected to be converted to revenue in the next twelve months, approximately 13% in the following twelve months, and 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 June 30, 2019 and December 30, 2018 were $201 million and $206 million, respectively, of which the short-term portions of $167 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 and six months ended June 30, 2019 included $42 million and $106 million of previously deferred revenue that was included in contract liabilities as of December 30, 2018. Contract assets as of June 30, 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 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. Up to April 25, 2019, the date of Helix’s deconsolidation, per-share earnings of Helix were 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.
Strategic Investments
We have strategic investments in privately held companies (non-marketable equity securities) and companies that have completed initial public offerings (marketable equity securities).

Our marketable equity securities are measured at fair value. As of June 30, 2019 and December 30, 2018, the fair value of our marketable equity securities, included in short-term investments, totaled $157 million and $39 million, respectively. Total unrealized gains on our marketable equity securities, included in other income, net, were $102 million and $104 million for the three and six months ended June 30, 2019, respectively.

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. As of June 30, 2019 and December 30, 2018, the aggregate carrying amounts of our non-marketable equity investments without readily determinable fair values, included in other assets, were $217 million and $231 million, respectively.

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 June 30, 2019 and December 30, 2018.
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.
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.
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Summary of Impact of Topic 842
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
Disaggregation of Revenue from External Customers
The following table represents revenue by source (in millions):
 
Three Months Ended
 
June 30,
2019
 
July 1,
2018
 
Sequencing
 
Microarray
 
Total
 
Sequencing
 
Microarray
 
Total
Consumables
$
497

 
$
74

 
$
571

 
$
460

 
$
85

 
$
545

Instruments
129

 
4

 
133

 
124

 
4

 
128

Total product revenue
626

 
78

 
704

 
584

 
89

 
673

Service and other revenue
102

 
32

 
134

 
106

 
51

 
157

Total revenue
$
728

 
$
110

 
$
838

 
$
690

 
$
140

 
$
830



 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
Sequencing
 
Microarray
 
Total
 
Sequencing
 
Microarray
 
Total
Consumables
$
978

 
$
149

 
$
1,127

 
$
882

 
$
173

 
$
1,055

Instruments
234

 
11

 
245

 
237

 
9

 
246

Total product revenue
1,212

 
160

 
1,372

 
1,119

 
182

 
1,301

Service and other revenue
215

 
97

 
312

 
202

 
109

 
311

Total revenue
$
1,427

 
$
257

 
$
1,684

 
$
1,321

 
$
291

 
$
1,612


Revenue related to our previously consolidated VIE, Helix, is included in sequencing service and other revenue up to April 25, 2019, the date of Helix’s deconsolidation.

The following table represents revenue by geographic area, based on region of destination (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Americas
$
476

 
$
466

 
$
949

 
$
906

Europe, Middle East, and Africa
208

 
202

 
418

 
396

Greater China (1)
97

 
107

 
185

 
185

Asia-Pacific
57

 
55

 
132

 
125

Total revenue
$
838

 
$
830

 
$
1,684

 
$
1,612

____________________________________
(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 Share
The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Weighted average shares outstanding
147

 
147

 
147

 
147

Effect of potentially dilutive common shares from:
 
 
 
 
 
 
 
Convertible senior notes
1

 
—

 
1

 
—

Equity awards
1

 
1

 
1

 
1

Weighted average shares used in calculating diluted earnings per share
149

 
148

 
149

 
148
v3.19.2
Balance Sheet Account Details (Tables)
 6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Summary of Short-term Investments
Our short-term investments are primarily available-for-sale debt securities that consisted of the following (in millions):
 
June 30, 2019
 
December 30, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Debt securities in government sponsored entities
$
26

 
$
—

 
$
26

 
$
21

 
$
—

 
$
—

 
$
21

Corporate debt securities
553

 
4

 
557

 
1,060

 
—

 
(2
)
 
1,058

U.S. Treasury securities
488

 
2

 
490

 
1,250

 
1

 
(1
)
 
1,250

Total
$
1,067

 
$
6

 
$
1,073

 
$
2,331

 
$
1

 
$
(3
)
 
$
2,329
Summary of Contractual Maturities of Available-for-sale Debt Securities
Contractual maturities of available-for-sale debt securities, as of June 30, 2019, were as follows (in millions):
 
Estimated
Fair Value
Due within one year
$
516

After one but within five years
557

Total
$
1,073
Summary of Inventory
Inventory consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Raw materials
$
124

 
$
117

Work in process
271

 
218

Finished goods
25

 
51

Total inventory
$
420

 
$
386
Summary of Property and Equipment
Property and equipment, net consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Leasehold improvements
$
596

