Cover Page
Cover Page - shares shares in Millions | 6 Months Ended | |
Jul. 04, 2021 | Jul. 30, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 4, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-35406 | |
Entity Registrant Name | Illumina, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0804655 | |
Entity Address, Address Line One | 5200 Illumina Way | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92122 | |
City Area Code | 858 | |
Local Phone Number | 202-4500 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | ILMN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146.7 | |
Entity Central Index Key | 0001110803 | |
Current Fiscal Year End Date | --01-02 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 4,196 | $ 1,810 |
Short-term investments | 90 | 1,662 |
Accounts receivable, net | 540 | 487 |
Inventory | 380 | 372 |
Prepaid expenses and other current assets | 104 | 152 |
Total current assets | 5,310 | 4,483 |
Property and equipment, net | 915 | 922 |
Operating lease right-of-use assets | 566 | 532 |
Goodwill | 966 | 897 |
Intangible assets, net | 162 | 142 |
Other assets | 756 | 609 |
Total assets | 8,675 | 7,585 |
Current liabilities: | ||
Accounts payable | 200 | 192 |
Accrued liabilities | 674 | 541 |
Convertible senior notes, current portion | 0 | 511 |
Total current liabilities | 874 | 1,244 |
Operating lease liabilities | 704 | 671 |
Term notes | 992 | 0 |
Convertible senior notes | 687 | 673 |
Other long-term liabilities | 238 | 303 |
Stockholders’ equity: | ||
Common stock | 2 | 2 |
Additional paid-in capital | 3,993 | 3,815 |
Accumulated other comprehensive income | 8 | 2 |
Retained earnings | 5,055 | 4,723 |
Treasury stock, at cost | (3,878) | (3,848) |
Total stockholders’ equity | 5,180 | 4,694 |
Total liabilities and stockholders’ equity | $ 8,675 | $ 7,585 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Revenue: | ||||
Total revenue | $ 1,126 | $ 633 | $ 2,219 | $ 1,492 |
Cost of revenue: | ||||
Amortization of acquired intangible assets | 7 | 7 | 13 | 14 |
Total cost of revenue | 324 | 205 | 653 | 445 |
Gross profit | 802 | 428 | 1,566 | 1,047 |
Operating expense: | ||||
Research and development | 202 | 155 | 398 | 311 |
Selling, general and administrative | 413 | 177 | 787 | 451 |
Total operating expense | 615 | 332 | 1,185 | 762 |
Income from operations | 187 | 96 | 381 | 285 |
Other income (expense): | ||||
Interest income | 0 | 7 | 0 | 21 |
Interest expense | (16) | (11) | (34) | (22) |
Other income, net | 36 | 73 | 31 | 58 |
Total other income (expense), net | 20 | 69 | (3) | 57 |
Income before income taxes | 207 | 165 | 378 | 342 |
Provision for income taxes | 22 | 118 | 45 | 122 |
Net income | $ 185 | $ 47 | $ 333 | $ 220 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.27 | $ 0.32 | $ 2.28 | $ 1.50 |
Diluted (in dollars per share) | $ 1.26 | $ 0.32 | $ 2.26 | $ 1.49 |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 146 | 147 | 146 | 147 |
Diluted (in shares) | 147 | 148 | 147 | 148 |
Product revenue | ||||
Revenue: | ||||
Total revenue | $ 972 | $ 527 | $ 1,925 | $ 1,228 |
Cost of revenue: | ||||
Cost of revenue | 254 | 152 | 519 | 326 |
Service and other revenue | ||||
Revenue: | ||||
Total revenue | 154 | 106 | 294 | 264 |
Cost of revenue: | ||||
Cost of revenue | $ 63 | $ 46 | $ 121 | $ 105 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 185 | $ 47 | $ 333 | $ 220 |
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | 0 | 8 | (1) | 9 |
Unrealized gain on cash flow hedges, net of deferred tax | 0 | 0 | 7 | 0 |
Total comprehensive income | $ 185 | $ 55 | $ 339 | $ 229 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings | Treasury Stock |
Beginning balance (in shares) at Dec. 29, 2019 | 194 | 47 | ||||
Beginning balance at Dec. 29, 2019 | $ 4,613 | $ 2 | $ 3,560 | $ 5 | $ 4,067 | $ (3,021) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 173 | 173 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | 1 | 1 | ||||
Issuance of common stock, net of repurchases | (191) | 32 | $ (223) | |||
Share-based compensation | 39 | 39 | ||||
Ending balance (in shares) at Mar. 29, 2020 | 194 | 47 | ||||
Ending balance at Mar. 29, 2020 | 4,635 | $ 2 | 3,631 | 6 | 4,240 | $ (3,244) |
Beginning balance (in shares) at Dec. 29, 2019 | 194 | 47 | ||||
Beginning balance at Dec. 29, 2019 | 4,613 | $ 2 | 3,560 | 5 | 4,067 | $ (3,021) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 220 | |||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | 9 | |||||
Unrealized gain on cash flow hedges, net of deferred tax | 0 | |||||
Ending balance (in shares) at Jun. 28, 2020 | 194 | 48 | ||||
Ending balance at Jun. 28, 2020 | 4,563 | $ 2 | 3,649 | 14 | 4,287 | $ (3,389) |
Beginning balance (in shares) at Mar. 29, 2020 | 194 | 47 | ||||
Beginning balance at Mar. 29, 2020 | 4,635 | $ 2 | 3,631 | 6 | 4,240 | $ (3,244) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 47 | 47 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | 8 | 8 | ||||
Unrealized gain on cash flow hedges, net of deferred tax | 0 | |||||
Issuance of common stock, net of repurchases (in shares) | 1 | |||||
Issuance of common stock, net of repurchases | (143) | 2 | $ (145) | |||
Share-based compensation | 16 | 16 | ||||
Ending balance (in shares) at Jun. 28, 2020 | 194 | 48 | ||||
Ending balance at Jun. 28, 2020 | 4,563 | $ 2 | 3,649 | 14 | 4,287 | $ (3,389) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 179 | 179 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | (2) | (2) | ||||
Issuance of common stock, net of repurchases | (101) | 27 | $ (128) | |||
Share-based compensation | 61 | 61 | ||||
Ending balance (in shares) at Sep. 27, 2020 | 194 | 48 | ||||
Ending balance at Sep. 27, 2020 | 4,700 | $ 2 | 3,737 | 12 | 4,466 | $ (3,517) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 257 | 257 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | (10) | (10) | ||||
Issuance of common stock, net of repurchases (in shares) | 1 | 1 | ||||
Issuance of common stock, net of repurchases | (331) | $ 0 | $ (331) | |||
Share-based compensation | 78 | 78 | ||||
Ending balance (in shares) at Jan. 03, 2021 | 195 | 49 | ||||
Ending balance at Jan. 03, 2021 | 4,694 | $ 2 | 3,815 | 2 | 4,723 | $ (3,848) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 147 | 147 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | (1) | (1) | ||||
Unrealized gain on cash flow hedges, net of deferred tax | 7 | 7 | ||||
Issuance of common stock, net of repurchases | 7 | 31 | $ (24) | |||
Share-based compensation | 68 | 68 | ||||
Ending balance (in shares) at Apr. 04, 2021 | 195 | 49 | ||||
Ending balance at Apr. 04, 2021 | 4,922 | $ 2 | 3,914 | 8 | 4,870 | $ (3,872) |
Beginning balance (in shares) at Jan. 03, 2021 | 195 | 49 | ||||
Beginning balance at Jan. 03, 2021 | 4,694 | $ 2 | 3,815 | 2 | 4,723 | $ (3,848) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 333 | |||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | (1) | |||||
Unrealized gain on cash flow hedges, net of deferred tax | 7 | |||||
Ending balance (in shares) at Jul. 04, 2021 | 196 | 49 | ||||
Ending balance at Jul. 04, 2021 | 5,180 | $ 2 | 3,993 | 8 | 5,055 | $ (3,878) |
Beginning balance (in shares) at Apr. 04, 2021 | 195 | 49 | ||||
Beginning balance at Apr. 04, 2021 | 4,922 | $ 2 | 3,914 | 8 | 4,870 | $ (3,872) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 185 | 185 | ||||
Unrealized gain (loss) on available-for-sale debt securities, net of deferred tax | 0 | |||||
Unrealized gain on cash flow hedges, net of deferred tax | 0 | |||||
Issuance of common stock, net of repurchases (in shares) | 1 | |||||
Issuance of common stock, net of repurchases | (6) | $ (6) | ||||
Share-based compensation | 79 | 79 | ||||
Ending balance (in shares) at Jul. 04, 2021 | 196 | 49 | ||||
Ending balance at Jul. 04, 2021 | $ 5,180 | $ 2 | $ 3,993 | $ 8 | $ 5,055 | $ (3,878) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jul. 04, 2021 | Jun. 28, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 333 | $ 220 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 82 | 75 |
Amortization of intangible assets | 15 | 15 |
Share-based compensation expense | 147 | 55 |
Accretion of debt discount on convertible senior notes | 19 | 19 |
Deferred income taxes | (156) | 47 |
Losses (gains) on equity securities | 44 | (69) |
(Gain) loss on derivative assets related to terminated acquisition | (26) | 107 |
Other | (17) | (12) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (61) | 190 |
Inventory | (9) | (75) |
Prepaid expenses and other current assets | 6 | 3 |
Operating lease right-of-use assets and liabilities, net | (5) | (7) |
Other assets | (7) | (23) |
Accounts payable | 12 | (13) |
Accrued liabilities | 162 | (41) |
Other long-term liabilities | (4) | 30 |
Net cash provided by operating activities | 535 | 521 |
Cash flows from investing activities: | ||
Maturities of available-for-sale securities | 331 | 218 |
Purchases of available-for-sale securities | (77) | (547) |
Sales of available-for-sale securities | 1,031 | 287 |
Cash received (paid for) derivative assets related to terminated acquisition | 52 | (132) |
Purchases of property and equipment | (86) | (79) |
Purchases of strategic investments | (12) | (107) |
Sales of strategic investments | 220 | 0 |
Net cash paid for acquisitions | (80) | (95) |
Net cash provided by (used in) investing activities | 1,379 | (455) |
Cash flows from financing activities: | ||
Net proceeds from issuance of debt | 988 | 0 |
Payments on convertible senior notes | (517) | 0 |
Common stock repurchases | 0 | (330) |
Taxes paid related to net share settlement of equity awards | (30) | (38) |
Proceeds from issuance of common stock | 31 | 34 |
Net cash provided by (used in) financing activities | 472 | (334) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (4) |
Net increase (decrease) in cash and cash equivalents | 2,386 | (272) |
Cash and cash equivalents at beginning of period | 1,810 | 2,042 |
Cash and cash equivalents at end of period | $ 4,196 | $ 1,770 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jul. 04, 2021 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Business Overview We are a provider of sequencing- and array-based solutions, serving customers in the research, clinical and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture and other emerging segments. Our customers include leading genomic research centers, academic institutions, government laboratories, and hospitals, as well as pharmaceutical, biotechnology, commercial molecular diagnostic laboratories, and consumer genomics companies . Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the fiscal year ended January 3, 2021, from which the prior year balance sheet information herein was derived. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expense, and related disclosure of contingent assets and liabilities. Though the impact of the COVID-19 pandemic to our business and operating results presents additional uncertainty, we continue to use the best information available to inform our critical accounting estimates. Actual results could differ from those estimates. The unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, and majority-owned or controlled companies. All intercompany transactions and balances have been eliminated in consolidation. We operate under one operating segment and report under one reportable segment. Certain prior period amounts have been reclassified to conform to the current period presentation. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. Fiscal Year Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. References to Q2 2021 and Q2 2020 refer to the three months ended July 4, 2021 and June 28, 2020, respectively, which were both 13 weeks, and references to year-to-date (YTD) 2021 and 2020 refer to the six months ended July 4, 2021 and June 28, 2020, respectively, which were both 26 weeks. Significant Accounting Policies During YTD 2021, there were no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended January 3, 2021. Accounting Pronouncements Pending Adoption In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). The new standard reduces the number of accounting models for convertible debt instruments, amends the accounting for certain contracts in an entity’s own equity, and modifies how certain convertible instruments and contracts that may be settled in cash or shares impact the calculation of diluted EPS. The standard is effective for us beginning in the first quarter of 2022, with early adoption permitted in Q1 2021. We did not elect to early adopt the standard in Q1 2021. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements. Earnings per Share Basic earnings per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under convertible senior notes and equity awards. Convertible senior notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercise of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares. The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Weighted average shares outstanding 146 147 146 147 Effect of potentially dilutive common shares from: Equity awards — 1 — 1 Convertible senior notes 1 — 1 — Weighted average shares used in calculating diluted earnings per share 147 148 147 148 Potentially dilutive shares excluded from calculation due to anti-dilutive effect — — — 1 |
