What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-05-20 compared with 2021-05-21 · 340 added, 293 removed, 1300 unchanged (33% of the section changed)

5 unchanged sentences

Our management (with the participation of our Chief Executive Officer and Chief Financial Officer) has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act).

Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

b) Management’s Report on Internal Control over Financial Reporting

1 unchanged sentence

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 1, 2022, 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 1, 2022, our internal control over financial reporting was effective at the reasonable assurance level based on these criteria.

1 unchanged sentence

c) Changes in Internal Control over Financial Reporting

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.

There was no change in our internal control over financial reporting that occurred during the quarter ended April 1, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

d) Limitations on Effectiveness of Controls

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Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Table of Conten ts

Directors, Executive Officers and Corporate Governance

8 unchanged sentences

Principal Accountant Fees and Services

Our independent registered public accounting firm is KPMG, LLC , Santa Clara, CA , Auditor Firm ID:

The information required by this item will be included under the caption “Principal Accountant Fees and Services” in our 2022 Proxy Statement and is incorporated herein by reference.

Table of Conten ts

Exhibits, Financial Statement Schedules

19 unchanged sentences

Divestitures, Discontinued Operations and Assets Held for Sale

Business Combinations

Goodwill and Intangible Assets

1 unchanged sentence

Financial Instruments and Fair Value Measurements

Restructuring, Transition and Other Costs

Restructuring and Other Costs

Stockholders’ Equity

3 unchanged sentences

Commitments and Contingencies

Subsequent Events

Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.

The information required by this Item is set forth in the Exhibit Index that precedes the signature page of this Annual Report.

Table of Conten ts

Report of Independent Registered Public Accounting Firm

8 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 1, 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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

18 unchanged sentences

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 Matter

Critical Audit Matters

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.

(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 matter does not alter in any way our opinion on the consolidated

Table of Conten ts

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of uncertain tax positions

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● 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 of the Company’s assessment.

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

1 unchanged sentence

Santa Clara, California

Table of Conten ts

NORTONLIFELOCK INC.

36 unchanged sentences

582 and 580 shares issued and outstanding as of April 1, 2022 and April 2, 2021, respectively

Accumulated other comprehensive income (loss) 47 ( 16 )

Accumulated other comprehensive income ( 4 ) 47

Retained earnings (accumulated deficit) ( 1,940 ) ( 2,776 )

2 unchanged sentences

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

Table of Conten ts

NORTONLIFELOCK INC.

1 unchanged sentence

(In millions, except per share amounts)

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

April 1, 2022 April 2, 2021 April 3, 2020

Net revenues $ 2,796 $ 2,551 $ 2,490

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Amortization of intangible assets 85 74 79

Restructuring, transition and other costs 161 266 221

Restructuring and other costs 31 161 266

Total operating expenses 1,383 1,293 1,742

Operating income 896 355 158

Operating income (loss) 1,005 896 355

Interest expense ( 126 ) ( 144 ) ( 196 )

1 unchanged sentence

Income (loss) from continuing operations before income taxes 1,042 872 819

Income tax expense 176 241 3

Income tax expense (benefit) 206 176 241

Income (loss) from continuing operations 836 696 578

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

Net income $ 554 $ 3,887 $ 31

Net income (loss) $ 836 $ 554 $ 3,887

Income (loss) per share - basic:

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Net income per share - basic $ 1.44 $ 0.94 $ 6.32

$ 0.94 $ 6.32 $ 0.05

Income (loss) per share - diluted:

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Net income per share - diluted $ 1.41 $ 0.92 $ 6.05

$ 0.92 $ 6.05 $ 0.05

Weighted-average shares outstanding:

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Diluted 591 600 643

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

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

Table of Conten ts

NORTONLIFELOCK INC.

1 unchanged sentence

(In millions)

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

April 1, 2022 April 2, 2021 April 3, 2020

Net income $ 836 $ 554 $ 3,887

1 unchanged sentence

Foreign currency translation adjustments ( 51 ) 63 ( 11 )

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

Unrealized gain (loss) on available-for-sale securities — — 1

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

2 unchanged sentences

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

Table of Conten ts

NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In millions, except per share amounts)

(In millions, except share amounts)

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

1 unchanged sentence

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

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

Net income — — — 3,887 3,887

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

Other comprehensive income (loss), net of taxes — — ( 9 ) — ( 9 )

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

4 unchanged sentences

Stock-based compensation — 338 — — 338

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

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) — — ( 9 ) — ( 9 )

Other comprehensive income (loss), net of taxes — — 63 — 63

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

4 unchanged sentences

Stock-based compensation — 81 — — 81

Short-swing profit disgorgement — 9 — — 9

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

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

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

Net income — — — 836 836

Other comprehensive income (loss) — — 63 — 63

Other comprehensive income (loss), net of taxes — — ( 51 ) — ( 51 )

Common stock issued under employee stock incentive plans 3 14 — — 14

Shares withheld for taxes related to vesting of restricted stock units ( 1 ) ( 16 ) — — ( 16 )

Repurchases of common stock ( 15 ) ( 304 ) — — ( 304 )

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

7 unchanged sentences

(In millions)

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

April 1, 2022 April 2, 2021 April 3, 2020

OPERATING ACTIVITIES:

4 unchanged sentences

Deferred income taxes ( 81 ) 42 16

Gain on extinguishment of debt ( 20 ) — —

Loss (gain) on extinguishment of debt 3 ( 20 ) —

Loss from equity interest — — 31

1 unchanged sentence

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

Gain on sale of properties ( 98 ) — —

Gain on sale of property ( 175 ) ( 98 ) —

Non-cash operating lease expense 20 22 40

14 unchanged sentences

Proceeds from the maturities and sales of short-term investments 15 68 167

Proceeds from sales of properties 218 — 26

Proceeds from the sale of property 355 218 —

Proceeds from sale of equity method investment — — 380

7 unchanged sentences

Dividends and dividend equivalents paid ( 303 ) ( 373 ) ( 7,481 )

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

Repurchases of common stock — ( 304 ) ( 1,581 )

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

1 unchanged sentence

Other — ( 1 ) ( 1 )

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

Net cash provided by (used in) financing activities ( 333 ) ( 1,903 ) ( 10,123 )

Effect of exchange rate fluctuations on cash and cash equivalents ( 13 ) 22 ( 9 )

7 unchanged sentences

NortonLifeLock, Inc.

is a leading provider of consumer Cyber Safety solutions globally.

