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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
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The NASDAQ Global Select Market
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Large accelerated filer
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Accelerated filer
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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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our expectations as to our future financial performance, results of operations, or other operational results or metrics;
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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;
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our expectations of the effect on our financial condition of claims, litigation, contingent liabilities, and governmental investigations, proceedings, and regulations;
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our strategies or expectations for product development, market position, financial results, and reserves; and
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other expectations, beliefs, plans, strategies, anticipated developments, and other matters that are not historical facts.
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our ability to develop and commercialize our instruments and consumables, to deploy new products, services, and applications, and to expand the markets for our technology platforms;
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our ability to manufacture robust instrumentation and consumables;
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our ability to identify and integrate acquired technologies, products, or businesses successfully;
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our expectations and beliefs regarding prospects and growth for the business and its markets;
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the assumptions underlying our critical accounting policies and estimates;
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our assessments and estimates that determine our effective tax rate;
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our assessments and beliefs regarding the outcome of pending legal proceedings and any liability, that we may incur as a result of those proceedings;
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uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth in the United States or worldwide; and
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other factors detailed in our filings with the SEC, including the risks, uncertainties, and assumptions described in 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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GenoLogics Life Sciences Software Inc., a developer of industry-leading laboratory information management systems, in August 2015;
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Myraqa, Inc., a regulatory and quality consulting firm specializing in IVDs and companion diagnostics, in July 2014;
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•
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NextBio, a provider of clinical and genomic informatics, in November 2013;
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Advanced Liquid Logic Inc., a developer of digital microfluidics and liquid handling solutions, in July 2013;
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Verinata Health, Inc., a provider of non-invasive tests for the early identification of fetal chromosomal abnormalities, in February 2013;
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BlueGnome Ltd., a provider of cytogenetics and in vitro fertilization screening solutions, in September 2012; and
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Epicentre Technologies Corporation, a provider of nucleic-acid sample preparation reagents and specialty enzymes for sequencing and array applications, in January 2011.
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ITEM 1A.
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Risk Factors.
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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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the timing of introduction of new products or services relative to competing products and services;
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scientists’ and customers’ opinions of the utility of new products or services;
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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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general trends in life sciences research and applied markets.
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not experimental or investigational;
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medically necessary;
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appropriate for the specific patient;
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cost-effective;
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supported by peer-reviewed publications; and
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included in clinical practice guidelines.
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difficulties in integrating new operations, technologies, products, and personnel;
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lack of synergies or the inability to realize expected synergies and cost-savings;
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difficulties in managing geographically dispersed operations;
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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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negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges;
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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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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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diversion of management’s attention and company resources from existing operations of the business;
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inconsistencies in standards, controls, procedures, and policies;
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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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assumption of, or exposure to, unknown contingent liabilities or liabilities that are difficult to identify or accurately quantify.
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decreased demand for our products;
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injury to our reputation;
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increased product liability insurance costs;
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costs of related litigation; and
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substantial monetary awards to plaintiffs.
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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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challenges in staffing and managing foreign operations;
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tariffs and other trade barriers;
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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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Location
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Approximate Square Feet
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Operation
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Lease
Expiration Dates
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San Diego, CA
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876,000
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R&D, Manufacturing, Warehouse, Distribution, and Administrative
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2017 – 2031
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San Francisco Bay Area, CA*
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268,000
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R&D, Manufacturing, Warehouse, and Administrative
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2016 – 2024
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Singapore
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167,000
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R&D, Manufacturing, Warehouse, Distribution, and Administrative
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2016 – 2021
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Cambridge, United Kingdom*
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94,000
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R&D, Manufacturing, and Administrative
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2017 – 2024
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Eindhoven, the Netherlands
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42,000
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Distribution and Administrative
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2020
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Madison, WI
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38,000
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R&D, Manufacturing, Distribution, and Administrative
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2019
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Other
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39,000
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Administrative
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2016 - 2019
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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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2015
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2014
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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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213.33
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$
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178.52
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$
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183.30
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$
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106.79
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Second Quarter
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$
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223.08
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$
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178.68
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$
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178.19
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$
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127.69
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Third Quarter
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$
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242.37
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$
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170.29
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$
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185.00
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$
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156.85
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Fourth Quarter
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$
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196.47
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$
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130.00
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$
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197.37
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$
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145.12
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Period
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Total Number
of Shares
Purchased (1) |
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Average Price Paid per Share |
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Total Number of
Shares Purchased as Part of Publicly Announced Programs |
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Approximate Dollar
Value of Shares that May Yet Be Purchased Under the Programs |
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September 28, 2015 - October 25, 2015
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56,772
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$
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153.59
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56,772
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$
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199,402,046
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October 26, 2015 - November 22, 2015
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1,210,271
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$
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149.79
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1,210,271
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$
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268,110,431
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November 23, 2015 - January 3, 2016
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66,930
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$
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179.29
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66,930
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$
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256,110,853
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Total
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1,333,973
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$
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151.44
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1,333,973
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$
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256,110,853
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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 3, 2016 (53 weeks)
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December 28, 2014 (52 weeks)
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December 29, 2013 (52 weeks)
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December 30, 2012 (52 weeks)
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January 1, 2012 (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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2,219,762
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$
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1,861,358
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$
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1,421,178
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$
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1,148,516
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$
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1,055,535
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Income from operations
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$
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612,841
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$
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514,711
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$
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134,107
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$
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200,752
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$
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199,461
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Consolidated net income
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$
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457,390
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$
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353,351
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$
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125,308
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$
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151,254
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$
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86,628
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Net loss attributable to noncontrolling interests
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$
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4,169
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—
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—
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—
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—
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Net income attributable to Illumina stockholders
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$
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461,559
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$
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353,351
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$
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125,308
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$
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151,254
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$
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86,628
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Earnings per share attributable to Illumina stockholders:
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Basic
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$
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3.19
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$
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2.61
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$
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1.00
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$
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1.23
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$
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0.70
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Diluted
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$
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3.10
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$
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2.37
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$
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0.90
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$
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1.13
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$
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0.62
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Shares used in calculating earnings per share:
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|||||||
Basic
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144,826
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135,553
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125,076
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122,999
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123,399
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|||||
Diluted
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149,069
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148,977
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139,936
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133,693
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138,937
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January 3,
2016 |
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December 28,
2014 |
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December 29,
2013 |
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December 30,
2012 |
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January 1,
2012 |
||||||||||
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(In thousands)
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||||||||||||||||||
Cash, cash equivalents and short-term investments
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$
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1,386,220
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$
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1,338,371
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$
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1,165,603
|
|
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$
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1,350,204
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$
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1,189,568
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Total assets
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$
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3,687,747
|
|
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$
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3,339,640
|
|
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$
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3,019,006
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$
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2,566,085
|
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$
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2,195,840
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Long-term debt, less current portion
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$
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1,015,649
|
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$
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986,780
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$
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839,305
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|
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$
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805,406
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|
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$
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807,369
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Redeemable noncontrolling interest
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$
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32,546
|
|
|
—
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—
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|
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—
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|
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—
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||||
Total stockholders’ equity
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$
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1,848,553
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$
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1,462,798
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$
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1,533,202
|
|
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$
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1,318,581
|
|
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$
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1,075,215
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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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Business Overview and Outlook
. High level discussion of our operating results and significant known trends that affect our business.
|
•
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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 3, 2016
.
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•
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Critical Accounting Policies and Estimates
. Discussion of significant changes we believe are important to understanding the assumptions and judgments underlying our financial statements.
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•
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Recent Accounting Pronouncements.
|
•
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Net revenue
increased
19.3%
in
2015
over
2014
. Our sales increased across our portfolio of sequencing products, including consumables, instruments, and services. We expect our revenue to continue to increase in 2016.
|
•
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Gross profit as a percentage of revenue (gross margin) increased to
69.8%
in
2015
from
69.7%
in
2014
. Gross margins in
2015
increased primarily due to a positive shift in product mix to sequencing consumables. Gross margin in 2014 was favorably impacted by the litigation settlement with Syntrix, which resulted in reversal of cost of sales of $10.4 million. See detailed discussions on this matter in note “9. Legal Proceedings” in Part II, Item 8 of this Form 10-K. We believe our gross margin in future periods will depend on several factors, including: market conditions that may impact our pricing power; sales mix changes among consumables, instruments, and services; product mix changes between established products and new products in new markets; royalties; our cost structure for manufacturing operations; and product support obligations.
|
•
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Income from operations
increased
$98.1 million
in
2015
compared to
2014
as a result of higher revenue, despite the increase in research and development and selling, general, and administrative expenses, which we expect will continue to grow.
|
•
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Our effective tax rate was
21.6%
and
21.3%
in
2015
and
2014
, respectively. The variance from the U.S. federal statutory tax rate of 35% was attributable to a discrete tax benefit of $24.8 million, related to the exclusion of stock compensation from prior period cost-sharing charges as a result of a recent tax court opinion in which an unrelated third party was successful in challenging such charges. If this tax court opinion is overturned, our tax rate will be adversely impacted by the reversal of the discrete tax benefit recorded this year and any stock compensation that should have been included in the cost-sharing charges from this year going forward. The decrease from the U.S. federal statutory tax rate also resulted from the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as Singapore and the United Kingdom.
