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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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Delaware
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33-0804655
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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5200 Illumina Way
San Diego, California
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92122
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value (including associated Preferred Stock Purchase Rights)
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The NASDAQ Global Select Market
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Large accelerated filer
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Accelerated filer
o
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Page
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•
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statements concerning our expectations as to our future financial performance, results of operations, or other operational results or metrics;
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•
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statements concerning 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; and
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statements of our expectations, beliefs, future plans and strategies, anticipated developments (including new products), and other matters that are not historical facts.
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our ability to maintain our revenue levels and profitability during periods of research funding reduction or uncertainty and adverse economic and business conditions, including as a result of slowing economic growth in the United States or worldwide;
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our ability to further develop and commercialize our sequencing, array, PCR, and consumables technologies and to deploy new products and applications, and expand the markets, for our technology platforms;
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our ability to manufacture robust instrumentation and consumables;
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our expectations and beliefs regarding future prospects and growth of the business and the markets in which we operate;
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the assumptions underlying our critical accounting policies and estimates, including our estimates regarding stock volatility and other assumptions used to estimate the fair value of share-based compensation; the future cash flows used to estimate the cease-use loss upon our exit of certain facilities; and expected future amortization of acquired intangible assets;
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•
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our belief that the investments we hold are not other-than-temporarily impaired;
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•
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our assessments and estimates that determine our effective tax rate;
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our belief that our cash and cash equivalents, investments, and cash generated from operations will be sufficient to meet our working capital, capital expenditures, and other liquidity requirements for at least the next 12 months;
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our assessments and beliefs regarding the future outcome of pending legal proceedings and the liability, if any, that we may incur as a result of those proceedings; and
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other factors detailed in our filings with the SEC, including the risks, uncertainties, and assumptions described in Item 1A “Risk Factors” below, or in information disclosed in public conference calls, the date and time of which are released beforehand.
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the ability of the research community to extract medically valuable information from genomics and to apply that knowledge to multiple areas of disease-related research and treatment;
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•
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the availability of sufficiently low cost, high-throughput research and analysis tools to enable the large amount of experimentation and analysis required to study genetic variation and biological function; and
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•
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the availability of government and private industry funding to perform the research required to extract medically relevant information from genomic analysis.
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ITEM 1A.
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Risk Factors
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•
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availability, quality, and price relative to competing products and services;
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•
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the functionality and performance of new and existing products and services;
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•
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the timing of introduction of new products or services relative to competing products and services;
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•
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scientists' and customers' opinions of the utility of new products or services;
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•
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citation of new products or services in published research;
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regulatory trends and approvals; and
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•
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general trends in life sciences research and applied markets.
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•
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difficulties in integrating new operations, technologies, products, and personnel;
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•
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lack of synergies or the inability to realize expected synergies and cost-savings;
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•
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difficulties in managing geographically dispersed operations;
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•
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underperformance of any acquired technology, product, or business relative to our expectations and the price we paid;
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•
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negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges;
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•
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the potential loss of key employees, customers, and strategic partners of acquired companies;
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claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction;
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•
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the issuance of dilutive securities, assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash;
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•
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diversion of management's attention and company resources from existing operations of the business;
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•
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inconsistencies in standards, controls, procedures, and policies;
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•
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the impairment of intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies; and
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•
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assumption of, or exposure to, unknown contingent liabilities or liabilities that are difficult to identify or accurately quantify.
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•
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longer payment cycles and difficulties in collecting accounts receivable outside of the United States;
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longer sales cycles due to the volume of transactions taking place through public tenders;
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•
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currency exchange fluctuations;
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•
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challenges in staffing and managing foreign operations;
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•
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tariffs and other trade barriers;
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•
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unexpected changes in legislative or regulatory requirements of foreign countries into which we sell our products;
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difficulties in obtaining export licenses or in overcoming other trade barriers and restrictions resulting in delivery delays; and
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significant taxes or other burdens of complying with a variety of foreign laws.
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ITEM 1B.
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Unresolved Staff Comments.
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ITEM 2.
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Properties.
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Approximate
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Lease
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Location
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Square Feet
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Operation
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Expiration Dates
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San Diego, CA
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670,000*
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R&D, Manufacturing, Storage,
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2012 – 2031
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Distribution, and Administrative
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Hayward, CA
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109,000
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R&D, Manufacturing, and Administrative
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2013 – 2014
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Singapore
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68,000
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Manufacturing and Administrative
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2013 – 2015
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Eindhoven, the Netherlands
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42,000
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Distribution and Administrative
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2015
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Little Chesterford, United Kingdom
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42,000
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R&D, Manufacturing, and Administrative
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2024
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Madison, WI
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33,000
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R&D, Manufacturing, and Administrative
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2012
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Other
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35,000
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R&D, Manufacturing, Sales, and Administrative
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2012 – 2015
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ITEM 3.
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Legal Proceedings.
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ITEM 4.
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Mine Safety Disclosures.
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ITEM 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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2011
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2010
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||||||||||||
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High
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Low
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High
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Low
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||||||||
First Quarter
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$
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74.12
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$
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61.87
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$
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40.90
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$
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29.76
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Second Quarter
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76.81
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65.41
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45.72
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36.70
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Third Quarter
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79.40
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39.82
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50.93
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41.15
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Fourth Quarter
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40.53
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25.57
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66.59
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47.70
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ITEM 6.
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Selected Financial Data.
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Years Ended
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||||||||||||||||||
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January 1,
2012
(52 weeks)
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January 2,
2011 (52 weeks) |
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January 3,
2010 (53 weeks) |
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December 28,
2008 (52 weeks) |
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December 30,
2007
(52 weeks)
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(In thousands, except per share data)
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Total revenue
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$
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1,055,535
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$
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902,741
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$
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666,324
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$
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573,225
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$
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366,799
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Income (loss) from operations(1),(2)
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199,461
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211,654
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125,597
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80,457
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(301,201
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)
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Net income (loss)
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86,628
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124,891
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72,281
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39,416
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(287,305
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)
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Net income (loss) per share:
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Basic
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$
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0.70
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$
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1.01
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$
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0.59
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$
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0.34
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$
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(2.65
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)
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Diluted
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$
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0.62
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$
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0.87
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$
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0.53
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$
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0.30
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$
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(2.65
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)
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Shares used in calculating net income (loss) per share:
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|||||
Basic
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123,399
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123,581
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123,154
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116,855
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108,308
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Diluted
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138,937
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143,433
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137,096
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133,607
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108,308
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January 1,
2012 |
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January 2,
2011 |
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January 3,
2010 |
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December 28,
2008 |
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December 30,
2007 |
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(In thousands)
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Cash, cash equivalents and short-term investments(2),(3),(4),(5)
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$
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1,189,568
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$
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894,289
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$
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693,527
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$
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640,075
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$
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386,082
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Working capital
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1,307,039
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723,881
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540,354
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483,113
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397,040
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Total assets
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2,195,840
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1,839,113
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1,429,937
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1,327,171
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929,981
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|||||
Long-term debt, current portion(5)
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—
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311,609
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290,202
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276,889
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16
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|||||
Long-term debt, less current portion(5)
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807,369
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—
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—
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—
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258,007
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|||||
Total stockholders’ equity(1),(2),(3),(4)
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1,075,215
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1,197,675
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864,248
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798,667
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353,927
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(1)
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The consolidated financial statements include results of operations of acquired companies commencing on their respective acquisition dates. As a result of prior acquisitions, we recorded charges to write-off acquired in-process research and development, or IPR&D, of $5.4 million, $1.3 million, $11.3 million, $24.7 million, and $303.4 million, during the fiscal years ended January 1, 2012, January 2, 2011, January 3, 2010, December 28, 2008, and December 30, 2007, respectively. See note “4. Acquisitions” in Part II, Item 8, Notes to Consolidated Financial Statements, for further information.
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(2)
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For the fiscal year ended December 30, 2007, we recorded a $54.0 million charge for the settlement of a litigation. In January 2008, we paid $90.0 million related to the settlement.
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(3)
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In August 2008, a total of 8,050,000 shares were sold to the public at a public offering price of $43.75 per share, raising net proceeds to us of $342.7 million.
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(4)
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For the fiscal years ended January 1, 2012, January 2, 2011, January 3, 2010, December 28, 2008, and December 30, 2007, we repurchased
9.2 million
, 0.8 million, 6.1 million, 3.1 million, and 14.8 million shares, respectively, of common stock for
$570.3 million
, $44.0 million, $175.1 million, $70.8 million, and $251.6 million, respectively. See note “11. Stockholders’ Equity” in Part II, Item 8, Notes to Consolidated Financial Statements.
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(5)
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During 2011, we issued $920.0 million principal amount of 0.25% Convertible Senior Notes due 2016, which was classified as long-term liability as of January 1, 2012. In February 2007, we issued $400.0 million principal amount of 0.625% Convertible Senior Notes due 2014. Due to the 0.625% Convertible Senior Notes due 2014 being convertible during the fiscal years ended January 2, 2011, January 3, 2010, and December 28, 2008, we classified the outstanding principal amount of these notes as current in our consolidated balance sheet in the respective periods. As of January 1, 2012, the remaining
$40.1 million
principal amount of the 0.625% Convertible Senior Notes was not convertible and was therefore reclassified to long-term liability. See note “8. Convertible Senior Notes” in Part II, Item 8, Notes to Consolidated Financial Statements, for further information.
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ITEM 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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•
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Business Overview and Outlook
. High level discussion of our operating results and significant known trends that affect our business.
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•
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Results of Operations
. Detailed discussion of our revenues and expenses.
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•
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Liquidity and Capital Resources
. Discussion of key aspects of our statements of cash flows, changes in our financial position, and our financial commitments.
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•
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Off-Balance Sheet Arrangements
. We have no significant off-balance sheet arrangements.
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•
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Contractual Obligations.
Tabular disclosure of known contractual obligations as of January 1, 2012.
