Quarterly Report (10-q)

Date : 08/09/2019 @ 8:10PM
Source : Edgar (US Regulatory)
Stock : Symantec Corporation (SYMC)
Quote : 23.75  0.0 (0.00%) @ 12:00AM

Quarterly Report (10-q)

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 Corp oration
(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:
( 650 527-8000
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.
 



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


2


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


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


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


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


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


SYMANTEC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 Description 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


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


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


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 5 Goodwill 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


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


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


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


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 8 Debt
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


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
$

 
$
(36
)

The fair value of our foreign exchange forward contracts is presented on a gross basis in our Condensed Consolidated Balance Sheets. To mitigate losses in the event of nonperformance by counterparties, we have entered into master netting arrangements with our counterparties that allow us to settle payments on a net basis. The effect of netting on our derivative assets and liabilities was not material as of July 5, 2019 and June 29, 2018 .
The notional amount of our outstanding foreign exchange forward contracts in U.S. dollar equivalent was as follows:
(In millions)
July 5, 2019
 
March 29, 2019
Net investment hedges
 
 
 
Foreign exchange forward contracts sold
$
153

 
$
116

Balance sheet contracts
 
 
 
Foreign exchange forward contracts purchased
$
599

 
$
963

Foreign exchange forward contracts sold
$
215

 
$
122


Note 10 . Restructuring, Transition and Other Costs
Our restructuring, transition and other costs consist primarily of severance, facilities, transition and other related costs. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. Included in other exit and disposal costs are advisory fees incurred in connection with restructuring events and facilities exit costs, which generally include rent expense and lease termination costs, less estimated sublease income. Transition costs are incurred in connection with Board of Directors approved discrete strategic information technology transformation initiatives and primarily consist of consulting charges associated with our enterprise resource planning and supporting systems and costs to automate business processes. Such projects were completed by the end of fiscal 2019. In addition, transition costs include expenses associated with divestitures of our product lines.
Fiscal 2019 Plan
In August 2018, we announced a restructuring plan (the Fiscal 2019 Plan) under which we will initiate targeted reductions of up to approximately 8% of our global workforce. We estimate that we will incur total costs in connection with the Fiscal 2019

16


Plan of approximately $50 million , primarily for severance and termination benefits. These actions are expected to be completed in fiscal 2020. As of July 5, 2019 , we have incurred costs of $47 million related to our Fiscal 2019 Plan.
Fiscal 2017 Plan
We initiated a restructuring plan in the first quarter of fiscal 2017 to reduce complexity by means of long-term structural improvements (the Fiscal 2017 Plan), under which we reduced headcount and closed certain facilities. These actions were completed in fiscal 2019 at a cumulative cost of $289 million related to our Fiscal 2017 Plan.
Restructuring, transition and other costs summary
Our restructuring, transition and other costs are presented in the table below:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Severance and termination benefit costs
$
24

 
$
12

Other exit and disposal costs
1

 
9

Asset write-offs

 
2

Transition costs

 
73

Total restructuring, transition and other costs
$
25

 
$
96


Note 11 Income Taxes
The following table summarizes our effective tax rate for the periods presented:
 
Three Months Ended
(In millions, except percentages)
July 5, 2019
 
June 29, 2018
Income (loss) before income taxes
$
108

 
$
(69
)
Income tax expense (benefit)
$
82

 
$
(4
)
Effective tax rate
76
%
 
6
%

Our effective tax rate for the three months ended July 5, 2019 differs from the federal statutory income tax rate primarily due to tax expense related to the Ninth Circuit's recent holding in Altera Corp. v. Commissioner, various permanent differences, and state taxes, partially offset by the benefits of lower-taxed international earnings, the research and development tax credit and foreign derived intangible income deduction.
Our effective tax rate for the three months ended June 29, 2018 differs from the federal statutory income tax rate primarily due to the benefits of lower-taxed international earnings, the research and development tax credit, and foreign derived intangible income deduction, partially offset by tax expense from certain intercompany transactions and various permanent differences.
On July 27, 2015, the United States Tax Court (Tax Court) issued its opinion in Altera Corp. v. Commissioner and concluded that related parties in a cost sharing arrangement are not required to share expenses related to stock-based compensation. The Commissioner of the Internal Revenue Service appealed the Tax Court decision to the Ninth Circuit Court of Appeals (Ninth Circuit). In June 2019, the U.S. Court of Appeals for the Ninth Circuit reversed the July 2015 decision of the U.S. Tax Court. As a result of this decision, we recorded a cumulative income tax expense of $62 million in three months ended July 5, 2019. On July 22, 2019, the taxpayer requested a rehearing before the full Ninth Circuit and may subsequently appeal from the Ninth Circuit to the Supreme Court. As a result, the final outcome of the case is uncertain. If the Altera Ninth Circuit Panel Opinion is reversed, we would anticipate recording an income tax benefit at that time.
The aggregate changes in the balance of gross unrecognized tax benefits for the three months ended July 5, 2019 were as follows:
 
