What changed in this filing

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Item 9A. Controls and Procedures

2021-05-21 compared with 2020-05-28 · 588 added, 672 removed, 1005 unchanged (56% of the section changed)

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Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal control over financial reporting as of April 2, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

We acquired Avira during January 2021.

Management excluded Avira from its assessment of the effectiveness of NortonLifeLock Inc.’s internal control over financial reporting as of April 2, 2021.

Total assets and total revenues of Avira represent approximately 1%, or $67 million and 1%, or $21 million, respectively, of the related consolidated financial statement amounts as of, and for the year ended, April 2, 2021.

Management did not assess the effectiveness of internal control over financial reporting at Avira due to the complexity associated with assessing internal control during integration efforts as well as the limited amount of time between the transaction date and the assessment date of April 2, 2021.

Our management has concluded that, as of April 2, 2021, our internal control over financial reporting was effective at the reasonable assurance level based on these criteria.

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There were no changes in our internal control over financial reporting during the quarter ended April 2, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have not experienced any significant impact to our internal controls over financial reporting despite the fact that a significant number of employees continue to work remotely due to the COVID-19 pandemic.

The design of our processes and controls allow for remote execution with accessibility to secure data.

We are continually monitoring and assessing the COVID-19 situation to minimize the impact, if any, on the design and operating effectiveness on our internal controls.

d) Limitations on Effectiveness of Controls

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Other Information

The information below is reported in lieu of information that would be reported under Items 5.03 under Form 8-K.

On May 22, 2020, we executed and filed a Certificate of Elimination of Series A Junior Preferred Stock (the “Junior Preferred Stock”) with the Secretary of State of the State of Delaware, to remove the Certificate of Designations of the Junior Preferred Stock from our Amended and Restated Certificate of Incorporation.

The Certificate of Elimination became effective upon filing.

No shares of the Junior Preferred Stock were issued or outstanding upon filing of the Certificate of Elimination.

A copy of the Certificate of Elimination is attached hereto as Exhibit 3.06 and is incorporated into this Item 9B by reference.

The information below is reported in lieu of information that would be reported under Item 5.02 under Form 8-K.

On May 28, 2020, we and Samir Kapuria, our President, entered into an amendment agreement to the letter agreement between Mr.

Kapuria and us dated December 5, 2019 (the Amendment).

Under the Amendment, we agreed to terminate Mr.

Kapuria other than for Cause by December 31, 2020, upon which time Mr.

Kapuria shall be entitled to the benefits set forth in the letter agreement and the Amendment.

The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which will be filed as an exhibit to our Quarterly Report on Form 10-Q for the fiscal quarter ending July 3, 2020.

Directors, Executive Officers and Corporate Governance

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The information required by this item will be included under the caption “Certain Relationships and Related Transactions, and Director Independence” in our 2021 Proxy Statement and is incorporated herein by reference.

Principal Accounting Fees and Services

Principal Accountant Fees and Services

The information required by this item will be included under the caption “Principal Accountant Fees and Services” in our 2021 Proxy Statement and is incorporated herein by reference.

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Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

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Recent Accounting Standards

Divestitures and Discontinued Operations

Divestitures, Discontinued Operations and Assets Held for Sale

Goodwill and Intangible Assets

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We have audited the accompanying consolidated balance sheets of NortonLifeLock Inc.

and subsidiaries (the Company) as of April 3, 2020 and March 29, 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended April 3, 2020, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of April 2, 2021 and April 3, 2020, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended April 2, 2021, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of April 2, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 3, 2020 and March 29, 2019 and the results of its operations and its cash flows for each of the years in the three-year period ended April 3, 2020, in conformity with U.S.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 2, 2021 and April 3, 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended April 2, 2021, in conformity with U.S.

generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 2, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 2 and 9 to the consolidated financial statements, the Company has changed its method of accounting for leases as of March 30, 2019, due to the adoption of Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 842, Leases .

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for revenue from contracts with customers as of March 31, 2018, due to the adoption of ASC Topic 606, Revenue from Contracts with Customers .

The Company acquired Avira during 2021, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of April 2, 2021, Avira’s internal control over financial reporting associated with total assets and total revenues of approximately 1%, or $67 million and 1%, or $21 million, respectively, included in the consolidated financial statements of the Company as of and for the year ended April 2, 2021.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Avira.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting under Item 9A.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of uncertain tax positions

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Complex auditor judgment, including the involvement of tax professionals with specialized skills and knowledge, was required to evaluate the Company’s interpretation and application of tax law globally across its multiple subsidiaries.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s uncertain tax positions process, including controls related to the interpretation of tax law, its application in the liability estimation process, and determination of the final uncertain tax position.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s uncertain tax positions process, including controls related to the interpretation of tax law, its application in the liability estimation process, and determination of the final uncertain tax position.

We involved tax professionals with specialized skills and knowledge, who assisted in:

● Obtaining an understanding of the Company’s overall tax structure across multiple subsidiaries and assessing the Company’s compliance with tax laws globally,

Evaluating tax law, and assessing the interpretation under the relevant jurisdictions’ tax law,

● Evaluating changes in tax law, and assessing the interpretation under the relevant jurisdictions’ tax law,

● Inspecting settlements with taxing authorities to assess the Company’s determination of its tax positions and having more than a 50% likelihood to be sustained upon examination, and

Performing an assessment of the Company’s tax positions and comparing the results to the Company’s assessment.

● Performing an assessment of the Company’s tax positions and comparing the results of the Company’s assessment.

In addition, we evaluated the Company’s ability to accurately estimate its gross unrecognized tax benefits by comparing historical gross unrecognized tax benefits to actual outcome upon conclusion of tax examinations.

Evaluation of the exchange of the 2.0% and 2.5% Convertible Notes

As discussed in Note 10 to the consolidated financial statements, in February 2020, the Company exchanged $250 million of its 2.5% Convertible Notes and $625 million of its 2.0% Convertible Notes for new convertible notes of the same principal amounts and paid the holders of the new convertible notes total cash consideration of $546 million in lieu of conversion price adjustments related to a $12 per share cash payment to the exchanged note holders.

As a result, the Company recorded $865 million as the liability component, recorded a reduction of additional paid-in capital of $546 million and a $2 million gain on extinguishment.

We identified the evaluation of the exchange of debt for the 2.0% and 2.5% Convertible Notes as a critical audit matter.

Complex auditor judgment, was required to evaluate the Company’s accounting treatment and appropriate accounting guidance in relation to the debt extinguishment and the cash payments in connection with the amended Convertible Senior Notes.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s debt process, including controls over the Company’s evaluation of the accounting guidance, including treatment and assessment of the extinguishment of debt and the cash payments.

We read the Company’s amended debt agreements and features included within the agreements and evaluated the accounting guidance.

We evaluated management’s accounting treatment and analysis of the debt extinguishment, cash payments, and classification within the consolidated financial statements.

We have served as the Company’s auditor since 2002.

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(In millions, except par value per share amounts)

April 3, 2020

March 29, 2019

April 2, 2021 April 3, 2020

Current assets:

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Assets held for sale 233 270

Current assets of discontinued operations

Total current assets 1,538 3,079

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Intangible assets, net 1,116 1,067

Goodwill 2,867 2,585

Other long-term assets 686 678

Long-term assets of discontinued operations

LIABILITIES AND STOCKHOLDERS’ EQUITY

Total assets $ 6,361 $ 7,735

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Other current liabilities 428 587

Current liabilities of discontinued operations

Total current liabilities 2,136 2,622

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Other long-term liabilities 60 79

Long-term liabilities of discontinued operations

Total liabilities 6,861 7,725

Commitments and contingencies (Note 18)

Stockholders’ equity:

Preferred stock, $0.01 par value:

1 shares authorized;

no shares issued and outstanding

Stockholders’ equity (deficit):

Common stock and additional paid-in capital, $ 0.01 par value:

3,000 shares authorized;

589 and 630 shares issued and outstanding as of April 3, 2020 and March 29, 2019, respectively

Accumulated other comprehensive loss

580 and 589 shares issued and outstanding as of April 2, 2021 and April 3, 2020, respectively

Accumulated other comprehensive income (loss) 47 ( 16 )

Retained earnings (accumulated deficit) ( 2,776 ) ( 3,330 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholders’ equity (deficit) ( 500 ) 10

Total liabilities and stockholders’ equity (deficit) $ 6,361 $ 7,735

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

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(In millions, except per share amounts)

April 3, 2020

March 29, 2019

March 30, 2018

April 2, 2021 April 3, 2020 March 29, 2019

Net revenues $ 2,551 $ 2,490 $ 2,456

Cost of revenues 362 393 455

Gross profit 2,189 2,097 2,001

Operating expenses:

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Total operating expenses 1,293 1,742 1,843

Operating income (loss)

Operating income 896 355 158

Interest expense ( 144 ) ( 196 ) ( 208 )

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Income (loss) from continuing operations before income taxes 872 819 ( 107 )

Income tax expense (benefit)

Income tax expense 176 241 3

Income (loss) from continuing operations 696 578 ( 110 )

Income from discontinued operations

Income (loss) from discontinued operations ( 142 ) 3,309 141

Net income $ 554 $ 3,887 $ 31

Income (loss) per share - basic:

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Net income per share - basic (1)

$ 0.94 $ 6.32 $ 0.05

Income (loss) per share - diluted:

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Net income per share - diluted (1)

$ 0.92 $ 6.05 $ 0.05

Weighted-average shares outstanding:

Basic 589 615 632

Diluted 600 643 632

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

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(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

April 2, 2021 April 3, 2020 March 29, 2019

Net income $ 554 $ 3,887 $ 31

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments 63 ( 11 ) ( 13 )

Translation adjustments

Reclassification adjustments for net loss included in net income

Net foreign currency translation adjustments

Unrealized gain (loss) on available-for-sale securities:

Unrealized gain (loss)

Reclassification adjustments for gain included in net income

Net unrealized gain (loss) on available-for-sale securities

Other comprehensive income (loss) from equity method investee:

Unrealized gain on available-for-sale securities — 1 3

Other comprehensive income (loss) from equity method investee — 1 ( 1 )

Reclassification adjustments for income included in net income

Net other comprehensive income (loss) from equity method investee

Other comprehensive loss, net of taxes

Other comprehensive income (loss), net of taxes 63 ( 9 ) ( 11 )

Comprehensive income $ 617 $ 3,878 $ 20

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NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In millions, except per share amounts)

Common Stock and Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings (Accumulated Deficit)

Total Stockholders’ Equity

Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of March 30, 2018 624 $ 4,691 $ 4 $ 328 $ 5,023

Other comprehensive loss

Cumulative effect from adoption of accounting standards — — — 939 939

Net income 31 31

Other comprehensive income (loss) — — ( 11 ) — ( 11 )

Common stock issued under employee stock incentive plans 24 19 — — 19

Shares withheld for taxes related to vesting of restricted stock units ( 8 ) ( 173 ) — — ( 173 )

Equity awards assumed in acquisitions

Repurchases of common stock ( 10 ) ( 84 ) — ( 168 ) ( 252 )

Cash dividends declared ($ 0.30 per share of common stock) and dividend equivalents accrued

— — — ( 197 ) ( 197 )

Stock-based compensation — 359 — — 359

Balance as of March 29, 2019 630 4,812 ( 7 ) 933 5,738

Cumulative effect from adoption of accounting standards

Other comprehensive loss

Net income — — — 3,887 3,887

Other comprehensive income (loss) — — ( 9 ) — ( 9 )

Common stock issued under employee stock incentive plans 32 123 — — 123

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Cash dividends declared ($ 12.40 per share of common stock) and dividend equivalents accrued

— ( 76 ) — ( 7,489 ) ( 7,565 )

Stock-based compensation — 338 — — 338

Balance as of March 29, 2019

Other comprehensive loss

Short-swing profit disgorgement — 9 — — 9

Exchange and extinguishment of convertible debt — ( 862 ) — — ( 862 )

Balance as of April 3, 2020 589 3,356 ( 16 ) ( 3,330 ) 10

Net income — — — 554 554

Other comprehensive income (loss) — — 63 — 63

Common stock issued under employee stock incentive plans 8 24 — — 24

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Cash dividends declared ($ 0.50 per share of common stock) and dividend equivalents accrued

— ( 301 ) — — ( 301 )

Stock-based compensation — 81 — — 81

Short-swing profit disgorgement

Exchange and extinguishment of convertible debt

Extinguishment of convertible debt — ( 578 ) — — ( 578 )

Balance as of April 2, 2021 580 $ 2,229 $ 47 $ ( 2,776 ) $ ( 500 )

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(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

April 2, 2021 April 3, 2020 March 29, 2019

OPERATING ACTIVITIES:

Net income $ 554 $ 3,887 $ 31

Amortization and depreciation 150 361 615

Impairments of long-lived assets

Impairments and write-offs of current and long-lived assets 90 74 10

Stock-based compensation expense 81 312 352

Loss from equity interest

Deferred income taxes 42 16 ( 70 )

Gain on extinguishment of debt ( 20 ) — —

Loss from equity interest — 31 101

Gain on divestitures — ( 5,684 ) —

Gain on sale of equity method investment — ( 379 ) —

Gain on sale of properties ( 98 ) — —

Non-cash operating lease expense 22 40 —

Changes in operating assets and liabilities, net of acquisitions and divestitures:

Other 52 ( 4 ) ( 14 )

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net 3 583 113

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Income taxes payable ( 299 ) 383 67

Other assets 144 ( 81 ) ( 26 )

Other liabilities ( 79 ) ( 101 ) 112

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Proceeds from divestitures, net of cash contributed and transaction costs — 10,918 —

Purchases of short-term investments

Proceeds from maturities and sales of short-term investments

Proceeds from sale of property

Proceeds from the maturities and sales of short-term investments 68 167 139

Proceeds from sales of properties 218 — 26

Proceeds from sale of equity method investment — 380 —

Other ( 5 ) 3 ( 19 )

Net cash provided by (used in) investing activities ( 69 ) 11,379 ( 241 )

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Dividends and dividend equivalents paid ( 373 ) ( 7,481 ) ( 217 )

Repurchases of common stock

Cash consideration paid in the exchange of convertible debt

Repurchase of common stock ( 304 ) ( 1,581 ) ( 234 )

Cash consideration paid in exchange of convertible debt — ( 546 ) —

Short-swing profit disgorgement — 9 —

Other ( 1 ) ( 1 ) ( 4 )

Net cash used in financing activities ( 1,903 ) ( 10,123 ) ( 1,209 )

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Description of Business and Significant Accounting Policies

We are a leading provider of Cyber Safety solutions for consumers.

During fiscal year 2020, we completed the sale of our Enterprise Security Assets to Broadcom Inc.

(Broadcom) and the sale of our ID Analytics business to LexisNexis® Risk Solutions, part of RELX Inc.