Revenue
Revenue | 6 Months Ended |
Jul. 04, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. REVENUE Our revenue is generated primarily from the sale of products and services. Product revenue primarily consists of sales of instruments and consumables used in genetic analysis. Service and other revenue primarily consists of revenue generated from genotyping and sequencing services, instrument service contracts, and development and licensing agreements. Revenue by Source Q2 2021 Q2 2020 In millions Sequencing Microarray Total Sequencing Microarray Total Consumables $ 704 $ 74 $ 778 $ 387 $ 49 $ 436 Instruments 189 5 194 88 3 91 Total product revenue 893 79 972 475 52 527 Service and other revenue 128 26 154 91 15 106 Total revenue $ 1,021 $ 105 $ 1,126 $ 566 $ 67 $ 633 YTD 2021 YTD 2020 In millions Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,399 $ 153 $ 1,552 $ 940 $ 116 $ 1,056 Instruments 365 8 373 166 6 172 Total product revenue 1,764 161 1,925 1,106 122 1,228 Service and other revenue 236 58 294 219 45 264 Total revenue $ 2,000 $ 219 $ 2,219 $ 1,325 $ 167 $ 1,492 Revenue by Geographic Area Based on region of destination (in millions) Q2 2021 Q2 2020 YTD 2021 YTD 2020 Americas $ 589 $ 335 $ 1,151 $ 812 Europe, Middle East, and Africa 320 168 625 389 Greater China (1) 132 79 259 163 Asia-Pacific 85 51 184 128 Total revenue $ 1,126 $ 633 $ 2,219 $ 1,492 _____________ (1) Region includes revenue from China, Taiwan, and Hong Kong. Performance Obligations We regularly enter into contracts with multiple performance obligations. Most performance obligations are generally satisfied within a short time frame, approximately three Contract Liabilities Contract liabilities, which consist of deferred revenue and customer deposits, as of July 4, 2021 and January 3, 2021 were $227 million and $230 million, respectively, of which the short-term portions of $182 million and $186 million, respectively, were recorded in accrued liabilities and the remaining long-term portions were recorded in other long-term liabilities. Revenue recorded in Q2 2021 and YTD 2021 included $45 million and $127 million, respectively, of previously deferred revenue that was included in contract liabilities as of January 3, 2021. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 6 Months Ended |
Jul. 04, 2021 | |
Fair Value Disclosures [Abstract] | |
Investments and Fair Value Measurements | 3. INVESTMENTS AND FAIR VALUE MEASUREMENTS Debt Securities Our short-term investments include available-for-sale debt securities that consisted of the following: July 4, 2021 January 3, 2021 In millions Amortized Gross Estimated Amortized Gross Estimated Debt securities in government-sponsored entities $ — $ — $ — $ 10 $ — $ 10 Corporate debt securities — — — 445 — 445 U.S. Treasury securities — — — 830 1 831 Total $ — $ — $ — $ 1,285 $ 1 $ 1,286 During Q1 2021, we sold all of our available-for-sale debt securities in anticipation of funding the pending GRAIL acquisition. See Pending Acquisition below for further details. Realized gains and losses are determined based on the specific-identification method and are reported in interest income. Strategic Investments Marketable Equity Securities As of July 4, 2021 and January 3, 2021, the fair value of our marketable equity securities, included in short-term investments, totaled $90 million and $376 million, respectively. Total unrealized losses on our marketable equity securities, included in other income, net, were $3 million and $61 million in Q2 2021 and YTD 2021, respectively. Total unrealized gains on our marketable equity securities were $66 million and $69 million in Q2 2020 and YTD 2020, respectively. Total net gains on marketable equity securities sold, included in other income, net, were $7 million in Q2 2021 and total net losses were $7 million in YTD 2021. There were no sales of our marketable equity securities in YTD 2020. Non-Marketable Equity Securities As of July 4, 2021 and January 3, 2021, the aggregate carrying amounts of our non-marketable equity securities without readily determinable fair values, included in other assets, were $338 million and $314 million, respectively. One of our investments, GRAIL, is a VIE for which we have concluded that we are not the primary beneficiary and, therefore, we do not consolidate GRAIL in our consolidated financial statements. In September 2020, we entered into an agreement to acquire GRAIL, as described in Pending Acquisition below. We have determined our maximum exposure to loss, excluding any amounts associated with the pending acquisition, to be the carrying value of our investment, which was $250 million as of both July 4, 2021 and January 3, 2021. Revenue recognized from transactions with our strategic investees was $22 million and $35 million for Q2 2021 and YTD 2021, respectively, and $10 million and $23 million for Q2 2020 and YTD 2020, respectively. Venture Funds We invest in two venture capital investment funds (the Funds) with capital commitments of $100 million, callable through April 2026, and up to $150 million, callable through July 2029, respectively, of which $23 million and up to $130 million, respectively, remained callable as of July 4, 2021. Our investments in the Funds are accounted for as equity-method investments. The aggregate carrying amounts of the Funds, included in other assets, were $144 million and $104 million as of July 4, 2021 and January 3, 2021, respectively. Contingent Value Right In conjunction with the deconsolidation of Helix Holdings I, LLC (Helix) in April 2019, we received a contingent value right with a 7-year term that entitles us to consideration dependent upon the outcome of Helix’s future financing and/or liquidity events. Changes in the fair value of the contingent value right resulted in unrealized gains of $8 million and $18 million in Q2 2021 and YTD 2021, respectively, and unrealized gains of $8 million and $5 million in Q2 2020 and YTD 2020, respectively, included in other income, net. Derivative Assets Related to Terminated Acquisition On November 1, 2018, we entered into an Agreement and Plan of Merger (the PacBio Merger Agreement ) to acquire Pacific Biosciences of California, Inc. (PacBio) for an all-cash price of approximately $1.2 billion (or $8.00 per share). On January 2, 2020, we entered into an agreement to terminate the PacBio Merger Agreement (the Termination Agreement ). Pursuant to the Termination Agreement, we made a cash payment to PacBio of $98 million on January 2, 2020, which represented the Reverse Termination Fee (as defined in the PacBio Merger Agreement). The Reverse Termination Fee was repayable, without interest, if PacBio entered into a definitive agreement providing for, or consummating, a Change of Control Transaction by September 30, 2020 (as defined in the Termination Agreement), and such transaction was consummated by the two-year anniversary of the execution of the definitive agreement for such Change of Control Transaction. PacBio did not enter into a definitive agreement that provided for, or consummated, a Change of Control Transaction by September 30, 2020 (as defined in the Termination Agreement); therefore, the Reverse Termination Fee is no longer repayable. In addition, we made cash payments to PacBio of $18 million in Q4 2019, pursuant to Amendment No. 1 to the PacBio Merger Agreement , and $34 million in Q1 2020, pursuant to the Termination Agreement, collectively referred to as the Continuation Advances. Up to the $52 million of Continuation Advances was repayable, without interest, if, within two years of March 31, 2020, PacBio entered into a Change of Control Transaction or raised at least $100 million in equity or debt financing in a single transaction (with the amount repayable dependent on the amount raised by PacBio). In February 2021, PacBio entered into an investment agreement with SB Northstar LP for the issuance and sale of $900 million in aggregate principal amount of PacBio’s convertible notes. Pursuant to the PacBio Merger Agreement, PacBio repaid to us the $52 million of Continuation Advances and we recorded a gain of $26 million in Q1 2021, included in other income, net. The potential repayments of the Continuation Advances and Reverse Termination Fee met the definition of derivative assets and were recorded at fair value. The $92 million difference between the $132 million in cash paid during Q1 2020 for the Continuation Advances and Reverse Termination Fee and the $40 million fair value of these derivative assets on the payment dates was recorded as selling, general and administrative expenses in Q1 2020. Changes in the fair value of the derivative assets were included in other income, net. Unrealized losses of $11 million and $15 million were recorded in Q2 2020 and YTD 2020, respectively. Pending Acquisition On September 20, 2020, we entered into an Agreement and Plan of Merger (the GRAIL Merger Agreement ) to acquire GRAIL for $8 billion, consisting of $3.5 billion in cash and $4.5 billion in shares of Illumina common stock, subject to a collar. The cash consideration for the transaction is expected to be funded using existing cash of both Illumina and GRAIL, plus up to $1 billion in capital raised in Q1 2021 through the issuance of term debt. Refer to note, “ 4. Debt ” for details. The transaction is subject to certain customary closing conditions, including GRAIL shareholder approval and receipt of required regulatory approvals. Refer to note, “ 7. Legal Proceedings ” for further details. In connection with the transaction, GRAIL stockholders will receive contingent value rights, which will entitle holders to receive future payments representing a pro rata portion of certain revenues each year for a 12-year period. This will reflect a 2.5% payment right to the first $1 billion of revenue each year for 12 years. Revenue above $1 billion each year will be subject to a 9% contingent payment right during this same period. Pursuant to the GRAIL Merger Agreement, we have offered GRAIL stockholders the option to receive additional stock consideration in lieu of the contingent value rights. Such additional stock consideration would be a number of shares valued, pursuant to an agreed formula, at $850 