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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 28, 2020
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from             to            
Commission File Number 001-35406 
ilmn-20200628_g1.jpg
Illumina, Inc.
(Exact name of registrant as specified in its charter)
Delaware33-0804655
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
5200 Illumina Way, San Diego, CA 92122
(Address of principal executive offices) (Zip code)
(858) 202-4500
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueILMNThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerþAccelerated filer
Non-accelerated filer
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As of July 31, 2020, there were 146 million shares of the registrant’s common stock outstanding.


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ILLUMINA, INC.
FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 28, 2020
TABLE OF CONTENTS

See “Form 10-Q Cross-Reference Index” within Other Key Information for a cross-reference to the parts and items requirements of the Securities and Exchange Commission Quarterly Report on Form 10-Q.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTSPAGE
MANAGEMENT’S DISCUSSION & ANALYSIS
OTHER KEY INFORMATION
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Consideration Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “continue,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “potential,” “predict,” should,” “will,” or similar words or phrases, or the negatives of these words, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward looking.  Examples of forward-looking statements include, among others, statements we make regarding:
our expectations as to our future financial performance, results of operations, or other operational results or metrics;
our expectations regarding the launch of new products or services;
the benefits that we expect will result from our business activities and certain transactions we have completed, such as product introductions, increased revenue, decreased expenses, and avoided expenses and expenditures;
our expectations of the effect on our financial condition of claims, litigation, contingent liabilities, and governmental investigations, proceedings, and regulations;
our strategies or expectations for product development, market position, financial results, and reserves;
our expectations regarding the integration of any acquired technologies with our existing technology; and
other expectations, beliefs, plans, strategies, anticipated developments, and other matters that are not historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance.  Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions.  Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control.  Our actual results and financial condition may differ materially from those indicated in the forward-looking statements.  Therefore, you should not rely on any of these forward-looking statements.  Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
the impact to our business and operating results caused by the COVID-19 pandemic;
our expectations and beliefs regarding prospects and growth for our business and the markets in which we operate;
the timing and mix of customer orders among our products and services;
challenges inherent in developing, manufacturing, and launching new products and services, including expanding manufacturing operations and reliance on third-party suppliers for critical components;
the impact of recently launched or pre-announced products and services on existing products and services;
our ability to develop and commercialize our instruments and consumables, to deploy new products, services, and applications, and to expand the markets for our technology platforms;
our ability to manufacture robust instrumentation and consumables;
our ability to identify and integrate acquired technologies, products, or businesses successfully;
the assumptions underlying our critical accounting policies and estimates;
our assessments and estimates that determine our effective tax rate;
our assessments and beliefs regarding the outcome of pending legal proceedings and any liability, that we may incur as a result of those proceedings;
uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth in the United States or worldwide; and
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other factors detailed in our filings with the SEC, including the risks, uncertainties, and assumptions described in “Risk Factors” within the Business and Market Information section of our Annual Report on Form 10-K for the fiscal year ended December 29, 2019, or in information disclosed in public conference calls, the date and time of which are released beforehand.

The foregoing factors should be considered together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand.  We undertake no obligation, and do not intend, to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, or to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of any current financial quarter, in each case whether as a result of new information, future developments, or otherwise.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ILLUMINA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
June 28,
2020
December 29,
2019
 (Unaudited) 
ASSETS
Current assets:
Cash and cash equivalents$1,770  $2,042  
Short-term investments1,498  1,372  
Accounts receivable, net385  573  
Inventory435  359  
Prepaid expenses and other current assets106  105  
Total current assets4,194  4,451  
Property and equipment, net890  889  
Operating lease right-of-use assets549  555  
Goodwill894  824  
Intangible assets, net156  145  
Deferred tax assets, net13  64  
Other assets552  388  
Total assets$7,248  $7,316  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$135  $149  
Accrued liabilities477  516  
Long-term debt, current portion503    
Total current liabilities1,115  665  
Operating lease liabilities681  695  
Long-term debt659  1,141  
Other long-term liabilities230  202  
Stockholders’ equity:
Common stock2  2  
Additional paid-in capital3,649  3,560  
Accumulated other comprehensive income14  5  
Retained earnings4,287  4,067  
Treasury stock, at cost(3,389) (3,021) 
Total stockholders’ equity4,563  4,613  
Total liabilities and stockholders’ equity$7,248  $7,316  
See accompanying notes to condensed consolidated financial statements.

