NortonLifeLock Inc.
10-Q on 08/09/2019   Download
SEC Document
SEC Filing
false--04-03Q1202000008493990000.0750.0750.010.01300000000030000000006300000006170000006300000006170000000.0200.050.0420.039500.010.011000000100000000000P1YP1YP1YP1YP1YP1Y 0000849399 2019-03-30 2019-07-05 0000849399 2019-07-31 0000849399 2019-03-29 0000849399 2019-07-05 0000849399 2018-03-31 2018-06-29 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-03-30 2019-07-05 0000849399 us-gaap:RetainedEarningsMember 2019-03-29 0000849399 us-gaap:RetainedEarningsMember 2019-03-30 2019-07-05 0000849399 us-gaap:ParentMember 2019-03-30 2019-07-05 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-07-05 0000849399 us-gaap:ParentMember 2019-07-05 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-03-29 0000849399 us-gaap:ParentMember 2019-03-29 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-05 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-30 2019-07-05 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-29 0000849399 us-gaap:RetainedEarningsMember 2019-07-05 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-03-31 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-03-31 2018-06-29 0000849399 us-gaap:ParentMember 2018-03-31 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-06-29 0000849399 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-03-30 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-30 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-29 0000849399 us-gaap:ParentMember 2018-03-30 0000849399 us-gaap:RetainedEarningsMember 2018-03-31 0000849399 us-gaap:ParentMember 2018-03-31 2018-06-29 0000849399 us-gaap:RetainedEarningsMember 2018-03-30 0000849399 us-gaap:RetainedEarningsMember 2018-03-31 2018-06-29 0000849399 us-gaap:ParentMember 2018-06-29 0000849399 us-gaap:RetainedEarningsMember 2018-06-29 0000849399 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 2018-06-29 0000849399 2018-06-29 0000849399 2018-03-30 0000849399 us-gaap:AccountingStandardsUpdate201602Member 2019-03-30 0000849399 symc:ConsumerCyberSafetyMember 2019-03-29 0000849399 symc:ConsumerCyberSafetyMember 2019-07-05 0000849399 symc:EnterpriseSecurityMember 2019-07-05 0000849399 symc:EnterpriseSecurityMember 2019-03-29 0000849399 2022-12-29 symc:ConsumerCyberSafetyMember 2019-07-05 0000849399 2020-12-29 symc:EnterpriseSecurityMember 2019-07-05 0000849399 2022-12-29 2019-07-05 0000849399 2021-12-29 2019-07-05 0000849399 2021-12-29 symc:ConsumerCyberSafetyMember 2019-07-05 0000849399 2021-12-29 symc:EnterpriseSecurityMember 2019-07-05 0000849399 2023-12-29 symc:ConsumerCyberSafetyMember 2019-07-05 0000849399 2023-12-29 2019-07-05 0000849399 2020-12-29 symc:ConsumerCyberSafetyMember 2019-07-05 0000849399 2022-12-29 symc:EnterpriseSecurityMember 2019-07-05 0000849399 2023-12-29 symc:EnterpriseSecurityMember 2019-07-05 0000849399 2020-12-29 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember us-gaap:TransferredOverTimeMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember us-gaap:TransferredOverTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember us-gaap:TransferredOverTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerCyberSafetyMember us-gaap:TransferredOverTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember us-gaap:TransferredOverTimeMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember us-gaap:TransferredAtPointInTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerCyberSafetyMember us-gaap:TransferredOverTimeMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember us-gaap:TransferredAtPointInTimeMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerCyberSafetyMember us-gaap:TransferredAtPointInTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerCyberSafetyMember us-gaap:TransferredAtPointInTimeMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember us-gaap:TransferredAtPointInTimeMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember us-gaap:TransferredAtPointInTimeMember 2019-03-30 2019-07-05 0000849399 srt:MinimumMember symc:DataCenterColocationsMember 2019-07-05 0000849399 srt:MaximumMember symc:FacilitiesMember 2019-07-05 0000849399 srt:MaximumMember us-gaap:EquipmentMember 2019-07-05 0000849399 srt:MaximumMember symc:DataCenterColocationsMember 2019-07-05 0000849399 srt:MinimumMember symc:FacilitiesMember 2019-07-05 0000849399 srt:MinimumMember us-gaap:EquipmentMember 2019-07-05 0000849399 us-gaap:MaterialReconcilingItemsMember 2018-03-31 2018-06-29 0000849399 us-gaap:DevelopedTechnologyRightsMember us-gaap:CostOfSalesMember 2019-03-30 2019-07-05 0000849399 us-gaap:CustomerRelationshipsMember us-gaap:OperatingExpenseMember 2018-03-31 2018-06-29 0000849399 us-gaap:MaterialReconcilingItemsMember 2019-03-30 2019-07-05 0000849399 us-gaap:DevelopedTechnologyRightsMember us-gaap:CostOfSalesMember 2018-03-31 2018-06-29 0000849399 us-gaap:CustomerRelationshipsMember us-gaap:OperatingExpenseMember 2019-03-30 2019-07-05 0000849399 us-gaap:DevelopedTechnologyRightsMember 2019-03-29 0000849399 us-gaap:CustomerRelationshipsMember 2019-07-05 0000849399 us-gaap:OtherIntangibleAssetsMember 2019-03-29 0000849399 us-gaap:DevelopedTechnologyRightsMember 2019-07-05 0000849399 us-gaap:OtherIntangibleAssetsMember 2019-07-05 0000849399 us-gaap:CustomerRelationshipsMember 2019-03-29 0000849399 us-gaap:TradeNamesMember 2019-07-05 0000849399 us-gaap:TradeNamesMember 2019-03-29 0000849399 symc:EnterpriseSecurityMember 2019-03-30 2019-07-05 0000849399 symc:ConsumerSecurityMember 2019-03-29 0000849399 symc:ConsumerSecurityMember 2019-03-30 2019-07-05 0000849399 symc:ConsumerSecurityMember 2019-07-05 0000849399 us-gaap:ConstructionInProgressMember 2019-07-05 0000849399 us-gaap:ConstructionInProgressMember 2019-03-29 0000849399 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2019-03-29 0000849399 us-gaap:LandMember 2019-03-29 0000849399 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2019-07-05 0000849399 us-gaap:LandMember 2019-07-05 0000849399 us-gaap:ComputerEquipmentMember 2019-03-29 0000849399 us-gaap:OfficeEquipmentMember 2019-03-29 0000849399 us-gaap:OfficeEquipmentMember 2019-07-05 0000849399 us-gaap:BuildingMember 