million in aggregate, subject to a cap of 3,035,714 shares. We are required to make monthly cash payments to GRAIL of $35 million (the Continuation Payments) through the earlier of the consummation of the acquisition or termination of the GRAIL Merger Agreement, subject to certain exceptions. We made Continuation Payments to GRAIL totaling $105 million and $210 million in Q2 2021 and YTD 2021, respectively, which were recorded as selling, general and administrative expenses. In July 2021, we made an additional monthly payment of $35 million. If the GRAIL Merger Agreement is terminated, we will receive shares of non-voting GRAIL preferred stock in respect of all Continuation Payments in excess of $315 million, subject to certain terms and conditions. The GRAIL Merger Agreement contains certain termination rights if the consummation of the acquisition does not occur on or before September 20, 2021, subject to a three-month extension related to obtaining certain required regulatory clearances. Upon termination of the GRAIL Merger Agreement under specified circumstances, we would be required to pay a termination fee of $300 million and make an additional $300 million investment in GRAIL in exchange for shares of non-voting GRAIL preferred stock, subject to certain terms and conditions. Fair Value Measurements The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis: July 4, 2021 January 3, 2021 In millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 3,798 $ — $ — $ 3,798 $ 1,512 $ — $ — $ 1,512 Debt securities in government-sponsored entities — — — — — 10 — 10 Corporate debt securities — — — — — 445 — 445 U.S. Treasury securities — — — — 831 — — 831 Marketable equity securities 90 — — 90 376 — — 376 Contingent value right — — 53 53 — — 35 35 Derivative assets related to terminated acquisition — — — — — — 26 26 Deferred compensation plan assets — 58 — 58 — 55 — 55 Total assets measured at fair value $ 3,888 $ 58 $ 53 $ 3,999 $ 2,719 $ 510 $ 61 $ 3,290 Liabilities: Acquisition related contingent consideration liability $ — $ — $ 14 $ 14 $ — $ — $ — $ — Deferred compensation plan liability — 55 — 55 — 51 — 51 Total liabilities measured at fair value $ — $ 55 $ 14 $ 69 $ — $ 51 $ — $ 51 We consider information provided by our investment accounting and reporting service provider in the measurement of fair value of our debt securities. The investment service provider provides valuation information from an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. Our marketable equity securities are measured at fair value based on quoted trade prices in active markets. Our deferred compensation plan assets consist primarily of investments in life insurance contracts carried at cash surrender value, which reflects the net asset value of the underlying publicly traded mutual funds. We perform control procedures to corroborate the fair value of our holdings, including comparing valuations obtained from our investment service provider to valuations reported by our asset custodians, validating pricing sources and models, and reviewing key model inputs, if necessary. We elected the fair value option to measure the contingent value right received from Helix. The fair value of our contingent value right, included in other assets, is derived using a Monte Carlo simulation. The derivative assets related to the terminated acquisition of PacBio were financial instruments measured at fair value, included in other assets. Significant estimates and assumptions required for these valuations include, but are not limited to, probabilities related to the timing and outcome of future financing and/or liquidity events and an assumption regarding collectibility. These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. As a result of an acquisition completed in Q2 2021, we recorded a contingent consideration liability of $14 million, included in accrued liabilities. The acquisition date fair value of the contingent consideration liability was derived using the income approach. Assumptions used to estimate the liability included the probability of achieving certain milestones and a discount rate. These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. Any change in the fair value of the contingent consideration subsequent to the acquisition date is recognized in selling, general and administrative expenses. There was no change in the fair value of the contingent consideration in Q2 2021. |
Debt
Debt | 6 Months Ended |
Jul. 04, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 4. DEBT Summary of Term Debt Obligations In millions July 4, Principal amount of 2031 Term Notes outstanding $ 500 Principal amount of 2023 Term Notes outstanding 500 Unamortized discounts and debt issuance costs (8) Net carrying amount of term notes 992 Less: current portion — Term notes, non-current $ 992 Fair value of term notes outstanding (Level 2) $ 1,010 0.550% Term Notes due 2023 (2023 Term Notes) and 2.550% Term Notes due 2031 (2031 Term Notes) On March 23, 2021, we issued $500 million aggregate principal amount of term notes due 2023 (2023 Term Notes) and $500 million aggregate principal amount of term notes due 2031 (2031 Term Notes, together the Term Notes). We received net proceeds from the issuance of $992 million, after deducting discounts and debt issuance costs. The 2023 and 2031 Term Notes accrue interest at a rate of 0.550% and 2.550% per annum, respectively, payable semi-annually. Interest is payable on March 23 and September 23 of each year, beginning on September 23, 2021. The 2023 Term Notes mature on March 23, 2023 and the 2031 Term Notes mature on March 23, 2031. We may redeem for cash all or any portion of the Term Notes, at our option, at any time prior to maturity. The 2023 Term Notes and, prior to December 23, 2030, the 2031 Term Notes are redeemable at make-whole premium redemption prices as defined in the applicable forms of note. After December 23, 2030, the 2031 Term Notes are redeemable at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest up to, but excluding, the redemption date. Interest expense recognized on the Term Notes was $4 million and $5 million during Q2 2021 and YTD 2021, respectively, which included amortization of debt discounts and issuance costs. Summary of Convertible Debt Obligations In millions July 4, January 3, Principal amount of 2023 Convertible Senior Notes outstanding $ 750 $ 750 Principal amount of 2021 Convertible Senior Notes outstanding — 517 Unamortized discount of liability component of convertible senior notes (63) (83) Net carrying amount of liability component of convertible senior notes 687 1,184 Less: current portion — (511) Convertible senior notes, non-current $ 687 $ 673 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 126 $ 213 Fair value of convertible senior notes outstanding (Level 2) $ 951 $ 1,595 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 2.1 years 2.4 years Interest expense recognized on the Convertible Senior Notes, which included amortization of debt discounts and issuance costs, was $10 million and $21 million during Q2 2021 and YTD 2021, respectively, and $11 million and $22 million during Q2 2020 and YTD 2020, respectively. 0% Convertible Senior Notes due 2023 (2023 Convertible Notes) In August 2018, we issued $750 million aggregate principal amount of convertible senior notes due 2023 (2023 Convertible Notes). The 2023 Convertible Notes mature on August 15, 2023, and the implied estimated effective rate of the liability component of the notes was 3.7%, assuming no conversion option. The 2023 Convertible Notes will be convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate, subject to adjustment, of 2.1845 shares of common stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $457.77 per share of common stock), only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price in effect on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2023 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events described in the indenture. Regardless of the foregoing circumstances, the holders may convert their notes on or after May 15, 2023 until August 11, 2023. We may redeem for cash all or any portion of the 2023 Convertible Notes, at our option, on or after August 20, 2021 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect (currently $595.10) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. The 2023 Convertible Notes were not convertible as of July 4, 2021 and had no dilutive impact during YTD 2021. If the notes were converted as of July 4, 2021, the if-converted value would not exceed the principal amount. 0.5% Convertible Senior Notes due 2021 (2021 Convertible Notes) In June 2014, we issued $517 million aggregate principal amount of convertible senior notes due 2021 (2021 Convertible Notes). The implied estimated effective rate of the liability component of the notes was 3.5%, assuming no conversion option. The 2021 Convertible Notes were convertible into cash, shares of common stock, or a combination of cash and shares of common stock, at our election, based on conversion rates as defined in the indenture. The 2021 Convertible Notes matured on June 15, 2021, by which time the principal had been converted and was repaid in cash. The excess of the conversion value over the principal amount was paid in shares of common stock. The following table summarizes information about the conversions during YTD 2021: In millions 2021 Notes Cash paid for principal of notes converted $ 517 Conversion value over principal amount, paid in shares of common stock $ 313 Number of shares of common stock issued upon conversion 0.7 Loss on extinguishment of debt $ 1 Credit Agreement On March 8, 2021, we entered into a credit agreement (the Credit Agreement), which provides us with a $750 million senior unsecured five-year revolving credit facility, including a $40 million sublimit for swingline borrowings and a $50 million sublimit for letters of credit (the Credit Facility). The proceeds of the loans under the Credit Facility may be used to finance working capital needs and for general corporate purposes. Any loans under the Credit Facility will have a variable interest rate based on either the eurocurrency rate or the alternate base rate, plus an applicable spread that varies with the Company’s debt rating. The Credit Agreement includes an option for us to elect to increase the commitments under the Credit Facility or to enter into one or more tranches of term loans in the aggregate principal amount of up to $250 million, subject to the consent of the lenders providing the additional commitments or term loans, as applicable, and certain other conditions. The Credit Agreement contains financial and operating covenants. Pursuant to the Credit Agreement, we are required to maintain a ratio of total debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA), calculated based on the four consecutive fiscal quarters ending with the most recent fiscal quarter, of not greater than 3.50 to 1.00 as of the end of each fiscal quarter. Upon the consummation of any Qualified Acquisition (as defined in the Credit Agreement) and us providing notice to the Administrative Agent, the ratio increases to 4.00 to 1.00 for the fiscal quarter in which the acquisition is consummated and the three consecutive fiscal quarters thereafter. The operating covenants include, among other things, limitations on (i) the incurrence of indebtedness by our subsidiaries, (ii) liens on our and our subsidiaries assets, and (iii) certain fundamental changes and the disposition of assets by us and our subsidiaries. The Credit Agreement contains other customary covenants, representations and warranties, and events of default. The Credit Facility matures, and all amounts outstanding thereunder become due and payable in full, on March 8, 2026, subject to two one-year extensions at our option, the consent of the extending lenders and certain other conditions. We may prepay amounts borrowed and terminate commitments under the Credit Facility at any time without premium or penalty. As of July 4, 2021, there were no borrowings outstanding under the Credit Facility, and we were in compliance with all financial and operating covenants. Bridge Facility In advance of the acquisition of GRAIL, we obtained a bridge facility commitment letter from Goldman Sachs Bank USA for a 364-day senior unsecured bridge loan facility, in an aggregate principal amount of $1 billion. The bridge facility commitment letter was subject to certain conditions, including consummation of the acquisition pursuant to the GRAIL Merger Agreement. On March 23, 2021, we terminated the bridge facility commitment letter in conjunction with the issuance of the 2023 and 2031 Term Notes. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jul. 04, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 5. STOCKHOLDERS’ EQUITY As of July 4, 2021, approximately 3.5 million shares remained available for future grants under the 2015 Stock Plan. Restricted Stock Restricted stock activity was as follows: Restricted Performance Stock Units (PSU) (1) Weighted-Average Grant Date Fair Value per Share Units in thousands RSU PSU Outstanding at January 3, 2021 1,721 — $ 313.35 — Awarded 97 428 $ 431.51 $ 474.86 Vested (73) — $ 268.96 — Cancelled (159) (20) $ 314.25 $ 482.69 Outstanding at July 4, 2021 1,586 408 $ 322.49 $ 474.48 _____________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Awarded units are presented net of performance adjustments. Stock Options Stock option activity was as follows: Units in thousands Options Weighted-Average Outstanding at January 3, 2021 10 $ 59.11 Exercised (1) $ 24.58 Outstanding and exercisable at July 4, 2021 9 $ 63.45 Employee Stock Purchase Plan The price at which common stock is purchased under the Employee Stock Purchase Plan (ESPP) is equal to 85% of the fair market value of the common stock on the first day of the offering period or purchase date, whichever is lower. During YTD 2021, approximately 0.1 million shares were issued under the ESPP. As of July 4, 2021, there were approximately 13.1 million shares available for issuance under the ESPP. Share Repurchases On February 5, 2020, our Board of Directors authorized a new share repurchase program, which supersedes all prior and available repurchase authorizations, to repurchase $750 million of outstanding common stock. The repurchases may be completed under a 10b5-1 plan or at management’s discretion. We did not repurchase any shares during YTD 2021. Authorizations to repurchase approximately $15 million of our common stock remained available as of July 4, 2021. Share-based Compensation Share-based compensation expense reported in our condensed consolidated statements of income was as follows: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Cost of product revenue $ 8 $ 3 $ 15 $ 7 Cost of service and other revenue 1 1 2 2 Research and development 26 12 50 27 Selling, general and administrative 45 1 80 19 Share-based compensation expense before taxes 80 17 147 55 Related income tax benefits (15) (6) (28) (15) Share-based compensation expense, net of taxes $ 65 $ 11 $ 119 $ 40 In February 2021, we modified the metrics and reduced the maximum potential payouts for our performance stock units granted in 2019 and 2020, which vest at the end of the three-year periods ended January 2, 2022 and January 1, 2023, respectively. The modifications affected 52 employees with units granted in 2019, which resulted in total incremental share-based compensation cost of approximately $41 million, and 72 employees with units granted in 2020, which resulted in total incremental share-based compensation cost of approximately $65 million. The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the ESPP during YTD 2021 were as follows: Employee Stock Purchase Rights Risk-free interest rate 0.08% - 1.46% Expected volatility 32% - 47% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average grant-date fair value per share $ 114.48 As of July 4, 2021, approximately $554 million of total unrecognized compensation cost related to restricted stock and ESPP shares issued to date was expected to be recognized over a weighted-average period of approximately 2.2 years. |
Supplemental Balance Sheet Deta
Supplemental Balance Sheet Details | 6 Months Ended |
Jul. 04, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Details | 6. SUPPLEMENTAL BALANCE SHEET DETAILS Accounts Receivable In millions July 4, January 3, Trade accounts receivable, gross $ 542 $ 491 Allowance for credit losses (2) (4) Total accounts receivable, net $ 540 $ 487 Inventory In millions July 4, January 3, Raw materials $ 79 $ 106 Work in process 278 244 Finished goods 23 22 Total inventory $ 380 $ 372 Intangible Assets and Goodwill We recorded an in-process research and development (IPR&D) intangible asset of $35 million, with an indefinite useful life, as a result of an acquisition in Q2 2021. We capitalize IPR&D and either amortize it over the life of the product upon commercialization or impair it if the project is abandoned. Changes to goodwill during YTD 2021 were as follows: In millions Goodwill Balance as of January 3, 2021 $ 897 Acquisition 69 Balance as of July 4, 2021 $ 966 Goodwill is reviewed for impairment at least annually during the second quarter, or more frequently if an event occurs indicating the potential for impairment. We performed our annual assessment for goodwill impairment in Q2 2021, noting no impairment. Accrued Liabilities In millions July 4, January 3, Accrued compensation expenses $ 195 $ 153 Contract liabilities, current portion 182 186 Accrued taxes payable 127 68 Operating lease liabilities, current portion 53 51 Acquisition related contingent liability 14 — Other, including warranties (a) 103 83 Total accrued liabilities $ 674 $ 541 (a) Changes in the reserve for product warranties were as follows: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Balance at beginning of period $ 15 $ 12 $ 13 $ 14 Additions charged to cost of product revenue 7 2 15 5 Repairs and replacements (6) (4) (12) (9) Balance at end of period $ 16 $ 10 $ 16 $ 10 We generally provide a one-year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six Derivative Financial Instruments We are exposed to foreign exchange rate risks in the normal course of business and use derivative financial instruments to partially offset this exposure. We do not use derivative financial instruments for speculative or trading purposes. All foreign exchange contracts are carried at fair value in other current assets or accrued liabilities on the condensed consolidated balance sheets. We use foreign exchange forward contracts to manage foreign currency risks related to monetary assets and liabilities denominated in currencies other than the U.S. dollar. These derivative financial instruments have terms of one month or less and are not designated as hedging instruments. Changes in fair value of these derivatives are recognized in other income, net, along with the re-measurement gain or loss on the foreign currency denominated assets or liabilities. As of July 4, 2021, we had foreign exchange forward contracts in place to hedge exposures in the euro, Japanese yen, Australian dollar, Canadian dollar, Singapore dollar, Chinese Yuan Renminbi, and British pound. As of July 4, 2021 and January 3, 2021, the total notional amounts of outstanding forward contracts in place for these foreign currency purchases were $533 million and $405 million, respectively. We also use foreign currency forward contracts to hedge portions of our foreign currency exposure associated with forecasted revenue transactions. These derivative financial instruments have terms up to 24 months and are designated as cash flow hedges. Changes in fair value of our cash flow hedges are recorded as a component of accumulated other comprehensive income and are reclassified to revenue in the same period the underlying hedged transactions are recorded. We regularly review the effectiveness of our cash flow hedges and consider them to be ineffective if it becomes probable that the forecasted transactions will not occur in the identified period. Changes in fair value of the ineffective portions of our cash flow hedges, if any, will be recognized in other income, net. As of July 4, 2021, we had foreign currency forward contracts in place to hedge exposures associated with forecasted revenue transactions denominated in the euro, Japanese yen, Australian dollar, and Canadian dollar. As of July 4, 2021 and January 3, 2021, the total notional amounts of outstanding cash flow hedge contracts in place for these foreign currency purchases were $396 million and $305 million, respectively. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jul. 04, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 7. LEGAL PROCEEDINGS We are involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, we assess, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the consolidated financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures in consideration of many factors, which include, but are not limited to, past history, scientific and other evidence, and the specifics and status of each matter. We may change our estimates if our assessment of the various factors changes and the amount of ultimate loss may differ from our estimates, resulting in a material effect on our business, financial condition, results of operations, and/or cash flows. Pending Acquisition of GRAIL On March 30, 2021, the Federal Trade Commission (the FTC) filed an administrative complaint and a motion for a preliminary injunction in the United States District Court for the District of Columbia. In both actions, the FTC alleged that our acquisition of GRAIL would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18. We filed an answer to the FTC’s complaint in federal district court on April 6, 2021, and in the administrative court on April 13, 2021. On April 20, 2021, the United States District Court for the District of Columbia granted our motion to transfer venue to the United States District Court for the Southern District of California. On May 28, 2021, the district court granted the FTC’s motion to dismiss the complaint without prejudice. The administrative trial is scheduled to commence on August 24, 2021. If the administrative court rules in favor of the FTC, and the FTC subsequently affirms that decision prior to completion of the acquisition of GRAIL, the completion of the acquisition may be delayed for a significant period of time (including beyond the outside date under the Merger Agreement of September 20, 2021, which may be extended by three months in certain circumstances (the Outside Date) or any alternative outside date to which we and GRAIL may agree, after which either we or GRAIL may terminate the Merger Agreement), or, if affirmed on appeal to a U.S. Court of Appeals, prevented from occurring. Additionally, the FTC may re-file a motion for injunctive relief in federal district court at any time prior to completion of the acquisition of GRAIL, which, if granted, may delay the completion of such acquisition for a significant period of time (including beyond the Outside Date or any alternative outside date to which we and GRAIL may agree) or prevent it from occurring. We intend to vigorously defend the FTC actions. On April 19, 2021, the European Commission accepted a request for a referral of the GRAIL acquisition for European Union merger review, submitted by a Member State of the European Union (France), and