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ILLUMINA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In millions, except per share amounts)
 
 Three Months EndedSix Months Ended
 June 28,
2020
June 30,
2019
June 28,
2020
June 30,
2019
Revenue:
Product revenue$527  $704  $1,228  $1,372  
Service and other revenue106  134  264  312  
Total revenue633  838  1,492  1,684  
Cost of revenue:
Cost of product revenue152  196  326  378  
Cost of service and other revenue46  59  105  130  
Amortization of acquired intangible assets7  10  14  19  
Total cost of revenue205  265  445  527  
Gross profit428  573  1,047  1,157  
Operating expense:
Research and development155  166  311  335  
Selling, general and administrative177  202  451  412  
Total operating expense332  368  762  747  
Income from operations96  205  285  410  
Other income (expense):
Interest income7  20  21  43  
Interest expense(11) (15) (22) (30) 
Other income, net73  136  58  157  
Total other income, net69  141  57  170  
Income before income taxes165  346  342  580  
Provision for income taxes118  53  122  63  
Consolidated net income47  293  220  517  
Add: Net loss attributable to noncontrolling interests  3    12  
Net income attributable to Illumina stockholders$47  $296  $220  $529  
Earnings per share attributable to Illumina stockholders:
Basic$0.32  $2.01  $1.50  $3.60  
Diluted$0.32  $1.99  $1.49  $3.56  
Shares used in computing earnings per share:
Basic 147  147  147  147  
Diluted148  149  148  149  
See accompanying notes to condensed consolidated financial statements.

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ILLUMINA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In millions)
 
 Three Months EndedSix Months Ended
 June 28,
2020
June 30,
2019
June 28,
2020
June 30,
2019
Consolidated net income$47  $293  $220  $517  
Unrealized gain on available-for-sale debt securities, net of deferred tax8  3  9  6  
Total consolidated comprehensive income 55  296  229  523  
Add: Comprehensive loss attributable to noncontrolling interests  3    12  
Comprehensive income attributable to Illumina stockholders$55  $299  $229  $535  
See accompanying notes to condensed consolidated financial statements.

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ILLUMINA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(In millions)
Illumina Stockholders
AdditionalAccumulated OtherTotal
 Common StockPaid-InComprehensiveRetainedTreasury StockNoncontrollingStockholders’
 SharesAmountCapital(Loss) IncomeEarningsSharesAmountInterestsEquity
Balance as of December 30, 2018192  $2  $3,290  $(1) $3,083  (45) $(2,616) $87  $3,845  
Net income (loss)—  —  —  —  233  —  —  (2) 231  
Unrealized gain on available-for-sale debt securities, net of deferred tax—  —  —  3  —  —  —  —  3  
Issuance of common stock, net of repurchases—  —  27  —  —  —  (86) —  (59) 
Share-based compensation—  —  51  —  —  —  —  —  51  
Cumulative-effect adjustment from adoption of ASU 2016-02, net of deferred tax—  —  —  —  (18) —  —  —  (18) 
Vesting of redeemable equity awards—  —  (1) —  —  —  —  —  (1) 
Adjustment to the carrying value of redeemable noncontrolling interests—  —  18  —  —  —  —  —  18  
Balance as of March 31, 2019192  2  3,385  2  3,298  (45) (2,702) 85  4,070  
Net income (loss)—  —  —  —  296  —  —  (1) 295  
Unrealized gain on available-for-sale debt securities, net of deferred tax—  —  —  3  —  —  —  —  3  
Issuance of common stock, net of repurchases1  —  3  —  —  —  (3) —    
Share-based compensation—  —  48  —  —  —  —  —  48  
Adjustment to the carrying value of redeemable noncontrolling interests—  —  (2) —  —  —  —  —  (2) 
Deconsolidation of Helix—  —  2  —  —  —  —  (84) (82) 
Balance as of June 30, 2019193  2  3,436  5  3,594  (45) (2,705)   4,332  
Net income—  —  —  —  234  —  —  —  234  
Issuance of common stock, net of repurchases—  —  29  —  —  (1) (201) —  (172) 
Share-based compensation—  —  45  —  —  —  —  —  45  
Balance as of September 29, 2019193  2  3,510  5  3,828  (46) (2,906)   4,439  
Net income—  —  —  —  239  —  —  —  239  
Issuance of common stock, net of repurchases1  —  —  —  —  (1) (115) —  (115) 
Share-based compensation—  —  50  —  —  —  —  —  50  
Balance as of December 29, 2019194  2  3,560  5  4,067  (47) (3,021)   4,613  
Net income—  —  —  —  173  —  —  —  173  
Unrealized gain on available-for-sale debt securities, net of deferred tax—  —  —  1  —  —  —  —  1  
Issuance of common stock, net of repurchases—  —  32  —  —  —  (223) —  (191) 
Share-based compensation—  —  39  —  —  —  —  —  39  
Balance as of March 29, 2020194  2  3,631  6  4,240  (47) (3,244)   4,635  
Net income—  —  —  —  47  —  —  —  47  
Unrealized gain on available-for-sale debt securities, net of deferred tax—  —  —  8  —  —  —  —  8  
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Issuance of common stock, net of repurchases—  —  2  —  —  (1) (145) —  (143) 
Share-based compensation—  —  16  —  —  —  —  —  16  
Balance as of June 28, 2020194  $2  $3,649  $14  $4,287  (48) $(