[May 10, 2017] |
|
Symantec Reports Fourth Quarter and Fiscal Year 2017 Results
Symantec Corp. (NASDAQ:SYMC) today reported its fourth quarter and
fiscal year 2017 results, ended March 31, 2017.
Greg Clark, Symantec CEO said, "Symantec's fourth quarter results
demonstrate consistent execution relative to expectations across our
Enterprise and Consumer Digital Safety businesses. The industrial logic
of combining Symantec and Blue Coat is proving out, with Enterprise
Security growing organically year over year and Blue Coat cloud
subscription revenue growing 67%. Our Integrated Cyber Defense Platform
is gaining traction with enterprise customers. Our consumer business has
transformed from PC malware protection to Consumer Digital Safety, with
total addressable market expansion to $10 billion. We are on-track to
deliver long-term, sustainable growth and industry-leading profitability
as the new Symantec."
To help readers understand our past financial performance and our future
results, we supplement the financial results that we provide in
accordance with generally accepted accounting principles, or GAAP, with
non-GAAP financial measures including constant currency information. The
method we use to produce non-GAAP results is not computed according to
GAAP and may differ from the methods used by other companies. Additional
information regarding our non-GAAP definition is provided below.
|
Results for the Fourth Quarter of Fiscal Year 2017 (Dollars in
millions, except EPS)
|
|
|
|
|
|
|
|
|
|
|
|
4Q17
|
|
4Q16
|
|
Reported Y/Y Change
|
|
FX Adjusted Y/Y Change
|
GAAP
|
|
|
|
|
|
|
|
|
Revenue
|
|
$1,115
|
|
$873
|
|
28%
|
|
29%
|
Operating Margin
|
|
(16.0%)
|
|
14.7%
|
|
(3,070) bps
|
|
(3,010) bps
|
Net Income (Loss)
|
|
($143)
|
|
$2,045
|
|
(107%)
|
|
N/A
|
EPS (Diluted)
|
|
($0.23)
|
|
$3.15
|
|
(107%)
|
|
N/A
|
CFFO*
|
|
$353
|
|
$250
|
|
41%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
4Q17
|
|
4Q16
|
|
Reported Y/Y Change
|
|
FX Adjusted Y/Y Change
|
Non-GAAP
|
|
|
|
|
|
|
|
|
Revenue
|
|
$1,176
|
|
$873
|
|
35%
|
|
36%
|
Operating Margin
|
|
26.7%
|
|
24.5%
|
|
220 bps
|
|
240 bps
|
Net Income
|
|
$184
|
|
$147
|
|
25%
|
|
N/A
|
EPS (Diluted)
|
|
$0.28
|
|
$0.22
|
|
27%
|
|
N/A
|
*Cash Flow from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2018 Guidance (Dollars in millions, except EPS
and FX rate)
|
|
|
|
|
|
|
|
1Q18
|
|
FX Adj. Y/Y Growth
|
GAAP
|
|
|
|
|
Revenue
|
|
$1,133 - $1,163
|
|
31% - 34%
|
Enterprise Security
|
|
$618 - $638
|
|
31% - 35%
|
Consumer Digital Safety
|
|
$515 - $525
|
|
30% - 33%
|
Operating Margin
|
|
(10%) - (8%)
|
|
N/A
|
EPS
|
|
($0.25) - ($0.21)
|
|
N/A
|
Non-GAAP
|
|
|
|
|
Revenue
|
|
$1,185 - $1,215
|
|
37% - 40%
|
Enterprise Security
|
|
$640 - $660
|
|
36% - 40%
|
Consumer Digital Safety
|
|
$545 - $555
|
|
38% - 40%
|
Operating Margin
|
|
27% - 29%
|
|
N/A
|
EPS (Diluted)
|
|
$0.28 - $0.32
|
|
N/A
|
Non-GAAP Tax Rate
|
|
29.5%
|
|
N/A
|
Basic Share Count
|
|
609 million
|
|
N/A
|
GAAP Fully Diluted Share Count
|
|
609 million
|
|
N/A
|
Non-GAAP Fully Diluted Share Count
|
|
667 million
|
|
N/A
|
FX Rate ($/€)
|
|
$1.07
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2018 Guidance (Dollars in millions, except EPS and
FX rate)
|
|
|
|
|
|
|
|
FY18
|
|
FX Adj. Y/Y Growth
|
GAAP
|
|
|
|
|
Revenue
|
|
$4,977 - $5,077
|
|
25% - 27%
|
Enterprise Security
|
|
$2,780 - $2,850
|
|
19% - 22%
|
Consumer Digital Safety
|
|
$2,198 - $2,228
|
|
33% - 35%
|
Operating Margin
|
|
4% - 5%
|
|
N/A
|
EPS
|
|
$0.03 - $0.13
|
|
N/A
|
Non-GAAP
|
|
|
|
|
Revenue
|
|
$5,100 - $5,200
|
|
24% - 26%
|
Enterprise Security
|
|
$2,840 - $2,910
|
|
16% - 19%
|
Consumer Digital Safety
|
|
$2,260 - $2,290
|
|
35% - 37%
|
Operating Margin
|
|
36% - 37%
|
|
N/A
|
EPS (Diluted)
|
|
$1.75 - $1.85
|
|
N/A
|
Non-GAAP Tax Rate
|
|
29.5%
|
|
N/A
|
Basic Share Count
|
|
616 million
|
|
N/A
|
GAAP Fully Diluted Share Count
|
|
675 million
|
|
N/A
|
Non-GAAP Fully Diluted Share Count
|
|
675 million
|
|
N/A
|
FX Rate ($/€)
|
|
$1.07
|
|
N/A
|
|
|
|
|
|
Symantec's Board of Directors has declared a quarterly cash dividend of
$0.075 per common share to be paid on June 21, 2017, to all shareholders
of record as of the close of business on June 7, 2017.
Symantec will also host its 2017 Financial Analyst Day on June 8, 2017.
The event will be webcast live and can be found on Symantec's investor
relations page.
Conference Call
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today
to discuss its fourth quarter fiscal 2017 results, ended March 31, 2017
and to review guidance. Interested parties may access the conference
call on the Internet at http://www.symantec.com/invest.
To listen to the live call, please go to the website at least 15 minutes
early to register, download and install any necessary audio software.
For telephone access to the conference, call (877) 475-6198 within the
United States or (970) 297-2372 from outside the United States. Please
call 15 minutes early on May 10 and give the operator conference ID
number 9642787.
A replay and our prepared remarks will be available on the investor
relations home page shortly after the call is completed.
About Symantec
Symantec Corporation (NASDAQ: SYMC), the world's leading cyber security
company, helps organizations, governments and people secure their most
important data wherever it lives. Organizations across the world look to
Symantec for strategic, integrated solutions to defend against
sophisticated attacks across endpoints, cloud and infrastructure.