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•
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We ended
2015
with cash, cash equivalents, and short-term investments totaling
$1.4 billion
.
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2015
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2014
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|
2013
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|||
Revenue:
|
|
|
|
|
|
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|
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Product revenue
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85.2
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%
|
|
87.0
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%
|
|
89.0
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%
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Service and other revenue
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14.8
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|
|
13.0
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|
|
11.0
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Total revenue
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100.0
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|
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100.0
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100.0
|
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Cost of revenue:
|
|
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|
|
|
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Cost of product revenue
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22.1
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|
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23.2
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|
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28.7
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Cost of service and other revenue
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6.0
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|
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5.0
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|
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4.8
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Amortization of acquired intangible assets
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2.1
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|
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2.1
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2.3
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Total cost of revenue
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30.2
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|
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30.3
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|
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35.8
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Gross profit
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69.8
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|
|
69.7
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|
|
64.2
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Operating expense:
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|
|
|
|
|
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Research and development
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18.1
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|
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20.8
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|
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19.5
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Selling, general and administrative
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23.6
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|
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25.1
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|
|
26.8
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|
Legal contingencies
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0.9
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|
|
(4.0
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)
|
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8.1
|
|
Acquisition related gain, net
|
(0.3
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
Headquarter relocation
|
(0.1
|
)
|
|
0.3
|
|
|
0.2
|
|
Unsolicited tender offer related expense
|
—
|
|
|
—
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|
|
1.0
|
|
Total operating expense
|
42.2
|
|
|
42.1
|
|
|
54.8
|
|
Income from operations
|
27.6
|
|
|
27.6
|
|
|
9.4
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest income
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
Interest expense
|
(1.9
|
)
|
|
(2.2
|
)
|
|
(2.7
|
)
|
Cost-method investment gain, net
|
0.7
|
|
|
0.2
|
|
|
4.3
|
|
Other expense, net
|
(0.3
|
)
|
|
(1.8
|
)
|
|
(0.1
|
)
|
Total other (expense) income, net
|
(1.3
|
)
|
|
(3.5
|
)
|
|
1.8
|
|
Income before income taxes
|
26.3
|
|
|
24.1
|
|
|
11.2
|
|
Provision for income taxes
|
5.7
|
|
|
5.1
|
|
|
2.4
|
|
Consolidated net income
|
20.6
|
|
|
19.0
|
|
|
8.8
|
|
Add: Net loss attributable to noncontrolling interests
|
0.2
|
|
|
—
|
|
|
—
|
|
Net income attributable to Illumina stockholders
|
20.8
|
%
|
|
19.0
|
%
|
|
8.8
|
%
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2013
|
|
Change
|
|
% Change
|
||||||||||||
Product revenue
|
$
|
1,890,633
|
|
|
$
|
1,619,511
|
|
|
$
|
271,122
|
|
|
17
|
%
|
|
$
|
1,264,656
|
|
|
$
|
354,855
|
|
|
28
|
%
|
Service and other revenue
|
329,129
|
|
|
241,847
|
|
|
87,282
|
|
|
36
|
|
|
156,522
|
|
|
85,325
|
|
|
55
|
|
|||||
Total revenue
|
$
|
2,219,762
|
|
|
$
|
1,861,358
|
|
|
$
|
358,404
|
|
|
19
|
%
|
|
$
|
1,421,178
|
|
|
$
|
440,180
|
|
|
31
|
%
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2013
|
|
Change
|
|
% Change
|
||||||||||||
Total gross profit
|
$
|
1,549,290
|
|
|
$
|
1,297,710
|
|
|
$
|
251,580
|
|
|
19
|
%
|
|
$
|
911,887
|
|
|
$
|
385,823
|
|
|
42
|
%
|
Total gross margin
|
69.8
|
%
|
|
69.7
|
%
|
|
|
|
|
|
64.2
|
%
|
|
|
|
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2013
|
|
Change
|
|
% Change
|
||||||||||||
Research and development
|
$
|
401,527
|
|
|
$
|
388,055
|
|
|
$
|
13,472
|
|
|
3
|
%
|
|
$
|
276,743
|
|
|
$
|
111,312
|
|
|
40
|
%
|
Selling, general and administrative
|
524,657
|
|
|
466,283
|
|
|
58,374
|
|
|
13
|
|
|
381,040
|
|
|
85,243
|
|
|
22
|
|
|||||
Legal contingencies
|
19,000
|
|
|
(74,338
|
)
|
|
93,338
|
|
|
(126
|
)
|
|
115,369
|
|
|
(189,707
|
)
|
|
(164
|
)
|
|||||
Acquisition related gain, net
|
(6,124
|
)
|
|
(2,639
|
)
|
|
(3,485
|
)
|
|
132
|
|
|
(11,617
|
)
|
|
8,978
|
|
|
(77
|
)
|
|||||
Headquarter relocation
|
(2,611
|
)
|
|
5,638
|
|
|
(8,249
|
)
|
|
(146
|
)
|
|
2,624
|
|
|
3,014
|
|
|
115
|
|
|||||
Unsolicited tender offer related expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,621
|
|
|
(13,621
|
)
|
|
(100
|
)
|
|||||
Total operating expense
|
$
|
936,449
|
|
|
$
|
782,999
|
|
|
$
|
153,450
|
|
|
20
|
%
|
|
$
|
777,780
|
|
|
$
|
5,219
|
|
|
1
|
%
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2013
|
|
Change
|
|
% Change
|
||||||||||||
Interest income
|
$
|
5,024
|
|
|
$
|
3,901
|
|
|
$
|
1,123
|
|
|
29
|
%
|
|
$
|
4,887
|
|
|
$
|
(986
|
)
|
|
(20
|
)%
|
Interest expense
|
(42,121
|
)
|
|
(41,728
|
)
|
|
(393
|
)
|
|
1
|
|
|
(39,690
|
)
|
|
(2,038
|
)
|
|
5
|
|
|||||
Cost-method investment gain, net
|
15,601
|
|
|
4,427
|
|
|
11,174
|
|
|
252
|
|
|
61,357
|
|
|
(56,930
|
)
|
|
(93
|
)
|
|||||
Other expense, net
|
(8,203
|
)
|
|
(32,553
|
)
|
|
24,350
|
|
|
(75
|
)
|
|
(1,347
|
)
|
|
(31,206
|
)
|
|
2,317
|
|
|||||
Total other (expense) income, net
|
$
|
(29,699
|
)
|
|
$
|
(65,953
|
)
|
|
$
|
36,254
|
|
|
(55
|
)%
|
|
$
|
25,207
|
|
|
$
|
(91,160
|
)
|
|
(362
|
)%
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2013
|
|
Change
|
|
% Change
|
||||||||||||
Income before income taxes
|
$
|
583,142
|
|
|
$
|
448,758
|
|
|
$
|
134,384
|
|
|
30
|
%
|
|
$
|
159,314
|
|
|
$
|
289,444
|
|
|
182
|
%
|
Provision for income taxes
|
125,752
|
|
|
95,407
|
|
|
30,345
|
|
|
32
|
|
|
34,006
|
|
|
61,401
|
|
|
181
|
|
|||||
Consolidated net income
|
$
|
457,390
|
|
|
$
|
353,351
|
|
|
$
|
104,039
|
|
|
29
|
%
|
|
$
|
125,308
|
|
|
$
|
228,043
|
|
|
182
|
%
|
Effective tax rate
|
21.6
|
%
|
|
21.3
|
%
|
|
|
|
|
|
21.3
|
%
|
|
|
|
|
•
|
potential early repayment of debt obligations as a result of conversions;
|
•
|
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;
|
•
|
acquisitions of equipment and other fixed assets for use in our current and future manufacturing and research and development facilities;
|
•
|
repurchases of our outstanding common stock;
|
•
|
the continued advancement of research and development efforts;
|
•
|
potential strategic acquisitions and investments;
|
•
|
the expansion needs of our facilities, including costs of leasing additional facilities; and
|
•
|
investment in our global business processes, and the associated enterprise resource planning platform.
|
•
|
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.
|
(In thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided by operating activities
|
$
|
659,596
|
|
|
$
|
501,271
|
|
|
$
|
386,421
|
|
Net cash used in investing activities
|
(106,146
|
)
|
|
(406,624
|
)
|
|
(69,649
|
)
|
|||
Net cash used in financing activities
|
(418,762
|
)
|
|
(166,748
|
)
|
|
(38,719
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,072
|
)
|
|
(3,382
|
)
|
|
(397
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
132,616
|
|
|
$
|
(75,483
|
)
|
|
$
|
277,656
|
|
|
|
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)
|
|
$
|
1,239,873
|
|
|
$
|
78,229
|
|
|
$
|
5,175
|
|
|
$
|
637,675
|
|
|
$
|
518,794
|
|
Leases
|
|
905,436
|
|
|
40,410
|
|
|
96,052
|
|
|
108,338
|
|
|
660,636
|
|
|||||
License agreements
|
|
91,295
|
|
|
12,380
|
|
|
31,865
|
|
|
47,050
|
|
|
—
|
|
|||||
Purchase obligations
|
|
23,142
|
|
|
12,172
|
|
|
8,048
|
|
|
2,922
|
|
|
—
|
|
|||||
Amounts due under executive deferred compensation plan
|
|
24,925
|
|
|
24,925
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Contingent consideration payments related to acquisitions
|
|
35,000
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
2,319,671
|
|
|
$
|
203,116
|
|
|
$
|
141,140
|
|
|
$
|
795,985
|
|
|
$
|
1,179,430
|
|
(1)
|
The table excludes
$56.1 million
of uncertain tax positions and
$32.5 million
of redeemable noncontrolling interest as the timing and amounts of the settlement remained uncertain as of
January 3, 2016
. See note “10. Income Taxes” and note “2. Balance Sheet Account Details”, respectively, in Part II, Item 8 of this Form 10-K for further discussions of these items.
