[May 08, 2014] |
|
Symantec Reports Fourth Quarter and Fiscal Year 2014 Results, Provides Fiscal Year 2015 Guidance
MOUNTAIN VIEW, Calif. --(Business Wire)--
Symantec Corp. (Nasdaq:SYMC) today reported the results of its fourth
quarter and fiscal year 2014, ended March 28, 2014. GAAP revenue for the
fourth quarter was $1.63 billion, down 7 percent year-over-year (as
reported and after adjusting for currency). For the fiscal year, GAAP
revenue was $6.68 billion, down 3 percent (as reported and after
adjusting for currency).
"Our fourth quarter results, led by better performance from our sales
teams and cost reductions, demonstrate the underlying health of our
business," said Michael Brown, Symantec interim president and chief
executive officer. "In the new leadership team's first 40 days, we've
taken important steps to accelerate the pace of our transformation.
There are substantial opportunities for us to improve our growth
profile, maximize profitability and create value, and I'm confident we
have the right team and plans in place to achieve our objectives."
Thomas Seifert, executive vice president and chief financial
officer, added, "We see further opportunities to streamline our
operations and drive ongoing operating margin expansion, with the
near-term goal of achieving 30 percent non-GAAP operating margin by
4Q15. We will also continue to return significant capital to
shareholders while maintaining a strong balance sheet."
GAAP Results for the Fourth Quarter of Fiscal Year 2014
-
GAAP operating margin was 18.8 percent, up 425 basis points and up 360
basis points after adjusting for currency, resulting in GAAP earnings
per share of $0.31, up 15 percent year-over-year.
-
GAAP net income was $217 million, up 14 percent year-over-year.
-
GAAP deferred revenue as of March 28, 2014 was $3.90 billion, down 4
percent year-over-year and down 6 percent after adjusting for currency.
-
Cash flow from operating activities was $449 million, down 27 percent
year-over-year.
GAAP Results for Fiscal Year 2014
-
GAAP operating margin was 17.7 percent, up 170 basis points and up 125
basis points after adjusting for currency, resulting in GAAP earnings
per share of $1.28, up 21 percent year-over-year.
-
GAAP net income was $898 million, up 19 percent year-over-year.
-
Cash flow from operating activities was $1.28 billion, down 20 percent
year-over-year.
Non-GAAP Results for the Fourth Quarter of Fiscal Year 2014
-
Non-GAAP revenue was $1.65 billion, down 6 percent year-over-year (as
reported and after adjusting for currency).
-
Non-GAAP operating margin was 27.3 percent, up 320 basis points and up
250 basis points after adjusting for currency, resulting in non-GAAP
earnings per share of $0.47, up 7 percent year-over-year.
-
Non-GAAP net income was $329 million, up 4 percent year-over-year.
Non-GAAP Results for Fiscal Year 2014
-
Non-GAAP revenue was $6.70 billion, down 3 percent year-over-year (as
reported and after adjusting for currency).
-
Non-GAAP operating margin was 27.5 percent, up 200 basis points and up
160 basis points after adjusting for currency, resulting in non-GAAP
earnings per share of $1.92, up 9 percent year-over-year.
-
Non-GAAP net income was $1.35 billion, up 8 percent year-over-year.
Capital Allocation
Symantec ended the quarter and fiscal year with cash, cash equivalents
and short-term investments of $4.08 billion compared to $4.75 billion, a
decrease of 14 percent year-over-year driven by a principal payment for
our matured and settled convertible notes. On March 19, 2014, we paid a
dividend of $0.15 per share for a total of $104 million. Also, during
the quarter, Symantec repurchased 5.5 million shares for $125 million at
an average price of $22.85. During the fiscal year 2014, the Company
repurchased 21 million shares at an average price of $23.87, equivalent
to $500 million. At the end of the fourth quarter, Symantec had $658
million remaining for future repurchases in the current board authorized
stock repurchase plan.
Symantec's Board of Directors has declared a quarterly cash dividend of
$0.15 per common share to be paid on June 25, 2014 to all shareholders
of record as of the close of business on June 10, 2014. The ex-dividend
date will be June 6, 2014.
Fiscal Year 2015 Guidance
For the fiscal year 2015, we expect:
-
Revenue of $6.63 to $6.77 billion, compared to $6.70 billion in the
year-ago period.
-
GAAP operating margin of 21.8 to 22.3 percent, compared to 17.7
percent in the year-ago period.
-
Non-GAAP operating margin of 27.7 to 28.2 percent, compared to 27.5
percent in the year-ago period.
-
GAAP diluted earnings per share between $1.43 and $1.51, compared to
$1.28 in the year-ago period.
-
Non-GAAP diluted earnings per share between $1.84 and $1.92, compared
to $1.92 in the year-ago period.
First Quarter Fiscal Year 2015 Guidance
For the first quarter of fiscal 2015, we expect:
-
Revenue of $1.65 to $1.69 billion, compared to $1.71 billion in the
year-ago period.
-
GAAP operating margin of 18.4 to 18.8 percent, compared to 13.1
percent in the year-ago period.
-
Non-GAAP operating margin of 24.1 to 24.5 percent, compared to 25.3
percent in the year-ago period.
-
GAAP diluted earnings per share between $0.31 and $0.33, compared to
$0.22 in the year-ago period.
-
Non-GAAP diluted earnings per share between $0.41 and $0.43, compared
to $0.44 in the year-ago period.
Guidance assumes an exchange rate of $1.38 per Euro for the June 2014
quarter versus the actual weighted average rate of $1.31 and an end of
period rate of $1.30 per Euro for the June 2013 quarter and $1.38 per
Euro for fiscal year 2015. Our guidance assumes an effective tax rate of
24.8 percent for the June 2014 quarter and 27.8 percent for the
remaining quarters in fiscal year 2015 and a common stock equivalents
total for the quarter and fiscal year of 695 million shares.
Conference Call
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today
to discuss results from the fiscal fourth quarter and fiscal year 2014,
ended March 28, 2014 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. 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) is an information protection expert
that helps people, businesses and governments seeking the freedom to
unlock the opportunities technology brings -- anytime, anywhere. Founded
in April 1982, Symantec, a Fortune 500 company, operating one of the
largest global data-intelligence networks, has provided leading
security, backup and availability solutions for where vital information
is stored, accessed and shared. The company's more than 20,000 employees
reside in more than 50 countries. Ninety-nine percent of Fortune 500
companies are Symantec customers. In fiscal 2014, it recorded revenue of
$6.7 billion. To learn more go to www.symantec.com
or connect with Symantec at: go.symantec.com/socialmedia.
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.
All prices noted are in U.S. dollars and are valid only in the United
States.