Likewise, a global community of more than 50 million people and families
rely on Symantec's Norton and LifeLock product suites to protect their
digital lives at home and across their devices. Symantec operates one of
the world's largest civilian cyber intelligence networks, allowing it to
see and protect against the most advanced threats. For additional
information, please visit www.symantec.com
or connect with us on Facebook, Twitter, and LinkedIn.
NOTE TO EDITORS: If you would like additional information on
Symantec Corporation and its products, please visit the Symantec News
Room at http://www.symantec.com/news.
Symantec, the Symantec Logo and the Checkmark logo are trademarks or
registered trademarks of Symantec Corporation or its affiliates in the
U.S. and other countries. Other names may be trademarks of their
respective owners.
Forward-Looking Statements: This press release contains
statements which may be considered forward-looking within the meaning of
the U.S. federal securities laws, including the information contained
under the caption "First Quarter 2018 Guidance (Dollars in millions,
except EPS and FX rate)" and "Fiscal Year 2018 Guidance (Dollars in
millions, except EPS and FX rate)" and the statements
regarding Symantec's other projected financial and business
results, including demand for its products and services, and product
release schedule, Symantec's competitive advantages and market
opportunities and Symantec's cost reduction, integration and synergy
efforts and outcomes. These statements are subject to known and unknown
risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to differ
materially from results expressed or implied in this press release. Such
risk factors include those related to: changes in certificate authority
standards that impact our web security business, the retention of
employees of acquired companies and the ability of Symantec to
successfully integrate acquired companies and to achieve expected
benefits; general economic conditions; fluctuations and volatility in
Symantec's stock price; the ability of Symantec to successfully execute
strategic plans; the ability to maintain customer and partner
relationships; anticipated growth of certain market segments; our sales
pipeline and business strategy; fluctuations in tax rates and currency
exchange rates; the timing and market acceptance of new product releases
and upgrades; and the successful development of new products and
integration of acquired businesses, and the degree to which these
products and businesses gain market acceptance. Actual results may
differ materially from those contained in the forward-looking statements
in this press release. Symantec assumes no obligation, and does not
intend, to update these forward-looking statements as a result of future
events or developments. Additional information concerning these and
other risk factors is contained in the Risk Factors sections of
Symantec's Form 10-K for the fiscal year ended April 1, 2016 and the
Quarterly Report on Form 10-Q for the fiscal quarter ended December 30,
2016.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have
undergone significant change due to the impact of purchase accounting on
revenue and cost of revenue, certain acquisition and integration costs,
discontinued operations, stock-based compensation, restructuring,
transition and separation matters, charges related to the amortization
of intangible assets, and certain other income and expense items that
management considers unrelated to the Company's core operations. To help
our readers understand our past financial performance and our future
results, we supplement the financial results that we provide in
accordance with generally accepted accounting principles, or GAAP, with
non-GAAP financial measures including constant currency information. The
method we use to produce non-GAAP results is not computed according to
GAAP and may differ from the methods used by other companies. Non-GAAP
financial measures are supplemental, should not be considered a
substitute for financial information presented in accordance with GAAP
and should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. Our management team uses
these non-GAAP financial measures in assessing Symantec's operating
results, as well as when planning, forecasting and analyzing future
periods. Investors are encouraged to review the reconciliation of our
non-GAAP financial measures to the comparable GAAP results, which is
attached to our quarterly earnings release and which can be found, along
with other financial information, on the investor relations page of our
website at: http://www.symantec.com/invest.
|
SYMANTEC CORPORATION
|
Condensed Consolidated Balance Sheets
|
(In millions, unaudited)
|
|
|
|
March 31, 2017
|
|
April 1, 2016 (1)
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,247
|
|
$
|
5,983
|
Accounts receivable, net
|
|
|
649
|
|
|
556
|
Other current assets
|
|
|
428
|
|
|
420
|
Total current assets
|
|
|
5,324
|
|
|
6,959
|
|
Property and equipment, net
|
|
|
937
|
|
|
957
|
Intangible assets, net
|
|
|
3,004
|
|
|
443
|
Goodwill
|
|
|
8,627
|
|
|
3,148
|
Equity investments
|
|
|
158
|
|
|
157
|
Other long-term assets
|
|
|
124
|
|
|
103
|
Total assets
|
|
$
|
18,174
|
|
$
|
11,767
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
180
|
|
$
|
175
|
Accrued compensation and benefits
|
|
|
272
|
|
|
219
|
Current portion of long-term debt
|
|
|
1,310
|
|
|
-
|
Deferred revenue
|
|
|
2,353
|
|
|
2,279
|
Income taxes payable
|
|
|
30
|
|
|
941
|
Other current liabilities
|
|
|
477
|
|
|
419
|
Total current liabilities
|
|
|
4,622
|
|
|
4,033
|
|
Long-term debt
|
|
|
6,876
|
|
|
2,207
|
Long-term deferred revenue
|
|
|
434
|
|
|
359
|
Long-term deferred tax liabilities
|
|
|
2,401
|
|
|
1,235
|
Long-term income taxes payable
|
|
|
251
|
|
|
160
|
Other long-term obligations
|
|
|
103
|
|
|
97
|
Total liabilities
|
|
|
14,687
|
|
|
8,091
|
|
|
|
|
|
Total stockholders' equity
|
|
|
3,487
|
|
|
3,676
|
Total liabilities and stockholders' equity
|
|
$
|
18,174
|
|
$
|
11,767
|
|
|
(1) Derived from audited consolidated financial
statements. Certain amounts have been reclassified to conform with
the fiscal year 2017 presentation.
