Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Illumina Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Federal	25)	32)	47)	259)	71)
State	13)	7)	15)	21)	10)
Foreign	45)	84)	68)	51)	45)
Current provision	83)	123)	130)	331)	126)
Federal	30)	1)	—)	36)	16)
State	94)	(1)	(16)	—)	(5)
Foreign	(7)	5)	(2)	(2)	(4)
Deferred expense (benefit)	117)	5)	(18)	34)	7)
Provision for income taxes	200)	128)	112)	365)	133)

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
Current provision	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Illumina Inc. current provision decreased from 2018 to 2019 and from 2019 to 2020.
Deferred expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Illumina Inc. deferred expense (benefit) increased from 2018 to 2019 and from 2019 to 2020.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Illumina Inc. provision for income taxes increased from 2018 to 2019 and from 2019 to 2020.

Illumina Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
U.S. federal statutory tax rate	21.00%	21.00%	21.00%	35.00%	35.00%
Effective income tax rate, before impact of U.S. Tax Reform	23.36%	11.45%	11.30%	20.61%	23.72%
Effective income tax rate	23.36%	11.45%	12.53%	35.00%	23.72%

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
Effective income tax rate, before impact of U.S. Tax Reform	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Illumina Inc. effective income tax rate, before impact of U.S. Tax Reform increased from 2018 to 2019 and from 2019 to 2020.

Illumina Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
Net operating losses	26)	21)	26)	18)	20)
Tax credits	70)	63)	63)	57)	43)
Other accruals and reserves	21)	12)	28)	25)	24)
Stock compensation	17)	20)	20)	19)	38)
Deferred rent	—)	—)	30)	28)	38)
Cost sharing adjustment	—)	21)	21)	21)	32)
Other amortization	17)	16)	13)	12)	16)
Obligations under financing leases	—)	—)	70)	27)	—)
Operating lease liabilities	156)	158)	—)	—)	—)
Investments	—)	2)	1)	13)	—)
Other	53)	45)	28)	26)	38)
Gross deferred tax assets	360)	358)	300)	246)	249)
Valuation allowance on deferred tax assets	(81)	(13)	(15)	(25)	(18)
Deferred tax assets	279)	345)	285)	221)	231)
Purchased intangible amortization	(27)	(27)	(32)	(26)	(53)
Convertible debt	(20)	(30)	(41)	(18)	(37)
Property and equipment	(34)	(47)	(94)	(44)	(17)
Operating lease right-of-use assets	(108)	(111)	—)	—)	—)
Investments	(137)	(62)	(45)	(40)	—)
Other	(6)	(5)	(3)	(5)	—)
Deferred tax liabilities	(332)	(282)	(215)	(133)	(108)
Deferred tax assets (liabilities), net	(53)	63)	70)	88)	122)

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
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Illumina Inc. gross deferred tax assets increased from 2018 to 2019 and from 2019 to 2020.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Illumina Inc. deferred tax assets increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.
Deferred tax assets (liabilities), net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Illumina Inc. deferred tax assets (liabilities), net decreased from 2018 to 2019 and from 2019 to 2020.

Illumina Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2020	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Dec 31, 2016
	Deferred tax assets, net	20)	64)	70)	88)	123)
	Deferred tax liabilities	73)	1)	—)	—)	1)

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
Deferred tax assets, net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Illumina Inc. deferred tax assets, net decreased from 2018 to 2019 and from 2019 to 2020.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Illumina Inc. deferred tax liabilities increased from 2018 to 2019 and from 2019 to 2020.

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: Noncurrent deferred tax assets, net	20)	64)	70)	88)	123)
Total assets (adjusted)	7,565)	7,252)	6,889)	5,169)	4,157)
Adjustment to Total Liabilities
Total liabilities (as reported)	2,891)	2,703)	3,053)	2,288)	1,966)
Less: Noncurrent deferred tax liabilities, net	73)	1)	—)	—)	1)
Total liabilities (adjusted)	2,818)	2,702)	3,053)	2,288)	1,966)
Adjustment to Total Illumina Stockholders’ Equity
Total Illumina stockholders’ equity (as reported)	4,694)	4,613)	3,758)	2,749)	2,197)
Less: Net deferred tax assets (liabilities)	(53)	63)	70)	88)	122)
Total Illumina stockholders’ equity (adjusted)	4,747)	4,550)	3,688)	2,661)	2,075)
Adjustment to Net Income Attributable To Illumina Stockholders
Net income attributable to Illumina stockholders (as reported)	656)	1,002)	826)	726)	463)
Add: Deferred income tax expense (benefit)	117)	5)	(18)	34)	7)
Net income attributable to Illumina stockholders (adjusted)	773)	1,007)	808)	760)	469)

