DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Illumina, Inc.
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		Illumina, Inc.
		5200 Illumina Way
		San Diego, CA 92122
		tel 858.202.4500
		fax 858.202.4545
		www.illumina.com

Dear Fellow Shareholders –

Our upcoming annual meeting of shareholders is on May 29, 2013. I am writing to ask you to vote FOR Proposal 4 in our proxy statement. With Proposal 4, we are asking that you approve an amendment to our 2005 Stock and Incentive Plan to authorize an additional 5,000,000 shares and extend the term of the plan to June 28, 2016.

The ability to award equity is a fundamental component of our compensation philosophy and an essential element of our total rewards strategy. We strongly believe that this critical tool influences our ability to attract, motivate, and retain talented, key employees thereby influencing our ability to deliver superior shareholder value. We also believe equity is an essential tool to align employee and stockholder interests, link employee compensation with company performance, and maintain a culture based on employee stock ownership. Further, Illumina carefully considers the balance between achieving these objectives and minimizing shareholder dilution before issuing equity to employees.

Illumina’s Board of Directors recommends voting for Proposal 4 to amend the 2005 Stock and Incentive Plan. The attached presentation outlines why we believe Proposal 4 is in the best interest of stockholders and Illumina. Thank you for your attention and consideration in supporting us on this important matter.

Sincerely,

Jay Flatley

Illumina

2013

Proxy Roadshow

May 16 -

17, 2013

Illumina, IlluminaDx, BaseSpace, BeadArray, BeadXpress, cBot, CSPro, DASL, DesignStudio, Eco, GAIIx, Genetic Energy, Genome Analyzer, GenomeStudio, GoldenGate, HiScan, HiSeq, Infinium,

iSelect, MiSeq, Nextera, NuPCR, SeqMonitor, Solexa, TruSeq, TruSight, VeraCode, the pumpkin orange color, and the Genetic Energy streaming bases design are trademarks or registered trademarks

of Illumina, Inc. All other brands and names contained herein are the property of their respective owners.

Safe Harbor Statement

This communication may contain statements that are forward-looking. Forward-looking

statements are subject to known and unknown risks and uncertainties and are based on

potentially inaccurate assumptions that could cause actual results to differ materially from

those expected or implied by the forward-looking statements. Among the important factors

that could cause actual results to differ materially from those in any forward-looking

statements are (i) our ability to develop and commercialize further our sequencing, array,

PCR, diagnostics, and consumables technologies and to deploy new products and

applications, and expand the markets, for our technology platforms, (ii) our ability to

manufacture robust instrumentation and consumables, (iii) significant uncertainty concerning

government and academic research funding worldwide as governments in the United States

and Europe, in particular, focus on reducing fiscal deficits while at the same time confronting

slowing economic growth, and (iv) other factors detailed in our filings with the U.S. Securities

and Exchange Commission (“SEC”), including our most recent filings on Forms 10-K and 10-

Q, or in information disclosed in public conference calls, the date and time of which are

released beforehand. Illumina undertakes no obligation, and does not intend, to update

these forward-looking statements.

Requests an amendment to our 2005 Stock and Incentive Plan:

Illumina’s Board of Directors Recommends a Yes Vote:

Illumina Investor Presentation

Executive Summary of Proposal 4

We must attract, retain, and motivate high-performers in order to generate

long-term shareholder value

We use equity compensation to align employee and shareholder interests

We have a disciplined annual share granting practice to limit dilution

We proactively manage our outstanding shares through equity repurchases

Authorize an additional 5 million shares to the plan

Extend the term of the Plan to June 28, 2016

Additional shares are expected to last three years

2012 Revenue of $1.15 billion

Guidance of 15% revenue growth in 2013

Over 2,400 employees globally; headquartered in San Diego, CA

Recognized leader in next-generation sequencing

>90% of the world’s sequencing data generated using Illumina platforms

Recognized leader in microarrays with ~80% market share in DNA genotyping

Strong diagnostic effort in reproductive health and cancer

Unmatched history of innovation and strong R&D pipeline

Who is Illumina?