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

is a global, leading provider of consumer Cyber Safety solutions.

Our portfolio provides protection across three Cyber Safety categories, including security, identity protection and online privacy.

We help customers protect their computer and mobile devices from online threats, safeguard their identity and personal information and strengthen online privacy capabilities and functionalities.

Basis of presentation

3 unchanged sentences

We have a 52/53-week fiscal year ending on the Friday closest to March 31.

Our fiscal year 2020 consisted of 53 weeks, whereas fiscal years 2021 and 2019 were each 52-week years.

Fiscal 2022, 2021 and 2020 in this report refers to fiscal years ended April 1, 2022, April 2, 2021, and April 3, 2020, respectively.

Fiscal 2020 was a 53-week year, whereas fiscal 2022 and 2021 each consisted of 52 weeks.

Use of estimates

5 unchanged sentences

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

34 unchanged sentences

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 income (loss) (AOCI).

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

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

5 unchanged sentences

Our non-marketable investments consist of equity investments in privately-held companies without a readily determinable fair value.

We measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

We primarily measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

We may elect to measure certain investments at fair value, for which we utilize third-party valuation specialists at least annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate a change in the fair value of the investment.

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

98 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 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.

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.

22 unchanged sentences

Customer A 41 % 46 %

Customer B 13 % 9 %

Advertising and other promotional costs

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Recently adopted authoritative guidance

Credit Losses.

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.

In August 2018, the FASB issued new guidance that clarifies the accounting for implementation costs in a cloud computing arrangement.

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

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 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.

The guidance also clarifies and amends existing guidance to improve consistent application.

On April 3, 2021, the first day of fiscal 2022, we adopted this guidance prospectively.

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

Business Combinations, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

In October 2021, the FASB issued new guidance which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers .

Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting.

This new guidance results in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

On October 2, 2021, the first day of the third quarter of fiscal 2022, we elected to early adopt this guidance retrospectively for all acquisitions in fiscal 2022 and going forward.

The adoption of this guidance did not have a material impact on our quarterly fiscal periods prior to adoption or our Consolidated Financial Statements and disclosures.

Recently issued authoritative guidance not yet adopted

Debt with Conversion and Other Options .

4 unchanged sentences

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.

The standard will be effective during our first quarter of fiscal 2023.

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.

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

Reference Rate Reform.

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(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.

As a result of the sale, the majority of the results of our Enterprise Security business and certain related costs 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.

During fiscal 2020, 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.

During fiscal 2021, in connection with Broadcom sale, we recognized costs for severance and termination benefits as part of our November 2019 restructuring plan.

These activities were completed during fiscal 2021.

See Note 12 for information associated with our restructuring activities.

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 were included in discontinued operations.

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.

2 unchanged sentences

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

4 unchanged sentences

Discontinued Operations

The following table presents information regarding certain components of income (loss) 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 during the years ended April 2, 2021 and April 3, 2020.

There was no discontinued operations activity during the year ended April 1, 2022.

(In millions)

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

April 2, 2021 April 3, 2020

Net revenues $ 1 $ 1,368

5 unchanged sentences

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

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 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 2, 2021 April 3, 2020 March 29, 2019

The following table presents significant non-cash items and capital expenditures of discontinued operations during the years ended April 2, 2021 and April 3, 2020.

There was no discontinued operations activity during the year ended April 1, 2022.

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

Amortization and depreciation

$ — $ 130 $ 368

Stock-based compensation expense

$ 1 $ 172 $ 193

Purchases of property and equipment $ — $ 43

2 unchanged sentences

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.

On July 27, 2020, we completed the sale of our Culver City, California 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, California, 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.

On July 14, 2021, we completed the sale of certain land and buildings in Mountain View, California for cash consideration of $ 355 million, net of selling costs.

We recognized a gain of $ 175 million on the sale.

In conjunction with the sale, we signed a 7-year leaseback agreement for a portion of the property.

See Note 9 for further information related to the sale leaseback.

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.

however, during fiscal 2022, the commercial real estate market continues to be adversely affected by the COVID-19 pandemic, which delayed the expected timing of sale.

As of April 1, 2022, 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.

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

As a result, we recognized an impairment of $ 2 million, which was included in restructuring costs, representing the difference between the estimated net sales price and the carrying value of one of our properties.

During fiscal 2022, there were no other impairments because the fair value of the other properties less costs to sell either equals or exceeds their carrying value.

Business Combinations

Proposed Merger with Avast

On August 10, 2021, we announced a transaction under which we intend to acquire the entire issued and to be issued ordinary share capital of Avast plc, a public company incorporated in England and Wales and a global leader of digital security and privacy headquartered in Prague, Czech Republic (Avast and such transaction, the Proposed Merger).

The Proposed Merger will be implemented by means of a court-sanctioned scheme of arrangement under the UK Companies Act 2006, as amended (the Scheme), and remains subject to a certain number of conditions.