With the sale of our enterprise assets, we have transformed ourselves into a pure consumer company and changed our name from Symantec Corporation to NortonLifeLock Inc.

Our NortonLifeLock branded solutions help customers protect their devices, online privacy, identity and home networks.

Recent Corporate Name Change

In connection with the sale of certain assets of our Enterprise Security business as disclosed in Discontinued operations below, effective November 4, 2019, we changed our corporate name from Symantec Corporation to NortonLifeLock Inc.

Discontinued operations

On August 8, 2019, we entered into a definitive agreement with Broadcom under which Broadcom agreed to purchase certain of our Enterprise Security assets and assume certain liabilities for a purchase price of $ 10.7 billion (the Broadcom sale).

On November 4, 2019, we completed the transaction.

The divestiture of our Enterprise Security business allowed us to shift our operational focus to our consumer business and represents a strategic shift in our operations.

As a result, the majority of results of our Enterprise Security business were classified as discontinued operations in our Consolidated Statements of Operations and thus excluded from both continuing operations and segment results for all periods presented.

We have operated in one reportable segment since the second quarter of fiscal 2020.

The Enterprise Security business was part of our Enterprise Security segment.

Results of discontinued operations include all revenues and expenses directly derived from the Enterprise Security business, with the exception of revenues and associated costs of our ID Analytics solutions, which were formerly included in the Enterprise Security segment, and general corporate overhead which were previously allocated to the Enterprise Security segment but are not allocated to discontinued operations.

These revenues and expenses are now included in continuing operations.

The assets acquired by and liabilities sold to Broadcom, as specified in the August 8, 2019 definitive agreement, are classified as discontinued operations in our Consolidated Balance Sheets, subject to changes set forth in the agreement.

See Note 3 for additional information about the divestiture of our Enterprise Security business .

Principles of consolidation

NortonLifeLock, Inc.

is a leading provider of consumer Cyber Safety solutions globally.

We help customers protect their devices, online privacy, identity and home networks.

Basis of presentation

The accompanying Consolidated Financial Statements of NortonLifeLock and our wholly-owned subsidiaries are prepared in conformity with generally accepted accounting principles in the United States (GAAP).

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The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.

Estimates are based upon historical factors, current circumstances, and the experience and judgment of management.

Management evaluates its assumptions and estimates on an ongoing basis and may engage outside subject matter experts to assist in its valuations.

Significant items subject to such estimates and assumptions include valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, and valuation of assets and liabilities and results of operations of our discontinued operations.

Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the COVID-19 pandemic.

Such estimates include, but are not limited to, valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, and valuation of assets and liabilities and results of operations of our discontinued operations.

On an ongoing basis, management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable.

Third-party valuation specialists are also utilized for certain estimates.

Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the COVID-19 pandemic, and such differences may be material to the Consolidated Financial Statements.

Significant Accounting Policies

With the exception of those discussed in Note 2, there were no material changes in accounting pronouncements issued by the Financial Accounting Standards Board (FASB) that were applicable or adopted by us during the fiscal 2021.

Revenue recognition

On March 31, 2018, the first day of our fiscal 2019, we adopted the new revenue standard, Revenue Recognition - Contracts with Customers, on a modified retrospective basis, applying the practical expedient to all uncompleted contracts as of March 31, 2018.

Accordingly, results of our fiscal 2020 and 2019 are presented under the new revenue recognition guidance, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition guidance.

The adoption of the new revenue standard did not have a significant impact on our net revenues.

We sell products and services directly to end-users and packaged software products through a multi-tiered distribution channel.

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We record estimated reserves for rebates as an offset to revenue or contract liabilities.

Reserves for rebates, recorded in Other current liabilities, were $ 10 million and $ 17 million as of April 3, 2020 and March 29, 2019 , respectively.

Reserves for rebates, recorded in Other current liabilities, were $ 6 million and $ 10 million as of April 2, 2021 and April 3, 2020, respectively.

For products that include content updates, rebates are recognized as a ratable offset to revenue or contract liabilities over the term of the subscription.

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At contract inception, we assess the products and services promised in the contract to identify each performance obligation and evaluate whether the performance obligations are capable of being distinct and are distinct within the context of the contract.

Performance obligations that are not both capable of being distinct and distinct within the context of the contract are combined and treated as a single performance obligation in determining the allocation and recognition of revenue.

Performance obligations that are not both capable of being distinct and are distinct within the context of the contract are combined and treated as a single performance obligation in determining the allocation and recognition of revenue.

Our software solutions typically consist of a term-based subscription as well as when-and-if available software updates and upgrades.

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• given the rapid pace with which new threats are identified, the value of the licensed software diminishes rapidly without the software updates and upgrades.

We therefore consider the software license and related support obligations represent a single, combined performance obligation with revenue recognized over time as our solutions are delivered.

We therefore consider the software license and related support obligations a single, combined performance obligation with revenue recognized over time as our solutions are delivered.

Fair value measurements

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They are classified as available-for-sale and recognized at fair value using Level 1 and Level 2 inputs, which are quoted using market prices, independent pricing vendors, or other sources, to determine the fair value.

Unrealized gains and losses, net of tax, are included in Accumulated other comprehensive loss (AOCI).

Unrealized gains and losses, net of tax, are included in Accumulated other comprehensive income (loss) (AOCI).

We regularly review our investment portfolio to identify and evaluate investments that have indications of impairment.

Factors considered in determining whether a loss is other-than-temporary include:

the length of time and extent to which the fair value has been lower than the cost basis, the financial condition and near-term prospects of the investee, credit quality, likelihood of recovery, and our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

We have entered into foreign exchange forward contracts with up to 12 months in duration to mitigate our foreign currency risk.

The forward contracts designated as net investment hedges are used to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency.

Gain or loss on these forward contracts are recognized in the translation adjustments component of AOCI and is reclassified to net earnings in the period in which the hedged subsidiary is either sold or substantially liquidated.

We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness and recognize these changes in Other income (expense), net in our Consolidated Statements of Operations.

The foreign exchange forward contracts not designated as hedges are used to hedge foreign currency balance sheet exposure.

These forward contracts are recognized at fair value using Level 2 inputs to determine the fair value.

Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses.

Factors considered in determining if a credit loss exists include:

the extent to which the fair value has been lower than the cost basis, any changes to the rating of the security by a rating agency, and any adverse financial conditions specifically related to the security.

Expected credit losses on available-for-sale debt securities are recognized in Other income (expense), net in our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in AOCI in our Consolidated Statements of Stockholders’ Equity (Deficit).

Non-marketable investments

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Gains and losses on these investments, whether realized or unrealized, are recognized in Other income (expense), net in our Consolidated Statements of Operations.

Prior to fiscal 2019, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment.

We accounted for the investment in common stock of DigiCert Parent Inc.

(DigiCert) that we received as a portion of the net consideration in the sale of our website security (WSS) and public key infrastructure (PKI) solutions under the equity method.

We recorded our interest in the net earnings (loss) of DigiCert based on the most recently available financial statements of DigiCert, which were provided to us on a three-month lag, along with adjustments for amortization of basis differences, in Other income (expense), net in our Consolidated Statements of Operations.

This investment was sold in October 2019.

We assess the recoverability of our non-marketable investments by reviewing various indicators of impairment.

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Accounts receivable are recorded at the invoiced amount and are not interest bearing.

We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables.

We maintain an allowance for doubtful accounts or expected credit losses to reserve for potentially uncollectible receivables.

We review our accounts receivables by aging category to identify specific customers with known disputes or collectability issues.

In addition, we maintain an allowance for all other receivables not included in the specific reserve by applying specific percentages of projected uncollectible receivables to the various aging categories.

In determining these percentages, we use judgment based on our historical collection experience and current economic trends.

We also offset deferred revenue against accounts receivable when channel inventories are in excess of specified levels and for transactions where collection of a receivable is not considered probable.

In determining these percentages, we use judgment based on our historical collection experience and current economic trends as well as reasonable and supportable forecasts of future economic conditions.

Assets held for sale

Long-lived assets held for sale are written down to fair value, less cost to sell.

Long-lived assets held for sale are recorded as the lower of its carrying value or fair value less costs to sell.

Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets and external data available.

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Internal-use software development costs

We capitalize qualifying costs incurred during the application development stage related to software developed for internal-use and amortize them over the estimated useful life of 3 to 10 years.

We capitalize qualifying costs incurred during the application development stage related to software developed for internal-use and amortize them over the estimated useful life of 3 years.

We expense costs incurred related to the planning and post-implementation phases of development as incurred.

As of April 3, 2020 and March 29, 2019 , capitalized costs, net of amortization, were $ 24 million and $ 43 million , respectively.

Beginning March 30, 2019, operating lease assets and liabilities are included in our Consolidated Balance Sheets.

As of April 2, 2021 and April 3, 2020, capitalized costs, net of amortization, were $ 9 million and $ 24 million, respectively.

We determine if an arrangement is a lease at inception.

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In fiscal 2021, based on our qualitative assessments, we concluded that it is more likely than not that the fair values are more than their carrying values.

Accordingly, there was no indication of impairment, and further quantitative testing was not required.

Accordingly, there was no indication of impairment of goodwill, and further quantitative testing was not required.

Long-lived assets

5 unchanged sentences

Indefinite-lived intangible assets are not subject to amortization but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets, including finite-lived intangible assets and property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable.

The evaluation is performed at the lowest level of identifiable cash flows independent of other assets.

1 unchanged sentence

Measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair value.

During the year ended April 3, 2020, we recognized an impairment loss of $ 74 million associated with our property and equipment as a result of our restructuring activities.

There was no impairment associated with our intangible assets.

In fiscal 2021, based on our qualitative assessments, we concluded that it is more likely than not that the fair values are more than their carrying values.

Accordingly, there was no indication of impairment of long-lived assets, and further quantitative testing was not required.

Contract liabilities

13 unchanged sentences

Shares repurchased under our share repurchase program are retired.

Upon retirement, we allocate the value of treasury stock between Paid-in capital and Retained earnings.

Upon retirement, we allocate the value of treasury stock between Additional paid-in capital and Retained earnings.

Restructuring

7 unchanged sentences

We measure deferred tax assets and liabilities using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled.

We also assess the likelihood that deferred tax assets will be realized from future taxable income and based on this assessment establish a valuation allowance, if required.

We also assess the likelihood that deferred tax assets will be realized from future taxable income and based on weighting positive and negative evidence, we will assess and determine the need for a valuation allowance, if required.

The determination of our valuation allowance involves assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate.

5 unchanged sentences

We measure and recognize stock-based compensation for all stock-based awards, including restricted stock units (RSU), performance-based restricted stock units (PRU), stock options, and rights to purchase shares under our employee stock purchase plan (ESPP), based on their estimated fair value on the grant date.

We recognize the costs in our financial statements on a straight-line basis over the award’s requisite service period except for PRUs with graded vesting, for which we recognize the costs on a graded basis.

We recognize the costs in our Consolidated

Financial Statements on a straight-line basis over the award’s requisite service period except for PRUs with graded vesting, for which we recognize the costs on a graded basis.

For awards with performance conditions, the amount of compensation cost we recognize over the requisite service period is based on the actual or estimated achievement of the performance condition.

5 unchanged sentences

The Black-Scholes valuation model incorporates a number of variables, including our expected stock price volatility over the expected life of the awards, actual and projected employee exercise and forfeiture behaviors, risk-free interest rates, and expected dividends.

We have certain liability-classified stock-based compensation awards for which the service inception date precedes the grant date.

For these awards, we recognize stock-based compensation expense on a straight-line basis over the service period.

The liability is reclassified to Additional paid-in capital in our Consolidated Balance Sheets when the award is granted.

Foreign currency

3 unchanged sentences

dollars are recorded in AOCI.

Remeasurement adjustments are recorded in Other income (expense), net .

Remeasurement adjustments are recorded in Other income (expense), net in our Consolidated Statements of Operations.

Concentrations of risk

5 unchanged sentences

A majority of our trade receivables are derived from sales to distributors and retailers.

The credit risk in our trade accounts receivable is substantially mitigated by our credit evaluation process, reasonably short collection

terms, and the geographical dispersion of sales transactions.

The credit risk in our trade accounts receivable is substantially mitigated by our credit evaluation process, reasonably short collection terms, and the geographical dispersion of sales transactions.

Customers which are distributors that accounted for over 10% of our net accounts receivable, are as follows:

April 3, 2020

March 29, 2019

April 2, 2021 April 3, 2020

Customer A 46 % 39 %

Advertising and other promotional costs

9 unchanged sentences

Recently adopted authoritative guidance

In February 2016, the FASB issued new guidance on lease accounting which requires lessees to recognize assets and liabilities on their balance sheet for the rights and obligations created by operating leases and also requires disclosures designed to give users of financial statements information on the amount, timing, and uncertainty of cash flows arising from leases.

Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases.

Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

On March 30, 2019, the first day of our fiscal 2020, we adopted the new guidance using the alternative modified retrospective transition method under which we continue to apply the legacy lease accounting guidance, including its disclosure requirements, in comparative periods prior to fiscal 2020.

In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard that allowed us not to reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases.

We currently do not have any finance leases.

We combine the lease and non-lease components in determining the operating lease assets and liabilities.

The adoption of the new lease accounting standard resulted in the recognition of ROU assets and lease liabilities of $ 182 million and $ 209 million , respectively, as of March 30, 2019 related to our operating leases.

The adoption of the standard also resulted in elimination of deferred rent liabilities of $ 17 million , as of March 30, 2019, which are now recorded as a reduction of the ROU assets.

The standard did not have an impact on our Consolidated Statements of Operations or Statements of Cash Flows.

Recently issued authoritative guidance not yet adopted

Credit Losses.

In June 2016, the FASB issued new authoritative guidance on credit losses which changes the impairment model for most financial assets and certain other instruments.

For trade receivables and other instruments, we will be required to use a new forward-looking “expected loss” model.

Additionally, for available-for-sale debt securities with unrealized losses, we will measure credit losses in a manner similar to today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities.

The standard will be effective for us in our first quarter of fiscal 2021.

We do not expect the adoption of this guidance will have a material impact on our Consolidated Financial Statements or disclosures.

In June 2016, the Financial Accounting Standards Board (FASB) issued new authoritative guidance on credit losses which changes the impairment model for most financial assets and certain other instruments.

On April 4, 2020, the first day of our fiscal 2021, we adopted the new guidance using the modified retrospective transition method.

Upon adoption, we utilized a new forward-looking “expected loss” model to replace the incurred loss impairment model for our accounts receivable and other financial assets.

Additionally, for available-for-sale debt securities with unrealized losses, we discontinued using the concept of “other than temporary” impairment and recognized the estimated credit loss as allowances.

The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.

Internal-Use Software.

1 unchanged sentence

The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The standard will be effective for us in our first quarter of fiscal 2021.

We do not expect the adoption of this guidance will have a material impact on our Consolidated Financial Statements.