joined by several other Member States (Belgium, Greece, Iceland, the Netherlands and Norway), under Article 22(1) of Council Regulation (EC) No 139/2004 (the EU Merger Regulation). On April 29, 2021, we filed an action in the General Court of the European Union (the General Court) asking for annulment of the European Commission’s assertion of jurisdiction to review the acquisition under Article 22 of the EU Merger Regulation, as the acquisition does not meet the jurisdictional criteria under the EU Merger Regulation or under the national merger control laws of any Member State of the European Union. The date of our hearing before the General Court has not yet been set. If the General Court decides in favor of the European Commission, or such decision is not received on a timely basis, then the European Commission’s review of the acquisition will continue and, depending on the outcome of such review, the acquisition may be delayed for a significant period of time (including beyond the Outside Date or any alternative outside date to which we and GRAIL may agree) or prevented from occurring. We intend to vigorously challenge the European Commission’s assertion of jurisdiction. BGI Genomics Co. Ltd. and its Affiliates We are involved in lawsuits against BGI Genomics Co. Ltd (BGI) and its affiliates, including Complete Genomics, Inc. (CGI), in the United States and elsewhere. On June 27, 2019, we filed suit against BGI in the United States District Court for the Northern District of California, alleging that certain BGI sequencing products infringe our U.S. Patent No. 7,566,537 (‘537 patent) and U.S. Patent No. 9,410,200 (‘200 patent). BGI has denied our claims and has counterclaimed that our technology infringes U.S. Patent No. 9,944,984 (‘984 patent). We deny their allegations. On February 27, 2020, we filed a second patent infringement suit against BGI in the United States District Court for the Northern District of California alleging that BGI sequencing products infringed U.S. Patent 7,771,973 (‘973 patent), U.S. Patent 7,541,444 (‘444 patent), and U.S. Patent 10,480,025 (‘025 patent). On June 15, 2020, the Court granted our motions requesting preliminary injunctions against BGI, finding that our patents were likely valid and infringed by BGI’s chemistries. The injunction prohibits the sale of BGI’s sequencers and sequencing reagents in the US. On December 9, 2020, BGI filed a motion to amend its answer to our second suit to include allegations that the ‘444 and ‘937 patents are unenforceable under the doctrine of unequitable conduct; we deny BGI’s allegations. As of April 12, 2021, BGI is seeking approximately $54 million in alleged damages and an ongoing royalty of 3.6% on sales of the accused products by us in the United States until the ‘984 patent expires on June 13, 2026. We deny that we owe any damages or ongoing royalty. On June 16, 2021, the parties filed motions for partial summary judgment. A summary judgment hearing was held on July 21, 2021, and the parties are awaiting a ruling from the Court. Trial is scheduled to begin November 15, 2021. On January 11, 2021, Complete Genomics, Inc., BGI Americas Corp., and MGI Americas, Inc. also filed a complaint in the United States District Court for the Northern District of California alleging the Company and its subsidiary Illumina Cambridge Ltd. violated federal antitrust and state unfair competition laws. CGI and these affiliates allege that the Company fraudulently withheld a prior art reference that was material to patentability for the ‘444 and ‘973 patents. They also allege that our infringement claims of the ‘025 against BGI’s “CoolMPS” chemistry were objectively baseless. The Company denies the allegations in the complaint. On March 30, 2021, the Court stayed the antitrust case pending resolution of the underlying patent infringement suit taking place in the same court. On May 28, 2019, CGI filed suit against us in the United States District Court for the District of Delaware alleging that our two-channel sequencing systems, including the NovaSeq, NextSeq, and MiniSeq systems, infringe certain claims of U.S. Patent No. 9,222,132. We have denied CGI’s allegations and have counterclaimed for infringement by CGI, BGI Americas Corp., and MGI Americas, Inc. of U.S. Patent No. 9,303,290, U.S. Patent No. 9,217,178, and U.S. Patent No. 9,970,055. On August 15, 2019, CGI filed a motion to dismiss our counterclaims. On August 29, 2019, we filed our Opposition to the Motion to Dismiss. The Court denied and granted the motion in part, denying the motion as to our claims for inducing infringement and granting it for contributory infringement. The Court gave us leave to file an amended complaint to attempt to cure the alleged deficiencies as to contributory infringement. On July 1, 2020, CGI amended its complaint to add claims of infringement of U.S. Patent No. 10,662,473 by our two-channel sequencing systems. We deny these allegations. As of May 12, 2021, CGI is seeking $225.4 million in alleged past damages and an average ongoing royalty of 5.5% on sales of the accused two-channel sequencing instruments and chemistry in the U.S. until the patents-in-suit expire on January 28, 2029. We deny that we owe any damages or ongoing royalty. Trial is scheduled to begin April 18, 2022. We will continue to pursue our claims against BGI and CGI, and vigorously defend against BGI’s and CGI’s claims. We currently cannot estimate any possible loss or range of loss that may result from BGI’s and CGI’s claims against us. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 04, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income. The effective tax rates for Q2 2021 and YTD 2021 were 10.8% and 11.8%, respectively. The variances from the U.S. federal statutory tax rate of 21% in Q2 2021 and YTD 2021 were primarily attributable to discrete tax benefits related to GRAIL Continuation Payments and the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore and the United Kingdom. For YTD 2021, this was partially offset by tax expense on certain foreign subsidiary earnings that are no longer indefinitely reinvested. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 04, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. |
Consolidation | The unaudited condensed consolidated financial statements include our accounts, our wholly-owned subsidiaries, and majority-owned or controlled companies. All intercompany transactions and balances have been eliminated in consolidation. We operate under one operating segment and report under one reportable segment. Certain prior period amounts have been reclassified to conform to the current period presentation. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. |
Fiscal Year | Our fiscal year is the 52 or 53 weeks ending the Sunday closest to December 31, with quarters of 13 or 14 weeks ending the Sunday closest to March 31, June 30, September 30, and December 31. |
Accounting Pronouncements and Pending Adoption | Accounting Pronouncements Pending Adoption In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). The new standard reduces the number of accounting models for convertible debt instruments, amends the accounting for certain contracts in an entity’s own equity, and modifies how certain convertible instruments and contracts that may be settled in cash or shares impact the calculation of diluted EPS. The standard is effective for us beginning in the first quarter of 2022, with early adoption permitted in Q1 2021. We did not elect to early adopt the standard in Q1 2021. We are currently evaluating the impact of ASU 2020-06 on our consolidated financial statements. |
Earnings per Share | Basic earnings per share is computed based on the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under convertible senior notes and equity awards. Convertible senior notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from equity awards are determined using the average share price for each period under the treasury stock method. In addition, proceeds from exercise of equity awards and the average amount of unrecognized compensation expense for equity awards are assumed to be used to repurchase shares. |
Warranties | We generally provide a one-year warranty on instruments. Additionally, we provide a warranty on consumables through the expiration date, which generally ranges from six |
Derivatives | We are exposed to foreign exchange rate risks in the normal course of business and use derivative financial instruments to partially offset this exposure. We do not use derivative financial instruments for speculative or trading purposes. All foreign exchange contracts are carried at fair value in other current assets or accrued liabilities on the condensed consolidated balance sheets. |
Intangible Assets | We capitalize IPR&D and either amortize it over the life of the product upon commercialization or impair it if the project is abandoned. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Accounting Policies [Abstract] | |
Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share, Earnings Per Share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Weighted average shares outstanding 146 147 146 147 Effect of potentially dilutive common shares from: Equity awards — 1 — 1 Convertible senior notes 1 — 1 — Weighted average shares used in calculating diluted earnings per share 147 148 147 148 Potentially dilutive shares excluded from calculation due to anti-dilutive effect — — — 1 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue by Source Q2 2021 Q2 2020 In millions Sequencing Microarray Total Sequencing Microarray Total Consumables $ 704 $ 74 $ 778 $ 387 $ 49 $ 436 Instruments 189 5 194 88 3 91 Total product revenue 893 79 972 475 52 527 Service and other revenue 128 26 154 91 15 106 Total revenue $ 1,021 $ 105 $ 1,126 $ 566 $ 67 $ 633 YTD 2021 YTD 2020 In millions Sequencing Microarray Total Sequencing Microarray Total Consumables $ 1,399 $ 153 $ 1,552 $ 940 $ 116 $ 1,056 Instruments 365 8 373 166 6 172 Total product revenue 1,764 161 1,925 1,106 122 1,228 Service and other revenue 236 58 294 219 45 264 Total revenue $ 2,000 $ 219 $ 2,219 $ 1,325 $ 167 $ 1,492 Revenue by Geographic Area Based on region of destination (in millions) Q2 2021 Q2 2020 YTD 2021 YTD 2020 Americas $ 589 $ 335 $ 1,151 $ 812 Europe, Middle East, and Africa 320 168 625 389 Greater China (1) 132 79 259 163 Asia-Pacific 85 51 184 128 Total revenue $ 1,126 $ 633 $ 2,219 $ 1,492 _____________ (1) Region includes revenue from China, Taiwan, and Hong Kong. |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Short-term Investments | Our short-term investments include available-for-sale debt securities that consisted of the following: July 4, 2021 January 3, 2021 In millions Amortized Gross Estimated Amortized Gross Estimated Debt securities in government-sponsored entities $ — $ — $ — $ 10 $ — $ 10 Corporate debt securities — — — 445 — 445 U.S. Treasury securities — — — 830 1 831 Total $ — $ — $ — $ 1,285 $ 1 $ 1,286 |