Three Months Ended
(In millions)
July 5, 2019
Balance at beginning of year
$
446

Lapse of statute of limitations
(13
)
Increase related to prior period tax positions
62

Increase related to current year tax positions
16

Net increase
65

Balance at end of quarter
$
511


As of July 5, 2019, $94 million of the gross unrecognized tax benefit was recorded in Deferred income tax liabilities and $417 million was recorded in Long-term income taxes payable .

17


The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Although potential resolution of uncertain tax positions involves multiple tax periods and jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could decrease, whether by payment, release, or a combination of both, in the next 12 months by $30 million , which could reduce our income tax provision and therefore benefit the resulting effective tax rate.
We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.
Note 12 Stockholders' Equity
Dividends
On August 8, 2019 , we announced a cash dividend of $0.075 per share of common stock to be paid in September 2019 . All shares of common stock issued and outstanding and all restricted stock units (RSUs) and performance-based restricted stock units (PRUs) as of the record date will be entitled to the dividend and dividend equivalents, respectively. Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.
Stock repurchase program
During the three months ended July 5, 2019 , we executed and settled repurchases of 25 million shares for $541 million in the open market at an average price of $21.85 per share. In addition, repurchases of 1 million shares executed during fiscal 2019 settled during the three months ended July 5, 2019. As of July 5, 2019 , we had $507 million remaining under the authorization to be completed in future periods with no expiration date.
Accumulated other comprehensive loss
Components of Accumulated other comprehensive loss, net of taxes, were as follows:
(In millions)
Foreign Currency
Translation Adjustments
 
Unrealized Loss on
Available-For-Sale Securities
 
Equity Method Investee
 
Total
Balance as of March 29, 2019
$
(5
)
 
$
(1
)
 
$
(1
)
 
$
(7
)
Other comprehensive income (loss) before reclassifications
(7
)
 
1

 
1

 
(5
)
Balance as of July 5, 2019
$
(12
)
 
$

 
$

 
$
(12
)

Note 13 Stock-Based Compensation
Stock-based compensation expense
The following table sets forth the stock-based compensation expense recognized for our equity incentive plans:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Cost of revenues
$
5

 
$
5

Sales and marketing
25

 
31

Research and development
35

 
39

General and administrative
15

 
38

Total stock-based compensation expense
$
80

 
$
113

Income tax benefit for stock-based compensation expense
$
(15
)
 
$
(26
)


18


The following table summarizes additional information related to our stock-based compensation:
 
Three Months Ended
(In millions, except per grant data)
July 5, 2019
 
June 29, 2018
RSUs:
 
 
 
Weighted-average fair value per award granted
$
19.39

 
$
21.71

Awards granted
12

 
10

Total fair value of awards released
$
174

 
$
167

Outstanding and unvested
22

 
20

PRUs:
 
 
 
Weighted-average fair value per award granted
$
19.21

 
$

Awards granted
2

 

Total fair value of awards released
$
26

 
$
8

Outstanding and unvested at target payout
3

 
3

Stock options:
 
 
 
Weight-average fair value per award granted
$
4.76

 
$

Awards granted
2

 

Total intrinsic value of stock options exercised
$
71

 
$
7

Outstanding
8

 
13

Exercisable
6

 
11

Restricted stock:
 
 
 
Outstanding and unvested
1

 
1


Liability-classified awards settled in shares
For certain employees, we settled fiscal 2019 bonuses in approximately 1 million RSUs. These awards were granted and vested in the first quarter of fiscal 2020. As of July 5, 2019 and March 29, 2019 , the total liability associated with liability-classified awards was $4 million and $22 million , respectively, which is presented in Accrued compensation and benefits in our Condensed Consolidated Balance Sheets.
As of July 5, 2019 , the total unrecognized stock-based compensation costs, net of estimated forfeitures, were as follows:
(In millions)
Unrecognized compensation cost
 
Weighted-average remaining years
RSUs
$
327

 
2.2 years
PRUs
32

 
1.7 years
Options
18

 
1.3 years
Restricted stock
18

 
1.3 years
Liability-classified awards settled in shares
25

 
2.1 years
Employee stock purchase plan
10

 
0.6 years
Total
$
430

 
 

Note 14 Net Income Per Share
Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding during the period using the treasury stock method. Dilutive potentially issuable common shares includes the dilutive effect of the shares underlying convertible debt and employee equity awards. Diluted loss per share was the same as basic loss per share for the three months ended June 29, 2018 , as there was a loss from continuing operations in the period and inclusion of potentially issuable shares was anti-dilutive.

