Illumina Inc., balance sheet: property, plant and equipment

US$ in millions

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Leasehold improvements	622	567	331	270	178
Machinery and equipment	401	382	316	274	224
Computer hardware and software	272	217	185	156	137
Furniture and fixtures	45	45	34	24	19
Buildings	44	285	155	9	8
Construction in progress	73	100	326	307	45
Property and equipment, gross	1,457	1,596	1,347	1,040	609
Accumulated depreciation	(568)	(521)	(416)	(327)	(267)
Property and equipment, net	889	1,075	931	713	343

Item	Description	The company
Property and equipment, gross	Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	Illumina Inc.’s property and equipment, gross increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Property and equipment, net	Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	Illumina Inc.’s property and equipment, net increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Illumina Inc., asset age ratios

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Average age ratio	38.98%	32.64%	30.88%	31.42%	43.77%
Estimated total useful life (years)	10	11	12	12	8
Estimated age, time elapsed since purchase (years)	4	4	4	4	4
Estimated remaining life (years)	6	8	8	8	5

Asset age ratio	Description	The company
Average age ratio	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.	Illumina Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.	Illumina Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.
Estimated time elapsed since purchase	The approximate age in years of a company’s fixed assets. Useful for comparison purposes.	Illumina Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Estimated remaining life		Illumina Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation	568	521	416	327	267
Property and equipment, gross	1,457	1,596	1,347	1,040	609
Asset Age Ratio
Average age¹	38.98%	32.64%	30.88%	31.42%	43.77%

2019 Calculations

¹ Average age = 100 × Accumulated depreciation ÷ Property and equipment, gross
= 100 × 568 ÷ 1,457 = 38.98%

Asset age ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient.	Illumina Inc.’s average age ratio of depreciable property, plant and equipment deteriorated from 2017 to 2018 and from 2018 to 2019.

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Selected Financial Data (US$ in millions)
Property and equipment, gross	1,457	1,596	1,347	1,040	609
Depreciation expense	151	140	110	90	73
Asset Age Ratio (Years)
Estimated total useful life¹	10	11	12	12	8

2019 Calculations

¹ Estimated total useful life = Property and equipment, gross ÷ Depreciation expense
= 1,457 ÷ 151 = 10

Asset age ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors.	Illumina Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation	568	521	416	327	267
Depreciation expense	151	140	110	90	73
Asset Age Ratio (Years)
Time elapsed since purchase¹	4	4	4	4	4

2019 Calculations

¹ Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 568 ÷ 151 = 4

Asset age ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company’s fixed assets. Useful for comparison purposes.	Illumina Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

	Dec 29, 2019	Dec 30, 2018	Dec 31, 2017	Jan 1, 2017	Jan 3, 2016
Selected Financial Data (US$ in millions)
Property and equipment, net	889	1,075	931	713	343
Depreciation expense	151	140	110	90	73
Asset Age Ratio (Years)
Estimated remaining life¹	6	8	8	8	5

2019 Calculations

¹ Estimated remaining life = Property and equipment, net ÷ Depreciation expense
= 889 ÷ 151 = 6

Asset age ratio	Description	The company
Estimated remaining life		Illumina Inc.’s estimated remaining life of depreciable property, plant and equipment decreased from 2017 to 2018 and from 2018 to 2019.

Illumina Inc. (NASDAQ:ILMN)

Analysis of Property, Plant and Equipment