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•
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Critical Accounting Policies and Estimates
. Discussion of significant changes since our most recent Annual Report on Form 10-K that we believe are important to understanding the assumptions and judgments underlying
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•
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Net revenue grew by
17%
during 2011 compared to 2010. The increase in revenue was primarily driven by an increase in consumable sales as our installed base increased in 2011, the launch of MiSeq in the third quarter of 2011, and increased HiSeq instrument revenue.
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•
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Gross profit as a percentage of revenue (gross margin) was
67.2%
in 2011, an increase from
66.6%
in 2010. The increase primarily resulted from improvements in instrument and consumable gross margins. Instrument gross margin improved during the period due to higher average selling prices and consumable gross margin improved due to a shift in sales mix from microarray consumables to sequencing consumables, which have a higher gross margin than microarray consumables. We believe our gross margin in future periods will depend on several factors, including market conditions that may impact our pricing power, product mix changes between consumable and instrument sales, our cost structure for manufacturing operations, and our ability to create innovative and high premium products that meet or stimulate customer demand.
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•
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Income from operations decreased
6%
in 2011 compared to 2010 primarily due to a
31%
increase in total
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•
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Our effective tax rate was
34.9%
in 2011, as compared to
32.6%
in 2010. The provision for income taxes is dependent on the mix of earnings in tax jurisdictions with different statutory tax rates and the other factors discussed in the risk factor “We are subject to risks related to taxation in multiple jurisdictions and the possible loss of the tax deduction on our outstanding convertible notes” in Item 1A of this report. For 2012 and beyond, we anticipate the provision for income taxes to increase in absolute dollars but the effective tax rate to trend lower than the U.S. federal statutory rate as the portion of our earnings subject to lower statutory tax rates increases.
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•
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We ended 2011 with cash, cash equivalents, and short-term investments totaling
$1.2 billion
. In 2011, we generated
$358.1 million
in cash from operations, an
$85.6 million
, or
31.4%
, increase from 2010. During 2011, we also generated $903.5 million in net proceeds from the issuance of our 0.25% Convertible Senior Notes due 2016 and used
$314.3 million
of such proceeds to repurchase shares of our common stock concurrently with the issuance and also used part of the net proceeds for the extinguishment upon conversion of
$349.9 million
principal amount of our existing
0.625%
convertible senior notes due 2014.
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2011
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2010
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2009
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Revenue:
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Product revenue
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93.5
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%
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93.3
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%
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94.1
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%
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Service and other revenue
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6.5
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|
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6.7
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5.9
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Total revenue
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100.0
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100.0
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100.0
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Cost of revenue:
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Cost of product revenue
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29.2
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30.1
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28.6
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Cost of service and other revenue
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2.5
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2.4
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2.3
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Amortization of acquired intangible assets
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1.1
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0.9
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1.0
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Total cost of revenue
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32.8
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|
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33.4
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|
|
31.9
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Gross profit
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67.2
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|
|
66.6
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|
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68.1
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Operating expense:
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|
|
|
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Research and development
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18.7
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|
19.7
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21.1
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Selling, general and administrative
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24.8
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24.4
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|
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26.5
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Headquarter relocation expense
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4.0
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|
|
—
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|
|
—
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Restructuring charges
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0.8
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|
|
—
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|
|
—
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Acquisition related expense (gain), net
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0.1
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|
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(0.9
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)
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|
1.7
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|
Total operating expense
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48.4
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|
|
43.2
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|
|
49.3
|
|
Income from operations
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18.8
|
|
|
23.4
|
|
|
18.8
|
|
Other income (expense):
|
|
|
|
|
|
|
|
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Interest income
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0.7
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|
|
0.9
|
|
|
1.7
|
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Interest expense
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(3.3
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)
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|
(2.7
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)
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(3.6
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)
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Other (expense) income, net
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(3.7
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)
|
|
(1.1
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)
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|
0.2
|
|
Total other expense, net
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(6.3
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)
|
|
(2.9
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)
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|
(1.7
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)
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Income before income taxes
|
12.5
|
|
|
20.5
|
|
|
17.1
|
|
Provision for income taxes
|
4.4
|
|
|
6.7
|
|
|
6.3
|
|
Net income
|
8.1
|
%
|
|
13.8
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%
|
|
10.8
|
%
|
|
2011 - 2010
|
|
2010 - 2009
|
||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
Change
|
|
% Change
|
|
2009
|
|
Change
|
|
% Change
|
||||||||||||
Product revenue
|
$
|
987,280
|
|
|
$
|
842,510
|
|
|
$
|
144,770
|
|
|
17
|
%
|
|
$
|
627,240
|
|
|
$
|
215,270
|
|
|
34
|
%
|
Service and other revenue
|
68,255
|
|
|
60,231
|
|
|
8,024
|
|
|
13
|
|
|
39,084
|
|
|
21,147
|
|
|
54
|
|
|||||
Total revenue
|
$
|
1,055,535
|
|
|
$
|
902,741
|
|
|
$
|
152,794
|
|
|
17
|
%
|
|
$
|
666,324
|
|
|
$
|
236,417
|
|
|
35
|
%
|
|
2011 - 2010
|
|
2010 - 2009
|
||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
Change
|
|
% Change
|
|
2009
|
|
Change
|
|
% Change
|
||||||||||||
Total gross profit
|
$
|
709,098
|
|
|
$
|
601,540
|
|
|
$
|
107,558
|
|
|
18
|
%
|
|
$
|
453,875
|
|
|
$
|
147,665
|
|
|
33
|
%
|
Total gross margin
|
67.2
|
%
|
|
66.6
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%
|
|
|
|
|
|
68.1
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%
|
|
|
|
|
|
2011 - 2010
|
|
2010 - 2009
|
||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
Change
|
|
% Change
|
|
2009
|
|
Change
|
|
% Change
|
||||||||||||
Research and development
|
$
|
196,913
|
|
|
$
|
177,947
|
|
|
$
|
18,966
|
|
|
11
|
%
|
|
$
|
140,616
|
|
|
$
|
37,331
|
|
|
27
|
%
|
Selling, general and administrative
|
261,843
|
|
|
220,454
|
|
|
41,389
|
|
|
19
|
|
|
176,337
|
|
|
44,117
|
|
|
25
|
|
|||||
Headquarter relocation expense
|
41,826
|
|
|
—
|
|
|
41,826
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring charges
|
8,136
|
|
|
—
|
|
|
8,136
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition related expense (gain), net
|
919
|
|
|
(8,515
|
)
|
|
9,434
|
|
|
(111
|
)
|
|
11,325
|
|
|
(19,840
|
)
|
|
(175
|
)
|
|||||
Total operating expense
|
$
|
509,637
|
|
|
$
|
389,886
|
|
|
$
|
119,751
|
|
|
31
|
%
|
|
$
|
328,278
|
|
|
$
|
61,608
|
|
|
19
|
%
|
|
2011 - 2010
|
|
2010 - 2009
|
||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
Change
|
|
% Change
|
|
2009
|
|
Change
|
|
% Change
|
||||||||||||
Interest income
|
$
|
7,052
|
|
|
$
|
8,378
|
|
|
$
|
(1,326
|
)
|
|
(16
|
)%
|
|
$
|
11,029
|
|
|
$
|
(2,651
|
)
|
|
(24
|
)%
|
Interest expense
|
(34,790
|
)
|
|
(24,598
|
)
|
|
(10,192
|
)
|
|
41
|
|
|
(23,718
|
)
|
|
(880
|
)
|
|
4
|
|
|||||
Other (expense) income, net
|
(38,678
|
)
|
|
(10,055
|
)
|
|
(28,623
|
)
|
|
285
|
|
|
1,217
|
|
|
(11,272
|
)
|
|
(926
|
)
|
|||||
Total other expense, net
|
$
|
(66,416
|
)
|
|
$
|
(26,275
|
)
|
|
$
|
(40,141
|
)
|
|
153
|
%
|
|
$
|
(11,472
|
)
|
|
$
|
(14,803
|
)
|
|
129
|
%
|
|
2011 - 2010
|
|
2010 - 2009
|
||||||||||||||||||||||
(Dollars in thousands)
|
2011
|
|
2010
|
|
Change
|
|
% Change
|
|
2009
|
|
Change
|
|
% Change
|
||||||||||||
Income before income taxes
|
$
|
133,045
|
|
|
$
|
185,379
|
|
|
$
|
(52,334
|
)
|
|
(28
|
)%
|
|
$
|
114,125
|
|
|
$
|
71,254
|
|
|
62
|
%
|
Provision for income taxes
|
46,417
|
|
|
60,488
|
|
|
(14,071
|
)
|
|
(23
|
)
|
|
41,844
|
|
|
18,644
|
|
|
45
|
|
|||||
Net income
|
$
|
86,628
|
|
|
$
|
124,891
|
|
|
$
|
(38,263
|
)
|
|
(31
|
)%
|
|
$
|
72,281
|
|
|
$
|
52,610
|
|
|
73
|
%
|
Effective tax rate
|
34.9
|
%
|
|
32.6
|
%
|
|
|
|
|
|
36.7
|
%
|
|
|
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
358,140
|
|
|
$
|
272,573
|
|
|
$
|
172,191
|
|
Net cash used in investing activities
|
(400,999
|
)
|
|
(285,053
|
)
|
|
(256,569
|
)
|
|||
Net cash provided by (used in) financing activities
|
97,016
|
|
|
116,474
|
|
|
(98,862
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(126
|
)
|
|
320
|
|
|
849
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
54,031
|
|
|
$
|
104,314
|
|
|
$
|
(182,391
|
)
|
•
|
potential strategic acquisitions and investments;
|
•
|
support of commercialization efforts related to our current and future products, including expansion of our direct sales force and field support resources both in the United States and abroad;
|
•
|
repurchases of our outstanding common stock;
|
•
|
the continued advancement of research and development efforts;
|
•
|
acquisitions of equipment and other fixed assets for use in our current and future manufacturing and research and development facilities; and
|
•
|
the expansion needs of our facilities, including costs of leasing additional facilities.