19


The components of basic and diluted net income (loss) per share are as follows:
 
Three Months Ended
(In millions, except per share amounts)
July 5, 2019
 
June 29, 2018
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

Dilutive potentially issuable shares:
 
 
 
Convertible debt
10

 

Employee equity awards
13

 

Weighted-average shares outstanding - diluted
642

 
624

 
 
 
 
Anti-dilutive shares excluded from diluted net income (loss) per share calculation:
 
 
 
Convertible debt

 
91

Employee equity awards
5

 
55

Total
5

 
146


 

(1) Net income per share amounts may not add due to rounding.
Under the treasury stock method, our Convertible Senior Notes will generally have a dilutive impact on net income per share when our average stock price for the period exceeds approximately $16.77 per share for the 2.5% Convertible Senior Notes and $20.41 per share for the 2.0% Convertible Senior Notes. The conversion feature of both notes was anti-dilutive during the three months ended June 29, 2018 as there was a loss from continuing operations in the period .
Note 15 Segment and Geographic Information
We operate in the following two reportable segments, which are the same as our operating segments:
Enterprise Security. Our Enterprise Security segment focuses on providing our Integrated Cyber Defense solutions to help business and government customers unify cloud and on-premises security to deliver a more effective cyber defense solution, while driving down cost and complexity. See Note 17 to the Condensed Consolidated Financial Statements for additional information about the planned divestiture of our Enterprise Security business .
Consumer Cyber Safety. Our Consumer Cyber Safety segment focuses on providing cyber safety solutions under our Norton LifeLock brand to help consumers protect their devices, online privacy, identities, and home networks.
Operating segments are based upon the nature of our business and how our business is managed. Our Chief Operating Decision Makers (CODM), use our operating segment financial information to evaluate segment performance and to allocate resources.

20


There were no inter-segment sales for the periods presented. The following table summarizes the operating results of our reportable segments:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Total Segments:
 
 
 
Net revenues
$
1,247

 
$
1,156

Operating income
$
375

 
$
319

Enterprise Security:
 
 
 
Net revenues
$
611

 
$
556

Operating income
$
39

 
$
56

Consumer Cyber Safety:
 
 
 
Net revenues
$
636

 
$
600

Operating income
$
336

 
$
263


We do not allocate to our operating segments certain operating expenses that we manage separately at the corporate level and are not used in evaluating the results of, or in allocating resources to, our segments. These unallocated expenses consist primarily of stock-based compensation expense; amortization of intangible assets; restructuring, transition and other costs.
The following table provides a reconciliation of our total reportable segments’ operating income to our total operating income:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Total segment operating income
$
375

 
$
319

Reconciling items:
 
 
 
Stock-based compensation expense
80

 
113

Amortization of intangible assets
112

 
111

Restructuring, transition and other costs
25

 
96

Other
1

 
(3
)
Total consolidated operating income from continuing operations
$
157

 
$
2


The following table summarizes net revenues by significant products and services categories:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Enterprise Security:
 
 
 
Endpoint and information protection
$
261

 
$
249

Network and web security
196

 
173

Other products and services
154

 
134

Total Enterprise Security
$
611

 
$
556

Consumer Cyber Safety:
 
 
 
Consumer security
$
381

 
$
369

Identity and information protection
255

 
231

Total Consumer Cyber Safety
636

 
600

Total net revenues
$
1,247

 
$
1,156


From time to time, changes in our product hierarchy cause changes to the product categories above. When changes occur, we recast historical amounts to match the current product hierarchy. Endpoint and information protection products include endpoint security, advanced threat protection, information protection solutions, and their related support services. Network and web security products include network security, web security, and cloud security solutions and their related support services. Other products and services primarily consist of email security products, managed security services, consulting, and other professional services.
Consumer security products include Norton security, Norton Secure VPN, and other consumer security solutions. Identity and information protection products include LifeLock identity theft protection and other information protection solutions.  