Worldwide Leader in Genomic Analysis

1. Revenue guidance given via press release and 8-K on January 28, 2013; guidance was not reaffirmed or updated post Q1’13 financial results

Illumina’s Markets 2013

Over $12 Billion Opportunity

Improve human health by

unlocking the power of the genome

Consumer

Markets

Life Science

Research

~$4B

Applied

Markets

~$1B

Clinical &

Translational

~$6B

Reproductive

Health

~$1B

>$50M

Illumina’s Equity Compensation Philosophy

Program is Based on Guiding Principles

Equity Compensation:

Used to attract, retain and motivate new and

existing employees

Aligns employee and stockholder interests

Granted to our highest performing employees

and senior executives to generate long-term

shareholder value

Share Balance by Year

5 Million Shares Will Fund Program for 3 Years

Available Shares to Grant (M)

Evergreen expired in 2010

2,500

5,000

2008

2009

2010

2011

2012

7,500

Net Grants by Year

Net Grant Levels Have Been Stable While the Number of Employees has Grown

2,500

2,000

1,500

1,000

500

2008

2009

2010

2011

2012

Net Grants (M)

Employees

Gross Burn Rate

Disciplined Annual Share Granting Practice

Our net burn rate averaged ~3.0% over the last five years

Gross Burn Rate (%)

4.8%

3.4%

3.8%

4.0%

3.4%

1.5%

3.0%

4.5%

2008

2009

2010

2011

2012

0.0%

Outstanding Options

Employee Interests are Closely Aligned with Non-Employee Shareholders

Employees

are holding more than 6 million in the money options at a weighted

average price of $24.49

Outstanding Options by

Expiry Date

Outstanding Options by

Strike Price

Includes options being held by the Board of Directors as of December 30, 2012

Includes options granted under the 2005 Stock and Incentive Plan, New Hire Stock and Incentive Plan, and the Solexa plan

1,200

1,000

800

600

400

200

$10

$15

$20

$25

$30

$35

$40

$45

$50

$55

$60

$65

$70

$75

$80

Exercisable

Unvested

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Exercisable

Unvested

Repurchased Shares (M)

Capital Deployment Strategy for Long-Term Growth

Equity Buybacks Partially Offset Dilution from Shares Granted

Equity Repurchases

$250 million authorization; ~$140 million remaining

Committed to returning cash to shareholders

Expanded sales force

Infrastructure investments; ERP and customer

supply improvement programs

Clinical and diagnostic infrastructure

Invest for Growth

Technology and Diagnostic Acquisitions

BlueGnome: IVF, Cancer and Cytogenetics

Verinata Health: Non-invasive Prenatal Testing

Repurchased shares exclude 4.9 million shares repurchased in tandem with the issuance of the 2016 convertible bond

3.1

6.1

0.8

4.3

1.9

2008

2009

2010

2011

2012

Leading Talent Brings Superior Revenue & EPS Growth

2013 Guidance is for 15% Revenue Growth¹

Revenue CAGR: 19%

EPS

CAGR

24%

1. Revenue guidance given via press release and 8-K on January 28, 2013; guidance was not reaffirmed or updated post Q1’13 financial results

2. Non-GAAP Diluted EPS

$0.00

$0.40

$0.80

$1.20

$1.60

$400

$800

$1,200

2008

2009

2010

2011

2012

Revenue ($M)

non

-GAAP EPS

Five-Year Stock Performance

Compensation Philosophy and Execution Delivers Superior Shareholder Value

HiSeq 2000 and Genome

Analyzer IIe Launched

HiScanSQ Begins Shipping

iScan Launched

Eco Real-Time PCR

System Launched

Epicentre Acquisition

MiSeq & BaseSpace Launched

HiSeq 2500 Announced

50%

100%

150%

200%

250%

300%

ILMN

S&P 500

Life Sciences

188%

109%

121%

Stock performance as defined by total return to shareholders

Life Sciences return is an average of total shareholder return of A, AFFX, BRKR, DHR, HOLX, LIFE, PKI, QGEN, SIAL, TECH, TMO and WAT

Financial

Guidance

Financial Outlook

Illumina Will Continue to Deliver Strong Growth for the Foreseeable Future

2013

Revenue: 15% YoY Growth

Gross Margin: ~ 70%

Non-GAAP

EPS

$1.55

$1.62

ETR%: 31%

Stock Based Compensation

Expense: $115M

Shares Outstanding: ~134M

1. Revenue guidance given via press release and 8-K on January 28, 2013; guidance was not reaffirmed or updated post Q1’13 financial results

2. Non-GAAP EPS guidance includes stock based compensation

Future

Growth

Drivers

2014 and Beyond

Key Target Markets:

–

Clinical & Translational: $6B

–

Life sciences: $4B

–

Reproductive Health: $1B

–

Applied markets: $1B

–

Consumer: $50M

Reproductive Health Diagnostics:

–

1.2 –

1.5M IVF cycles annually

–

500 –

750K high risk pregnancies

in the U.S. alone

–

Carrier screening, CF assay and

MiSeq DX platform

Illumina’s Board of Directors Recommends a Yes Vote on Proposal 4

Conclusion

We use equity compensation to align employee and shareholder interests

We have a disciplined annual share granting practice

We have a strong track record of performance stemming from our overall

strategic plan, including equity compensation

We have a robust equity repurchase plan and intend to continue

repurchases over the life of our 2005 Stock and Incentive Plan