|
(2)
|
Debt obligations include the principal amount of our convertible senior notes due 2016, 2019, and 2021, as well as interest payments to be made under the notes. Although these notes mature in 2016, 2019, and 2021, respectively, they may 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 “5. 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.
|
|
Page
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
768,770
|
|
|
$
|
636,154
|
|
Short-term investments
|
617,450
|
|
|
702,217
|
|
||
Accounts receivable, net
|
385,529
|
|
|
289,458
|
|
||
Inventory
|
270,777
|
|
|
191,144
|
|
||
Deferred tax assets, current portion
|
—
|
|
|
40,786
|
|
||
Prepaid expenses and other current assets
|
54,297
|
|
|
29,844
|
|
||
Total current assets
|
2,096,823
|
|
|
1,889,603
|
|
||
Property and equipment, net
|
342,694
|
|
|
265,264
|
|
||
Goodwill
|
752,629
|
|
|
724,904
|
|
||
Intangible assets, net
|
273,621
|
|
|
314,500
|
|
||
Deferred tax assets, long-term portion
|
134,515
|
|
|
49,848
|
|
||
Other assets
|
87,465
|
|
|
95,521
|
|
||
Total assets
|
$
|
3,687,747
|
|
|
$
|
3,339,640
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
139,226
|
|
|
$
|
82,626
|
|
Accrued liabilities
|
396,339
|
|
|
335,276
|
|
||
Long-term debt, current portion
|
74,929
|
|
|
304,256
|
|
||
Total current liabilities
|
610,494
|
|
|
722,158
|
|
||
Long-term debt
|
1,015,649
|
|
|
986,780
|
|
||
Other long-term liabilities
|
180,505
|
|
|
167,904
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
32,546
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
|
|||
Preferred stock, $0.01 par value, 10,000 shares authorized; no shares issued and outstanding at January 3, 2016 and December 28, 2014
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 320,000 shares authorized; 186,663 shares issued and 146,584 outstanding at January 3, 2016; 181,332 shares issued and 143,629 outstanding at December 28, 2014
|
1,859
|
|
|
1,805
|
|
||
Additional paid-in capital
|
2,497,501
|
|
|
2,172,940
|
|
||
Accumulated other comprehensive income (loss)
|
36
|
|
|
(1,080
|
)
|
||
Retained earnings
|
1,022,765
|
|
|
561,206
|
|
||
Treasury stock, 40,079 shares and 37,703 shares at cost at January 3, 2016 and December 28, 2014, respectively
|
(1,673,608
|
)
|
|
(1,272,073
|
)
|
||
Total stockholders’ equity
|
1,848,553
|
|
|
1,462,798
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,687,747
|
|
|
$
|
3,339,640
|
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Product revenue
|
$
|
1,890,633
|
|
|
$
|
1,619,511
|
|
|
$
|
1,264,656
|
|
Service and other revenue
|
329,129
|
|
|
241,847
|
|
|
156,522
|
|
|||
Total revenue
|
2,219,762
|
|
|
1,861,358
|
|
|
1,421,178
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|||
Cost of product revenue
|
490,812
|
|
|
431,920
|
|
|
407,877
|
|
|||
Cost of service and other revenue
|
133,850
|
|
|
92,355
|
|
|
67,811
|
|
|||
Amortization of acquired intangible assets
|
45,810
|
|
|
39,373
|
|
|
33,603
|
|
|||
Total cost of revenue
|
670,472
|
|
|
563,648
|
|
|
509,291
|
|
|||
Gross profit
|
1,549,290
|
|
|
1,297,710
|
|
|
911,887
|
|
|||
Operating expense:
|
|
|
|
|
|
|
|
|
|||
Research and development
|
401,527
|
|
|
388,055
|
|
|
276,743
|
|
|||
Selling, general and administrative
|
524,657
|
|
|
466,283
|
|
|
381,040
|
|
|||
Legal contingencies
|
19,000
|
|
|
(74,338
|
)
|
|
115,369
|
|
|||
Acquisition related gain, net
|
(6,124
|
)
|
|
(2,639
|
)
|
|
(11,617
|
)
|
|||
Headquarter relocation
|
(2,611
|
)
|
|
5,638
|
|
|
2,624
|
|
|||
Unsolicited tender offer related expense
|
—
|
|
|
—
|
|
|
13,621
|
|
|||
Total operating expense
|
936,449
|
|
|
782,999
|
|
|
777,780
|
|
|||
Income from operations
|
612,841
|
|
|
514,711
|
|
|
134,107
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Interest income
|
5,024
|
|
|
3,901
|
|
|
4,887
|
|
|||
Interest expense
|
(42,121
|
)
|
|
(41,728
|
)
|
|
(39,690
|
)
|
|||
Cost-method investment gain, net
|
15,601
|
|
|
4,427
|
|
|
61,357
|
|
|||
Other expense, net
|
(8,203
|
)
|
|
(32,553
|
)
|
|
(1,347
|
)
|
|||
Total other (expense) income, net
|
(29,699
|
)
|
|
(65,953
|
)
|
|
25,207
|
|
|||
Income before income taxes
|
583,142
|
|
|
448,758
|
|
|
159,314
|
|
|||
Provision for income taxes
|
125,752
|
|
|
95,407
|
|
|
34,006
|
|
|||
Consolidated net income
|
457,390
|
|
|
353,351
|
|
|
125,308
|
|
|||
Add: Net loss attributable to noncontrolling interests
|
4,169
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Illumina stockholders
|
$
|
461,559
|
|
|
$
|
353,351
|
|
|
$
|
125,308
|
|
Earnings per share attributable to Illumina stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.19
|
|
|
$
|
2.61
|
|
|
$
|
1.00
|
|
Diluted
|
$
|
3.10
|
|
|
$
|
2.37
|
|
|
$
|
0.90
|
|
Shares used in computing earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
144,826
|
|
|
135,553
|
|
|
125,076
|
|
|||
Diluted
|
149,069
|
|
|
148,977
|
|
|
139,936
|
|
|
|
Years Ended
|
||||||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Consolidated net income
|
|
$
|
457,390
|
|
|
$
|
353,351
|
|
|
$
|
125,308
|
|
Unrealized gain (loss) on available-for-sale securities, net of deferred tax
|
|
1,116
|
|
|
(2,314
|
)
|
|
(889
|
)
|
|||
Total consolidated comprehensive income
|
|
458,506
|
|
|
351,037
|
|
|
124,419
|
|
|||
Add: Comprehensive loss attributable to noncontrolling interests
|
|
4,169
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributable to Illumina stockholders
|
|
$
|
462,675
|
|
|
$
|
351,037
|
|
|
$
|
124,419
|
|
|
|
|
|
|
Additional
|
|
Accumulated Other
|
|
|
|
|
|
|
|
Total
|
||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Comprehensive
|
|
Retained
|
|
Treasury Stock
|
|
Stockholders’
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Income (Loss)
|
|
Earnings
|
|
Shares
|
|
Amount
|
|
Equity
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||
Balance as of December 30, 2012
|
170,171
|
|
|
$
|
1,703
|
|
|
$
|
2,419,831
|
|
|
$
|
2,123
|
|
|
$
|
82,547
|
|
|
(46,228
|
)
|
|
$
|
(1,187,623
|
)
|
|
$
|
1,318,581
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,308
|
|
|
—
|
|
|
—
|
|
|
125,308
|
|
||||||
Unrealized loss on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(889
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(889
|
)
|
||||||
Issuance of common stock, net of repurchases
|
5,034
|
|
|
50
|
|
|
98,215
|
|
|
—
|
|
|
—
|
|
|
(1,254
|
)
|
|
(52,722
|
)
|
|
45,543
|
|
||||||
Reclassification of conversion option subject to cash settlement
|
—
|
|
|
—
|
|
|
2,338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,338
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
105,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,771
|
|
||||||
Net incremental tax benefit related to share-based compensation
|
—
|
|
|
—
|
|
|
53,032
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,032
|
|
||||||
Equity based contingent compensation
|
—
|
|
|
—
|
|
|
8,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,278
|
|
||||||
Fair value of options assumed in acquisition
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||||
Warrant retirement
|
—
|
|
|
—
|
|
|
(125,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(125,000
|
)
|
||||||
Balance as of December 29, 2013
|
175,205
|
|
|
1,753
|
|
|
2,562,705
|
|
|
1,234
|
|
|
207,855
|
|
|
(47,482
|
)
|
|
(1,240,345
|
)
|
|
1,533,202
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353,351
|
|
|
—
|
|
|
—
|
|
|
353,351
|
|
||||||
Unrealized loss on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,314
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,314
|
)
|
||||||
Issuance of common stock, net of repurchases
|
6,127
|
|
|
52
|
|
|
96,204