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Operations
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
Year-Over-Year
|
|
|
Three Months Ended
|
|
Growth Rate
|
|
|
March 31,
|
|
April 1,
|
|
|
|
Constant
|
|
|
2017
|
|
2016
|
|
Actual
|
|
Currency (1)
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
1,115
|
|
|
$
|
873
|
|
|
28
|
%
|
|
29
|
%
|
Cost of revenues
|
|
|
259
|
|
|
|
147
|
|
|
76
|
%
|
|
76
|
%
|
Gross profit
|
|
|
856
|
|
|
|
726
|
|
|
18
|
%
|
|
19
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
453
|
|
|
|
308
|
|
|
|
|
|
Research and development
|
|
|
249
|
|
|
|
177
|
|
|
|
|
|
General and administrative
|
|
|
204
|
|
|
|
77
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
56
|
|
|
|
16
|
|
|
|
|
|
Restructuring, separation, transition, and other
|
|
|
72
|
|
|
|
20
|
|
|
|
|
|
Total operating expenses
|
|
|
1,034
|
|
|
|
598
|
|
|
73
|
%
|
|
73
|
%
|
Operating income (loss)
|
|
|
(178
|
)
|
|
|
128
|
|
|
-239
|
%
|
|
-236
|
%
|
|
Interest income
|
|
|
7
|
|
|
|
4
|
|
|
|
|
|
Interest expense
|
|
|
(74
|
)
|
|
|
(19
|
)
|
|
|
|
|
Other income (expense), net
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(248
|
)
|
|
|
116
|
|
|
-314
|
%
|
|
N/A
|
|
Income tax expense (benefit)
|
|
|
(71
|
)
|
|
|
1,129
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(177
|
)
|
|
|
(1,013
|
)
|
|
|
|
|
Income from discontinued operations, net of income taxes
|
|
|
34
|
|
|
|
3,058
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(143
|
)
|
|
$
|
2,045
|
|
|
-107
|
%
|
|
N/A
|
|
|
Income (loss) per share - basic:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
(1.56
|
)
|
|
|
|
|
Discontinued operations
|
|
|
0.06
|
|
|
|
4.70
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
|
(0.23
|
)
|
|
|
3.15
|
|
|
|
|
|
|
Income (loss) per share - diluted:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
(1.56
|
)
|
|
|
|
|
Discontinued operations
|
|
|
0.06
|
|
|
|
4.70
|
|
|
|
|
|
Net income (loss) per share - diluted
|
|
|
(0.23
|
)
|
|
|
3.15
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic
|
|
|
618
|
|
|
|
650
|
|
|
|
|
|
|
Weighted-average shares outstanding - diluted
|
|
|
618
|
|
|
|
650
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.075
|
|
|
$
|
4.15
|
|
|
|
|
|
|
(1) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Operations
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
Year-Over-Year
|
|
|
Year Ended
|
|
Growth Rate
|
|
|
March 31,
|
|
April 1,
|
|
|
|
Constant
|
|
|
2017
|
|
2016
|
|
Actual
|
|
Currency (1)
|
|
Net revenues
|
|
$
|
4,019
|
|
|
$
|
3,600
|
|
|
12
|
%
|
|
11
|
%
|
Cost of revenues
|
|
|
853
|
|
|
|
615
|
|
|
39
|
%
|
|
39
|
%
|
Gross profit
|
|
|
3,166
|
|
|
|
2,985
|
|
|
6
|
%
|
|
5
|
%
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
1,459
|
|
|
|
1,292
|
|
|
|
|
|
Research and development
|
|
|
823
|
|
|
|
748
|
|
|
|
|
|
General and administrative
|
|
|
564
|
|
|
|
295
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
147
|
|
|
|
57
|
|
|
|
|
|
Restructuring, separation, transition, and other
|
|
|
273
|
|
|
|
136
|
|
|
|
|
|
Total operating expenses
|
|
|
3,266
|
|
|
|
2,528
|
|
|
29
|
%
|
|
30
|
%
|
Operating income (loss)
|
|
|
(100
|
)
|
|
|
457
|
|
|
-122
|
%
|
|
-129
|
%
|
|
Interest income
|
|
|
21
|
|
|
|
10
|
|
|
|
|
|
Interest expense
|
|
|
(208
|
)
|
|
|
(75
|
)
|
|
|
|
|
Other income, net
|
|
|
25
|
|
|
|
-
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(262
|
)
|
|
|
392
|
|
|
-167
|
%
|
|
N/A
|
|
Income tax expense (benefit)
|
|
|
(26
|
)
|
|
|
1,213
|
|
|
|
|
|
Loss from continuing operations
|
|
|
(236
|
)
|
|
|
(821
|
)
|
|
|
|
|
Income from discontinued operations, net of income taxes
|
|
|
130
|
|
|
|
3,309
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(106
|
)
|
|
$
|
2,488
|
|
|
-104
|
%
|
|
N/A
|
|
|
Income (loss) per share - basic:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.38
|
)
|
|
$
|
(1.23
|
)
|
|
|
|
|
Discontinued operations
|
|
|
0.21
|
|
|
|
4.94
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
|
(0.17
|
)
|
|
|
3.71
|
|
|
|
|
|
|
Income (loss) per share - diluted:
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.38
|
)
|
|
$
|
(1.23
|
)
|
|
|
|
|
Discontinued operations
|
|
|
0.21
|
|
|
|
4.94
|
|
|
|
|
|
Net income (loss) per share - diluted
|
|
|
(0.17
|
)
|
|
|
3.71
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic
|
|
|
618
|
|
|
|
670
|
|
|
|
|
|
|
Weighted-average shares outstanding - diluted
|
|
|
618
|
|
|
|
670
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.30
|
|
|
$
|
4.60
|
|
|
|
|
|
|
(1) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Cash Flows
|
(In millions, unaudited)
|
|
|
|
Year Ended
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
Net income (loss)
|
|
$
|
(106
|
)
|
|
$
|
2,488
|
|
Income from discontinued operations, net of income taxes
|
|
|
(130
|
)
|
|
|
(3,309
|
)
|
Adjustments to continuing operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
530
|
|
|
|
304
|
|
Stock-based compensation expense
|
|
|
440
|
|
|
|
161
|
|
Deferred income taxes
|
|
|
(168
|
)
|
|
|
1,082
|
|
Other
|
|
|
32
|
|
|
|
7
|
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
Accounts receivable, net
|
|
|
45
|
|
|
|
38
|
|
Accounts payable
|
|
|
(67
|
)
|
|
|
(69
|
)
|
Accrued compensation and benefits
|
|
|
20
|
|
|
|
(7
|
)
|
Deferred revenue
|
|
|
125
|
|
|
|
20
|
|
Income taxes payable
|
|
|
(904
|
)
|
|
|
693
|
|
Other assets
|
|
|
117
|
|
|
|
(3
|
)
|
Other liabilities
|
|
|
(90
|
)
|
|
|
51
|
|
Net cash provided by (used in) continuing operating activities
|
|
|
(156
|
)
|
|
|
1,456
|
|