2019-03-29 0000849399 us-gaap:BuildingMember 2019-07-05 0000849399 us-gaap:ComputerEquipmentMember 2019-07-05 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:ShortTermInvestmentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel1Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:CashAndCashEquivalentsMember us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-03-29 0000849399 us-gaap:FairValueInputsLevel2Member us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsRecurringMember 2019-07-05 0000849399 us-gaap:FairValueInputsLevel2Member 2019-07-05 0000849399 symc:DigicertParentInc.Member us-gaap:OtherNonoperatingIncomeExpenseMember 2018-03-31 2018-06-29 0000849399 symc:DigicertParentInc.Member 2019-07-05 0000849399 us-gaap:FairValueInputsLevel2Member 2019-03-29 0000849399 symc:DigicertParentInc.Member 2019-03-29 0000849399 symc:DigicertParentInc.Member us-gaap:OtherNonoperatingIncomeExpenseMember 2019-03-30 2019-07-05 0000849399 symc:DigicertParentInc.Member 2019-01-01 2019-03-31 0000849399 symc:DigicertParentInc.Member 2018-01-01 2018-04-01 0000849399 symc:TwoPointFiveZeroPercentConvertibleSeniorNotesDueAprilTwentyTwentyOneMember us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 symc:A2.0ConvertibleSeniorNotesDueAugust152021Member us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 symc:A2.0ConvertibleSeniorNotesDueAugust152021Member us-gaap:ConvertibleDebtMember 2019-03-30 2019-07-05 0000849399 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-07-05 0000849399 symc:A2.5ConvertibleSeniorNotesDueApril12021Member us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 symc:A2.5ConvertibleSeniorNotesDueApril12021Member us-gaap:ConvertibleDebtMember 2019-03-30 2019-07-05 0000849399 symc:SeniorTermLoanA5FloatingRateDueAugust12021Member us-gaap:UnsecuredDebtMember 2019-07-05 0000849399 symc:SeniorTermLoanA5FloatingRateDueAugust12021Member us-gaap:UnsecuredDebtMember 2019-03-29 0000849399 us-gaap:ConvertibleDebtMember 2019-03-30 2019-07-05 0000849399 us-gaap:ConvertibleDebtMember 2018-03-31 2018-06-29 0000849399 symc:ThreePointNineFiveSeniorNotesMember us-gaap:SeniorNotesMember 2019-07-05 0000849399 symc:SeniorTermLoanA5dueAugust12021Member us-gaap:UnsecuredDebtMember 2019-07-05 0000849399 symc:A2.0ConvertibleSeniorNotesDue2021Member us-gaap:ConvertibleDebtMember 2019-03-29 0000849399 symc:TwoPointFiveZeroPercentConvertibleSeniorNotesDueAprilTwentyTwentyOneMember us-gaap:ConvertibleDebtMember 2019-03-29 0000849399 symc:A5Point0PercentSeniorNotesDue2025Member us-gaap:SeniorNotesMember 2019-07-05 0000849399 symc:FourPointTwoZeroSeniorNotesMember us-gaap:SeniorNotesMember 2019-07-05 0000849399 symc:ThreePointNineFiveSeniorNotesMember us-gaap:SeniorNotesMember 2019-03-29 0000849399 symc:A5Point0PercentSeniorNotesDue2025Member us-gaap:SeniorNotesMember 2019-03-29 0000849399 symc:A2.0ConvertibleSeniorNotesDue2021Member us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 symc:FourPointTwoZeroSeniorNotesMember us-gaap:SeniorNotesMember 2019-03-29 0000849399 symc:SeniorTermLoanA5dueAugust12021Member us-gaap:UnsecuredDebtMember 2019-03-29 0000849399 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-03-29 0000849399 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember us-gaap:OtherNonoperatingIncomeExpenseMember 2018-03-31 2018-06-29 0000849399 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember us-gaap:OtherNonoperatingIncomeExpenseMember 2019-03-30 2019-07-05 0000849399 srt:MaximumMember us-gaap:ForeignExchangeForwardMember 2019-03-30 2019-07-05 0000849399 us-gaap:ForeignExchangeForwardMember symc:BalanceSheetContractsMember us-gaap:NondesignatedMember us-gaap:LongMember 2019-03-29 0000849399 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortMember 2019-07-05 0000849399 us-gaap:ForeignExchangeForwardMember symc:BalanceSheetContractsMember us-gaap:NondesignatedMember us-gaap:LongMember 2019-07-05 0000849399 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortMember 2019-03-29 0000849399 us-gaap:ForeignExchangeForwardMember symc:BalanceSheetContractsMember us-gaap:NondesignatedMember us-gaap:ShortMember 2019-07-05 0000849399 us-gaap:ForeignExchangeForwardMember symc:BalanceSheetContractsMember us-gaap:NondesignatedMember us-gaap:ShortMember 2019-03-29 0000849399 us-gaap:EmployeeSeveranceMember symc:Fiscal2019PlanMember 2019-07-05 0000849399 symc:Fiscal2017PlanMember 2019-03-29 0000849399 us-gaap:EmployeeSeveranceMember symc:Fiscal2019PlanMember 2018-08-31 0000849399 us-gaap:EmployeeSeveranceMember symc:Fiscal2019PlanMember 2018-08-01 2018-08-31 0000849399 symc:LongtermIncomeTaxesPayableMember 2019-07-05 0000849399 symc:AlteraCorp.v.CommissionerMember 2019-03-30 2019-07-05 0000849399 symc:DeferredIncomeTaxLiabilitiesMember 2019-07-05 0000849399 us-gaap:CommonStockMember 2019-03-30 2019-07-05 0000849399 us-gaap:CommonStockMember 2019-07-05 0000849399 us-gaap:CommonStockMember us-gaap:SubsequentEventMember 2019-08-08 2019-08-08 0000849399 us-gaap:CommonStockMember 2018-03-31 2019-03-29 0000849399 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-30 2019-07-05 0000849399 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-30 2019-07-05 0000849399 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-07-05 0000849399 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-03-29 0000849399 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-07-05 0000849399 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-29 0000849399 us-gaap:AccumulatedTranslationAdjustmentMember 2019-07-05 0000849399 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-29 0000849399 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-03-30 2019-07-05 0000849399 us-gaap:RestrictedStockUnitsRSUMember 2019-03-30 2019-07-05 0000849399 us-gaap:EmployeeStockOptionMember 2018-06-29 0000849399 us-gaap:EmployeeStockOptionMember 2019-03-30 2019-07-05 0000849399 us-gaap:PerformanceSharesMember 2018-06-29 0000849399 us-gaap:RestrictedStockMember 2018-06-29 0000849399 us-gaap:PerformanceSharesMember 2018-03-31 2018-06-29 0000849399 us-gaap:RestrictedStockUnitsRSUMember 2018-03-31 2018-06-29 0000849399 us-gaap:EmployeeStockOptionMember 