SUPPLEMENTAL BALANCE SHEET DETAILS

12 Months Ended

Dec. 29, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]


8. SUPPLEMENTAL BALANCE SHEET DETAILS

Accounts Receivable


In millions	December 29, 2024		December 31, 2023
Trade accounts receivable, gross	$	744	$	741
Allowance for credit losses	(9)		(7)
Total accounts receivable, net	$	735	$	734

Inventory


In millions	December 29, 2024		December 31, 2023
Raw materials	$	225	$	276
Work in process	404		402
Finished goods	31		30
Inventory, gross	660		708
Inventory reserve	(113)		(121)
Total inventory, net	$	547	$	587

Property and Equipment


In millions	December 29, 2024		December 31, 2023
Leasehold improvements	$	772	$	803
Machinery and equipment	683		684
Computer hardware and software	478		463
Furniture and fixtures	53		55
Buildings	44		44
Construction in progress	39		96
Total property and equipment, gross	2,069		2,145
Accumulated depreciation	(1,254)		(1,138)
Total property and equipment, net	$	815	$	1,007

Accrued Liabilities


In millions	December 29, 2024		December 31, 2023
Legal contingencies(1)	$	26	$	484
Contract liabilities, current portion	260		252
Accrued compensation expenses	252		223
Accrued taxes payable	101		79
Operating lease liabilities, current portion	79		86
Liability-classified equity incentive awards	—		55
Other, including warranties(2)	109		146
Total accrued liabilities	$	827	$	1,325

_____________

(1)See note 9. Legal Proceedings for additional details.

(2)See table below for changes in the reserve for product warranties.

Changes in the reserve for product warranties were as follows:


In millions
Balance as of January 2, 2022	$	22
Additions charged to cost of product revenue	23
Repairs and replacements	(27)
Balance as of January 1, 2023	18
Additions charged to cost of product revenue	42
Repairs and replacements	(39)
Balance as of December 31, 2023	21
Additions charged to cost of product revenue	42
Repairs and replacements	(45)
Balance as of December 29, 2024	$	18

Restructuring

In Q2 2023, we implemented a cost reduction initiative that included workforce reductions, the consolidation of certain facilities and other actions to reduce expenses, all as part of a plan to realign operating expenses while maintaining focus on our innovation roadmap and sustainable long-term growth. In both 2024 and 2023, we recorded restructuring charges primarily consisting of asset impairments related to exit activities at certain of our leased facilities.

A summary of the pre-tax restructuring charges is as follows:


In millions	2024		2023		Cumulative charges recorded since inception
Employee separation costs	$	12	$	48	$	60
Asset impairment charges(1)	46		100		146
Other costs	4		4		8
Total restructuring charges(2)	$	62	$	152	$	214

_____________

(1)For 2024, relates to impairment of right-of-use assets and leasehold improvements for Foster City campus and other property in San Diego.

For 2023, primarily relates to impairment of right-of-use assets and leasehold improvements for our i3 and Foster City campuses.

(2)For 2024, $59 million was recorded in SG&A expense, $2 million in R&D expense, and remainder in cost of revenue.

For 2023, $122 million was recorded in SG&A expense, $24 million in R&D expense, and remainder in cost of revenue.

Total restructuring charges primarily relate to our Core Illumina segment.

In 2024, we recorded right-of-use asset impairments of $12 million and $19 million related to our campus in Foster City, California and another property in San Diego, California, respectively. In 2023, we recorded right-of-use asset impairments of $38 million and $21 million related to our i3 campus in San Diego and our campus in Foster City, respectively. The impairments were determined by comparing the fair values of the impacted right-of-use assets to the carrying values of the assets as of the impairment measurement date. The fair values of the right-of-use assets were estimated using the discounted future cash flows method, which includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions, as well as discount rates. The estimates and assumptions used in our assessments represent Level 3 measurements because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. In 2024, we recorded $14 million of leasehold improvement impairments related to our Foster City campus and, in 2023, we recorded $16 million and $22 million of leasehold improvement impairments related to our i3 and Foster City campuses, respectively. The right-of-use asset and leasehold improvement impairments were recognized in selling, general and administrative expense. We continue to evaluate our options for the rest of our Foster City campus, for which, as of December 29, 2024, we had remaining assets, consisting primarily of right-of-use assets and leasehold improvements, of $100 million.

A summary of the restructuring liability is as follows:


In millions	Employee Separation Costs		Other Costs		Total
Amount recorded in accrued liabilities as of January 1, 2023	$	—	$	—	$	—
Expense recorded	48		4		52
Cash payments	(31)		(3)		(34)
Amount recorded in accrued liabilities as of December 31, 2023	17		1		18
Expense recorded	12		4		16
Cash payments	(24)		(2)		(26)
Adjustments to accrual	(3)		(1)		(4)
Amount recorded in accrued liabilities as of December 29, 2024	$	2	$	2	$	4