Net cash used in discontinued operating activities
|
|
|
(64
|
)
|
|
|
(660
|
)
|
Net cash provided by (used in) operating activities
|
|
|
(220
|
)
|
|
|
796
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(70
|
)
|
|
|
(272
|
)
|
Payments for acquisitions, net of cash acquired
|
|
|
(6,736
|
)
|
|
|
(4
|
)
|
Purchases of short-term investments
|
|
|
-
|
|
|
|
(378
|
)
|
Proceeds from maturities and sale of short-term investments
|
|
|
31
|
|
|
|
1,355
|
|
Proceeds from divestiture, net of cash contributed
|
|
|
7
|
|
|
|
6,535
|
|
Other
|
|
|
2
|
|
|
|
-
|
|
Net cash provided by (used in) continuing investing activities
|
|
|
(6,766
|
)
|
|
|
7,236
|
|
Net cash used in discontinued investing activities
|
|
|
-
|
|
|
|
(63
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(6,766
|
)
|
|
|
7,173
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
Repayments of debt and other obligations
|
|
|
(107
|
)
|
|
|
(368
|
)
|
Proceeds from issuance of debt, net of issuance costs
|
|
|
6,069
|
|
|
|
500
|
|
Net proceeds from sales of common stock under employee stock plans
|
|
|
95
|
|
|
|
65
|
|
Tax payments related to restricted stock units
|
|
|
(65
|
)
|
|
|
(39
|
)
|
Dividends and dividend equivalents paid
|
|
|
(222
|
)
|
|
|
(3,030
|
)
|
Repurchases of common stock
|
|
|
(500
|
)
|
|
|
(1,868
|
)
|
Other
|
|
|
21
|
|
|
|
6
|
|
Net cash provided by (used in) continuing financing activities
|
|
|
5,291
|
|
|
|
(4,734
|
)
|
Net cash used in discontinued financing activities
|
|
|
-
|
|
|
|
(30
|
)
|
Net cash provided by (used in) financing activities
|
|
|
5,291
|
|
|
|
(4,764
|
)
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
(41
|
)
|
|
|
(96
|
)
|
Change in cash and cash equivalents
|
|
|
(1,736
|
)
|
|
|
3,109
|
|
Beginning cash and cash equivalents
|
|
|
5,983
|
|
|
|
2,874
|
|
Ending cash and cash equivalents
|
|
$
|
4,247
|
|
|
$
|
5,983
|
|
|
|
SYMANTEC CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
(1)
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
Year-Over-Year
|
|
|
Three Months Ended
|
|
Non-GAAP Growth Rate
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
Actual
|
|
Currency (3)
|
|
Net revenues (2)
|
|
$
|
1,115
|
|
|
$
|
61
|
|
|
$
|
1,176
|
|
|
$
|
873
|
|
|
$
|
-
|
|
|
$
|
873
|
|
|
35
|
%
|
|
36
|
%
|
|
Gross profit:
|
|
$
|
856
|
|
|
$
|
122
|
|
|
$
|
978
|
|
|
$
|
726
|
|
|
$
|
9
|
|
|
$
|
735
|
|
|
33
|
%
|
|
34
|
%
|
Deferred revenue fair value adjustment (2)
|
|
|
|
|
61
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
7
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
54
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
76.8
|
%
|
|
|
6.4
|
%
|
|
|
83.2
|
%
|
|
|
83.2
|
%
|
|
|
1.0
|
%
|
|
|
84.2
|
%
|
|
-100 bps
|
|
-90 bps
|
|
Operating expenses:
|
|
$
|
1,034
|
|
|
$
|
(370
|
)
|
|
$
|
664
|
|
|
$
|
598
|
|
|
$
|
(77
|
)
|
|
$
|
521
|
|
|
27
|
%
|
|
28
|
%
|
Stock-based compensation
|
|
|
|
|
(202
|
)
|
|
|
|
|
|
|
(41
|
)
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
(56
|
)
|
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
|
Restructuring, separation, transition, and other
|
|
|
|
|
(72
|
)
|
|
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
Acquisition and integration costs
|
|
|
|
|
(40
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
92.7
|
%
|
|
|
-36.2
|
%
|
|
|
56.5
|
%
|
|
|
68.5
|
%
|
|
|
-8.8
|
%
|
|
|
59.7
|
%
|
|
-320 bps
|
|
-330 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
(178
|
)
|
|
$
|
492
|
|
|
$
|
314
|
|
|
$
|
128
|
|
|
$
|
86
|
|
|
$
|
214
|
|
|
47
|
%
|
|
49
|
%
|
|
Operating margin %
|
|
|
-16.0
|
%
|
|
|
42.7
|
%
|
|
|
26.7
|
%
|
|
|
14.7
|
%
|
|
|
9.8
|
%
|
|
|
24.5
|
%
|
|
220 bps
|
|
240 bps
|
|
Net income (loss):
|
|
$
|
(143
|
)
|
|
$
|
327
|
|
|
$
|
184
|
|
|
$
|
2,045
|
|
|
$
|
(1,898
|
)
|
|
$
|
147
|
|
|
25
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
122
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
Operating expenses adjustment
|
|
|
|
|
370
|
|
|
|
|
|
|
|
77
|
|
|
|
|
|
|
|
Non-cash interest expense and amortization of debt issuance costs
|
|
|
|
|
16
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Income tax effects and adjustments
|
|
|
|
|
(147
|
)
|
|
|
|
|
|
|
1,074
|
|
|
|
|
|
|
|
Total net income adjustment from discontinued operations
|
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
(3,058
|
)
|
|
|
|
|
|
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share from continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
0.57
|
|
|
$
|
0.28
|
|
|
$
|
(1.56
|
)
|
|
$
|
1.78
|
|
|
$
|
0.22
|
|
|
|
|
|
Income per share from discontinued operations
|
|
|
0.06
|
|
|
|
(0.06
|
)
|
|
|
-
|
|
|
|
4.70
|
|
|
|
(4.70
|
)
|
|
|
-
|
|
|
|
|
|
Diluted net income (loss) per share (4)
|
|
|
(0.23
|
)
|
|
|
0.51
|
|
|
|
0.28
|
|
|
|
3.15
|
|
|
|
(2.93
|
)
|
|
|
0.22
|
|
|
27
|
%
|
|
N/A
|
|
|
Diluted weighted-average shares outstanding
|
|
|
618
|
|
|
|
45
|
|
|
|
663
|
|
|
|
650
|
|
|
|
6
|
|
|
|
656
|
|
|
1
|
%
|
|
N/A
|
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the three months ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments as a result of purchase accounting. Please see
Appendix A for further information.
|
(3) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how
our underlying businesses performed excluding the effect of
foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities
reporting in currencies other than United States dollars are
converted into United States dollars at the current exchange rates
in effect during the respective prior periods.
|
(4) Net income per share amounts may not add due to
rounding.