 
$
567

Machinery and equipment
400

 
382

Computer hardware and software
263

 
217

Furniture and fixtures
47

 
45

Buildings
44

 
285

Construction in progress
59

 
100

Total property and equipment, gross
1,409

 
1,596

Accumulated depreciation
(555
)
 
(521
)
Total property and equipment, net
$
854

 
$
1,075
Summary of Leases
As of June 30, 2019, the maturities of our operating lease liabilities were as follows (in millions):
 
Remaining Lease Payments
2019
$
35

2020
82

2021
81

2022
83

2023
85

Thereafter
619

Total remaining lease payments (1)
985

Less: imputed interest
(243
)
Total operating lease liabilities
742

Less: current portion
(44
)
Long-term operating lease liabilities
$
698

Weighted-average remaining lease term
11.5 years

Weighted-average discount rate
4.6
%

____________________________________
(1) Total remaining lease payments exclude $53 million of legally binding minimum lease payments for leases signed but not yet commenced.
Components of Lease Costs
The components of our lease costs included in our condensed consolidated statements of income were as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2019
Operating lease costs
$
21

 
$
43

Sublease income
(3
)
 
(6
)
Total lease costs
$
18

 
$
37
Summary of Changes to Goodwill
Changes to goodwill during the six months ended June 30, 2019 were as follows (in millions):
 
Goodwill
Balance as of December 30, 2018
$
831

Helix deconsolidation
(7
)
Balance as of June 30, 2019
$
824
Summary of Accrued Liabilities
Accrued liabilities consisted of the following (in millions):
 
June 30,
2019
 
December 30,
2018
Contract liabilities, current portion
$
167

 
$
175

Accrued compensation expenses
132

 
193

Accrued taxes payable
66

 
82

Operating lease liabilities, current portion
44

 
—

Other, including warranties
64

 
63

Total accrued liabilities
$
473

 
$
513
Summary of Changes in Reserve for Product Warranties
Changes in the reserve for product warranties during the three and six months ended June 30, 2019 and July 1, 2018 were as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Balance at beginning of period
$
16

 
$
16

 
$
19

 
$
17

Additions charged to cost of product revenue
6

 
6

 
9

 
12

Repairs and replacements
(6
)
 
(7
)
 
(12
)
 
(14
)
Balance at end of period
$
16

 
$
15

 
$
16

 
$
15
Summary of Activity of Redeemable Noncontrolling Interests
The activity of the redeemable noncontrolling interests during the six months ended June 30, 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
(9
)
Adjustment down to the redemption value
(16
)
Release of potential obligation to noncontrolling interests
(37
)
Balance as of June 30, 2019
$
—
v3.19.2
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 30, 2018 (in millions):
 
June 30, 2019
 
December 30, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds (cash equivalents)
$
1,631

 
$
—

 
$
—

 
$
1,631

 
$
832

 
$
—

 
$
—

 
$
832

Debt securities in government-sponsored entities
—

 
26

 
—

 
26

 
—

 
21

 
—

 
21

Corporate debt securities
—

 
557

 
—

 
557

 
—

 
1,058

 
—

 
1,058

U.S. Treasury securities
490

 
—

 
—

 
490

 
1,250

 
—

 
—

 
1,250

Marketable equity securities
157

 
—

 
—

 
157

 
39

 
—

 
—

 
39

Contingent value right
—

 
—

 
27

 
27

 
—

 
—

 
—

 
—

Deferred compensation plan assets
—

 
44

 
—

 
44

 
—

 
34

 
—

 
34

Total assets measured at fair value
$
2,278

 
$
627

 
$
27

 
$
2,932

 
$
2,121

 
$
1,113

 
$
—

 
$
3,234

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan liability
$
—

 
$
42

 
$
—

 
$
42

 
$
—

 
$
33

 
$
—

 
$
33
v3.19.2
Debt and Other Commitments (Tables)
 6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Summary of Debt Obligations
Debt obligations consisted of the following (dollars in millions):
 
June 30,
2019
 
December 30,
2018
Principal amount of 2023 Notes outstanding
$
750

 
$
750

Principal amount of 2021 Notes outstanding
517

 
517

Principal amount of 2019 Notes outstanding
—

 
633

Unamortized discount of liability component of convertible senior notes
(147
)
 
(175
)
Net carrying amount of liability component of convertible senior notes
1,120

 
1,725

Obligations under financing leases
—

 
269

Other
—

 
3

Less: current portion
—

 
(1,107
)
Long-term debt
$
1,120

 
$
890

Carrying value of equity component of convertible senior notes, net of debt issuance costs
$
213

 
$
287

Fair value of convertible senior notes outstanding (Level 2)
$
1,658

 
$
2,222

Weighted-average remaining amortization period of discount on the liability component of convertible senior notes
3.7 years