Under the terms of the Proposed Merger, Avast shareholders will be entitled to elect to receive, for each ordinary share of Avast held, in respect of their entire holding of Avast shares, either:

(i) $ 7.61 in cash and 0.0302 of a new share of our common stock (such option, the Majority Cash Option);

or (ii) $ 2.37 in cash and 0.1937 of a new share of our common stock (such option, the Majority Stock Option).

Based on our undisturbed closing share price of $ 27.20 on July 13, 2021, and depending on the Avast shareholder elections, the estimated purchase price range for the Avast shares under the Proposed Merger is $ 8.1 billion to $ 8.6 billion.

Each of the directors of Avast who holds shares has undertaken to elect for the Majority Stock Option in respect of their entire beneficial holdings of Avast shares.

We plan to finance the Proposed Merger with existing cash, cash to be generated by operations and new debt financing.

In conjunction with the Proposed Merger, on August 10, 2021, we entered into an agreement (as amended, the Interim Facilities Agreement) with certain financial institutions, in which they agreed to provide us with (i) a $ 3,600 million term loan interim facility B (the Interim Facility B), (ii) $ 750 million term loan interim facility A1 (the Interim Facility A1) and $ 3,500 million term loan interim facility A2 (the Interim Facility A2), and (iii) a $ 1,500 million interim revolving facility (the Interim Revolving Facility) (collectively, the Interim Facilities) and a commitment letter (as amended, the Commitment Letter) with certain financial institutions, in which they agreed to provide us with financing no less than the financing available under the Interim Facilities (the Definitive Facilities and, together with the Interim Facilities, the Facilities) to finance the cash consideration payable in connection with the Proposed Merger.

The Definitive Facilities will be financed by a syndicate of lenders led by Bank of America, N.A.

and Wells Fargo Bank N.A.

On January 28, 2022, Bank of America N.A.

and Wells Fargo Bank N.A.

agreed to arrange, on a best efforts basis, additional term loans under the Definitive Facilities in an amount up to $ 500 million.

The Interim Facilities Agreement contains, and any definitive financing documentation for the Definitive Facilities entered into in connection with the Commitment Letter (the Facilities Agreement) will contain, customary representations and warranties, events of default and covenants for transactions of this type.

The Facilities Agreement will replace the existing credit facility agreement upon the close of the transaction.

In conjunction with the Proposed Merger, on August 10, 2021, we entered into a Co-operation Agreement (the Co-operation Agreement) with Nitro Bidco Limited, our wholly-owned subsidiary (Bidco), and Avast, pursuant to which we and Bidco agreed to, among other things, use all reasonable endeavors for the purposes of obtaining any regulatory authorizations which are required to implement the Proposed Merger, and we, Bidco and Avast agreed to cooperate with each other in preparing required transaction documents and certain other matters in connection with the Proposed Merger.

The Co-operation Agreement also contains certain termination rights.

The Co-operation Agreement also provides that, subject to certain exceptions, if we fail to receive approval from the U.K Competition and Markets Authority and cannot consummate the Proposed Merger, we may be required to pay Avast a break fee of up to $ 200 million.

The Proposed Merger was approved by our Board of Directors and by our shareholders, the Board of Directors and shareholders of Avast and regulators including the Federal Trade Commission under the U.S.

Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR” Act) and in Europe, the German Federal Cartel Office and the Spanish National Markets and Competition Commission.

On March 25, 2022, the U.K Competition and Markets Authority referred the Proposed Merger to a Phase 2 review investigation.

The Proposed Merger is currently expected to close mid-to-late calendar year 2022, subject to regulatory approvals and the satisfaction or waiver of other customary closing conditions.

Fiscal 2022 acquisition

On September 15, 2021, we completed an acquisition of an online reputation management and digital privacy solutions company for total aggregate consideration of $ 39 million, net of $ 1 million cash acquired.

The purchase price was primarily allocated to intangible assets and goodwill during the year ended April 1, 2022.

Fiscal 2021 acquisition

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

1 unchanged sentence

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

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

(In millions) January 8, 2021

Current assets $ 12

7 unchanged sentences

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.

The allocation of the purchase price reflects adjustments during the year ended April 1, 2022.

Our estimates and assumptions were subject to refinement within the measurement period, which was up to one year from the acquisition date.

Adjustments to the purchase price during the measurement period required adjustments to be made to goodwill.

The measurement period ended on January 7, 2022.

Contract liabilities

2 unchanged sentences

Remaining performance obligations represent contracted revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods.

As of 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.

As of April 1, 2022, we had $ 785 million of remaining performance obligations, excluding customer deposit liabilities of $ 521 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.

2 unchanged sentences

(In millions)

Balance as of March 29, 2019 $ 2,677

Divestitures ( 88 )

Other adjustments ( 4 )

Balance as of April 3, 2020 $ 2,585

2 unchanged sentences

Balance as of April 2, 2021 2,867

Acquisitions 25

Purchase accounting adjustments ( 7 )

Translation adjustments ( 12 )

Balance as of April 1, 2022 $ 2,873

Intangible assets, net

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Year Ended Consolidated Statements of Operations Classification

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Customer relationships and other $ 85 $ 74 $ 79 Operating expenses

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Total property and equipment, net $ 60 $ 78

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 $ 16 million, $ 45 million, and $ 122 million in fiscal 2022, 2021 and 2020, respectively.

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Other taxes payable 87 82

Accrued legal fees 273 66

Accrued royalties 49 46

Other accrued liabilities 121 123

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Other income (expense), net:

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Interest income $ — $ 4 $ 80

3 unchanged sentences

Gain on sale of equity method investment — — 379

Gain on early extinguishment of debt 20 — —

(Loss) gain on early extinguishment of debt ( 3 ) 20 —

Gain on sale of properties 175 98 —

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

Other ( 7 ) 6 7

Total other income (expense), net $ 163 $ 120 $ 660

Supplemental cash flow information:

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Income taxes paid, net of refunds $ 356 $ 341 $ 1,985

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Due in one year or less $ 4

Due after one year through five years 4

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

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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.