Symantec and the Symantec 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
regarding our financial and business results and business strategy,
which may be considered forward-looking within the meaning of the U.S.
federal securities laws, including projections of future revenue,
operating margin and earnings per share, projections of amortization of
acquisition-related intangibles and stock-based compensation and
restructuring charges, operating margin expansion and future return of
capital to shareholders. 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: general economic conditions;
maintaining customer and partner relationships; the anticipated growth
of certain market segments, particularly with regard to security and
storage; the competitive environment in the software industry; changes
to operating systems and product strategy by vendors of operating
systems; our ability to reduce our operating expenses; fluctuations in
currency exchange rates; our actual effective tax rate in future
periods; the timing and market acceptance of new product releases and
upgrades; 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. We assume no obligation, and do not intend, to update these
forward-looking statements as a result of future events or developments.
Additional information concerning these and other risks factors is
contained in the Risk Factors sections of our Form 10-K for the year
ended March 29, 2013.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have
undergone significant change due to a series of acquisitions, the impact
of stock-based compensation, impairment charges and other corporate
events, including the impact on revenue of the ongoing investigation
into Symantec's compliance with certain provisions of its 2007 GSA
contract. 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. 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. Our non-GAAP results are not meant
to be considered in isolation or as a substitute for comparable GAAP
measures and should be read only in conjunction with our consolidated
financial statements prepared in accordance with GAAP. Our management
regularly uses our supplemental non-GAAP financial measures internally
to understand, manage and evaluate our business and make operating
decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods.
Investors are encouraged to review the reconciliation of our non-GAAP
financial measures to the comparable GAAP results, which is attached to
this release and which can be found, along with other financial
information, on the investor relations' page of our website at www.symantec.com/invest.
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Balance Sheets
|
(Dollars in millions, unaudited)
|
|
|
|
March 28,
|
|
March 29,
|
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,707
|
|
$
|
4,685
|
|
Short-term investments
|
|
|
377
|
|
|
62
|
|
Trade accounts receivable, net
|
|
|
1,007
|
|
|
1,031
|
|
Inventories, net
|
|
|
14
|
|
|
24
|
|
Deferred income taxes
|
|
|
142
|
|
|
169
|
|
Deferred commissions
|
|
|
115
|
|
|
130
|
|
Other current assets
|
|
|
290
|
|
|
315
|
|
Total current assets
|
|
|
5,652
|
|
|
6,416
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,116
|
|
|
1,122
|
|
Intangible assets, net
|
|
|
768
|
|
|
977
|
|
Goodwill
|
|
|
5,858
|
|
|
5,841
|
|
Long-term deferred commissions
|
|
|
21
|
|
|
29
|
|
Other long-term assets
|
|
|
124
|
|
|
123
|
|
Total assets
|
|
$
|
13,539
|
|
$
|
14,508
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
282
|
|
$
|
334
|
|
Accrued compensation and benefits
|
|
|
365
|
|
|
422
|
|
Deferred revenue
|
|
|
3,322
|
|
|
3,496
|
|
Current portion of long-term debt
|
|
|
-
|
|
|
997
|
|
Other current liabilities
|
|
|
337
|
|
|
318
|
|
Total current liabilities
|
|
|
4,306
|
|
|
5,567
|
|
|
|
|
|
|
Long-term debt
|
|
|
2,095
|
|
|
2,094
|
|
Long-term deferred revenue
|
|
|
581
|
|
|
584
|
|
Long-term deferred tax liabilities
|
|
|
425
|
|
|
409
|
|
Long-term income taxes payable
|
|
|
252
|
|
|
318
|
|
Other long-term obligations
|
|
|
83
|
|
|
60
|
|
Total liabilities
|
|
|
7,742
|
|
|
9,032
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
5,797
|
|
|
5,476
|
|
Total liabilities and stockholders' equity
|
|
$
|
13,539
|
|
$
|
14,508
|
|
|
|
|
|
|
(1) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions and a
correction of previously provided financial information related to
deferred revenue. Please see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Income
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Year-Over-Year
|
|
|
Three Months Ended
|
|
Growth Rate
|
|
|
March 28,
|
|
March 29,
|
|
|
|
Constant
|
|
|
2014
|
|
2013 (2)
|
|
Actual
|
|
Currency (1)
|
|
|
|
|
|
|
|
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
1,433
|
|
|
$
|
1,527
|
|
|
-6
|
%
|
|
-6
|
%
|
License
|
|
|
192
|
|
|
|
221
|
|
|
-13
|
%
|
|
-14
|
%
|
Total net revenue
|
|
|
1,625
|
|
|
|
1,748
|
|
|
-7
|
%
|
|
-7
|
%
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
249
|
|
|
|
265
|
|
|
|
|
|
License
|
|
|
20
|
|
|
|
27
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
13
|
|
|
|
16
|
|
|
|
|
|
Total cost of revenue
|
|
|
282
|
|
|
|
308
|
|
|
-8
|
%
|
|
-8
|
%
|
Gross profit
|
|
|
1,343
|
|
|
|
1,440
|
|
|
-7
|
%
|
|
-7
|
%
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
584
|
|
|
|
693
|
|
|
|
|
|
Research and development
|
|
|
277
|
|
|
|
267
|
|
|
|
|
|
General and administrative
|
|
|
115
|
|
|
|
114
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
28
|
|
|
|
71
|
|
|
|
|
|
Restructuring and transition
|
|
|
33
|
|
|
|
40
|
|
|
|
|
|
Total operating expenses
|
|
|
1,037
|
|
|
|
1,185
|
|
|
-12
|
%
|
|
-12
|
%
|
Operating income
|
|
|
306
|
|
|
|
255
|
|
|
20
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3
|
|
|
|
3
|
|
|
|
|
|
Interest expense
|
|
|
(19
|
)
|
|
|
(37
|
)
|
|
|
|
|
Other income, net
|
|
|
8
|
|
|
|
12
|
|
|
|
|
|
Income before income taxes
|
|
|
298
|
|
|
|
233
|
|
|
28
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
81
|
|
|
|
43
|
|
|
|
|
|