|
•
|
our ability to successfully commercialize and further develop our technologies and create innovative products in our markets;
|
•
|
scientific progress in our research and development programs and the magnitude of those programs;
|
•
|
competing technological and market developments; and
|
•
|
the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.
|
|
|
Payments Due by Period(1)
|
||||||||||||||||||
|
|
|
|
Less Than
|
|
|
|
|
|
More Than
|
||||||||||
Contractual Obligation
|
|
Total
|
|
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
5 Years
|
||||||||||
Debt obligations(2)
|
|
$
|
971,102
|
|
|
$
|
2,551
|
|
|
$
|
45,101
|
|
|
$
|
923,450
|
|
|
$
|
—
|
|
Operating leases
|
|
487,267
|
|
|
16,336
|
|
|
43,949
|
|
|
41,207
|
|
|
385,775
|
|
|||||
Purchase obligations
|
|
6,571
|
|
|
6,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amounts due under executive deferred compensation plan
|
|
8,970
|
|
|
8,970
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,467,346
|
|
|
$
|
27,864
|
|
|
$
|
89,050
|
|
|
$
|
964,657
|
|
|
$
|
385,775
|
|
(1)
|
The table excludes $28.4 million of uncertain tax benefits. We have not included this amount in the table because we cannot make a reasonably reliable estimate regarding the timing of settlements with taxing authorities, if any. See note “13. Income Taxes” in Part II, Item 8 of this Form 10-K for further discussion of our uncertain tax positions. The table also excludes $15.0 million in potential contingent consideration payments related to acquisitions. We have not included this amount in the table because we cannot make a reasonably reliable estimate regarding whether the milestones required for these payments will be achieved. See note “4. Acquisitions” in Part II, Item 8 of this Form 10-K for further discussion of our contingent consideration.
|
(2)
|
Debt obligations include the principal amount of our convertible senior notes due 2016 and 2014, as well as interest payments to be made under the notes. Although these notes mature in 2016 and 2014 respectively, they can be converted into cash and shares of our common stock prior to maturity if certain conditions are met. Any conversion prior to maturity can result in repayments of the principal amounts sooner than the scheduled repayments as indicated in the table. See note “8. Convertible Senior Notes” in Part II, Item 8 of this Form 10-K for further discussion of the terms of the convertible senior notes.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
ITEM 8.
|
Financial Statements and Supplementary Data.
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
|
(In thousands)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
302,978
|
|
|
$
|
248,947
|
|
Short-term investments
|
886,590
|
|
|
645,342
|
|
||
Accounts receivable, net
|
173,886
|
|
|
165,598
|
|
||
Inventory, net
|
128,781
|
|
|
142,211
|
|
||
Deferred tax assets, current portion
|
23,188
|
|
|
19,378
|
|
||
Prepaid expenses and other current assets
|
29,196
|
|
|
36,922
|
|
||
Total current assets
|
1,544,619
|
|
|
1,258,398
|
|
||
Property and equipment, net
|
143,483
|
|
|
129,874
|
|
||
Goodwill
|
321,853
|
|
|
278,206
|
|
||
Intangible assets, net
|
106,475
|
|
|
91,462
|
|
||
Deferred tax assets, long-term portion
|
19,675
|
|
|
39,497
|
|
||
Other assets
|
59,735
|
|
|
41,676
|
|
||
Total assets
|
$
|
2,195,840
|
|
|
$
|
1,839,113
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
49,806
|
|
|
$
|
66,744
|
|
Accrued liabilities
|
187,774
|
|
|
156,164
|
|
||
Long-term debt, current portion
|
—
|
|
|
311,609
|
|
||
Total current liabilities
|
237,580
|
|
|
534,517
|
|
||
Long-term debt
|
807,369
|
|
|
—
|
|
||
Other long-term liabilities
|
69,954
|
|
|
28,531
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Conversion option subject to cash settlement
|
5,722
|
|
|
78,390
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at January 1, 2012 and January 2, 2011
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 320,000,000 shares authorized, 166,707,208 shares issued at January 1, 2012, 151,512,837 shares issued at January 2, 2011
|
1,668
|
|
|
1,516
|
|
||
Additional paid-in capital
|
2,249,900
|
|
|
1,891,288
|
|
||
Accumulated other comprehensive income
|
2,117
|
|
|
1,765
|
|
||
Accumulated deficit
|
(68,707
|
)
|
|
(155,335
|
)
|
||
Treasury stock, at cost (44,664,972 shares at January 1, 2012 and 24,904,564 shares at January 2, 2011)
|
(1,109,763
|
)
|
|
(541,559
|
)
|
||
Total stockholders’ equity
|
1,075,215
|
|
|
1,197,675
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,195,840
|
|
|
$
|
1,839,113
|
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Product revenue
|
$
|
987,280
|
|
|
$
|
842,510
|
|
|
$
|
627,240
|
|
Service and other revenue
|
68,255
|
|
|
60,231
|
|
|
39,084
|
|
|||
Total revenue
|
1,055,535
|
|
|
902,741
|
|
|
666,324
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|||
Cost of product revenue
|
308,228
|
|
|
271,997
|
|
|
190,714
|
|
|||
Cost of service and other revenue
|
26,118
|
|
|
21,399
|
|
|
15,055
|
|
|||
Amortization of acquired intangible assets
|
12,091
|
|
|
7,805
|
|
|
6,680
|
|
|||
Total cost of revenue
|
346,437
|
|
|
301,201
|
|
|
212,449
|
|
|||
Gross profit
|
709,098
|
|
|
601,540
|
|
|
453,875
|
|
|||
Operating expense:
|
|
|
|
|
|
|
|
|
|||
Research and development
|
196,913
|
|
|
177,947
|
|
|
140,616
|
|
|||
Selling, general and administrative
|
261,843
|
|
|
220,454
|
|
|
176,337
|
|
|||
Headquarter relocation expense
|
41,826
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges
|
8,136
|
|
|
—
|
|
|
—
|
|
|||
Acquisition related expense (gain), net
|
919
|
|
|
(8,515
|
)
|
|
11,325
|
|
|||
Total operating expense
|
509,637
|
|
|
389,886
|
|
|
328,278
|
|
|||
Income from operations
|
199,461
|
|
|
211,654
|
|
|
125,597
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Interest income
|
7,052
|
|
|
8,378
|
|
|
11,029
|
|
|||
Interest expense
|
(34,790
|
)
|
|
(24,598
|
)
|
|
(23,718
|
)
|
|||
Other (expense) income, net
|
(38,678
|
)
|
|
(10,055
|
)
|
|
1,217
|
|
|||
Total other expense, net
|
(66,416
|
)
|
|
(26,275
|
)
|
|
(11,472
|
)
|
|||
Income before income taxes
|
133,045
|
|
|
185,379
|
|
|
114,125
|
|
|||
Provision for income taxes
|
46,417
|
|
|
60,488
|
|
|
41,844
|
|
|||
Net income
|
$
|
86,628
|
|
|
$
|
124,891
|
|
|
$
|
72,281
|
|
Net income per basic share
|
$
|
0.70
|
|
|
$
|
1.01
|
|
|
$
|
0.59
|
|
Net income per diluted share
|
$
|
0.62
|
|
|
$
|
0.87
|
|
|
$
|
0.53
|
|
Shares used in calculating basic net income per share
|
123,399
|
|
|
123,581
|
|
|
123,154
|
|
|||
Shares used in calculating diluted net income per share
|
138,937
|
|
|
143,433
|
|
|
137,096
|
|
|
|
|
|
|
Additional
|
|
Accumulated Other
|
|
|
|
|
|
|
|
Total
|
||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Comprehensive
|
|
Accumulated
|
|
Treasury Stock
|
|
Stockholders’
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Income
|
|
Deficit
|
|
Shares
|
|
Amount
|
|
Equity
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||
Balance as of December 28, 2008
|
138,937
|
|
|
$
|
1,389
|
|
|
$
|
1,469,770
|
|
|
$
|
2,422
|
|
|
$
|
(352,507
|
)
|
|
(17,928
|
)
|
|
$
|
(322,407
|
)
|
|
$
|
798,667
|
|
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,281
|
|
|
—
|
|
|
—
|
|
|
72,281
|
|
||||||
Unrealized gain on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
408
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
408
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,689
|
|
||||||
Issuance of common stock, net of repurchases
|
4,523
|
|
|
46
|
|
|
46,909
|
|
|
—
|
|
|
—
|
|
|
(6,140
|
)
|
|
(175,136
|
)
|
|
(128,181
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
60,813
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,813
|
|
||||||
Incremental tax benefit related to stock options exercised
|
—
|
|
|
—
|
|
|
39,319
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,319
|
|
||||||
Remeasurement of convertible debt
|
84
|
|
|
1
|
|
|
20,940