2018-03-31 2018-06-29 0000849399 us-gaap:RestrictedStockUnitsRSUMember 2019-07-05 0000849399 us-gaap:RestrictedStockMember 2019-07-05 0000849399 us-gaap:EmployeeStockOptionMember 2019-07-05 0000849399 us-gaap:PerformanceSharesMember 2019-03-30 2019-07-05 0000849399 us-gaap:PerformanceSharesMember 2019-07-05 0000849399 us-gaap:RestrictedStockUnitsRSUMember 2018-06-29 0000849399 us-gaap:SellingAndMarketingExpenseMember 2018-03-31 2018-06-29 0000849399 us-gaap:ResearchAndDevelopmentExpenseMember 2018-03-31 2018-06-29 0000849399 us-gaap:GeneralAndAdministrativeExpenseMember 2019-03-30 2019-07-05 0000849399 us-gaap:SellingAndMarketingExpenseMember 2019-03-30 2019-07-05 0000849399 us-gaap:CostOfSalesMember 2018-03-31 2018-06-29 0000849399 us-gaap:GeneralAndAdministrativeExpenseMember 2018-03-31 2018-06-29 0000849399 us-gaap:CostOfSalesMember 2019-03-30 2019-07-05 0000849399 us-gaap:ResearchAndDevelopmentExpenseMember 2019-03-30 2019-07-05 0000849399 symc:LiabilityClassifiedAwardsMember 2019-07-05 0000849399 symc:EmployeeStockPurchasePlanMember 2019-03-30 2019-07-05 0000849399 us-gaap:StockOptionMember 2019-03-30 2019-07-05 0000849399 symc:EmployeeStockPurchasePlanMember 2019-07-05 0000849399 us-gaap:StockOptionMember 2019-07-05 0000849399 us-gaap:RestrictedStockMember 2019-03-30 2019-07-05 0000849399 symc:LiabilityClassifiedAwardsMember 2019-03-30 2019-07-05 0000849399 symc:LiabilityClassifiedAwardsMember symc:AccruedcompensationandbenefitsMember 2019-03-29 0000849399 symc:LiabilityClassifiedAwardsMember symc:AccruedcompensationandbenefitsMember 2019-07-05 0000849399 us-gaap:ConvertibleDebtSecuritiesMember 2018-03-31 2018-06-29 0000849399 us-gaap:ConvertibleDebtSecuritiesMember 2019-03-30 2019-07-05 0000849399 symc:EmployeeEquityAwardsMember 2018-03-31 2018-06-29 0000849399 symc:EmployeeEquityAwardsMember 2019-03-30 2019-07-05 0000849399 srt:MinimumMember symc:TwoPointFiveZeroPercentConvertibleSeniorNotesDueAprilTwentyTwentyOneMember us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 srt:MinimumMember symc:A2.0ConvertibleSeniorNotesDue2021Member us-gaap:ConvertibleDebtMember 2019-07-05 0000849399 country:US 2019-03-30 2019-07-05 0000849399 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-03-30 2019-07-05 0000849399 us-gaap:IntersegmentEliminationMember 2019-03-30 2019-07-05 0000849399 country:US 2018-03-31 2018-06-29 0000849399 srt:AsiaPacificMember 2018-03-31 2018-06-29 0000849399 us-gaap:EMEAMember 2019-03-30 2019-07-05 0000849399 us-gaap:EMEAMember 2018-03-31 2018-06-29 0000849399 srt:AsiaPacificMember 2019-03-30 2019-07-05 0000849399 srt:AmericasMember 2018-03-31 2018-06-29 0000849399 srt:AmericasMember 2019-03-30 2019-07-05 0000849399 country:US 2019-07-05 0000849399 symc:ForeignCountriesMember 2019-07-05 0000849399 symc:ForeignCountriesMember 2019-03-29 0000849399 country:US 2019-03-29 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerSecurityMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:EnterpriseSecurityMember 2019-03-30 2019-07-05 0000849399 us-gaap:OperatingSegmentsMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember symc:ConsumerSecurityMember 2018-03-31 2018-06-29 0000849399 us-gaap:OperatingSegmentsMember 2019-03-30 2019-07-05 0000849399 country:IN 2019-07-05 0000849399 symc:LifeLockIdentityandFraudProtectionMember 2019-03-30 2019-07-05 0000849399 symc:CoreConsumerSecurityMember 2019-03-30 2019-07-05 0000849399 symc:NetworkandWebSecurityMember 2019-03-30 2019-07-05 0000849399 symc:ConsumerCyberSafetyMember 2019-03-30 2019-07-05 0000849399 symc:LifeLockIdentityandFraudProtectionMember 2018-03-31 2018-06-29 0000849399 symc:CoreConsumerSecurityMember 2018-03-31 2018-06-29 0000849399 symc:NetworkandWebSecurityMember 2018-03-31 2018-06-29 0000849399 symc:EndpointandInformationProtectionMember 2018-03-31 2018-06-29 0000849399 symc:OthersMember 2019-03-30 2019-07-05 0000849399 symc:EndpointandInformationProtectionMember 2019-03-30 2019-07-05 0000849399 symc:EnterpriseSecurityMember 2018-03-31 2018-06-29 0000849399 symc:OthersMember 2018-03-31 2018-06-29 0000849399 symc:EnterpriseSecurityMember 2019-03-30 2019-07-05 0000849399 symc:ConsumerCyberSafetyMember 2018-03-31 2018-06-29 0000849399 symc:CustomerBMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-03-31 2019-03-29 0000849399 symc:CustomerCMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-03-30 2019-07-05 0000849399 symc:CustomerAMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-03-31 2019-03-29 0000849399 symc:CustomerBMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-03-30 2019-07-05 0000849399 symc:CustomerAMember us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-03-30 2019-07-05 0000849399 us-gaap:IntersegmentEliminationMember 2018-03-31 2018-06-29 0000849399 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-03-31 2018-06-29 0000849399 symc:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember 2014-01-31 0000849399 symc:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember srt:MinimumMember 2019-07-05 0000849399 symc:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember 2007-01-01 2012-09-30 0000849399 us-gaap:FacilityClosingMember symc:Fiscal2020PlanMember us-gaap:SubsequentEventMember 2019-08-06 0000849399 us-gaap:EmployeeSeveranceMember symc:Fiscal2020PlanMember us-gaap:SubsequentEventMember 2019-08-06 0000849399 symc:Fiscal2020PlanMember us-gaap:SubsequentEventMember 2019-08-06 0000849399 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember symc:EnterpriseSecurityMember us-gaap:SubsequentEventMember 2019-08-08 0000849399 symc:Fiscal2020PlanMember us-gaap:SubsequentEventMember 2019-08-06 2019-08-06 0000849399 us-gaap:SubsequentEventMember 2019-08-06 0000849399 srt:MinimumMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember symc:EnterpriseSecurityMember us-gaap:SubsequentEventMember 2019-08-08 0000849399 srt:MaximumMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember symc:EnterpriseSecurityMember symc:DomesticTaxAuthorityandForeignTaxAuthorityMember us-gaap:SubsequentEventMember 2019-08-08 xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares symc:segment symc:customer