 
3.9 years
Schedule of Debt Conversions
The following table summarizes information about the conversion of the 2019 Notes during the six months ended June 30, 2019 (in millions):
 
2019 Notes
Cash paid for principal of notes converted
$
633

Conversion value over principal amount, paid in shares of common stock
$
153

Number of shares of common stock issued upon conversion
0.4
v3.19.2
Stockholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Summary of Restricted Stock Activity and Related Information, Restricted Stock
Restricted stock activity for the six months ended June 30, 2019 was as follows (units in thousands):
 
Restricted
Stock Units
(RSU)
 
Performance
Stock Units
(PSU)(1)
 
 
 
 
 
RSU
 
PSU
Outstanding at December 30, 2018
1,840

 
660

 
$
227.00

 
$
196.99

Awarded
52

 
(42
)
 
$
305.68

 
$
258.92

Vested
(65
)
 
—

 
$
195.44

 
—

Cancelled
(83
)
 
(49
)
 
$
215.41

 
$
167.43

Outstanding at June 30, 2019
1,744

 
569

 
$
231.06

 
$
194.97


______________________________________
(1)
The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Restricted Stock Activity and Related Information, Performance Units
Restricted stock activity for the six months ended June 30, 2019 was as follows (units in thousands):
 
Restricted
Stock Units
(RSU)
 
Performance
Stock Units
(PSU)(1)
 
 
 
 
 
RSU
 
PSU
Outstanding at December 30, 2018
1,840

 
660

 
$
227.00

 
$
196.99

Awarded
52

 
(42
)
 
$
305.68

 
$
258.92

Vested
(65
)
 
—

 
$
195.44

 
—

Cancelled
(83
)
 
(49
)
 
$
215.41

 
$
167.43

Outstanding at June 30, 2019
1,744

 
569

 
$
231.06

 
$
194.97


______________________________________
(1)
The number of units reflect the estimated number of shares to be issued at the end of the performance period.
Summary of Stock Option Activity Under all Stock Option Plans
Stock option activity during the six months ended June 30, 2019 was as follows:
 
Options
(in thousands)
 
Weighted-Average
Exercise Price
Outstanding at December 30, 2018
192

 
$
54.52

Exercised
(85
)
 
$
49.82

Outstanding and exercisable at June 30, 2019
107

 
$
58.26
Summary of Share-based Compensation Expense for all Stock Awards
Share-based compensation expense reported in our condensed consolidated statements of income was as follows (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Cost of product revenue
$
5

 
$
4

 
$
10

 
$
8

Cost of service and other revenue
1

 
1

 
2

 
2

Research and development
16

 
15

 
34

 
30

Selling, general and administrative
26

 
30

 
53

 
58

Share-based compensation expense before taxes
48

 
50

 
99

 
98

Related income tax benefits
(11
)
 
(11
)
 
(21
)
 
(21
)
Share-based compensation expense, net of taxes
$
37

 
$
39

 
$
78

 
$
77
Summary of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase Plan
The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the Employee Stock Purchase Plan (ESPP) during the six months ended June 30, 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
v3.19.2
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Summary of Operating Performance and Assets by Segment
The following table presents the operating performance of each reportable segment (in millions):
 
Three Months Ended
 
Six Months Ended
 
June 30,
2019
 
July 1,
2018
 
June 30,
2019
 
July 1,
2018
Revenue:
 
 
 
 
 
 
 
Core Illumina
$
838

 
$
829

 
$
1,684

 
$
1,612

Helix
—

 
3

 
1

 
6

Elimination of intersegment revenue
—

 
(2
)
 
(1
)
 
(6
)
Consolidated revenue
$
838

 
$
830

 
$
1,684

 
$
1,612

 
 
 
 
 
 
 
 
Income (loss) from operations:
 
 
 
 
 
 
 
Core Illumina
$
211

 
$
246

 
$
433

 
$
484

Helix
(6
)
 
(20
)
 
(24
)
 
(41
)
Elimination of intersegment earnings
—

 
1

 
1

 
2

Consolidated income from operations
$
205

 
$
227

 
$
410

 
$
445


The following table presents the total assets of each reportable segment (in millions):
 