|
|
|
—
|
|
|
—
|
|
|
(2,696
|
)
|
|
(247,221
|
)
|
|
(150,965
|
)
|
||||||
Tax impact from the issuance, repurchase and conversion of convertible notes
|
—
|
|
|
—
|
|
|
(58,354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,354
|
)
|
||||||
Reclassification of conversion option subject to cash settlement
|
—
|
|
|
—
|
|
|
282
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
282
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
153,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153,189
|
|
||||||
Net incremental tax benefit related to share-based compensation
|
—
|
|
|
—
|
|
|
126,477
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,477
|
|
||||||
Equity based contingent compensation
|
—
|
|
|
—
|
|
|
2,621
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,621
|
|
||||||
Warrant exercises
|
—
|
|
|
—
|
|
|
(215,493
|
)
|
|
—
|
|
|
—
|
|
|
12,475
|
|
|
215,493
|
|
|
—
|
|
||||||
Repurchase of convertible notes, net of issuances
|
—
|
|
|
—
|
|
|
(494,691
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(494,691
|
)
|
||||||
Balance as of December 28, 2014
|
181,332
|
|
|
1,805
|
|
|
2,172,940
|
|
|
(1,080
|
)
|
|
561,206
|
|
|
(37,703
|
)
|
|
(1,272,073
|
)
|
|
1,462,798
|
|
||||||
Net income attributable to Illumina stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
461,559
|
|
|
—
|
|
|
—
|
|
|
461,559
|
|
||||||
Unrealized gain on available-for-sale securities, net of deferred tax
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,116
|
|
||||||
Issuance of common stock, net of repurchases
|
5,331
|
|
|
54
|
|
|
69,870
|
|
|
—
|
|
|
—
|
|
|
(2,376
|
)
|
|
(401,535
|
)
|
|
(331,611
|
)
|
||||||
Tax impact from the conversion of convertible notes
|
—
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
373
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
133,454
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,454
|
|
||||||
Net incremental tax benefit related to share-based compensation
|
—
|
|
|
—
|
|
|
125,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,451
|
|
||||||
Reclassification of vested Helix stock units
|
—
|
|
|
—
|
|
|
(418
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(418
|
)
|
||||||
Adjustment to the carrying value of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
(4,169
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,169
|
)
|
||||||
Balance as of January 3, 2016
|
186,663
|
|
|
$
|
1,859
|
|
|
$
|
2,497,501
|
|
|
$
|
36
|
|
|
$
|
1,022,765
|
|
|
(40,079
|
)
|
|
$
|
(1,673,608
|
)
|
|
$
|
1,848,553
|
|
ILLUMINA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|||||||||||
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Consolidated net income
|
$
|
457,390
|
|
|
$
|
353,351
|
|
|
$
|
125,308
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
72,687
|
|
|
61,905
|
|
|
50,810
|
|
|||
Amortization of intangible assets
|
53,732
|
|
|
50,669
|
|
|
47,115
|
|
|||
Share-based compensation expense
|
132,593
|
|
|
152,551
|
|
|
105,826
|
|
|||
Accretion of debt discount
|
38,517
|
|
|
38,069
|
|
|
36,237
|
|
|||
Loss on extinguishment of debt
|
4,062
|
|
|
31,360
|
|
|
555
|
|
|||
Incremental tax benefit related to share-based compensation
|
(126,659
|
)
|
|
(126,479
|
)
|
|
(56,678
|
)
|
|||
Deferred income taxes
|
80,504
|
|
|
99,846
|
|
|
(36,663
|
)
|
|||
Change in fair value of contingent consideration
|
(6,124
|
)
|
|
(5,356
|
)
|
|
(18,784
|
)
|
|||
(Gain) impairment related to discontinued product line
|
—
|
|
|
(2,000
|
)
|
|
25,214
|
|
|||
Change in estimated cease-use loss
|
(2,611
|
)
|
|
5,651
|
|
|
2,624
|
|
|||
Cost-method investment gain, net
|
(15,601
|
)
|
|
(4,427
|
)
|
|
(61,357
|
)
|
|||
Gain on litigation settlement
|
—
|
|
|
(109,363
|
)
|
|
—
|
|
|||
Other
|
9,548
|
|
|
11,967
|
|
|
12,811
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(95,913
|
)
|
|
(50,381
|
)
|
|
(15,928
|
)
|
|||
Inventory
|
(80,545
|
)
|
|
(36,542
|
)
|
|
6,217
|
|
|||
Prepaid expenses and other current assets
|
(10,876
|
)
|
|
6,619
|
|
|
1,783
|
|
|||
Other assets
|
(1,418
|
)
|
|
(36,256
|
)
|
|
(16,357
|
)
|
|||
Accounts payable
|
46,296
|
|
|
(2,106
|
)
|
|
2,389
|
|
|||
Accrued liabilities
|
79,791
|
|
|
83,902
|
|
|
38,550
|
|
|||
Accrued legal contingencies
|
19,000
|
|
|
(23,570
|
)
|
|
132,933
|
|
|||
Other long-term liabilities
|
5,223
|
|
|
1,861
|
|
|
3,816
|
|
|||
Net cash provided by operating activities
|
659,596
|
|
|
501,271
|
|
|
386,421
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Purchases of available-for-sale securities
|
(797,022
|
)
|
|
(791,252
|
)
|
|
(364,001
|
)
|
|||
Sales of available-for-sale securities
|
582,528
|
|
|
391,655
|
|
|
523,635
|
|
|||
Maturities of available-for-sale securities
|
294,224
|
|
|
150,229
|
|
|
289,197
|
|
|||
Net cash paid for acquisitions
|
(36,581
|
)
|
|
(3,285
|
)
|
|
(523,501
|
)
|
|||
Net (purchases of) sales proceeds from strategic investments
|
(6,048
|
)
|
|
(11,755
|
)
|
|
95,580
|
|
|||
Purchases of property and equipment
|
(142,847
|
)
|
|
(105,996
|
)
|
|
(79,215
|
)
|
|||
Cash paid for intangible assets
|
(400
|
)
|
|
(36,220
|
)
|
|
(11,344
|
)
|
|||
Net cash used in investing activities
|
(106,146
|
)
|
|
(406,624
|
)
|
|
(69,649
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Payments on financing obligations
|
(244,952
|
)
|
|
(29,991
|
)
|
|
(10,852
|
)
|
|||
Payments on acquisition related contingent consideration liability
|
(2,900
|
)
|
|
—
|
|
|
(3,985
|
)
|
|||
Proceeds from issuance of convertible notes
|
—
|
|
|
1,132,378
|
|
|
—
|
|
|||
Repurchase of convertible notes
|
—
|
|
|
(1,244,721
|
)
|
|
—
|
|
|||
Incremental tax benefit related to share-based compensation
|
126,659
|
|
|
126,479
|
|
|
56,678
|
|
|||
Common stock repurchases
|
(274,324
|
)
|
|
(237,183
|
)
|
|
(50,020
|
)
|
|||
Taxes paid related to net share settlement of equity awards
|
(127,212
|
)
|
|
(10,038
|
)
|
|
—
|
|
|||
Payments on retirement of warrants
|
—
|
|
|
—
|
|
|
(125,000
|
)
|
|||
Proceeds from issuance of common stock
|
71,839
|
|
|
96,328
|
|
|
94,460
|
|
|||
Contributions from noncontrolling interest owners
|
32,128
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities
|
(418,762
|
)
|
|
(166,748
|
)
|
|
(38,719
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,072
|
)
|
|
(3,382
|
)
|
|
(397
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
132,616
|
|
|
(75,483
|
)
|
|
277,656
|
|
|||
Cash and cash equivalents at beginning of year
|
636,154
|
|
|
711,637
|
|
|
433,981
|
|
|||
Cash and cash equivalents at end of year
|
$
|
768,770
|
|
|
$
|
636,154
|
|
|
$
|
711,637
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for income taxes
|
$
|
16,913
|
|
|
$
|
17,886
|
|
|
$
|
50,086
|
|
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 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
|||
Weighted average shares outstanding
|
144,826
|
|
|
135,553
|
|
|
125,076
|
|
Effect of potentially dilutive common shares from:
|
|
|
|
|
|
|||
Convertible senior notes
|
1,661
|
|
|
3,489
|
|
|
1,340
|
|
Equity awards
|
2,582
|
|
|
4,340
|
|
|
4,404
|
|
Warrants
|
—
|
|
|
5,595
|
|
|
9,116
|
|
Weighted average shares used in calculating diluted earnings per share
|
149,069
|
|
|
148,977
|
|
|
139,936
|
|
Potentially dilutive shares excluded from calculation due to anti-dilutive effect
|
139
|
|
|
124
|
|
|
996
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Foreign currency translation adjustments
|
$
|
1,289
|
|
|
$
|
1,289
|
|
Unrealized loss on available-for-sale securities, net of deferred tax
|
(1,253
|
)
|
|
(2,369
|
)
|
||
Total accumulated other comprehensive income (loss)
|
$
|
36
|
|
|
$
|
(1,080
|
)
|
2.