We recorded a loss from our equity interest of $ 31 million during fiscal 2020 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.

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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) Year Ended

December 31, 2018

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

Revenue $ 350

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

On July 14, 2021, we completed the sale of certain land and buildings in Mountain View, California for cash consideration of $ 355 million, net of selling costs.

In conjunction with the sale, we signed a 7-year leaseback agreement for a portion of the property, with an option to extend the lease for an additional 5 years.

The leaseback agreement is effective as of the date of sale.

The sale transaction and immediate leaseback qualified as a completed sale and we recognized a gain of $ 175 million on the sale.

The following summarizes our lease costs for fiscal 2022, 2021 and 2020:

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Operating lease costs $ 16 $ 17 $ 34

2 unchanged sentences

Total lease costs $ 24 $ 27 $ 63

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

Other information related to our operating leases for fiscal 2022, 2021 and 2020 was as follows:

April 1, 2022 April 2, 2021 April 3, 2020

Weighted-average remaining lease term 4.7 years 4.4 years 4.5 years

Weighted-average discount rate 4.04 % 4.07 % 4.05 %

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Interest Rate

2.00 % Convertible Unsecured Notes due August 15, 2022

$ — N/A $ 625 2.66 %

4.20 % Senior Notes due September 15, 2020

— N/A 750 4.25 %

New 2.50 % Convertible Senior Notes due April 1, 2022

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525 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 5.00 %

Initial Term Loan due May 7, 2026 1,010 LIBOR plus (1)

494 LIBOR plus (1)

Delayed Term Loan due May 7, 2026 703 LIBOR plus (1)

741 LIBOR plus (1)

0.95 % Avira Mortgage due December 30, 2030

5 0.95 % — N/A

4 0.95 % 5 0.95 %

1.29 % Avira Mortgage due December 30, 2029

5 1.29 % — N/A

5 1.29 % 5 1.29 %

Total principal amount 3,747 3,620

6 unchanged sentences

April 1, 2022 April 2, 2021

Term Loan due November 4, 2024 1.50 % 2.88 %

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

Initial Term Loan due May 7, 2026 1.75 % 1.50 %

Delayed Term Loan due May 7, 2026 1.75 % 1.50 %

As of April 1, 2022, the future contractual maturities of debt by fiscal year are as follows:

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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 First Amendment also provided for an incremental increase under the Initial Term Loan of $ 525 million.

This transaction was accounted for as a debt extinguishment of the Initial Term Loan and resulted in accelerated recognition of interest expense for unamortized debt issuance costs, which was immaterial.

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 under the Initial Term Loan, such that loans in an aggregate principal amount of $ 1,741 million 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 Initial Term Loan and the additional borrowings under the First Amendment 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.

As of April 1, 2022, 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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As of April 1, 2022, we were in compliance with all debt covenants.

Interim Facilities

On August 10, 2021, in conjunction with the Proposed Merger, we entered into the Interim Facilities Agreement with certain financial institutions, in which they agreed to provide us with (i) a 7-year term loan interim facility B of $ 3,600 million (the Interim Facility B), (ii) a 60-day term loan interim facility A1 of $ 750 million (the Interim Facility A1) and 5-year term loan interim facility A2 of $ 3,500 million (the Interim Facility A2), and (iii) a 5-year interim revolving facility of $ 1,500 million (the Interim Revolving Facility) (collectively, the Interim Facilities) and a commitment letter (as amended, the Commitment Letter) with certain financial institutions, in which they agreed to provide us with financing no less than the financing available under the Interim Facilities (the Definitive Facilities and, together with the Interim Facilities, the Facilities) to finance the cash consideration payable in connection with the Proposed Merger.

The Definitive Facilities will be financed by a syndicate of lenders led by Bank of America, N.A.

and Wells Fargo Bank N.A.

On January 28, 2022, Bank of America N.A.

and Wells Fargo Bank N.A.

agreed to arrange, on a best efforts basis, additional term loans under the Definitive Facilities in an amount up to $ 500 million.

The Facilities Agreement will replace the existing credit facility agreement upon the close of the transaction.

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).

11 unchanged sentences

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

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.

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.

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

On May 20, 2021, we settled the $ 250 million principal and conversion rights of the New 2.5 % Convertible Senior Notes in cash.

The aggregate settlement amount of $ 364 million was based on $ 24.40 per underlying share into which the 2.5 % Convertible Notes were convertible.

In addition, we paid $ 1 million of accrued and unpaid interest through the date of settlement and $ 1 million of cash dividends that we declared on May 10, 2021.

The extinguishment resulted in an adjustment to stockholders’ equity of $ 112 million and a loss on extinguishment of $ 2 million.

On March 18, 2022, we settled $ 100 million of principal and conversion rights of the New 2.0 % Convertible Senior Notes in cash.

The aggregate settlement amount of $ 139 million was based on $ 28.32 per underlying share into which the New 2.0 % Convertible Notes were convertible.

The extinguishment resulted in an adjustment to stockholders’ equity of $ 40 million and a gain on extinguishment of $ 1 million.

As of April 1, 2022 and April 2, 2021, the Convertible Senior Notes consisted of the following:

3 unchanged sentences

New 2.0 % Convertible Notes

2.0 % Convertible Notes

Liability component:

3 unchanged sentences

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

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.

Based on the closing price of our common stock of $ 26.94 on the last trading date closest to April 1, 2022, the if-converted values of the New 2.0 % Convertible Notes exceeded the principal amount by approximately $ 168 million.