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 5, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      
For the Transition Period from                to                
Commission File Number 000-17781
image0a13.jpg
 Symantec Corporation
(Exact name of the registrant as specified in its charter)
Delaware
  
77-0181864
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. employer Identification no.)
 
 
 
 
 
350 Ellis Street,
Mountain View,
California
  
94043
(Address of principal executive offices)
 
(Zip code)
Registrant’s telephone number, including area code:
(650527-8000
Former name or former address, if changed since last report:
Not Applicable
  ________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock,
par value $0.01 per share
SYMC
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ   No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ   No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
þ
  
Accelerated filer
o
  
Non-accelerated filer
o
  
Smaller reporting company
 
 
  
 
 
 
Emerging growth company
 
 
 
 
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No þ
The number of shares of Symantec common stock, $0.01 par value per share, outstanding as of July 31, 2019 was 618,031,627 shares.
 


Table of Contents

SYMANTEC CORPORATION
FORM 10-Q
Quarterly Period Ended July 5, 2019
TABLE OF CONTENTS
Page
 
 
 
 
 
 
 


2

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SYMANTEC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except par value per share amounts)
 
July 5, 2019
 
March 29, 2019 (1)
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
1,532

 
$
1,791

Short-term investments
162

 
252

Accounts receivable, net
438

 
708

Other current assets
429

 
435

Total current assets
2,561

 
3,186

Property and equipment, net
784

 
790

Operating lease assets
183

 

Intangible assets, net
2,137

 
2,250

Goodwill
8,449

 
8,450

Other long-term assets
1,255

 
1,262

Total assets
$
15,369

 
$
15,938

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
Accounts payable
$
135

 
$
165

Accrued compensation and benefits
198

 
257

Current portion of long-term debt
494

 
491

Contract liabilities
2,211

 
2,320

Current operating lease liabilities
45

 

Other current liabilities
525

 
533

Total current liabilities
3,608

 
3,766

Long-term debt
3,964

 
3,961

Long-term contract liabilities
688

 
736

Deferred income tax liabilities
548

 
577

Long-term income taxes payable
1,078

 
1,076

Long-term operating lease liabilities
163

 

Other long-term liabilities
70

 
84

Total liabilities
10,119


10,200

Commitments and contingencies (Note 16)


 


Stockholders’ equity:
 
 
 
Preferred stock, $0.01 par value: 1 shares authorized; 0 shares issued and outstanding

 

Common stock and additional paid-in capital, $0.01 par value: 3,000 shares authorized; 617 and 630 shares issued and outstanding as of July 5, 2019 and March 29, 2019, respectively
4,701

 
4,812

Accumulated other comprehensive loss
(12
)
 
(7
)
Retained earnings
561

 
933

Total stockholders’ equity
5,250

 
5,738

Total liabilities and stockholders’ equity
$
15,369

 
$
15,938

 
(1)
Derived from audited financial statements.
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

Table of Contents

SYMANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
 
Three Months Ended
 
July 5, 2019
 
June 29, 2018
Net revenues
$
1,247

 
$
1,156

Cost of revenues
272

 
249

Gross profit
975

 
907

Operating expenses:
 
 
 
Sales and marketing
393

 
386

Research and development
241

 
237

General and administrative
108

 
133

Amortization of intangible assets
51

 
53

Restructuring, transition and other costs
25

 
96

Total operating expenses
818

 
905

Operating income
157

 
2

Interest expense
(49
)
 
(52
)
Other expense, net

 
(19
)
Income (loss) from continuing operations before income taxes
108

 
(69
)
Income tax expense (benefit)
82

 
(4
)
Income (loss) from continuing operations
26

 
(65
)
Income from discontinued operations

 
5

Net income (loss)
$
26

 
$
(60
)
 
 
 
 
Income (loss) per share - basic:
 
 
 
Continuing operations
$
0.04

 
$
(0.10
)
Discontinued operations
$

 
$
0.01

Net income (loss) per share - basic (1)
$
0.04

 
$
(0.10
)
 
