[May 14, 2015] |
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Symantec Reports Fourth Quarter and Fiscal Year 2015 Results
Symantec Corp. (NASDAQ: SYMC) today reported the results of its fourth
quarter and fiscal year 2015, ended April 3, 2015.
Michael A. Brown, president and CEO, said, "Fiscal 2015 was a
transformative year for Symantec, as we announced our unified security
and information management strategies, delivered more than fifty
products, and made the decision to separate Symantec and Veritas into
two standalone companies."
"With the progress we made in FY15, our businesses have the necessary
focus to thrive and we are already seeing the benefits. Setting aside
currency headwinds, continued growth in both implied billings and
deferred revenue underscores the momentum in our businesses. Our
endpoint protection, data loss prevention, NetBackup appliances and
NetBackup software all outperformed the market this quarter."
Thomas Seifert, executive vice president and CFO, said, "Symantec
returned to growth and expanded operating margin year-over-year in
constant currency during the fourth quarter. We continued to improve our
cost structure, and over the year delivered more than $150 million of
incremental profit from our revenue and efficiency initiatives.
Additionally, the Veritas separation is progressing on schedule."
Results for the Fourth Quarter of Fiscal Year 2015 (Dollars in
millions, except EPS)
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4Q15
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4Q14
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Reported Y/Y Change
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FX Adjusted Y/Y Change
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GAAP
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Revenue
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$1,518
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$1,625
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(7%)
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0%
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Operating Margin
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10.0%
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18.8%
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(880) bps
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(640) bps
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Net Income
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$176
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$217
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(19%)
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N/A
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Deferred Revenue
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$3,664
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$3,903
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(6%)
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1%
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EPS (Diluted)
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$0.25
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$0.31
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(19%)
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N/A
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CFFO
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$488
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$449
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9%
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N/A
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Non-GAAP
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Revenue
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$1,548
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$1,650
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(6%)
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1%
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Operating Margin
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25.6%
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27.2%
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(160) bps
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30 bps
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Net Income
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$299
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$333
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(10%)
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N/A
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EPS (Diluted)
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$0.43
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$0.48
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(10%)
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N/A
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Results for Fiscal Year 2015 (Dollars in millions, except EPS)
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FY15
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FY14
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Reported Y/Y Change
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FX Adjusted Y/Y Change
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GAAP
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Revenue
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$6,508
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$6,676
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(3%)
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0%
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Operating Margin
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17.7%
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17.7%
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0 bps
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60 bps
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Net Income
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$878
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$898
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(2%)
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N/A
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Deferred Revenue
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$3,664
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$3,903
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(6%)
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1%
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EPS (Diluted)
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$1.26
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$1.28
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(2%)
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N/A
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CFFO
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$1,312
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$1,281
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2%
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N/A
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Non-GAAP
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Revenue
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$6,538
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$6,701
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(2%)
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0%
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Operating Margin
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27.3%
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27.4%
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(10) bps
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50 bps
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Net Income
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$1,311
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$1,370
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(4%)
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N/A
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EPS (Diluted)
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$1.88
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$1.95
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(4%)
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N/A
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First Quarter and Fiscal Year 2016 Guidance (Dollars in millions,
except EPS and FX rate)
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1Q16
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FY16
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GAAP
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Revenue
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$1,500 - $1,540
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$6,210 - $6,350
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Operating Margin
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14.0% - 15.0%
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14.5% - 15.5%
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EPS (Diluted)
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$0.20 - $0.23
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$0.86 - $0.96
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Non-GAAP
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Operating Margin
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27.0% - 28.0%
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29.0% - 30.0%
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EPS (Diluted)
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$0.41 - $0.44
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$1.80 - $1.90
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Tax Rate
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27.0%
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27.5%
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Share Count
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690 million
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694 million
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FX Rate (€/$)
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$1.10
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$1.13
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Symantec's Board of Directors has declared a quarterly cash dividend of
$0.15 per common share to be paid on June 24, 2015 to all shareholders
of record as of the close of business on June 10, 2015. The ex-dividend
date will be June 8, 2015.
Conference Call
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today
to discuss its fourth quarter and fiscal year 2015 results, ended April
3, 2015 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 19,000 employees
reside in more than 50 countries. Ninety-nine percent of Fortune 500
companies are Symantec customers. In fiscal 2015, it recorded revenues
of $6.5 billion. To learn more go to www.symantec.com
or connect with Symantec at: http://www.symantec.com/social/
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 plans, which may be
considered forward-looking within the meaning of the U.S. federal
securities laws. These include statements regarding our plan to separate
into two publicly traded companies, as well as projections of future
revenue, operating margin and earnings per share, amortization of
acquisition-related intangibles, stock-based compensation, and
restructuring, separation and transition charges. 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; risks related to the planned separation of the
company into the security business and the information management
business; 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; fluctuations in currency exchange rates; 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 28, 2014
and our Form 10-Q for the quarter ended January 2, 2015.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have
undergone significant change due to the impact of stock-based
compensation, 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, including restructuring,
separation and transition costs. 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. 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 the Company'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.
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SYMANTEC CORPORATION
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Condensed Consolidated Balance Sheets
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(Dollars in millions, unaudited)
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April 3,
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March 28,
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2015
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2014 (1)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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2,874
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$
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3,707
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Short-term investments
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1,017
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377
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Trade accounts receivable, net
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993
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1,007
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Deferred income taxes
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152
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142
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Deferred commissions
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131
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115
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Other current assets
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255
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304
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Total current assets
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5,422
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5,652
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Property and equipment, net
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1,205
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1,116
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Intangible assets, net
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628
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768
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Goodwill
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5,847
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5,858
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Long-term deferred commissions
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26
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21
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Other long-term assets
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105
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124
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Total assets
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$
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13,233
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$
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13,539
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$
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213
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$
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282
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Accrued compensation and benefits
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398
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365
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Deferred revenue
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3,109
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3,322
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Current portion of long-term debt
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350
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-
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Other current liabilities
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383
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337
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Total current liabilities
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4,453
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4,306
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Long-term debt
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1,746
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2,095
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Long-term deferred revenue
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555
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581
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Long-term deferred tax liabilities
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308
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425
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Long-term income taxes payable
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134
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252
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Other long-term obligations
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102
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83
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Total liabilities
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7,298
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7,742
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Total stockholders' equity
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5,935
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5,797
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Total liabilities and stockholders' equity
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$
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13,233
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$
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13,539
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(1) Derived from audited consolidated financial statements.