Net income attributable to Symantec Corporation stockholders
|
|
$
|
217
|
|
|
$
|
190
|
|
|
14
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to Symantec Corporation
stockholders -- basic
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
|
|
|
Net income per share attributable to Symantec Corporation
stockholders -- diluted
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
|
|
|
Weighted-average shares outstanding attributable to Symantec
Corporation stockholders -- basic
|
|
|
693
|
|
|
|
693
|
|
|
|
|
|
Weighted-average shares outstanding attributable to Symantec
Corporation stockholders -- diluted
|
|
|
700
|
|
|
|
714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.15
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
|
|
|
|
|
|
(2) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Income
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Year-Over-Year
|
|
|
Year Ended
|
|
Growth Rate
|
|
|
March 28,
|
|
March 29,
|
|
|
|
Constant
|
|
|
2014
|
|
2013 (2)
|
|
Actual
|
|
Currency (1)
|
|
|
|
|
|
|
|
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
5,960
|
|
|
$
|
6,021
|
|
|
-1
|
%
|
|
-1
|
%
|
License
|
|
|
716
|
|
|
|
885
|
|
|
-19
|
%
|
|
-19
|
%
|
Total net revenue
|
|
|
6,676
|
|
|
|
6,906
|
|
|
-3
|
%
|
|
-3
|
%
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
1,008
|
|
|
|
1,017
|
|
|
|
|
|
License
|
|
|
87
|
|
|
|
89
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
54
|
|
|
|
69
|
|
|
|
|
|
Total cost of revenue
|
|
|
1,149
|
|
|
|
1,175
|
|
|
-2
|
%
|
|
-2
|
%
|
Gross profit
|
|
|
5,527
|
|
|
|
5,731
|
|
|
-4
|
%
|
|
-3
|
%
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
2,435
|
|
|
|
2,752
|
|
|
|
|
|
Research and development
|
|
|
1,038
|
|
|
|
1,012
|
|
|
|
|
|
General and administrative
|
|
|
445
|
|
|
|
450
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
156
|
|
|
|
286
|
|
|
|
|
|
Restructuring and transition
|
|
|
270
|
|
|
|
125
|
|
|
|
|
|
Total operating expenses
|
|
|
4,344
|
|
|
|
4,625
|
|
|
-6
|
%
|
|
-5
|
%
|
Operating income
|
|
|
1,183
|
|
|
|
1,106
|
|
|
7
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
12
|
|
|
|
12
|
|
|
|
|
|
Interest expense
|
|
|
(84
|
)
|
|
|
(139
|
)
|
|
|
|
|
Other income, net
|
|
|
45
|
|
|
|
27
|
|
|
|
|
|
Income before income taxes
|
|
|
1,156
|
|
|
|
1,006
|
|
|
15
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
258
|
|
|
|
251
|
|
|
|
|
|
Net income attributable to Symantec Corporation stockholders
|
|
$
|
898
|
|
|
$
|
755
|
|
|
19
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to Symantec Corporation
stockholders -- basic
|
|
$
|
1.29
|
|
|
$
|
1.08
|
|
|
|
|
|
Net income per share attributable to Symantec Corporation
stockholders -- diluted
|
|
$
|
1.28
|
|
|
$
|
1.06
|
|
|
|
|
|
Weighted-average shares outstanding attributable to Symantec
Corporation stockholders -- basic
|
|
|
696
|
|
|
|
701
|
|
|
|
|
|
Weighted-average shares outstanding attributable to Symantec
Corporation stockholders -- diluted
|
|
|
704
|
|
|
|
711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.60
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
|
|
|
|
|
|
(2) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Cash Flows
|
(Dollars in millions, unaudited)
|
|
|
|
Year Ended
|
|
|
March 28,
|
|
March 29,
|
|
|
2014
|
|
2013 (1)
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
898
|
|
|
$
|
755
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation
|
|
|
281
|
|
|
|
283
|
|
Amortization of intangible assets
|
|
|
210
|
|
|
|
355
|
|
Amortization of debt issuance costs and discounts
|
|
|
7
|
|
|
|
60
|
|
Stock-based compensation expense
|
|
|
156
|
|
|
|
164
|
|
Deferred income taxes
|
|
|
47
|
|
|
|
31
|
|
Excess income tax benefit from the exercise of stock options
|
|
|
(17
|
)
|
|
|
(11
|
)
|
Net gain from sale of short-term investments
|
|
|
(32
|
)
|
|
|
-
|
|
Liquidation of foreign entities
|
|
|
-
|
|
|
|
2
|
|
Other
|
|
|
8
|
|
|
|
14
|
|
Net change in assets and liabilities, excluding effects of
acquisitions:
|
|
|
|
|
Trade accounts receivable, net
|
|
|
30
|
|
|
|
(107
|
)
|
Inventories, net
|
|
|
10
|
|
|
|
4
|
|
Deferred commissions
|
|
|
26
|
|
|
|
17
|
|
Accounts payable
|
|
|
(75
|
)
|
|
|
33
|
|
Accrued compensation and benefits
|
|
|
(58
|
)
|
|
|
12
|
|
Deferred revenue
|
|
|
(223
|
)
|
|
|
119
|
|
Income taxes payable
|
|
|
7
|
|
|
|
(31
|
)
|
Other assets
|
|
|
(21
|
)
|
|
|
(68
|
)
|
Other liabilities
|
|
|
27
|
|
|
|
(39
|
)
|
Net cash provided by operating activities
|
|
|
1,281
|
|
|
|
1,593
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(260
|
)
|
|
|
(336
|
)
|
Cash payments for acquisitions, net of cash acquired
|
|
|
(17
|
)
|
|
|
(28
|
)
|
Purchases of short-term investments
|
|
|
(492
|
)
|
|
|
-
|
|
Proceeds from maturity and sales of short-term investments
|
|
|
186
|
|
|
|
46
|
|
Other
|
|
|
-
|
|
|
|
(1
|
)
|
Net cash used in investing activities
|
|
|
(583
|
)
|
|
|
(319
|
)
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
Repayments of debt and other obligations
|
|
|
(1,189
|
)
|
|
|
-
|
|
Proceeds from convertible note hedge
|
|
|
189
|
|
|
|
-
|
|
Net proceeds from sales of common stock under employee stock benefit
plans
|
|
|
234
|
|
|
|
281
|
|
Excess income tax benefit from the exercise of stock options
|
|
|
17
|
|
|
|
11
|
|
Tax payments related to restricted stock units
|
|
|
(45
|
)
|
|
|
(36
|
)
|
Dividends paid, net
|
|
|
(418
|
)
|
|
|
-
|
|
Repurchases of common stock
|
|
|
(500
|
)
|
|
|
(826
|
)
|
Purchase of additional equity interest in subsidiary
|
|
|
-
|
|
|
|
(111
|
)
|
Proceeds from debt issuance, net of discount
|
|
|
-
|
|
|
|
996
|
|
Debt issuance costs
|
|
|
-
|
|
|
|
(7
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(1,712
|
)
|
|
|
308
|
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
36
|
|
|
|
(59
|
)
|
Change in cash and cash equivalents
|
|
|
(978
|
)
|
|
|
1,523
|
|
Beginning cash and cash equivalents
|
|
|
4,685
|
|
|
|
3,162
|
|
Ending cash and cash equivalents
|
|
$
|
3,707
|
|
|
$
|
4,685
|
|
|
|
|
|
|
(1) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions.