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,941
|
|
||||||
Balance as of January 3, 2010
|
143,544
|
|
|
1,436
|
|
|
1,637,751
|
|
|
2,830
|
|
|
(280,226
|
)
|
|
(24,068
|
)
|
|
(497,543
|
)
|
|
864,248
|
|
||||||
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,891
|
|
|
—
|
|
|
—
|
|
|
124,891
|
|
||||||
Unrealized loss on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,065
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,065
|
)
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123,826
|
|
||||||
Issuance of common stock, net of repurchases
|
7,969
|
|
|
80
|
|
|
117,965
|
|
|
—
|
|
|
—
|
|
|
(836
|
)
|
|
(44,016
|
)
|
|
74,029
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
71,725
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,725
|
|
||||||
Incremental tax benefit related to stock options exercised
|
—
|
|
|
—
|
|
|
42,445
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,445
|
|
||||||
Reclassification of conversion option subject to cash settlement
|
—
|
|
|
—
|
|
|
21,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,402
|
|
||||||
Balance as of January 2, 2011
|
151,513
|
|
|
1,516
|
|
|
1,891,288
|
|
|
1,765
|
|
|
(155,335
|
)
|
|
(24,904
|
)
|
|
(541,559
|
)
|
|
1,197,675
|
|
||||||
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,628
|
|
|
—
|
|
|
—
|
|
|
86,628
|
|
||||||
Unrealized gain on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
352
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,980
|
|
||||||
Issuance of common stock, net of repurchases
|
15,194
|
|
|
152
|
|
|
104,268
|
|
|
—
|
|
|
—
|
|
|
(19,990
|
)
|
|
(572,207
|
)
|
|
(467,787
|
)
|
||||||
Convertible note, equity portion, net of tax and issuance costs
|
—
|
|
|
—
|
|
|
155,366
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155,366
|
|
||||||
Tax impact from the issuance of convertible debt
|
—
|
|
|
—
|
|
|
(59,427
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,427
|
)
|
||||||
Tax benefit related to conversions of convertible debt
|
—
|
|
|
—
|
|
|
11,409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,409
|
|
||||||
Reclassification of conversion option subject to cash settlement
|
—
|
|
|
—
|
|
|
7,667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,667
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
92,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,153
|
|
||||||
Net incremental tax benefit related to stock options exercised
|
—
|
|
|
—
|
|
|
43,122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,122
|
|
||||||
Equity based contingent compensation
|
—
|
|
|
—
|
|
|
3,457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,457
|
|
||||||
Issuance of treasury stock
|
—
|
|
|
—
|
|
|
597
|
|
|
—
|
|
|
—
|
|
|
229
|
|
|
4,003
|
|
|
4,600
|
|
||||||
Balance as of January 1, 2012
|
166,707
|
|
|
$
|
1,668
|
|
|
$
|
2,249,900
|
|
|
$
|
2,117
|
|
|
$
|
(68,707
|
)
|
|
(44,665
|
)
|
|
$
|
(1,109,763
|
)
|
|
$
|
1,075,215
|
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
86,628
|
|
|
$
|
124,891
|
|
|
$
|
72,281
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation expense
|
55,575
|
|
|
34,204
|
|
|
24,504
|
|
|||
Amortization of acquired intangible assets
|
12,689
|
|
|
7,805
|
|
|
6,680
|
|
|||
Share-based compensation expense
|
92,092
|
|
|
71,645
|
|
|
60,811
|
|
|||
Accretion of debt discount
|
32,173
|
|
|
21,407
|
|
|
20,286
|
|
|||
Loss on extinguishment of debt
|
37,611
|
|
|
—
|
|
|
—
|
|
|||
Cease-use loss
|
23,638
|
|
|
—
|
|
|
—
|
|
|||
Contingent compensation expense
|
3,457
|
|
|
—
|
|
|
—
|
|
|||
Incremental tax benefit related to stock options exercised
|
(46,354
|
)
|
|
(42,445
|
)
|
|
(39,319
|
)
|
|||
Deferred income taxes
|
19,227
|
|
|
48,696
|
|
|
29,704
|
|
|||
Change in fair value of contingent consideration
|
(4,500
|
)
|
|
(10,376
|
)
|
|
—
|
|
|||
Impairment of cost-method investment
|
—
|
|
|
13,223
|
|
|
—
|
|
|||
Acquired in-process research and development
|
—
|
|
|
1,325
|
|
|
11,325
|
|
|||
Other non-cash adjustments
|
8,872
|
|
|
4,325
|
|
|
1,721
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(7,011
|
)
|
|
(7,844
|
)
|
|
(18,578
|
)
|
|||
Inventory
|
22,152
|
|
|
(48,583
|
)
|
|
(20,557
|
)
|
|||
Prepaid expenses and other current assets
|
(2,016
|
)
|
|
2,554
|
|
|
(3,429
|
)
|
|||
Other assets
|
(4,004
|
)
|
|
(3,566
|
)
|
|
(2,670
|
)
|
|||
Accounts payable
|
(21,097
|
)
|
|
23,150
|
|
|
11,778
|
|
|||
Accrued liabilities
|
42,955
|
|
|
32,028
|
|
|
19,997
|
|
|||
Other long-term liabilities
|
8,058
|
|
|
(113
|
)
|
|
814
|
|
|||
Unrealized gain (loss) on foreign exchange
|
(2,005
|
)
|
|
247
|
|
|
(3,157
|
)
|
|||
Net cash provided by operating activities
|
358,140
|
|
|
272,573
|
|
|
172,191
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Purchases of available-for-sale securities
|
(1,310,269
|
)
|
|
(846,208
|
)
|
|
(694,487
|
)
|
|||
Sales of available-for-sale securities
|
900,884
|
|
|
539,161
|
|
|
310,226
|
|
|||
Maturities of available-for-sale securities
|
160,007
|
|
|
149,450
|
|
|
203,990
|
|
|||
Sales and maturities of trading securities
|
—
|
|
|
54,900
|
|
|
1,000
|
|
|||
Net cash paid for acquisitions
|
(58,302
|
)
|
|
(98,211
|
)
|
|
(1,325
|
)
|
|||
Purchases of strategic investments
|
(13,769
|
)
|
|
(27,677
|
)
|
|
(19,900
|
)
|
|||
Purchases of property and equipment
|
(77,800
|
)
|
|
(49,818
|
)
|
|
(52,673
|
)
|
|||
Cash paid for intangible assets
|
(1,750
|
)
|
|
(6,650
|
)
|
|
(3,400
|
)
|
|||
Net cash used in investing activities
|
(400,999
|
)
|
|
(285,053
|
)
|
|
(256,569
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Payments on current portion of long-term debt
|
(349,874
|
)
|
|
—
|
|
|
(10,000
|
)
|
|||
Proceeds from issuance of convertible notes
|
903,492
|
|
|
—
|
|
|
—
|
|
|||
Incremental tax benefit related to stock options exercised
|
46,354
|
|
|
42,445
|
|
|
39,319
|
|
|||
Common stock repurchases
|
(570,406
|
)
|
|
(44,016
|
)
|
|
(175,136
|
)
|
|||
Proceeds from the exercise of warrants
|
5,512
|
|
|
16,029
|
|
|
7,576
|
|
|||
Proceeds from issuance of common stock
|
61,938
|
|
|
102,016
|
|
|
39,379
|
|
|||
Net cash provided by (used in) financing activities
|
97,016
|
|
|
116,474
|
|
|
(98,862
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(126
|
)
|
|
320
|
|
|
849
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
54,031
|
|
|
104,314
|
|
|
(182,391
|
)
|
|||
Cash and cash equivalents at beginning of year
|
248,947
|
|
|
144,633
|
|
|
327,024
|
|
|||
Cash and cash equivalents at end of year
|
$
|
302,978
|
|
|
$
|
248,947
|
|
|
$
|
144,633
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
$
|
2,481
|
|
|
$
|
2,437
|
|
|
$
|
2,437
|
|
Cash paid for income taxes
|
$
|
9,806
|
|
|
$
|
31,566
|
|
|
$
|
10,361
|
|
1.
|
Organization and Summary of Significant Accounting Policies
|
•
|
Level 1 —
Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 —
Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 —
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Years Ended
|
|||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
|||
Weighted average shares outstanding
|
123,399
|
|
|
123,581
|
|
|
123,154
|
|
Effect of dilutive Convertible Senior Notes
|
3,783
|
|
|
9,058
|
|
|
6,497
|
|
Effect of dilutive equity awards
|
4,703
|
|
|
4,674
|
|
|
4,335
|
|
Effect of dilutive warrants sold in connection with the Convertible Senior Notes
|
7,052
|
|
|
5,317
|
|
|
1,566
|
|
Effect of dilutive warrants assumed in a prior acquisition
|
—
|
|
|
803
|
|
|
1,544
|
|
Weighted-average shares used in calculating diluted net income per share
|
138,937
|
|
|
143,433
|
|
|
137,096
|
|
Weighted average shares excluded from calculation due to anti-dilutive effect
|
2,418
|
|
|
1,934
|
|
|
924
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Foreign currency translation adjustments
|
$
|
1,289
|
|
|
$
|
1,338
|
|
Unrealized gain on available-for-sale securities, net of deferred tax
|
828
|
|
|
427
|
|
||
Total accumulated other comprehensive income
|
$
|
2,117
|
|
|
$
|
1,765
|
|
2.