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SYMANTEC CORPORATION
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Condensed Consolidated Statements of Income
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(In millions, except per share data, unaudited)
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Year-Over-Year
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Three Months Ended
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Growth Rate
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April 3,
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March 28,
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Constant
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2015
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2014
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Actual
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Currency (1)
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Net revenue:
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Content, subscription, and maintenance
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$
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1,318
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$
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1,433
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-8
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%
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-1
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%
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License
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200
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192
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4
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%
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13
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%
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Total net revenue
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1,518
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1,625
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-7
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%
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0
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%
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Cost of revenue:
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Content, subscription, and maintenance
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240
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249
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License
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34
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20
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Amortization of intangible assets
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13
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13
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Total cost of revenue
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287
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282
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2
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%
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6
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%
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Gross profit
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1,231
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1,343
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-8
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%
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-1
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%
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Operating expenses:
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Sales and marketing
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551
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585
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Research and development
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293
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277
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General and administrative
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89
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115
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Amortization of intangible assets
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25
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28
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Restructuring, separation, and transition
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121
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32
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Total operating expenses
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1,079
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1,037
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4
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%
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|
9
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%
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Operating income
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|
|
152
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|
|
|
306
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-50
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%
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-34
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%
|
|
|
|
|
|
|
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|
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Interest income
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|
3
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|
|
|
3
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|
|
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Interest expense
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(19
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)
|
|
|
(19
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)
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Other income, net
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|
|
7
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|
|
|
8
|
|
|
|
|
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Income before income taxes
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|
|
143
|
|
|
|
298
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|
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-52
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%
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N/A
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|
|
|
|
|
|
|
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|
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Income tax (benefit) expense
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(33
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)
|
|
|
81
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|
|
|
|
|
Net income
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|
$
|
176
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|
|
$
|
217
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|
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-19
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%
|
|
N/A
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|
|
|
|
|
|
|
|
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Net income per share -- basic
|
|
$
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0.26
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|
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$
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0.31
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|
|
|
|
|
|
|
|
|
|
|
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Net income per share -- diluted
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$
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0.25
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|
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$
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0.31
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|
|
|
|
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|
|
|
|
|
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Weighted-average shares outstanding -- basic
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684
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693
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Weighted-average shares outstanding -- diluted
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693
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700
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Cash dividends declared per common share
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$
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0.15
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$
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0.15
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(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.
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SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Income
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
Year-Over-Year
|
|
|
Year Ended
|
|
Growth Rate (1)
|
|
|
April 3,
|
|
March 28,
|
|
|
|
Constant
|
|
|
2015
|
|
2014
|
|
Actual
|
|
Currency (2)
|
|
|
|
|
|
|
|
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
5,749
|
|
|
$
|
5,960
|
|
|
-4
|
%
|
|
-1
|
%
|
License
|
|
|
759
|
|
|
|
716
|
|
|
6
|
%
|
|
10
|
%
|
Total net revenue
|
|
|
6,508
|
|
|
|
6,676
|
|
|
-3
|
%
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
988
|
|
|
|
1,008
|
|
|
|
|
|
License
|
|
|
114
|
|
|
|
87
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
51
|
|
|
|
54
|
|
|
|
|
|
Total cost of revenue
|
|
|
1,153
|
|
|
|
1,149
|
|
|
0
|
%
|
|
2
|
%
|
Gross profit
|
|
|
5,355
|
|
|
|
5,527
|
|
|
-3
|
%
|
|
-1
|
%
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
2,323
|
|
|
|
2,439
|
|
|
|
|
|
Research and development
|
|
|
1,144
|
|
|
|
1,039
|
|
|
|
|
|
General and administrative
|
|
|
379
|
|
|
|
446
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
108
|
|
|
|
156
|
|
|
|
|
|
Restructuring, separation, and transition
|
|
|
252
|
|
|
|
264
|
|
|
|
|
|
Total operating expenses
|
|
|
4,206
|
|
|
|
4,344
|
|
|
-3
|
%
|
|
-2
|
%
|
Operating income
|
|
|
1,149
|
|
|
|
1,183
|
|
|
-3
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
12
|
|
|
|
12
|
|
|
|
|
|
Interest expense
|
|
|
(79
|
)
|
|
|
(84
|
)
|
|
|
|
|
Other income, net
|
|
|
11
|
|
|
|
45
|
|
|
|
|
|
Income before income taxes
|
|
|
1,093
|
|
|
|
1,156
|
|
|
-5
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
215
|
|
|
|
258
|
|
|
|
|
|
Net income
|
|
$
|
878
|
|
|
$
|
898
|
|
|
-2
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
Net income per share -- basic
|
|
$
|
1.27
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share -- diluted
|
|
$
|
1.26
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding -- basic
|
|
|
689
|
|
|
|
696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding -- diluted
|
|
|
696
|
|
|
|
704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We have a 52/53-week fiscal accounting year. The year ended
April 3, 2015 consisted of 53 weeks, whereas the year ended March
28, 2014 consisted of 52 weeks.