|
Balance Sheet Account Details
|
|
January 3, 2016
|
|
December 28, 2014
|
||||||||||||||||||||||||||||
|
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
|
$
|
14,634
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
14,626
|
|
|
$
|
51,308
|
|
|
$
|
10
|
|
|
$
|
(55
|
)
|
|
$
|
51,263
|
|
Corporate debt securities
|
422,177
|
|
|
44
|
|
|
(1,127
|
)
|
|
421,094
|
|
|
502,924
|
|
|
46
|
|
|
(2,882
|
)
|
|
500,088
|
|
||||||||
U.S. Treasury securities
|
182,144
|
|
|
3
|
|
|
(417
|
)
|
|
181,730
|
|
|
151,255
|
|
|
5
|
|
|
(394
|
)
|
|
150,866
|
|
||||||||
Total available-for-sale securities
|
$
|
618,955
|
|
|
$
|
47
|
|
|
$
|
(1,552
|
)
|
|
$
|
617,450
|
|
|
$
|
705,487
|
|
|
$
|
61
|
|
|
$
|
(3,331
|
)
|
|
$
|
702,217
|
|
|
Estimated Fair Value
|
||
Due within one year
|
$
|
276,219
|
|
After one but within five years
|
341,231
|
|
|
Total
|
$
|
617,450
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Accounts receivable from product and service sales
|
$
|
393,106
|
|
|
$
|
292,847
|
|
Other receivables
|
636
|
|
|
2,070
|
|
||
Total accounts receivable, gross
|
393,742
|
|
|
294,917
|
|
||
Allowance for doubtful accounts
|
(8,213
|
)
|
|
(5,459
|
)
|
||
Total accounts receivable, net
|
$
|
385,529
|
|
|
$
|
289,458
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Raw materials
|
$
|
97,740
|
|
|
$
|
73,179
|
|
Work in process
|
138,322
|
|
|
94,102
|
|
||
Finished goods
|
34,715
|
|
|
23,863
|
|
||
Total inventory
|
$
|
270,777
|
|
|
$
|
191,144
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Leasehold improvements
|
$
|
178,019
|
|
|
$
|
143,597
|
|
Machinery and equipment
|
224,158
|
|
|
192,715
|
|
||
Computer hardware and software
|
136,550
|
|
|
86,929
|
|
||
Furniture and fixtures
|
18,539
|
|
|
13,669
|
|
||
Building
|
7,670
|
|
|
7,670
|
|
||
Construction in progress
|
44,501
|
|
|
35,421
|
|
||
Total property and equipment, gross
|
609,437
|
|
|
480,001
|
|
||
Accumulated depreciation
|
(266,743
|
)
|
|
(214,737
|
)
|
||
Total property and equipment, net
|
$
|
342,694
|
|
|
$
|
265,264
|
|
|
January 3, 2016
|
|
December 28, 2014
|
||||
Balance at beginning of period
|
$
|
724,904
|
|
|
$
|
723,061
|
|
Current period acquisition
|
27,725
|
|
|
3,338
|
|
||
Purchase price allocation adjustments related to prior year acquisitions
|
—
|
|
|
(1,495
|
)
|
||
Balance at end of period
|
$
|
752,629
|
|
|
$
|
724,904
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Accrued compensation expenses
|
$
|
120,662
|
|
|
$
|
112,606
|
|
Deferred revenue, current portion
|
96,654
|
|
|
75,294
|
|
||
Accrued taxes payable
|
44,159
|
|
|
38,942
|
|
||
Acquisition related contingent consideration liability
|
35,000
|
|
|
44,124
|
|
||
Customer deposits
|
20,901
|
|
|
20,274
|
|
||
Other
|
78,963
|
|
|
44,036
|
|
||
Total accrued liabilities
|
$
|
396,339
|
|
|
$
|
335,276
|
|
|
Redeemable Noncontrolling Interests
|
||
Balance as of December 28, 2014
|
$
|
—
|
|
Cash contributions
|
56,875
|
|
|
Amount held in escrow by third party
|
(24,747
|
)
|
|
Vested portion of stock units
|
418
|
|
|
Net loss attributable to noncontrolling interests
|
(4,169
|
)
|
|
Adjustment to the redemption value
|
4,169
|
|
|
Balance as of January 3, 2016
|
$
|
32,546
|
|
3.
|
Intangible Assets
|
|
January 3, 2016
|
|
December 28, 2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Intangibles,
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Intangibles,
Net
|
||||||||||||
Licensed technologies
|
$
|
83,956
|
|
|
$
|
(53,226
|
)
|
|
$
|
30,730
|
|
|
$
|
83,956
|
|
|
$
|
(39,423
|
)
|
|
$
|
44,533
|
|
Core technologies
|
324,898
|
|
|
(109,706
|
)
|
|
215,192
|
|
|
321,200
|
|
|
(77,493
|
)
|
|
243,707
|
|
||||||
Customer relationships
|
34,246
|
|
|
(17,558
|
)
|
|
16,688
|
|
|
26,461
|
|
|
(12,522
|
)
|
|
13,939
|
|
||||||
License agreements
|
15,442
|
|
|
(6,289
|
)
|
|
9,153
|
|
|
15,042
|
|
|
(4,592
|
)
|
|
10,450
|
|
||||||
Trade name
|
5,379
|
|
|
(3,521
|
)
|
|
1,858
|
|
|
4,700
|
|
|
(2,829
|
)
|
|
1,871
|
|
||||||
Total intangible assets, net
|
$
|
463,921
|
|
|
$
|
(190,300
|
)
|
|
$
|
273,621
|
|
|
$
|
451,359
|
|
|
$
|
(136,859
|
)
|
|
$
|
314,500
|
|
|
Weighted-Average
Useful Lives
(in years)
|
|
Gross
Carrying
Amount
|
||
Core technologies
|
5.0
|
|
$
|
3,698
|
|
Customer relationships
|
10.0
|
|
8,076
|
|
|
License agreements
|
4.6
|
|
400
|
|
|
Trade name
|
3.0
|
|
679
|
|
|
Total intangible asset additions
|
|
|
$
|
12,853
|
|
4.
|
Fair Value Measurements
|
|
January 3, 2016
|
|
December 28, 2014
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds (cash equivalent)
|
$
|
391,246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
391,246
|
|
|
$
|
431,172
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
431,172
|
|
Debt securities in government-sponsored entities
|
—
|
|
|
14,626
|
|
|
—
|
|
|
14,626
|
|
|
—
|
|
|
51,263
|
|
|
—
|
|
|
51,263
|
|
||||||||
Corporate debt securities
|
—
|
|
|
421,094
|
|
|
—
|
|
|
421,094
|
|
|
—
|
|
|
500,088
|
|
|
—
|
|
|
500,088
|
|
||||||||
U.S. Treasury securities
|
181,730
|
|
|
—
|
|
|
—
|
|
|
181,730
|
|
|
150,866
|
|
|
—
|
|
|
—
|
|
|
150,866
|
|
||||||||
Deferred compensation plan assets
|
—
|
|
|
26,245
|
|
|
—
|
|
|
26,245
|
|
|
—
|
|
|
23,486
|
|
|
—
|
|
|
23,486
|
|
||||||||
Total assets measured at fair value
|
$
|
572,976
|
|
|
$
|
461,965
|
|
|
$
|
—
|
|
|
$
|
1,034,941
|
|
|
$
|
582,038
|
|
|
$
|
574,837
|
|
|
$
|
—
|
|
|
$
|
1,156,875
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Acquisition related contingent consideration liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,000
|
|
|
$
|
35,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,124
|
|
|
$
|
44,124
|
|
Deferred compensation liability
|
—
|
|
|
24,925
|
|
|
—
|
|
|
24,925
|
|
|
—
|
|
|
20,310
|
|
|
—
|
|
|
20,310
|
|
||||||||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
24,925
|
|
|
$
|
35,000
|
|
|
$
|
59,925
|
|
|
$
|
—
|
|
|
$
|
20,310
|
|
|
$
|
44,124
|
|
|
$
|
64,434
|
|
|
Contingent
Consideration
Liability
(Level 3
Measurement)
|
||
Balance as of December 30, 2012
|
$
|
12,519
|
|
Additional liability recorded for current period acquisitions
|
60,184
|
|
|
Change in estimated fair value, recorded in acquisition related gain, net
|
(18,784
|
)
|
|
Cash payments
|
(4,439
|
)
|
|
Balance as of December 29, 2013
|
49,480
|
|
|
Change in estimated fair value, recorded in acquisition related gain, net
|
(5,356
|
)
|
|
Balance as of December 28, 2014
|
44,124
|
|
|
Change in estimated fair value, recorded in acquisition related gain, net
|
(6,124
|
)
|
|
Cash payments
|
(3,000
|
)
|
|
Balance as of January 3, 2016
|
$
|
35,000
|
|
5.