|
Balance Sheet Account Details
|
|
January 1, 2012
|
|
January 2, 2011
|
||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||||||||||
Available-for-sale securities:
|
|||||||||||||||||||||||||||||||
Debt securities in government sponsored entities
|
$
|
393,759
|
|
|
$
|
428
|
|
|
$
|
(148
|
)
|
|
$
|
394,039
|
|
|
$
|
261,890
|
|
|
$
|
106
|
|
|
$
|
(299
|
)
|
|
$
|
261,697
|
|
Corporate debt securities
|
432,550
|
|
|
1,293
|
|
|
(461
|
)
|
|
433,382
|
|
|
329,823
|
|
|
1,170
|
|
|
(235
|
)
|
|
330,758
|
|
||||||||
U.S. treasury securities
|
58,955
|
|
|
214
|
|
|
—
|
|
|
59,169
|
|
|
52,938
|
|
|
70
|
|
|
(121
|
)
|
|
52,887
|
|
||||||||
Total available-for-sale securities
|
$
|
885,264
|
|
|
$
|
1,935
|
|
|
$
|
(609
|
)
|
|
$
|
886,590
|
|
|
$
|
644,651
|
|
|
$
|
1,346
|
|
|
$
|
(655
|
)
|
|
$
|
645,342
|
|
|
January 1, 2012
|
|
January 2, 2011
|
||||||||||||
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||
Debt securities in government sponsored entities
|
$
|
133,904
|
|
|
$
|
(148
|
)
|
|
$
|
127,756
|
|
|
$
|
(299
|
)
|
Corporate debt securities
|
138,326
|
|
|
(461
|
)
|
|
92,199
|
|
|
(235
|
)
|
||||
U.S. treasury securities
|
—
|
|
|
—
|
|
|
13,490
|
|
|
(121
|
)
|
||||
Total
|
$
|
272,230
|
|
|
$
|
(609
|
)
|
|
$
|
233,445
|
|
|
$
|
(655
|
)
|
|
Estimated Fair Value
|
||
Due within one year
|
$
|
268,355
|
|
After one but within five years
|
618,235
|
|
|
Total
|
$
|
886,590
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Accounts receivable from product and service sales
|
$
|
175,226
|
|
|
$
|
165,117
|
|
Other receivables
|
2,657
|
|
|
2,167
|
|
||
Total accounts receivable, gross
|
177,883
|
|
|
167,284
|
|
||
Allowance for doubtful accounts
|
(3,997
|
)
|
|
(1,686
|
)
|
||
Total accounts receivable, net
|
$
|
173,886
|
|
|
$
|
165,598
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Raw materials
|
$
|
58,340
|
|
|
$
|
54,762
|
|
Work in process
|
53,412
|
|
|
64,862
|
|
||
Finished goods
|
17,029
|
|
|
22,587
|
|
||
Total inventory, net
|
$
|
128,781
|
|
|
$
|
142,211
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Leasehold improvements
|
$
|
63,406
|
|
|
$
|
55,681
|
|
Manufacturing and laboratory equipment
|
137,805
|
|
|
114,108
|
|
||
Computer equipment and software
|
54,826
|
|
|
41,500
|
|
||
Furniture and fixtures
|
9,274
|
|
|
6,732
|
|
||
Leased equipment
|
14,854
|
|
|
15,475
|
|
||
Total property and equipment, gross
|
280,165
|
|
|
233,496
|
|
||
Accumulated depreciation
|
(136,682
|
)
|
|
(103,622
|
)
|
||
Total property and equipment, net
|
$
|
143,483
|
|
|
$
|
129,874
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Deferred revenue, current portion
|
$
|
52,573
|
|
|
$
|
45,863
|
|
Accrued compensation expenses
|
52,035
|
|
|
49,368
|
|
||
Accrued taxes payable
|
19,339
|
|
|
13,277
|
|
||
Customer deposits
|
17,958
|
|
|
14,900
|
|
||
Reserve for product warranties
|
11,966
|
|
|
16,761
|
|
||
Deferred rent, current portion
|
11,042
|
|
|
—
|
|
||
Accrued royalties
|
5,682
|
|
|
2,781
|
|
||
Facility exit obligation, current portion
|
4,408
|
|
|
—
|
|
||
Acquisition related contingent consideration liability
|
2,335
|
|
|
3,738
|
|
||
Other accrued expenses
|
10,436
|
|
|
9,476
|
|
||
Total accrued liabilities
|
$
|
187,774
|
|
|
$
|
156,164
|
|
3.
|
Restructuring Activities
|
|
Employee Separation costs
|
|
Facilities Exit Costs
|
|
Other Costs
|
|
Total
|
||||||||
Expense recorded in the year ended January 1, 2012
|
$
|
7,683
|
|
|
$
|
—
|
|
|
$
|
453
|
|
|
$
|
8,136
|
|
Cash paid during the year ended January 1, 2012
|
4,187
|
|
|
—
|
|
|
423
|
|
|
4,610
|
|
||||
Amount recorded in accrued liabilities as of January 1, 2012
|
$
|
3,496
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
3,526
|
|
|
|
|
|
|
|
|
|
||||||||
Estimated total restructuring costs to be incurred
|
$
|
10,932
|
|
|
$
|
1,600
|
|
|
$
|
1,303
|
|
|
$
|
13,835
|
|
4.
|
Acquisitions
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
Contingent compensation expense, included in research and development expense
|
$
|
4,799
|
|
|
$
|
3,675
|
|
|
$
|
3,675
|
|
Contingent compensation expense, included in selling, general and administrative expense
|
1,258
|
|
|
—
|
|
|
—
|
|
|||
Total contingent compensation expense
|
$
|
6,057
|
|
|
$
|
3,675
|
|
|
$
|
3,675
|
|
IPR&D, included in acquisition related (gain) expense, net
|
$
|
5,425
|
|
|
$
|
1,325
|
|
|
$
|
11,325
|
|
5.
|
Intangible Assets
|
|
January 1, 2012
|
|
January 2, 2011
|
||||||||||||||||||||||||||
|
Weighted
Average
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Intangibles,
Net
|
|
Weighted
Average
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Intangibles,
Net
|
||||||||||||||
Finite-lived Intangible assets:
|
|||||||||||||||||||||||||||||
Licensed technology
|
8.0
|
|
|
$
|
36,000
|
|
|
$
|
(20,000
|
)
|
|
$
|
16,000
|
|
|
8.0
|
|
|
$
|
36,000
|
|
|
$
|
(15,849
|
)
|
|
$
|
20,151
|
|
Core technology
|
9.7
|
|
|
74,800
|
|
|
(18,544
|
)
|
|
56,256
|
|
|
10.0
|
|
|
51,500
|
|
|
(10,604
|
)
|
|
40,896
|
|
||||||
Customer relationships
|
3.0
|
|
|
1,980
|
|
|
(1,253
|
)
|
|
727
|
|
|
3.0
|
|
|
900
|
|
|
(900
|
)
|
|
—
|
|
||||||
License agreements
|
8.9
|
|
|
12,404
|
|
|
(2,605
|
)
|
|
9,799
|
|
|
8.9
|
|
|
10,654
|
|
|
(1,677
|
)
|
|
8,977
|
|
||||||
Trade name
|
10.0
|
|
|
2,500
|
|
|
(245
|
)
|
|
2,255
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Infinite-lived Intangible Asset:
|
|||||||||||||||||||||||||||||
In-process research & development
|
—
|
|
|
21,438
|
|
|
—
|
|
|
21,438
|
|
|
—
|
|
|
21,438
|
|
|
—
|
|
|
21,438
|
|
||||||
Total intangible assets, net
|
|
|
|
$
|
149,122
|
|
|
$
|
(42,647
|
)
|
|
$
|
106,475
|
|
|
|
|
|
$
|
120,492
|
|
|
$
|
(29,030
|
)
|
|
$
|
91,462
|
|
2012
|
$
|
14,247
|
|
2013
|
14,332
|
|
|
2014
|
13,548
|
|
|
2015
|
13,102
|
|
|
2016
|
8,426
|
|
|
Thereafter
|
21,382
|
|
|
Total
|
$
|
85,037
|
|
6.
|
Fair Value Measurements
|
|
January 1, 2012
|
|
January 2, 2011
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds (cash equivalent)
|
$
|
166,898
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166,898
|
|
|
$
|
148,822
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148,822
|
|
Debt securities in government sponsored entities
|
—
|
|
|
394,039
|
|
|
—
|
|
|
394,039
|
|
|
—
|
|
|
261,697
|
|
|
—
|
|
|
261,697
|
|
||||||||
Corporate debt securities
|
—
|
|
|
433,382
|
|
|
—
|
|
|
433,382
|
|
|
—
|
|
|
330,758
|
|
|
—
|
|
|
330,758
|
|
||||||||
U.S. Treasury securities
|
59,169
|
|
|
—
|
|
|
—
|
|
|
59,169
|
|
|
52,887
|
|
|
—
|
|
|
—
|
|
|
52,887
|
|
||||||||
Deferred compensation plan assets
|
—
|
|
|
10,800
|
|
|
—
|
|
|
10,800
|
|
|
—
|
|
|
6,449
|
|
|
—
|
|
|
6,449
|
|
||||||||
Total assets measured at fair value
|
$
|
226,067
|
|
|
$
|
838,221
|
|
|
$
|
—
|
|
|
$
|
1,064,288
|
|
|
$
|
201,709
|
|
|
$
|
598,904
|
|
|
$
|
—
|
|
|
$
|
800,613
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Acquisition related contingent consideration liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,638
|
|
|
$
|
6,638
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,738
|
|
|
$
|
3,738
|
|
Deferred compensation liability
|
—
|
|
|
8,970
|
|
|
—
|
|
|
8,970
|
|
|
—
|
|
|
5,272
|
|
|
—
|
|
|
5,272
|
|
||||||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
8,970
|
|
|
$
|
6,638
|
|
|
$
|
15,608
|
|
|
$
|
—
|
|
|
$
|
5,272
|
|
|
$
|
3,738
|
|
|
$
|
9,010
|
|
|
Contingent
Consideration
Liability
(Level 3 Measurement)
|
||
Balance as of January 3, 2010
|
$
|
—
|
|
Acquisition of Helixis
|
14,114
|
|
|
Gain recorded in acquisition related (gain) expense, net
|
(10,376
|
)
|
|
Balance as of January 2, 2011
|
$
|
3,738
|
|
Acquisition of Epicentre
|
7,400
|
|
|
Gain recorded in acquisition related (gain) expense, net
|
(4,500
|
)
|
|
Balance as of January 1, 2012
|
$
|
6,638
|
|
7.
|
Warranties
|
Balance as of December 28, 2008
|
$
|
8,203
|
|
Additions charged to cost of revenue
|
14,613
|
|
|
Repairs and replacements
|
(12,601
|
)
|
|
Balance as of January 3, 2010
|
10,215
|
|
|
Additions charged to cost of revenue
|
25,146
|
|
|
Repairs and replacements
|
(18,600
|
)
|
|
Balance as of January 2, 2011
|
16,761
|
|
|
Additions charged to cost of revenue
|
17,913
|
|
|
Repairs and replacements
|
(22,708
|
)
|
|
Balance as of January 1, 2012
|
$
|
11,966
|
|
8.