Please see Appendix A for more details.
|
|
|
|
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 28, 2014
|
|
March 29, 2013 (3)
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
Actual
|
|
Currency (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,625
|
|
|
$
|
25
|
|
|
$
|
1,650
|
|
|
$
|
1,748
|
|
|
|
N/A
|
|
|
$
|
1,748
|
|
|
-6
|
%
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,343
|
|
|
$
|
44
|
|
|
$
|
1,387
|
|
|
$
|
1,440
|
|
|
$
|
19
|
|
|
$
|
1,459
|
|
|
-5
|
%
|
|
-5
|
%
|
GSA investigation
|
|
|
|
|
25
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
6
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
13
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
82.6
|
%
|
|
|
1.5
|
%
|
|
|
84.1
|
%
|
|
|
82.4
|
%
|
|
|
1.1
|
%
|
|
|
83.5
|
%
|
|
60 bps
|
|
40 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
$
|
1,037
|
|
|
$
|
100
|
|
|
$
|
937
|
|
|
$
|
1,185
|
|
|
$
|
147
|
|
|
$
|
1,038
|
|
|
-10
|
%
|
|
-9
|
%
|
Stock-based compensation
|
|
|
|
|
39
|
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
28
|
|
|
|
|
|
|
|
71
|
|
|
|
|
|
|
|
Restructuring and transition
|
|
|
|
|
33
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
63.8
|
%
|
|
|
-7.0
|
%
|
|
|
56.8
|
%
|
|
|
67.8
|
%
|
|
|
-8.4
|
%
|
|
|
59.4
|
%
|
|
-260 bps
|
|
-210 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
306
|
|
|
$
|
144
|
|
|
$
|
450
|
|
|
$
|
255
|
|
|
$
|
166
|
|
|
$
|
421
|
|
|
7
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %
|
|
|
18.8
|
%
|
|
|
8.5
|
%
|
|
|
27.3
|
%
|
|
|
14.6
|
%
|
|
|
9.5
|
%
|
|
|
24.1
|
%
|
|
320 bps
|
|
250 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
$
|
217
|
|
|
$
|
112
|
|
|
$
|
329
|
|
|
$
|
190
|
|
|
$
|
126
|
|
|
$
|
316
|
|
|
4
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
44
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
Operating expense adjustment
|
|
|
|
|
100
|
|
|
|
|
|
|
|
147
|
|
|
|
|
|
|
|
Non-cash interest expense
|
|
|
|
|
1
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
Gain on sale of short-term investments
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
China VAT Refund
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
Income tax effect on above items
|
|
|
|
|
(25
|
)
|
|
|
|
|
|
|
(46
|
)
|
|
|
|
|
|
|
Tax related adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Release of pre-acquisition tax contingencies
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share attributable to Symantec
Corporation stockholders
|
|
$
|
0.31
|
|
|
$
|
0.16
|
|
|
$
|
0.47
|
|
|
$
|
0.27
|
|
|
$
|
0.17
|
|
|
$
|
0.44
|
|
|
7
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding attributable to
Symantec Corporation stockholders
|
|
|
700
|
|
|
|
-
|
|
|
|
700
|
|
|
|
714
|
|
|
|
-
|
|
|
|
714
|
|
|
-2
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) 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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
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 28, 2014
|
|
March 29, 2013 (3)
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
Actual
|
|
Currency (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
6,676
|
|
|
$
|
25
|
|
|
$
|
6,701
|
|
|
$
|
6,906
|
|
|
|
N/A
|
|
|
$
|
6,906
|
|
|
-3
|
%
|
|
-3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
5,527
|
|
|
$
|
98
|
|
|
$
|
5,625
|
|
|
$
|
5,731
|
|
|
$
|
84
|
|
|
$
|
5,815
|
|
|
-3
|
%
|
|
-3
|
%
|
GSA investigation
|
|
|
|
|
25
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
19
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
54
|
|
|
|
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
82.8
|
%
|
|
|
1.1
|
%
|
|
|
83.9
|
%
|
|
|
83.0
|
%
|
|
|
1.2
|
%
|
|
|
84.2
|
%
|
|
-30 bps
|
|
-30 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
$
|
4,344
|
|
|
$
|
565
|
|
|
$
|
3,779
|
|
|
$
|
4,625
|
|
|
$
|
570
|
|
|
$
|
4,055
|
|
|
-7
|
%
|
|
-6
|
%
|
Stock-based compensation
|
|
|
|
|
137
|
|
|
|
|
|
|
|
149
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
156
|
|
|
|
|
|
|
|
286
|
|
|
|
|
|
|
|
Restructuring and transition
|
|
|
|
|
270
|
|
|
|
|
|
|
|
125
|
|
|
|
|
|
|
|
Acquisition/divestiture-related expenses
|
|
|
|
|
2
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
65.1
|
%
|
|
|
-8.7
|
%
|
|
|
56.4
|
%
|
|
|
67.0
|
%
|
|
|
-8.3
|
%
|
|
|
58.7
|
%
|
|
-230 bps
|
|
-190 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
1,183
|
|
|
$
|
663
|
|
|
$
|
1,846
|
|
|
$
|
1,106
|
|
|
$
|
654
|
|
|
$
|
1,760
|
|
|
5
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %
|
|
|
17.7
|
%
|
|
|
9.8
|
%
|
|
|
27.5
|
%
|
|
|
16.0
|
%
|
|
|
9.5
|
%
|
|
|
25.5
|
%
|
|
200 bps
|
|
160 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
$
|
898
|
|
|
$
|
452
|
|
|
$
|
1,350
|
|
|
$
|
755
|
|
|
$
|
493
|
|
|
$
|
1,248
|
|
|
8
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
98
|
|
|
|
|
|
|
|
84
|
|
|
|
|
|
|
|
Operating expense adjustment
|
|
|
|
|
565
|
|
|
|
|
|
|
|
570
|
|
|
|
|
|
|
|
Non-cash interest expense
|
|
|
|
|
7
|
|
|
|
|
|
|
|
58
|
|
|
|
|
|
|
|
Gain on sale of short-term investments
|
|
|
|
|
(40
|
)
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
China VAT Refund
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(26
|
)
|
|
|
|
|
|
|
Income tax effect on above items
|
|
|
|
|
(180
|
)
|
|
|
|
|
|
|
(186
|
)
|
|
|
|
|
|
|
Tax related adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Release of pre-acquisition tax contingencies
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
Change in valuation allowance
|
|
|
|
|
2
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share attributable to Symantec
Corporation stockholders
|
|