June 30,
2019
 
December 30,
2018
Core Illumina
$
6,973

 
$
6,912

Helix
—

 
154

Elimination of intersegment assets
—

 
(107
)
Consolidated total assets
$
6,973

 
$
6,959
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Impact of Topic 842 (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 31, 2018
Dec. 30, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Prepaid expenses and other current assets $ 93 $ 70 $ 78
Property and equipment, net 854 834 1,075
Operating lease right-of-use assets 558 579  
Deferred tax assets, net 69 76 70
Total assets   1,559  
Accrued liabilities 473 549 513
Total operating lease liabilities 742 722  
Long-term debt   838  
Other long-term liabilities 211 224 359
Retained earnings $ 3,594 3,065 $ 3,083
Total liabilities and stockholders’ equity   5,398  
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 assets   579  
Deferred tax assets, net   6  
Total assets   336  
Accrued liabilities   36  
Total operating lease liabilities   722  
Long-term debt   (269)  
Other long-term liabilities   (135)  
Retained earnings   (18)  
Total liabilities and stockholders’ equity   336  
Pre-adoption      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Prepaid expenses and other current assets   78  
Property and equipment, net   1,075  
Deferred tax assets, net   70  
Total assets   1,223  
Accrued liabilities   513  
Long-term debt   1,107  
Other long-term liabilities   359  
Retained earnings   3,083  
Total liabilities and stockholders’ equity   $ 5,062  
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Dec. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]      
Contract liability $ 201 $ 201 $ 206
Contract liabilities, current portion 167 167 $ 175
Revenue recognized, previously deferred $ 42 $ 106  
Minimum      
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]      
Product or service delivery period   3 months  
Maximum      
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]      
Product or service delivery period   6 months  
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies - Narrative - Revenue, Remaining Performance Obligation (Details)
$ in Millions
Jun. 30, 2019
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation $ 1,146
Percent of remaining performance obligation 67.00%
Expected timing of remaining performance obligation 12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Percent of remaining performance obligation 13.00%
Expected timing of remaining performance obligation 12 months
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Principles (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Disaggregation of Revenue [Line Items]        
Revenue $ 838 $ 830 $ 1,684 $ 1,612
Americas        
Disaggregation of Revenue [Line Items]        
Revenue 476 466 949 906
Europe, Middle East, and Africa        
Disaggregation of Revenue [Line Items]        
Revenue 208 202 418 396
Greater China        
Disaggregation of Revenue [Line Items]        
Revenue 97 107 185 185
Asia-Pacific        
Disaggregation of Revenue [Line Items]        
Revenue 57 55 132 125
Sequencing        
Disaggregation of Revenue [Line Items]        
Revenue 728 690 1,427 1,321
Microarray        
Disaggregation of Revenue [Line Items]        
Revenue 110 140 257 291
Total product revenue        
Disaggregation of Revenue [Line Items]        
Revenue 704 673 1,372 1,301
Total product revenue | Sequencing        
Disaggregation of Revenue [Line Items]        
Revenue 626 584 1,212 1,119
Total product revenue | Microarray        
Disaggregation of Revenue [Line Items]        
Revenue 78 89 160 182
Consumables        
Disaggregation of Revenue [Line Items]        
Revenue 571 545 1,127 1,055
Consumables | Sequencing        
Disaggregation of Revenue [Line Items]        
Revenue 497 460 978 882
Consumables | Microarray        
Disaggregation of Revenue [Line Items]        
Revenue 74 85 149 173
Instruments        
Disaggregation of Revenue [Line Items]        
Revenue 133 128 245 246
Instruments | Sequencing        
Disaggregation of Revenue [Line Items]        
Revenue 129 124 234 237
Instruments | Microarray        
Disaggregation of Revenue [Line Items]        
Revenue 4 4 11 9
Service and other revenue        
Disaggregation of Revenue [Line Items]        
Revenue 134 157 312 311
Service and other revenue | Sequencing        
Disaggregation of Revenue [Line Items]        
Revenue 102 106 215 202
Service and other revenue | Microarray        
Disaggregation of Revenue [Line Items]        
Revenue $ 32 $ 51 $ 97 $ 109
v3.19.2
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share (Details) - shares
shares in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Weighted average shares used to calculate basic and diluted earnings per share        
Weighted average shares outstanding 147 147 147 147
Effect of potentially dilutive common shares from:        
Convertible senior notes 1   1  
Equity awards 1 1 1 1
Weighted average shares used in calculating diluted earnings per share 149 148 149 148
v3.19.2