 
 
 
Income (loss) per share - diluted:
 
 
 
Continuing operations
$
0.04

 
$
(0.10
)
Discontinued operations
$

 
$
0.01

Net income (loss) per share - diluted (1)
$
0.04

 
$
(0.10
)
 
 
 
 
Weighted-average shares outstanding:
 
 
 
Basic
619

 
624

Diluted
642

 
624


 
(1) Net income (loss) per share may not add due to rounding.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

Table of Contents

SYMANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited, in millions)
 
Three Months Ended
 
July 5, 2019
 
June 29, 2018
Net income (loss)
$
26

 
$
(60
)
Other comprehensive income (loss), net of taxes:

 

Foreign currency translation adjustments
(7
)
 
(24
)
Net unrealized gain on available-for-sale securities
1

 

Other comprehensive income from equity method investee
1

 

Other comprehensive loss, net of taxes
(5
)
 
(24
)
Comprehensive income (loss)
$
21

 
$
(84
)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

Table of Contents

SYMANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per share amounts)
 
Common Stock and Additional Paid-In Capital
 
Accumulated Other Comprehensive Loss
 
Retained Earnings
 
Total Stockholders’ Equity
 
Shares
 
Amount
 
 
 
Balance as of March 29, 2019
630

 
$
4,812

 
$
(7
)
 
$
933

 
$
5,738

Net income

 

 

 
26

 
26

Other comprehensive loss

 

 
(5
)
 

 
(5
)
Common stock issued under employee stock incentive plans
16

 
37

 

 

 
37

Shares withheld for taxes related to vesting of restricted stock units
(3
)
 
(57
)
 

 

 
(57
)
Repurchases of common stock
(26
)
 
(190
)
 

 
(351
)
 
(541
)
Cash dividends declared ($0.075 per share of common stock) and dividend equivalents accrued

 

 

 
(47
)
 
(47
)
Stock-based compensation

 
99

 

 

 
99

Balance as of July 5, 2019
617

 
$
4,701

 
$
(12
)
 
$
561

 
$
5,250

 
Common Stock and Additional Paid-In Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Retained Earnings
 
Total Stockholders’ Equity
 
Shares
 
Amount
 
 
 
Balance as of March 30, 2018
624

 
$
4,691

 
$
4

 
$
328

 
$
5,023

Cumulative effect from adoption of accounting standards

 

 

 
939

 
939

Net loss

 

 

 
(60
)
 
(60
)
Other comprehensive loss

 

 
(24
)
 

 
(24
)
Common stock issued under employee stock incentive plans
9

 
4

 

 

 
4

Shares withheld for taxes related to vesting of restricted stock units
(2
)
 
(45
)
 

 

 
(45
)
Cash dividends declared ($0.075 per share of common stock) and dividend equivalents accrued

 

 

 
(49
)
 
(49
)
Stock-based compensation

 
130

 

 

 
130

Balance as of June 29, 2018
631

 
$
4,780

 
$
(20
)
 
$
1,158

 
$
5,918

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6

Table of Contents

SYMANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
 
Three Months Ended
 
July 5, 2019
 
June 29, 2018
OPERATING ACTIVITIES:
 
 
 
Net income (loss)
$
26

 
$
(60
)
Income from discontinued operations

 
(5
)
Adjustments:
 
 
 
Amortization and depreciation
158

 
152

Impairments of long-lived assets
3

 
4

Stock-based compensation expense
80

 
113

Deferred income taxes
(30
)
 
(42
)
Loss from equity interest
11

 
26

Other
13

 
(47
)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable, net
270

 
321

Accounts payable
(21
)
 
19

Accrued compensation and benefits
(46
)
 
(77
)
Contract liabilities
(161
)
 
(106
)
Income taxes payable
72

 
(1
)
Other assets
5

 
(5
)
Other liabilities
(55
)
 
39

Net cash provided by operating activities
325

 
331

INVESTING ACTIVITIES:
 
 
 
Purchases of property and equipment
(49
)
 
(44
)
Payments for acquisitions, net of cash acquired

 
(5
)
Proceeds from maturities and sales of short-term investments
92

 
64

Other
(5
)
 
(5
)
Net cash provided by investing activities
38

 
10

FINANCING ACTIVITIES:
 
 
 
Net proceeds from sales of common stock under employee stock incentive plans
37

 
4

Tax payments related to restricted stock units
(52
)
 
(42
)
Dividends and dividend equivalents paid
(51
)
 
(60
)
Repurchases of common stock
(559
)
 

Net cash used in financing activities
(625
)
 
(98
)
Effect of exchange rate fluctuations on cash and cash equivalents
3

 
(16
)
Change in cash and cash equivalents
(259
)
 
227

Beginning cash and cash equivalents
1,791

 
1,774

Ending cash and cash equivalents
$
1,532

 
$
2,001


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

7

Table of Contents

SYMANTEC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1Description of Business and Significant Accounting Policies
Business
Symantec Corporation is a global leader in cyber security. We provide cyber security products, services, and solutions. Our Integrated Cyber Defense Platform helps business and government customers unify cloud and on-premises security to deliver a more effective cyber defense solution, while driving down cost and complexity. Our Cyber Safety solutions under our Norton LifeLock brand help consumers protect their devices, online privacy, identities, and home networks.
Basis of presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America (U.S.) for interim financial information. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 29, 2019. The results of operations for the three months ended July 5, 2019 are not necessarily indicative of the results expected for the entire fiscal year.
We have a 52/53-week fiscal year ending on the Friday closest to March 31. Unless otherwise stated, references to three-month periods in this report relate to fiscal periods ended July 5, 2019 and June 29, 2018. The three months ended July 5, 2019 consisted of 14 weeks, whereas the three months ended June 29, 2018 consisted of 13 weeks. Our 2020 fiscal year consists of 53 weeks and ends on April 3, 2020.
Use of estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, the determination of stand-alone selling price for performance obligations, valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, valuation of stock-based compensation, and the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions. Management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ significantly from these estimates, and such differences may be material to the Condensed Consolidated Financial Statements.
Significant accounting policies
There have been no material changes to our significant accounting policies as of and for the three months ended July 5, 2019, except for those noted in Note 2 and Note 4, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 29, 2019.
Note 2. Recent Accounting Standards
Recently adopted authoritative guidance
Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued new guidance on lease accounting which requires lessees to recognize assets and liabilities on their balance sheet for the rights and obligations created by operating leases and also requires disclosures designed to give users of financial statements information on the amount, timing, and uncertainty of cash flows arising from leases. Most prominent among the changes in the standard is the recognition of right-of-use (ROU) assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.
On March 30, 2019, the first day of our fiscal 2020, we adopted the new guidance using the alternative modified retrospective transition method under which we continue to apply the legacy lease accounting guidance, including its disclosure requirements, in comparative periods prior to fiscal 2020. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard that allowed us not to reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. We currently do not have any finance leases. We combine the lease and non-lease components in determining the operating lease assets and liabilities.