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Contractual interest expense $ 12 $ 20 $ 37

5 unchanged sentences

As a result, we are exposed to foreign exchange gains or losses which impacts our operating results.

As part of our foreign currency risk mitigation strategy, we have entered into foreign exchange forward contracts with up to twelve months in duration.

As part of our foreign currency risk mitigation strategy, we have entered into monthly foreign exchange forward contracts.

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.

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Foreign exchange forward contracts gain (loss) $ ( 7 ) $ 15 $ ( 22 )

7 unchanged sentences

Foreign exchange forward contracts sold $ 191 $ 68

Restructuring, Transition and Other Costs

Our restructuring, transition and other costs consist primarily of severance, contract cancellations, separation, transition, and other related costs.

Restructuring and Other Costs

Our restructuring and other costs consist primarily of severance, contract cancellations, separation and other related costs.

Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs.

Included in other exit and disposal costs are advisory fees incurred in connection with restructuring events.

Contract cancellation charges primarily include penalties for early termination of contracts and write-offs of related prepaid assets.

Other exit and disposal costs include costs to exit and consolidate facilities and advisory fees incurred in connection with restructuring events.

Separation costs primarily consist of consulting costs incurred in connection with our divestitures.

Transition costs are incurred in connection with Board of Directors approved discrete strategic information technology transformation initiatives and primarily consist of consulting charges associated with our enterprise resource planning and supporting systems and costs to automate business processes.

Such 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.

These actions were completed in fiscal 2022.

Any remaining costs or adjustments are immaterial.

We incurred total costs of $ 24 million under the December 2020 Plan.

November 2019 Plan

1 unchanged sentence

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.

These actions were completed in fiscal 2021.

Any remaining costs or adjustments are immaterial.

We incurred total costs of $ 528 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.

5 unchanged sentences

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 2, 2021 April 3, 2020 March 29, 2019

Restructuring and other costs summary

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Severance and termination benefit costs $ 5 $ 31 $ 90

4 unchanged sentences

Separation costs — — 1

Transition costs — — 185

Total restructuring, transition and other $ 161 $ 266 $ 221

In connection with the agreement to sell certain assets of our Enterprise Security business, a portion of our restructuring, transition and other costs were classified to discontinued operations for all periods presented.

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

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

Total restructuring and other $ 31 $ 161 $ 266

In connection with the agreement to sell certain assets of our Enterprise Security business, a portion of our restructuring and other costs were classified to discontinued operations for all periods presented.

Our restructuring and other costs attributable to discontinued operations are presented in the table below.

There was no discontinued operations activity during the year ended April 1, 2022.

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

Severance and termination benefit costs $ 64 $ 121

2 unchanged sentences

Asset write-offs and impairments — 13

Other exit and disposal costs — — 3

Separation costs 2 25

Transition costs — — 8

Total restructuring, transition and other $ 66 $ 261 $ 20

Total restructuring and other $ 66 $ 261

Restructuring summary

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

Our activities and liability balances related to our December 2020 Plan are presented in the tables below:

(In millions) Liability Balance as of April 2, 2021 Net Charges Cash Payments Non-Cash Items Liability Balance as of April 1, 2022

Severance and termination benefit costs $ 3 $ 5 $ ( 8 ) $ — $ —

Contract cancellation charges 7 51 ( 11 ) ( 35 ) 12

Stock-based compensation charges — 10 — ( 10 ) —

Asset write-offs and impairments — 58 — ( 58 ) —

Other exit and disposal costs — 7 ( 1 ) ( 6 ) —

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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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Domestic $ 791 $ 607 $ 667

2 unchanged sentences

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Federal $ 217 $ 133 $ 208

8 unchanged sentences

federal statutory income tax rates we have applied for fiscal 2022, 2021 and 2020 are as follows:

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

April 1, 2022 April 2, 2021 April 3, 2020

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 2, 2021 April 3, 2020 March 29, 2019

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Federal statutory tax expense (benefit) $ 219 $ 183 $ 172

1 unchanged sentence

Foreign earnings taxed at other than the federal rate ( 47 ) ( 10 ) ( 2 )

Transition tax — — ( 2 )

Federal research and development credit ( 4 ) ( 1 ) ( 2 )

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Other, net — 2 17

Irish FX remeasurement ( 19 ) 17 —

Income tax expense $ 206 $ 176 $ 241

6 unchanged sentences

Operating lease liabilities 28 29

Deferred revenue — 2

Property and equipment 13 17

Intangible assets 123 103

Loss on investments not currently tax deductible — 1

Stock-based compensation 8 7

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Net deferred tax assets (liabilities) $ 276 $ 218

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.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their basis for income tax purposes and the tax effects of net operating losses and tax credit carryforwards.

The valuation allowance provided against our deferred tax assets as of April 1, 2022, increased primarily due to a valuation allowance on capital loss carryforwards.

The ending valuation allowance of $ 11 million is provided primarily against tax attributes.

As of April 1, 2022, we have U.S.

federal net operating losses attributable to various acquired companies of approximately $ 52 million, which, if not used, will expire between fiscal 2023 and 2039.

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

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

federal tax regulations but are expected to be fully realized.

8 unchanged sentences

we have strong, consistent taxpaying history;

we have substantial U.S.

federal income tax carryback potential;

and we have substantial amounts of scheduled future reversals of taxable temporary differences from our deferred tax liabilities.

1 unchanged sentence

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Balance at beginning of year $ 548 $ 724 $ 446

4 unchanged sentences

Increase related to current year tax positions 8 11 232

Increase due to acquisition — — 8

Balance at end of year $ 527 $ 548 $ 724

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If the accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced in the period that such determination is made and reflected as a reduction of the overall income tax provision.