Balance Sheet Account Details - Summary of Short-term Investments (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Available-for-sale debt securities:    
Amortized Cost $ 1,067 $ 2,331
Gross Unrealized Gains 6 1
Gross Unrealized Losses   (3)
Estimated Fair Value 1,073 2,329
Debt securities in government sponsored entities    
Available-for-sale debt securities:    
Amortized Cost 26 21
Estimated Fair Value 26 21
Corporate debt securities    
Available-for-sale debt securities:    
Amortized Cost 553 1,060
Gross Unrealized Gains 4  
Gross Unrealized Losses   (2)
Estimated Fair Value 557 1,058
U.S. Treasury securities    
Available-for-sale debt securities:    
Amortized Cost 488 1,250
Gross Unrealized Gains 2 1
Gross Unrealized Losses   (1)
Estimated Fair Value $ 490 $ 1,250
v3.19.2
Balance Sheet Account Details - Summary of Contractual Maturities of Available-for-sale Debt Securities (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Estimated Fair Value    
Due within one year $ 516  
After one but within five years 557  
Total $ 1,073 $ 2,329
v3.19.2
Balance Sheet Account Details - Narrative - Strategic Investments (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Jul. 30, 2019
Dec. 30, 2018
Schedule of Investments [Line Items]            
Marketable equity securities $ 157   $ 157     $ 39
Marketable equity securities unrealized gains 102   104      
Carrying value of investment 189   189     189
Remaining capital commitment 57   57      
Other Assets            
Schedule of Investments [Line Items]            
Strategic equity investments, without readily determinable fair values 217   217     231
Equity method investments 47   47     $ 29
Investee            
Schedule of Investments [Line Items]            
Revenue from transactions with strategic investees 18 $ 36 34 $ 72    
Venture Capital Investment Fund (the Fund)            
Schedule of Investments [Line Items]            
Commitment in new venture capital investment fund $ 100   $ 100      
Second Venture Capital Investment Fund | Subsequent Event            
Schedule of Investments [Line Items]            
Commitment in new venture capital investment fund         $ 160  
v3.19.2
Balance Sheet Account Details - Summary of Inventory (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Raw materials $ 124 $ 117
Work in process 271 218
Finished goods 25 51
Total inventory $ 420 $ 386
v3.19.2
Balance Sheet Account Details - Summary of Property and Equipment (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 31, 2018
Dec. 30, 2018
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross $ 1,409   $ 1,596
Accumulated depreciation (555)   (521)
Total property and equipment, net 854 $ 834 1,075
Leasehold improvements      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross 596   567
Machinery and equipment      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross 400   382
Computer hardware and software      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross 263   217
Furniture and fixtures      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross 47   45
Buildings      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross 44   285
Construction in progress      
Property, Plant and Equipment [Line Items]      
Total property and equipment, gross $ 59   $ 100
v3.19.2
Balance Sheet Account Details - Narrative - Property and Equipment (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Dec. 31, 2018
Dec. 30, 2018
Property, Plant and Equipment [Line Items]        
Non-cash expenditures included in capital expenditures $ 18 $ 42    
Property and equipment, net $ 854   $ 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   $ 16    
ASU 2016-02        
Property, Plant and Equipment [Line Items]        
Property and equipment, net     $ (241)  
v3.19.2
Balance Sheet Account Details - Narrative - Leases (Details)
ft² in Millions
 6 Months Ended
Jun. 30, 2019
ft²
Lessee, Lease, Description [Line Items]  
Leased office space (in square feet) 2.5
Minimum  
Lessee, Lease, Description [Line Items]  
Remaining lease terms 1 year
Terms of extension options 6 months
Maximum  
Lessee, Lease, Description [Line Items]  
Remaining lease terms 20 years
Terms of extension options 20 years
v3.19.2
Balance Sheet Account Details - Summary of Leases (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
2019 $ 35  
2020 82  
2021 81  
2022 83  
2023 85  
Thereafter 619  
Total remaining lease payments 985  
Less: imputed interest (243)  
Total operating lease liabilities 742 $ 722
Less: current portion (44)  
Long-term operating lease liabilities $ 698  
Weighted-average remaining lease term 11 years 6 months  
Weighted-average discount rate 4.60%  
Lease payments for leases not yet commenced $ 53  
v3.19.2
Balance Sheet Account Details - Summary of Lease Costs (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Operating lease costs $ 21 $ 43
Sublease income (3) (6)
Total lease costs $ 18 $ 37
v3.19.2
Balance Sheet Account Details - Summary of Changes in Goodwill (Details)
$ in Millions
 6 Months Ended