Schedule of Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the hierarchy for assets and liabilities measured at fair value on a recurring basis: July 4, 2021 January 3, 2021 In millions Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 3,798 $ — $ — $ 3,798 $ 1,512 $ — $ — $ 1,512 Debt securities in government-sponsored entities — — — — — 10 — 10 Corporate debt securities — — — — — 445 — 445 U.S. Treasury securities — — — — 831 — — 831 Marketable equity securities 90 — — 90 376 — — 376 Contingent value right — — 53 53 — — 35 35 Derivative assets related to terminated acquisition — — — — — — 26 26 Deferred compensation plan assets — 58 — 58 — 55 — 55 Total assets measured at fair value $ 3,888 $ 58 $ 53 $ 3,999 $ 2,719 $ 510 $ 61 $ 3,290 Liabilities: Acquisition related contingent consideration liability $ — $ — $ 14 $ 14 $ — $ — $ — $ — Deferred compensation plan liability — 55 — 55 — 51 — 51 Total liabilities measured at fair value $ — $ 55 $ 14 $ 69 $ — $ 51 $ — $ 51 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | Summary of Term Debt Obligations In millions July 4, Principal amount of 2031 Term Notes outstanding $ 500 Principal amount of 2023 Term Notes outstanding 500 Unamortized discounts and debt issuance costs (8) Net carrying amount of term notes 992 Less: current portion — Term notes, non-current $ 992 Fair value of term notes outstanding (Level 2) $ 1,010 Summary of Convertible Debt Obligations In millions July 4, January 3, Principal amount of 2023 Convertible Senior Notes outstanding $ 750 $ 750 Principal amount of 2021 Convertible Senior Notes outstanding — 517 Unamortized discount of liability component of convertible senior notes (63) (83) Net carrying amount of liability component of convertible senior notes 687 1,184 Less: current portion — (511) Convertible senior notes, non-current $ 687 $ 673 Carrying value of equity component of convertible senior notes, net of debt issuance costs $ 126 $ 213 Fair value of convertible senior notes outstanding (Level 2) $ 951 $ 1,595 Weighted-average remaining amortization period of discount on the liability component of convertible senior notes 2.1 years 2.4 years |
Schedule of Debt Conversions | The following table summarizes information about the conversions during YTD 2021: In millions 2021 Notes Cash paid for principal of notes converted $ 517 Conversion value over principal amount, paid in shares of common stock $ 313 Number of shares of common stock issued upon conversion 0.7 Loss on extinguishment of debt $ 1 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Equity [Abstract] | |
Schedule of Restricted Stock Activity and Related Information, Restricted Stock | Restricted stock activity was as follows: Restricted Performance Stock Units (PSU) (1) Weighted-Average Grant Date Fair Value per Share Units in thousands RSU PSU Outstanding at January 3, 2021 1,721 — $ 313.35 — Awarded 97 428 $ 431.51 $ 474.86 Vested (73) — $ 268.96 — Cancelled (159) (20) $ 314.25 $ 482.69 Outstanding at July 4, 2021 1,586 408 $ 322.49 $ 474.48 _____________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Awarded units are presented net of performance adjustments. |
Schedule of Restricted Stock Activity and Related Information, Performance Units | Restricted stock activity was as follows: Restricted Performance Stock Units (PSU) (1) Weighted-Average Grant Date Fair Value per Share Units in thousands RSU PSU Outstanding at January 3, 2021 1,721 — $ 313.35 — Awarded 97 428 $ 431.51 $ 474.86 Vested (73) — $ 268.96 — Cancelled (159) (20) $ 314.25 $ 482.69 Outstanding at July 4, 2021 1,586 408 $ 322.49 $ 474.48 _____________ (1) The number of units reflect the estimated number of shares to be issued at the end of the performance period. Awarded units are presented net of performance adjustments. |
Schedule of Stock Option Activity Under all Stock Option Plans | Stock option activity was as follows: Units in thousands Options Weighted-Average Outstanding at January 3, 2021 10 $ 59.11 Exercised (1) $ 24.58 Outstanding and exercisable at July 4, 2021 9 $ 63.45 |
Schedule of Share-based Compensation Expense for all Stock Awards | Share-based compensation expense reported in our condensed consolidated statements of income was as follows: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Cost of product revenue $ 8 $ 3 $ 15 $ 7 Cost of service and other revenue 1 1 2 2 Research and development 26 12 50 27 Selling, general and administrative 45 1 80 19 Share-based compensation expense before taxes 80 17 147 55 Related income tax benefits (15) (6) (28) (15) Share-based compensation expense, net of taxes $ 65 $ 11 $ 119 $ 40 |
Schedule of Assumptions used to Estimate the Weighted-Average Fair Value Per Share for Stock Purchase under the Employee Stock Purchase Plan | The assumptions used for the specified reporting periods and the resulting estimates of weighted-average fair value per share for stock purchased under the ESPP during YTD 2021 were as follows: Employee Stock Purchase Rights Risk-free interest rate 0.08% - 1.46% Expected volatility 32% - 47% Expected term 0.5 - 1.0 year Expected dividends 0 % Weighted-average grant-date fair value per share $ 114.48 |
Supplemental Balance Sheet De_2
Supplemental Balance Sheet Details (Tables) | 6 Months Ended |
Jul. 04, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts Receivable In millions July 4, January 3, Trade accounts receivable, gross $ 542 $ 491 Allowance for credit losses (2) (4) Total accounts receivable, net $ 540 $ 487 |
Summary of Inventory | Inventory In millions July 4, January 3, Raw materials $ 79 $ 106 Work in process 278 244 Finished goods 23 22 Total inventory $ 380 $ 372 |
Schedule of Goodwill | Changes to goodwill during YTD 2021 were as follows: In millions Goodwill Balance as of January 3, 2021 $ 897 Acquisition 69 Balance as of July 4, 2021 $ 966 |
Summary of Accrued Liabilities | Accrued Liabilities In millions July 4, January 3, Accrued compensation expenses $ 195 $ 153 Contract liabilities, current portion 182 186 Accrued taxes payable 127 68 Operating lease liabilities, current portion 53 51 Acquisition related contingent liability 14 — Other, including warranties (a) 103 83 Total accrued liabilities $ 674 $ 541 (a) Changes in the reserve for product warranties were as follows: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Balance at beginning of period $ 15 $ 12 $ 13 $ 14 Additions charged to cost of product revenue 7 2 15 5 Repairs and replacements (6) (4) (12) (9) Balance at end of period $ 16 $ 10 $ 16 $ 10 |
Summary of Changes in Reserve for Product Warranties | Changes in the reserve for product warranties were as follows: In millions Q2 2021 Q2 2020 YTD 2021 YTD 2020 Balance at beginning of period $ 15 $ 12 $ 13 $ 14 Additions charged to cost of product revenue 7 2 15 5 Repairs and replacements (6) (4) (12) (9) Balance at end of period $ 16 $ 10 $ 16 $ 10 |
Organization and Significant _4
Organization and Significant Accounting Policies - Narrative (Details) | 6 Months Ended |
Jul. 04, 2021segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Organization and Significant _5
Organization and Significant Accounting Policies - Summary of Calculation of Weighted Average Shares used to Calculate Basic and Diluted Earnings Per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Weighted average shares used to calculate basic and diluted earnings per share | ||||
Weighted average shares outstanding (in shares) | 146 | 147 | 146 | 147 |
Effect of potentially dilutive common shares from: | ||||
Equity awards (in shares) | 0 | 1 | 0 | 1 |
Convertible senior notes (in shares) | 1 | 0 | 1 | 0 |
Weighted average shares used in calculating diluted earnings per share (in shares) | 147 | 148 | 147 | 148 |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect (in shares) | 0 | 0 | 0 | 1 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,126 | $ 633 | $ 2,219 | $ 1,492 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 589 | 335 | 1,151 | 812 |
Europe, Middle East, and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 320 | 168 | 625 | 389 |
Greater China | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 132 | 79 | 259 | 163 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 85 | 51 | 184 | 128 |
Consumables | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 778 | 436 | 1,552 | 1,056 |
Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 194 | 91 | 373 | 172 |
Total product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 972 | 527 | 1,925 | 1,228 |
Service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 154 | 106 | 294 | 264 |
Sequencing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,021 | 566 | 2,000 | 1,325 |
Sequencing | Consumables | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 704 | 387 | 1,399 | 940 |
Sequencing | Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 189 | 88 | 365 | 166 |
Sequencing | Total product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 893 | 475 | 1,764 | 1,106 |
Sequencing | Service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 128 | 91 | 236 | 219 |
Microarray | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 105 | 67 | 219 | 167 |
Microarray | Consumables | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 74 | 49 | 153 | 116 |
Microarray | Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5 | 3 | 8 | 6 |
Microarray | Total product revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 79 | 52 | 161 | 122 |
Microarray | Service and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 26 | $ 15 | $ 58 | $ 45 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) $ in Millions | 6 Months Ended |
Jul. 04, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 1,139 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Product or service delivery period | 3 years |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Product or service delivery period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-05 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of remaining performance obligation | 90.00% |
Expected timing of remaining performance obligation | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-05 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of remaining performance obligation | 7.00% |
Expected timing of remaining performance obligation | 12 months |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jul. 04, 2021 | Jul. 04, 2021 | Jan. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, liability | $ 227 | $ 227 | $ 230 |
Contract liabilities, current portion | 182 | 182 | $ 186 |
Revenue recognized | $ 45 | $ 127 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Summary of Short-term Investments (Details) - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Available-for-sale debt securities: | ||
Amortized Cost | $ 0 | $ 1,285 |
Gross Unrealized Gains | 0 | 1 |
Estimated Fair Value | 0 | 1,286 |
Debt securities in government-sponsored entities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 0 | 10 |
Gross Unrealized Gains | 0 | 0 |
Estimated Fair Value | 0 | 10 |
Corporate debt securities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 0 | 445 |
Gross Unrealized Gains | 0 | 0 |
Estimated Fair Value | 0 | 445 |
U.S. Treasury securities | ||
Available-for-sale debt securities: | ||
Amortized Cost | 0 | 830 |
Gross Unrealized Gains | 0 | 1 |
Estimated Fair Value | $ 0 | $ 831 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Narrative (Details) | Sep. 20, 2020USD ($)shares | Jan. 02, 2020USD ($) | Apr. 25, 2019 | Nov. 01, 2018USD ($)$ / shares | Jul. 31, 2021USD ($) | Mar. 02, 2020USD ($) | Jul. 04, 2021USD ($) | Apr. 04, 2021USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Jul. 04, 2021USD ($)fund | Jun. 28, 2020USD ($) | Dec. 29, 2019USD ($) | Feb. 28, 2021USD ($) | Jan. 03, 2021USD ($) |
Schedule of Investments [Line Items] | |||||||||||||||
Marketable equity securities | $ 90,000,000 | $ 90,000,000 | $ 376,000,000 | ||||||||||||
Marketable equity securities unrealized (losses) and gains | (3,000,000) | $ 66,000,000 | (61,000,000) | $ 69,000,000 | |||||||||||
Gains (losses) on marketable equity securities | 7,000,000 | (7,000,000) | 0 | ||||||||||||
Strategic equity investments, without readily determinable fair values | 338,000,000 | $ 338,000,000 | 314,000,000 | ||||||||||||
Number of venture capital investment funds | fund | 2 | ||||||||||||||
Equity method investments | 144,000,000 | $ 144,000,000 | 104,000,000 | ||||||||||||