On July 27, 2015, the United States Tax Court (Tax Court) issued its opinion in Altera v.

Commissioner and concluded that related parties in a cost sharing arrangement are not required to share expenses related to stock-based compensation.

The Commissioner of the Internal Revenue Service appealed the Tax Court decision to the Ninth Circuit.

In June 2019, the U.S.

Court of Appeals for the Ninth Circuit reversed the July 2015 decision of the U.S.

As a result of this decision, we recorded a cumulative income tax expense of $ 62 million in the first quarter of fiscal 2020.

On July 22, 2019, the taxpayer requested a rehearing before the full Ninth Circuit, but such request was denied on November 12, 2019.

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

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

We file income tax returns in the U.S.

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Our fiscal years 2014 through 2021 remain subject to examination by the IRS for U.S.

federal tax purposes.

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

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

federal tax purposes and fiscal years 2014 through 2020 are under audit.

Our 2017 through 2021 fiscal years remain subject to examination by the appropriate governmental agencies for Irish tax purposes.

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Stockholders' Equity

Preferred stock

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 5, 2022, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in June 2022.

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

On May 4, 2021, our Board of Directors approved an incremental share repurchase authorization of $ 1,500 million.

As of April 1, 2022, we have $ 1,774 million remaining under the authorization to be completed in future periods with no expiration date.

The following table summarizes activity related to our stock repurchase program:

No shares were repurchased during the year ended April 1, 2022.

The following table summarizes activity related to our stock repurchase program during the years ended April 2, 2021 and April 3, 2020:

(In millions, except per share amounts)

3 unchanged sentences

Aggregate purchase price $ 304 $ 1,562

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.

Subsequent to April 1, 2022, we executed repurchases of 4 million shares of our common stock for an aggregate amount of $ 107 million.

As a result, we have $ 1,667 million remaining under our existing share repurchase program.

Accumulated other comprehensive income (loss)

2 unchanged sentences

Translation Adjustments

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

Equity Method Investee Total AOCI

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

Balance as of April 3, 2020 $ ( 16 )

Other comprehensive income (loss) before reclassifications 63

Reclassification to net income — — ( 1 ) ( 1 )

Balance as of April 2, 2021 47

Other comprehensive income before reclassifications 63 — — 63

Other comprehensive income (loss) before reclassifications ( 51 )

Balance as of April 1, 2022 $ ( 4 )

Stock-Based Compensation and Other Benefit Plans

Stock-Based Compensation and Benefit Plans

Stock incentive plans

19 unchanged sentences

Grant Date Fair Value

Outstanding and unvested at April 3, 2020 2 $ 22.68

Outstanding and unvested as of April 2, 2021 1 $ 27.50

Granted 3 $ 28.68

Vested ( 2 ) $ 23.97

Forfeited ( 1 ) $ 28.40

Unvested at April 1, 2022 3 $ 28.50

Vested and unreleased at April 2, 2021 —

Outstanding at April 2, 2021 1

Vested and unreleased as of April 1, 2022 —

Outstanding as of April 1, 2022 3

The total fair value of PRUs released in fiscal 2022, 2021 and 2020 was $ 0 million , $ 43 million, and $ 39 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 2, 2021 April 3, 2020 March 29, 2019

April 1, 2022 April 2, 2021 April 3, 2020

Expected term 3.9 years 2.7 years 1.9 years

8 unchanged sentences

(Years) Aggregate Intrinsic

Outstanding at April 3, 2020 2 $ 6.85

Outstanding as of April 1, 2021 (1)

Granted — $ —

Exercised (1)

Canceled — $ —

Forfeited and expired (1)

Outstanding at April 2, 2021 (1)

Exercisable at April 2, 2021 (1)

Outstanding as of April 1, 2022 (1)

Exercisable as of April 1, 2022 (1)

— $ 5.51 3.8 $ 4

1 unchanged sentence

The total intrinsic value of options exercised during fiscal 2022, 2021 and 2020 was $ 3 million, $ 18 million, and $ 171 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 in fiscal 2022 and 2021.

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.

2 unchanged sentences

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Shares issued under the ESPP 1 1 2

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Stock-based award modifications

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.

In connection with restructuring activities related to the Broadcom sale, we entered into severance and retention arrangements with certain other employees.

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

In connection with the Broadcom sale, during fiscal 2021 and 2020, we entered into severance and retention arrangements with certain executives.

Pursuant to these agreements, these executives were 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.

In addition, we entered into severance and retention arrangements with certain other employees in connection with restructuring activities and the Broadcom sale, which accelerated either a portion or all of the vesting of their stock-based awards.

All award modifications related to the Broadcom sale were fully expensed by fiscal 2021.

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

9 unchanged sentences

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 2, 2021 April 3, 2020 March 29, 2019

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Cost of revenues $ 2 $ 1 $ 2

2 unchanged sentences

General and administrative 30 26 58

Restructuring, transition and other costs 10 20 —

Restructuring and other costs — 10 20

Other income (expense), net — ( 1 ) 1

9 unchanged sentences

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

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

Net Income Per Share

Net Income (Loss) Per Share

Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period.

1 unchanged sentence

Dilutive potentially issuable common shares include the dilutive effect of the shares underlying convertible debt and employee equity awards.

Diluted income (loss) per share was the same as basic income (loss) per share for the year ended March 29, 2019, as there was a loss from continuing operations in the period and inclusion of potentially issuable shares was anti-dilutive.