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Condensed Consolidated Statements of Cash Flows
|
(Dollars in millions, unaudited)
|
|
|
|
Year Ended
|
|
|
April 3,
|
|
March 28,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
878
|
|
|
$
|
898
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation
|
|
|
280
|
|
|
|
281
|
|
Amortization of intangible assets
|
|
|
159
|
|
|
|
210
|
|
Amortization of debt issuance costs and discounts
|
|
|
4
|
|
|
|
7
|
|
Stock-based compensation expense
|
|
|
195
|
|
|
|
156
|
|
Deferred income taxes
|
|
|
(23
|
)
|
|
|
47
|
|
Excess income tax benefit from the exercise of stock options
|
|
|
(10
|
)
|
|
|
(17
|
)
|
Net gain from sale of short-term investments
|
|
|
-
|
|
|
|
(32
|
)
|
Other
|
|
|
10
|
|
|
|
8
|
|
Net change in assets and liabilities, excluding effects of
acquisitions:
|
|
|
|
|
Trade accounts receivable, net
|
|
|
(38
|
)
|
|
|
30
|
|
Deferred commissions
|
|
|
(30
|
)
|
|
|
26
|
|
Accounts payable
|
|
|
(65
|
)
|
|
|
(75
|
)
|
Accrued compensation and benefits
|
|
|
49
|
|
|
|
(58
|
)
|
Deferred revenue
|
|
|
19
|
|
|
|
(223
|
)
|
Income taxes payable
|
|
|
(191
|
)
|
|
|
7
|
|
Other assets
|
|
|
22
|
|
|
|
(11
|
)
|
Other liabilities
|
|
|
53
|
|
|
|
27
|
|
Net cash provided by operating activities
|
|
|
1,312
|
|
|
|
1,281
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(381
|
)
|
|
|
(260
|
)
|
Payments for acquisitions, net of cash acquired, and purchases of
intangibles
|
|
|
(39
|
)
|
|
|
(17
|
)
|
Purchases of short-term investments
|
|
|
(1,758
|
)
|
|
|
(492
|
)
|
Proceeds from maturities of short-term investments
|
|
|
681
|
|
|
|
117
|
|
Proceeds from sales of short-term investments
|
|
|
343
|
|
|
|
69
|
|
Net cash used in investing activities
|
|
|
(1,154
|
)
|
|
|
(583
|
)
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
Repayments of debt and other obligations
|
|
|
(21
|
)
|
|
|
(1,189
|
)
|
Proceeds from convertible note hedge
|
|
|
-
|
|
|
|
189
|
|
Net proceeds from sales of common stock under employee stock benefit
plans
|
|
|
116
|
|
|
|
234
|
|
Excess income tax benefit from the exercise of stock options
|
|
|
10
|
|
|
|
17
|
|
Tax payments related to restricted stock units
|
|
|
(47
|
)
|
|
|
(45
|
)
|
Dividends paid, net
|
|
|
(413
|
)
|
|
|
(418
|
)
|
Repurchases of common stock
|
|
|
(500
|
)
|
|
|
(500
|
)
|
Proceeds from other financing, net
|
|
|
44
|
|
|
|
-
|
|
Net cash used in financing activities
|
|
|
(811
|
)
|
|
|
(1,712
|
)
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
(180
|
)
|
|
|
36
|
|
Change in cash and cash equivalents
|
|
|
(833
|
)
|
|
|
(978
|
)
|
Beginning cash and cash equivalents
|
|
|
3,707
|
|
|
|
4,685
|
|
Ending cash and cash equivalents
|
|
$
|
2,874
|
|
|
$
|
3,707
|
|
|
|
|
|
|
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
(1) (2)
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-Over-Year
|
|
|
Three Months Ended
|
|
|
Non-GAAP Growth Rate
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
|
Actual
|
|
Currency (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,518
|
|
|
$
|
30
|
|
|
$
|
1,548
|
|
|
|
$
|
1,625
|
|
|
$
|
25
|
|
|
$
|
1,650
|
|
|
|
-6
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
$
|
1,231
|
|
|
$
|
49
|
|
|
$
|
1,280
|
|
|
|
$
|
1,343
|
|
|
$
|
44
|
|
|
$
|
1,387
|
|
|
|
-8
|
%
|
|
-1
|
%
|
EDS & NDI contingency
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
GSA investigation
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
81.1
|
%
|
|
|
1.6
|
%
|
|
|
82.7
|
%
|
|
|
|
82.6
|
%
|
|
|
1.5
|
%
|
|
|
84.1
|
%
|
|
|
-140 bps
|
|
-100 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
$
|
1,079
|
|
|
$
|
195
|
|
|
$
|
884
|
|
|
|
$
|
1,037
|
|
|
$
|
99
|
|
|
$
|
938
|
|
|
|
-6
|
%
|
|
-2
|
%
|
Stock-based compensation
|
|
|
|
|
49
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
Restructuring, separation, and transition
|
|
|
|
|
121
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
71.1
|
%
|
|
|
-14.0
|
%
|
|
|
57.1
|
%
|
|
|
|
63.8
|
%
|
|
|
-7.0
|
%
|
|
|
56.8
|
%
|
|
|
30 bps
|
|
-130 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
152
|
|
|
$
|
244
|
|
|
$
|
396
|
|
|
|
$
|
306
|
|
|
$
|
143
|
|
|
$
|
449
|
|
|
|
-12
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %
|
|
|
10.0
|
%
|
|
|
15.6
|
%
|
|
|
25.6
|
%
|
|
|
|
18.8
|
%
|
|
|
8.4
|
%
|
|
|
27.2
|
%
|
|
|
-160 bps
|
|
30 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
$
|
176
|
|
|
$
|
123
|
|
|
$
|
299
|
|
|
|
$
|
217
|
|
|
$
|
116
|
|
|
$
|
333
|
|
|
|
-10
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
49
|
|
|
|
|
|
|
|
|
44
|
|
|
|
|
|
|
|
|
Operating expense adjustment
|
|
|
|
|
195
|
|
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
|
|
Income tax effect on above items
|
|
|
|
|
(121
|
)
|
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.25
|
|
|
$
|
0.18
|
|
|
$
|
0.43
|
|
|
|
$
|
0.31
|
|