|
|
|
SYMANTEC CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
(1)
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
Year-Over-Year
|
|
|
Year Ended
|
|
Non-GAAP Growth Rate
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
Actual
|
|
Currency (4)
|
|
Net revenues (2)
|
|
$
|
4,019
|
|
|
$
|
144
|
|
|
$
|
4,163
|
|
|
$
|
3,600
|
|
|
$
|
-
|
|
|
$
|
3,600
|
|
|
16
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
$
|
3,166
|
|
|
$
|
335
|
|
|
$
|
3,501
|
|
|
$
|
2,985
|
|
|
$
|
60
|
|
|
$
|
3,045
|
|
|
15
|
%
|
|
14
|
%
|
Deferred revenue fair value adjustment (2)
|
|
|
|
|
144
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Unallocated corporate charges
|
|
|
|
|
-
|
|
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
21
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
146
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
Inventory fair value adjustment (3)
|
|
|
|
|
24
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
78.8
|
%
|
|
|
5.3
|
%
|
|
|
84.1
|
%
|
|
|
82.9
|
%
|
|
|
1.7
|
%
|
|
|
84.6
|
%
|
|
-50 bps
|
|
-60 bps
|
|
Operating expenses:
|
|
$
|
3,266
|
|
|
$
|
(959
|
)
|
|
$
|
2,307
|
|
|
$
|
2,528
|
|
|
$
|
(509
|
)
|
|
$
|
2,019
|
|
|
14
|
%
|
|
15
|
%
|
Unallocated corporate charges
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(164
|
)
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
(419
|
)
|
|
|
|
|
|
|
(152
|
)
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
(147
|
)
|
|
|
|
|
|
|
(57
|
)
|
|
|
|
|
|
|
Restructuring, separation, transition, and other
|
|
|
|
|
(273
|
)
|
|
|
|
|
|
|
(136
|
)
|
|
|
|
|
|
|
Acquisition and integration costs
|
|
|
|
|
(120
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
81.3
|
%
|
|
|
-25.9
|
%
|
|
|
55.4
|
%
|
|
|
70.2
|
%
|
|
|
-14.1
|
%
|
|
|
56.1
|
%
|
|
-70 bps
|
|
-20 bps
|
|
Operating income (loss)
|
|
$
|
(100
|
)
|
|
$
|
1,294
|
|
|
$
|
1,194
|
|
|
$
|
457
|
|
|
$
|
569
|
|
|
$
|
1,026
|
|
|
16
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %
|
|
|
-2.5
|
%
|
|
|
31.2
|
%
|
|
|
28.7
|
%
|
|
|
12.7
|
%
|
|
|
15.8
|
%
|
|
|
28.5
|
%
|
|
20 bps
|
|
-40 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss):
|
|
$
|
(106
|
)
|
|
$
|
868
|
|
|
$
|
762
|
|
|
$
|
2,488
|
|
|
$
|
(1,790
|
)
|
|
$
|
698
|
|
|
9
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
335
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
Operating expenses adjustment
|
|
|
|
|
959
|
|
|
|
|
|
|
|
509
|
|
|
|
|
|
|
|
Non-cash interest expense and amortization of debt issuance costs
|
|
|
|
|
36
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Income tax effects and adjustments
|
|
|
|
|
(332
|
)
|
|
|
|
|
|
|
950
|
|
|
|
|
|
|
|
Total net income adjustment from discontinued operations
|
|
|
|
|
(130
|
)
|
|
|
|
|
|
|
(3,309
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share from continuing operations
|
|
$
|
(0.38
|
)
|
|
$
|
1.56
|
|
|
$
|
1.18
|
|
|
$
|
(1.23
|
)
|
|
$
|
2.26
|
|
|
$
|
1.03
|
|
|
|
|
|
Income per share from discontinued operations
|
|
|
0.21
|
|
|
|
(0.21
|
)
|
|
|
-
|
|
|
|
4.94
|
|
|
|
(4.94
|
)
|
|
|
-
|
|
|
|
|
|
Diluted net income (loss) per share
|
|
|
(0.17
|
)
|
|
|
1.35
|
|
|
|
1.18
|
|
|
|
3.71
|
|
|
|
(2.68
|
)
|
|
|
1.03
|
|
|
15
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding
|
|
|
618
|
|
|
|
27
|
|
|
|
645
|
|
|
|
670
|
|
|
|
6
|
|
|
|
676
|
|
|
-5
|
%
|
|
N/A
|
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the fiscal year ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments as a result of purchase accounting. Please see
Appendix A for further information.
|
(3) The adjustment for the fiscal year ended March 31,
2017 relates to the Blue Coat inventory fair value adjustment as a
result of purchase accounting. Please see Appendix A for further
information.
|
(4) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how
our underlying businesses performed excluding the effect of
foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities
reporting in currencies other than United States dollars are
converted into United States dollars at the current exchange rates
in effect during the respective prior periods.
|
|
|
SYMANTEC CORPORATION
|
Revenue Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Revenues
|
|
|
|
|
|
|
|
|
Total Revenues (2)
|
|
$
|
1,115
|
|
|
$
|
61
|
|
|
$
|
1,176
|
|
|
$
|
873
|
|
Total Y/Y Growth Rate
|
|
|
28
|
%
|
|
|
7
|
%
|
|
|
35
|
%
|
|
|
-3
|
%
|
Total Y/Y Growth Rate in Constant Currency (3)
|
|
|
29
|
%
|
|
|
7
|
%
|
|
|
36
|
%
|
|
|
-2
|
%
|
|
Revenues by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
$
|
459
|
|
|
$
|
28
|
|
|
$
|
487
|
|
|
$
|
406
|
|
Enterprise Security (2)
|
|
|
656
|
|
|
|
33
|
|
|
|
689
|
|
|
|
467
|
|
Revenues by Segment - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
13
|
%
|
|
|
7
|
%
|
|
|
20
|
%
|
|
|
0
|
%
|
Enterprise Security
|
|
|
40
|
%
|
|
|
8
|
%
|
|
|
48
|
%
|
|
|
-5
|
%
|
Revenues by Segment - Y/Y Growth Rate in Constant Currency
(3)
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
14
|
%
|
|
|
7
|
%
|
|
|
21
|
%
|
|
|
0
|
%
|
Enterprise Security
|
|
|
41
|
%
|
|
|
8
|
%
|
|
|
49
|
%
|
|
|
-4
|
%
|
|
Revenues by Geography
|
|
|
|
|
|
|
|
|
International
|
|
$
|
497
|
|
|
$
|
17
|
|
|
$
|
514
|
|
|
$
|
417
|
|
U.S.
|
|
|
618
|
|
|
|
44
|
|
|
|
662
|
|
|
|
456
|
|
Revenues by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
International
|
|
|
19
|
%
|
|
|
4
|
%
|
|
|
23
|
%
|
|
|
-6
|
%
|
U.S.
|
|
|
36
|
%
|
|
|
9
|
%
|
|
|
45
|
%
|
|
|
0
|
%
|
Revenues by Geography - Y/Y Growth Rate in Constant Currency
(3)
|
|
|
|
|
|
|
|
|
International
|
|
|
20
|
%
|
|
|
5
|
%
|
|
|
25
|
%
|
|
|
-5
|
%
|
U.S.
|
|
|
36
|
%
|
|
|
9
|
%
|
|
|
45
|
%
|
|
|
0
|
%
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the three months ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments as a result of purchase accounting. Please see
Appendix A for further information.
|
(3) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
|
|
SYMANTEC CORPORATION
|
Revenue Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
Year Ended
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Revenues
|
|
|
|
|
|
|
|
|
Total Revenues (2)
|
|
$
|
4,019
|
|
|
$
|
144
|
|
|
$
|
4,163
|
|
|
$
|
3,600
|
|
Total Y/Y Growth Rate
|
|
|
12
|
%
|
|
|
4
|
%
|
|
|
16
|
%
|
|
|
-9
|
%
|
Total Y/Y Growth Rate in Constant Currency (3)
|
|
|
11
|
%
|
|
|
4
|
%
|
|
|
15
|
%
|
|
|
-4
|
%
|
|
Revenues by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
$
|
1,664
|
|
|
$
|
28
|
|
|
$
|
1,692
|
|
|
$
|
1,670
|
|
Enterprise Security (2)
|
|
|
2,355
|
|
|
|
116
|
|
|
|
2,471
|
|
|
|
1,930
|
|
Revenues by Segment - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
-11
|
%
|
Enterprise Security
|
|
|
22
|
%
|
|
|
6
|
%
|
|
|
28
|
%
|
|
|
-7
|
%
|
Revenues by Segment - Y/Y Growth Rate in Constant Currency
(3)
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
-1
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
-7
|
%
|
Enterprise Security
|
|
|
22
|
%
|
|
|
6
|
%
|
|
|
28
|
%
|
|
|
-2
|
%
|
|
Revenues by Geography
|
|
|
|
|
|
|
|
|
International
|
|
$
|
1,914
|
|
|
$
|
57
|
|
|
$
|
1,971
|
|
|
$
|
1,703
|
|
U.S.