8

Table of Contents

The adoption of the new lease accounting standard resulted in the recognition of ROU assets and lease liabilities of $182 million and $209 million, respectively, as of March 30, 2019 related to our operating leases. The adoption of the standard also resulted in elimination of deferred rent liabilities of $17 million, as of March 30, 2019, which are now recorded as a reduction of the ROU assets. The standard did not have an impact on our consolidated statements of operations or statements of cash flows.
Recently issued authoritative guidance not yet adopted
Credit Losses. In June 2016, the FASB issued new authoritative guidance on credit losses which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, we will be required to use a new forward-looking “expected loss” model. Additionally, for available-for-sale debt securities with unrealized losses, we will measure credit losses in a manner similar to today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. The standard will be effective for us in our first quarter of fiscal 2021. We are currently evaluating the impact of the adoption of this guidance on our Consolidated Financial Statements.
Internal-Use Software. In August 2018, the FASB issued new guidance that clarifies the accounting for implementation costs in a cloud computing arrangement. The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will be effective for us in our first quarter of fiscal 2021, with early adoption permitted. We are currently evaluating the adoption date and the impact of the adoption of this guidance on our Consolidated Financial Statements and disclosures.
Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had, or will have, a material impact on our consolidated financial position, operating results or disclosures.
Note 3. Revenues
Timing of revenue recognition
The following table provides our revenue disaggregated by the timing of recognition:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Enterprise Security:
 
 
 
Products and services transferred at a point in time
$
93

 
$
99

Products and services transferred over time
$
518

 
$
457

Consumer Cyber Safety:
 
 
 
Products and services transferred at a point in time
$
13

 
$
12

Products and services transferred over time
$
623

 
$
588

Total
 
 
 
Products and services transferred at a point in time
$
106

 
$
111

Products and services transferred over time
$
1,141

 
$
1,045

Contract liabilities
Contract liabilities by segment were as follows:
(In millions)
July 5, 2019
 
March 29, 2019
Enterprise Security
$
1,888

 
$
2,002

Consumer Cyber Safety
1,011

 
1,054

Total
$
2,899

 
$
3,056


The amount of revenue recognized during the three months ended July 5, 2019 that was included within the contract liabilities balance at March 29, 2019 was $920 million. The amount of revenue recognized during the three months ended June 29, 2018 that was included within the contract liabilities balance at March 31, 2018 was $848 million.
Contract acquisition costs
During the three months ended July 5, 2019 and June 29, 2018, we recognized amortization expense of capitalized contract acquisition costs of $28 million and $23 million, respectively. There were no impairment losses recognized during the periods.

9

Table of Contents

Remaining performance obligations
Remaining performance obligations represent contracted revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods. As of July 5, 2019, we had $2,506 million of remaining performance obligations, which does not include Consumer Cyber Safety customer deposit liabilities of approximately $416 million. The approximate percentages expected to be recognized as revenue in the future are as follows:
 
Total Remaining Performance Obligations
 
Percent Expected to be Recognized as Revenue
(In millions, except percentages)
 
0 - 12 Months
 
13 - 24 Months
 
25 - 36 Months
 
Over 36 Months
Enterprise Security
$
1,911

 
65
%
 
24
%
 
9
%
 
2
%
Consumer Cyber Safety
595

 
95
%
 
4
%
 
1
%
 
%
Total
$
2,506

 
72
%
 
19
%
 
7
%
 
1
%
 
Percentages may not add to 100% due to rounding.
Note 4. Leases
We lease certain of our facilities, equipment, and data center co-locations under operating leases that expire on various dates through fiscal 2029. Our leases generally have terms that range from 1 year to 17 years for our facilities, 1 year to 6 years for equipment, and 1 year to 6 years for data center co-locations. Some of our leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives.
We determine if an arrangement is a lease at inception. We have elected to not recognize a lease liability or right-of-use (ROU) asset for short-term leases (leases with a term of twelve months or less that do not include an option to purchase the underlying asset). Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The interest rate we use to determine the present value of future payments is our incremental borrowing rate because the rate implicit in our leases is not readily determinable. Our incremental borrowing rate is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors. Our operating lease assets also include adjustments for prepaid lease payments, lease incentives and initial direct costs.
Certain lease contracts include obligations to pay for other services, such as operations and maintenance. We elected the practical expedient whereby we record all lease components and the related minimum non-lease components as a single lease component. Cash payments made for variable lease costs are not included in the measurement of our operating lease assets and liabilities. Many of our lease terms include one or more options to renew. We do not assume renewals in our determination of the lease term unless it is reasonably certain that we will exercise that option. Lease costs for minimum lease payments for operating leases is recognized on a straight-line basis over the lease term. Our lease agreements do not contain any residual value guarantees.
The following summarizes our lease costs for the three months ended July 5, 2019:
 
Three Months Ended
(In millions)
July 5, 2019
Operating lease costs
$
15

Short-term lease costs
2

Variable lease costs
8

Total lease costs
$
25


Rent expense under operating leases was $19 million for the three months ended June 29, 2018.
Other information related to our operating leases was as follows:
 
Three Months Ended
 
July 5, 2019
Weighted-average remaining lease term
5.3 years

Weighted-average discount rate
4.28
%

See Note 6 for additional cash flow information related to our operating leases.