Jun. 30, 2019
USD ($)
Goodwill [Roll Forward]  
Goodwill, beginning balance $ 831
Helix deconsolidation (7)
Goodwill, ending balance $ 824
v3.19.2
Balance Sheet Account Details - Narrative - Derivatives (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Not Designated as Hedging Instrument | Foreign Exchange Forward    
Derivative [Line Items]    
Derivative, notional amount $ 256 $ 122
v3.19.2
Balance Sheet Account Details - Summary of Accrued Liabilities (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 31, 2018
Dec. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Contract liabilities, current portion $ 167   $ 175
Accrued compensation expenses 132   193
Accrued taxes payable 66   82
Operating lease liabilities, current portion 44    
Other, including warranties 64   63
Total accrued liabilities $ 473 $ 549 $ 513
v3.19.2
Balance Sheet Account Details - Narrative - Warranties (Details)
 6 Months Ended
Jun. 30, 2019
Instruments  
Product Warranty Liability [Line Items]  
Warranty period 1 year
Consumables | Minimum  
Product Warranty Liability [Line Items]  
Warranty period 6 months
Consumables | Maximum  
Product Warranty Liability [Line Items]  
Warranty period 12 months
v3.19.2
Balance Sheet Account Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Reserve for product warranties [Roll Forward]        
Balance at beginning of period $ 16 $ 16 $ 19 $ 17
Additions charged to cost of product revenue 6 6 9 12
Repairs and replacements (6) (7) (12) (14)
Balance at end of period $ 16 $ 15 $ 16 $ 15
v3.19.2
Balance Sheet Account Details - Narrative - Deconsolidation of Helix (Details) - USD ($)
$ in Millions
 3 Months Ended 4 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
Apr. 25, 2019
Jun. 30, 2019
Dec. 30, 2018
Jul. 31, 2015
Variable Interest Entity [Line Items]          
Gains on deconsolidation     $ 54    
Helix Holdings I, LLC          
Variable Interest Entity [Line Items]          
Gains on deconsolidation     $ 39    
Contingent value right   $ 30      
Contingent Value Right, Terms     7 years    
Unrealized losses from contingent value right $ 3        
Helix Holdings I, LLC | Variable Interest Entity, Primary Beneficiary          
Variable Interest Entity [Line Items]          
Equity ownership interest percentage         50.00%
Noncontrolling Interest, Loss Percentage Attributable to Parent   50.00%   50.00%  
v3.19.2
Balance Sheet Account Details - Summary of Activity of Redeemable Noncontrolling Interests (Details)
$ in Millions
 6 Months Ended
Jun. 30, 2019
USD ($)
Increase (Decrease) in Redeemable Noncontrolling Interests [Roll Forward]  
Balance as of December 30, 2018 $ 61
Vesting of redeemable equity awards 1
Net loss attributable to noncontrolling interests (9)
Adjustment down to the redemption value (16)
Release of potential obligation to noncontrolling interests (37)
Balance as of June 30, 2019 $ 0
v3.19.2
Pending Acquisition (Details) - Pacific Biosciences of California, Inc (PacBio)
$ / shares in Units, $ in Millions
Nov. 01, 2018
USD ($)
$ / shares
Business Acquisition [Line Items]  
Expected business acquisition total consideration $ 1,200
Expected share price (in dollars per share) | $ / shares $ 8.00
Potential fee paid to Illumina if contract terminates $ 43
Potential fee paid by Illumina if contract terminates $ 98
v3.19.2
Fair Value Measurements - Summary of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Millions
Jun. 30, 2019
Dec. 30, 2018
Assets:    
Available-for-sale securities $ 1,073 $ 2,329
Marketable equity securities 157 39
Debt securities in government sponsored entities    
Assets:    
Available-for-sale securities 26 21
Corporate debt securities    
Assets:    
Available-for-sale securities 557 1,058
U.S. Treasury securities    
Assets:    
Available-for-sale securities 490 1,250
Fair Value, Measurements, Recurring    
Assets:    
Marketable equity securities 157 39
Contingent value right 27  
Deferred compensation plan assets 44 34
Total assets measured at fair value 2,932 3,234
Liabilities:    
Deferred compensation plan liability 42 33
Fair Value, Measurements, Recurring | Debt securities in government sponsored entities    
Assets:    
Available-for-sale securities 26 21
Fair Value, Measurements, Recurring | Corporate debt securities    
Assets:    
Available-for-sale securities 557 1,058
Fair Value, Measurements, Recurring | U.S. Treasury securities    
Assets:    
Available-for-sale securities 490 1,250
Fair Value, Measurements, Recurring | Money market funds (cash equivalents)    
Assets:    
Money market funds (cash equivalents) 1,631 832
Fair Value, Measurements, Recurring | Level 1    
Assets:    
Marketable equity securities 157 39
Total assets measured at fair value 2,278 2,121
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities    
Assets:    
Available-for-sale securities 490 1,250
Fair Value, Measurements, Recurring | Level 1 | Money market funds (cash equivalents)    
Assets:    
Money market funds (cash equivalents) 1,631 832
Fair Value, Measurements, Recurring | Level 2    
Assets:    