|
Convertible Senior Notes
|
|
|
January 1,
2012 |
||
Cash paid for principal of notes converted
|
|
$
|
349,874
|
|
Conversion value over principal amount paid in shares of common stock
|
|
$
|
727,618
|
|
Number of shares of common stock issued upon conversion
|
|
10,733
|
|
|
Loss on extinguishment of debt
|
|
$
|
37,611
|
|
Effective interest rates used to measure fair value of converted notes upon conversion
|
|
3.5% - 4.3%
|
|
|
|
January 1, 2012
|
|
January 2, 2011
|
||||||||
|
|
0.25% Convertible Senior Notes due 2016
|
|
0.625% Convertible Senior Notes due 2014
|
|
0.625% Convertible Senior Notes due 2014
|
||||||
Principal amount of convertible notes outstanding
|
|
$
|
920,000
|
|
|
$
|
40,125
|
|
|
$
|
389,999
|
|
Unamortized discount of liability component
|
|
(147,034
|
)
|
|
(5,722
|
)
|
|
(78,390
|
)
|
|||
Net carrying amount of liability component
|
|
772,966
|
|
|
34,403
|
|
|
311,609
|
|
|||
Less: current portion
|
|
—
|
|
|
—
|
|
|
(311,609
|
)
|
|||
Long-term debt
|
|
$
|
772,966
|
|
|
$
|
34,403
|
|
|
$
|
—
|
|
Conversion option subject to cash settlement
|
|
$
|
—
|
|
|
$
|
5,722
|
|
|
$
|
78,390
|
|
Carrying value of equity component, net of issuance costs
|
|
$
|
155,366
|
|
|
$
|
114,035
|
|
|
$
|
71,199
|
|
Fair value of outstanding notes
|
|
$
|
725,632
|
|
|
$
|
60,122
|
|
|
$
|
1,157,450
|
|
Remaining amortization period of discount on the liability component
|
|
4.2 years
|
|
|
2.1 years
|
|
|
3.1 years
|
|
|||
Effective interest rate of liability component
|
|
4.5
|
%
|
|
8.3
|
%
|
|
8.3
|
%
|
|||
Contractual coupon interest expense
|
|
$
|
1,871
|
|
|
$
|
414
|
|
|
$
|
2,390
|
|
Accretion of discount on the liability component
|
|
$
|
24,502
|
|
|
$
|
7,671
|
|
|
$
|
21,407
|
|
9.
|
Commitments
|
2012
|
$
|
16,336
|
|
2013
|
22,598
|
|
|
2014
|
21,351
|
|
|
2015
|
20,355
|
|
|
2016
|
20,852
|
|
|
Thereafter
|
385,775
|
|
|
Total
|
$
|
487,267
|
|
|
January 1,
2012 |
||
Facility exit obligation, current portion
|
$
|
4,408
|
|
Facility exit obligation, non-current
|
20,641
|
|
|
Total facility exit obligation
|
$
|
25,049
|
|
10.
|
Share-based Compensation Expense
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
Cost of product revenue
|
$
|
6,951
|
|
|
$
|
5,378
|
|
|
$
|
4,776
|
|
Cost of service and other revenue
|
695
|
|
|
470
|
|
|
514
|
|
|||
Research and development
|
32,105
|
|
|
25,428
|
|
|
19,960
|
|
|||
Selling, general and administrative
|
52,341
|
|
|
40,369
|
|
|
35,561
|
|
|||
Share-based compensation expense before taxes
|
92,092
|
|
|
71,645
|
|
|
60,811
|
|
|||
Related income tax benefits
|
(32,168
|
)
|
|
(25,231
|
)
|
|
(20,121
|
)
|
|||
Share-based compensation expense, net of taxes
|
$
|
59,924
|
|
|
$
|
46,414
|
|
|
$
|
40,690
|
|
|
Years Ended
|
|||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
|||
Stock options granted:
|
|
|
|
|
|
|||
Risk-free interest rate
|
0.85 - 2.23%
|
|
|
2.05 - 2.73%
|
|
|
1.69 - 1.97%
|
|
Expected volatility
|
41 - 53%
|
|
|
46 - 48%
|
|
|
55 - 58%
|
|
Expected term
|
4.7 - 5.5 years
|
|
|
6.0 years
|
|
|
5.2 years
|
|
Expected dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||
Stock purchased under the ESPP:
|
|
|
|
|
|
|||
Risk-free interest rate
|
0.16 - 0.30%
|
|
|
0.17 - 0.48%
|
|
|
0.28 - 2.90%
|
|
Expected volatility
|
43 - 48%
|
|
|
46 - 48%
|
|
|
48 - 58%
|
|
Expected term
|
0.5 - 1.0 years
|
|
|
0.5 - 1.0 years
|
|
|
0.5 - 1.0 years
|
|
Expected dividends
|
—
|
|
|
—
|
|
|
—
|
|
11.
|
Stockholders’ Equity
|
|
Options (in thousands)
|
|
Weighted-
Average
Exercise Price
|
|
Weighted
Average
Grant-Date
Fair Value
per Share
|
|||||
Outstanding at December 28, 2008
|
18,134
|
|
|
$
|
16.26
|
|
|
|
||
Granted
|
1,560
|
|
|
28.86
|
|
|
$
|
14.74
|
|
|
Exercised
|
(2,966
|
)
|
|
10.56
|
|
|
|
|||
Cancelled
|
(639
|
)
|
|
14.88
|
|
|
|
|||
Outstanding at January 3, 2010
|
16,089
|
|
|
18.59
|
|
|
|
|||
Granted
|
2,045
|
|
|
39.11
|
|
|
18.82
|
|
||
Exercised
|
(5,541
|
)
|
|
16.65
|
|
|
|
|||
Cancelled
|
(711
|
)
|
|
21.76
|
|
|
|
|||
Outstanding at January 2, 2011
|
11,882
|
|
|
22.83
|
|
|
|
|||
Granted
|
1,399
|
|
|
64.98
|
|
|
$
|
27.47
|
|
|
Exercised
|
(2,784
|
)
|
|
17.98
|
|
|
|
|||
Cancelled
|
(119
|
)
|
|
33.49
|
|
|
|
|||
Outstanding at January 1, 2012
|
10,378
|
|
|
$
|
29.69
|
|
|
|
|
Restricted
Stock Units (in thousands)
(1)
|
|
Weighted Average
Grant-Date Fair
Value per Share
|
|||
Outstanding at December 28, 2008
|
1,579
|
|
|
$
|
32.68
|
|
Awarded
|
1,293
|
|
|
32.25
|
|
|
Vested
|
(246
|
)
|
|
32.33
|
|
|
Cancelled
|
(117
|
)
|
|
33.19
|
|
|
Outstanding at January 3, 2010
|
2,509
|
|
|
32.45
|
|
|
Awarded
|
1,353
|
|
|
50.74
|
|
|
Vested
|
(510
|
)
|
|
32.10
|
|
|
Cancelled
|
(243
|
)
|
|
33.36
|
|
|
Outstanding at January 2, 2011
|
3,109
|
|
|
40.39
|
|
|
Awarded
|
1,550
|
|
|
42.02
|
|
|
Vested
|
(827
|
)
|
|
36.47
|
|
|
Cancelled
|
(356
|
)
|
|
42.15
|
|
|
Outstanding at January 1, 2012
|
3,476
|
|
|
$
|
41.87
|
|
(1)
|
Each RSU represents the fair market value of one share of common stock.
|
12.
|
Legal Proceedings
|
13.
|
Income Taxes
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
United States
|
$
|
(7,100
|
)
|
|
$
|
109,068
|
|
|
$
|
65,081
|
|
Foreign
|
140,145
|
|
|
76,311
|
|
|
49,044
|
|
|||
Total income before income taxes
|
$
|
133,045
|
|
|
$
|
185,379
|
|
|
$
|
114,125
|
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
43,161
|
|
|
$
|
39,476
|
|
|
$
|
43,565
|
|
State
|
3,958
|
|
|
8,607
|
|
|
2,511
|
|
|||
Foreign
|
24,154
|
|
|
6,330
|
|
|
6,204
|
|
|||
Total current provision
|
71,273
|
|
|
54,413
|
|
|
52,280
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(22,738
|
)
|
|
6,557
|
|
|
(14,607
|
)
|
|||
State
|
(8,050
|
)
|
|
(6,808
|
)
|
|
5,184
|
|
|||
Foreign
|
5,932
|
|
|
6,326
|
|
|
(1,013
|
)
|
|||
Total deferred provision (benefit)
|
(24,856
|
)
|
|
6,075
|
|
|
(10,436
|
)
|
|||
Total tax provision
|
$
|
46,417
|
|
|
$
|
60,488
|
|
|
$
|
41,844
|
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
Tax at federal statutory rate
|
$
|
46,566
|
|
|
$
|
64,881
|
|
|
$
|
39,944
|
|
State, net of federal benefit
|
(49
|
)
|
|
6,231
|
|
|
4,275
|
|
|||
Research and other credits
|
(6,774
|
)
|
|
(5,859
|
)
|
|
(4,050
|
)
|
|||
Acquired in-process research & development
|
1,989
|
|
|
517
|
|
|
4,386
|
|
|||
Change in valuation allowance
|
(688
|
)
|
|
(9,497
|
)
|
|
(1,967
|
)
|
|||
Permanent differences
|
1,668
|
|
|
1,397
|
|
|
2,093
|
|
|||
Change in fair value of contingent consideration
|
(1,311
|
)
|
|
(3,632
|
)
|
|
—
|
|
|||
Impact of foreign operations
|
5,579
|
|
|
7,597
|
|
|
(5,400
|
)
|
|||
Other
|
(563
|
)
|
|
(1,147
|
)
|
|
2,563
|
|
|||
Total tax provision
|
$
|
46,417
|
|
|
$
|
60,488
|
|
|
$
|
41,844
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
Deferred tax assets:
|
|
|
|
|
|
||
Net operating losses
|
$
|
4,981
|
|
|
$
|
11,898
|
|
Tax credits
|
16,647
|
|
|
18,329
|
|
||
Other accruals and reserves
|
22,411
|
|
|
17,616
|
|
||
Stock compensation
|
33,811
|
|
|
23,829
|
|
||
Inventory adjustments
|
16,469
|
|
|
5,573
|
|
||
Impairment of cost-method investment
|
4,972
|
|
|
5,058
|
|
||
Other amortization
|
4,521
|
|
|
4,893
|
|
||
Other
|
8,861
|
|
|
3,588
|
|
||
Total gross deferred tax assets
|
112,673
|
|
|
90,784
|
|
||
Valuation allowance on deferred tax assets
|
(1,799
|
)
|
|
(4,986
|
)
|
||
Total deferred tax assets
|
110,874
|
|
|
85,798
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Purchased intangible amortization
|
(19,760
|
)
|
|
(22,605
|
)
|
||
Convertible debt
|
(49,404
|
)
|
|
(3,191
|
)
|
||
Other
|
(12,322
|
)
|
|
(7,137
|
)
|
||
Total deferred tax liabilities
|
(81,486
|
)
|
|
(32,933
|
)
|
||
Net deferred tax assets
|
$
|
29,388
|
|
|
$
|
52,865
|
|
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
Balance at beginning of year
|
$
|
22,729
|
|
|
$
|
11,760
|
|
|
$
|
9,402
|
|
Increases related to prior year tax positions
|
875
|
|
|
5,066
|
|
|
—
|
|
|||
Decreases related to prior year tax positions
|
(382
|
)
|
|
—
|
|
|
—
|
|
|||
Increases related to current year tax positions
|
5,174
|
|
|
5,903
|
|
|
2,358
|
|
|||
Balance at end of year
|
$
|
28,396
|
|
|
$
|
22,729
|
|
|
$
|
11,760
|
|
14.