10

Table of Contents

As of July 5, 2019, the maturities of our lease liabilities by fiscal year are as follows:
(In millions)
 
Remainder of 2020
$
39

2021
53

2022
43

2023
30

2024
26

Thereafter
42

Total lease payments
233

Less: Imputed interest
(25
)
Present value of lease liabilities
$
208


As of March 29, 2019, the minimum future rentals on non-cancelable operating leases by fiscal year, based on the previous lease accounting standard, were as follows:
(In millions)
 
2020
$
55

2021
49

2022
40

2023
32

2024
26

Thereafter
42

Total minimum future lease payments
$
244


Note 5Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill by segment were as follows:
(In millions)
Enterprise Security
 
Consumer Cyber Safety
 
Total
Balance as of March 29, 2019
$
5,861

 
$
2,589

 
$
8,450

Translation adjustments
(1
)
 

 
(1
)
Balance as of July 5, 2019
$
5,860

 
$
2,589

 
$
8,449


Intangible assets, net
 
July 5, 2019
 
March 29, 2019
(In millions)
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Customer relationships
$
1,425

 
$
(566
)
 
$
859

 
$
1,425

 
$
(515
)
 
$
910

Developed technology
1,039

 
(617
)
 
422

 
1,039

 
(555
)
 
484

Other
6

 
(2
)
 
4

 
6

 
(2
)
 
4

Total finite-lived intangible assets
2,470

 
(1,185
)
 
1,285

 
2,470

 
(1,072
)
 
1,398

Indefinite-lived trade names
852

 

 
852

 
852

 

 
852

Total intangible assets
$
3,322

 
$
(1,185
)
 
$
2,137

 
$
3,322

 
$
(1,072
)
 
$
2,250



11

Table of Contents

Amortization expense for purchased intangible assets is summarized below:
 
Three Months Ended
 
Statements of Operations Classification
(In millions)
July 5, 2019
 
June 29, 2018
 
Customer relationships and other
$
51

 
$
53

 
Operating expenses
Developed technology
61

 
58

 
Cost of revenues
Total
$
112

 
$
111

 
 

As of July 5, 2019, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:
(In millions)
July 5, 2019
Remainder of 2020
$
335

2021
338

2022
275

2023
224

2024
110

Thereafter
3

Total
$
1,285


Note 6. Supplementary Information (in millions)
Cash and cash equivalents:
 
July 5, 2019
 
March 29, 2019
Cash
$
270

 
$
376

Cash equivalents
1,262

 
1,415

Total cash and cash equivalents
$
1,532

 
$
1,791


Other current assets:
 
July 5, 2019
 
March 29, 2019
Prepaid expenses
$
164

 
$
162

Income tax receivable and prepaid income taxes
34

 
61

Value-added tax receivable and other tax receivables
76

 
69

Short-term deferred commissions
101

 
92

Other
54

 
51

Total other current assets
$
429

 
$
435


Property and equipment, net:
 
July 5, 2019
 
March 29, 2019
Land
$
65

 
$
66

Computer hardware and software
1,181

 
1,159

Office furniture and equipment
122

 
118

Buildings
364

 
364

Leasehold improvements
379

 
372

Construction in progress
31

 
30

Total property and equipment, gross
2,142

 
2,109

Accumulated depreciation and amortization
(1,358
)
 
(1,319
)
Total property and equipment, net
$
784

 
$
790



12

Table of Contents

Other long-term assets:
 
July 5, 2019
 
March 29, 2019
Cost method investments
$
186

 
$
184

Equity method investment
22

 
32

Long-term income tax receivable and prepaid income taxes
43

 
34

Deferred income tax assets
833

 
830

Long-term deferred commissions
82

 
93

Other
89

 
89

Total other long-term assets
$
1,255

 
$
1,262


Short-term contract liabilities:
 
July 5, 2019
 
March 29, 2019
Deferred revenue
$
1,795

 
$
1,815

Customer deposit liabilities
416

 
505

Total short-term contract liabilities
$
2,211

 
$
2,320


Long-term income taxes payable:
 
July 5, 2019
 
March 29, 2019
Deemed repatriation tax payable
$
638

 
$
703

Uncertain tax positions (including interest and penalties)
440

 
373

Total long-term income taxes payable
$
1,078

 
$
1,076


Other expense, net:
 
Three Months Ended
 
July 5, 2019
 
June 29, 2018
Interest income
$
10

 
$
7

Loss from equity interest
(11
)
 
(26
)
Foreign exchange loss
(2
)
 
(9
)
Other
3

 
9

Other expense, net
$

 
$
(19
)

Supplemental cash flow information:
 
Three Months Ended
 
July 5, 2019
 
June 29, 2018
Income taxes paid, net of refunds
$
36

 
$
21

Interest expense paid
$
48

 
$
49

Cash paid for amounts included in the measurement of operating lease liabilities
$
18

 
$

Non-cash operating activities:
 
 
 
Operating lease assets obtained in exchange for operating lease liabilities
$
13

 
$

Non-cash investing activities:
 
 
 
Purchases of property and equipment in current liabilities
$
14

 
$
13


Note 7. Financial Instruments and Fair Value Measurements
For financial instruments measured at fair value, fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider assumptions that market participants would use when pricing the asset or liability.
The three levels of inputs that may be used to measure fair value are:
Level 1: Quoted prices in active markets for identical assets or liabilities.