Deferred compensation plan assets 44 34
Total assets measured at fair value 627 1,113
Liabilities:    
Deferred compensation plan liability 42 33
Fair Value, Measurements, Recurring | Level 2 | Debt securities in government sponsored entities    
Assets:    
Available-for-sale securities 26 21
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities    
Assets:    
Available-for-sale securities 557 $ 1,058
Fair Value, Measurements, Recurring | Level 3    
Assets:    
Contingent value right 27  
Total assets measured at fair value $ 27  
v3.19.2
Debt and Other Commitments - Summary of Debt Obligations (Details) - USD ($)
$ in Millions
 6 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 30, 2018
Aug. 21, 2018
Jun. 29, 2014
Debt Instrument [Line Items]        
Obligations under financing leases   $ 269    
Other   3    
Less: current portion   (1,107)    
Long-term debt $ 1,120 890    
Convertible Senior Notes        
Debt Instrument [Line Items]        
Unamortized discount of liability component of convertible senior notes (147) (175)    
Net carrying amount of liability component of convertible senior notes 1,120 1,725    
Carrying value of equity component, net of debt issuance cost $ 213 $ 287    
Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 3 years 8 months 12 days 3 years 10 months 24 days    
Level 2 | Convertible Senior Notes        
Debt Instrument [Line Items]        
Fair value of convertible senior notes outstanding (Level 2) $ 1,658 $ 2,222    
2023 | Convertible Senior Notes        
Debt Instrument [Line Items]        
Principal amount of notes outstanding 750 750 $ 750  
2021 | Convertible Senior Notes        
Debt Instrument [Line Items]        
Principal amount of notes outstanding $ 517 517   $ 517
2019 | Convertible Senior Notes        
Debt Instrument [Line Items]        
Principal amount of notes outstanding   $ 633   $ 633
v3.19.2
Debt and Other Commitments - Narrative (Details) - Convertible Senior Notes
$ / shares in Units, $ in Millions
 1 Months Ended 6 Months Ended
Aug. 21, 2018
USD ($)
day
$ / shares
Jun. 29, 2014
USD ($)
day
$ / shares
Jun. 30, 2019
USD ($)
Dec. 30, 2018
USD ($)
2023        
Debt Instrument [Line Items]        
Stated rate     0.00%  
Principal amount of notes outstanding | $ $ 750   $ 750 $ 750
Effective interest rate used to measure fair value of convertible senior note 3.70%      
Conversion rate 0.0021845      
Conversion price (in dollars per share) | $ / shares $ 457.77      
Threshold common stock trading days 20      
Threshold consecutive common stock trading days 30      
Threshold percentage of common stock price trigger 130.00%      
Threshold note trading days 5      
Threshold consecutive note trading days 10      
Threshold percentage of note price trigger 98.00%      
Convertible stock price trigger (in dollars per share) | $ / shares $ 595.10      
2021        
Debt Instrument [Line Items]        
Stated rate     0.50%  
Principal amount of notes outstanding | $   $ 517 $ 517 517
Effective interest rate used to measure fair value of convertible senior note   3.50%    
Conversion rate   0.0039318    
Conversion price (in dollars per share) | $ / shares   $ 254.34    
Threshold common stock trading days   20    
Threshold consecutive common stock trading days   30    
Threshold percentage of common stock price trigger   130.00%    
Threshold note trading days   5    
Threshold consecutive note trading days   10    
Threshold percentage of note price trigger   98.00%    
If-converted value in excess of principal | $     $ 182  
2019        
Debt Instrument [Line Items]        
Stated rate     0.00%  
Principal amount of notes outstanding | $   $ 633   $ 633
Effective interest rate used to measure fair value of convertible senior note   2.90%    
v3.19.2
Debt and Other Commitments - Summary of Debt Conversions (Details) - 2019
shares in Millions, $ in Millions
 6 Months Ended
Jun. 30, 2019
USD ($)
shares
Short-term Debt [Line Items]  
Cash paid for principal of notes converted $ 633
Conversion value over principal amount, paid in shares of common stock $ 153
Number of shares of common stock issued upon conversion (in shares) | shares 0.4
v3.19.2
Debt and Other Commitments - Narrative - Obligations Under Financing Leases (Details)
$ in Millions
Dec. 30, 2018
USD ($)
Debt Disclosure [Abstract]  
Obligations under financing leases $ 269
v3.19.2
Stockholders' Equity - Narrative (Details)
shares in Millions
Jun. 30, 2019
shares
2015 Stock Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares available for issuance (in shares) 4.9
v3.19.2
Stockholders' Equity - Summary of Restricted Stock Activity and Related Information (Details)
shares in Thousands
 6 Months Ended
Jun. 30, 2019
$ / shares
shares
Restricted Stock Units (RSU)  
Stock Units  
Outstanding at period start (in shares) | shares 1,840
Awarded (in shares) | shares 52
Vested (in shares) | shares (65)
Cancelled (in shares) | shares (83)
Outstanding at period end (in shares) | shares 1,744
Weighted-Average Exercise Price  