|
$
|
0.17
|
|
|
$
|
0.48
|
|
|
|
-10
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding
|
|
|
693
|
|
|
|
-
|
|
|
|
693
|
|
|
|
|
700
|
|
|
|
-
|
|
|
|
700
|
|
|
|
-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) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "Change in non-GAAP methodology" in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
SYMANTEC CORPORATION
|
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
(1) (2)
|
(In millions, except per share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-Over-Year
|
|
|
Year Ended
|
|
|
Non-GAAP Growth Rate
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
|
|
Constant
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj
|
|
Non-GAAP
|
|
|
Actual
|
|
Currency (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
6,508
|
|
|
$
|
30
|
|
|
$
|
6,538
|
|
|
|
$
|
6,676
|
|
|
$
|
25
|
|
|
$
|
6,701
|
|
|
|
-2
|
%
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
$
|
5,355
|
|
|
$
|
105
|
|
|
$
|
5,460
|
|
|
|
$
|
5,527
|
|
|
$
|
98
|
|
|
$
|
5,625
|
|
|
|
-3
|
%
|
|
0
|
%
|
EDS & NDI contingency
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
GSA investigation
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin %
|
|
|
82.3
|
%
|
|
|
1.2
|
%
|
|
|
83.5
|
%
|
|
|
|
82.8
|
%
|
|
|
1.1
|
%
|
|
|
83.9
|
%
|
|
|
-40 bps
|
|
-30 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
$
|
4,206
|
|
|
$
|
531
|
|
|
$
|
3,675
|
|
|
|
$
|
4,344
|
|
|
$
|
557
|
|
|
$
|
3,787
|
|
|
|
-3
|
%
|
|
-2
|
%
|
Stock-based compensation
|
|
|
|
|
171
|
|
|
|
|
|
|
|
|
137
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
|
108
|
|
|
|
|
|
|
|
|
156
|
|
|
|
|
|
|
|
|
Restructuring, separation, and transition
|
|
|
|
|
252
|
|
|
|
|
|
|
|
|
264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses as a % of revenue
|
|
|
64.6
|
%
|
|
|
-8.4
|
%
|
|
|
56.2
|
%
|
|
|
|
65.1
|
%
|
|
|
-8.6
|
%
|
|
|
56.5
|
%
|
|
|
-30 bps
|
|
-80 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
1,149
|
|
|
$
|
636
|
|
|
$
|
1,785
|
|
|
|
$
|
1,183
|
|
|
$
|
655
|
|
|
$
|
1,838
|
|
|
|
-3
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin %
|
|
|
17.7
|
%
|
|
|
9.6
|
%
|
|
|
27.3
|
%
|
|
|
|
17.7
|
%
|
|
|
9.7
|
%
|
|
|
27.4
|
%
|
|
|
-10 bps
|
|
50 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income:
|
|
$
|
878
|
|
|
$
|
433
|
|
|
$
|
1,311
|
|
|
|
$
|
898
|
|
|
$
|
472
|
|
|
$
|
1,370
|
|
|
|
-4
|
%
|
|
N/A
|
|
Gross profit adjustment
|
|
|
|
|
105
|
|
|
|
|
|
|
|
|
98
|
|
|
|
|
|
|
|
|
Operating expense adjustment
|
|
|
|
|
531
|
|
|
|
|
|
|
|
|
557
|
|
|
|
|
|
|
|
|
Income tax effect on above items
|
|
|
|
|
(203
|
)
|
|
|
|
|
|
|
|
(183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
1.26
|
|
|
$
|
0.62
|
|
|
$
|
1.88
|
|
|
|
$
|
1.28
|
|
|
$
|
0.67
|
|
|
$
|
1.95
|
|
|
|
-4
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding
|
|
|
696
|
|
|
|
-
|
|
|
|
696
|
|
|
|
|
704
|
|
|
|
-
|
|
|
|
704
|
|
|
|
-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) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "Change in non-GAAP methodology" in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 actual exchange rates in effect during the respective prior
periods.
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Revenue and Deferred Revenue Detail (1) (2)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
GAAP
|
|
Adj (3)
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj (4)
|
|
Non-GAAP
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
1,318
|
|
|
$
|
30
|
|
|
$
|
1,348
|
|
|
|
$
|
1,433
|
|
|
$
|
21
|
|
|
$
|
1,454
|
|
License
|
|
|
200
|
|
|
|
-
|
|
|
|
200
|
|
|
|
|
192
|
|
|
|
4
|
|
|
|
196
|
|
Total Revenue
|
|
$
|
1,518
|
|
|
$
|
30
|
|
|
$
|
1,548
|
|
|
|
$
|
1,625
|
|
|
$
|
25
|
|
|
$
|
1,650
|
|
Revenue - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-8
|
%
|
|
|
1
|
%
|
|
|
-7
|
%
|
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
-5
|
%
|
License
|
|
|
4
|
%
|
|
|
-2
|
%
|
|
|
2
|
%
|
|
|
|
-13
|
%
|
|
|
2
|
%
|
|
|
-11
|
%
|
Total Y/Y Growth Rate
|
|
|
-7
|
%
|
|
|
1
|
%
|
|
|
-6
|
%
|
|
|
|
-7
|
%
|
|
|
1
|
%
|
|
|
-6
|
%
|
Revenue - Y/Y Growth Rate in Constant Currency (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
-5
|
%
|
License
|
|
|
13
|
%
|
|
|
-3
|
%
|
|
|
10
|
%
|
|
|
|
-14
|
%
|
|
|
2
|
%
|
|
|
-12
|
%
|
Total Y/Y Growth Rate in Constant Currency (5)
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
|
-7
|
%
|
|
|
1
|
%
|
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Segment (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
$
|
408
|
|
|
$
|
30
|
|
|
$
|
438
|
|
|
|
$
|
504
|
|
|
$
|
-
|
|
|
$
|
504
|
|
Enterprise Security
|
|
|
491
|
|
|
|
-
|
|
|
|
491
|
|
|
|
|
511
|
|
|
|
10
|
|
|
|
521
|
|
Information Management
|
|
|
619
|
|
|
|
-
|
|
|
|
619
|
|
|
|
|
610
|
|
|
|
15
|
|
|
|
625
|
|