|
Convertible Senior Notes
|
|
2016 Notes
|
||
Cash paid for principal of notes converted
|
$
|
244,480
|
|
Conversion value over principal amount paid in shares of common stock
|
$
|
345,829
|
|
Number of shares of common stock issued upon conversion
|
1,721
|
|
|
Loss on extinguishment of debt
|
$
|
4,062
|
|
Effective interest rate used to measure fair value of converted notes upon conversion
|
1.1% - 1.4%
|
|
|
January 3,
2016 |
|
December 28, 2014
|
||||
Principal amount of convertible notes outstanding
|
$
|
1,225,547
|
|
|
$
|
1,470,027
|
|
Unamortized discount of liability component
|
(134,969
|
)
|
|
(178,991
|
)
|
||
Net carrying amount of liability component
|
1,090,578
|
|
|
1,291,036
|
|
||
Less: current portion
|
(74,929
|
)
|
|
(304,256
|
)
|
||
Long-term debt
|
$
|
1,015,649
|
|
|
$
|
986,780
|
|
Carrying value of equity component, net of issuance costs
|
$
|
213,811
|
|
|
$
|
215,283
|
|
Fair value of outstanding notes
|
$
|
1,456,451
|
|
|
$
|
2,021,750
|
|
Weighted average remaining amortization period of discount on the liability component
|
4.6 years
|
|
|
5.2 years
|
|
6.
|
Commitments
|
|
Operating
Leases
|
|
Sublease
Income
|
|
Net Operating
Leases
|
||||||
2016
|
$
|
39,397
|
|
|
$
|
(3,252
|
)
|
|
$
|
36,145
|
|
2017
|
37,909
|
|
|
(3,113
|
)
|
|
34,796
|
|
|||
2018
|
39,853
|
|
|
(3,206
|
)
|
|
36,647
|
|
|||
2019
|
43,027
|
|
|
(3,303
|
)
|
|
39,724
|
|
|||
2020
|
43,656
|
|
|
(3,291
|
)
|
|
40,365
|
|
|||
Thereafter
|
488,127
|
|
|
(8,878
|
)
|
|
479,249
|
|
|||
Total minimum lease payments
|
$
|
691,969
|
|
|
$
|
(25,043
|
)
|
|
$
|
666,926
|
|
|
Facility Exit Obligation
|
||
Balance as of December 30, 2012
|
$
|
45,352
|
|
Adjustment to facility exit obligation
|
(114
|
)
|
|
Accretion of interest expense
|
2,738
|
|
|
Cash payments
|
(9,758
|
)
|
|
Balance as of December 29, 2013
|
38,218
|
|
|
Adjustment to facility exit obligation
|
2,555
|
|
|
Accretion of interest expense
|
2,638
|
|
|
Cash payments
|
(5,711
|
)
|
|
Balance as of December 28, 2014
|
37,700
|
|
|
Adjustment to facility exit obligation
|
(5,303
|
)
|
|
Accretion of interest expense
|
2,294
|
|
|
Cash payments
|
(12,531
|
)
|
|
Balance as of January 3, 2016
|
$
|
22,160
|
|
|
Minimum Payments
|
||
2016
|
$
|
12,380
|
|
2017
|
13,410
|
|
|
2018
|
18,455
|
|
|
2019
|
23,500
|
|
|
2020
|
23,550
|
|
|
Total minimum royalty payments
|
$
|
91,295
|
|
|
Warranty Reserve
|
||
Balance as of December 30, 2012
|
$
|
10,136
|
|
Additions charged to cost of revenue
|
15,674
|
|
|
Repairs and replacements
|
(15,403
|
)
|
|
Balance as of December 29, 2013
|
10,407
|
|
|
Additions charged to cost of revenue
|
24,150
|
|
|
Repairs and replacements
|
(18,941
|
)
|
|
Balance as of December 28, 2014
|
15,616
|
|
|
Additions charged to cost of revenue
|
27,574
|
|
|
Repairs and replacements
|
(26,473
|
)
|
|
Balance as of January 3, 2016
|
$
|
16,717
|
|
7.
|
Share-based Compensation Expense
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Cost of product revenue
|
$
|
9,841
|
|
|
$
|
9,451
|
|
|
$
|
6,223
|
|
Cost of service and other revenue
|
1,609
|
|
|
1,204
|
|
|
777
|
|
|||
Research and development
|
42,001
|
|
|
50,880
|
|
|
37,439
|
|
|||
Selling, general and administrative
|
79,142
|
|
|
91,016
|
|
|
61,387
|
|
|||
Share-based compensation expense before taxes
|
132,593
|
|
|
152,551
|
|
|
105,826
|
|
|||
Related income tax benefits
|
(38,986
|
)
|
|
(44,194
|
)
|
|
(32,819
|
)
|
|||
Share-based compensation expense, net of taxes
|
$
|
93,607
|
|
|
$
|
108,357
|
|
|
$
|
73,007
|
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Stock options granted:
|
|
|
|
|
|
||||||
Risk-free interest rate
|
—
|
|
—
|
|
0.14% - 1.86%
|
|
|||||
Expected volatility
|
—
|
|
—
|
|
30 - 44%
|
|
|||||
Expected term
|
—
|
|
—
|
|
0.8 - 9.4 years
|
|
|||||
Expected dividends
|
—
|
|
—
|
|
0
|
%
|
|||||
Weighted-average grant-date fair value per share
|
—
|
|
—
|
|
$
|
40.66
|
|
||||
|
|
|
|
|
|
||||||
Stock purchased under the ESPP:
|
|
|
|
|
|
||||||
Risk-free interest rate
|
0.07% - 0.33%
|
|
|
0.05% - 0.13%
|
|
|
0.08% - 0.15%
|
|
|||
Expected volatility
|
29% - 38%
|
|
|
38% - 41%
|
|
|
31 - 32%
|
|
|||
Expected term
|
0.5 - 1.0 year
|
|
|
0.5 - 1.0 year
|
|
|
0.5 - 1.0 year
|
|
|||
Expected dividends
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||
Weighted-average grant-date fair value per share
|
$
|
53.92
|
|
|
$
|
44.64
|
|
|
$
|
19.30
|
|
8.
|
Stockholders’ Equity
|
|
Restricted
Stock Awards
(RSA)
|
|
Restricted
Stock Units
(RSU)
|
|
Performance
Stock Units
(PSU)(1)
|
|
Weighted-Average
Grant-Date Fair Value per Share
|
|||||||||||||
|
|
|
|
RSA
|
|
RSU
|
|
PSU
|
||||||||||||
Outstanding at December 30, 2012
|
465
|
|
|
3,660
|
|
|
587
|
|
|
$
|
53.84
|
|
|
$
|
45.49
|
|
|
$
|
49.64
|
|
Awarded
|
—
|
|
|
1,532
|
|
|
584
|
|
|
—
|
|
|
$
|
77.53
|
|
|
$
|
59.16
|
|
|
Vested
|
(217
|
)
|
|
(1,308
|
)
|
|
—
|
|
|
$
|
54.27
|
|
|
$
|
42.97
|
|
|
—
|
|
|
Cancelled
|
—
|
|
|
(256
|
)
|
|
(70
|
)
|
|
—
|
|
|
$
|
49.24
|
|
|
$
|
50.42
|
|
|
Outstanding at December 29, 2013
|
248
|
|
|
3,628
|
|
|
1,101
|
|
|
$
|
53.46
|
|
|
$
|
59.66
|
|
|
$
|
54.64
|
|
Awarded
|
—
|
|
|
780
|
|
|
968
|
|
|
—
|
|
|
$
|
172.53
|
|
|
$
|
104.52
|
|
|
Vested
|
(140
|
)
|
|
(1,383
|
)
|
|
(753
|
)
|
|
$
|
47.90
|
|
|
$
|
55.44
|
|
|
$
|
49.52
|
|
Cancelled
|
—
|
|
|
(184
|
)
|
|
(59
|
)
|
|
—
|
|
|
$
|
65.09
|
|
|
$
|
52.87
|
|
|
Outstanding at December 28, 2014
|
108
|
|
|
2,841
|
|
|
1,257
|
|
|
$
|
56.62
|
|
|
$
|
92.35
|
|
|
$
|
96.21
|
|
Awarded
|
—
|
|
|
756
|
|
|
194
|
|
|
—
|
|
|
$
|
184.10
|
|
|
$
|
183.29
|
|
|
Vested
|
(87
|
)
|
|
(1,138
|
)
|
|
(741
|
)
|
|
$
|
58.72
|
|
|
$
|
75.29
|
|
|
$
|
60.80
|
|
Cancelled
|
—
|
|
|
(253
|
)
|
|
(127
|
)
|
|
—
|
|
|
$
|
99.50
|
|
|
$
|
99.30
|
|
|
Outstanding at January 3, 2016
|
21
|
|
|
2,206
|
|
|
583
|
|
|
$
|
47.93
|
|
|
$
|
131.80
|
|
|
$
|
169.41
|
|
(1)
|
The number of units reflect the estimated number of shares to be issued at the end of the performance period.
