Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Illumina Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Licensed technologies	95)	95)	95)	95)	95)
Core technologies	352)	325)	331)	300)	328)
Customer relationships	31)	31)	32)	32)	33)
License agreements	14)	14)	14)	14)	14)
Trade name	4)	4)	9)	7)	5)
Intangible assets, gross carrying amount	496)	469)	481)	448)	475)
Accumulated amortization	(354)	(324)	(296)	(273)	(237)
Intangible assets, net	142)	145)	185)	175)	237)
Goodwill	897)	824)	831)	771)	776)
Intangible assets and goodwill	1,039)	969)	1,016)	946)	1,013)

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

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Item	Description	The company
Intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Illumina Inc. intangible assets, net decreased from 2018 to 2019 and from 2019 to 2020.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Illumina Inc. goodwill decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Intangible assets and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Illumina Inc. intangible assets and goodwill decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Illumina Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported)	7,585)	7,316)	6,959)	5,257)	4,281)
Less: Goodwill	897)	824)	831)	771)	776)
Total assets (adjusted)	6,688)	6,492)	6,128)	4,486)	3,505)
Adjustment to Total Illumina Stockholders’ Equity
Total Illumina stockholders’ equity (as reported)	4,694)	4,613)	3,758)	2,749)	2,197)
Less: Goodwill	897)	824)	831)	771)	776)
Total Illumina stockholders’ equity (adjusted)	3,797)	3,789)	2,927)	1,978)	1,421)

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

Illumina Inc., Financial Data: Reported vs. Adjusted

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Illumina Inc., adjusted financial ratios

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Total Asset Turnover
Reported total asset turnover	0.43	0.48	0.48	0.52	0.56
Adjusted total asset turnover	0.48	0.55	0.54	0.61	0.68
Financial Leverage
Reported financial leverage	1.62	1.59	1.85	1.91	1.95
Adjusted financial leverage	1.76	1.71	2.09	2.27	2.47
Return on Equity (ROE)
Reported ROE	13.98%	21.72%	21.98%	26.41%	21.06%
Adjusted ROE	17.28%	26.44%	28.22%	36.70%	32.55%
Return on Assets (ROA)
Reported ROA	8.65%	13.70%	11.87%	13.81%	10.81%
Adjusted ROA	9.81%	15.43%	13.48%	16.18%	13.20%

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Illumina Inc. adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Illumina Inc. adjusted financial leverage ratio decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Illumina Inc. adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Illumina Inc. adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Illumina Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Revenue	3,239)	3,543)	3,333)	2,752)	2,398)
Total assets	7,585)	7,316)	6,959)	5,257)	4,281)
Activity Ratio
Total asset turnover¹	0.43	0.48	0.48	0.52	0.56
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	3,239)	3,543)	3,333)	2,752)	2,398)
Adjusted total assets	6,688)	6,492)	6,128)	4,486)	3,505)
Activity Ratio
Adjusted total asset turnover²	0.48	0.55	0.54	0.61	0.68

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

2020 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 3,239 ÷ 7,585 = 0.43

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 3,239 ÷ 6,688 = 0.48

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Illumina Inc. adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets	7,585)	7,316)	6,959)	5,257)	4,281)
Total Illumina stockholders’ equity	4,694)	4,613)	3,758)	2,749)	2,197)
Solvency Ratio
Financial leverage¹	1.62	1.59	1.85	1.91	1.95
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	6,688)	6,492)	6,128)	4,486)	3,505)
Adjusted total Illumina stockholders’ equity	3,797)	3,789)	2,927)	1,978)	1,421)
Solvency Ratio
Adjusted financial leverage²	1.76	1.71	2.09	2.27	2.47

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

2020 Calculations

¹ Financial leverage = Total assets ÷ Total Illumina stockholders’ equity
= 7,585 ÷ 4,694 = 1.62

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Illumina stockholders’ equity
= 6,688 ÷ 3,797 = 1.76

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Illumina Inc. adjusted financial leverage ratio decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Illumina stockholders	656)	1,002)	826)	726)	463)
Total Illumina stockholders’ equity	4,694)	4,613)	3,758)	2,749)	2,197)
Profitability Ratio
ROE¹	13.98%	21.72%	21.98%	26.41%	21.06%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Illumina stockholders	656)	1,002)	826)	726)	463)
Adjusted total Illumina stockholders’ equity	3,797)	3,789)	2,927)	1,978)	1,421)
Profitability Ratio
Adjusted ROE²	17.28%	26.44%	28.22%	36.70%	32.55%

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

2020 Calculations

¹ ROE = 100 × Net income attributable to Illumina stockholders ÷ Total Illumina stockholders’ equity
= 100 × 656 ÷ 4,694 = 13.98%

² Adjusted ROE = 100 × Net income attributable to Illumina stockholders ÷ Adjusted total Illumina stockholders’ equity
= 100 × 656 ÷ 3,797 = 17.28%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Illumina Inc. adjusted ROE deteriorated from 2018 to 2019 and from 2019 to 2020.

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Illumina stockholders	656)	1,002)	826)	726)	463)
Total assets	7,585)	7,316)	6,959)	5,257)	4,281)
Profitability Ratio
ROA¹	8.65%	13.70%	11.87%	13.81%	10.81%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Illumina stockholders	656)	1,002)	826)	726)	463)
Adjusted total assets	6,688)	6,492)	6,128)	4,486)	3,505)
Profitability Ratio
Adjusted ROA²	9.81%	15.43%	13.48%	16.18%	13.20%

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

2020 Calculations

¹ ROA = 100 × Net income attributable to Illumina stockholders ÷ Total assets
= 100 × 656 ÷ 7,585 = 8.65%

² Adjusted ROA = 100 × Net income attributable to Illumina stockholders ÷ Adjusted total assets
= 100 × 656 ÷ 6,688 = 9.81%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Illumina Inc. adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Illumina Inc. (NASDAQ:ILMN)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Illumina Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Illumina Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)