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
Net Profit Margin
Reported net profit margin	20.25%	28.28%	24.78%	26.38%	19.29%
Adjusted net profit margin	23.87%	28.42%	24.24%	27.62%	19.57%
Total Asset Turnover
Reported total asset turnover	0.43	0.48	0.48	0.52	0.56
Adjusted total asset turnover	0.43	0.49	0.48	0.53	0.58
Financial Leverage
Reported financial leverage	1.62	1.59	1.85	1.91	1.95
Adjusted financial leverage	1.59	1.59	1.87	1.94	2.00
Return on Equity (ROE)
Reported ROE	13.98%	21.72%	21.98%	26.41%	21.06%
Adjusted ROE	16.28%	22.13%	21.91%	28.56%	22.62%
Return on Assets (ROA)
Reported ROA	8.65%	13.70%	11.87%	13.81%	10.81%
Adjusted ROA	10.22%	13.89%	11.73%	14.70%	11.29%

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 net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Illumina Inc. adjusted net profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
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 and from 2019 to 2020.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Illumina Inc. adjusted ROE improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROA	A profitability ratio calculated as adjusted 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)
Net income attributable to Illumina stockholders	656)	1,002)	826)	726)	463)
Revenue	3,239)	3,543)	3,333)	2,752)	2,398)
Profitability Ratio
Net profit margin¹	20.25%	28.28%	24.78%	26.38%	19.29%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Illumina stockholders	773)	1,007)	808)	760)	469)
Revenue	3,239)	3,543)	3,333)	2,752)	2,398)
Profitability Ratio
Adjusted net profit margin²	23.87%	28.42%	24.24%	27.62%	19.57%

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 Net profit margin = 100 × Net income attributable to Illumina stockholders ÷ Revenue
= 100 × 656 ÷ 3,239 = 20.25%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Illumina stockholders ÷ Revenue
= 100 × 773 ÷ 3,239 = 23.87%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Illumina Inc. adjusted net profit margin 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)
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 Deferred Taxes
Selected Financial Data (US$ in millions)
Revenue	3,239)	3,543)	3,333)	2,752)	2,398)
Adjusted total assets	7,565)	7,252)	6,889)	5,169)	4,157)
Activity Ratio
Adjusted total asset turnover²	0.43	0.49	0.48	0.53	0.58

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 ÷ 7,565 = 0.43

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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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	7,565)	7,252)	6,889)	5,169)	4,157)
Adjusted total Illumina stockholders’ equity	4,747)	4,550)	3,688)	2,661)	2,075)
Solvency Ratio
Adjusted financial leverage²	1.59	1.59	1.87	1.94	2.00

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
= 7,565 ÷ 4,747 = 1.59

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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 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 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Illumina stockholders	773)	1,007)	808)	760)	469)
Adjusted total Illumina stockholders’ equity	4,747)	4,550)	3,688)	2,661)	2,075)
Profitability Ratio
Adjusted ROE²	16.28%	22.13%	21.91%	28.56%	22.62%

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 × Adjusted net income attributable to Illumina stockholders ÷ Adjusted total Illumina stockholders’ equity
= 100 × 773 ÷ 4,747 = 16.28%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Illumina Inc. adjusted ROE 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)
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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Illumina stockholders	773)	1,007)	808)	760)	469)
Adjusted total assets	7,565)	7,252)	6,889)	5,169)	4,157)
Profitability Ratio
Adjusted ROA²	10.22%	13.89%	11.73%	14.70%	11.29%

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 × Adjusted net income attributable to Illumina stockholders ÷ Adjusted total assets
= 100 × 773 ÷ 7,565 = 10.22%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted 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 Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Illumina Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Illumina Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)