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Pre-tax intrinsic value of outstanding restricted stock:
|
|
|
|
|
|
||||||
RSA
|
$
|
4,041
|
|
|
$
|
20,321
|
|
|
$
|
27,384
|
|
RSU
|
$
|
423,391
|
|
|
$
|
534,708
|
|
|
$
|
400,421
|
|
PSU
|
$
|
111,958
|
|
|
$
|
236,606
|
|
|
$
|
121,555
|
|
|
|
|
|
|
|
||||||
Fair value of restricted stock vested:
|
|
|
|
|
|
||||||
RSA
|
$
|
5,104
|
|
|
$
|
6,712
|
|
|
$
|
11,750
|
|
RSU
|
$
|
85,683
|
|
|
$
|
76,646
|
|
|
$
|
56,212
|
|
PSU
|
$
|
45,014
|
|
|
$
|
37,313
|
|
|
—
|
|
|
Options
(in thousands)
|
|
Weighted-
Average
Exercise Price
|
|||
Outstanding at December 30, 2012
|
8,351
|
|
|
$
|
32.10
|
|
Granted
|
512
|
|
|
$
|
14.74
|
|
Exercised
|
(3,006
|
)
|
|
$
|
27.70
|
|
Cancelled
|
(133
|
)
|
|
$
|
41.80
|
|
Outstanding at December 29, 2013
|
5,724
|
|
|
$
|
32.64
|
|
Exercised
|
(2,478
|
)
|
|
$
|
29.93
|
|
Cancelled
|
(35
|
)
|
|
$
|
31.73
|
|
Outstanding at December 28, 2014
|
3,211
|
|
|
$
|
34.74
|
|
Exercised
|
(1,529
|
)
|
|
$
|
28.54
|
|
Cancelled
|
(83
|
)
|
|
$
|
10.31
|
|
Outstanding at January 3, 2016
|
1,599
|
|
|
$
|
41.95
|
|
9.
|
Legal Proceedings
|
10.
|
Income Taxes
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
United States
|
$
|
217,674
|
|
|
$
|
176,974
|
|
|
$
|
(53,703
|
)
|
Foreign
|
365,468
|
|
|
271,784
|
|
|
213,017
|
|
|||
Total income before income taxes
|
$
|
583,142
|
|
|
$
|
448,758
|
|
|
$
|
159,314
|
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
106,062
|
|
|
$
|
60,984
|
|
|
$
|
78,419
|
|
State
|
18,240
|
|
|
12,381
|
|
|
8,854
|
|
|||
Foreign
|
46,397
|
|
|
41,815
|
|
|
39,416
|
|
|||
Total current provision
|
170,699
|
|
|
115,180
|
|
|
126,689
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(11,534
|
)
|
|
(3,191
|
)
|
|
(69,102
|
)
|
|||
State
|
(31,779
|
)
|
|
(4,974
|
)
|
|
(15,222
|
)
|
|||
Foreign
|
(1,634
|
)
|
|
(11,608
|
)
|
|
(8,359
|
)
|
|||
Total deferred benefit
|
(44,947
|
)
|
|
(19,773
|
)
|
|
(92,683
|
)
|
|||
Total tax provision
|
$
|
125,752
|
|
|
$
|
95,407
|
|
|
$
|
34,006
|
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Tax at federal statutory rate
|
$
|
204,100
|
|
|
$
|
157,065
|
|
|
$
|
55,760
|
|
State, net of federal benefit
|
8,821
|
|
|
5,023
|
|
|
647
|
|
|||
Research and other credits
|
(19,853
|
)
|
|
(16,144
|
)
|
|
(10,977
|
)
|
|||
Change in valuation allowance
|
(3,750
|
)
|
|
(4,212
|
)
|
|
10,544
|
|
|||
Change in fair value of contingent consideration
|
(2,143
|
)
|
|
(1,321
|
)
|
|
(3,859
|
)
|
|||
Impact of foreign operations
|
(42,356
|
)
|
|
(42,215
|
)
|
|
(18,006
|
)
|
|||
Cost sharing adjustment
|
(24,813
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
5,746
|
|
|
(2,789
|
)
|
|
(103
|
)
|
|||
Total tax provision
|
$
|
125,752
|
|
|
$
|
95,407
|
|
|
$
|
34,006
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
Deferred tax assets:
|
|
|
|
|
|
||
Net operating losses
|
$
|
35,448
|
|
|
$
|
47,738
|
|
Tax credits
|
40,590
|
|
|
32,192
|
|
||
Other accruals and reserves
|
42,223
|
|
|
41,676
|
|
||
Stock compensation
|
52,199
|
|
|
54,570
|
|
||
Deferred rent
|
30,355
|
|
|
25,975
|
|
||
Cost sharing adjustment
|
24,813
|
|
|
—
|
|
||
Other amortization
|
32,782
|
|
|
28,203
|
|
||
Other
|
27,727
|
|
|
36,048
|
|
||
Total gross deferred tax assets
|
286,137
|
|
|
266,402
|
|
||
Valuation allowance on deferred tax assets
|
(13,392
|
)
|
|
(15,191
|
)
|
||
Total deferred tax assets
|
272,745
|
|
|
251,211
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Purchased intangible amortization
|
(78,270
|
)
|
|
(85,612
|
)
|
||
Convertible debt
|
(47,863
|
)
|
|
(61,383
|
)
|
||
Property and equipment
|
(15,090
|
)
|
|
(16,521
|
)
|
||
Other
|
(825
|
)
|
|
(1,670
|
)
|
||
Total deferred tax liabilities
|
(142,048
|
)
|
|
(165,186
|
)
|
||
Net deferred tax assets
|
$
|
130,697
|
|
|
$
|
86,025
|
|
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
Balance at beginning of year
|
$
|
52,088
|
|
|
$
|
49,046
|
|
|
$
|
37,585
|
|
Increases related to prior year tax positions
|
2,185
|
|
|
426
|
|
|
4,794
|
|
|||
Decreases related to prior year tax positions
|
(1,115
|
)
|
|
(804
|
)
|
|
(223
|
)
|
|||
Increases related to current year tax positions
|
10,584
|
|
|
8,756
|
|
|
7,503
|
|
|||
Decreases related to lapse of statute of limitations
|
(7,600
|
)
|
|
(5,336
|
)
|
|
(613
|
)
|
|||
Balance at end of year
|
$
|
56,142
|
|
|
$
|
52,088
|
|
|
$
|
49,046
|
|
11.
|
Employee Benefit Plans
|
12.
|
Segment Information, Geographic Data, and Significant Customers
|
|
Years Ended
|
||||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29,
2013 |
||||||
United States
|
$
|
1,207,373
|
|
|
$
|
950,703
|
|
|
$
|
714,662
|
|
Europe
|
527,406
|
|
|
466,536
|
|
|
354,682
|
|
|||
Asia-Pacific
|
379,575
|
|
|
342,702
|
|
|
276,442
|
|
|||
Other markets
|
105,408
|
|
|
101,417
|
|
|
75,392
|
|
|||
Total
|
$
|
2,219,762
|
|
|
$
|
1,861,358
|
|
|
$
|
1,421,178
|
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
United States
|
$
|
273,193
|
|
|
$
|
204,717
|
|
United Kingdom
|
33,271
|
|
|
31,965
|
|
||
Singapore
|
30,127
|
|
|
22,326
|
|
||
Other countries
|
6,103
|
|
|
6,256
|
|
||
Total
|
$
|
342,694
|
|
|
$
|
265,264
|
|
13.
|
Quarterly Financial Information (unaudited)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue
|
$
|
538,565
|
|
|
$
|
539,378
|
|
|
$
|
550,271
|
|
|
$
|
591,548
|
|
Gross profit
|
$
|
375,027
|
|
|
$
|
376,365
|
|
|
$
|
387,539
|
|
|
$
|
410,359
|
|
Consolidated net income
|
$
|
136,658
|
|
|
$
|
102,247
|
|
|
$
|
115,621
|
|
|
$
|
102,864
|
|
Net loss attributable to noncontrolling interests
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,556
|
|
|
$
|
1,613
|
|
Net income attributable to Illumina stockholders
|
$
|
136,658
|
|
|
$
|
102,247
|
|
|
$
|
118,177
|
|
|
$
|
104,477
|
|
Earnings per share attributable to Illumina stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.95
|
|
|
$
|
0.71
|
|
|
$
|
0.81
|
|
|
$
|
0.72
|
|
Diluted
|
$
|
0.92
|
|
|
$
|
0.69
|
|
|
$
|
0.79
|
|
|
$
|
0.70
|
|
2014
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
420,781
|
|
|
$
|
447,568
|
|
|
$
|
480,630
|
|
|
$
|
512,379
|
|
Gross profit
|
$
|
278,292
|
|
|
$
|
300,540
|
|
|
$
|
333,941
|
|
|
$
|
384,937
|
|
Net income
|
$
|
59,977
|
|
|
$
|
46,605
|
|
|
$
|
93,489
|
|
|
$
|
153,280
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.47
|
|
|
$
|
0.36
|
|
|
$
|
0.66
|
|
|
$
|
1.08
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.31
|
|
|
$
|
0.63
|
|
|
$
|
1.03
|
|
14.