|
|
|
2,105
|
|
|
|
87
|
|
|
|
2,192
|
|
|
|
1,897
|
|
Revenues by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
International
|
|
|
12
|
%
|
|
|
4
|
%
|
|
|
16
|
%
|
|
|
-15
|
%
|
U.S.
|
|
|
11
|
%
|
|
|
5
|
%
|
|
|
16
|
%
|
|
|
-3
|
%
|
Revenues by Geography - Y/Y Growth Rate in Constant Currency
(3)
|
|
|
|
|
|
|
|
|
International
|
|
|
12
|
%
|
|
|
4
|
%
|
|
|
16
|
%
|
|
|
-6
|
%
|
U.S.
|
|
|
11
|
%
|
|
|
5
|
%
|
|
|
16
|
%
|
|
|
-3
|
%
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the fiscal year ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments as a result of purchase accounting. Please see
Appendix A for further information.
|
(3) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Operating Income (Loss) by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
$
|
177
|
|
|
$
|
28
|
|
|
$
|
205
|
|
|
$
|
217
|
|
Enterprise Security (2)
|
|
|
76
|
|
|
|
33
|
|
|
|
109
|
|
|
|
(3
|
)
|
Total Operating Income by Segment
|
|
|
253
|
|
|
|
61
|
|
|
|
314
|
|
|
|
214
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
209
|
|
|
|
(209
|
)
|
|
|
-
|
|
|
|
43
|
|
Amortization of intangible assets
|
|
|
110
|
|
|
|
(110
|
)
|
|
|
-
|
|
|
|
23
|
|
Restructuring, separation, transition, and other
|
|
|
72
|
|
|
|
(72
|
)
|
|
|
-
|
|
|
|
20
|
|
Acquisition and integration costs
|
|
|
40
|
|
|
|
(40
|
)
|
|
|
-
|
|
|
|
-
|
|
Total Consolidated Operating Income (Loss)
|
|
$
|
(178
|
)
|
|
$
|
492
|
|
|
$
|
314
|
|
|
$
|
128
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
39
|
%
|
|
|
3
|
%
|
|
|
42
|
%
|
|
|
53
|
%
|
Enterprise Security
|
|
|
12
|
%
|
|
|
4
|
%
|
|
|
16
|
%
|
|
|
-1
|
%
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the three months ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments as a result of purchase accounting. Please see
Appendix A for further information.
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
Year Ended
|
|
|
March 31, 2017
|
|
April 1, 2016
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Operating Income (Loss) by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
$
|
839
|
|
|
$
|
28
|
|
|
$
|
867
|
|
|
$
|
924
|
|
Enterprise Security (2)
|
|
|
187
|
|
|
|
140
|
|
|
|
327
|
|
|
|
102
|
|
Total Operating Income by Segment
|
|
|
1,026
|
|
|
|
168
|
|
|
|
1,194
|
|
|
|
1,026
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
Unallocated corporate charges (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
186
|
|
Stock-based compensation
|
|
|
440
|
|
|
|
(440
|
)
|
|
|
-
|
|
|
|
161
|
|
Amortization of intangible assets
|
|
|
293
|
|
|
|
(293
|
)
|
|
|
-
|
|
|
|
86
|
|
Restructuring, separation, transition, and other
|
|
|
273
|
|
|
|
(273
|
)
|
|
|
-
|
|
|
|
136
|
|
Acquisition and integration costs
|
|
|
120
|
|
|
|
(120
|
)
|
|
|
-
|
|
|
|
-
|
|
Total Consolidated Operating Income (Loss)
|
|
$
|
(100
|
)
|
|
$
|
1,294
|
|
|
$
|
1,194
|
|
|
$
|
457
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
Consumer Digital Safety
|
|
|
50
|
%
|
|
|
1
|
%
|
|
|
51
|
%
|
|
|
55
|
%
|
Enterprise Security
|
|
|
8
|
%
|
|
|
5
|
%
|
|
|
13
|
%
|
|
|
5
|
%
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) The adjustment for the fiscal year ended March 31,
2017 relates to the Blue Coat and LifeLock deferred revenue fair
value adjustments of $116 million and $28 million, respectively,
and inventory fair value adjustments of $24 million, as a result
of purchase accounting. Please see Appendix A for further
information.
|
(3) This item consists of charges previously allocated
to our discontinued information management business. Please see
Appendix A for further information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Guidance and Reconciliation of GAAP to Non-GAAP Revenue,
Operating Margin and Earnings Per Share (1)
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
First Quarter Fiscal Year 2018
|
|
|
|
|
|
|
|
|
Three Months Ending June 30, 2017
|
|
|
|
|
Year-Over-Year Growth Rate (2)
|
Revenue Guidance
|
|
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
|
|
|
|
|
|
GAAP revenue range
|
|
$1,133 - $1,163
|
|
28% - 32%
|
|
31% - 34%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$52
|
|
6%
|
|
6%
|
Non-GAAP revenue range (4)
|
|
$1,185 - $1,215
|
|
34% - 37%
|
|
37% - 40%
|
|
|
Three Months Ending June 30, 2017
|
|
|
|
|
Year-Over-Year Growth Rate (2)
|
Segment Revenue Guidance
|
|
Range
|
|
Actual
|
|
Constant Currency (3)
|
|
|
|
|
|
|
|
GAAP Consumer Digital Safety revenue range
|
|
$515 - $525
|
|
28% - 30%
|
|
30% - 33%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$30
|
|
8%
|
|
8%
|
Non-GAAP Consumer Digital Safety revenue range (4)
|
|
$545 - $555
|
|
35% - 38%
|
|
38% - 40%
|
|
|
|
|
|
|
|
GAAP Enterprise Security revenue range
|
|
$618 - $638
|
|
28% - 33%
|
|
31% - 35%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$22
|
|
5%
|
|
5%
|
Non-GAAP Enterprise Security revenue range (4)
|
|
$640 - $660
|
|
33% - 37%
|
|
36% - 40%
|
|
|
Three Months Ending June 30, 2017
|
|
|
|
|
Year-Over-Year Increase
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
(10%) - (8%)
|
|
--
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
3%
|
|
|
|
|
Stock-based compensation
|
|
13%
|
|
|
|
|
Other non-GAAP adjustments
|
|
21%
|
|
|
|
|
Non-GAAP operating margin
|
|
27% - 29%
|
|
--
|
|
|
Three Months Ending June 30, 2017
|
|
|
|
|
Year-Over-Year Growth Rate
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
($0.25) - ($0.21)
|
|
--
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
|
$0.06
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.16
|
|
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$0.31
|
|
|
|
|
Non-GAAP diluted earnings per share range
|
|
$0.28 - $0.32
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) Growth rates are calculated using prior period GAAP
revenue which was the same as non-GAAP revenue.