Revenue by Segment - Y/Y Growth Rate (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
-19
|
%
|
|
|
6
|
%
|
|
|
-13
|
%
|
|
|
|
-5
|
%
|
|
|
0
|
%
|
|
|
-5
|
%
|
Enterprise Security
|
|
|
-4
|
%
|
|
|
-2
|
%
|
|
|
-6
|
%
|
|
|
|
-6
|
%
|
|
|
2
|
%
|
|
|
-4
|
%
|
Information Management
|
|
|
1
|
%
|
|
|
-2
|
%
|
|
|
-1
|
%
|
|
|
|
-10
|
%
|
|
|
3
|
%
|
|
|
-7
|
%
|
Revenue by Segment - Y/Y Growth Rate in Constant Currency
(5) (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
-13
|
%
|
|
|
6
|
%
|
|
|
-7
|
%
|
|
|
|
-5
|
%
|
|
|
0
|
%
|
|
|
-5
|
%
|
Enterprise Security
|
|
|
2
|
%
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
|
-6
|
%
|
|
|
2
|
%
|
|
|
-4
|
%
|
Information Management
|
|
|
9
|
%
|
|
|
-3
|
%
|
|
|
6
|
%
|
|
|
|
-10
|
%
|
|
|
2
|
%
|
|
|
-8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
$
|
758
|
|
|
$
|
-
|
|
|
$
|
758
|
|
|
|
$
|
847
|
|
|
$
|
-
|
|
|
$
|
847
|
|
U.S.
|
|
|
760
|
|
|
|
30
|
|
|
|
790
|
|
|
|
|
778
|
|
|
|
25
|
|
|
|
803
|
|
Americas (U.S., Latin America, Canada)
|
|
|
855
|
|
|
|
30
|
|
|
|
885
|
|
|
|
|
880
|
|
|
|
25
|
|
|
|
905
|
|
EMEA
|
|
|
399
|
|
|
|
-
|
|
|
|
399
|
|
|
|
|
470
|
|
|
|
-
|
|
|
|
470
|
|
Asia Pacific & Japan
|
|
|
264
|
|
|
|
-
|
|
|
|
264
|
|
|
|
|
275
|
|
|
|
-
|
|
|
|
275
|
|
Revenue by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
-11
|
%
|
|
|
0
|
%
|
|
|
-11
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
U.S.
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
|
|
|
-9
|
%
|
|
|
3
|
%
|
|
|
-6
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-3
|
%
|
|
|
1
|
%
|
|
|
-2
|
%
|
|
|
|
-8
|
%
|
|
|
3
|
%
|
|
|
-5
|
%
|
EMEA
|
|
|
-15
|
%
|
|
|
0
|
%
|
|
|
-15
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
Asia Pacific & Japan
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
|
-11
|
%
|
|
|
0
|
%
|
|
|
-11
|
%
|
Revenue by Geography - Y/Y Growth Rate in Constant Currency
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
2
|
%
|
|
|
0
|
%
|
|
|
2
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
U.S.
|
|
|
-2
|
%
|
|
|
1
|
%
|
|
|
-1
|
%
|
|
|
|
-9
|
%
|
|
|
3
|
%
|
|
|
-6
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-3
|
%
|
|
|
1
|
%
|
|
|
-2
|
%
|
|
|
|
-8
|
%
|
|
|
3
|
%
|
|
|
-5
|
%
|
EMEA
|
|
|
3
|
%
|
|
|
0
|
%
|
|
|
3
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
Asia Pacific & Japan
|
|
|
6
|
%
|
|
|
0
|
%
|
|
|
6
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Revenue
|
|
$
|
3,664
|
|
|
$
|
-
|
|
|
$
|
3,664
|
|
|
|
$
|
3,903
|
|
|
$
|
-
|
|
|
$
|
3,903
|
|
Deferred Revenue - Y/Y Growth Rate
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
Deferred Revenue - Y/Y Growth Rate in Constant Currency
(5)
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Symantec's Explanation of Non-GAAP Measures in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "change in non-GAAP methodology" in Symantec's
Explanation of Non-GAAP Measures in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The revenue adjustment relates to the EDS & NDI contingency.
Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) The revenue adjustment relates to the GSA investigation. Please
see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) 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).
|
|
(6) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1) (2) (3)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
GAAP
|
|
Adj (4)
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj (5)
|
|
Non-GAAP
|
Operating Income by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
$
|
212
|
|
|
$
|
30
|
|
|
$
|
242
|
|
|
|
$
|
255
|
|
|
$
|
-
|
|
|
$
|
255
|
|
Enterprise Security
|
|
|
47
|
|
|
|
-
|
|
|
|
47
|
|
|
|
|
69
|
|
|
|
10
|
|
|
|
79
|
|
Information Management
|
|
|
107
|
|
|
|
-
|
|
|
|
107
|
|
|
|
|
100
|
|
|
|
15
|
|
|
|
115
|
|
Total Operating Income by Segment
|
|
|
366
|
|
|
|
30
|
|
|
|
396
|
|
|
|
|
424
|
|
|
|
25
|
|
|
|
449
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
55
|
|
|
|
(55
|
)
|
|
|
-
|
|
|
|
|
45
|
|
|
|
(45
|
)
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
38
|
|
|
|
(38
|
)
|
|
|
-
|
|
|
|
|
41
|
|
|
|
(41
|
)
|
|
|
-
|
|
Restructuring, separation, and transition
|
|
|
121
|
|
|
|
(121
|
)
|
|
|
-
|
|
|
|
|
32
|
|
|
|
(32
|
)
|
|
|
-
|
|
Total Consolidated Operating Income
|
|
$
|
152
|
|
|
$
|
244
|
|
|
$
|
396
|
|
|
|
$
|
306
|
|
|
$
|
143
|
|
|
$
|
449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
52
|
%
|
|
|
3
|
%
|
|
|
55
|
%
|
|
|
|
51
|
%
|
|
|
0
|
%
|
|
|
51
|
%
|
Enterprise Security
|
|
|
10
|
%
|
|
|
0
|
%
|
|
|
10
|
%
|
|
|
|
14
|
%
|
|
|
1
|
%
|
|
|
15
|
%
|
Information Management
|
|
|
17
|
%
|
|
|
0
|
%
|
|
|
17
|
%
|
|
|
|
16
|
%
|
|
|
2
|
%
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "Change in non-GAAP methodology" in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) The revenue adjustment relates to the EDS & NDI contingency.
Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) The revenue adjustment relates to the GSA investigation. Please
see Appendix A for more details.
|
|
|
|
|
|
SYMANTEC CORPORATION
|
Revenue and Deferred Revenue Detail (1) (2)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
GAAP
|
|
Adj (3)
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj (4)
|
|
Non-GAAP
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
$
|
5,749
|
|
|
$
|
30
|
|
|
$
|
5,779
|
|
|
|
$
|
5,960
|
|
|
$
|
21
|
|
|
$
|
5,981
|
|
License
|
|
|
759
|
|
|
|
-
|
|
|
|
759
|
|
|
|
|
716
|
|
|
|
4
|
|
|
|
720
|
|
Total Revenue
|
|
$
|
6,508
|
|
|
$
|
30
|
|
|
$
|
6,538
|
|
|
|
$
|
6,676
|
|
|
$
|
25
|
|
|
$
|
6,701
|
|
Revenue - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
-3
|
%
|
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
License
|
|
|
6
|
%
|
|
|
-1
|
%
|
|
|
5
|
%
|
|
|
|
-19
|
%
|
|
|
0
|
%
|
|
|
-19
|
%
|
Total Y/Y Growth Rate
|
|
|
-3
|
%
|
|
|
1
|
%
|
|
|
-2
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
Revenue - Y/Y Growth Rate in Constant Currency (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-1
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
License
|
|
|
10
|
%
|
|
|
-1
|
%
|
|
|
9
|
%
|
|
|
|
-19
|
%
|
|
|
0
|
%
|
|
|
-19
|
%
|
Total Y/Y Growth Rate in Constant Currency (5)
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Segment (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
$
|
1,887
|
|
|
$
|
30
|
|
|
$
|
1,917
|
|
|
|
$
|
2,063
|
|
|
$
|
-
|
|
|
$
|
2,063
|
|
Enterprise Security
|
|
|
2,063
|
|
|
|
-
|
|
|
|
2,063
|
|
|
|
|
2,100
|
|
|
|
10
|
|
|
|
2,110
|
|
Information Management
|
|
|
2,558
|
|
|
|
-
|
|
|
|
2,558
|
|
|
|
|
2,513
|
|
|
|
15
|
|
|
|
2,528
|
|
Revenue by Segment - Y/Y Growth Rate (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
-9
|
%
|
|
|
2
|
%
|
|
|
-7
|
%
|
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
Enterprise Security
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
Information Management
|
|
|
2
|
%
|
|
|
-1
|
%
|
|
|
1
|
%
|
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
Revenue by Segment - Y/Y Growth Rate in Constant Currency
(5) (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
-6
|
%
|
|
|
1
|
%
|
|
|
-5
|
%
|
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
Enterprise Security
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
Information Management
|
|
|
4
|
%
|
|
|
0
|
%
|
|
|
4
|
%
|
|
|
|
-5
|
%
|
|
|
1
|
%
|
|
|
-4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
$
|
3,338
|
|
|
$
|
-
|
|
|
$
|
3,338
|
|
|
|
$
|
3,478
|
|
|
$
|
-
|
|
|
$
|
3,478
|
|
U.S.
|
|
|
3,170
|
|
|
|
30
|
|
|
|
3,200
|
|
|
|
|
3,198
|
|
|
|
25
|
|
|
|
3,223
|
|
Americas (U.S., Latin America, Canada)
|
|
|
3,586
|
|
|
|
30
|
|
|
|
3,616
|
|
|
|
|
3,617
|
|
|
|
25
|
|
|
|
3,642
|
|
EMEA
|
|
|
1,813
|
|
|
|
-
|
|
|
|
1,813
|
|
|
|
|
1,891
|
|
|
|
-
|
|
|
|
1,891
|
|
Asia Pacific & Japan
|
|
|
1,109
|
|
|
|
-
|
|
|
|
1,109
|
|
|
|
|
1,168
|
|
|
|
-
|
|
|
|
1,168
|
|
Revenue by Geography - Y/Y Growth Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
U.S.
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
-3
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
EMEA
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
|
2
|
%
|
|
|
0
|
%
|
|
|
2
|
%
|
Asia Pacific & Japan
|
|
|
-5
|
%
|
|
|
0
|
%
|
|
|
-5
|
%
|
|
|
|
-10
|
%
|
|
|
0
|
%
|
|
|
-10
|
%
|
Revenue by Geography - Y/Y Growth Rate in Constant Currency
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
U.S.