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

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

(In millions, except per share amounts) April 1, 2022 April 2, 2021 April 3, 2020

Income (loss) from continuing operations $ 836 $ 696 $ 578

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

Net income $ 554 $ 3,887 $ 31

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

Net income (loss) $ 836 $ 554 $ 3,887

Income (loss) per share - basic:

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Net income per share - basic $ 1.44 $ 0.94 $ 6.32

$ 0.94 $ 6.32 $ 0.05

Income (loss) per share - diluted:

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Net income per share - diluted $ 1.41 $ 0.92 $ 6.05

$ 0.92 $ 6.05 $ 0.05

Weighted-average outstanding shares - basic 589 615 632

Weighted-average shares outstanding - basic 581 589 615

Dilutive potentially issuable shares:

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Employee equity awards 1 — 2

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.

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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 New 2.5 % Convertible Notes were fully repaid on May 20, 2021.

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

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

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

April 1, 2022 April 2, 2021 April 3, 2020

2.5 % Convertible Senior Notes due April 1, 2022

N/A $ 8.40 (1)

N/A N/A $ 8.40

2.0 % Convertible Senior Notes due August 15, 2022

N/A $ 10.23 (1)

N/A N/A $ 10.23

New 2.5 % Convertible Senior Notes due April 1, 2022

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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.

$ 20.41 $ 20.41 $ 20.41

Segment and Geographic Information

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The following table summarizes net revenues for our major solutions:

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Consumer security $ 1,669 $ 1,513 $ 1,450

2 unchanged sentences

Total net revenues $ 2,796 $ 2,551 $ 2,490

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.

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

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

(In millions) April 1, 2022 April 2, 2021 April 3, 2020

Americas $ 1,963 $ 1,827 $ 1,831

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Ireland 27 32

Germany 13 14

Other countries (1)

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Deemed repatriation taxes

Under the Tax Cuts and Jobs Act (H.R.1), we are required to pay a one-time transition tax on untaxed foreign earnings of our foreign subsidiaries through July 2025.

Under the Tax Cuts and Jobs Act (H.R.1), we are required to pay a one-time transition tax on untaxed earnings of our foreign subsidiaries through July 2025.

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

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As a condition to consenting to the assignments, certain lessors required us to agree to indemnify the lessor under the applicable lease with respect to certain matters, including, but not limited to, losses arising out of Veritas Technologies LLC, Broadcom, or their related subsidiaries’ breach of payment obligations under the terms of the lease.

As with our other indemnification obligations discussed above and in general, it is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

As with our other indemnification obligations discussed above and in

general, it is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

As with our other indemnification obligations, such indemnification agreements might not be subject to maximum loss clauses, and to date, generally under our real estate obligations, we have not incurred material costs as a result of such obligations under our leases and have not accrued any liabilities related to such indemnification obligations in our Consolidated Financial Statements.

We provide limited product warranties, and the majority of our software license agreements contain provisions that indemnify licensees of our software from damages and costs resulting from claims alleging that our software infringes on the intellectual property rights of a third party.

Such indemnification provisions may not be subject to maximum loss clauses.

Historically, payments made under these provisions have been immaterial.

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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.

Trustees of the University of Columbia in the City of New York v.

NortonLifeLock

As previously disclosed in our public filings, on May 2, 2022, a jury returned its verdict in a patent infringement case filed in 2013 by the Trustees of Columbia University in the City of New York in the U.S.

District Court for the Eastern District of Virginia.

Columbia originally brought suit alleging infringement of six patents owned by the university.

The Company won a favorable claim construction order on all six patents, and the claim construction was upheld by the Federal Circuit in 2016 on all but U.S.

8,601,322 and 8,074,115.

The Company also sought inter partes review by the Patent Trial and Appeal Board of the claims of the ‘322 and ‘115 Patents and all but two claims of the ‘322 Patent and three claims of the ‘115 Patent were invalidated.

The remaining claims of the ‘322 and ‘115 Patents were the only claims that remained in suit at trial.

The jury found that the Company’s Norton Security products and Symantec Endpoint Protection products (the latter of which were sold to Broadcom as part of an Asset Purchase Agreement with NortonLifeLock dated November 4, 2019) willfully infringe the ‘322 and ‘115 Patents through the use of SONAR/BASH behavioral protection technology.

The jury awarded damages in the amount of $ 185 million.

Columbia did not seek injunctive relief against the Company.

The Company intends to cease use of the technology found by the jury to infringe.

The jury also found that the Company did not fraudulently conceal its prosecution of U.S.

8,549,643 but did find that two Columbia professors were coinventors of this patent.

No damages were awarded related to this patent.

A formal judgment has not yet been entered in the case.

There are likely to be post-verdict motions and hearings, and the Company intends to file an appeal challenging the verdict.

At this time, our current estimate of the low end of the range of probable estimated losses from this matter is $ 185 million which we have accrued.

The jury’s verdict may be enhanced and, should it be upheld on appeal, could ultimately result in the payment of somewhere between one and three times the jury’s verdict, plus interest and attorneys’ fees.

There is a reasonable possibility that a loss may be incurred in excess of our accrual for this matter;

however, such loss cannot be reasonably estimated.

SEC Investigation

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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 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.

The SEC commenced a formal investigation with which we cooperated.

In April 2022, the SEC Staff informed the Company that it concluded its investigation and does not intend to recommend an enforcement action by the Commission against us.

Securities Class Action and Derivative Litigation

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Defendants filed answers on November 7, 2019.

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.

On May 24, 2021, the parties reached a proposed settlement and release of all claims in the class action, for $ 70 million, and on June 8, 2021, the parties executed a Stipulation and Agreement of Settlement, subject to Court approval and exclusive of any claims that may be brought by shareholders who opted out of the class action.

Of the $ 70 million, $ 67.1 million was covered under the applicable insurance policy with the remainder to be paid by the Company.

The Court approved the settlement on February 12, 2022.