On April 4, 2020, we adopted the new guidance prospectively.

The adoption of this guidance did not have a material impact on our Consolidated Financial Statements.

Recently issued authoritative guidance not yet adopted

Income taxes .

In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by removing certain exceptions in the current guidance.

It also simplifies accounting in areas related to franchise taxes that are partially based on income, transactions that result in a step-up in tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods.

The standard will be effective for us in our first quarter of fiscal 2023, with early adoption permitted.

In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The guidance also clarifies and amends existing guidance to

improve consistent application.

The standard will be effective for us in our first quarter of fiscal 2022.

We do not believe the adoption of this guidance will have a material impact on our Consolidated Financial Statements.

Debt with Conversion and Other options.

In August 2020, the FASB issued new guidance that simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments.

The new guidance removes from GAAP the separation models for convertible debt with embedded conversion features.

As a result, after adopting the guidance, entities will no longer separately present embedded conversion features in equity.

Instead, they will account for the convertible debt wholly as debt.

The new guidance also requires use of the if-converted method when calculating the dilutive impact of convertible debt on earnings per share.

The standard will be effective for us in our first quarter of fiscal 2023, with early adoption permitted beginning in the first quarter of fiscal 2022.

It may be applied retrospectively to each prior period presented or retrospectively with cumulative effect recognized in retained earnings as of the date of adoption.

We are currently evaluating the adoption date and the impact of the adoption of this guidance on our Consolidated Financial Statements and disclosures.

Reference Rate Reform .

In March 2020, the FASB issued new guidance providing temporary optional expedients and exceptions to ease the financial reporting burden of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate.

The standard was effective upon issuance and may generally be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR.

We continue to evaluate our contractual arrangements and hedging relationships that reference LIBOR.

Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had, or will have, a material impact on our Consolidated Financial Statements or disclosures.

Divestitures and Discontinued Operations

Divestitures, Discontinued Operations and Assets Held for Sale

Enterprise Security assets

On November 4, 2019, we sold certain of our Enterprise Security assets and certain liabilities to Broadcom for a purchase price of $ 10.7 billion .

The following table presents the gain before income taxes associated with the sale, presented in the results of our discontinued operations below.

(In millions)

Cash proceeds

Income taxes withheld by Broadcom

Net assets sold

Transaction costs

Foreign exchange impact

Total gain on sale

The carrying value of the net assets sold was as follows:

(In millions)

Current assets

Intangible assets, net

Other long-term assets

Current contract liabilities

Other current liabilities

Long-term contract liabilities

Other long-term liabilities

Total net assets sold

In connection with the Broadcom sale, we entered into a transition services agreement under which we will provide assistance to Broadcom including, but not limited to, business support services and information technology services for a period of up to six months .

Dedicated direct cost, net of charges to Broadcom, for these transition services was $ 19 million in fiscal 2020 and was recorded as part of Other income (expense), net in our Consolidated Statements of Operations.

On November 4, 2019, we completed the sale of certain of our Enterprise Security assets and certain liabilities to Broadcom Inc.

(the Broadcom sale) for a purchase price of $ 10.7 billion.

As a result of the sale, the majority of the results of our Enterprise Security business were classified as discontinued operations in our Consolidated Statements of Operations and thus excluded from both continuing operations and segment results for all periods presented.

We recognized a gain on sale of $ 5,434 million, which was included in Income (loss) from discontinued operations in our Consolidated Statements of Operations.

Total net assets sold was $ 5,211 million, consisting of goodwill, net intangible assets and other assets of $ 7,121 million, net of contract and other liabilities of $ 1,910 million.

In connection with the Broadcom sale, we entered into a transition services agreement under which we provided assistance to Broadcom including, but not limited to, business support services and information technology services.

During fiscal 2021, the transition services were completed.

Dedicated direct costs, net of charges to Broadcom, for these transition services were $ 9 million and $ 19 million during fiscal 2021 and 2020, respectively.

These direct costs were presented as part of Other income (expense), net in the Consolidated Statements of Operations.

On October 1, 2020, we entered into multiple agreements with Broadcom for an aggregate amount of $ 200 million.

We licensed Broadcom’s enterprise software, multiple security engines and related telemetry for 5.6 years, which will be amortized to continuing operations over the term of the license.

In addition, we resolved all outstanding payments and certain claims related to the asset purchase and transition services agreements, which is included in discontinued operations.

ID Analytics solutions

1 unchanged sentence

We recognized a gain on sale of $ 250 million, which was included in Other income (expense), net in our Consolidated Statements of Operations.

Total net assets sold was $ 125 million , consisting of goodwill and net intangible assets of $ 114 million and net assets, net of other liabilities, of $ 11 million .

Total net assets sold was $ 125 million, consisting of goodwill and net intangible assets of $ 114 million and net other assets, net of other liabilities, of $ 11 million.

We incurred tax expense of $ 86 million related to the gain.

Website Security and Public Key Infrastructure solutions

On October 31, 2017 , we completed the sale of our WSS and PKI solutions to DigiCert.

In accordance with the terms of the agreement, we received aggregate consideration of $ 1.1 billion , consisting of approximately $ 951 million in cash and shares of common stock representing an approximate 28 % interest in the outstanding common stock of DigiCert valued at $ 160 million as of October 31, 2017 .

The carrying value of the net assets sold was as follows:

(In millions)

Cash and cash equivalents

Goodwill and intangible assets, net

Liabilities, net of other assets

Net assets sold

As of the transaction close date, we also had $ 8 million in cumulative currency translation losses related to subsidiaries that were sold, which was reclassified from AOCI to Other income (expense), net .

In addition, we incurred direct costs of $ 8 million , which was recorded as part of Other income (expense), net , and tax expense of $ 123 million .

The following table presents the gain before income taxes associated with the divestiture, presented as part of Other income (expense), net :

(In millions)

Gain on sale of short-term investment

Gain on sale of other assets and liabilities

Total gain on divestiture

The gain on sale of short-term investment represents the gain on the sale of a short-term investment that was included in the transaction and resulted in the reclassification on the transaction close date of $ 7 million of unrealized gains from AOCI to Other income (expense), net .

Income before income taxes for our WSS and PKI solutions in fiscal 2018 was $ 66 million , which is included in income from continuing operations.

Discontinued Operations

The following table presents information regarding certain components of income from discontinued operations, net of income taxes:

The following table presents information regarding certain components of income (loss) from discontinued operations, net of income taxes:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

Operating income

Income before income taxes

Income tax expense

Income from discontinued operations

April 2, 2021 April 3, 2020 March 29, 2019

Net revenues $ 1 $ 1,368 $ 2,288

Gross profit $ 1 $ 1,035 $ 1,693

Operating income (loss) $ ( 177 ) $ 4 $ 234

Gain on sale $ — $ 5,434 $ —

Income (loss) before income taxes $ ( 176 ) $ 5,431 $ 228

Income tax expense (benefit) $ ( 34 ) $ 2,122 $ 87

Income (loss) from discontinued operations, net of taxes $ ( 142 ) $ 3,309 $ 141

Our discontinued operations consist of our divested Enterprise Security assets and results of our previously divested Veritas information management business (Veritas).

There was no income from Veritas during fiscal 2020.

Revenue from Veritas was $ 13 million and $ 54 million during fiscal 2019 and 2018, respectively.

Income from Veritas, net of taxes was $ 15 million and $ 11 million during fiscal 2019 and 2018, respectively.

We recorded income tax expense from discontinued operations of $ 2,122 million in fiscal 2020, primarily related to the gain on the Broadcom sale.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations as of March 29, 2019 :

(In millions)

Current assets

Intangible assets, net

Other long-term assets

Total assets of discontinued operations

Current contract liabilities

Other current liabilities

Long-term contract liabilities

Other long-term liabilities

Total liabilities of discontinued operations

There was no income from Veritas during fiscal 2021 and 2020.

During fiscal 2019, revenue from Veritas was $ 13 million and income from Veritas, net of taxes was $ 15 million.

The following table presents significant non-cash items and capital expenditures of discontinued operations:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Amortization and depreciation

$ — $ 130 $ 368

Stock-based compensation expense

$ 1 $ 172 $ 193

Purchases of property and equipment $ — $ 43 $ 65

Fiscal 2019 acquisitions

In February 2019, we completed our acquisition of Israel-based Luminate Security (Luminate).

The total aggregate consideration for the acquisition, primarily consisting of cash, was $ 139 million , net of $ 5 million cash acquired.

The net purchase price was allocated to $ 112 million of goodwill, $ 33 million of intangible assets, and $ 6 million of liabilities assumed.

In addition, we completed acquisitions of other companies for an aggregate purchase price of $ 42 million , net of $ 3 million cash acquired.

The purchase prices were primarily allocated to goodwill and intangible assets.

Fiscal 2018 acquisitions

In July 2017, we completed our acquisitions of Israel-based Fireglass Ltd.

(Fireglass) and Skycure Ltd.

The total aggregate consideration for these acquisitions, primarily consisting of cash, was $ 345 million , net of $ 15 million cash acquired.

The net purchase price was allocated to $ 247 million of goodwill, $ 134 million of intangible assets, and $ 36 million of liabilities assumed, primarily consisting of deferred income tax liabilities.

In addition, we completed acquisitions of other companies for an aggregate purchase price of $ 66 million , net of $ 1 million cash acquired.

Of the aggregate purchase price, $ 48 million was recorded to goodwill.

Pro forma results of operations for our fiscal 2019 and 2018 acquisitions have not been presented because they were not material to our consolidated results of operations, either individually or in the aggregate.

Assets held for sale

During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to assets held for sale when the properties were approved for immediate sale in their present condition and the sale was expected to be completed within one year.

As a result, we recognized an impairment of $ 24 million in fiscal 2020, which was included in restructuring costs, representing the difference between the estimated net sales price and the carrying value of one of our properties.

On July 27, 2020, we completed the sale of our Culver City property, which was previously classified as held for sale during the first quarter of fiscal 2021, for cash consideration of $ 118 million, net of selling costs, and recognized a gain on sale of $ 35 million.

On April 1, 2021, we completed the sale of certain land and buildings in Mountain View, which was previously classified as held for sale as of April 3, 2020, for cash consideration of $ 100 million, net of selling costs, and recognized a gain on sale of $ 63 million.

We continue to actively market the remaining properties for sale;

however, in fiscal 2021, the real estate market was adversely affected by the COVID-19 pandemic, which delayed the expected timing of sale.

We have taken into consideration the current real estate values and demand, and continue to execute plans to sell these properties.

As of April 2, 2021, these assets are classified as assets held for sale.

During fiscal 2021, there were no impairments because the fair value of the properties less costs to sell either equals or exceeds their carrying value.

Fiscal 2021 acquisition

On January 8, 2021, we completed our acquisition of Avira.

Avira provides a consumer-focused portfolio of cybersecurity and privacy solutions primarily in Europe and key emerging markets.

The total aggregate consideration for the acquisition was $ 344 million, net of $ 32 million cash acquired.

Our preliminary allocation of the aggregate purchase price for the acquisition as of January 8, 2021, was as follows:

(In millions, except useful lives) January 8, 2021

Current assets $ 12

Intangible assets 151

Other long-term asset 21

Total assets acquired 453

Current liabilities 29

Contract liabilities 54

Other long-term obligations 26

Total liabilities assumed 109

Total purchase price $ 344

The allocation of the purchase price was based upon a preliminary valuation, and our estimates and assumptions are subject to refinement within the measurement period, which may be up to one year from the acquisition date.

Adjustments to the purchase price allocation may require adjustments to goodwill prospectively.

The primary areas of preliminary purchase price allocation that are not yet finalized are certain tax matters and intangible assets.

The preliminary goodwill of $ 269 million arising from the acquisition is attributed to the expected synergies, including future cost efficiencies, and other benefits that are expected to be generated by combining Avira and NortonLifeLock.

Substantially all of the goodwill recognized is expected to be deductible for tax purposes.

See Note 6 for further information on goodwill.

Contract liabilities

During fiscal 2021 and 2020, we recognized $ 1,050 million and $ 1,017 million of revenue, respectively, from the contract liabilities balance at the beginning of the respective fiscal years.

2 unchanged sentences

As of April 2, 2021, we had $ 850 million of remaining performance obligations, which does not include customer deposit liabilities of $ 415 million, of which we expect to recognize approximately 94 % as revenue over the next 12 months.

See Note 1 for a description of our revenue recognition policy and Note 17 for tabular disclosures of disaggregated revenue by solution and geographic region.

Goodwill and Intangible Assets

2 unchanged sentences

Balance as of March 29, 2019 $ 2,677

Other adjustments

Balance as of March 29, 2019

Divestitures ( 88 )

Other adjustments ( 4 )

Balance as of April 3, 2020 2,585

Acquisitions 269

Translation adjustments 13

Balance as of April 2, 2021 $ 2,867

Intangible assets, net

April 3, 2020

March 29, 2019

(In millions)

April 2, 2021 April 3, 2020

(In millions) Gross

Customer relationships $ 556 $ ( 299 ) $ 257 $ 505 $ ( 230 ) $ 275

Developed technology 210 ( 104 ) 106 133 ( 85 ) 48

Other 7 ( 1 ) 6 — — —

Total finite-lived intangible assets 773 ( 404 ) 369 638 ( 315 ) 323

1 unchanged sentence

Total intangible assets $ 1,520 $ ( 404 ) $ 1,116 $ 1,382 $ ( 315 ) $ 1,067

Goodwill and intangible assets disposed of as a result of the Broadcom sale were included in assets of discontinued operations in our Consolidated Balance Sheets as of March 29, 2019 , and were derecognized on November 4, 2019 upon the close of the sale, and accordingly, are excluded from the tables above.

Amortization expense for purchased intangible assets is summarized below:

Statements of Operations Classification

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

Customer relationships and other

Operating expenses

Developed technology

Cost of revenues

Year Ended Consolidated Statements of Operations Classification

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Customer relationships and other $ 74 $ 79 $ 80 Operating expenses

Developed technology 31 30 30 Cost of revenues

Total $ 105 $ 109 $ 110

As of April 2, 2021, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions)

April 3, 2020

Supplementary Information (in millions)

(In millions) April 2, 2021

Thereafter 16

Supplementary Information

Cash and cash equivalents:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Cash $ 650 $ 483

Cash equivalents 283 1,694

1 unchanged sentence

Accounts receivable, net:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Accounts receivable $ 118 $ 123

2 unchanged sentences

Other current assets:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Prepaid expenses $ 95 $ 110

3 unchanged sentences

Property and equipment, net:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Computer hardware and software 479 746

Office furniture and equipment 63 88

Buildings 29 108

Leasehold improvements 58 128

3 unchanged sentences

Total property and equipment, net $ 78 $ 238

During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to Assets held for sale in our Consolidated Balance Sheets.

The properties have been approved for immediate sale in their present condition and are being actively marketed.