$
|
1.28
|
|
|
$
|
0.64
|
|
|
$
|
1.92
|
|
|
$
|
1.06
|
|
|
$
|
0.70
|
|
|
$
|
1.76
|
|
|
9
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding attributable to
Symantec Corporation stockholders
|
|
|
704
|
|
|
|
-
|
|
|
|
704
|
|
|
|
711
|
|
|
|
-
|
|
|
|
711
|
|
|
-1
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) 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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Revenue and Deferred Revenue Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 28, 2014
|
|
March 29, 2013
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Revenue
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
1,433
|
|
|
$
|
21
|
|
|
$
|
1,454
|
|
|
$
|
1,527
|
|
License
|
|
|
192
|
|
|
|
4
|
|
|
|
196
|
|
|
|
221
|
|
Total Revenue
|
|
$
|
1,625
|
|
|
$
|
25
|
|
|
$
|
1,650
|
|
|
$
|
1,748
|
|
Revenue - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
-5
|
%
|
|
|
4
|
%
|
License
|
|
|
-13
|
%
|
|
|
2
|
%
|
|
|
-11
|
%
|
|
|
5
|
%
|
Total Y/Y Growth Rate
|
|
|
-7
|
%
|
|
|
1
|
%
|
|
|
-6
|
%
|
|
|
4
|
%
|
Revenue - Y/Y Growth Rate in Constant Currency (2)
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
-5
|
%
|
|
|
5
|
%
|
License
|
|
|
-14
|
%
|
|
|
2
|
%
|
|
|
-12
|
%
|
|
|
6
|
%
|
Total Y/Y Growth Rate in Constant Currency (2)
|
|
|
-7
|
%
|
|
|
1
|
%
|
|
|
-6
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Revenue by Segment (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
$
|
700
|
|
|
$
|
4
|
|
|
$
|
704
|
|
|
$
|
747
|
|
Information Security
|
|
|
315
|
|
|
|
6
|
|
|
|
321
|
|
|
|
326
|
|
Information Management
|
|
|
610
|
|
|
|
15
|
|
|
|
625
|
|
|
|
675
|
|
Revenue by Segment - Y/Y Growth Rate (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
2
|
%
|
Information Security
|
|
|
-3
|
%
|
|
|
1
|
%
|
|
|
-2
|
%
|
|
|
3
|
%
|
Information Management
|
|
|
-10
|
%
|
|
|
3
|
%
|
|
|
-7
|
%
|
|
|
7
|
%
|
Revenue by Segment - Y/Y Growth Rate in Constant Currency
(2) (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
3
|
%
|
Information Security
|
|
|
-3
|
%
|
|
|
2
|
%
|
|
|
-1
|
%
|
|
|
4
|
%
|
Information Management
|
|
|
-10
|
%
|
|
|
2
|
%
|
|
|
-8
|
%
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Revenue by Geography
|
|
|
|
|
|
|
|
|
International
|
|
$
|
847
|
|
|
$
|
-
|
|
|
$
|
847
|
|
|
$
|
897
|
|
U.S.
|
|
|
778
|
|
|
|
25
|
|
|
|
803
|
|
|
|
851
|
|
Americas (U.S., Latin America, Canada)
|
|
|
880
|
|
|
|
25
|
|
|
|
905
|
|
|
|
957
|
|
EMEA
|
|
|
470
|
|
|
|
-
|
|
|
|
470
|
|
|
|
483
|
|
Asia Pacific & Japan
|
|
|
275
|
|
|
|
-
|
|
|
|
275
|
|
|
|
308
|
|
Revenue by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
International
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
2
|
%
|
U.S.
|
|
|
-9
|
%
|
|
|
3
|
%
|
|
|
-6
|
%
|
|
|
6
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-8
|
%
|
|
|
3
|
%
|
|
|
-5
|
%
|
|
|
6
|
%
|
EMEA
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
6
|
%
|
Asia Pacific & Japan
|
|
|
-11
|
%
|
|
|
0
|
%
|
|
|
-11
|
%
|
|
|
-4
|
%
|
Revenue by Geography - Y/Y Growth Rate in Constant Currency
(2)
|
|
|
|
|
|
|
|
|
International
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
4
|
%
|
U.S.
|
|
|
-9
|
%
|
|
|
3
|
%
|
|
|
-6
|
%
|
|
|
6
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-8
|
%
|
|
|
3
|
%
|
|
|
-5
|
%
|
|
|
6
|
%
|
EMEA
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
5
|
%
|
Asia Pacific & Japan
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
Deferred Revenue (4)
|
|
$
|
3,903
|
|
|
$
|
-
|
|
|
$
|
3,903
|
|
|
$
|
4,080
|
|
Deferred Revenue - Y/Y Growth Rate (4)
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
1
|
%
|
Deferred Revenue - Y/Y Growth Rate in Constant Currency
(2) (4)
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
(2) 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. 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 actual exchange
rates in effect during the respective prior periods (or, in the case
of deferred revenue, converted into United States dollars at the
actual exchange rate in effect at the end of the prior period).
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
(4) This presentation includes revised amounts from a correction of
previously provided financial information related to deferred
revenue. Please see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1) (2) (3)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 28, 2014
|
|
March 29, 2013
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Operating Income by Segment
|
|
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
$
|
278
|
|
|
$
|
4
|
|
|
$
|
282
|
|
|
$
|
253
|
|
Information Security
|
|
|
46
|
|
|
|
6
|
|
|
|
52
|
|
|
|
8
|
|
Information Management
|
|
|
101
|
|
|
|
15
|
|
|
|
116
|
|
|
|
160
|
|
Total Operating Income by Segment (4)
|
|
|
425
|
|
|
|
25
|
|
|
|
450
|
|
|
|
421
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
45
|
|
|
|
(45
|
)
|
|
|
-
|
|
|
|
39
|
|
Amortization of intangible assets
|
|
|
41
|
|
|
|
(41
|
)
|
|
|
-
|
|
|
|
87
|
|
Restructuring and transition
|
|
|
33
|
|
|
|
(33
|
)
|
|
|
-
|
|
|
|
40
|
|
Total Consolidated Operating Income
|
|
$
|
306
|
|
|
$
|
144
|
|
|
$
|
450
|
|
|
$
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
40
|
%
|
|
|
0
|
%
|
|
|
40
|
%
|
|
|
34
|
%
|
Information Security
|
|
|
15
|
%
|
|
|
1
|
%
|
|
|
16
|
%
|
|
|
2
|
%
|
Information Management
|
|
|
17
|
%
|
|
|
2
|
%
|
|
|
19
|
%
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
(2) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
(4) This adjustment relates to the GSA investigation. Please see
Appendix A for more details.