On November 22, 2021, investment funds managed by Orbis Investment Management Ltd.

which previously opted out of the securities class action, filed suit under the Securities and Exchange Act of 1934, Arizona Securities Act, Arizona Consumer Fraud Act and certain common law causes of action to recover alleged damages for losses incurred by the funds for their purchases or acquisitions of our common stock during the class period.

In the fourth quarter of fiscal 2022, we made an immaterial settlement offer in this matter, for which we have accrued.

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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these lawsuits include an action brought derivatively on behalf of our 2008 Employee Stock Purchase Plan.

The derivative actions are currently voluntarily stayed in light of the securities class action.

No specific amount of damages has been alleged in these lawsuits.

We have also received demands from purported stockholders to inspect corporate books and records under Delaware law.

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

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.

If any of the lawsuits are decided adversely, we may be liable for significant damages directly or under our indemnification obligations, which could adversely affect our business, results of operations, and cash flows.

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

During the first quarter of fiscal 2013, we were advised by the Commercial Litigation Branch of the Department of Justice’s (DOJ) Civil Division and the Civil Division of the U.S.

20 unchanged sentences

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.

A second Motion for Reconsideration of certain rulings in the Summary Judgement Order based on significant change in the law was filed on July 23, 2021.

Both Motions for Reconsideration were denied.

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

On March 23, 2021, Plaintiffs withdrew their demand for a jury trial and the Company consented to proceed with a bench trial, which concluded on March 24, 2022.

The Court has not yet issued its judgment.

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, plus Relator’s statutory attorney’s fees with respect to the State of Florida’s claims.

On February 28 2022, we reached a settlement in principle with the State of New York and Relator to resolve all of the New York claims asserted in the litigation for $ 5 million.

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 States of Florida and New York, 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.

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

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

however, such loss cannot be reasonably estimated.

NortonLifeLock

5 unchanged sentences

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.

On April 29, 2021, Plaintiff filed a Motion for Leave to File an Amended Complaint.

On July 22, 2021, the Court granted Plaintiff leave to file an amended complaint and deemed the Motion for Judgment on the Pleadings moot.

On August 5, 2021, the Company filed a Motion to Dismiss the First Amended Complaint.

On September 9, 2021, the Plaintiff filed a Notice of Voluntary Dismissal Without Prejudice and the Court entered an Order on September 16, 2021, dismissing the case without prejudice.

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 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

8 unchanged sentences

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

2.02 Rule 2.7 Announcement, dated as of August 10, 2021

8-K 000-17781 2.01 8/10/2021

2.03 Co-operation Agreement, dated August 10, 2021, by and between NortonLifeLock Inc., Nitro Bidco Limited and Avast plc

8-K 000-17781 2.02 8/10/2021

2.04 Form of Deed of Irrevocable Undertaking, dated August 10, 2021, by and between NortonLifeLock Inc.

and Nitro Bidco Limited

8-K 000-17781 2.03 8/10/2021

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

10-K 000-17781 3.01 5/21/2021

3.02 Amended and Restated Bylaws of Registrant.

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8-K 000-17781 4.02 6/14/2012

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

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

11 unchanged sentences

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).

5 unchanged sentences

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),

and BC Bear cat 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

15 unchanged sentences

8-K 000-17781 10.01 12/3/2018

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.07(*) Forms of award agreements under 2013 Equity Incentive Plan.

3 unchanged sentences

10.09(*) Form of FY22 Performance Based Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

10-K 000-17781 10.09 5/21/2021

10.10(*) Form of Amended and Restated Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10-K 000-17781 10.10 5/21/2021

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.

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10.18(*) Registrant’s Executive Retention Plan, as amended and restated.

10-K 000-17781 10.18 5/21/2021

10.19(*) Registrant’s Executive Severance Plan.

10.20(*) FY2 1 Executive Annual Incentive Plan - Chief Executive Officer.

10-K 000-17781 10.19 5/21/2021

10.20(*) FY22 Executive Annual Incentive Plan - CEO

10-Q 000-17781 10.03 8/2/2021

10.21(*) FY2 1 Executive Annual Incentive Plan - Senior Vice President and Executive Vice President.

10.21(*) FY22 Executive Annual Incentive Plan - Extended Leadership Team

10-Q 000-17781 10.04 8/2/2021

5 unchanged sentences

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.

2 unchanged sentences

10-Q 000-17781 10.02 11/16/2018

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.27(*) Registrant’s Offer Letter with Natalie M.

8 unchanged sentences

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.

10-K 000-17781 10.31 5/21/2021

10.32 Amended and Restated Commitment Letter, dated September 1, 2021, by and between NortonLifeLock Inc.

and the parties thereto

8-K 000-17781 10.02 9/3/2021

10.33 Amended and Restated Interim Facilities Agreement, dated September 1, 2021, by and between NortonLifeLock Inc., the parties specified thereto, as acceding finance partners, BofA Securities, Inc.

and Wells Fargo Securities, LLC, as arrangers, and Bank of America, N.A., as issuing bank, interim facility agent and interim security agent

8-K 000-17781 10.01 9/3/2021

10.34 Agreement of Sale and Purchase and Joint Escrow Instructions, dated as of June 4, 2021, by and between NortonLifeLock Inc.

and TMG Partners R.E., LLC

8-K 000-17781 10.01 6/7/2021

21.01 Subsidiaries of Registrant.

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32.01(††) Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02(††) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Incorporated by Reference Filed

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Exhibit Filing Date

32.02(††) Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.00 The following financial information from NortonLifeLock Inc.'s Annual Report on Form 10-K for the fiscal year ended April 1, 2022 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 (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

104.00 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Indicates a management contract, compensatory plan or arrangement.

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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 21st day of May 2021.

NORTONLIFELOCK INC.

24 unchanged sentences

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