21


Geographical information
Net revenues by geography are based on the billing addresses of our customers. The following table represents net revenues by geographic area for the periods presented:
 
Three Months Ended
(In millions)
July 5, 2019
 
June 29, 2018
Americas
$
807

 
$
734

EMEA
252

 
243

APJ
188

 
179

Total net revenues
$
1,247

 
$
1,156


The Americas include U.S., Canada and Latin America; EMEA includes Europe, Middle East and Africa; APJ includes Asia Pacific and Japan.
Revenues from customers inside the U.S. were $754 million and $688 million during the three months ended July 5, 2019 and June 29, 2018 , respectively. No other individual country accounted for more than 10% of revenues.
Most of our assets, as of July 5, 2019 and March 29, 2019 were attributable to our U.S. operations. The table below represents cash, cash equivalents and short-term investments held in the U.S. and internationally in various foreign subsidiaries.
(In millions)
July 5, 2019
 
March 29, 2019
U.S.
$
1,216

 
$
1,544

International
478

 
499

Total cash, cash equivalent and short-term investments
$
1,694

 
$
2,043


The table below represents our property and equipment, net of accumulated depreciation and amortization, by geographic area, based on the physical location of the asset, at the end of each period presented.
(In millions)
July 5, 2019
 
March 29, 2019
U.S.
$
661

 
$
671

International (1)
123

 
119

Total property and equipment, net
$
784

 
$
790

 
(1)
No individual country represented more than 10% of the respective totals.
Our operating lease assets by geographic area, based on the physical location of the asset, were as follows:
(In millions)
July 5, 2019
U.S.
$
95

India
22

Other international countries (1)
66

Total operating lease assets
$
183

 
(1)
No other international country represented more than 10% of the respective totals.
Significant customers
In the three months ended July 5, 2019 and June 29, 2018 , no customer accounted for more than 10% of our net revenues.
Customers, which are distributors, that accounted for over 10% of our net accounts receivable were as follows:
 
July 5, 2019
 
March 29, 2019
Customer A
15
%
 
16
%
Customer B
11
%
 
15
%
Customer C
11
%
 
N/A



22


Note 16 Commitments and Contingencies
Purchase obligations
As of July 5, 2019 , we had purchase obligations of $1,107 million associated with agreements for purchases of goods or services. Management believes that cancellation of these contracts is unlikely, and we expect to make future cash payments according to the contract terms.
Deemed repatriation taxes
As of July 5, 2019 , we are required to pay a one-time transition tax of $703 million on untaxed foreign earnings of our foreign subsidiaries due in installments through July 2025 as a result of the Tax Cuts and Jobs Act (H.R.1).
Indemnifications
In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, subsidiaries, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of agreements or representations and warranties made by us. In addition, our bylaws contain indemnification obligations to our directors, officers, employees, and agents, and we have entered into indemnification agreements with our directors and certain of our officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in our bylaws and to provide additional procedural protections. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements might not be subject to maximum loss clauses. Historically, we have not incurred material costs as a result of obligations under these agreements, and we have not accrued any material liabilities related to such indemnification obligations in our Condensed Consolidated Financial Statements.
In connection with the sale of our Veritas information management business, we assigned several leases to Veritas Technologies LLC or its related subsidiaries. As a condition to consenting to the assignments, certain lessors required us to agree to indemnify the lessor under the applicable lease with respect to certain matters, including, but not limited to, losses arising out of Veritas Technologies LLC or its related subsidiaries’ breach of payment obligations under the terms of the lease. As with our other indemnification obligations discussed above and in general, it is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. As with our other indemnification obligations, such indemnification agreements might not be subject to maximum loss clauses, and to date, generally under our real estate obligations, we have not incurred material costs as a result of such obligations under our leases and have not accrued any liabilities related to such indemnification obligations in our Condensed Consolidated Financial Statements.
We provide limited product warranties, and the majority of our software license agreements contain provisions that indemnify licensees of our software from damages and costs resulting from claims alleging that our software infringes on the intellectual property rights of a third party. Historically, payments made under these provisions have been immaterial. We monitor the conditions that are subject to indemnification to identify if a loss has occurred.
Litigation contingencies
SEC Investigation
As previously disclosed in our public filings, the Audit Committee of our Board of Directors (the Audit Committee) completed its internal investigation (the Audit Committee Investigation) in September 2018. In connection with the Audit Committee Investigation, we voluntarily contacted the U.S. Securities and Exchange Commission (SEC) in April 2018. The SEC commenced a formal investigation, and we continue to cooperate with that investigation. The outcome of such an investigation is difficult to predict. We have incurred, and will continue to incur, significant expenses related to legal and other professional services in connection with the SEC investigation. At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss.
Securities Class Action and Derivative Litigation
Securities class action lawsuits, which have since been consolidated, were filed in May 2018 against us and certain of our former officers, in the U.S. District Court for the Northern District of California. The lead plaintiff’s consolidated amended complaint alleged that, during a purported class period of May 11, 2017 to August 2, 2018, defendants made false and misleading statements in violation of Sections 10(b) and 20(a), and that certain individuals violated Section 20A, of the Securities Exchange Act. Defendants filed motions to dismiss, which the Court granted in an order dated June 14, 2019. Pursuant to that order, plaintiff was permitted to file a motion seeking leave to amend its claims. Plaintiff filed that motion on July 11, 2019 and defendants are opposing that motion.
Purported shareholder derivative lawsuits have been filed against Symantec and certain of our former officers and current and former directors in the U.S. District Courts for the District of Delaware and the Northern District of California, Delaware Chancery Court, and Delaware Superior Court, arising generally out of the same facts and circumstances as alleged in the securities class action and alleging claims for breach of fiduciary duty and related claims; these lawsuits include an action brought derivatively on behalf of Symantec’s 2008 Employee Stock Purchase Plan. The derivative actions are currently voluntarily stayed in light of the securities class action. No specific amount of damages has been alleged in these lawsuits. We have also received demands from purported stockholders to inspect corporate books and records under Delaware law. We will