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Revenue and Deferred Revenue Detail (1)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
March 28, 2014
|
|
March 29, 2013
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Revenue
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
5,960
|
|
|
$
|
21
|
|
|
$
|
5,981
|
|
|
$
|
6,021
|
|
License
|
|
|
716
|
|
|
|
4
|
|
|
|
720
|
|
|
|
885
|
|
Total Revenue
|
|
$
|
6,676
|
|
|
$
|
25
|
|
|
$
|
6,701
|
|
|
$
|
6,906
|
|
Revenue - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
3
|
%
|
License
|
|
|
-19
|
%
|
|
|
0
|
%
|
|
|
-19
|
%
|
|
|
-2
|
%
|
Total Y/Y Growth Rate
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
Revenue - Y/Y Growth Rate in Constant Currency (2)
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-1
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
5
|
%
|
License
|
|
|
-19
|
%
|
|
|
0
|
%
|
|
|
-19
|
%
|
|
|
0
|
%
|
Total Y/Y Growth Rate in Constant Currency (2)
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Revenue by Segment (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
$
|
2,869
|
|
|
$
|
4
|
|
|
$
|
2,873
|
|
|
$
|
2,979
|
|
Information Security
|
|
|
1,294
|
|
|
|
6
|
|
|
|
1,300
|
|
|
|
1,298
|
|
Information Management
|
|
|
2,513
|
|
|
|
15
|
|
|
|
2,528
|
|
|
|
2,629
|
|
Revenue by Segment - Y/Y Growth Rate (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
0
|
%
|
Information Security
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
8
|
%
|
Information Management
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
3
|
%
|
Revenue by Segment - Y/Y Growth Rate in Constant Currency
(2) (3)
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
2
|
%
|
Information Security
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
10
|
%
|
Information Management
|
|
|
-5
|
%
|
|
|
1
|
%
|
|
|
-4
|
%
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Revenue by Geography
|
|
|
|
|
|
|
|
|
International
|
|
$
|
3,478
|
|
|
$
|
-
|
|
|
$
|
3,478
|
|
|
$
|
3,569
|
|
U.S.
|
|
|
3,198
|
|
|
|
25
|
|
|
|
3,223
|
|
|
|
3,337
|
|
Americas (U.S., Latin America, Canada)
|
|
|
3,617
|
|
|
|
25
|
|
|
|
3,642
|
|
|
|
3,744
|
|
EMEA
|
|
|
1,891
|
|
|
|
-
|
|
|
|
1,891
|
|
|
|
1,858
|
|
Asia Pacific & Japan
|
|
|
1,168
|
|
|
|
-
|
|
|
|
1,168
|
|
|
|
1,304
|
|
Revenue by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
International
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
2
|
%
|
U.S.
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
EMEA
|
|
|
2
|
%
|
|
|
0
|
%
|
|
|
2
|
%
|
|
|
0
|
%
|
Asia Pacific & Japan
|
|
|
-10
|
%
|
|
|
0
|
%
|
|
|
-10
|
%
|
|
|
5
|
%
|
Revenue by Geography - Y/Y Growth Rate in Constant Currency
(2)
|
|
|
|
|
|
|
|
|
International
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
|
|
6
|
%
|
U.S.
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
EMEA
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
|
|
6
|
%
|
Asia Pacific & Japan
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Deferred Revenue (4)
|
|
$
|
3,903
|
|
|
$
|
-
|
|
|
$
|
3,903
|
|
|
$
|
4,080
|
|
Deferred Revenue - Y/Y Growth Rate (4)
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
1
|
%
|
Deferred Revenue - Y/Y Growth Rate in Constant Currency
(2) (4)
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
(2) 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. 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 actual exchange
rates in effect during the respective prior periods (or, in the case
of deferred revenue, converted into United States dollars at the
actual exchange rate in effect at the end of the prior period).
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
(4) This presentation includes revised amounts from a correction of
previously provided financial information related to deferred
revenue. Please see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1) (2) (3)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
March 28, 2014
|
|
March 29, 2013
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
GAAP
|
Operating Income by Segment
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
$
|
1,061
|
|
|
$
|
4
|
|
|
$
|
1,065
|
|
|
$
|
1,015
|
|
Information Security
|
|
|
186
|
|
|
|
6
|
|
|
|
192
|
|
|
|
38
|
|
Information Management
|
|
|
574
|
|
|
|
15
|
|
|
|
589
|
|
|
|
707
|
|
Total Operating Income by Segment (4)
|
|
|
1,821
|
|
|
|
25
|
|
|
|
1,846
|
|
|
|
1,760
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
156
|
|
|
|
(156
|
)
|
|
|
-
|
|
|
|
164
|
|
Amortization of intangible assets
|
|
|
210
|
|
|
|
(210
|
)
|
|
|
-
|
|
|
|
355
|
|
Restructuring and transition
|
|
|
270
|
|
|
|
(270
|
)
|
|
|
-
|
|
|
|
125
|
|
Acquisition/divestiture-related expenses
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
10
|
|
Total Consolidated Operating Income
|
|
$
|
1,183
|
|
|
$
|
663
|
|
|
$
|
1,846
|
|
|
$
|
1,106
|
|
|
|
|
|
|
|
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
User Productivity & Protection
|
|
|
37
|
%
|
|
|
0
|
%
|
|
|
37
|
%
|
|
|
34
|
%
|
Information Security
|
|
|
14
|
%
|
|
|
1
|
%
|
|
|
15
|
%
|
|
|
3
|
%
|
Information Management
|
|
|
23
|
%
|
|
|
0
|
%
|
|
|
23
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
(1) This presentation includes non-GAAP measures. Our non-GAAP
measures are not meant to be considered in isolation or as a
substitute for comparable GAAP measures and should be read only in
conjunction with our consolidated financial measures prepared in
accordance with GAAP. For a detailed explanation of these non-GAAP
measures, please see Symantec's Explanation of Non-GAAP Measures and
Other Items in Appendix A.
|
|
|
|
|
|
|
|
|
|
(2) This presentation includes revised amounts from a change in
accounting policy related to the accounting for commissions. Please
see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
(4) This adjustment relates to the GSA investigation. Please see
Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Guidance and Reconciliation of GAAP to Non-GAAP Operating Margin
and Earnings Per Share
|
(Dollars in millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
We include certain non-GAAP measures in the tracking and forecasting
of our earnings and management of our business. For a detailed
explanation of these non-GAAP measures, please see our Explanation
of non-GAAP Measures and Other Items in Appendix A.