|
(3) Management refers to growth rates adjusting for
currency fluctuations in foreign currency exchange rates so that the
business results can be viewed without the impact of these
fluctuations. We compare the percent change of the results from one
period to another period in order to provide a consistent framework
for assessing how our underlying businesses performed. To exclude
the effects of foreign currency rate fluctuations, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
(4) The total percentages may not add due to rounding.
|
|
|
SYMANTEC CORPORATION
|
Guidance and Reconciliation of GAAP to Non-GAAP Revenue,
Operating Margin and Earnings Per Share (1)
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Fiscal Year 2018
|
Revenue Guidance
|
|
Year Ending March 30, 2018
|
|
|
|
Year-Over-Year Growth Rate
|
|
Range
|
|
Actual
|
|
Constant Currency (2)
|
|
|
|
|
|
|
|
GAAP revenue range (3)
|
|
$4,977 - $5,077
|
|
24% - 26%
|
|
25% - 27%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$123
|
|
(1%)
|
|
(1%)
|
Non-GAAP revenue range
|
|
$5,100 - $5,200
|
|
23% - 25%
|
|
24% - 26%
|
Segment Revenue Guidance
|
|
Year Ending March 30, 2018
|
|
|
|
Year-Over-Year Growth Rate
|
|
Range
|
|
Actual
|
|
Constant Currency (2)
|
|
|
|
|
|
|
|
GAAP Consumer Digital Safety revenue range
|
|
$2,198 - $2,228
|
|
32% - 34%
|
|
33% - 35%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$62
|
|
2%
|
|
2%
|
Non-GAAP Consumer Digital Safety revenue range (3)
|
|
$2,260 - $2,290
|
|
34% - 35%
|
|
35% - 37%
|
|
|
|
|
|
|
|
GAAP Enterprise Security revenue range
|
|
$2,780 - $2,850
|
|
18% - 21%
|
|
19% - 22%
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
$60
|
|
(3%)
|
|
(3%)
|
Non-GAAP Enterprise Security revenue range
|
|
$2,840 - $2,910
|
|
15% - 18%
|
|
16% - 19%
|
|
|
Year Ending March 30, 2018
|
|
|
|
|
Year-Over-Year Increase
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
GAAP operating margin
|
|
4% - 5%
|
|
--
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment
|
|
2%
|
|
|
|
|
Stock-based compensation
|
|
12%
|
|
|
|
|
Other non-GAAP adjustments
|
|
18%
|
|
|
|
|
Non-GAAP operating margin
|
|
36% - 37%
|
|
--
|
|
|
Year Ending March 30, 2018
|
|
|
|
|
Year-Over-Year Growth Rate
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
$0.03 - $0.13
|
|
--
|
Add back:
|
|
|
|
|
|
|
Deferred revenue fair value adjustment, net of taxes
|
|
$0.12
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.57
|
|
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$1.03
|
|
|
|
|
Non-GAAP diluted earnings per share range
|
|
$1.75 - $1.85
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures.
Non-GAAP financial measures are supplemental and should not be
considered a substitute for financial information presented in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Appendix A.
|
(2) Management refers to growth rates adjusting for
currency fluctuations in foreign currency exchange rates so that the
business results can be viewed without the impact of these
fluctuations. We compare the percent change of the results from one
period to another period in order to provide a consistent framework
for assessing how our underlying businesses performed. To exclude
the effects of foreign currency rate fluctuations, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the current exchange rates in effect during
the respective prior period.
|
(3) The total percentages and amounts may not add due
to rounding.
|
|
SYMANTEC CORPORATION
Explanation of Non-GAAP Measures and Other Items
Appendix A
Objective of non-GAAP measures: We believe
our presentation of non-GAAP financial measures, when taken together
with corresponding GAAP financial measures, provides meaningful
supplemental information regarding the Company's operating performance
for the reasons discussed below. Our management team uses these non-GAAP
financial measures in assessing our operating results, as well as when
planning, forecasting and analyzing future periods. We believe that
these non-GAAP financial measures also facilitate comparisons of our
performance to prior periods and to our peers and that investors benefit
from an understanding of the non-GAAP financial measures. Non-GAAP
financial measures are supplemental and should not be considered a
substitute for financial information presented in accordance with GAAP.
Discontinued operations: In August 2015, we
entered into a definitive agreement to sell the assets of our
information management business ("Veritas") to Carlyle. In January 2016,
we and Carlyle amended the terms of the purchase agreement for Carlyle's
acquisition of Veritas. The transaction closed on January 29, 2016. The
results of Veritas are presented as discontinued operations in our
Consolidated Statements of Operations and thus have been excluded from
continuing operations and segment results for all reported periods.
Furthermore, Veritas' assets and liabilities were removed from our
Consolidated Balance Sheet as of April 1, 2016, and have been classified
as discontinued operations on our Consolidated Balance Sheet for all
prior periods.
Gain on sale of Veritas: Our management
excludes this gain when evaluating its ongoing performance and therefore
has excluded this gain when presenting non-GAAP financial measures. The
disposition resulted in a net gain of $3.0 billion, which is presented
as part of income from discontinued operations, net of income taxes in
the Consolidated Statements of Operations for fiscal 2016.
Deferred revenue fair value adjustment: Our
non-GAAP net revenues eliminates the impact of the Blue Coat and
LifeLock deferred revenue purchase accounting adjustments required by
U.S. GAAP. U.S. GAAP requires an adjustment to the liability for
acquired deferred revenue such that the liability approximates how much
we the acquirer would have to pay a third party to assume the liability.
We believe that eliminating the impact of this adjustment improves the
comparability of revenues between periods. Also, although the adjustment
amounts will never be recognized in our U.S. GAAP financial statements,
we do not expect the acquisitions to affect the future renewal rates of
revenues excluded by the adjustments. In addition, our management uses
non-GAAP net revenues, excluding the impact of purchase accounting
adjustments to assess our operating performance and overall revenue
trends. Nevertheless, non-GAAP net revenues has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for U.S. GAAP net revenues. Additionally, other companies in
our industry may not calculate these measures in the same manner which
may limit their usefulness for comparative purposes.
Inventory fair value adjustment: Purchase
accounting requires us to measure acquired inventory at fair value. The
fair value of inventory reflects the acquired company's cost of
manufacturing plus a portion of the expected profit margin. These
non-GAAP adjustments to our cost of revenues in fiscal 2017 exclude the
expected profit margin component that is recorded under purchase
accounting associated with our acquisition of Blue Coat. We believe the
adjustments are useful to investors as an additional means to reflect
cost of revenues and gross margin trends of our business.
Unallocated corporate charges: A
significant portion of the segments' expenses arise from shared services
and infrastructure that we have historically provided to the segments in
order to realize economies of scale and to efficiently use resources.