|
Employee Benefit Plans
|
15.
|
Segment Information, Geographic Data, and Significant Customers
|
|
Years Ended
|
||||||||||
|
January 1,
2012 |
|
January 2,
2011 |
|
January 3,
2010 |
||||||
United States
|
$
|
528,723
|
|
|
$
|
498,981
|
|
|
$
|
347,195
|
|
United Kingdom
|
67,578
|
|
|
60,521
|
|
|
55,854
|
|
|||
Other European countries
|
210,393
|
|
|
163,062
|
|
|
140,931
|
|
|||
Asia-Pacific
|
197,005
|
|
|
143,441
|
|
|
96,396
|
|
|||
Other markets
|
51,836
|
|
|
36,736
|
|
|
25,948
|
|
|||
Total
|
$
|
1,055,535
|
|
|
$
|
902,741
|
|
|
$
|
666,324
|
|
|
January 1,
2012 |
|
January 2,
2011 |
||||
United States
|
$
|
94,624
|
|
|
$
|
75,050
|
|
United Kingdom
|
22,642
|
|
|
26,578
|
|
||
Singapore
|
14,673
|
|
|
14,739
|
|
||
Other countries
|
11,544
|
|
|
13,507
|
|
||
Total
|
$
|
143,483
|
|
|
$
|
129,874
|
|
16.
|
Quarterly Financial Information (unaudited)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2011:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue
|
$
|
282,515
|
|
|
$
|
287,450
|
|
|
$
|
235,499
|
|
|
$
|
250,071
|
|
Gross profit
|
188,041
|
|
|
193,356
|
|
|
157,115
|
|
|
170,586
|
|
||||
Net income
|
24,137
|
|
|
30,620
|
|
|
20,151
|
|
|
11,720
|
|
||||
Net income per share, basic
|
0.19
|
|
|
0.25
|
|
|
0.17
|
|
|
0.10
|
|
||||
Net income per share, diluted
|
0.16
|
|
|
0.22
|
|
|
0.15
|
|
|
0.09
|
|
||||
2010:
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
192,131
|
|
|
$
|
212,003
|
|
|
$
|
237,309
|
|
|
$
|
261,298
|
|
Gross profit
|
132,178
|
|
|
146,091
|
|
|
157,145
|
|
|
166,126
|
|
||||
Net income
|
21,208
|
|
|
29,796
|
|
|
35,447
|
|
|
38,440
|
|
||||
Net income per share, basic
|
0.18
|
|
|
0.24
|
|
|
0.28
|
|
|
0.31
|
|
||||
Net income per share, diluted
|
0.16
|
|
|
0.21
|
|
|
0.24
|
|
|
0.25
|
|
17.
|
Subsequent Event
|
ITEM 9A.
|
Controls and Procedures.
|
ITEM 9B.
|
Other Information.
|
ITEM 10.
|
Directors, Executive Officers, and Corporate Governance.
|
ITEM 11.
|
Executive Compensation.
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
ITEM 14.
|
Principal Accountant Fees and Services.
|
ITEM 15.
|
Exhibits, Financial Statement Schedules.
|
|
Balance at
Beginning of
Period
|
|
Additions Charged
to Expense/
Revenue(1)
|
|
Deductions(2)
|
|
Balance at End of
Period
|
||||||
|
(In thousands)
|
||||||||||||
Year ended January 1, 2012
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,686
|
|
|
4,201
|
|
|
(1,890
|
)
|
|
$
|
3,997
|
|
Reserve for inventory
|
12,273
|
|
|
14,160
|
|
|
(11,935
|
)
|
|
14,498
|
|
||
Year ended January 2, 2011
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
$
|
1,398
|
|
|
341
|
|
|
(53
|
)
|
|
$
|
1,686
|
|
Reserve for inventory
|
10,597
|
|
|
9,559
|
|
|
(7,883
|
)
|
|
12,273
|
|
||
Year ended January 3, 2010
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
$
|
1,138
|
|
|
828
|
|
|
(568
|
)
|
|
$
|
1,398
|
|
Reserve for inventory
|
6,431
|
|
|
8,403
|
|
|
(4,237
|
)
|
|
10,597
|
|
(1)
|
Additions to the allowance for doubtful accounts and reserve for inventory are charged to selling, general and administrative expense and cost of product revenue respectively.
|
(2)
|
Deductions for allowance for doubtful accounts and reserve for inventory are for accounts receivable written off and disposal of obsolete inventory.
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit
|
|
|
|
|
|
|
|
|
|
Filing
|
|
Filed
|
|
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Date
|
|
Herewith
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation
|
|
8-K
|
|
000-30361
|
|
3.1
|
|
|
9/23/2008
|
|
|
3.2
|
|
Amended and Restated Bylaws
|
|
8-K
|
|
000-30361
|
|
3.2
|
|
|
4/27/2010
|
|
|
3.3
|
|
Certificate of Designations of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of the State of Delaware on January 26, 2012
|
|
8-K
|
|
000-30361
|
|
3.1
|
|
|
1/26/2012
|
|
|
4.1
|
|
Specimen Common Stock Certificate
|
|
S-1/A
|
|
333-33922
|
|
4.1
|
|
|
7/3/2000
|
|
|
4.2
|
|
Rights Agreement, dated as of January 26, 2012, between Illumina, Inc. and Computershare Trust Company, N.A., as Rights Agent
|
|
8-K
|
|
000-30361
|
|
4.1
|
|
|
1/26/2012
|
|
|
4.3
|
|
Indenture related to the 0.625% Convertible Senior Notes due 2014, dated as of February 16, 2007, between Illumina and The Bank of New York, as trustee
|
|
8-K
|
|
000-30361
|
|
4.1
|
|
|
2/16/2007
|
|
|
4.4
|
|
Indenture related to the 0.25% Convertible Senior Notes due 2016, dated as of March 18, 2011, between Illumina and The Bank of New York Mellon Trust Company, N.A., as trustee
|
|
10-Q
|
|
000-30361
|
|
4.1
|
|
|
5/4/2011
|
|
|
+10.1
|
|
Form of Indemnification Agreement between Illumina and each of its directors and executive officers
|
|
10-Q
|
|
000-30361
|
|
10.55
|
|
|
7/25/2008
|
|
|
+10.2
|
|
Amended and Restated Change in Control Severance Agreement between Illumina and Jay T Flatley, dated October 22, 2008
|
|
10-K
|
|
000-30361
|
|
10.33
|
|
|
2/26/2009
|
|
|
+10.3
|
|
Form of Change in Control Severance Agreement between Illumina and each of its executive officers
|
|
10-K
|
|
000-30361
|
|
10.34
|
|
|
2/26/2009
|
|
|
+10.4
|
|
2000 Employee Stock Purchase Plan, as amended and restated through February 2, 2012
|
|
|
|
|
|
|
|
|
|
X
|
|
+10.5
|
|
2005 Stock and Incentive Plan, as amended and restated through April 22, 2010
|
|
S-8
|
|
333-168393
|
|
4.5
|
|
|
7/29/2010
|
|
|
+10.6
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2005 Stock and Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
|
+10.7
|
|
Form of Stock Option Agreement for Non-Employee Directors under 2005 Stock and Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
|
+10.8
|
|
Form of Restricted Stock Unit Agreement for Employees under 2005 Stock and Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
|
+10.9
|
|
Form of Stock Option Agreement for Employees under 2005 Stock and Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
|
+10.10
|
|
New Hire Stock and Incentive Plan, as amended and restated through October 28, 2009
|
|
10-K
|
|
000-30361
|
|
10.7
|
|
|
2/26/2010
|
|
|
10.11
|
|
License Agreement, effective as of May 6, 1998, between Tufts University and Illumina
|
|
10-Q
|
|
000-30361
|
|
10.5
|
|
|
5/3/2007
|
|
|
+10.12
|
|
The Solexa Unapproved Company Share Option Plan
|
|
8-K
|
|
000-30361
|
|
99.3
|
|
|
11/26/2007
|
|
|
+10.13
|
|
The Solexa Share Option Plan for Consultants
|
|
8-K
|
|
000-30361
|
|
99.4
|
|
|
11/26/2007
|
|
|
+10.14
|
|
Solexa Limited Enterprise Management Incentive Plan
|
|
8-K
|
|
000-30361
|
|
99.5
|
|
|
11/26/2007
|
|
|
+10.15
|
|
Amended and Restated Solexa 2005 Equity Incentive Plan
|
|
10-K
|
|
000-30361
|
|
10.25
|
|
|
2/26/2009
|
|
|
+10.16
|
|
Amended and Restated Solexa 1992 Stock Option Plan
|
|
10-K
|
|
000-30361
|
|
10.26
|
|
|
2/26/2009
|
|
|
10.17
|
|
License Agreement, dated June 24, 2002, between Dade Behring Marburg GmbH and Illumina (with certain confidential portions omitted)
|
|
S-3/A
|
|
333-111496
|
|
10.23
|
|
|
3/2/2004
|
|
|
10.18
|
|
Non-exclusive License Agreement, dated January 24, 2002, between Amersham Biosciences Corp. and Illumina (with certain confidential portions omitted)
|
|
S-3/A
|
|
333-111496
|
|
10.24
|
|
|
3/2/2004
|
|
|
10.19
|
|
Amended and Restated Lease between BMR-9885 Towne Centre Drive LLC and Illumina for the 9885 Towne Centre Drive property, dated January 26, 2007
|
|
10-Q
|
|
000-30361
|
|
10.41
|
|
|
5/3/2007
|
|
|
10.20
|
|
Settlement and Cross License Agreement dated August 18, 2004 between Applera Corporation and Illumina (with certain confidential portions omitted)
|
|
10-Q
|
|
000-30361
|
|
10.27
|
|
|
11/12/2004
|
|
|
10.21
|
|
Collaboration Agreement, dated December 17, 2004, between Invitrogen Corporation and Illumina (with certain confidential portions omitted)
|
|
10-K
|
|
000-30361
|
|
10.28
|
|
|
3/8/2005
|
|
|
10.22
|
|
Joint Development and Licensing Agreement, dated May 15, 2006, between deCODE genetics, ehf. and Illumina (with certain confidential portions omitted)
|
|
10-Q
|
|
000-30361
|
|
10.32
|
|
|
8/2/2006
|
|
|
10.23
|
|
Lease between BMR-9885 Towne Centre Drive LLC and Illumina for the 9865 Towne Centre Drive property, dated January 26, 2007
|
|
10-Q
|
|
000-30361
|
|
10.42
|
|
|
5/3/2007
|
|
|
10.24
|
|
Settlement and Release Agreement between Affymetrix, Inc. and Illumina, dated January 9, 2008
|
|
10-K
|
|
000-30361
|
|
10.44
|
|
|
2/26/2008
|
|
|
10.25
|
|
Confirmation of Convertible Bond Hedge Transaction, dated February 12, 2007, by and between Illumina and Goldman, Sachs & Co.