23


continue to incur legal fees in connection with these pending cases and demands, including expenses for the reimbursement of legal fees of present and former officers and directors under indemnification obligations. The expense of continuing to defend such litigation may be significant. We intend to defend these lawsuits vigorously, but there can be no assurance that we will be successful in any defense. If any of the lawsuits are decided adversely, we may be liable for significant damages directly or under our indemnification obligations, which could adversely affect our business, results of operations, and cash flows. At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of these lawsuits or estimate the range of any potential loss.
GSA
During the first quarter of fiscal 2013, we were advised by the Commercial Litigation Branch of the Department of Justice’s (DOJ) Civil Division and the Civil Division of the U.S. Attorney’s Office for the District of Columbia that the government is investigating our compliance with certain provisions of our U.S. General Services Administration (GSA) Multiple Award Schedule Contract No. GS-35F-0240T effective January 24, 2007, including provisions relating to pricing, country of origin, accessibility, and the disclosure of commercial sales practices.
As reported on the GSA’s publicly-available database, our total sales under the GSA Schedule contract were approximately $222 million from the period beginning January 2007 and ending September 2012. We have fully cooperated with the government throughout its investigation, and in January 2014, representatives of the government indicated that their initial analysis of our actual damages exposure from direct government sales under the GSA schedule was approximately  $145 million ; since the initial meeting, the government’s analysis of our potential damages exposure relating to direct sales has increased. The government has also indicated they are going to pursue claims for certain sales to California, Florida, and New York as well as sales to the federal government through reseller GSA Schedule contracts, which could significantly increase our potential damages exposure.
In 2012, a sealed civil lawsuit was filed against Symantec related to compliance with the GSA Schedule contract and contracts with California, Florida, and New York. On July 18, 2014, the Court-imposed seal expired, and the government intervened in the lawsuit. On September 16, 2014, the states of California and Florida intervened in the lawsuit, and the state of New York notified the Court that it would not intervene. On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific damages amount. On October 17, 2014, California and Florida combined their claims with those of the DOJ and the relator on behalf of New York in an Omnibus Complaint, and a First Amended Omnibus Complaint was filed on October 8, 2015; the state claims also do not state specific damages amounts.
It is possible that the litigation could lead to claims or findings of violations of the False Claims Act and could be material to our results of operations and cash flows for any period. Resolution of False Claims Act investigations can ultimately result in the payment of somewhere between one and three times the actual damages proven by the government, plus civil penalties in some cases, depending upon a number of factors. Our current estimate of the low end of the range of the probable estimated loss from this matter is  $25 million , which we have accrued. This amount contemplates estimated losses from both the investigation of compliance with the terms of the GSA Schedule contract as well as possible violations of the False Claims Act. There is at least a reasonable possibility that a loss may have been incurred in excess of our accrual for this matter, however, we are currently unable to determine the high end of the range of estimated losses resulting from this matter.
Other
We are involved in a number of other judicial and administrative proceedings that are incidental to our business. Although adverse decisions (or settlements) may occur in one or more of the cases, it is not possible to estimate the possible loss or losses from each of these cases. The final resolution of these lawsuits, individually or in the aggregate, is not expected to have a material adverse effect on our business, results of operations, financial condition or cash flows.
Note 17 . Subsequent Events
Fiscal 2020 Plan
On August 6, 2019, our Board of Directors approved a fiscal 2020 restructuring plan to improve productivity and reduce complexity in the way we manage the business. We expect to reduce net global headcount by approximately 7% . We also plan to downsize, vacate or close certain facilities and data centers in connection with the restructuring plan. We estimate that we will incur total costs in connection with the restructuring of approximately $100 million , approximately $75 million for severance and termination benefits and $25 million for site closures. These actions are expected to be completed in fiscal 2020.
Stock repurchase program
On August 6, 2019, our Board of Directors increased the share repurchase authorization to $1,600 million .
Planned divestiture of Enterprise Security business
On August 8, 2019, we entered into a definitive agreement to sell our Enterprise Security assets to Broadcom Inc. for $10.7 billion in cash and the assumption of certain liabilities. The divestiture of our Enterprise Security business will allow us to shift our operational focus to our Consumer Cyber Safety business. The transaction is expected to close before the end of calendar year 2019, subject to regulatory approvals and other customary closing conditions.