We expect to sell the properties within the next twelve months and it is unlikely that significant changes to the plan will be made.

The fair value of the other properties held for sale, net of costs to sell, exceeded their carrying value as of April 3, 2020.

During 2021, we completed the sale of certain properties with total carrying value of $ 120 million, including land, buildings, furniture and fixtures, and leasehold improvements, of which $ 37 million was classified as held for sale and $ 83 million was included in property and equipment as of April 3, 2020.

See Note 3 for further information on the sale.

Depreciation and amortization expense of property and equipment was $ 45 million, $ 122 million, and $ 139 million in fiscal 2021, 2020, and 2019, respectively.

Other long-term assets:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Non-marketable equity investments $ 185 $ 187

Equity method investment

Long-term income tax receivable and prepaid income taxes 30 38

Deferred income tax assets 355 387

Long-term prepaid royalty 70 15

Total other long-term assets $ 686 $ 678

Deferred income tax assets as of April 3, 2020 reflect a $ 454 million decrease as a result of the Broadcom sale.

Short-term contract liabilities:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Deferred revenue $ 795 $ 709

2 unchanged sentences

Other current liabilities:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Income taxes payable $ 111 $ 195

3 unchanged sentences

Long-term income taxes payable:

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Deemed repatriation tax payable $ 525 $ 615

Other long-term income taxes 29 —

Uncertain tax positions (including interest and penalties) 565 695

1 unchanged sentence

Other income (expense), net:

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Interest income $ 4 $ 80 $ 42

Loss from equity interest — ( 31 ) ( 101 )

Foreign exchange loss

Foreign exchange gain (loss) 1 ( 6 ) ( 11 )

Gain on divestitures — 250 —

Gain on sale of equity method investment — 379 —

Gain on early extinguishment of debt 20 — —

Gain on sale of properties 98 — —

Transition service expense, net ( 9 ) ( 19 ) —

1 unchanged sentence

Supplemental cash flow information:

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Income taxes paid, net of refunds $ 341 $ 1,985 $ 112

6 unchanged sentences

Purchases of property and equipment in current liabilities $ — $ — $ 23

Equity investment received as consideration in divestitures

Extinguishment and exchange of debt with borrowings from same creditors

Extinguishment of debt with borrowings from same creditors $ — $ 1,073 $ —

Financial Instruments and Fair Value Measurements

The following table summarizes our financial instruments measured at fair value on a recurring basis:

April 3, 2020

March 29, 2019

(In millions)

April 2, 2021 April 3, 2020

(In millions) Fair Value Level 1 Level 2 Fair Value Level 1 Level 2

Money market funds $ 284 $ 284 $ — $ 1,346 $ 1,346 $ —

1 unchanged sentence

Corporate bonds 17 — 17 86 — 86

Total $ 302 $ 284 $ 18 $ 1,780 $ 1,346 $ 434

The following table presents the contractual maturities of our investments in debt securities as of April 2, 2021:

(In millions)

(In millions) Fair Value

Due in one year or less $ 14

3 unchanged sentences

Non-marketable equity investments

As of April 3, 2020 and March 29, 2019 , the carrying value of our non-marketable equity investments was $ 187 million and $ 184 million , respectively.

As of April 2, 2021 and April 3, 2020, the carrying value of our non-marketable equity investments was $ 185 million and $ 187 million, respectively.

Equity method investment

Our investment in equity securities that was accounted for using the equity method was included in Other long-term assets in our Consolidated Balance Sheets and consisted of our equity investment in DigiCert that had a carrying value of $ 32 million at March 29, 2019.

Our investment in equity securities that was accounted for using the equity method was divested during fiscal 2020 and consisted of our equity investment in DigiCert.

On October 16, 2019, Clearlake Capital Group, L.P, a private investment firm, and TA Associates, an investor of DigiCert and private equity firm, completed a joint investment in DigiCert.

As a result, we sold our equity investment in DigiCert for $ 380 million in cash and recognized a gain on sale of $ 379 million .

We recorded a loss from our equity interest of $ 31 million , $ 101 million and $ 26 million during fiscal 2020, 2019 and 2018, respectively, in Other income (expense), net in our Consolidated Statements of Operations.

As a result, we sold our equity investment in DigiCert for $ 380 million in cash and recognized a gain on sale of $ 379 million in fiscal 2020.

We recorded a loss from our equity interest of $ 31 million and $ 101 million during 2020 and 2019, respectively, in Other income (expense), net in our Consolidated Statements of Operations.

This loss was reflected as a reduction in the carrying amount of our investment in equity interests in our Consolidated Balance Sheets.

1 unchanged sentence

The following table summarizes DigiCert’s results of operations through October 16, 2019, the date of our investment sale.

(In millions)

Period from January 1, 2019 to October 16, 2019 (unaudited)

(In millions) Period from January 1, 2019 to October 16, 2019 (unaudited) Year Ended

December 31, 2018

The following table summarizes DigiCert’s balance sheet information as of December 31, 2018, its last fiscal year end prior to the sale of our equity investment.

(In millions)

Current assets

Long-term assets

Current liabilities

Long-term liabilities

Revenue $ 350 $ 313

Gross profit $ 293 $ 250

Net loss $ ( 102 ) $ ( 342 )

Current and long-term debt

As of April 3, 2020 and March 29, 2019 , the total fair value of our current and long-term fixed rate debt was $ 3,634 million and $ 3,964 million , respectively.

As of April 2, 2021 and April 3, 2020, the total fair value of our current and long-term fixed rate debt was $ 2,400 million and $ 3,634 million, respectively.

The fair value of our variable rate debt approximated their carrying value.

3 unchanged sentences

Some of our leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives.

The following summarizes our lease costs for fiscal 2020:

(In millions)

The following summarizes our lease costs for fiscal 2021 and 2020:

(In millions) April 2, 2021 April 3, 2020

Operating lease costs $ 17 $ 34

2 unchanged sentences

Total lease costs $ 27 $ 63

Rent expense under operating leases was $ 58 million and $ 62 million for fiscal 2019 and 2018, respectively.

Other information related to our operating leases as of April 3, 2020 as follows:

Weighted-average remaining lease term

Rent expense under operating leases prior to our adoption of Topic 842 was $ 58 million for fiscal 2019.

Other information related to our operating leases as of April 2, 2021 was as follows:

April 2, 2021 April 3, 2020

Weighted-average remaining lease term 4.4 years 4.5 years

Weighted-average discount rate 4.07 % 4.05 %

See Note 7 for additional cash flow information related to our operating leases.

See Note 7 for cash flow information related to our operating leases.

As of April 2, 2021, the maturities of our lease liabilities by fiscal year are as follows:

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Present value of lease liabilities $ 92

As of March 29, 2019, the minimum future rentals on non-cancelable operating leases, which includes leases associated with our discontinued operations and is based on the previous lease accounting standard, by fiscal year were as follows:

(In millions)

Total minimum future lease payments

The following table summarizes components of our debt:

April 3, 2020

March 29, 2019

(In millions, except percentages)

Interest Rate

April 2, 2021 April 3, 2020

(In millions, except percentages) Amount Effective

Interest Rate Amount Effective

Interest Rate

2.00 % Convertible Unsecured Notes due August 15, 2022

$ — N/A $ 625 2.66 %

4.20 % Senior Notes due September 15, 2020

Senior Term Loan A-5 due August 1, 2021

LIBOR plus (1)

2.5% Convertible Senior Notes due April 1, 2022

— N/A 750 4.25 %

New 2.50 % Convertible Senior Notes due April 1, 2022

250 2.63 % 250 2.63 %

3.95 % Senior Notes due June 15, 2022

2.0% Convertible Senior Notes due August 15, 2022

New 2.0% Convertible Senior Notes due August 15, 2022

Term Loan due November 4, 2024

400 4.05 % 400 4.05 %

New 2.00 % Convertible Unsecured Notes due August 15, 2022

625 2.62 % 625 2.62 %

Term Loan due November 4, 2024 494 LIBOR plus (1)

500 LIBOR plus (1)

Delayed Term Loan due November 4, 2024 741 LIBOR plus (1)

5.0 % Senior Notes due April 15, 2025

1,100 5.00 % 1,100 5.23 %

0.95 % Avira Mortgage due December 30, 2030

5 0.95 % — N/A

1.29 % Avira Mortgage due December 30, 2029

5 1.29 % — N/A

Total principal amount 3,620 4,250

unamortized discount and issuance costs ( 19 ) ( 29 )

Total debt 3,601 4,221

current portion ( 313 ) ( 756 )

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The interest rates for the outstanding term loans are as follows:

April 3, 2020

March 29, 2019

Senior Term Loan A-5 due August 1, 2021

April 2, 2021 April 3, 2020

Term Loan due November 4, 2024 1.50 % 2.88 %

Delayed Term Loan due November 4, 2024 1.50 % N/A

As of April 2, 2021, the future contractual maturities of debt by fiscal year are as follows:

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Total future maturities of debt $ 3,620

Senior Term Loan A-5

On August 1, 2016, we entered into a term loan agreement that provides for a 5 -year term loan (the Senior Term Loan A-5) that bears interest at a floating rate of interest plus an applicable margin, which is based on our senior unsecured credit agency rating.

For the duration of Senior Term Loan A-5, quarterly payments are due in aggregate annual amounts equal to 10 % of the original principal amount.

We may voluntarily repay outstanding principal balances under the Senior Term Loan A-5 at any time without premium or penalty, and prepayments must be applied to reduce the subsequent scheduled and outstanding required payments.

In connection with the credit agreement entered on November 4, 2019 as described below, we fully prepaid the principal amount of $ 500 million of our Senior Term Loan A-5.

This transaction was accounted for as an extinguishment of debt and resulted in accelerated recognition of interest expense for unamortized debt issuance costs, which was not significant.

Out of the repayments, $ 198 million was replaced by borrowings under the term loan of $ 500 million issued on November 4, 2019 to the same creditors.

Credit Facility

On November 4, 2019, we entered into a credit agreement with financial institutions, which provides a revolving line of credit of $ 1,000 million through November 2024, a 5 -year term loan of $ 500 million , and a delayed 5 -year term loan commitment of

$ 750 million through September 15, 2020.

At our option, we may increase commitments under the revolving line of credit or the term loan facility by an aggregate amount of up to $ 500 million , subject to customary conditions.

On November 4, 2019, we entered into a credit agreement with financial institutions, which provides a revolving line of credit of $ 1 billion, a 5 -year term loan of $ 500 million (the Initial Term Loan), and a delayed draw 5 -year term loan commitment of $ 750 million (the Delayed Draw Term Loan).

On September 14, 2020, we drew $ 750 million on the Delayed Draw Term Loan.

On May 7, 2021, we entered into the first amendment to the credit agreement with financial institutions (the First Amendment), which extends the maturity of all term loan and revolver credit facilities from November 2024 to May 2026.

The First Amendment also provides an additional five-year term loan facility (the First Amendment Additional Term Loan) of $ 525 million.

At the closing of the First Amendment, we did not borrow any funds under the revolving line of credit and fully borrowed the First Amendment Additional Term Loan such that loans in an aggregate principal amount of $ 1.75 billion were outstanding.

The credit facilities remain senior secured.

The principal amount of the Initial Term Loan and the First Amendment Additional Term Loan must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the quarter ended September 30, 2022 in an amount equal to 1.25 % of the aggregate principal amount, as of the date of the first amendment.

The principal amount of the Delayed Draw Term Loan must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the later of (i) the quarter ended March 31, 2021 and (ii) the first full fiscal quarter ended following the Borrowing of the Delayed Draw Term Loans in an amount equal to 1.25 % of aggregate principal amount that are outstanding immediately after the borrowing of the Delayed Draw Term Loan.

We may voluntarily repay outstanding principal balances without penalty.

As of April 2, 2021 and April 3, 2020, there were no borrowings outstanding under our revolving credit facilities.

Interest on borrowings under the credit agreement can be based on a base rate or a LIBOR at our election.

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The unused revolving line of credit is subject to a commitment fee ranging from 0.125 % to 0.30 % per annum.

The principal amount of the term loan is repayable in quarterly installments on the last business day of each calendar quarter commencing with the quarter ended March 31, 2021 in an amount equal to 1.25 % of the aggregate principal amount of the term loan and in the outstanding principal amount upon the November 2024 maturity date.

We may voluntarily repay outstanding principal balances without penalty.

The credit agreement contains customary representations and warranties, non-financial covenants for financial reporting, affirmative and negative covenants, including a covenant that we maintain a consolidated leverage ratio of not more than 5.25 to 1.0, or 5.75 to 1.0 if we acquire assets or business in an aggregate amount greater than $ 250 million, and restrictions on indebtedness, liens, investments, stock repurchases, and dividends (with exceptions permitting our regular quarterly dividend and other specific capital returns).

As of April 2, 2021, we were in compliance with all debt covenants.

Concurrently with this credit agreement, we terminated our existing revolving line of credit.

As of April 3, 2020 and March 29, 2019 , there were no borrowings outstanding under our revolving credit facilities.

On February 9, 2017, we issued $ 1.1 billion aggregate principal amount of our 5.0 % Senior Notes due April 15, 2025 (the 5.0 % Senior Notes).

The 5.0 % Senior Notes bear interest at a rate of 5.00 % per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2017.

We may redeem some or all of the 5.0 % Senior Notes at any time prior to April 15, 2020 at a price equal to 100 % of the principal amount of the 5.0 % Senior Notes redeemed, plus accrued and unpaid interest, if any, and a premium, as described in the supplemental indenture to the 5.0 % Senior Notes.

On or after April 15, 2020, we may redeem some or all of the 5.0 % Senior Notes at the applicable redemption prices set forth in the supplemental indenture, plus accrued and unpaid interest.

In addition, we have two series of senior notes, the 4.2 % Senior Notes and 3.95 % Senior Notes that are senior unsecured obligations that rank equally in right of payment with all of our existing and future senior, unsecured, unsubordinated obligations and may be redeemed at any time, subject to the make-whole provisions contained in the applicable indenture relating to such series of notes.

In addition, we had two series of senior notes, the 4.2 % Senior Notes and 3.95 % Senior Notes that are senior unsecured obligations that rank equally in right of payment with all of our existing and future senior, unsecured, unsubordinated obligations and may be redeemed at any time, subject to the make-whole provisions contained in the applicable indenture relating to such series of notes.

Interest on each series of these notes is payable semi-annually in arrears, on September 15 and March 15 for the 4.2 % Senior Notes, and June 15 and December 15 for the 3.95 % Senior Notes.

On September 15, 2020, we fully repaid the principal and accrued interest under the 4.2 % Senior Notes due September 2020, which had an aggregate principal amount outstanding of $ 750 million.

Convertible Senior Notes

On March 4, 2016, we issued $ 500 million of convertible notes which would mature on April 1, 2021 and bear interest at an annual rate of 2.5 % ( 2.5 % Convertible Notes).