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-4
|
%
|
|
|
1
|
%
|
|
|
-3
|
%
|
Americas (U.S., Latin America, Canada)
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
|
-3
|
%
|
|
|
0
|
%
|
|
|
-3
|
%
|
EMEA
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
|
-2
|
%
|
|
|
0
|
%
|
|
|
-2
|
%
|
Asia Pacific & Japan
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Revenue
|
|
$
|
3,664
|
|
|
$
|
-
|
|
|
$
|
3,664
|
|
|
|
$
|
3,903
|
|
|
$
|
-
|
|
|
$
|
3,903
|
|
Deferred Revenue - Y/Y Growth Rate
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
|
-4
|
%
|
|
|
0
|
%
|
|
|
-4
|
%
|
Deferred Revenue - Y/Y Growth Rate in Constant Currency
(5)
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
|
-6
|
%
|
|
|
0
|
%
|
|
|
-6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Symantec's Explanation of Non-GAAP Measures in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "change in non-GAAP methodology" in Symantec's
Explanation of Non-GAAP Measures in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The revenue adjustment relates to the EDS & NDI contingency.
Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) The revenue adjustment relates to the GSA investigation. Please
see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) 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).
|
|
(6) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
SYMANTEC CORPORATION
|
Operating Margin by Segment Detail (1) (2) (3)
|
(Dollars in millions, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
April 3, 2015
|
|
|
March 28, 2014
|
|
|
GAAP
|
|
Adj (4)
|
|
Non-GAAP
|
|
|
GAAP
|
|
Adj (5)
|
|
Non-GAAP
|
Operating Income by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
$
|
982
|
|
|
$
|
30
|
|
|
$
|
1,012
|
|
|
|
$
|
928
|
|
|
$
|
-
|
|
|
$
|
928
|
|
Enterprise Security
|
|
|
287
|
|
|
|
-
|
|
|
|
287
|
|
|
|
|
314
|
|
|
|
10
|
|
|
|
324
|
|
Information Management
|
|
|
486
|
|
|
|
-
|
|
|
|
486
|
|
|
|
|
571
|
|
|
|
15
|
|
|
|
586
|
|
Total Operating Income by Segment
|
|
|
1,755
|
|
|
|
30
|
|
|
|
1,785
|
|
|
|
|
1,813
|
|
|
|
25
|
|
|
|
1,838
|
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
195
|
|
|
|
(195
|
)
|
|
|
-
|
|
|
|
|
156
|
|
|
|
(156
|
)
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
159
|
|
|
|
(159
|
)
|
|
|
-
|
|
|
|
|
210
|
|
|
|
(210
|
)
|
|
|
-
|
|
Restructuring, separation, and transition
|
|
|
252
|
|
|
|
(252
|
)
|
|
|
-
|
|
|
|
|
264
|
|
|
|
(264
|
)
|
|
|
-
|
|
Total Consolidated Operating Income
|
|
$
|
1,149
|
|
|
$
|
636
|
|
|
$
|
1,785
|
|
|
|
$
|
1,183
|
|
|
$
|
655
|
|
|
$
|
1,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Security
|
|
|
52
|
%
|
|
|
1
|
%
|
|
|
53
|
%
|
|
|
|
45
|
%
|
|
|
0
|
%
|
|
|
45
|
%
|
Enterprise Security
|
|
|
14
|
%
|
|
|
0
|
%
|
|
|
14
|
%
|
|
|
|
15
|
%
|
|
|
0
|
%
|
|
|
15
|
%
|
Information Management
|
|
|
19
|
%
|
|
|
0
|
%
|
|
|
19
|
%
|
|
|
|
23
|
%
|
|
|
0
|
%
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Non-GAAP measures for fiscal 2015 have been revised to reflect a
change in methodology that reduces the number of adjustments to GAAP
measures. For a detailed explanation of this change in methodology,
please see "Change in non-GAAP methodology" in Appendix A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) This presentation includes revised amounts from a change in
segment reporting. Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) The revenue adjustment relates to the EDS & NDI contingency.
Please see Appendix A for more details.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) The revenue 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 (1)
|
(Dollars in millions, except per share data, unaudited)
|
|
Fiscal Year 2016
|
Revenue Guidance
|
|
Year Ended April 1, 2016
|
|
|
|
Year-Over-Year Growth Rate (2) (3)
|
|
Range
|
|
Actual
|
|
Constant Currency (4) (5)
|
|
Revenue range
|
|
$6,210 - $6,350
|
|
(5.0)% - (2.9)%
|
|
0.0% - 2.3%
|
|
|
|
|
|
|
|
|
|
Year Ended April 1, 2016
|
|
|
|
|
Year-Over-Year Increase (Decrease) (2)
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
Constant Currency (4) (5)
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
14.5% - 15.5%
|
|
(320) bps - (220) bps
|
|
(108) bps - (8) bps
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation
|
|
4.6%
|
|
|
|
|
Other non-GAAP adjustments
|
|
9.9%
|
|
|
|
|
Non-GAAP operating margin
|
|
29.0% - 30.0%
|
|
170 bps - 270 bps
|
|
330 bps - 430 bps
|
|
|
|
|
|
|
|
|
|
Year Ended April 1, 2016
|
|
|
|
|
Year-Over-Year Growth Rate (2)
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
$0.86 - $0.96
|
|
(31.7)% - (23.8)%
|
Add back:
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.30
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$0.64
|
|
|
Non-GAAP diluted earnings per share range
|
|
$1.80 - $1.90
|
|
(4.3)% - 1.1%
|
|
First Quarter Fiscal Year 2016
|
Revenue Guidance
|
|
Three Months Ended July 3, 2015
|
|
|
|
Year-Over-Year Growth Rate (2)
|
|
Range
|
|
Actual
|
|
Constant Currency (4) (5)
|
|
Revenue range
|
|
$1,500 - $1,540
|
|
(13.5)% - (11.2)%
|
|
(0.5)% - 2.1%
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 3, 2015
|
|
|
|
|
Year-Over-Year Increase (Decrease) (2)
|
Operating Margin Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
Constant Currency (4) (5)
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
14.0% - 15.0%
|
|
(460) bps - (360) bps
|
|
33 bps - 134 bps
|
Add back:
|
|
|
|
|
|
|
Stock-based compensation
|
|
3.7%
|
|
|
|
|
Other non-GAAP adjustments
|
|
9.3%
|
|
|
|
|
Non-GAAP operating margin
|
|
27.0% - 28.0%
|
|
240 bps - 340 bps
|
|
635 bps - 735 bps
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 3, 2015
|
|
|
|
|
Year-Over-Year Growth Rate (2)
|
Earnings Per Share Guidance and Reconciliation
|
|
Range
|
|
Actual
|
|
|
|
|
|
GAAP diluted earnings per share range
|
|
$0.20 - $0.23
|
|
(41.2)% - (32.4)%
|
Add back:
|
|
|
|
|
Stock-based compensation, net of taxes
|
|
$0.06
|
|
|
Other non-GAAP adjustments, net of taxes
|
|
$0.15
|
|
|
Non-GAAP diluted earnings per share range
|
|
$0.41 - $0.44
|
|
(8.9)% - (2.2)%
|
|
|
|
|
|
|
|
(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) We have a 52/53-week fiscal accounting year. The fiscal year
ended April 1, 2016 consists of 52 weeks, whereas the fiscal year
ended April 3, 2015 consisted of 53 weeks. The quarter ended July 3,
2015 consists of 13 weeks, whereas the quarter ended July 4, 2014
consisted of 14 weeks.