|
Fiscal Year 2015
|
|
|
Year Ended April 3, 2015
|
|
|
|
|
Year-Over-Year Growth Rate (2)
|
Revenue Guidance
|
|
Range
|
|
Actual
|
|
Constant Currency (1)
|
|
|
|
|
|
|
|
Revenue range
|
|
$6,630 - $6,770
|
|
(1.1%) - 1.0%
|
|
(1.8%) - 0.3%
|
|
|
|
|
|
|
|
|
|
Year Ended April 3, 2015
|
|
|
|
|
Year-Over-Year Increase
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
Constant Currency (1)
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
21.8% - 22.3%
|
|
410 bps - 460 bps
|
|
397 bps - 459 bps
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation
|
|
2.9%
|
|
|
|
|
Other non-GAAP adjustments
|
|
3.0%
|
|
|
|
|
Non-GAAP operating margin
|
|
27.7% - 28.2%
|
|
20 bps - 70 bps
|
|
13 bps - 64 bps
|
|
|
|
|
|
|
|
|
|
Year Ended April 3, 2015
|
|
|
|
|
Year-Over-Year Growth Rate
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
$1.43 - $1.51
|
|
11.7% - 18.0%
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.20
|
|
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$0.21
|
|
|
|
|
Non-GAAP diluted earnings per share range
|
|
$1.84 - $1.92
|
|
(4.2%) - 0.0%
|
|
|
|
|
|
|
|
First Quarter Fiscal Year 2015
|
|
|
|
|
|
|
|
|
Three Months Ended July 4, 2014
|
|
|
|
|
Year-Over-Year Growth Rate
|
Revenue Guidance
|
|
Range
|
|
Actual
|
|
Constant Currency (1)
|
|
|
|
|
|
|
|
Revenue range
|
|
$1,650 - $1,690
|
|
(3.5%) - (1.1%)
|
|
(4.7%) - (2.4%)
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 4, 2014
|
|
|
|
|
Year-Over-Year Increase (Decrease)
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
Constant Currency (1)
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
18.4% - 18.8%
|
|
530 bps - 570 bps
|
|
477 bps - 519 bps
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation
|
|
2.7%
|
|
|
|
|
Other non-GAAP adjustments
|
|
3.0%
|
|
|
|
|
Non-GAAP operating margin
|
|
24.1% - 24.5%
|
|
(120 bps) - (80 bps)
|
|
(170 bps) - (126 bps)
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 4, 2014
|
|
|
|
|
Year-Over-Year Growth Rate
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
$0.31 - $0.33
|
|
40.9% - 50.0%
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.05
|
|
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$0.05
|
|
|
|
|
Non-GAAP diluted earnings per share range
|
|
$0.41 - $0.43
|
|
(6.8%) - (2.3%)
|
|
|
|
|
|
|
|
(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. 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 actual exchange
rates in effect during the respective prior periods (or, in the case
of deferred revenue, converted into United States dollars at the
actual exchange rate in effect at the end of the prior period).
|
|
|
|
|
|
|
|
(2) Growth rates are calculated using fiscal year 2014 non-GAAP
revenue.
|
|
SYMANTEC CORPORATION Explanation of Non-GAAP Measures and
Other Items Appendix A
Change in accounting policy: Effective
March 30, 2013, we changed our accounting policy for sales commissions
that are incremental and directly related to customer sales contracts in
which revenue is deferred. These commission costs are accrued and
capitalized upon execution of a non-cancelable customer contract, and
subsequently expensed over the term of such contract in proportion to
the related future revenue streams. For commission costs where revenue
is recognized, the related commission costs are recorded in the period
of revenue recognition. Prior to this change in accounting policy,
commission costs were expensed in the period in which they were
incurred. The adoption of this accounting policy change has been applied
retrospectively to all periods presented in this document, in which the
cumulative effect of the change has been reflected as of the beginning
of the first period presented.
Segment reporting: We previously announced
our new strategic direction during the fourth quarter of fiscal 2013. As
part of the strategy, we made changes to the organization and to
performance measurements. During the first quarter of fiscal 2014, we
modified our segment reporting structure to more readily match our
operating structure. The historical periods presented have been adjusted
to reflect the modified reporting structure, which are now the following:
-
User Productivity & Protection
-
Information Security
-
Information Management
Historically, we reported our Other segment which consisted primarily of
sunset products and products nearing the end of their life cycle. As
such there was no revenue associated with this segment. Additionally,
this Other segment included certain general and administrative expenses,
amortization of intangible assets, stock-based compensation expense,
restructuring and transition expenses, and certain indirect costs that
were not charged to the other operating segments. Effective fiscal 2014,
we allocate all of our shared expenses from this Other segment to the
three new segments except for the following reconciling items:
stock-based compensation, amortization of intangible assets,
restructuring and transition, impairment of intangible assets,
impairment of assets held for sale, acquisition/divestiture-related
expenses and settlements of litigation.
The non-GAAP financial measures included in the tables adjust for the
following items: business combination accounting entries, stock-based
compensation expense, restructuring and transition charges, charges
related to the amortization of intangible assets, impairments of assets
and certain other items. We believe the presentation of these non-GAAP
financial measures, when taken together with the corresponding GAAP
financial measures, provides meaningful supplemental information
regarding the Company's operating performance for the reasons discussed
below. Our management uses these non-GAAP financial measures in
assessing the Company's operating results, as well as when planning,
forecasting and analyzing future periods. We believe that these non-GAAP
financial measures also facilitate comparisons of the Company's
performance to prior periods and to our peers and that investors benefit
from an understanding of these non-GAAP financial measures.
Correction of previously provided financial
information: In the fourth quarter of fiscal 2014, we identified
a computational error that caused certain low-dollar value, multi-year
maintenance agreements to be amortized over a period shorter than their
contractual term that resulted in an understatement of deferred revenue
that affected multiple accounting periods. We corrected the error by (i)
adjusting our April 2, 2011 stockholders' equity balance to correct
misstatements in years prior to fiscal 2012 and (ii) recognizing an
adjustment in the fourth quarter of our fiscal 2014 Consolidated
Statements of Income to correct misstatements in fiscal years 2014, 2013
and 2012. The adjustment recognized in the fourth quarter of our fiscal
2014 Consolidated Statements of Income reduced revenue by $28 million
and net income by $22 million, see table below for the amounts related
to fiscal 2014, 2013 and 2012. The adjustment related to years prior to
fiscal 2012 decreased stockholders' equity by $49 million and increased
long-term deferred revenue by $67 million as of April 2, 2011. The
errors were not material to the Consolidated Statements of Income in our
fiscal years 2013 and 2012 or the quarters in our fiscal year 2014. The
adjustment to correct the cumulative misstatement to stockholders'
equity was also not material as of April 2, 2011.
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Nine Months
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Twelve Months
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Total
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Ended
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Ended
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Adjustment
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December 27,
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March 29,
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March 30,
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in Q4 FY14
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2013
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2013
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2012
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Net revenue
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$
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(28
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)
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$
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(2
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)
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$
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(8
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)
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$
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(18
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)
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Provision for income taxes
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6
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1
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2
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3
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Impact to net income
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$
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(22
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)
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$
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(1
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)
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$
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(6
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)
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|
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$
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(15
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)
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GSA investigation: During the first quarter
of fiscal 2013, we were advised by the Commercial Litigation Branch of
the Department of Justice's 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 a result of these
developments, we considered the need for an accrual for a potential
loss. Considering the preliminary stage of the negotiated resolution
process with the government, we are currently unable to determine a
precise range of estimated losses resulting from this matter. However,
we recorded an amount as a reduction of revenue that represents our best
estimate of the low end of such range. The Company's management excluded
this item when evaluating its ongoing operating performance, and
therefore excluded this loss when presenting non-GAAP financial measures.