(Gain) loss on derivative assets related to terminated acquisition | 26,000,000 | (107,000,000) | |||||||||||||
Acquisition related contingent liability current | 14,000,000 | 14,000,000 | 0 | ||||||||||||
Pacific Biosciences of California, Inc (PacBio) | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Cash payments | $ 1,200,000,000 | $ 34,000,000 | $ 132,000,000 | $ 18,000,000 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 8 | ||||||||||||||
Loss on contract termination | $ 98,000,000 | ||||||||||||||
Business combination, contingent consideration arrangements, maximum outcome | 52,000,000 | ||||||||||||||
Equity or debt financing to be raised | $ 100,000,000 | ||||||||||||||
Derivative asset | $ 40,000,000 | ||||||||||||||
Pacific Biosciences of California, Inc (PacBio) | Selling, General and Administrative | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
(Gain) loss on derivative assets related to terminated acquisition | (92,000,000) | ||||||||||||||
Pacific Biosciences of California, Inc (PacBio) | Other Operating Income (Expense) | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
(Gain) loss on derivative assets related to terminated acquisition | (11,000,000) | (15,000,000) | |||||||||||||
GRAIL Inc | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Contingent value right, terms | 12 years | ||||||||||||||
Cash payments | $ 3,500,000,000 | ||||||||||||||
Merger agreement consideration | 8,000,000,000 | ||||||||||||||
Business combination, equity interests issued and issuable (in shares) | 4,500,000,000 | ||||||||||||||
Capital raised | 1,000,000,000 | ||||||||||||||
Business acquisition, contingent value rights, stock consideration aggregate value | $ 850,000,000 | ||||||||||||||
Business acquisition, contingent value rights (in shares) | shares | 3,035,714 | ||||||||||||||
Business combination, continuation payments | $ 35,000,000 | ||||||||||||||
Business combination, threshold of continuation payments | 315,000,000 | ||||||||||||||
Termination fee | 300,000,000 | ||||||||||||||
Investment to be made if merger does not occur | $ 300,000,000 | ||||||||||||||
GRAIL Inc | Subsequent Event | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Business combination, continuation payments | $ 35,000,000 | ||||||||||||||
GRAIL Inc | Payment Rights Of One Billion, Each Twelve Years | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Contingent payment rights, first percentage | 2.50% | ||||||||||||||
Business acquisition, contingent value rights, revenue threshold | $ 1,000,000,000 | ||||||||||||||
GRAIL Inc | Payment Rights Of Above One Billion, Each Twelve Years | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Business acquisition, contingent value rights, revenue threshold | $ 1,000,000,000 | ||||||||||||||
Contingent payment rights, second percentage | 9.00% | ||||||||||||||
GRAIL Inc | Selling, General and Administrative | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Business combination, continuation payments | 105,000,000 | 210,000,000 | |||||||||||||
Helix Holdings I, LLC | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Contingent value right, terms | 7 years | ||||||||||||||
Unrealized gain (loss) from contingent value right | 8,000,000 | 8,000,000 | 18,000,000 | 5,000,000 | |||||||||||
Pacific Biosciences of California, Inc (PacBio) | S B Northstar L P | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangements, maximum outcome | $ 52,000,000 | ||||||||||||||
(Gain) loss on derivative assets related to terminated acquisition | $ 26,000,000 | ||||||||||||||
Pacific Biosciences of California, Inc (PacBio) | S B Northstar L P | Convertible Senior Notes | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Principal amount of notes outstanding | $ 900,000,000 | ||||||||||||||
Venture Capital Investment Fund (the Fund) | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Commitment in new venture capital investment fund | 100,000,000 | 100,000,000 | |||||||||||||
Remaining capital commitment | 23,000,000 | 23,000,000 | |||||||||||||
Second Venture Capital Investment Fund | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Commitment in new venture capital investment fund | 150,000,000 | 150,000,000 | |||||||||||||
Remaining capital commitment | 130,000,000 | 130,000,000 | |||||||||||||
Investee | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Revenue from transactions with strategic investees | 22,000,000 | $ 10,000,000 | 35,000,000 | $ 23,000,000 | |||||||||||
Variable Interest Entity, Primary Beneficiary | GRAIL, Inc. | |||||||||||||||
Schedule of Investments [Line Items] | |||||||||||||||
Net assets | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 |
Investments and Fair Value Me_5
Investments and Fair Value Measurements - Fair Value Hierarchy of Assets and Liabilities (Details) - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Assets: | ||
Available-for-sale securities | $ 0 | $ 1,286 |
Marketable equity securities | 90 | 376 |
Debt securities in government-sponsored entities | ||
Assets: | ||
Available-for-sale securities | 0 | 10 |
Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 0 | 445 |
U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 0 | 831 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Marketable equity securities | 90 | 376 |
Contingent value right | 53 | 35 |
Derivative assets related to terminated acquisition | 0 | 26 |
Deferred compensation plan assets | 58 | 55 |
Total assets measured at fair value | 3,999 | 3,290 |
Liabilities: | ||
Acquisition related contingent consideration liability | 14 | 0 |
Deferred compensation plan liability | 55 | 51 |
Total liabilities measured at fair value | 69 | 51 |
Fair Value, Measurements, Recurring | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 3,798 | 1,512 |
Fair Value, Measurements, Recurring | Debt securities in government-sponsored entities | ||
Assets: | ||
Available-for-sale securities | 0 | 10 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 0 | 445 |
Fair Value, Measurements, Recurring | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 0 | 831 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Marketable equity securities | 90 | 376 |
Contingent value right | 0 | 0 |
Derivative assets related to terminated acquisition | 0 | 0 |
Deferred compensation plan assets | 0 | 0 |
Total assets measured at fair value | 3,888 | 2,719 |
Liabilities: | ||
Acquisition related contingent consideration liability | 0 | 0 |
Deferred compensation plan liability | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 3,798 | 1,512 |
Fair Value, Measurements, Recurring | Level 1 | Debt securities in government-sponsored entities | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 0 | 831 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Contingent value right | 0 | 0 |
Derivative assets related to terminated acquisition | 0 | 0 |
Deferred compensation plan assets | 58 | 55 |
Total assets measured at fair value | 58 | 510 |
Liabilities: | ||
Acquisition related contingent consideration liability | 0 | 0 |
Deferred compensation plan liability | 55 | 51 |
Total liabilities measured at fair value | 55 | 51 |
Fair Value, Measurements, Recurring | Level 2 | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Debt securities in government-sponsored entities | ||
Assets: | ||
Available-for-sale securities | 0 | 10 |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 0 | 445 |
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Marketable equity securities | 0 | 0 |
Contingent value right | 53 | 35 |
Derivative assets related to terminated acquisition | 0 | 26 |
Deferred compensation plan assets | 0 | 0 |
Total assets measured at fair value | 53 | 61 |
Liabilities: | ||
Acquisition related contingent consideration liability | 14 | 0 |
Deferred compensation plan liability | 0 | 0 |
Total liabilities measured at fair value | 14 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Money market funds (cash equivalents) | ||
Assets: | ||
Money market funds (cash equivalents) | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Debt securities in government-sponsored entities | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Corporate debt securities | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Available-for-sale securities | $ 0 | $ 0 |
Debt - Summary of Term Debt Obl
Debt - Summary of Term Debt Obligations (Details) - Term Notes - USD ($) | Jul. 04, 2021 | Mar. 23, 2021 |
Debt Instrument [Line Items] | ||
Unamortized discounts and debt issuance costs | $ (8,000,000) | |
Net carrying amount of liability component of convertible senior notes | 992,000,000 | |
Less: current portion | 0 | |
Term notes, non-current | 992,000,000 | |
Level 2 | ||
Debt Instrument [Line Items] | ||
Fair value of term notes outstanding (Level 2) | 1,010,000,000 | |
2031 Term Notes | ||
Debt Instrument [Line Items] | ||
Principal amount of notes outstanding | 500,000,000 | $ 500,000,000 |
2023 Term Notes | ||
Debt Instrument [Line Items] | ||
Principal amount of notes outstanding | $ 500,000,000 | $ 500,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Mar. 23, 2021USD ($) | Mar. 08, 2021USD ($) | Aug. 21, 2018 | Aug. 30, 2018USD ($)day$ / shares | Jul. 04, 2021USD ($)renewal | Jun. 28, 2020USD ($) | Jul. 04, 2021USD ($)renewal | Jun. 28, 2020USD ($) | Jan. 03, 2021USD ($) | Jun. 30, 2014USD ($) |
Term Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Net proceeds | $ 992,000,000 | |||||||||
Redemption price, percentage | 100.00% | |||||||||
Interest expense recognized | $ 4,000,000 | $ 5,000,000 | ||||||||
Convertible Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest expense recognized | 10,000,000 | $ 11,000,000 | 21,000,000 | $ 22,000,000 | ||||||
2023 Term Notes | Term Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated rate | 0.55% | |||||||||
Principal amount of notes outstanding | $ 500,000,000 | 500,000,000 | 500,000,000 | |||||||
2031 Term Notes | Term Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated rate | 2.55% | |||||||||
Principal amount of notes outstanding | $ 500,000,000 | 500,000,000 | 500,000,000 | |||||||
2023 Convertible Notes | Convertible Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated rate | 0.00% | |||||||||
Principal amount of notes outstanding | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | ||||||
Redemption price, percentage | 100.00% | |||||||||
Effective interest rate used to measure fair value of convertible senior note | 3.70% | |||||||||
Conversion rate | 0.0021845 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 457.77 | |||||||||
Threshold common stock trading days | day | 20 | |||||||||
Threshold consecutive common stock trading days | day | 30 | |||||||||
Threshold percentage of common stock price trigger | 130.00% | |||||||||
Threshold note trading days | day | 5 | |||||||||
Threshold consecutive note trading days | day | 10 | |||||||||
Threshold percentage of note price trigger | 98.00% | |||||||||
Convertible stock price trigger (in dollars per share) | $ / shares | $ 595.10 | |||||||||
The Credit Agreement | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument term, number of renewal | renewal | 2 | 2 | ||||||||
Debt instrument, renewal term | 1 year | |||||||||
Borrowings outstanding | $ 0 | $ 0 | ||||||||
The Credit Agreement | Line of Credit | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 750,000,000 | |||||||||
Debt instrument term | 5 years | |||||||||
The Credit Agreement | Line of Credit | Swingline Borrowings | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 40,000,000 | |||||||||
The Credit Agreement | Line of Credit | Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 50,000,000 | |||||||||
The Credit Agreement | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount, optional increase in additional borrowings | $ 250,000,000 | |||||||||