On August 1, 2016, we issued an additional $ 1.25 billion of convertible notes which would mature on August 15, 2021 and bear interest at an annual rate of 2.0 % ( 2.0 % Convertible Notes).

Both the 2.5 % Convertible Notes and the 2.0 % Convertible Notes (collectively, Convertible Senior Notes) provided for coupon interest payable semiannually in arrears in cash due on October 1 and April 1 of each year in the case of the 2.5 % Convertible Notes, and February 15 and August 15 in the case of the 2.0 % Convertible Notes.

As of March 29, 2019, the principal amount and associated unamortized discount and issuance costs of the 2.5 % Convertible Notes were classified as current because upon the 4-year anniversary of the issuance of the notes, holders of thereof had the option to require us to repurchase the notes, in cash, equal to the principal amount and accrued and unpaid interest of the 2.5 % Convertible Notes (the Repurchase Right).

Holders of the Convertible Senior Notes could convert the notes into our common stock at any time up to the maturity date of each note.

The conversion rate for the 2.0 % Convertible Notes was 48.9860 shares of common stock per $ 1,000 principal amount of the notes, which represented an initial conversion price of approximately $ 20.41 per share.

The conversion rate for the 2.5 % Convertible Notes was 59.6341 shares of common stock per $ 1,000 principal amount of the notes, which represented an initial conversion price of approximately $ 16.77 per share.

If holders of the Convertible Senior Notes converted them in connection with a fundamental change, such as a sale of substantially all our assets, a change of the control of NortonLifeLock, or a plan for our liquidation or dissolution, we would be required to provide a make-whole premium in the form of an increased conversion rate, subject to a maximum amount, based on the effective date of the fundamental change as set forth in a table contained in the indenture governing each of the Convertible Senior Notes.

The conversion rates under the Convertible Senior Notes also included customary anti-dilution adjustments.

If the holders requested a conversion, we retained the option to settle the par amount of the Convertible Senior Notes using cash, shares of our common stock, or a combination of cash and shares with the cash settlement not exceeding the principal amount and accrued and unpaid interest of the Convertible Senior Notes.

Additionally, we could redeem all or part of the principal of the 2.5 % Convertible Notes, at our option, at a purchase price equal to the principal amount plus accrued interest on or after the 4 -year anniversary of the issuance date of the 2.5 % Convertible Notes (the Redemption Right), if the closing trading price of our common stock exceeds 150 % of the then-current conversion price for 20 or more trading days in the 30 consecutive trading-day period preceding our exercise of the redemption right (including the last three such trading days) and provided that we have satisfied all regulatory common stock registration requirements.

The 2.0 % Convertible Notes are not redeemable at our option.

Notes for new notes to be issued pursuant to a new indenture (the New 2.5 % Convertible Notes) and would also pay cash consideration of $ 12 for each share underlying the New 2.5 % Convertible Notes, and exchange $ 625 million of the principal amount underlying the 2.0 % Convertible Notes for new notes to be issued pursuant to a new indenture (the New 2.0 % Convertible Notes) and would also pay cash consideration of $ 12 for each share underlying the New 2.0 % Convertible Notes, in each case in lieu of conversion price adjustments (the Cash Note Payments).

On August 1, 2016, we issued an additional $ 1.25 billion of convertible notes which would mature on August 15, 2021 and bear interest at an annual rate of 2.0 % ( 2.0 % Convertible Notes and collectively, Convertible Senior Notes).

As of March 29, 2019, the principal amount and associated unamortized discount and issuance costs of the 2.5 % Convertible Notes were classified as current because upon the four year anniversary of the issuance of the notes, holders of thereof had the option to require us to repurchase the notes, in cash, equal to the principal amount and accrued and unpaid interest of the 2.5 % Convertible Notes (the Repurchase Right).

On November 11, 2019, we amended the Convertible Senior Notes agreements to provide that, if and when we pay a special dividend of $ 12 to our stockholders, we would exchange $ 250 million of the principal amount underlying the 2.5 % Convertible Notes for new notes to be issued pursuant to a new indenture (the New 2.5 % Convertible Notes) and would also pay cash consideration of $ 12 for each share underlying the New 2.5 % Convertible Notes, and exchange $ 625 million of the principal amount underlying the 2.0 % Convertible Notes for new notes to be issued pursuant to a new indenture (the New 2.0 % Convertible Notes) and would also pay cash consideration of $ 12 for each share underlying the New 2.0 % Convertible Notes, in each case in lieu of conversion price adjustments (the Cash Note Payments).

The remaining principal of the Convertible Senior Notes would receive a conversion price adjustment with respect to such special dividend.

The special dividend was payable to stockholders on January 31, 2020.

On February 4, 2020, we issued the New 2.5 % Convertible Notes, which mature on April 1, 2022, and the New 2.0 % Convertible Notes, which mature on August 15, 2022, pursuant to two new indentures, and made the Cash Note Payments.

On February 4, 2020, we issued the New 2.5 % Convertible Notes, maturing on April 1, 2022, and the New 2.0 % Convertible Notes, which mature on August 15, 2022, pursuant

to two new indentures, and made the Cash Note Payments.

The new Notes are convertible into cash, shares of common stock or a combination of cash and common stock, at the Company’s option, at an initial conversion rate for the New 2.50 % Convertible Notes of 59.6341 per $1,000 principal amount of the New 2.50 % Convertible Notes (which represents an initial conversion price of approximately $ 16.77 per share) and an initial conversion rate for the New 2.00 % Convertible Notes of 48.9860 per $1,000 principal amount of the New 2.00 % Convertible Notes (which represents an initial conversion price of approximately $ 20.41 per share), in each case subject to certain limitations and certain adjustments.

The Cash Note Payments consisted of $ 179 million with respect to holders of the New 2.5 % Convertible Notes and $ 367 million with respect to holders of the New 2.0 % Convertible Notes.

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The extinguishment was settled on March 10, 2020 and resulted in an adjustment to stockholders’ equity of $ 316 million and a loss on extinguishment of $ 1 million.

As of April 3, 2020 and March 29, 2019, the Convertible Senior Notes consisted of the following:

April 3, 2020

March 29, 2019

(In millions)

On May 26, 2020, we settled the $ 625 million principal and conversion rights of the 2.0 % Convertible Senior Notes in cash.

The aggregate settlement amount of $ 1,176 million was based on $ 19.25 per underlying share into which the 2.0 % Convertible Notes were convertible.

In addition, we paid $ 3 million of accrued and unpaid interest through the date of settlement.

The extinguishment resulted in an adjustment to stockholders’ equity of $ 578 million and a gain on extinguishment of $ 20 million.

As of April 2, 2021 and April 3, 2020, the Convertible Senior Notes consisted of the following:

April 2, 2021 April 3, 2020

(In millions) New 2.5 % Convertible Notes

New 2.0 % Convertible Notes

2.0% Convertible Notes (1)

New 2.5 % Convertible Notes

2.5% Convertible Notes

New 2.0 % Convertible Notes

2.0 % Convertible Notes

Liability component:

Principal $ 250 $ 625 $ 250 $ 625 $ 625

Unamortized discount and issuance costs — ( 5 ) ( 1 ) ( 9 ) ( 6 )

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Equity component, net of tax $ 43 $ 56 $ 43 $ 56 $ 12

(1) In May 2020, we settled $ 625 million of our 2.0 % Convertible Notes for $ 1.18 billion , which included a cash settlement of the equity conversion feature and payments for accrued and unpaid interests and dividend.

See Note 19 for more information on the settlement.

Based on the closing price of our common stock of $ 18.29 on April 3, 2020 , the if-converted values of the New 2.5 % Convertible Notes and the 2.0 % Convertible Notes exceeded the principal amount by approximately $ 23 million and $ 492 million , respectively.

The if-converted value of the New 2.0 % Convertible Notes is less than the principal amount.

In addition to the Cash Note Payments discussed above, during fiscal 2020, we made payments totaling $ 10 million to holders of the Convertible Notes in lieu of conversion price adjustments because our dividend of $ 0.125 per share to our common stockholders that was paid in December 2019 and March 2020 exceeded the amounts defined in the Convertible Senior Notes agreements.

Based on the closing price of our common stock of $ 21.42 on the last trading date closest to April 2, 2021, the if-converted values of the New 2.5 % Convertible Notes and the 2.0 % Convertible Notes exceeded the principal amount by approximately $ 69 million and $ 31 million, respectively.

See Note 19 for discussion of convertible note purchase agreement entered into on May 13, 2021.

The following table sets forth total interest expense recognized related to our convertible notes:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Contractual interest expense $ 20 $ 37 $ 38

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Payments in lieu of conversion price adjustments (1)

$ 12 $ 11 $ —

(1) Payments in lieu of conversion price adjustments consist of amounts paid to holders of the Convertible Senior Notes when our quarterly dividend to our common stockholders exceeds the amounts defined in the Convertible Senior Notes agreements.

We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency.

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We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates.

To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, we conduct a program under which we may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates.

We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness.

We recognize changes in the excluded component in Other income (expense), net .

As of April 3, 2020 , there were no outstanding notional amounts related to our net investment hedges.

As of March 29, 2019, the fair value of these contracts was insignificant.

The net gain recognized in Accumulated other comprehensive income was insignificant for all periods presented.

We also enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure.

We enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure.

These forward contracts are not designated as hedging instruments.

As of April 3, 2020 and March 29, 2019 , the fair value of these contracts was insignificant.

As of April 2, 2021 and April 3, 2020, the fair value of these contracts was immaterial.

The related gain (loss) recognized in Other income (expense), net in our Consolidated Statements of Operations was as follows:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Foreign exchange forward contracts gain (loss) $ 15 $ ( 22 ) $ ( 37 )

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To mitigate losses in the event of nonperformance by counterparties, we have entered into master netting arrangements with our counterparties that allow us to settle payments on a net basis.

The effect of netting on our derivative assets and liabilities was not material as of April 3, 2020 and March 29, 2019 .

The effect of netting on our derivative assets and liabilities was not material as of April 2, 2021 and April 3, 2020.

The notional amount of our outstanding foreign exchange forward contracts in U.S.

dollar equivalent was as follows:

(In millions)

April 3, 2020

March 29, 2019

Net investment hedges

Foreign exchange forward contracts sold

Balance sheet contracts

(In millions) April 2, 2021 April 3, 2020

Foreign exchange forward contracts purchased $ 270 $ 362

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Such transition projects were completed by the end of fiscal 2019.

December 2020 Plan

In December 2020, our Board of Directors approved a restructuring plan (the December 2020 Plan) to consolidate facilities and reduce operating costs in connection with our acquisition of Avira.

We estimate that we will incur total costs of up to $ 20 million.

These actions are expected to be completed in fiscal 2022.

As of April 2, 2021, we have incurred total costs of $ 12 million under the December 2020 Plan.

See Note 4 for further information on our Avira acquisition.

November 2019 Plan

In November 2019, our Board of Directors approved a restructuring plan (the November 2019 Plan) in connection with the strategic decision to divest our Enterprise Security business.

Actions under this plan include the reduction of our workforce by approximately 3,100 employees, as well as asset write-offs and impairments, contract terminations, facilities closures, and the

sale of underutilized facilities.

As of April 3, 2020, we estimate that we will incur total costs of $ 550 million , excluding stock-based compensation expense, in connection with the November 2019 Plan, of which up to $ 200 million is expected to consist of cash expenditures for severance and termination benefits and $ 110 million of cash expenditures for contract terminations.

Non-cash costs are estimated to be up to $ 240 million related to asset write-offs and other restructuring costs.

These actions are expected to be completed by September 2020.

As of April 3, 2020 , we have incurred costs of $ 423 million related to our November 2019 Plan, including $ 117 million of stock-based compensation.

In addition, in connection with the Broadcom sale, our Board of Directors approved an equity-based severance program under which certain equity awards to certain terminated employees were accelerated.

See Note 15 for more information on the impact of this program.

Actions under this plan included the reduction of our workforce as well as asset write-offs and impairments, contract terminations, facilities closures, and the sale of underutilized facilities.

These actions were completed in fiscal 2021, and we incurred total costs of $ 509 million, excluding stock-based compensation expense, under the November 2019 Plan.

In connection with the Broadcom sale, our Board of Directors approved an equity-based severance program under which certain equity awards to certain terminated employees were accelerated.

As of April 2, 2021, we have incurred $ 127 million of stock-based compensation related to our equity-based severance program.

See Note 15 for further information on the impact of this program.

August 2019 Plan

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Under the August 2019 Plan, we reduced our global headcount and closed certain facilities.

These actions were completed in fiscal 2020.

As of April 3, 2020 , we have incurred costs of $ 53 million related to our August 2019 Plan, primarily consisting of severance and termination benefits.

August 2018 Plan

In August 2018, we announced a restructuring plan (the August 2018 Plan) under which we incurred costs of $ 48 million as of April 3, 2020 .

These actions were completed in fiscal 2020.

These actions were completed in fiscal 2020, and we incurred total costs of $ 53 million, primarily consisting of severance and termination benefits.

Restructuring, transition and other costs summary

Our restructuring, transition and other costs attributable to continuing operations are presented in the table below:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Severance and termination benefit costs $ 31 $ 90 $ 19

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Our restructuring, transition and other costs attributable to discontinued operations are presented in the table below:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Severance and termination benefit costs $ 64 $ 121 $ 9

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Stock-based compensation charges — 97 —

Asset write-offs

Asset write-offs and impairments — 13 —

Other exit and disposal costs — — 3

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Restructuring summary

Our activities related to our restructuring plans are presented in the tables below:

Our activities and liability balances related to our restructuring plans are presented in the tables below:

December 2020 Plan

(In millions) Liability Balance as of April 3, 2020 Net Charges Cash Payments Non-Cash Items Liability Balance as of April 2, 2021

Severance and termination benefit costs $ — $ 12 $ ( 9 ) $ — $ 3

Total $ — $ 12 $ ( 9 ) $ — $ 3

November 2019 Plan

(In millions)

Liability Balance as of March 29, 2019

Non-Cash Items

Liability Balance as of April 3, 2020

(In millions) Liability Balance as of April 3, 2020 Net Charges Cash Payments Non-Cash Items Liability Balance as of April 2, 2021

Severance and termination benefit costs $ 35 $ 83 $ ( 118 ) $ — $ —

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Other exit and disposal costs — 11 ( 10 ) — 1

August 2019 Plan

(In millions)

Liability Balance as of March 29, 2019

Non-Cash Items

Liability Balance as of April 3, 2020

Severance and termination benefit costs

Asset write-offs

August 2018 Plan

(In millions)

Liability Balance as of March 29, 2019

Non-Cash Items

Liability Balance as of April 3, 2020

Severance and termination benefit costs

Other exit and disposal costs

The restructuring liabilities are included in Accounts payable and Other current liabilities in our Consolidated Balance Sheets.