Stock-based compensation: Consists of
expenses for employee stock options, restricted stock units, restricted
stock awards, 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 plans, we
do not consider stock-based compensation charges. Our management team is
held accountable for cash-based compensation, but we believe that
management is limited in its ability to project the impact of
stock-based compensation and accordingly is not held accountable for its
impact on our operating results. Although stock-based compensation is
necessary to attract and retain qualified and quality employees, our
consideration of stock-based compensation places its primary emphasis on
overall shareholder dilution rather than the accounting charges
associated with such grants. 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.
Furthermore, unlike cash-based compensation, the value of stock-based
compensation is determined using complex formulas that incorporate
factors, such as market volatility, that are beyond our control.
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Three Months Ended
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March 28,
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March 29,
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2014
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2013
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Cost of revenue
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$
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6
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$
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3
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Sales and marketing
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15
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16
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Research and development
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14
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13
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General and administrative
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10
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7
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Total stock-based compensation
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$
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45
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$
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39
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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.
Restructuring and transition: We have
engaged in various restructuring and transition activities over the past
several years that have resulted in costs associated with severance,
facilities costs, and transition and other related costs. Transition and
other related costs consist of severance costs associated with
acquisition integrations in efforts to streamline our business
operations, consulting charges associated with the implementation of a
new Enterprise Resource Planning system, and costs related to the
outsourcing of certain back office functions. Each restructuring and
transition 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 or transition activities in the
ordinary course of business. While our operations previously benefited
from the employees and facilities covered by our various restructuring
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, we believe that investors
benefit from excluding these charges from our operating results to
facilitate a more meaningful evaluation of current operating performance
and comparisons to past operating performance.
Acquisition/divestiture-related expenses:
The authoritative guidance on business combinations requires us to
record in the Consolidated Statements of Income, certain items that at
the time of an acquisition would have been recorded to goodwill under
the old authoritative guidance. We have excluded the effect of
acquisition-related expenses from our non-GAAP operating expenses and
net income measures. We incurred expenses in connection with our
acquisitions, which we generally would not have otherwise incurred in
the periods presented as a part of our continuing operations.
Acquisition/divestiture-related expenses consist of professional service
expenses. We believe it is useful for investors to understand the
effects of these items on our operations. Although
acquisition/divestiture-related expenses generally diminish over time
with respect to past transactions, we generally will incur these
expenses in connection with any future transactions.
Settlements of litigation: From time to
time we are party to legal settlements. We exclude the impact of these
settlements because we do not consider these settlements to be part of
the ongoing operation of our business and because of the singular nature
of the claims underlying the matter.
Non-cash interest expense: Effective April
4, 2009, we adopted authoritative guidance on convertible debt
instruments, which changed the method of accounting for our convertible
notes. Under this authoritative guidance, our EPS and net income
calculated in accordance with GAAP has been reduced as a result of
recognizing incremental non-cash interest expense. We believe it is
useful to provide a non-GAAP financial measure that excludes this
incremental non-cash interest expense 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.
Loss on sale of assets: During the first
quarter of fiscal 2013, management sold certain intangible assets
pertaining to the former Storage and Server Management segment and
incurred a loss of $7 million. These intangible assets were acquired, in
addition to other intangible assets, in a recent acquisition and did not
meet the long-term strategic objectives of the segment. We have included
the impact of this item in the Other income (expense), net in our GAAP
Consolidated Statements of Income. The Company's management excluded
this item when evaluating its ongoing operating performance, and
therefore excluded this loss when presenting non-GAAP financial measures.
Gain on sale of short-term investments:
This constitutes the gain or loss from the sale of the Company's
short-term investments. The Company's management excludes this gain or
loss when evaluating its ongoing performance and therefore excludes this
gain or loss when presenting non-GAAP financial measures.
China VAT refund: During the third quarter
of fiscal 2013, we received a tax incentive from the China tax bureau in
the form of value-added tax ("VAT") refunds. The tax incentive is
provided to software companies that perform research and development
activities with respect to software in China. The refunds relate to VAT
collected on qualifying software product sales during the periods from
January 2011 through December 2012. This tax incentive plan was updated
late in 2011 and it enabled companies to retrospectively apply the
incentive back to January 2011. To maintain comparability of results
across periods, we have excluded from our non-GAAP financial measures
the portion of the refund representing periods ended prior to the third
quarter of fiscal 2013.
Release of pre-acquisition tax contingencies:
During the second quarter of fiscal 2013, certain tax accruals related
to pre-acquisition contingencies were effectively settled. As a result,
we realized benefits to GAAP net income of $12 million and non-GAAP net
income of $5 million.
The non-GAAP benefit was due to the reversal of accrued interest
recorded in our Consolidated Statements of Income during our post
acquisition periods. Accordingly, the amount of this accrual has not
been excluded from Symantec's non-GAAP results.
During the third quarter of fiscal 2013, we executed the final closing
agreement for the VERITAS 2002 through 2005 tax years and recorded a
benefit to GAAP net income of $3 million and a non-GAAP expense of $2
million, based on the closing agreement, as well as a GAAP benefit of $2
million for the adjustment of other pre-acquisition tax accruals. The
non-GAAP expense was due to the additional accrual of post-acquisition
related interest.
During the fourth quarter of fiscal 2013, we recorded a benefit to GAAP
net income of $7 million for the state impacts of the VERITAS 2002-2005
final closing agreement. The benefit has been excluded from our non-GAAP
results as it relates to a pre-acquisition contingency.
Release of tax contingencies: During the
second quarter of fiscal 2014, we realized a GAAP tax benefit of $33
million for resolution of a tax matter related to the sale of our 49%
ownership interest in the joint venture with Huawei during the fourth
quarter of fiscal 2012. The related gain on the sale in the fourth
quarter of fiscal 2012 was excluded from non-GAAP results and,
accordingly, we have excluded the tax benefit from our non-GAAP results.
During the second quarter of fiscal 2014 we settled the Symantec 2005
through 2008 IRS audit. As a result, we realized a non-GAAP benefit of
$24 million related to this settlement.
Change in valuation allowance: As a result
of an election made for state income tax purposes, we determined that it
is not more-likely-than-not that we will utilize certain of our state
tax credit carryforwards based on GAAP income allocated to the state.
Accordingly, during the second quarter of fiscal 2013, we recorded a
valuation allowance against certain state tax credit carryforwards.
In connection with the settlement of the Symantec 2005 through 2008 IRS
audit during the second quarter of fiscal 2014, we reassessed the amount
of state tax credits to be utilized to offset the state tax liability
for the amended returns. Accordingly, we have increased the valuation
allowance for the additional amount of unutilized tax credits.
To enhance consistency and comparability of results across periods, we
exclude the impact of these releases of the valuation allowance from our
non-GAAP results.
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