Outstanding at period start (in dollars per share) | $ / shares $ 227.00
Awarded (in dollars per share) | $ / shares 305.68
Vested (in dollars per share) | $ / shares 195.44
Cancelled (in dollars per share) | $ / shares 215.41
Outstanding at period end (in dollars per share) | $ / shares $ 231.06
Performance Stock Units (PSU)  
Stock Units  
Outstanding at period start (in shares) | shares 660
Awarded (in shares) | shares (42)
Cancelled (in shares) | shares (49)
Outstanding at period end (in shares) | shares 569
Weighted-Average Exercise Price  
Outstanding at period start (in dollars per share) | $ / shares $ 196.99
Awarded (in dollars per share) | $ / shares 258.92
Cancelled (in dollars per share) | $ / shares 167.43
Outstanding at period end (in dollars per share) | $ / shares $ 194.97
v3.19.2
Stockholders' Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details)
shares in Thousands
 6 Months Ended
Jun. 30, 2019
$ / shares
shares
Options  
Outstanding at period start (in shares) | shares 192
Exercised (in shares) | shares (85)
Outstanding at period end (in shares) | shares 107
Options, Exercisable (in shares) | shares 107
Weighted-Average Exercise Price  
Outstanding at period start (in dollars per share) | $ / shares $ 54.52
Exercised (in dollars per share) | $ / shares 49.82
Outstanding at period end (in dollars per share) | $ / shares 58.26
Weighted-Average Exercise Price, Options, Exercisable (in dollars per share) | $ / shares $ 58.26
v3.19.2
Stockholders' Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee Stock
shares in Millions
 6 Months Ended
Jun. 30, 2019
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Specified percentage of the fair market value of the common stock on the first or last day of the offering period whichever is lower at which stock is purchased 85.00%
Total shares issued under the ESPP (in shares) 0.1
Shares available for issuance (in shares) 13.6
v3.19.2
Stockholders' Equity - Narrative - Share Repurchases (Details) - USD ($)
shares in Millions, $ in Millions
 6 Months Ended
Jun. 30, 2019
Feb. 06, 2019
Class of Stock [Line Items]    
Common stock repurchases $ 63  
Common Stock    
Class of Stock [Line Items]    
Stock repurchase program, authorized amount   $ 550
Repurchased common stock (in shares) 0.2  
Common stock repurchases $ 63  
Dollar amount remaining in authorized stock repurchase program $ 488  
v3.19.2
Stockholders' Equity - Summary of Share-based Compensation Expense for all Stock Awards (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation expense before taxes $ 48 $ 50 $ 99 $ 98
Related income tax benefits (11) (11) (21) (21)
Share-based compensation expense, net of taxes 37 39 78 77
Cost of product revenue        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation expense before taxes 5 4 10 8
Cost of service and other revenue        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation expense before taxes 1 1 2 2
Research and development        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation expense before taxes 16 15 34 30
Selling, general and administrative        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based compensation expense before taxes $ 26 $ 30 $ 53 $ 58
v3.19.2
Stockholders' Equity - Summary of Assumptions Used to Estimate the Weighted Average Fair Value Per Share (Details)
$ / shares in Units, $ in Millions
 6 Months Ended
Jun. 30, 2019
USD ($)
$ / 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 | $ $ 372
Weighted-average period of unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date 2 years 1 month 6 days
Employee Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility, minimum 30.00%
Expected volatility, maximum 38.00%
Expected dividends 0.00%
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 rate 1.89%
Expected term 6 months
Maximum | Employee Stock  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Risk-free interest rate 2.56%
Expected term 1 year
v3.19.2
Income Taxes - Narrative (Details)
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Income Tax Disclosure [Abstract]    
Effective tax rate 15.40% 10.80%
v3.19.2
Segment Information (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
USD ($)
Jul. 01, 2018
USD ($)
Jun. 30, 2019
USD ($)
segment
Jul. 01, 2018
USD ($)
Dec. 30, 2018
USD ($)
Segment Reporting Information [Line Items]          
Number of reportable segments | segment     1    
Revenue $ 838 $ 830 $ 1,684 $ 1,612  
Income (loss) from operations 205 227 410 445  
Assets 6,973   6,973   $ 6,959
Operating Segments | Core Illumina          
Segment Reporting Information [Line Items]          
Revenue 838 829 1,684 1,612  
Income (loss) from operations 211 246 433 484  
Assets 6,973   6,973   6,912
Operating Segments | Helix          
Segment Reporting Information [Line Items]          
Revenue   3 1 6  
Income (loss) from operations $ (6) (20) (24) (41)  
Assets         154
Elimination of intersegment          
Segment Reporting Information [Line Items]          
Revenue   (2) (1) (6)  
Income (loss) from operations   $ 1 $ 1 $ 2  
Assets         $ (107)