24


We are in the process of evaluating the transaction and its impact on our consolidated financial statements, including evaluating the resulting net gain and expenses that will be recognized, based on the terms of the definitive agreement. The Company's U.S. and foreign income taxes payable resulting from the transaction are estimated to range from $2.3 billion to $2.7 billion .

25


Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking statements and factors that may affect future results
The discussion below contains forward-looking statements, which are subject to safe harbors under the Securities Act of 1933, as amended (the Securities Act) and the Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements include references to our ability to utilize our deferred tax assets, as well as statements including words such as “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” “intent,” “momentum,” “projects,” and similar expressions. In addition, projections of our future financial performance; anticipated growth and trends in our businesses and in our industries; the anticipated impacts of acquisitions, restructurings, stock repurchases, and investment activities; the outcome or impact of pending litigation, claims or disputes; our intent to pay quarterly cash dividends in the future; plans for and anticipated benefits of our solutions; matters arising out of the ongoing U.S. Securities and Exchange Commission (the SEC) investigation; and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions, based on our current expectations about future events and may not prove to be accurate. We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising after the date of this report. These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several factors, including those that we discuss in Part II Item 1A, of this quarterly report on Form 10-Q. We encourage you to read that section carefully.
OVERVIEW
Symantec Corporation is a global leader in cyber security. We provide cyber security products, services, and solutions to organizations and individuals worldwide.
Our segments consist of:
Enterprise Security. Our Enterprise Security segment focuses on providing our Integrated Cyber Defense solutions to help business and government customers unify cloud and on-premises security to deliver a more effective cyber defense solution, while driving down cost and complexity. See Subsequent event below and Note 17 to the Condensed Consolidated Financial Statements for additional information about the planned divestiture of our Enterprise Security business.
Consumer Cyber Safety. Our Consumer Cyber Safety segment focuses on providing cyber safety solutions under our Norton LifeLock brand to help consumers protect their devices, online privacy, identities, and home networks.
Subsequent event
On August 8, 2019, we entered into a definitive agreement to sell our Enterprise Security assets to Broadcom Inc. for $10.7 billion in cash and the assumption of certain liabilities. The divestiture of our Enterprise Security business will allow us to shift our operational focus to our Consumer Cyber Safety business. The transaction is expected to close before the end of calendar year 2019, subject to regulatory approvals and other customary closing conditions. See Note 17 to the Condensed Consolidated Financial Statements for additional information about the planned divestiture of our Enterprise Security business.
Fiscal calendar
We have a 52/53-week fiscal year ending on the Friday closest to March 31. The first quarter of fiscal 2020 consists of 14 weeks, whereas the first quarter of fiscal 2019 consisted of 13 weeks. Our 2020 fiscal year consists of 53 weeks and ends on April 3, 2020 .
Key financial metrics
The following tables provide our key financial metrics for the periods presented:
 
Three Months Ended
(In millions, except for per share amounts)
July 5, 2019
 
June 29, 2018
Net revenues
$
1,247

 
$
1,156

Operating income
$
157

 
$
2

Net income (loss)
$
26

 
$
(60
)
Net income (loss) per share - diluted
$
0.04

 
$
(0.10
)
Cash provided by operating activities
$
325

 
$
331