These expenses, collectively called corporate charges, include legal,
accounting, real estate, information technology services, treasury,
human resources and other corporate infrastructure expenses. Charges
were allocated to the segments, and the allocations were determined on a
basis that we consider to be a reasonable reflection of the utilization
of services provided to or benefits received by the segments. Corporate
charges previously allocated to our information management business, but
not classified within discontinued operations, were not reallocated to
our other segments. We eliminate these unallocated corporate charges
from our non-GAAP operating results to facilitate a more meaningful
comparison of our past operating performance to current operating
results.
Stock-based compensation: This consists of
expenses for employee stock options, restricted stock units, performance
based awards and our employee stock purchase plan determined in
accordance with the authoritative guidance on stock-based compensation.
When evaluating the performance of our individual business units and
developing short- and long-term strategic plans, we do not consider
stock-based compensation charges. Our management team is held
accountable for cash-based compensation, but not for stock-based
compensation expenses as we believe that management is limited in its
ability to project the impact of stock-based compensation would have on
our operating results. In addition, for comparability purposes, we
believe it is useful to provide a non-GAAP financial measure that
excludes stock-based compensation in order to better understand the
long-term performance of our core business and to facilitate the
comparison of our results to the results of our peer companies. The
following table sets forth our stock-based compensation expenses for the
reported periods:
|
|
|
|
|
Twelve Months Ended
|
|
|
March 31,
|
|
April 1,
|
|
|
2017
|
|
2016
|
Cost of revenue
|
|
$
|
21
|
|
$
|
10
|
Sales and marketing
|
|
|
107
|
|
|
53
|
Research and development
|
|
|
110
|
|
|
56
|
General and administrative
|
|
|
202
|
|
|
42
|
Total continuing operations
|
|
|
|
|
stock-based compensation
|
|
$
|
440
|
|
$
|
161
|
|
|
|
|
|
|
|
Amortization of intangible assets: When
conducting internal development of intangible assets, accounting rules
require that we expense the costs as incurred. In the case of acquired
businesses, however, we are required to allocate a portion of the
purchase price to the accounting value assigned to intangible assets
acquired and amortize this amount over the estimated useful lives of the
acquired intangible assets. The acquired company, in most cases, has
itself previously expensed the costs incurred to develop the acquired
intangible assets, and the purchase price allocated to these assets is
not necessarily reflective of the cost we would incur in developing the
intangible asset. We eliminate these amortization charges from our
non-GAAP operating results to provide better comparability of pre- and
post-acquisition operating results and comparability to results of
businesses utilizing internally developed intangible assets.
SYMANTEC CORPORATION
Explanation of Non-GAAP Measures and Other Items
Appendix A (continued)
Acquisition and integration costs: These
represent the transaction and integration costs associated with the Blue
Coat and LifeLock acquisitions. These costs include all incremental
expenses incurred to effect these business combinations. Acquisition
costs include advisory, legal, accounting, valuation, and other
professional or consulting fees. We exclude the transaction and
integration expenses as they are related to acquisitions and thus have
no direct correlation to the operation of our business, and because we
believe that the non-GAAP financial measures excluding these costs
provide meaningful supplemental information regarding our operational
performance and liquidity. In addition, excluding these costs from the
non-GAAP measures facilitates comparisons to our historical operating
results and comparisons to peer company operating results.
Restructuring, separation, transition and other:
We have engaged in various restructuring, separation, transition, and
other activities over the past several years that have resulted in costs
associated with severance, facilities, transition, and other related
costs. Separation and associated costs consist of consulting and
disentanglement costs incurred to separate our security and information
management businesses into standalone companies, as well as costs to
prune selected product lines that do not fit either our growth or margin
objectives. Transition and associated costs primarily consist of
consulting charges associated with the implementation of new enterprise
resource planning systems and costs to automate business processes.
Additionally, other costs primarily consist of asset write-offs and
advisory fees incurred in connection with restructuring events. Each
restructuring, separation, transition, and other activity has been a
discrete event based on a unique set of business objectives or
circumstances, and each has differed from the others in terms of its
operational implementation, business impact and scope. We do not engage
in restructuring, separation, transition, or other activities in the
ordinary course of business. While our operations previously benefited
from the employees and facilities covered by our various restructuring
and separation charges, these employees and facilities have benefited
different parts of our business in different ways, and the amount of
these charges has varied significantly from period to period. We believe
that it is important to understand these charges and that investors
benefit from the presentation of non-GAAP financial measures excluding
these charges to facilitate a more meaningful evaluation of our current
operating performance and comparisons to our past operating performance.
Non-cash interest expense and amortization of debt
issuance costs: In accordance with GAAP, we separately account
for the value of the conversion feature on our convertible notes as a
debt discount, which is amortized in a manner that reflects our debt
borrowing rates. Additionally, we amortize debt issuance costs over the
term of the related debt. We exclude the difference between the imputed
interest expense, which includes the amortization of the conversion
feature and of the issuance costs, and the coupon interest expense,
because we believe that excluding these costs provides meaningful
supplemental information regarding operational performance and
liquidity, along with enhancing investors' ability to view the Company's
results from management's perspective. In addition, we believe excluding
these costs from the non-GAAP measures facilitates comparisons to our
historical operating results and comparisons to peer company operating
results.
Income tax effects and adjustments: Our
non-GAAP tax rate for the fourth quarter of fiscal 2017 was 29%. We use
a projected long-term non-GAAP tax rate in order to provide better
consistency across the interim financial reporting periods by
eliminating the effects of stock based compensation, amortization of
intangible assets and restructuring, separation and transition and other
related charges. The long-term projected non-GAAP tax rate also reflects
the elimination of the effects of certain discontinued operations
accounting policy elections and unique GAAP reporting requirements under
discontinued operations as a result of the sale of Veritas. This
long-term tax rate could be subject to change for a variety of reasons,
such as significant changes in the geographic earnings mix due to
acquisition activities or fundamental tax law changes in major
jurisdictions where we operate. We will evaluate and assess the
appropriateness of this rate annually, giving due consideration to the
impacts of significant events and structural changes in the Company.
Deferred taxes on foreign earnings: In the
fourth quarter of fiscal 2016, we recorded $1.1 billion in income tax
expense related to unremitted earnings of foreign subsidiaries that were
formerly considered to be permanently invested in our operations outside
the U.S. This charge is presented in loss from continuing operations in
the Consolidated Statements of Operations for the fourth quarter of
fiscal 2016.
Diluted GAAP and non-GAAP weighted-average shares
outstanding: Diluted GAAP and non-GAAP weighted-average shares
outstanding are the same except in periods that there is a GAAP loss
from continuing operations. In accordance with authoritative accounting
guidance, we do not present dilution for GAAP in periods in which there
is a loss from continuing operations. However, if there is non-GAAP net
income, we present dilution for non-GAAP weighted-average shares
outstanding in an amount equal to the dilution that would have been
presented had there been GAAP income from continuing operations for the
period.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170510006550/en/
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