|
Subsequent Events
|
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 Expenses/(Reductions from
Revenue)(1)
|
|
Deductions(2)
|
|
Balance at
End of
Period
|
||||||
|
(In thousands)
|
||||||||||||
Year ended January 3, 2016
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
5,459
|
|
|
3,213
|
|
|
(459
|
)
|
|
$
|
8,213
|
|
Year ended December 28, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
$
|
3,680
|
|
|
1,870
|
|
|
(91
|
)
|
|
$
|
5,459
|
|
Year ended December 29, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||
Allowance for doubtful accounts
|
$
|
4,280
|
|
|
(422
|
)
|
|
(178
|
)
|
|
$
|
3,680
|
|
(1)
|
Additions to and reductions from allowance for doubtful accounts are recorded to selling, general and administrative expense.
|
(2)
|
Deductions for allowance for doubtful accounts are for accounts receivable written off.
|
INDEX TO EXHIBITS — (Continued)
|
|||||||||||||
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit
|
|
|
|
|
|
|
|
|
|
Filing
|
|
Filed
|
|
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Date
|
|
Herewith
|
|
+10.9
|
|
Form of Stock Option Agreement for Employees under 2005 Stock and Incentive Plan
|
|
10-K
|
|
001-35406
|
|
10.9
|
|
|
2/24/2012
|
|
|
+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
|
|
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
|
|
|
10.21
|
|
Settlement and Release Agreement between Affymetrix, Inc. and Illumina, dated January 9, 2008
|
|
10-K
|
|
000-30361
|
|
10.44
|
|
|
2/26/2008
|
|
|
10.22
|
|
Amended and Restated Lease Agreement, dated March 27, 2012, between ARE-SD Region No. 32, LLC and Illumina
|
|
10-Q
|
|
001-35406
|
|
10.1
|
|
|
5/3/2012
|
|
|
10.23
|
|
First Amendment to Amended and Restated Lease Agreement, dated March 27, 2012, between ARE-SD Region No. 32, LLC and Illumina
|
|
10-K
|
|
001-35406
|
|
10.23
|
|
|
2/18/2015
|
|
|
10.24
|
|
Second Amendment to Amended and Restated Lease Agreement, dated March 27, 2012, between ARE-SD Region No. 32, LLC and Illumina
|
|
10-K
|
|
001-35406
|
|
10.24
|
|
|
2/18/2015
|
|
|
+10.25
|
|
Deferred Compensation Plan, effective December 1, 2007
|
|
14D-9
|
|
005-60457
|
|
99(e)(6)
|
|
|
2/7/2012
|
|
|
10.26
|
|
Lease between BMR-Lincoln Centre LP and Illumina, dated December 30, 2014
|
|
10-K
|
|
001-35406
|
|
10.26
|
|
|
2/18/2015
|
|
|
INDEX TO EXHIBITS — (Continued)
|
|||||||||||||
|
|
|
|
Incorporated by Reference
|
|
|
|||||||
Exhibit
|
|
|
|
|
|
|
|
|
|
Filing
|
|
Filed
|
|
Number
|
|
Exhibit Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Date
|
|
Herewith
|
|
10.27
|
|
Pooled Patents Agreement between Illumina and Sequenom, Inc., dated December 2, 2014 (with certain confidential portions omitted)
|
|
10-K
|
|
001-35406
|
|
10.27
|
|
|
2/18/2015
|
|
|
10.28
|
|
Agreement for Lease between Granta Park Park Jco 1 Limited and Illumina, dated June 25, 2015
|
|
10-Q
|
|
001-35406
|
|
10.1
|
|
|
7/31/2015
|
|
|
10.29
|
|
Third Amendment to Lease between ARE-SD Region No. 32, LLC and Illumina, dated September 2, 2015
|
|
|
|
|
|
|
|
|
|
X
|
|
10.30
|
|
First Amendment to Lease between BMR-Lincoln Center LP and Illumina, dated February 23, 2016
|
|
|
|
|
|
|
|
|
|
X
|
|
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
Chief Executive Officer and Chairman of the Board of Directors
|
/s/ J
AY
T. F
LATLEY
|
|
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
|
March 2, 2016
|
Jay T. Flatley
|
|
|
|
|
|
|
|
|
|
/s/ M
ARC
A. S
TAPLEY
|
|
Executive Vice President, Chief Administrative Officer and Chief Financial Officer
(Principal Financial Officer)
|
|
March 2, 2016
|
Marc A. Stapley
|
|
|
|
|
|
|
|
|
|
/s/ M
ICHEL
B
OUCHARD
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
|
March 2, 2016
|
Michel Bouchard
|
|
|
|
|
|
|
|
|
|
/s/ F
RANCIS
A. D
ESOUZA
|
|
President and Director
|
|
March 2, 2016
|
Francis A. deSouza
|
|
|
|
|
|
|
|
|
|
/s/ FRANCES ARNOLD
|
|
Director
|
|
March 2, 2016
|
Frances Arnold
|
|
|
|
|
|
|
|
|
|
/s/ A. B
LAINE
B
OWMAN
|
|
Director
|
|
March 2, 2016
|
A. Blaine Bowman
|
|
|
|
|
|
|
|
|
|
/s/ D
ANIEL
M. B
RADBURY
|
|
Director
|
|
March 2, 2016
|
Daniel M. Bradbury
|
|
|
|
|
|
|
|
|
|
/s/ K
ARIN
E
ASTHAM
|
|
Director
|
|
March 2, 2016
|
Karin Eastham
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
March 2, 2016
|
Robert S. Epstein
|
|
|
|
|
|
|
|
|
|
/s/ D
AVID
R. W
ALT
|
|
Director
|
|
March 2, 2016
|
David R. Walt
|
|
|
|
|
|
|
|
|
|
/s/ R
OY
W
HITFIELD
|
|
Director
|
|
March 2, 2016
|
Roy Whitfield
|
|
|
|
|
1.
|
Construction of P1 Parking Structure
. Landlord consented to Tenant’s request for Tenant to construct at the Project, at Tenant’s sole cost and expense, the P1 Parking Structure in a good and workman like manner, lien free and in compliance with all Legal Requirements. Tenant was required to and represents and warrants to Landlord that Tenant named Landlord a third party beneficiary of the contracts entered into with architect, general contractor and subcontractors, and of any warranty made by any the architect, general contractor or any subcontractors in connection with the construction of the P1 Parking Structure.
|
2.
|
No Removal
. Notwithstanding anything to the contrary contained in the Lease, Tenant shall have no obligation or right to remove the P1 Parking Structure, and Tenant shall be required, at Tenant’s sole cost and expense, to maintain the P1 Parking Structure at all times in good condition and repair (including repairing any construction defects) during the Term.
|
3.
|
Brokers
. Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “
Broker
”) in connection with the transaction reflected in this Third Amendment and that no Broker brought about this transaction, other than Cushman & Wakefield. Landlord and Tenant each hereby agrees to indemnify and hold the other harmless from and against any claims by any Broker claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this leasing transaction. Tenant shall be responsible for all commissions, if any, due to Cushman & Wakefield arising out of the execution of this Third Amendment.
|
4.
|
Disclosure
. For purposes of Section 1938 of the California Civil Code, as of the date of this Amendment, Tenant acknowledges having been advised by Landlord that the Project has not been inspected by a certified access specialist.
|
5.
|
Miscellaneous
.
|
By:
|
ARE-QRS CORP.,
|
|
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction
|
|
Doing Business As
|
|
||||
Advanced Liquid Logic Inc.
|
|
Delaware
|
|
Advanced Liquid Logic Inc.
|
BlueGnome, Ltd.
|
|
United Kingdom
|
|
BlueGnome, Ltd.
|
Epicentre Technologies Corporation
|
|
Wisconsin
|
|
Epicentre Biotechnologies
|
GenoLogics Life Science Software Inc.
|
|
Canada
|
|
GenoLogics Life Science Software 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.
|
|
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 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
|
NextBio
|
|
California
|
|
NextBio
|
Verinata Health, Inc.
|
|
Delaware
|
|
Verinata Health, Inc.
|
(1)
|
Registration Statements (Form S-3 Nos. 333-111496, 333-125100, 333-134012, 333-144953, 333-145408 and 333-168395) of Illumina, Inc.,
|
(2)
|
Registration Statement (Form S-4 No. 333-139111) of Illumina, Inc., and
|
(3)
|
Registration Statements (Form S-8 Nos. 333-42866, 333-69058, 333-88808, 333-104190, 333-114633, 333-124074, 333-125133, 333-129611, 333-134399, 333-140416, 333-147389, 333-151625, 333-159662, 333-168393, 333-188037, 333-190322, and 333-206215) of Illumina, Inc.;
|
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.
|
|
By:
|
|
/s/ J
AY
T. F
LATLEY
|
|
|
|
Jay T. Flatley
|
|
|
|
Chief Executive Officer and Chairman of the Board of Directors
|
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.
|
|
By:
|
|
/s/ M
ARC
A. S
TAPLEY
|
|
|
|
Marc A. Stapley
|
|
|
|
Executive Vice President & Chief Administrative Officer and Chief Financial 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:
|
|
/s/ J
AY
T. F
LATLEY
|
|
|
|
Jay T. Flatley
|
|
|
|
Chief Executive Officer and Chairman of the Board of Directors
|
(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/ M
ARC
A. S
TAPLEY
|
|
|
|
Marc A. Stapley
|
|
|
|
Executive Vice President & Chief Administrative Officer and Chief Financial Officer
|