13

Table of Contents

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes.
Assets measured and recorded at fair value on a recurring basis
The following table summarizes our financial instruments measured at fair value on a recurring basis:
 
July 5, 2019
 
March 29, 2019
(In millions)
Fair Value
 
Level 1
 
Level 2
 
Fair Value
 
Level 1
 
Level 2
Assets:
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
1,064

 
$
1,064

 
$

 
$
1,415

 
$
1,415

 
$

Certificates of deposit
198

 

 
198

 

 

 

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
161

 

 
161

 
251

 

 
251

Certificates of deposit
1

 

 
1

 
1

 

 
1

Total
$
1,424

 
$
1,064

 
$
360

 
$
1,667

 
$
1,415

 
$
252


The following table presents the contractual maturities of our investments in debt securities as of July 5, 2019:
(In millions)
Fair Value
Due in one year or less
$
97

Due after one year through five years
65

Total
$
162


Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.
Financial instruments not recorded at fair value on a recurring basis include our non-marketable equity investments, equity method investment and our long-term debt.
Non-marketable equity investments
As of July 5, 2019 and March 29, 2019, the carrying value of our non-marketable equity investments was $186 million and $184 million, respectively.
Equity method investment
Our investment in equity securities that is accounted for using the equity method is included in Other long-term assets in our Condensed Consolidated Balance Sheets and consists of our equity investment in DigiCert Parent Inc. (DigiCert) that had a carrying value of $22 million and $32 million at July 5, 2019 and March 29, 2019, respectively.
We recorded a loss from equity interests of $11 million and $26 million during the three months ended July 5, 2019 and June 29, 2018, respectively, in Other expense, net in our Condensed Consolidated Statements of Operations. This loss was reflected as a reduction in the carrying amount of our investment in equity interests in our Condensed Consolidated Balance Sheets.
The following table summarizes financial data from DigiCert which was provided to us on a three-month lag:
 
Three Months Ended
(In millions)
March 31, 2019
 
March 31, 2018
Revenue
$
106

 
$
66

Gross profit
$
87

 
$
53

Net loss
$
(36
)
 
$
(82
)

On July 9, 2019, DigiCert announced that Clearlake Capital Group, L.P. (Clearlake), a private investment firm, and TA Associates, an existing investor of DigiCert and a private equity firm, have reached a definitive agreement to make an investment in DigiCert. As a part of the transaction, Clearlake and TA will become equal partners in DigiCert. The transaction is expected to close in the second half of calendar year 2019, pending customary regulatory approvals and closing conditions.

14

Table of Contents

Current and long-term debt
As of July 5, 2019 and March 29, 2019, the total fair value of our current and long-term fixed rate debt was $4,029 million and $3,964 million, respectively. The fair value of our variable rate debt approximated its carrying value. The fair values of all our debt obligations were based on Level 2 inputs.
Note 8Debt
The following table summarizes components of our debt:
(In millions, except percentages)
July 5, 2019
 
March 29, 2019
 
Effective
Interest Rate
4.2% Senior Notes due September 15, 2020
$
750

 
$
750

 
4.25
%
2.5% Convertible Senior Notes due April 1, 2021
500

 
500

 
3.76
%
Senior Term Loan A-5 due August 1, 2021
500

 
500

 
LIBOR plus (1)

2.0% Convertible Senior Notes due August 15, 2021
1,250

 
1,250

 
2.66
%
3.95% Senior Notes due June 15, 2022
400

 
400

 
4.05
%
5.0% Senior Notes due April 15, 2025
1,100

 
1,100

 
5.23
%
Total principal amount
4,500

 
4,500

 
 
Less: Unamortized discount and issuance costs
(42
)
 
(48
)
 
 
Total debt
4,458

 
4,452

 
 
Less: current portion
(494
)
 
(491
)
 
 
Total long-term debt
$
3,964

 
$
3,961

 
 
 

(1)
The senior term facility bears interest at a rate equal to the London Interbank Offered Rate (LIBOR) plus a margin based on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt and the underlying loan agreement. The interest rates for the outstanding senior term loan are as follows:
 
July 5, 2019
 
March 29, 2019
Senior Term Loan A-5 due August 1, 2021
4.16
%
 
4.24
%

On or after March 4, 2020, holders of the 2.5% Convertible Senior Notes have the option to require us to repurchase the notes, in cash, equal to the principal amount and accrued and unpaid interest of the 2.5% Convertible Senior Notes. Therefore, as of July 5, 2019 and March 29, 2019, the principal amount and associated unamortized discount and issuance costs of the 2.5% Convertible Senior Notes were classified as Current portion of long-term debt in our Condensed Consolidated Balance Sheets.
As of July 5, 2019, the future contractual maturities of debt by fiscal year are as follows:
(In millions)
 
Remainder of 2020
$

2021
1,250

2022
1,750

2023
400

2024

Thereafter
1,100

Total future maturities of debt
$
4,500


Based on the closing price of our common stock of $25.00 on July 5, 2019, the if-converted value of our 2.5% Convertible Senior Notes exceeded the principal amount by approximately $245 million and the if-converted value of our 2.0% Convertible Senior Notes exceeded the principal amount by approximately $281 million.
The following table sets forth total interest expense recognized related to our 2.5% and 2.0% Convertible Senior Notes:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Contractual interest expense
$
10

 
$
9

Amortization of debt discount and issuance costs
$
4

 
$
4



15

Table of Contents

Revolving credit facility
We have an unsecured revolving credit facility to borrow up to $1.0 billion through May 10, 2021. Borrowings under the revolving facility bear interest at a floating rate of interest plus an applicable margin which is based on our senior unsecured credit agency rating. We are obligated to pay commitment fees on the daily amount of the unused commitment at a rate based on our debt ratings. As of July 5, 2019 and March 29, 2019, there were no borrowings outstanding under this revolving credit facility.
Debt Covenant compliance
The Senior Term Loan A-5 agreement contains customary representations and warranties, non-financial covenants for financial reporting, and affirmative and negative covenants, including compliance with specified financial ratios. As of July 5, 2019, we were in compliance with all debt covenants.
Note 9. Derivatives
We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, we are exposed to foreign exchange gains or losses which impacts our operating results. As part of our foreign currency risk mitigation strategy, we have entered into foreign exchange forward contracts with up to twelve months in duration. We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates.
To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, we conduct a program under which we may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates. As of July 5, 2019 and June 29, 2018, the fair value of these contracts was insignificant. During the three months ended July 5, 2019, the net gain recognized in Accumulated other comprehensive income (loss) was insignificant.
We also enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure. These forward contracts are not designated as hedging instruments. As of July 5, 2019 and June 29, 2018, the fair value of these contracts was insignificant. The related gain (loss) recognized in Other expense, net in our Condensed Consolidated Statements of Operations was as follows:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Foreign exchange forward contracts loss
$

 
$
(