|
|
8-K
|
|
000-30361
|
|
10.1
|
|
|
2/16/2007
|
|
|
10.26
|
|
Confirmation of Convertible Bond Hedge Transaction, dated February 12, 2007, by and between Illumina and Deutsche Bank AG London
|
|
8-K
|
|
000-30361
|
|
10.2
|
|
|
2/16/2007
|
|
|
10.27
|
|
Confirmation Issuer Warrant Transaction, dated February 12, 2007, by and between Illumina and Goldman, Sachs & Co.
|
|
8-K
|
|
000-30361
|
|
10.3
|
|
|
2/16/2007
|
|
|
10.28
|
|
Confirmation Issuer Warrant Transaction, dated February 12, 2007, by and between Illumina and Deutsche Bank AG London
|
|
8-K
|
|
000-30361
|
|
10.4
|
|
|
2/16/2007
|
|
|
10.29
|
|
Amendment to the Confirmation of Issuer Warrant Transaction, dated February 13, 2007, by and between Illumina and Goldman, Sachs & Co.
|
|
8-K
|
|
000-30361
|
|
10.5
|
|
|
2/16/2007
|
|
|
10.30
|
|
Amendment to the Confirmation of Issuer Warrant Transaction, dated February 13, 2007, by and between Illumina and Deutsche Bank AG London
|
|
8-K
|
|
000-30361
|
|
10.6
|
|
|
2/16/2007
|
|
|
10.31
|
|
Lease Agreement, dated December 30, 2010, between ARE-SD Region No. 32, LLC and Illumina
|
|
10-K
|
|
000-30361
|
|
10.35
|
|
|
2/28/2011
|
|
|
+10.32
|
|
Deferred Compensation Plan, effective December 1, 2007
|
|
14D-9
|
|
005-60457
|
|
99(e)(6)
|
|
|
2/7/2012
|
|
|
21.1
|
|
Subsidiaries of Illumina
|
|
|
|
|
|
|
|
|
|
|
X
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
|
|
X
|
24.1
|
|
Power of Attorney (included on the signature page)
|
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Jay T. Flatley pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Marc A. Stapley pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of Jay T. Flatley pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification of Marc A. Stapley pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
+
|
|
Management contract or corporate plan or arrangement
|
|
ILLUMINA
, I
NC.
|
|
|
|
|
|
By
|
/s/ J
AY
T. F
LATLEY
|
|
|
Jay T. Flatley
President and Chief Executive Officer
|
/s/ J
AY
T. F
LATLEY
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 23, 2012
|
Jay T. Flatley
|
|
|
|
|
|
|
|
|
|
/s/ Marc A. Stapley
|
|
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 23, 2012
|
Marc A. Stapley
|
|
|
|
|
|
|
|
|
|
/s/ W
ILLIAM
H. R
ASTETTER
|
|
Chairman of the Board of Directors
|
|
February 23, 2012
|
William H. Rastetter
|
|
|
|
|
|
|
|
|
|
/s/ A. B
LAINE
B
OWMAN
|
|
Director
|
|
February 23, 2012
|
A. Blaine Bowman
|
|
|
|
|
|
|
|
|
|
/s/ D
ANIEL
M. B
RADBURY
|
|
Director
|
|
February 23, 2012
|
Daniel M. Bradbury
|
|
|
|
|
|
|
|
|
|
/s/ K
ARIN
E
ASTHAM
|
|
Director
|
|
February 23, 2012
|
Karin Eastham
|
|
|
|
|
|
|
|
|
|
/s/ P
AUL
G
RINT
|
|
Director
|
|
February 23, 2012
|
Paul Grint
|
|
|
|
|
|
|
|
|
|
/s/ Gerald Möller
|
|
Director
|
|
February 23, 2012
|
Gerald Möller
|
|
|
|
|
|
|
|
|
|
/s/ D
AVID
R. W
ALT
|
|
Director
|
|
February 23, 2012
|
David R. Walt
|
|
|
|
|
|
|
|
|
|
/s/ R
OY
W
HITFIELD
|
|
Director
|
|
February 23, 2012
|
Roy Whitfield
|
|
|
|
|
Number of
RSUs Granted: [NUMBER]
Date of Grant: [DATE]
|
PARTICIPANT:
|
ILLUMINA, INC.
|
Type of Option
:
Nonstatutory Option
|
OPTIONEE:
|
ILLUMINA, INC.
|
Number of
RSUs Granted: ____________________________
Date of Grant: ____________________________
|
I.
|
NOTICE OF GRANT
|
Type of Option
:
|
X
|
Nonstatutory Stock Option
|
II.
|
AGREEMENT
|
|
ILLUMINA, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction
|
|
Doing Business As
|
|
||||
|
|
|
|
|
Avantome, Inc.
|
|
Delaware
|
|
Avantome, Inc.
|
Epicentre Technologies Corporation
|
|
Wisconsin
|
|
Epicentre Biotechnologies
|
Helixis, Inc.
|
|
Delaware
|
|
Helixis, Inc.
|
Illumina Australia Pty. Ltd.
|
|
Australia
|
|
Illumina Australia Pty. Ltd.
|
Illumina Brasil Produtos de Biotecnologia Ltda.
|
|
Brazil
|
|
Illumina Brazil
|
Illumina Cambridge, Ltd.
|
|
United Kingdom
|
|
Illumina Cambridge, Ltd.
|
Illumina Canada, Inc.
|
|
New Brunswick, Canada
|
|
Illumina Canada, Inc.
|
Illumina France Holding Sarl
|
|
France
|
|
Illumina France Holding Sarl
|
Illumina France Sarl
|
|
France
|
|
Illumina France Sarl
|
Illumina GmbH
|
|
Germany
|
|
Illumina GmbH
|
Illumina Hong Kong Limited
|
|
Hong Kong
|
|
Illumina Hong Kong Limited
|
Illumina Iceland ehf
|
|
Iceland
|
|
Illumina Iceland ehf
|
Illumina Italy S.r.l.
|
|
Italy
|
|
Illumina Italy S.r.l.
|
Illumina K.K. Japan
|
|
Japan
|
|
Illumina K.K. Japan
|
Illumina Netherlands B.V.
|
|
Netherlands
|
|
Illumina Netherlands B.V.
|
Illumina New Zealand Limited
|
|
New Zealand
|
|
Illumina New Zealand Limited
|
Illumina Singapore Pte. Ltd.
|
|
Singapore
|
|
Illumina Singapore Pte. Ltd
|
Illumina Trading (Shanghai) Co., Ltd.
|
|
China
|
|
Illumina Trading (Shanghai) Co., Ltd.
|
Illumina UK, Ltd.
|
|
United Kingdom
|
|
Illumina UK, Ltd.
|
Illumina Switzerland GmbH
|
|
Switzerland
|
|
Illumina Switzerland GmbH
|
Illumina Europe Limited
|
|
United Kingdom
|
|
Illumina Europe Limited
|
Illumina Denmark ApS
|
|
Denmark
|
|
Illumina Denmark ApS
|
Illumina Productos de Espana, S.L.U.
|
|
Spain
|
|
Illumina Productos de Espana, S.L.U.
|
Illumina AB
|
|
Sweden
|
|
Illumina AB
|
|
|
|
|
|
|
|
|
|
|
1
|
|
I have reviewed this Annual Report on Form 10-K of Illumina, Inc.;
|
|
|
|
|
|
2
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
|
3
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
|
4
|
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
|
5
|
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1
|
I have reviewed this Annual Report on Form 10-K of Illumina, Inc.;
|
|
|
|
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
5
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
/s/ JAY T. FLATLEY
|
|
|
|
Jay T. Flatley
|
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
MARC STAPLEY
|
|
|
|
Marc Stapley
|
|
|
|
Senior Vice President and Chief Financial Officer
|