|
|
|
|
|
|
|
|
(3) Growth rates are calculated using fiscal year 2015 non-GAAP
revenue.
|
|
|
|
|
|
|
|
(4) 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 actual exchange rates in effect during the respective prior
periods.
|
|
(5) These calculations are adjusted for the extra week in the June
2014 quarter.
|
|
SYMANTEC CORPORATION
Explanation of Non-GAAP Measures and Other Items
Appendix A
Segment reporting: In fiscal 2015, we are
focused on managing our businesses as a portfolio and optimizing certain
businesses for margin or growth. As a result, we formed a new consumer
group and we consolidated our enterprise security businesses into a
segment. We modified our segment reporting structure to match our
operating structure in the second quarter of fiscal 2015. The historical
periods presented have been adjusted to reflect the new reporting
structure, which is now:
• Consumer Security
• Enterprise Security
• Information Management
Consumer Security consists of our consumer security businesses that were
previously reported in User Productivity & Protection. Enterprise
Security consists of our enterprise security businesses that were
previously reported in User Productivity & Protection and Information
Security. There were no changes to the Information Management segment.
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 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 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.
Change in non-GAAP methodology: From time
to time, the Company performs a comprehensive review of its non-GAAP
financial measures. Effective in the first quarter of fiscal 2015,
non-GAAP financial measures are adjusted for the following items:
stock-based compensation expense; charges related to the amortization of
intangible assets; certain other income and expense items that
management considers unrelated to the Company's core operations; and the
associated income tax effects of the adjustments. By limiting the number
and nature of adjustments, our management team believes this
supplemental information will provide more meaningful insight into the
performance of the Company's core business and enhance investors'
ability to compare the Company's performance to its peers. The adoption
of the change in methodology has been applied retrospectively to prior
periods to facilitate comparability across periods.
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 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
April 3,
|
|
March 28,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
6
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
20
|
|
|
15
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
20
|
|
|
14
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
9
|
|
|
10
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation
|
|
$
|
55
|
|
$
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, separation, and transition:
We have engaged in various restructuring, separation, and transition
activities over the past several years that have resulted in costs
associated with severance, facilities, transition, and other related
costs. Separation and other related costs consist of consulting and
disentanglement costs incurred to split the Company into two,
independent publicly traded companies, as well as costs to prune
selected product lines that do not fit either the Company's growth or
margin objectives. Transition and other related costs consist of
consulting charges associated with the implementation of new Enterprise
Resource Planning systems. Each restructuring, separation, 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, separation, or transition
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 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.
EDS & NDI contingency: On January 24,
2011, a class action lawsuit was filed against the Company and its
previous e-commerce vendor Digital River, Inc. The lawsuit alleged
violations of California's Unfair Competition Law, the California Legal
Remedies Act and unjust enrichment related to prior sales of Extended
Download Service (EDS) and Norton Download Insurance (NDI). On March 31,
2014, the U.S. District Court for the District of Minnesota certified a
class of all people who purchased these products between January 24,
2005, and March 10, 2011. In April 2015, we reached agreement in
principle with the plaintiffs under which the Company will pay the
plaintiffs $30 million. As we consider this settlement amount now
estimable and probable, we have recorded it as an offset to revenue
during the year ended April 3, 2015. The Company's management excluded
this item when evaluating its ongoing operating performance, and
therefore excluded this loss when presenting non-GAAP financial measures.
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
and we recorded an amount as a reduction of revenue that represents our
best estimate of the low end of such range. This amount contemplates
estimated losses from both the investigation of compliance with the
terms of the GSA Schedule contract as well as possible violations of the
False Claims Act. There is at least a reasonable possibility that a loss
may have been incurred in excess of our accrual for this matter, however
we are currently unable to determine a range of estimated losses
resulting from this matter. The Company's management excluded this item
when evaluating its ongoing operating performance, and therefore
excluded this loss when presenting non-GAAP financial measures.
Release of tax contingencies: During the
fourth quarter of fiscal 2015 and second quarter of fiscal 2014, we
realized GAAP tax benefits of $39 million and $33 million, respectively,
for the resolution of tax matters 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.
This GAAP tax benefit is presented in the "Income tax effect on above
items" line.
Defined benefit plans: The Company has
defined benefit plans in the form of company mandatory or statutory
retirement and termination indemnities in foreign locations including a
company supplemental plan in Germany which is now frozen. In the fourth
quarter of fiscal 2015, the Company recorded an $11 million charge to
operating expenses to adjust for gains and losses on such defined
benefit plans. This charge was included in our non-GAAP results.
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