Debt instrument, covenant, minimum debt to EBITDA ratio | 3.50 | 3.50 | ||||||||
Debt instrument, covenant, minimum debt to EBITDA ratio upon consummation of acquisition | 4 | 4 | ||||||||
Bridge Facility | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount of notes outstanding | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||
Debt instrument term | 364 days | |||||||||
2021 Convertible Notes | Convertible Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated rate | 0.50% | |||||||||
Principal amount of notes outstanding | $ 0 | $ 0 | $ 517,000,000 | $ 517,000,000 | ||||||
Effective interest rate used to measure fair value of convertible senior note | 3.50% |
Debt - Summary of Convertible D
Debt - Summary of Convertible Debt Obligations (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jul. 04, 2021 | Jan. 03, 2021 | Aug. 30, 2018 | Jun. 30, 2014 | |
Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount of liability component of convertible senior notes | $ (63,000,000) | $ (83,000,000) | ||
Net carrying amount of liability component of convertible senior notes | 687,000,000 | 1,184,000,000 | ||
Less: current portion | 0 | (511,000,000) | ||
Term notes, non-current | 687,000,000 | 673,000,000 | ||
Carrying value of equity component of convertible senior notes, net of debt issuance costs | $ 126,000,000 | $ 213,000,000 | ||
Weighted-average remaining amortization period of discount on the liability component of convertible senior notes | 2 years 1 month 6 days | 2 years 4 months 24 days | ||
Term Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount of liability component of convertible senior notes | $ (8,000,000) | |||
Net carrying amount of liability component of convertible senior notes | 992,000,000 | |||
Less: current portion | 0 | |||
Term notes, non-current | 992,000,000 | |||
Level 2 | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Fair value of convertible senior notes outstanding (Level 2) | 951,000,000 | $ 1,595,000,000 | ||
Level 2 | Term Notes | ||||
Debt Instrument [Line Items] | ||||
Fair value of term notes outstanding (Level 2) | 1,010,000,000 | |||
2023 Convertible Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | 750,000,000 | 750,000,000 | $ 750,000,000 | |
2021 Convertible Notes | Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of notes outstanding | $ 0 | $ 517,000,000 | $ 517,000,000 |
Debt - Summary of Debt Conversi
Debt - Summary of Debt Conversions (Details) - 2021 Convertible Notes shares in Thousands, $ in Millions | 6 Months Ended |
Jul. 04, 2021USD ($)shares | |
Short-term Debt [Line Items] | |
Cash paid for principal of notes converted | $ 517 |
Conversion value over principal amount, paid in shares of common stock | $ 313 |
Number of shares of common stock issued upon conversion (in shares) | shares | 700 |
Loss on extinguishment of debt | $ 1 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) shares in Millions | Jul. 04, 2021shares |
2015 Stock Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for issuance (in shares) | 3.5 |
Stockholders_ Equity - Summary
Stockholders’ Equity - Summary of Restricted Stock Activity and Related Information (Details) shares in Thousands | 6 Months Ended |
Jul. 04, 2021$ / sharesshares | |
Restricted Stock Units (RSU) | |
Stock Units | |
Outstanding at period start (in shares) | shares | 1,721 |
Awarded (in shares) | shares | 97 |
Vested (in shares) | shares | (73) |
Cancelled (in shares) | shares | (159) |
Outstanding at period end (in shares) | shares | 1,586 |
Weighted-Average Grant Date Fair Value per Share | |
Outstanding at period start (in dollars per share) | $ / shares | $ 313.35 |
Awarded (in dollars per share) | $ / shares | 431.51 |
Vested (in dollars per share) | $ / shares | 268.96 |
Cancelled (in dollars per share) | $ / shares | 314.25 |
Outstanding at period end (in dollars per share) | $ / shares | $ 322.49 |
Performance Stock Units (PSU) | |
Stock Units | |
Outstanding at period start (in shares) | shares | 0 |
Awarded (in shares) | shares | 428 |
Vested (in shares) | shares | 0 |
Cancelled (in shares) | shares | (20) |
Outstanding at period end (in shares) | shares | 408 |
Weighted-Average Grant Date Fair Value per Share | |
Outstanding at period start (in dollars per share) | $ / shares | $ 0 |
Awarded (in dollars per share) | $ / shares | 474.86 |
Vested (in dollars per share) | $ / shares | 0 |
Cancelled (in dollars per share) | $ / shares | 482.69 |
Outstanding at period end (in dollars per share) | $ / shares | $ 474.48 |
Stockholders_ Equity - Summar_2
Stockholders’ Equity - Summary of Stock Option Activity Under all Stock Option Plans (Details) shares in Thousands | 6 Months Ended |
Jul. 04, 2021$ / sharesshares | |
Options | |
Outstanding at period start (in shares) | shares | 10 |
Exercised (in shares) | shares | (1) |
Outstanding at period end (in shares) | shares | 9 |
Exercisable at period end (in shares) | shares | 9 |
Weighted-Average Exercise Price | |
Outstanding at period start (in dollars per share) | $ / shares | $ 59.11 |
Exercised (in dollars per share) | $ / shares | 24.58 |
Outstanding at period end (in dollars per share) | $ / shares | 63.45 |
Exercisable at period end (in dollars per share) | $ / shares | $ 63.45 |
Stockholders_ Equity - Narrat_2
Stockholders’ Equity - Narrative - Employee Stock Purchase Plan (Details) - ESPP - Employee Stock shares in Millions | 6 Months Ended |
Jul. 04, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Specified percentage of the fair market value of the common stock on the first or last day of the offering period whichever is lower at which stock is purchased | 85.00% |
Total shares issued under the ESPP (in shares) | 0.1 |
Shares available for issuance (in shares) | 13.1 |
Stockholders_ Equity - Narrat_3
Stockholders’ Equity - Narrative - Share Repurchases (Details) - Common Stock - USD ($) $ in Millions | 6 Months Ended | |
Jul. 04, 2021 | Feb. 05, 2020 | |
Class of Stock [Line Items] | ||
Stock repurchase program, authorized amount | $ 750 | |
Repurchased common stock (in shares) | 0 | |
Dollar amount remaining in authorized stock repurchase program | $ 15 |
Stockholders_ Equity - Summar_3
Stockholders’ Equity - Summary of Share-based Compensation Expense for all Stock Awards (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2021USD ($)employee | Jul. 04, 2021USD ($) | Jun. 28, 2020USD ($) | Jul. 04, 2021USD ($) | Jun. 28, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before taxes | $ 80 | $ 17 | $ 147 | $ 55 | |
Related income tax benefits | (15) | (6) | (28) | (15) | |
Share-based compensation expense, net of taxes | 65 | 11 | 119 | 40 | |
Performance Stock Units (PSU) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting performance period | 3 years | ||||
Performance Shares, Granted In 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of employees effected by modification | employee | 52 | ||||
Incremental share-based compensation cost | $ 41 | ||||
Performance Shares, Granted In 2020 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of employees effected by modification | employee | 72 | ||||
Incremental share-based compensation cost | $ 65 | ||||
Cost of product revenue | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before taxes | 8 | 3 | 15 | 7 | |
Cost of service and other revenue | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before taxes | 1 | 1 | 2 | 2 | |
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before taxes | 26 | 12 | 50 | 27 | |
Selling, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense before taxes | $ 45 | $ 1 | $ 80 | $ 19 |
Stockholders_ Equity- Summary o
Stockholders’ Equity- Summary of Assumptions Used to Estimate the Weighted Average Fair Value Per Share (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jul. 04, 2021USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date | $ | $ 554 |
Weighted-average period of unrecognized compensation cost related to stock options, restricted stock, and ESPP shares granted to date | 2 years 2 months 12 days |
Employee Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility, minimum | 32.00% |
Expected volatility, maximum | 47.00% |
Expected dividends | 0.00% |
Weighted-average fair value per share (in dollars per share) | $ / shares | $ 114.48 |
Minimum | Employee Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.08% |
Expected term | 6 months |
Maximum | Employee Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.46% |
Expected term | 1 year |
Supplemental Balance Sheet De_3
Supplemental Balance Sheet Details - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade accounts receivable, gross | $ 542 | $ 491 |
Allowance for credit losses | (2) | (4) |
Total accounts receivable, net | $ 540 | $ 487 |
Supplemental Balance Sheet De_4
Supplemental Balance Sheet Details - Summary of Inventory (Details) - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 79 | $ 106 |
Work in process | 278 | 244 |
Finished goods | 23 | 22 |
Total inventory | $ 380 | $ 372 |
Supplemental Balance Sheet De_5
Supplemental Balance Sheet Details - Narrative - Intangible Assets and Goodwill (Details) | 3 Months Ended |
Jul. 04, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Goodwill, impairment loss | $ 0 |
Developed Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets acquired | $ 35,000,000 |
Supplemental Balance Sheet De_6
Supplemental Balance Sheet Details - Summary of Changes in Goodwill (Details) $ in Millions | 6 Months Ended |
Jul. 04, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 897 |
Acquisition | 69 |
Goodwill, ending balance | $ 966 |
Supplemental Balance Sheet De_7
Supplemental Balance Sheet Details - Summary of Accrued Liabilities (Details) - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation expenses | $ 195 | $ 153 |
Contract liabilities, current portion | 182 | 186 |
Accrued taxes payable | 127 | 68 |
Operating lease liabilities, current portion | 53 | 51 |
Acquisition related contingent liability | 14 | 0 |
Other, including warranties | 103 | 83 |
Total accrued liabilities | $ 674 | $ 541 |
Supplemental Balance Sheet De_8
Supplemental Balance Sheet Details - Summary of Changes in Reserve for Product Warranties (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 04, 2021 | Jun. 28, 2020 | Jul. 04, 2021 | Jun. 28, 2020 | |
Reserve for product warranties [Roll Forward] | ||||
Balance at beginning of period | $ 15 | $ 12 | $ 13 | $ 14 |
Additions charged to cost of product revenue | 7 | 2 | 15 | 5 |
Repairs and replacements | (6) | (4) | (12) | (9) |
Balance at end of period | $ 16 | $ 10 | $ 16 | $ 10 |
Supplemental Balance Sheet De_9
Supplemental Balance Sheet Details - Narrative - Warranties (Details) | 6 Months Ended |
Jul. 04, 2021 | |
Instruments | |
Product Warranty Liability [Line Items] | |
Warranty period | 1 year |
Consumables | Minimum | |
Product Warranty Liability [Line Items] | |
Warranty period | 6 months |
Consumables | Maximum | |
Product Warranty Liability [Line Items] | |
Warranty period | 12 months |
Supplemental Balance Sheet D_10
Supplemental Balance Sheet Details - Narrative - Derivatives (Details) - Foreign Exchange Forward - USD ($) $ in Millions | Jul. 04, 2021 | Jan. 03, 2021 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 533 | $ 405 |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 396 | $ 305 |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Millions | May 12, 2021 | Apr. 12, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency, damages sought, value | $ 225.4 | $ 54 |
Loss contingency, royalty on sales of accused products, percentage | 5.50% | 3.60% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended |
Jul. 04, 2021 | Jul. 04, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 10.80% | 11.80% |