01—Abstract
Summary
Summary of the 8-K/A filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Illumina, Inc. filed this Form 8-K/A to disclose, under Item 2.05 of Form 8-K, the company's determination regarding certain estimates related to a further reduction in its real estate footprint.
The filing amends a June 26, 2023 Original 8-K and two prior amendments that reported costs tied to exit activities. The sole purpose of this amendment is the real estate footprint disclosure; no other changes were made to the earlier filings. The company recorded right-of-use asset and leasehold improvement impairment charges of $43 milliona in the fourth quarter of 2023 related to exiting a portion of its Foster City campus.
In the first quarter of 2024, it recorded additional right-of-use asset impairments of $18 millionb for the Foster City campus and another San Diego, California property, plus $14 million of leasehold improvement impairments for Foster City. All of these charges were recognized in selling, general and administrative expense and will be excluded from non-GAAP financial metrics. As of March 31, 2024, remaining assets tied to the Foster City campus and the other San Diego property totaled approximately $142 million, primarily right-of-use assets and leasehold improvements.
The company is still evaluating its options for the rest of these sites and states that it may incur additional charges, but it cannot yet estimate their timing, amount, or potential cash outlay. It will file a further amendment if such costs become material and estimable.
02—Key points
Key Highlights
- Q4 2023: $43 million in right-of-use asset and leasehold improvement impairment charges tied to exiting part of the Foster City campus.
- Q1 2024: $18 million of additional right-of-use asset impairments for Foster City and a San Diego, California property.
- Q1 2024: $14 million of leasehold improvement impairments related to the Foster City campus.
- All impairment charges were recognized in selling, general and administrative expense and are excluded from non-GAAP metrics.
- Remaining assets of approximately $142 million as of March 31, 2024 relate to Foster City and the San Diego property.
- Additional charges are possible from further exits, but the company cannot yet estimate their timing or amount.
- This 8-K/A's sole purpose is disclosing the company's determination on estimates for a further real estate footprint reduction.
03—Questions
Frequently Asked Questions
What charges has Illumina recorded related to its real estate footprint reduction?
Illumina recorded $43 million of right-of-use asset and leasehold improvement impairments in Q4 2023 for a partial exit of its Foster City campus, and in Q1 2024 recorded $18 million of right-of-use asset impairments (Foster City and San Diego) plus $14 million of leasehold improvement impairments for Foster City.
How much real estate-related asset value remains on the balance sheet?
As of March 31, 2024, the company had remaining assets, primarily right-of-use assets and leasehold improvements, of approximately $142 million tied to the Foster City campus and another property in San Diego, California.
Where are these impairment charges reported in the financial statements?
All of the charges were recognized in selling, general and administrative expense, and they will be excluded from non-GAAP financial metrics.
Could there be more charges from this real estate reduction?
Yes, the company states it may incur additional charges if it further exits either campus. It is currently unable to estimate the timing, amount, or potential cash outlay, and will file an amendment if such costs become material and estimable.
04—Continue