Pre-tax income from international operations was $ 152 million , $ 72 million , and $ 497 million for fiscal 2020 , 2019 , and 2018 , respectively.

The components of income tax expense (benefit) recorded in continuing operations are as follows:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

Total $ 42 $ 213 $ ( 139 ) $ ( 103 ) $ 13

The restructuring liabilities are included in Other current liabilities in our Consolidated Balance Sheets.

The components of our income (loss) from continuing operations before income taxes are as follows:

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Domestic $ 607 $ 667 $ ( 179 )

International 265 152 72

Income (loss) before income taxes $ 872 $ 819 $ ( 107 )

The components of income tax expense (benefit) from continuing operations are as follows:

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Federal $ 133 $ 208 $ 58

State 36 33 4

International ( 13 ) 3 ( 14 )

Income tax expense (benefit)

Total 156 244 48

Federal ( 6 ) ( 23 ) ( 35 )

State ( 5 ) 3 ( 3 )

International 31 17 ( 7 )

Total 20 ( 3 ) ( 45 )

Income tax expense $ 176 $ 241 $ 3

federal statutory income tax rates we have applied for fiscal 2021, 2020, and 2019 are as follows:

April 3, 2020

March 29, 2019

March 30, 2018

April 2, 2021 April 3, 2020 March 29, 2019

federal statutory income tax rate 21.0 % 21.0 % 21.0 %

The difference between our effective income tax and the federal statutory income tax is as follows:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Federal statutory tax expense (benefit) $ 183 $ 172 $ ( 23 )

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Nondeductible goodwill — 18 —

Effect of tax rate change on deferred taxes

Re-assessment of deferred taxes on foreign earnings

Favorable ruling on foreign withholding tax ( 35 ) — —

US tax on foreign earnings ( 15 ) ( 4 ) ( 1 )

Return to provision adjustment 1 12 ( 16 )

Income tax expense (benefit)

Other, net 2 17 6

Income tax expense $ 176 $ 241 $ 3

The principal components of deferred tax assets and liabilities are as follows:

(In millions)

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Deferred tax assets:

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Deferred tax liabilities:

Property and equipment

Operating lease assets ( 25 ) ( 10 )

Goodwill ( 1 ) —

Deferred revenue ( 1 ) —

Unremitted earnings of foreign subsidiaries ( 15 ) ( 17 )

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Net deferred tax assets (liabilities) $ 218 $ 238

The valuation allowance provided against our deferred tax assets as of April 3, 2020 decreased primarily due to a corresponding decrease in capital losses from equity investments and the release of valuation allowance related to certain acquired net operating loss and tax credit carryforwards.

The ending valuation allowance of $ 9 million is provided primarily against certain foreign tax credits and unrealized capital losses that are not expected to be realized .

The valuation allowance provided against our deferred tax assets as of April 2, 2021, decreased primarily due to a change in tax credit carryforwards.

The ending valuation allowance of $ 7 million is provided primarily against certain foreign tax credits.

As of April 2, 2021, we have U.S.

federal net operating losses attributable to various acquired companies of approximately $ 77 million, which, if not used, will expire between fiscal 2022 and 2039.

$ 34 million of the net operating loss carryforwards are subject to limitations which currently prevent their use, and therefore these attributes are not expected to be realized.

The remaining net operating loss carryforwards are subject to an annual limitation under U.S.

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state net operating losses will expire between fiscal 2022 and 2038.

In addition, we have foreign net operating loss carryforwards attributable to various foreign companies of approximately $ 89 million , that can be carried forward indefinitely under current applicable foreign tax law.

We have $ 6 million of foreign tax credits which, if not used, will expire beginning in fiscal 2030 .

In addition, we have foreign net operating loss carryforwards attributable to various foreign companies of approximately $ 26 million.

In assessing the ability to realize our deferred tax assets, we considered whether it is more likely than not that some portion or all the deferred tax assets will not be realized.

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The aggregate changes in the balance of gross unrecognized tax benefits were as follows:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Balance at beginning of year $ 724 $ 446 $ 378

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This gross liability does not include offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, interest deductions, and state income taxes.

Of the total unrecognized tax benefits at April 3, 2020 , $ 593 million , if recognized, would favorably affect our effective tax rate.

Of the total unrecognized tax benefits at April 2, 2021, $ 494 million, if recognized, would affect our effective tax rate.

We recognize interest and/or penalties related to uncertain tax positions in income tax expense.

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In February 2020, Altera requested a hearing before the Supreme Court of the United States.

The final outcome of the case remains uncertain.

If the Altera Ninth Circuit Opinion is reversed, we would anticipate recording an income tax benefit at that time.

In June 2020, the Supreme Court declined to review the case.

We file income tax returns in the U.S.

1 unchanged sentence

state and foreign jurisdictions.

Our most significant tax jurisdictions are the U.S., Ireland, and Singapore.

Our most significant tax jurisdictions are the U.S.

Our tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate.

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Our fiscal years prior to 2014 have been settled and closed with the IRS.

Our 2016 through 2020 fiscal years remain subject to examination by the appropriate governmental agencies for Irish tax purposes, and our 2016 through 2020 fiscal years remain subject to examination by the appropriate governmental agencies for Singapore tax purposes.

Our fiscal years 2014 to 2019 are currently under audit by the IRS.

Our 2016 through 2021 fiscal years remain subject to examination by the appropriate governmental agencies for Irish tax purposes.

The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year.

potential resolution of uncertain tax positions involves multiple tax periods and jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could decrease (whether by payment, release, or a combination of both) in the next 12 months by $ 31 million .

Depending on the nature of the settlement or expiration of statutes of limitations, we estimate $ 31 million could affect our income tax provision and therefore benefit the resulting effective tax rate.

In April 2020, we became aware of a new interpretation of a country specific withholding tax regulation that could be interpreted to apply to certain of our intra-group transactions.

We are evaluating this new information and the effect, if any, on our tax positions.

If it is determined that it does impact our previous transaction, this activity would be recorded in the financial statements in fiscal 2021.

The amount of the potential impact, if any, on our Consolidated Financial Statements is not yet estimable given, in part, the level of information available at this time.

Although potential resolution of uncertain tax positions involves multiple tax periods and jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could decrease (whether by payment, release, or a combination of both) in the next 12 months.

Depending on the nature of the settlement or expiration of statutes of limitations, it could affect our income tax provision and therefore benefit the resulting effective tax rate.

We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected tolling of the statute of limitations in various taxing jurisdictions.

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Preferred stock

Our Board of Directors has the authority to issue up to 1 million shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action by the stockholders.

As of April 3, 2020 and March 29, 2019 , there were no shares outstanding.

On May 22, 2020, we filed a Certificate of Elimination of Series A Junior Preferred Stock (the “Junior Preferred Stock”) with the Secretary of State of the State of Delaware, to remove the Certificate of Designations of the Junior Preferred Stock from our Amended and Restated Certificate of Incorporation.

The Certificate of Elimination became effective upon filing.

No shares of the Junior Preferred Stock were issued or outstanding upon filing of the Certificate of Elimination.

On May 10, 2021, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in June 2021.

All shares of common stock issued and outstanding and all RSUs and PRUs as of the record date will be entitled to the dividend and dividend equivalent rights (DERs), respectively, which will be paid out if and when the underlying shares are released.

Any future dividends and DERs will be subject to the approval of our Board of Directors.

Stock repurchase program

Under our stock repurchase program, we may purchase shares of our outstanding common stock through open market and through accelerated stock repurchase (ASR) transactions.

On August 6, 2019, our Board of Directors increased the share repurchase authorization to $ 1,600 million .

Under our stock repurchase program, we may purchase shares of our outstanding common stock through open market and through accelerated stock repurchase transactions.

As of April 2, 2021, we have $ 274 million remaining under the authorization to be completed in future periods with no expiration date.

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(In millions, except per share amounts)

April 3, 2020

March 29, 2019

April 2, 2021 April 3, 2020

Number of shares repurchased 15 68

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Aggregate purchase price $ 304 $ 1,562

In fiscal 2019, we executed share repurchases of $ 18 million for 1 million shares settled in fiscal 2020.

In addition, in fiscal 2018, we received 2 million shares at an average price of $ 30.51 per share from the final settlement of an ASR entered into in fiscal 2017.

Repurchases of 1 million shares executed during 2019 were settled in fiscal 2020.

On May 4, 2021, our Board of Directors approved an incremental share repurchase authorization of $ 1,500 million, bringing the total authorized under the stock repurchase program to $ 1,774 million.

The authorization does not have an expiration date.

Accumulated other comprehensive income (loss)

Components and activities of AOCI, net of tax, were as follows:

(In millions)

Foreign Currency

(In millions) Foreign Currency

Translation Adjustments

Unrealized Gain (Loss) On Available-For-Sale Securities

Equity Method Investee

Balance as of March 30, 2018

Other comprehensive loss before reclassifications

Equity Method Investee Total AOCI

Balance as of March 29, 2019 $ ( 5 ) $ ( 1 ) $ ( 1 ) $ ( 7 )

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Balance as of April 3, 2020 ( 16 ) — — ( 16 )

Other comprehensive income before reclassifications 63 — — 63

Balance as of April 2, 2021 $ 47 $ — $ — $ 47

Stock-Based Compensation and Other Benefit Plans

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As amended, our stockholders have approved and reserved 82 million shares of common stock for issuance under the 2013 Plan.

As of April 3, 2020 , 21 million

shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting.

As of April 2, 2021, 18 million shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting.

In connection with the acquisitions of various companies, we have assumed the equity awards granted under stock incentive plans of the acquired companies or issued equity awards in replacement thereof.

No new awards will be granted under our acquired stock plans.

The following information related to our stock-based awards includes awards associated with our discontinued operations.

(In millions, except per share and year data)

(In millions, except per share and year data) Number of

Grant Date Fair Value

Outstanding and unvested at March 29, 2019

Outstanding and unvested at April 3, 2020

Outstanding as of April 3, 2020 7 $ 21.33

Granted 4 $ 20.70

Vested ( 4 ) $ 21.86

Forfeited ( 2 ) $ 20.55

Outstanding as of April 2, 2021 5 $ 20.62

RSUs generally vest over a three-year period.

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The total fair value of RSUs released in fiscal 2021, 2020, and 2019 was $ 86 million, $ 300 million, and $ 214 million, respectively, which represents the market value of our common stock on the date the RSUs were released.

(In millions, except per share and year data)

(In millions, except per share and year data) Number of

Shares Weighted-

Grant Date Fair Value

Outstanding and unvested at March 29, 2019

Outstanding and unvested at April 3, 2020 2 $ 22.68

Granted 2 $ 26.39

Vested ( 2 ) $ 23.97

Forfeited ( 1 ) $ 20.61

Unvested at April 2, 2021 1 $ 27.50

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Outstanding at April 2, 2021 1

(1) The number of shares is less than 1 million .

The total fair value of PRUs released in fiscal 2021, 2020, and 2019 was $ 43 million, $ 39 million, and $ 261 million, respectively, which represents the market value of our common stock on the date the PRUs were released.

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The valuation and the underlying weighted-average assumptions for PRUs are summarized below:

April 3, 2020

March 29, 2019

March 30, 2018

Expected term

April 2, 2021 April 3, 2020 March 29, 2019

Expected term 2.7 years 1.9 years 2.7 years

Expected volatility 42.5 % 38.1 % 34.2 %

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Stock options

(In millions, except per share and year data)

Exercise Price (1)

(In millions, except per share and year data) Number of

Shares Weighted-Average Exercise Price Weighted-

Remaining Contractual Term

Aggregate Intrinsic

Outstanding at March 29, 2019

(Years) Aggregate Intrinsic

Outstanding at April 3, 2020 2 $ 6.85

Exercised ( 1 ) $ 7.25

Forfeited and expired ( 1 ) $ 6.93

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Exercisable at April 2, 2021 (1)

(1) As a result of our special dividend of $ 12 per share paid in January 2020, we reduced the exercise price of 2 million options to the extent that their original exercise price equaled or exceeded $ 12 .

The weighted-average exercise prices in the table reflects the exercise price as of the date of the activity and the exercise price of outstanding and exercisable awards as of April 3, 2020 reflect the adjusted exercise prices.

— $ 5.22 4.75 $ 5

(1) The number of shares is less than 1 million.

The total intrinsic value of options exercised during fiscal 2021, 2020, and 2019 was $ 18 million, $ 171 million, and $ 23 million, respectively.

No options were granted in fiscal 2021.

The fair value of options granted in fiscal 2020 was $ 4.76 per share.

No options were granted during fiscal 2019 and fiscal 2018.

Restricted stock

In connection with our fiscal 2018 acquisitions, we issued approximately 1 million restricted shares of our common stock for which we recognized an aggregate of $ 44 million of expense over the service period that ended in fiscal 2020.

As of April 3, 2020 , all of the restricted shares had been released.

Liability-classified awards settled in shares

In each of fiscal 2020 and 2019, we settled certain bonuses by issuing 2 million RSUs that vested shortly after the grant date.

As of April 3, 2020, and March 29, 2019, the total liability associated with these liability-classified awards was $ 0 million and $ 22 million , respectively, and is presented in Accrued compensation and benefits in our Consolidated Balance Sheets.

Under our 2008 Employee Stock Purchase Plan, employees may annually contribute up to 10 % of their gross compensation, subject to certain limitations, to purchase shares of our common stock at a discounted price.

Eligible employees are offered shares through a 12 -month offering period, which consists of two consecutive 6 -month purchase periods, at 85 % of the lower of either the fair market value on the purchase date or the fair market value at the beginning of the offering period.

In August 2018, we cancelled the issuance of common stock under our ESPP for the 6-month purchase period ended August 15, 2018, as a result of the delayed filing of our Annual Report on Form 10-K for the fiscal year ended March 30, 2018.

All participant contributions were refunded.

In addition, the enrollment in the purchase period beginning August 16, 2018 was cancelled.

On February 16, 2019, we opened enrollment in a new offering period.

As of April 2, 2021, 38 million shares have been issued under this plan, and 32 million shares remained available for future issuance.

The following table summarizes activity related to the purchase rights issued under the ESPP:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Shares issued under the ESPP 1 2 —

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The weighted-average grant date fair value related to rights to acquire shares of common stock under our ESPP in fiscal 2021, 2020, and 2019 was $ 5.65 per share, $ 5.17 per share, and $ 6.22 per share, respectively.

Dividend equivalent rights

Dividend equivalent rights (DERs)

Our RSUs and PRUs contain dividend equivalent rights (DER) that entitles the recipient of an award to receive cash dividend payments when the associated award is released.

The amount of DER equals to the cumulated dividends on the issued number of common stock that would have been payable since the date the associated award was granted.

As of April 3, 2020 and March 29, 2019 , current dividends payable related to DER was $ 62 million and $ 5 million , respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 31 million and $ 3 million , respectively, recorded as part of Other long-term liabilities.

As of April 2, 2021 and April 3, 2020, current dividends payable related to DER was $ 12 million and $ 62 million, respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 10 million and $ 31 million, respectively, recorded as part of Other long-term liabilities.

Stock-based award modifications

In connection with the Broadcom sale, we approved severance and retention arrangements for certain executives.

In connection with the Broadcom sale in fiscal 2020, we approved severance and retention arrangements for certain executives.

As a result, these executives are entitled to receive vesting of 50 % of their unvested equity, subject to a service condition, and the remaining unvested equity will be earned at levels of 0 % to 150 %, subject to market and service conditions.

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These arrangements provided for acceleration of either a portion or all of the vesting of their stock-based awards.

During fiscal 2020, we recognized $ 145 million of expense associated with these modifications, of which $ 20 million was recognized in General and administrative expense, $ 6 million in Sales and marketing expense, $ 20 million in continuing operations restructuring costs, $ 97 million in discontinued operations restructuring costs and $ 2 million in discontinued operations expense.

The following table summarizes the stock-based compensation expense recognized as a result of these modifications:

(In millions)

April 2, 2021 April 3, 2020

Sales and marketing $ 2 $ 6

Research and development 9 —

General and administrative 8 20

Restructuring and other costs 10 20

Discontinued operations 1 99

Total stock-based compensation $ 30 $ 145

Stock-based compensation expense

Total stock-based compensation expense and the related income tax benefit recognized for all of our equity incentive plans in our Consolidated Statements of Operations were as follows:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Cost of revenues $ 1 $ 2 $ 6

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Our employer matching contributions to the 401(k) plan were as follows, including contributions to employees of our discontinued operations:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

401(k) matching contributions $ 3 $ 16 $ 23

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The components of basic and diluted net income (loss) per share are as follows:

(In millions, except per share amounts)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions, except per share amounts) April 2, 2021 April 3, 2020 March 29, 2019

Income (loss) from continuing operations $ 696 $ 578 $ ( 110 )

Income from discontinued operations, net of income taxes

Income (loss) from discontinued operations, net of income taxes ( 142 ) 3,309 141

Net income $ 554 $ 3,887 $ 31

Income (loss) per share - basic:

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Net income per share - basic (1)

$ 0.94 $ 6.32 $ 0.05

Income (loss) per share - diluted:

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Net income per share - diluted (1)

$ 0.92 $ 6.05 $ 0.05

Weighted-average outstanding shares - basic 589 615 632

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Employee equity awards — 2 47

Total 8 7 138

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

Under the treasury stock method, our convertible debt instruments will generally have a dilutive impact on net income per share when our average stock price for the period exceeds the conversion prices for the convertible debt instruments.

Prior to February 4, 2020, the conversion price for the 2.5 % Convertible Notes and the 2.0 % Convertible Notes were $ 16.77 per share and $ 20.41 per share, respectively.

On February 4, 2020, a portion of the 2.5 % Convertible Notes were exchanged for the New 2.5 % Convertible Notes, and a portion of the 2.0 % Convertible Notes were exchanged for the New 2.0 % Convertible Notes.

The remaining Convertible Senior Notes received conversion price adjustments.

As a result, beginning February 4, 2020, the

conversion price for the 2.5 % Convertible Notes, the 2.0 % Convertible Notes, the New 2.5 % Convertible Notes, and the New 2.0 % Convertible Notes was $ 8.40 per share, $ 10.23 per share, $ 16.77 per share, and $ 20.41 per share, respectively.

The 2.5 % Convertible Notes were fully repaid on March 10, 2020.

See Note 10 for more information on our convertible debt instruments.

The 2.5 % Convertible Notes and 2.0 % Convertible Notes were fully repaid on March 10, 2020 and May 26, 2020, respectively.

See Note 10 for further information on our convertible debt instruments and Note 19 for information on a convertible note purchase agreement entered into on May 13, 2021.

The conversion price of each convertible debt applicable in the periods presented is as follows:

April 2, 2021 April 3, 2020 March 29, 2019

2.5 % Convertible Senior Notes due April 1, 2022

N/A $ 8.40 (1)

2.0 % Convertible Senior Notes due August 15, 2022

N/A $ 10.23 (1)

New 2.5 % Convertible Senior Notes due April 1, 2022

$ 16.77 $ 16.77 N/A

New 2.0 % Convertible Senior Notes due August 15, 2022

$ 20.41 $ 20.41 N/A

(1) Conversion prices of the Convertible Senior Notes prior to their full repayments.

The conversion features of the convertible debt instruments were anti-dilutive during fiscal 2019 due to a loss from continuing operations.

Segment and Geographic Information

Prior to the Broadcom sale, we operated in two reportable segments:

Enterprise Security and Consumer Cyber Safety.

The Enterprise Security segment focused on providing our Integrated Cyber Defense solutions to help business and government customers unify cloud and on-premises security to deliver a more effective cyber defense solution, while driving down cost and complexity.

The Consumer Cyber Safety segment focused on providing cyber safety solutions under our NortonLifeLock brand to help consumers protect their devices, online privacy, identities, and home networks.

As a result of the divestiture, we now have one reportable segment.

We operate as one reportable segment.

Our Chief Operating Decision Maker reviews financial information presented on a consolidated basis to evaluate company performance and to allocate resources.

The change has been reflected in our segment reporting for all periods presented.

Disaggregated net revenues

The following table summarizes net revenues for our major solutions:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Consumer security $ 1,513 $ 1,450 $ 1,471

Identity and information protection 1,038 994 937

ID Analytics — 46 48

Total net revenues $ 2,551 $ 2,490 $ 2,456

Consumer security products include Norton security, Norton Secure VPN, and other consumer security solutions.

Identity and information protection products include LifeLock identity theft protection and other information protection solutions.

WSS and PKI solutions were divested on October 31, 2017.

From time to time, changes in our product hierarchy cause changes to the product categories above.

When changes occur, we recast historical amounts to match the current product hierarchy.

The changes have been reflected for all periods presented above.

Consumer security products include our Norton 360 Security offerings, Norton Security, Norton Secure VPN, Avira Security, and other consumer security solutions.

Identity and information protection products include our Norton 360 with LifeLock offerings, LifeLock identity theft protection and other information protection solutions.

Our ID Analytics solutions were divested on January 31, 2020.

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The following table represents net revenues by geographic area for the periods presented:

(In millions)

April 3, 2020

March 29, 2019

March 30, 2018

(In millions) April 2, 2021 April 3, 2020 March 29, 2019

Americas $ 1,827 $ 1,831 $ 1,786

EMEA 419 376 392

APJ 305 283 278

Total net revenues $ 2,551 $ 2,490 $ 2,456

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and internationally in various foreign subsidiaries:

(In millions)

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

$ 536 $ 1,345

International 415 918

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The table below represents our property and equipment, net of accumulated depreciation and amortization, by geographic area, based on the physical location of the asset, at the end of each period presented:

(In millions)

April 3, 2020

March 29, 2019

(In millions) April 2, 2021 April 3, 2020

Ireland 32 34

Other countries (1)

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Our operating lease assets by geographic area, based on the physical location of the asset were as follows:

(In millions)

April 3, 2020

(In millions) April 2, 2021 April 3, 2020

Other countries (1)

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Management believes that cancellation of these contracts is unlikely, and we expect to make future cash payments according to the contract terms.

The following reflects estimated future payments for purchase obligations by fiscal year, including purchase obligations associated with our discontinued operations.

The following reflects estimated future payments for purchase obligations by fiscal year.

The amount of purchase obligations reflects estimated future payments as of April 2, 2021.

(In millions)

April 3, 2020

(In millions) April 2, 2021

Total purchase obligations $ 380

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The following reflects estimated future payments for deemed repatriation taxes by fiscal year:

(In millions)

April 3, 2020

(In millions) April 2, 2021

Total obligations $ 594

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Litigation contingencies

For a description of our accounting policy regarding litigation and loss contingencies, see “Critical Accounting Policies and Estimates” included in Part II, Item 7 of this annual report.

SEC Investigation

As previously disclosed in our public filings, the Audit Committee of our Board of Directors (the Audit Committee) completed its internal investigation (the Audit Committee Investigation) in September 2018.

In connection with the Audit Committee Investigation, we voluntarily contacted the SEC in April 2018.

In connection with the Audit Committee Investigation, we voluntarily contacted the U.S.

Securities and Exchange Commission (SEC) in April 2018.

The SEC commenced a formal investigation, and we continue to cooperate with that investigation.

The outcome of such an investigation is difficult to predict.

We have incurred, and will continue to incur, significant expenses related to legal and other professional services in connection with the SEC investigation.

We have incurred, and may continue to incur, significant expenses related to legal and other professional services in connection with the SEC investigation.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss.

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The Court granted the motion in part on October 2, 2019 and the first amended complaint was filed on October 11, 2019.

The Court’s order

dismissed certain claims against certain of our former officers.

The Court’s order dismissed certain claims against certain of our former officers.

Defendants filed answers on November 7, 2019.

No trial date has been set.

On April 20, 2021, to resolve an alleged conflict of interest raised with respect to the lead plaintiff and its counsel, the Court ordered a second Class Notice disclosing the circumstances of the alleged conflict and providing a further period for class members to opt out, which will conclude on July 2, 2021.

The initial class opt out period closed on August 25, 2020.

In an April 29, 2021 Order, the Court vacated the June 14, 2021 trial date and the trial is now continued indefinitely.

A settlement conference has been set for May 24, 2021.

Purported shareholder derivative lawsuits have been filed against us and certain of our former officers and current and former directors in the U.S.

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We will continue to incur legal fees in connection with these pending cases and demands, including expenses for the reimbursement of legal fees of present and former officers and directors under indemnification obligations.

The expense of continuing to defend such litigation may be significant.

The expense of

continuing to defend such litigation may be significant.

We intend to defend these lawsuits vigorously, but there can be no assurance that we will be successful in any defense.

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As reported on the GSA’s publicly-available database, our total sales under the GSA Schedule contract were approximately $ 222 million from the period beginning January 2007 and ending September 2012.

We fully cooperated with the government throughout its investigation, and in January 2014, representatives of the government indicated that their initial analysis of our actual damages exposure from direct government sales under the GSA schedule was approximately $ 145 million ;

since the initial meeting, the government’s analysis of our potential damages exposure relating to direct sales has increased.

The government has also indicated they are going to pursue claims for certain sales to California, Florida, and New York as well as sales to the federal government through reseller GSA Schedule contracts, which could significantly increase our potential damages exposure.

The government also indicated they would pursue claims for certain sales to California, Florida, and New York as well as sales to the federal government through reseller GSA Schedule contracts, which could significantly increase our potential damages exposure.

In 2012, a sealed civil lawsuit was filed against us related to compliance with the GSA Schedule contract and contracts with California, Florida, and New York.

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On June 6, 2019, we filed a motion seeking summary judgment on all claims asserted by all plaintiffs, and the plaintiffs filed a motion for partial summary judgment on elements of liability on their claims.

On October 21, 2019, the DOJ moved for a Prejudgment Writ of Sequestration for the Company to set aside $ 1,090 million to pay a judgment, should the United States prevail in this litigation, under the Federal Debt Collection Procedures Act.

The Writ was sought in response to the Company’s announcement of its plans to distribute the after-tax proceeds of the sale of the Symantec enterprise business to Broadcom to its shareholders via a special dividend.

The Court denied the Writ on December 12, 2019, on the basis of the Government’s failure to establish the “probable validity” of the debt, the amount sought to be sequestered, and the Company’s available cash, cash equivalents and short-term investments.

The Court permitted the DOJ limited discovery of facts relevant to the Company’s financial state and financial projections and the option to renew its motion if appropriate and supported by the analysis of its own financial expert.

That discovery period has now closed.

On March 30, 2020, the Court issued an Order granting in part and denying in part our motion for summary judgment and granting in part and denying in part the United States’ motion for partial summary judgment.

On September 30, 2020, the Company filed a Motion for Reconsideration of certain rulings in the Court’s March 30 Summary Judgment Order.

Court ordered mediations in July 2020 February 2021 were not successful.

Trial is set for August 2, 2021.

On March 23, 2021, Plaintiffs withdrew their demand for a jury trial and the Company consented to proceed with a bench trail.

On May 13, 2021, we reached a settlement in principle with the State of Florida to resolve all claims it asserted in the litigation for $ 0.5 million.

The issue of Relator’s statutory attorney’s fees with respect to the State of Florida’s claims remains unresolved.

At this time, our current estimate of the low end of the range of probable estimated losses from this matter is $ 50 million, inclusive of the settlement with the State of Florida, which we have accrued.

It is possible that the litigation could lead to claims or findings of violations of the False Claims Act and could be material to our results of operations and cash flows for any period.

Resolution of False Claims Act investigations can ultimately result in the payment of somewhere between one and three times the actual damages proven by the government, plus civil penalties in some cases, depending upon a number of factors.

Our current estimate of the low end of the range of the probable estimated loss from this matter is $ 25 million , which we have accrued.

This amount contemplates estimated losses from both the investigation of compliance with the terms of the GSA Schedule contract as well as possible violations of the False Claims Act.

There is at least a reasonable possibility that a loss may have been incurred in excess of our accrual for this matter, however, we are currently unable to determine the high end of the range of estimated losses resulting from this matter.

LifeLock et al

On August 29, 2019 the Ninth Circuit issued a mandate remanding a securities class action lawsuit, originally filed on July 22, 2015, against our subsidiary, LifeLock, as well as certain of LifeLock’s former officers (the “LifeLock Defendants”) for further proceedings in the U.S.

District Court for the District of Arizona.

The Ninth Circuit had affirmed in part and reversed in part the August 21, 2017 decision of the District Court, which had dismissed the case with prejudice.

The complaint in the remanded action alleges that, during a purported class period of July 30, 2014 to July 21, 2015, a period that predates our acquisition of LifeLock, the LifeLock Defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act.

We have settled this lawsuit and will pay $ 20 million to the class in the settlement.

The settlement is subject to approval by the United States District Court for the District of Arizona.

As a result of this settlement, we recorded a charge of $ 20 million in General and administrative in fiscal 2020.

Resolution of False Claims Act investigations can ultimately result in the payment of somewhere between one and three times the actual damages proven by the government, plus civil penalties.

There is at least a reasonable possibility that a loss may have been incurred in excess of our accrual for this matter.

NortonLifeLock

On February 8, 2021, Lauren Holden filed a putative class action in the Circuit Court for Duval County, Florida alleging that the Company violated the Florida wiretapping statute, Florida Security of Communications Act, Fla.

§ 934.01, et.

seq., through the use of session replay technology on www.us.norton.com.

The complaint defines the class as consisting of Florida residents who visited the website and whose electronic communications were alleged to have been intercepted by the Company without prior consent and, on behalf of the class, seeks statutory damages, attorney’s fees and costs, and injunctive relief.

On March 12, 2021, the Company removed the case to the District Court for the Middle District of Florida and filed its Answer and Affirmative Defenses to the complaint.

The Company then filed a Motion for Judgment on the Pleadings on April 20, 2021.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of this lawsuit or estimate the range of any potential loss.

We dispute these claims and intend to defend them vigorously.

We are involved in a number of other judicial and administrative proceedings that are incidental to our business.

Although adverse decisions (or settlements) may occur in one or more of the cases, it is not possible to estimate the possible loss or losses from each of these cases.

Although adverse decisions (or settlements) may occur in one or more of the cases, it is not possible to estimate the possible loss or

losses from each of these cases.

The final resolution of these lawsuits, individually or in the aggregate, is not expected to have a material adverse effect on our business, results of operations, financial condition or cash flows.

Subsequent Events

On May 14, 2020 , we announced a cash dividend of $ 0.125 per share of common stock to be paid in June 2020 .

All shares of common stock issued and outstanding and all RSUs and PRUs as of the record date will be entitled to the dividend and dividend equivalents, respectively.

Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.

Repayment of convertible debt

In May 2020, we settled the $ 625 million principal and conversion rights of the 2.0 % Convertible Notes in cash.

The aggregate settlement amount of $ 1.18 billion was based on $ 19.25 per underlying share into which the 2.0 % Convertible Notes were convertible.

The settlement is expected to have an immaterial impact on our Consolidated Statements of Operations in our first quarter of fiscal 2021.

On May 13, 2021, we entered into a Convertible Notes Purchase Agreement (the “Agreement”) with affiliates of Silver Lake Partners (“Silver Lake”), pursuant to which we agreed to repurchase $ 250 million in aggregate principal amount of our new 2.50 % convertible unsecured senior notes due 2022 (the “Note Repurchase”).

These notes are convertible into our common stock at a rate of 59.6341 shares for each $1,000 principal amount of notes, representing a conversion price of approximately $ 16.77 per share.

Under the terms of the Agreement, we will pay Silver Lake an aggregate of $ 365 million, representing $ 24.40 per underlying share into which the notes are convertible, accrued and unpaid interest through the date of settlement, and a portion of the cash dividend that we declared on May 10, 2021.

The Note Repurchase was completed on May 20, 2021.

(2) Financial Statement Schedule

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All financial statement schedules have been omitted, since the required information is not applicable or is not present in material amounts, and/or changes to such amounts are immaterial to require submission of the schedule, or because the information required is included in our Consolidated Financial Statements and notes thereto included in this Form 10-K.

Incorporated by Reference

Exhibit Description

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

2.01(§) Asset Purchase Agreement, dated August 8, 2019, by and between Broadcom Inc.

and Registrant.

Amended and Restated Certificate of Incorporation of Registrant.

Certificate of Amendment of Amended and Restated Certificate of Incorporation of Symantec Corporation.

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Registrant.

Certificate of Amendment to Amended and Restated Certificate of Incorporation of Symantec Corporation.

8-K 000-17781 2.01 8/8/2019

3.01 Amended and Restated Certificate of Incorporation of Registrant, and all amendments thereto.

3.02 Amended and Restated Bylaws of Registrant.

8-K 000-17781 3.02 11/4/2019

3.03 Certificate of Elimination of Series A Junior Preferred Stock.

10-K 000-17781 3.06 5/28/2020

4.01 Form of Common Stock Certificate.

10-K 000-17781 4.01 5/28/2020

4.02 Description of Securities.

10-K 000-17781 4.02 5/28/2020

4.03 Indenture, dated September 16, 2010, between Registrant and Wells Fargo Bank, National Association, as trustee.

Form of Global Note for Symantec’s 4.200% Senior Note due 2020 (contained in Exhibit No.

4.02 of Form 8-K).

Incorporated by Reference

Exhibit Description

8-K 000-17781 4.01 9/16/2010

4.04 Form of Global Note for Symantec’s 3.950% Senior Notes due 2022 (contained in Exhibit No.

4.02 of Form 8-K).

8-K 000-17781 4.04 6/14/2012

4.05 Investment Agreement, dated as of February 3, 2016, by and among Registrant and Silver Lake Partners IV Cayman (AIV II), L.P.

8-K 000-17781 10.01 2/9/2016

4.06 First Amendment to Investment Agreement, dated as of March 2, 2016, by and among Registrant and Silver Lake Partners IV Cayman (AIV II), L.P.

8-K 000-17781 10.01 3/7/2016

4.07 Investment Agreement, dated as of June 12, 2016, by and among Registrant, Bain Capital Fund XI, L.P., Bain Capital Europe Fund IV, L.P.

1 unchanged sentence

(including the form of Indenture attached as Exhibit A thereto).

8-K 000-17781 2.02 6/14/2016

4.08 Amendment to Investment Agreement, dated as of July 31, 2016, by and among Registrant, Bain Capital Fund XI, L.P., Bain Capital Europe Fund IV, L.P.

and Silver Lake Partners IV Cayman (AIV II), L.P.

10-Q 000-17781 2.03 8/5/2016

4.09 Base Indenture, dated as of February 9, 2017, between Registrant and Wells Fargo Bank, National Association, as trustee.

8-K 000-17781 4.01 2/9/2017

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

4.10 First Supplemental Indenture related to the 5% Senior Notes due 2025, dated as of February 9, 2017, between Registrant and Wells Fargo Bank, National Association, as trustee (including form of 5.00% Senior Note due 2025).

8-K 000-17781 4.02 2/9/2017

4.11 Third Amendment to Investment Agreement, dated November 11, 2019, by and between NortonLifeLock Inc.

1 unchanged sentence

and SLP IV Seal II Holdings, L.P.

8-K 000-17781 10.01 11/12/2019

4.12 Second Amendment to Investment Agreement, dated November 11, 2019, by and between NortonLifeLock Inc.

and BC Bearcat SPV, LP, BCIP Venture Associates, BCIP Venture Associates-B, BCIP Associates IV (US), L.P., BCIP Associates IV-B (US), L.P., BCIP T Associates IV (US),

8-K 000-17781 10.02 11/12/2019

4.13 Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.00% Convertible Senior Notes Due 2022).

10-K 000-17781 4.14 5/28/2020

4.14 Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.500% Convertible Senior Notes Due 2022).

10-K 000-17781 4.15 5/28/2020

10.01(*) Form of Indemnification Agreement for Officers, Directors and Key Employees (form for agreements entered into between January 17, 2006 and March 6, 2016).

8-K 000-17781 10.01 1/23/2006

10.02(*) Form of Indemnification Agreement for Officers, Directors and Key Employees, as amended (form for agreements entered into after March 6, 2016).

Incorporated by Reference

Exhibit Description

8-K 000-17781 10.03 3/7/2016

10.03(*) Registrant’s Deferred Compensation Plan, restated and amended January 1, 2010, as adopted December 15, 2009.

10-K 000-17781 10.05 5/24/2010

10.04(*) Registrant’s 2000 Director Equity Incentive Plan, as amended.

10-Q 000-17781 10.01 11/1/2011

10.05(*) Registrant’s 2008 Employee Stock Purchase Plan, as amended.

10-Q 000-17781 10.06 2/7/2020

10.06(*) Registrant’s 2013 Equity Incentive Plan, as amended.

8-K 000-17781 10.01 12/3/2018

10.07(*) Forms of award agreements under 2013 Equity Incentive Plan.

10-K 000-17781 10.10 10/26/2018

10.08(*) Form of FY2 1 Performance Based Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

10-Q 000-17781 10.03 8/6/2020

10.09(*) Form of FY22 Performance Based Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

10.10(*) Form of Amended and Restated Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

Blue Coat, Inc.

2016 Equity Incentive Plan, including forms of awards thereunder.

Batman Holdings, Inc.

2015 Amended and Restated Equity Incentive Plan, including form of Stock Option Agreement thereunder.

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.11 Amended and Restated Credit Agreement, effective as of August 1, 2016, among Registrant, the lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Term Loan A-1/Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan A-2 Administrative Agent, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Barclays Bank PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Lead Arrangers and Joint Bookrunners in respect of the Term A-2 Facility, Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd.

And TD Securities (USA) LLC, as Co-Documentation Agents in respect of the Term A-2 Facility, and Bank of America, N.A., as Syndication Agent in respect of Term A-2 Facility.

Incorporated by Reference

Exhibit Description

10-Q 000-17781 4.03 8/5/2016

10.12 Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

10-Q 000-17781 4.05 8/5/2016

10.13 Amendment Agreement, dated as of July 18, 2016, by and among Registrant, Symantec Operating Corporation, the Lenders and the New Term Lenders, Wells Fargo Bank, National Association, and JPMorgan Chase Bank, N.A.

10-Q 000-17781 4.02 8/5/2016

10.14 Assignment and Assumption, dated October 3, 2016, to the Term Loan Agreement dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

10-Q 000-17781 4.01 2/3/2017

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.15 First Amendment, dated December 12, 2016, to the Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

Incorporated by Reference

Exhibit Description

10-Q 000-17781 4.02 2/3/2017

10.16 First Amendment, dated December 12, 2016, to the Credit Agreement, effective as of August 1, 2016, among the Registrant, the lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Term Loan A-1/Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan A-2 Administrative Agent, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Barclays Bank PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Lead Arrangers and Joint Bookrunners in respect of the Term A-2 Facility, Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd.

And TD Securities (USA) LLC, as Co-Documentation Agents in respect of the Term A-2 Facility, and Bank of America, N.A., as Syndication Agent in respect of Term A-2 Facility.

10-Q 000-17781 4.03 2/3/2017

10.17(*) Registrant’s Senior Executive Incentive Plan, as amended and restated.

8-K 000-17781 10.03 10/25/2013

10.18(*) Registrant’s Executive Retention Plan, as amended and restated.

1 unchanged sentence

10.20(*) FY2 1 Executive Annual Incentive Plan - Chief Executive Officer.

10-Q 000-17781 10.01 8/6/2020

10.21(*) FY2 1 Executive Annual Incentive Plan - Senior Vice President and Executive Vice President.

10-Q 000-17781 10.02 8/6/2020

10.22(§§) Assignment of Copyright and Other Intellectual Property Rights, by and between Peter Norton and Peter Norton Computing, Inc., dated August 31, 1990.

S-4 33-35385 10.37 6/13/1990

10.23(†) Environmental Indemnity Agreement, dated April 23, 1999, between Veritas and Fairchild Semiconductor Corporation, included as Exhibit C to that certain Agreement of Purchase and Sale, dated March 29, 1999, between Veritas and Fairchild Semiconductor of California.

S-1/A 333-83777 10.27 8/6/1999

10.24 Amendment, dated June 20, 2007, to the Amended and Restated Agreement Respecting Certain Rights of Publicity dated as of August 31, 1990, by and between Peter Norton and Registrant.

10-Q 000-17781 10.01 8/7/2007

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.25 Second Amendment and Limited Waiver to Amended and Restated Credit Agreement dated as of June 22, 2018.

10-Q 000-17781 10.01 11/16/2018

10.26 Second Amendment and Limited Waiver to Term Loan dated as of June 22, 2018.

Registrant’s Offer Letter with Matthew Brown.

Offer Letter with Vincent Pilette dated April 26, 2019.

Incorporated by Reference

Exhibit Description

10-Q 000-17781 10.02 11/16/2018

10.27(*) Registrant’s Offer Letter with Natalie M.

Derse dated June 19, 2020

10-Q 000-17781 10.01 7/8/2020

10.28 Credit Agreement, effective as of November 4, 2019, among NortonLifeLock Inc., the issuing banks and lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BofA Securities, Inc., Mizuho Bank, Ltd., Barclays Bank PLC, and The Bank of Nova Scotia, as Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Mizuho Bank, Ltd., Barclays Bank PLC and The Bank of Nova Scotia, as Syndication Agents and and Goldman Sachs Bank USA, HSBC Securities (USA) Inc., MUFG Bank, Ltd., SunTrust Robinson Humphrey, Inc., Citizens Bank, N.A., BMO Capital Markets Corp., BNP Paribas Securities Corp.

and Santander Bank, N.A., as Co-Documentation Agents.

Symantec Corporation Broadcom Transaction Severance & Retention Plan dated August 21, 2019.

Transitions Services Agreement by and between Richard S.

Hill and Registrant dated August 30, 2019.

Severance Benefit Agreement with Samir Kapuria dated December 5, 2019.

8-K 000-17781 10.01 11/4/2019

10.29 APA Letter Agreement dated October 1, 2020 by and between the Company and Broadcom Inc.

8-K 000-17781 10.01 7/8/2020

10.30(+) Stock Purchase Agreement dated December 7, 2020 between the Company and Alpaca HoldCo GmbH, Alpaca TopCo GmbH.

10-Q 000-17781 10.01 2/5/2021

10.31 First Amendment, effective as of May [7], 2021, among NortonLifeLock Inc., JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent, Wells Fargo Bank, National Association, as Revolver Administrative Agent, and the lenders and other parties party thereto.

21.01 Subsidiaries of Registrant.

5 unchanged sentences

32.02(††) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Incorporated by Reference

Exhibit Description

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

101.00 The following financial information from NortonLifeLock Inc.'s Annual Report on Form 10-K for the fiscal year ended April 2, 2021 are formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity, (vi) Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity (Deficit), (vi) Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104.00 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

* Indicates a management contract, compensatory plan or arrangement.

5 unchanged sentences

†† This exhibit is being furnished, rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

+ Certain portions of this document that constitute confidential information have been redacted in accordance with Regulations S-K, Item 601(b)(10).

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mountain View, State of California, on the 28th day of May 2020.

NORTONLIFELOCK INC.

2 unchanged sentences

Chief Executive Officer and Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vincent Pilette, Matthew Brown, and Bryan Ko, and each or any of them, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities to sign any and all amendments to this report on Form 10-K and any other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vincent Pilette, Natalie Derse, and Bryan Ko, and each or any of them, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities to sign any and all amendments to this report on Form 10-K and any other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be signed in several counterparts.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below.

/s/ Vincent Pilette

Chief Executive Officer and Director

Signature Title Date

/s/ Vincent Pilette Chief Executive Officer and Director

(Principal Executive Officer)

Vincent Pilette

/s/ Matthew Brown

Vice President and Interim Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

Matthew Brown

Chairman of the Board

/s/ Sue Barsamian

/s/ Natalie Derse Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer) May 21, 2021

Natalie Derse

Dangeard Chairman of the Board May 21, 2021

/s/ Sue Barsamian Director May 21, 2021

Sue Barsamian

/s/ Nora Denzel

Brandt Director May 21, 2021

/s/ Nora Denzel Director May 21, 2021

Feld Director May 21, 2021

/s/ Kenneth Y.

Hao Director May 21, 2021

/s/ Emily Heath Director May 21, 2021

/s/ Sherrese M.

Smith Director May 21, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures