What changed in this filing

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Item 9A. Controls and Procedures

2023-05-25 compared with 2022-05-20 · 663 added, 506 removed, 1134 unchanged (51% of the section changed)

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Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management.

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 Annual Report on Form 10-K.

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

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for NortonLifeLock.

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).

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.

The effectiveness of our internal control over financial reporting, as of April 1, 2022, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Part IV, Item 15 of this Annual Report on Form 10-K.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for Gen Digital.

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 March 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We acquired Avast during September 2022.

Management excluded Avast from its assessment of the effectiveness of Gen’s internal control over financial reporting as of March 31, 2023.

Total assets (excluding goodwill and intangibles) and total revenues of Avast represent approximately 3%, or $462 million and 16%, or $518 million, respectively, of the Consolidated Financial Statements amounts as of, and for the year ended, March 31, 2023.

Management did not assess the effectiveness of internal controls over financial reporting of Avast 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 March 31, 2023.

Our management has concluded that, as of March 31, 2023, our internal control over financial reporting was effective at the reasonable assurance level based on these criteria.

The effectiveness of our internal control over financial reporting, as of March 31, 2023, has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Part IV, Item 15 of this Annual Report on Form 10-K.

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.

During the quarter ended March 31, 2023, except for changes in connection with our Merger with Avast discussed above, there were no changes in our internal controls over financial reporting or in other factors, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

(d) Limitations on Effectiveness of Controls

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Not applicable.

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Directors, Executive Officers and Corporate Governance

The information required by this item will be included under the caption “Directors, Executive Officers, and Corporate Governance” in our proxy statement for the 2022 Annual Meeting to be filed with the SEC within 120 days of the fiscal year ended April 1, 2022 (the 2022 Proxy Statement) and is incorporated herein by reference .

The information required by this item will be included under the caption “Directors, Executive Officers, and Corporate Governance” in our proxy statement for the 2023 Annual Meeting to be filed with the SEC within 120 days of the fiscal year ended March 31, 2023 (the 2023 Proxy Statement) and is incorporated herein by reference .

With regard to the information required by this item regarding compliance with Section 16(a) of the Exchange Act, we will provide disclosure of delinquent Section 16(a) reports, if any, in the 2023 Proxy Statement, and such disclosure, if any, is incorporated herein by reference.

Executive Compensation

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

The information required by this item will be included under the caption “Executive Compensation” in our 2023 Proxy Statement and is incorporated herein by reference (excluding the information under the subheading “Pay Versus Performance”).

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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Principal Accountant Fees and Services

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

Our independent registered public accounting firm is KPMG, LLP , 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 2023 Proxy Statement and is incorporated herein by reference.

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Exhibits, Financial Statement Schedules

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All requests should be sent to:

NortonLifeLock Inc.

Gen Digital Inc.

Investor Relations

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

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

NortonLifeLock Inc.:

Gen Digital Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

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

and subsidiaries (the Company) as of April 1, 2022 and April 2, 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended April 1, 2022, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s 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.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 1, 2022 and April 2, 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended April 1, 2022, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Gen Digital Inc.

and subsidiaries (the Company) as of March 31, 2023 and April 1, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended March 31, 2023, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of March 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2023 and April 1, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2023, in conformity with U.S.

generally accepted accounting principles.

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

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired Avast plc during September 2022 and management excluded it from its assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2023, Avast plc’s internal control over financial reporting associated with total assets (excluding goodwill and intangibles) and total revenues representing approximately 3%, or $462 million, and 16%, or $518 million, respectively, included in the consolidated financial statements of the Company as of and for the year ended March 31, 2023.

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

Basis for Opinions

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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:

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

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

The communication of critical audit 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.

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

Sufficiency of audit evidence over net revenues

As discussed in Note 1 to the consolidated financial statements, the Company’s net revenues are principally derived from the sale of packaged software products directly to end-user customers through a multi-tiered distribution channel.

The processing of customer orders through to the determination of net revenues to be recognized is reliant upon multiple information technology (IT) systems.

The Company recorded $3,338 million of net revenues for the year ended March 31, 2023.

We identified the evaluation of sufficiency of audit evidence over net revenues as a critical audit matter.

The evaluation of sufficiency of audit evidence over net revenues required a high degree of subjective auditor judgment due to the number of revenue-related IT systems involved.

Specifically, judgment was required to evaluate that revenue data was captured and aggregated throughout various IT systems.

Additionally, IT professionals with specialized skills and knowledge were required to evaluate the nature and extent of evidence obtained over net revenues.

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

We applied auditor judgment to determine the nature and extent of procedures to be performed over net revenues.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the revenue process, including IT related controls.

We involved IT professionals with specialized skills and knowledge, who assisted in identifying and testing key IT configuration and IT interface controls for the various systems processing and recording revenue transactions.

For a sample of transactions, we assessed the recorded revenue by comparing cash receipts to the revenue recognized.

We evaluated the sufficiency of audit evidence obtained over net revenues by assessing the results of procedures performed.

Assessment of uncertain tax positions

As discussed in Notes 1 and 13 to the consolidated financial statements, as of April 1, 2022 the Company recognized uncertain tax positions.

The Company recognizes tax benefits from uncertain tax positions when there is more than a 50% likelihood that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position.

As of April 1, 2022, the Company has recorded a liability for gross unrecognized tax benefits, of $527 million.

As discussed in Notes 1 and 13 to the consolidated financial statements, as of March 31, 2023, the Company recognized uncertain tax positions.

The Company evaluates uncertain tax positions to determine whether it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position.

As of March 31, 2023, the Company recorded a liability for gross unrecognized tax benefits of $710 million.

We identified the assessment of uncertain tax positions as a critical audit matter.

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

Complex auditor judgment, including the involvement of tax professionals with specialized skills and knowledge, was required to evaluate the Company’s determination of uncertain tax positions, which included assessing the Company’s interpretation and application of tax laws globally across its multiple jurisdictions.

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

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

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s uncertain tax positions process, including controls related to the determination of uncertain tax positions, which included assessing the Company’s interpretation and application of tax laws.

We evaluated the Company’s ability to identify and determine its uncertain tax positions by comparing historical uncertain tax positions to actual outcomes upon conclusion of tax examinations.

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

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

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

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

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

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

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.

● Inspecting settlements with taxing authorities to assess the Company’s determination of its tax positions,

● Inspecting correspondence and agreements with taxing authorities, reading internal meeting minutes, and evaluating the status of income tax audits with relevant tax authorities, and

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

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

Santa Clara, California

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NORTONLIFELOCK INC.

GEN DIGITAL INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value per share amounts)

April 1, 2022 April 2, 2021

March 31, 2023 April 1, 2022

Current assets:

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3,000 shares authorized;

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

Accumulated other comprehensive income ( 4 ) 47

640 and 582 shares issued and outstanding as of March 31, 2023 and April 1, 2022, respectively

Accumulated other comprehensive income (loss) ( 15 ) ( 4 )

Retained earnings (accumulated deficit) ( 585 ) ( 1,940 )

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

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NORTONLIFELOCK INC.

GEN DIGITAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

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

March 31, 2023 April 1, 2022 April 2, 2021

Net revenues $ 3,338 $ 2,796 $ 2,551

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

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NORTONLIFELOCK INC.

GEN DIGITAL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

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

Net income $ 836 $ 554 $ 3,887

March 31, 2023 April 1, 2022 April 2, 2021

Net income (loss) $ 1,349 $ 836 $ 554

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments ( 11 ) ( 51 ) 63

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

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

Other comprehensive income (loss), net of taxes ( 11 ) ( 51 ) 63

Comprehensive income $ 785 $ 617 $ 3,878

Comprehensive income (loss) $ 1,338 $ 785 $ 617

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

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NORTONLIFELOCK INC.

GEN DIGITAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

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Shares Amount

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

Net income — — — 3,887 3,887

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

Net income (loss) — — — 554 554

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

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

Shares withheld for taxes related to vesting of restricted stock units ( 4 ) ( 86 ) — — ( 86 )

Shares withheld for taxes related to vesting of stock units ( 2 ) ( 49 ) — — ( 49 )

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

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Stock-based compensation — 81 — — 81

Short-swing profit disgorgement — 9 — — 9

Exchange and extinguishment of convertible debt — ( 578 ) — — ( 578 )

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

Net income — — — 554 554

Net income (loss) — — — 836 836

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 ( 2 ) ( 49 ) — — ( 49 )

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

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

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

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Balance as of April 1, 2022 582 1,851 ( 4 ) ( 1,940 ) ( 93 )

Net income — — — 836 836

Net income (loss) — — — 1,349 1,349

Other comprehensive income (loss), net of taxes — — ( 11 ) — ( 11 )

Common stock issued under employee stock incentive plans 5 12 — — 12

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

Shares withheld for taxes related to vesting of stock units ( 1 ) ( 19 ) — — ( 19 )

Repurchases of common stock ( 40 ) ( 904 ) — — ( 904 )

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

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Extinguishment of convertible debt — ( 100 ) — — ( 100 )

Balance as of April 1, 2022 582 $ 1,851 $ ( 4 ) $ ( 1,940 ) $ ( 93 )

Cumulative effect adjustment from adoption of ASU 2020-06 (1)

— ( 7 ) — 6 ( 1 )

Merger consideration 94 2,141 — — 2,141

Balance as of March 31, 2023 640 $ 2,800 $ ( 15 ) $ ( 585 ) $ 2,200

(1) Effective on April 2, 2022, the Company adopted ASU 2020-06 (Debt with Conversion and Other Options, ASC 470-20) using a modified retrospective method.

See Note 2 for further information about this recently adopted guidance.

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

NORTONLIFELOCK INC.

GEN DIGITAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

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

March 31, 2023 April 1, 2022 April 2, 2021

OPERATING ACTIVITIES:

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Loss (gain) on extinguishment of debt 9 3 ( 20 )

Loss from equity interest — — 31

Gain on divestitures — — ( 5,684 )

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

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

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

Non-cash operating lease expense 23 20 22

Other 1 52 ( 4 )

Changes in operating assets and liabilities, net of acquisitions:

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Payments for acquisitions, net of cash acquired ( 6,547 ) ( 39 ) ( 344 )

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

Proceeds from the maturities and sales of short-term investments 4 15 68

Proceeds from the sale of property 355 218 —

Proceeds from sale of equity method investment — — 380

Proceeds from the sale of properties — 355 218

Other 2 1 ( 5 )

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Net proceeds from sales of common stock under employee stock incentive plans 12 14 24

Tax payments related to restricted stock units ( 15 ) ( 58 ) ( 78 )

Tax payments related to vesting of stock units ( 20 ) ( 15 ) ( 58 )

Dividends and dividend equivalents paid ( 314 ) ( 303 ) ( 373 )

Repurchases of common stock ( 904 ) — ( 304 )

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

Short-swing profit disgorgement — — 9

Other — — ( 1 )

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

NORTONLIFELOCK INC.

GEN DIGITAL INC.

Notes to the Consolidated Financial Statements

Description of Business and Significant Accounting Policies

NortonLifeLock, Inc.

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.

On August 10, 2021, we announced a transaction under which we intended 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 Merger).

On September 12, 2022, we completed the Merger with Avast, and its results of operations have been included in our Consolidated Statements of Operations beginning September 12, 2022.

See Note 4 for further information about this business combination.

In connection with the Merger, effective November 7, 2022, we changed our corporate name from NortonLifeLock Inc.

to Gen Digital Inc.

Gen is a global company powering Digital Freedom with a family of trusted consumer brands including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner.

Our Cyber Safety portfolio provides protection across multiple channels and geographies, including security and performance, identity protection, and online privacy.

Our technology platforms bring together software and service capabilities into comprehensive and easy-to-use products and solutions across our brands.

We have also evolved beyond traditional Cyber Safety to offer adjacent trust-based solutions, including digital identity and access management, digital reputation, and restoration support services.

Basis of presentation

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

The accompanying Consolidated Financial Statements of Gen Digital Inc.

and our wholly-owned subsidiaries are prepared in conformity with generally accepted accounting principles in the United States (GAAP).

All significant intercompany accounts and transactions have been eliminated in consolidation.

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

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.

Fiscal 2023, 2022 and 2021 in this report refers to fiscal years ended March 31, 2023, April 1, 2022, and April 2, 2021, respectively, each of which was a 52-week year.

Use of estimates

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

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

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

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

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

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

Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment as a result of macroeconomic factors such as inflation, fluctuations in foreign currency exchange rates relative to the U.S.

dollars, our reporting currency, changes in interest rates, the COVID-19 pandemic and Russia’s invasion of Ukraine, and such differences may be material to the Consolidated Financial Statements.

Significant Accounting Policies

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Revenue is recognized net of allowances for partner incentives and rebates, and any taxes collected from customers and subsequently remitted to governmental authorities.

Revenue from e-commerce partners is recognized on a gross basis before the deduction of partner incentive and fees.

Taxes will be collected by our e-commerce partners and subsequently remitted to governmental authorities.

We offer various channel rebates for our products.

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

Reserves for rebates, recorded in Other current liabilities, were $ 5 million and $ 6 million as of April 1, 2022 and April 2, 2021, respectively.

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

Reserves for rebates, recorded in Other current liabilities, were $ 4 million and $ 5 million as of March 31, 2023 and April 1, 2022, respectively.

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

Performance obligations

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

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

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

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

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We immediately recognize the impairment to our non-marketable equity investments if the carrying value exceeds the fair value.

For our equity method investment, if a decline in value is determined to be other than temporary, impairment is recognized and included in Other income (expense), net in our Consolidated Statements of Operations.

Accounts receivable

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

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

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

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

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Assets held for sale

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

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

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

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

As of April 1, 2022 and April 2, 2021, capitalized costs, net of amortization, were $ 6 million and $ 9 million, respectively.

As of March 31, 2023 and April 1, 2022, capitalized costs, net of amortization, were $ 6 million and $ 6 million, respectively.

We determine if an arrangement is a lease at inception.

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The accounting guidance gives us the option to perform a qualitative assessment to determine whether further impairment testing is necessary.

The qualitative assessment considers events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount.

The qualitative assessment considers events and circumstances that might indicate that a reporting unit’s fair value is less than

its carrying amount.

If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed.

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

In fiscal 2022, based on our qualitative assessments, we concluded that it is more likely than not that the fair values are more than their carrying values.

In fiscal 2023, based on our qualitative and quantitative assessments, we concluded that it is more likely than not that the fair values are more than their carrying values.

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

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In these arrangements, we have concluded there are no enforceable rights and obligations during the period in which the option to cancel is exercisable by the customer, and therefore the consideration received or due from the customer is recorded as a customer deposit liability.

Our debt includes senior unsecured notes, senior term loans, convertible senior notes and a senior unsecured revolving credit facility.

Our debt includes senior unsecured notes, senior term loans and a senior secured revolving credit facility.

Our senior unsecured notes are recorded at par value at issuance less a discount representing the amount by which the face value exceeds the fair value at the date of issuance and an amount which represents issuance costs.

Our senior term loans are recorded at par value less debt issuance costs, which are recorded as a reduction in the carrying value of the debt.

Our convertible senior notes are recorded at par value less the fair value of the equity component of the notes, at their issuance date, determined using Level 2 inputs and less any issuance costs.

The discount and issuance costs associated with the various notes are amortized using the effective interest rate method over the term of the debt as a non-cash charge to interest expense.

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Restructuring

Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs and assets write-offs.

Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs and asset write-offs and impairments.

Employee-related severance charges are largely based upon substantive severance plans, while some charges result from mandated requirements in certain foreign jurisdictions.

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These charges are reflected in the period when a contract is terminated.

Asset impairments, including those related to ROU lease assets, are recognized in the period that an asset is decommissioned or a facility ceases to be used.

Asset write-offs and impairments, including those related to ROU lease assets, are recognized in the period that an asset is decommissioned or a facility ceases to be used.

We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and tax credit carryforwards in each jurisdiction in which we operate.

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

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

The determination of our valuation allowance involves assumptions, judgments and estimates, including forecasted earnings, future taxable income

and the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate.

To the extent we establish a valuation allowance or change the valuation allowance in a period, we reflect the change with a corresponding increase or decrease to our tax expense.

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The fair value of each PRU that contains a market condition is estimated using the Monte Carlo simulation model.

The fair values of RSUs and PRUs are not discounted by the dividend yield because our RSUs and PRUs include dividend-equivalent rights.

The fair values of RSUs and PRUs are not discounted by the dividend yield because our RSUs and PRUs include dividend-equivalent rights, except for the $ 4 million unvested RSUs assumed as part of the Merger with Avast.

We use the Black-Scholes model to determine the fair value of stock options and the fair value of rights to acquire shares of common stock under our ESPP .

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

If the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected life, we estimate the expected life of the stock option awards granted based on its expected term using the simplified method available under U.S.

Foreign currency

12 unchanged sentences

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

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

April 1, 2022 April 2, 2021

Customer A 41 % 46 %

Customer B 13 % 9 %

Distributors that accounted for over 10% of our total billed and unbilled accounts receivable, are as follows:

March 31, 2023 April 1, 2022

Distributor A 13 % 23 %

Distributor B 14 % N/A

Advertising and other promotional costs

9 unchanged sentences

Recently adopted authoritative guidance

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.

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 .

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

In August 2020, the FASB issued Accounting Standards Update 2020-06 (ASU 2020-06) which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments.

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

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

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

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

The standard will be effective 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 impact of the adoption of this guidance on our Consolidated Financial Statements and disclosures.

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

A convertible debt instrument will be accounted for wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging , or (2) a convertible debt instrument was issued at a substantial premium.

In addition, the debt discount, which is equal to the carry value of the embedded conversion feature upon issuance, will no longer be amortized as interest expense over the life of the instrument.

The new guidance also requires the use of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share and include the effect of share settlement for instruments that may be settled in cash or shares.

See Note 16 for further information related to the diluted earnings per share calculation.

We adopted this standard as of April 2, 2022, the first day of fiscal 2023, using a modified retrospective method of transition, under which, financial results and earnings per share amounts reported in prior periods were not adjusted or restated in our Consolidated Financial Statements.

As such, the new guidance was applied to the convertible debt instruments outstanding as of the beginning of this fiscal year, with the cumulative effect of adoption recognized through an adjustment to the opening balance of retained earnings.

We increased the carrying amount of the New 2.0 % Convertible Notes (as defined in Note 10) by approximately $ 1 million and reduced additional paid-in capital by approximately $ 7 million, net of tax.

The net effect of these adjustments was recorded as an increase to retained earnings as of April 2, 2022.

Reference Rate Reform.

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

The standard was effective upon issuance and may generally be applied through December 31, 2024, to any new or amended contracts, hedging relationships and other transactions that reference LIBOR.

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

During fiscal 2023, w e fully transitioned to SOFR and no longer use LIBOR on any debt or material contractual arrangements that are outstanding.

Any future contracts, hedging relationships and other transactions will be SOFR denominated.

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

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

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

(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 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.

During fiscal 2021, in connection with the Broadcom sale, we recognized costs for severance and termination benefits as part of our November 2019 restructuring plan, which was included in Income (loss) from discontinued operations in our Consolidated Statements of Operations.

These activities were completed during fiscal 2021.

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During fiscal 2021, the transition services were completed.

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

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

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

ID Analytics solutions

On January 31, 2020, we completed the sale of our ID Analytics solutions for $ 375 million in net cash proceeds.

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

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

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

Discontinued Operations

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.

The following table presents information regarding certain components of income (loss) from discontinued operations, net of income taxes during the year ended April 2, 2021.

There was no discontinued operations activity during the years ended March 31, 2023 and April 1, 2022.

(In millions)

April 2, 2021 April 3, 2020

April 2, 2021

Net revenues $ 1

1 unchanged sentence

Operating income (loss) $ ( 177 )

Gain on sale $ — $ 5,434

Income (loss) before income taxes $ ( 176 )

1 unchanged sentence

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

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

Stock-based compensation expense

Purchases of property and equipment $ — $ 43

Assets Held for Sale

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

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

However, the commercial real estate market was adversely affected by the COVID-19 pandemic, which delayed the expected timing of such sales.

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, 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.

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, and recognized a gain of $ 175 million on the sale.

During the second quarter of fiscal 2023 , we determined certain land and buildings in Mountain View, California, which were previously reported as assets held for sale as of April 1, 2022, no longer qualified as held for sale classification.

As a result, we reclassified the aggregate $ 26 million carrying value from assets held for sale to property and equipment, net, in our Consolidated Balance Sheets and recorded an immaterial catch-up depreciation adjustment, which is included in our Consolidated Statements of Operations.

During the fourth quarter of fiscal 2023, we determined certain land and buildings in Dublin, Ireland, which were previously reported as property and equipment, net as of April 1, 2022, now qualifies as held for sale classification.

As a result, we reclassified the aggregate $ 23 million carrying value from property and equipment, net to assets held for sale in our Consolidated Balance Sheets.

We continue to actively market the remaining properties held for sale.

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.

As a result, we recognized an impairment of $ 23 million representing the difference between the estimated net sales price and the carrying value of one of our properties.

As of March 31, 2023, this property remains classified as assets held for sale.

During fiscal 2023, 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:

Merger with Avast

On August 10, 2021, we announced a transaction under which we intended to acquire the entire issued and to be issued share capital of Avast plc, a public company incorporated in England and Wales (Avast and such transaction, the Merger).

The Merger was implemented by means of a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006 (the Scheme).

Under the terms of the Merger, Avast shareholders were 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.

Each Avast Director who held Avast shares elected for the Majority Stock Option in respect to their entire beneficial holdings of Avast shares.

The 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, the Spanish National Markets and Competition Commission and the U.K.

Competition and Markets Authority.

Closing of Merger with Avast

On September 12, 2022 (Closing Date), we completed the Merger with Avast, and as a result, we have changed our corporate name to Gen Digital Inc.

and have become dual headquartered in Tempe, Arizona and Prague, Czech Republic, although our principal executive offices remain in Tempe, Arizona.

Prior to the Merger, Avast was a global leader in consumer cybersecurity, offering a comprehensive range of digital security and privacy products and services that protected and enhanced users’ online experiences.

With this Merger, we are positioned to provide a broad and complementary consumer product portfolio with greater geographic diversification and access to a larger user base.

Upon completion of the Merger, we acquired all of the outstanding common stock of Avast.

Based on the election of the Avast shareholders, we paid cash consideration of approximately $ 6,910 million and issued 94,201,223 shares o f our common stock to Avast shareholders.

As a result, immediately following the closing of the Merger, Avast shareholders owned approximately 14 % of our outstanding common stock.

The fair value of our common stock provided on September 12, 2022 in exchange for all outstanding ordinary shares of Avast was approximately $ 2,141 million.

Consideration transferred

The total consideration for the Merger with Avast was approximately $ 8,688 million, net of cash acquired, and consisted of the following:

(In millions) September 12, 2022

Cash and equity consideration for outstanding Avast common shares (1)

Repayment of outstanding Avast debt (2)

Total consideration 9,051

Cash acquired 363

Net consideration transferred $ 8,688

(1) Represents the total value of cash paid and our common stock issued to Avast shareholders pursuant to the Majority Cash/Stock Option in the Scheme.

(2) Represents the cash consideration paid concurrent with the close of the Merger to retire certain Avast debt, including repayment of the associated principal, accrued interest, premiums and other costs.

Fair value of assets acquired and liabilities assumed

We accounted for the Merger as a business combination.

The identifiable assets acquired and liabilities assumed of Avast were recorded at their estimated fair values as of the acquisition date and consolidated with those of our company.

The allocation of purchase price requires management to make significant estimates and assumptions in determining the fair values of the assets acquired and liabilities assumed, especially with respect to intangible assets.

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

Our preliminary allocation of the aggregate purchase price, based on the estimated fair values of the assets acquired and liabilities assumed, as of the acquisition date, inclusive of measurement period adjustments, is as follows:

(In millions) September 12, 2022

Accounts receivable $ 63

Other current assets 17

Property and equipment 33

Operating lease assets 18

Intangible assets 2,383

Goodwill 7,349

Other long-term assets 11

Total assets acquired 9,874

Current liabilities 180

Contract liabilities 509

Operating lease liabilities 18

Long-term deferred tax liabilities 433

Other long-term obligations 46

Total liabilities assumed 1,186

Total purchase price $ 8,688

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

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

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

During the fourth quarter of fiscal 2023, we recorded measurement period adjustments resulting in a net increase to goodwill of $ 84 million, primarily related to updated information regarding long-term deferred tax liabilities, which resulted in an increase of $ 88 million of long-term deferred tax liabilities, offset by other immaterial adjustments.

The preliminary goodwill of $ 7,349 million represents the excess of the consideration transferred over the fair values of the assets acquired and liabilities assumed.

It is attributable to the expected synergies of the Merger, including future cost savings from planned integration of infrastructure, facilities, personnel and systems, and other benefits that are anticipated to be generated by combining both companies.

Goodwill is allocated to our single reportable segment.

Substantially all of the goodwill recognized is expected to be deductible for U.S.

tax purposes.

See Note 6 for further information on goodwill.

Preliminary identified intangible assets and their respective useful lives, as of September 12, 2022, are as follows:

(In millions, except for useful lives) Fair Value Weighted-Average Estimated Useful Life

Customer relationships (1)

$ 1,055 7 years

Developed technology (2)

1,244 6 years

Finite-lived trade names (2)

Total identified intangible assets $ 2,383

(1) Customer relationships were valued using the multi-period excess earnings method, which is a form of the income approach that primarily considers customer retention rate.

(2) Developed technology and finite-lived trade names were valued using the relief-from-royalty method, which is a form of the income approach that primarily considers technology migration and probability of use, respectively.

In connection with the Merger, on September 12, 2022, we entered into the Amended and Restated Credit Agreement (Credit Agreement) with certain financial institutions, in which they agreed to provide us with (i) a $ 1,500 million revolving credit facility (Revolving Facility), a $ 3,910 million term loan A facility (Term A Facility), (iii) a $ 3,690 million term loan B facility (Term B Facility) and (iv) a $ 750 million tranche A bridge loan (Bridge Loan) (collectively, the senior credit facilities).

The Bridge Loan was undrawn and immediately terminated upon the Merger’s close.

The proceeds were or will be used (i) to finance the cash consideration payable for the Merger, (ii) to repay in full and terminate all commitments under Avast’s credit facility, (iii) to pay expenses relating to the Merger, (iv) to add cash to the balance sheet and (v) for general corporate purposes and on-going business activities.

See Note 10 for further information about these debt instruments and the related debt covenants.

In connection with the financing provided by the Term B Facility, we incurred customary ticking fees with respect to the undrawn commitments that began accruing on the 61st day post-syndication.

The ticking fees were payable at the per annum rate of (i) 50 % of the interest rate margin for adjusted SOFR (or applicable replacement rate) loans for 61-90 days from January 28, 2022, the syndication date, and (ii) 100 % of the interest rate margin for adjusted SOFR (or applicable replacement rate) loans on and after 91 days from the syndication date.

Ticking fees were payable on the Closing Date of the Merger and capitalized as a portion of debt issuance cost for the Term B Facility.

During the year ended March 31, 2023, we paid $ 31 million in ticking fees.

Impact on operating results

The operating results of Avast have been included in our Consolidated Statements of Operations beginning September 12, 2022.

Our results of operations for fiscal 2023 include $ 518 million of net revenues of Avast.

This total post-acquisition revenue is not comparable to pre-acquisition results due to our product integration strategy, cross-selling activities and the reallocation of performance marketing spend deployed to maximize total Gen revenue and not revenue by brand.

It is impracticable to provide income before income taxes attributable to Avast subsequent to the Merger due to the integration of our operations.

The Company does not consider it to be a separate operating unit or separate reporting segment, but rather an integrated brand, selling and marketing strategy, and is in the advanced stages of completing the full integration of Avast with our ongoing operations.

We recognized transaction and integration costs of $ 77 million and $ 35 million for the years ended March 31, 2023 and April 1, 2022, respectively.

These costs were primarily associated with legal and professional services and other regulatory closing fees, which were expensed as incurred and included in general and administrative expenses in our Consolidated Statements of Operations.

On the Closing Date of the Merger, we incurred $ 145 million of debt issuance costs associated with the senior credit facilities, of which $ 132 million was capitalized and recorded as a reduction of outstanding debt balances and $ 10 million was capitalized and included in Other long-term assets in our Consolidated Balance Sheets.

The remaining $ 3 million was capitalized but immediately extinguished in conjunction with the termination of the Bridge Loan.

Unaudited pro forma information

The following unaudited pro forma financial information represents the combined historical results for the year ended March 31, 2023 and April 1, 2022, as if the Merger had been completed on April 3, 2021, the first day of fiscal 2022.

The results presented below include adjustments to conform Avast financial information, prepared in accordance with International Financial Reporting Standards (IFRS), to U.S.

GAAP as well as the impacts of material, nonrecurring pro forma adjustments, including amortization of acquired intangible assets, interest on debt issued to finance the Merger, and acquisition-related transaction costs, and the income tax effect of the other pro forma adjustments.

The unaudited pro forma results do not include any anticipated synergies or other expected benefits of the Merger.

The following table summarizes the unaudited pro forma financial information:

(In millions) March 31, 2023 April 1, 2022

Net revenues $ 3,804 $ 3,737

Net income (loss) $ 1,133 $ 242

The unaudited pro forma financial information is provided for informational purposes only and are not indicative of future operations or results that would have been achieved had the Merger been completed as of the beginning of fiscal 2022.

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.

The purchase price was primarily allocated to intangible assets and goodwill.

Our estimates and assumptions were subject to refinement within the measurement period, which is 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 September 14, 2022.

Fiscal 2021 acquisition

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

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

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

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

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

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

(In millions) January 8, 2021

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Total purchase price $ 344

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.

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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 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.

As of March 31, 2023, we had $ 1,233 million of remaining performance obligations, excluding customer deposit liabilities of $ 555 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.

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Acquisitions 25

Purchase accounting adjustments ( 7 )

Translation adjustments ( 12 )

Balance as of April 1, 2022 2,873

Acquisitions 25

Merger with Avast 7,265

Purchase accounting adjustments 84

Translation adjustments ( 5 )

Balance as of April 1, 2022 $ 2,873

Balance as of March 31, 2023 $ 10,217

Intangible assets, net

April 1, 2022 April 2, 2021

March 31, 2023 April 1, 2022

(In millions) Gross

5 unchanged sentences

Total intangible assets $ 3,933 $ ( 836 ) $ 3,097 $ 1,551 $ ( 528 ) $ 1,023

As a result of the Merger with Avast, we recorded $ 2,383 million of acquired intangible assets during the second quarter of fiscal 2023.

See Note 4 for further information about this business combination.

Amortization expense for purchased intangible assets is summarized below:

Year Ended Consolidated Statements of Operations Classification

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Customer relationships and other $ 172 $ 85 $ 74 Operating expenses

1 unchanged sentence

Total $ 308 $ 124 $ 105

As of April 1, 2022, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions) April 1, 2022

As of March 31, 2023, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions) March 31, 2023

Thereafter 341

Total $ 2,358

Supplementary Information

Cash and cash equivalents:

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

(In millions) March 31, 2023 April 1, 2022

Cash $ 576 $ 609

2 unchanged sentences

Accounts receivable, net:

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

(In millions) March 31, 2023 April 1, 2022

Accounts receivable $ 169 $ 121

2 unchanged sentences

Other current assets:

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

(In millions) March 31, 2023 April 1, 2022

Prepaid expenses $ 122 $ 107

3 unchanged sentences

Property and equipment, net:

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

(In millions) March 31, 2023 April 1, 2022

Land $ 13 $ 2

Computer hardware and software 498 462

6 unchanged sentences

Total property and equipment, net $ 76 $ 60

During the second quarter of fiscal 2023, we reclassified $ 26 million of buildings and leasehold improvements, which were previously reported as held for sale as of April 1, 2022, to property and equipment, net.

Adjustments associated with catch-up depreciation were immaterial.

As a result, we reclassified the aggregate $ 23 million carrying value from property and equipment, net to assets held for sale in our Consolidated Balance Sheets.

Refer to Note 3 for further information about our assets held for sale.

Depreciation and amortization expense of property and equipment was $ 21 million, $ 16 million, and $ 45 million in fiscal 2023, 2022 and 2021, respectively.

Other long-term assets:

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

(In millions) March 31, 2023 April 1, 2022

Non-marketable equity investments $ 176 $ 178

4 unchanged sentences

Short-term contract liabilities:

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

(In millions) March 31, 2023 April 1, 2022

Deferred revenue $ 1,153 $ 743

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Other current liabilities:

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

(In millions) March 31, 2023 April 1, 2022

Income taxes payable $ 172 $ 109

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Accrued royalties 48 49

Accrued interest 27 32

Other accrued liabilities 96 89

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Long-term income taxes payable:

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

(In millions) March 31, 2023 April 1, 2022

Deemed repatriation tax payable $ 310 $ 437

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Other income (expense), net:

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Interest income $ 15 $ — $ 4

Loss from equity interest — — ( 31 )

Foreign exchange gain (loss) ( 8 ) ( 2 ) 1

Gain on divestitures — — 250

Gain on sale of equity method investment — — 379

(Loss) gain on early extinguishment of debt ( 9 ) ( 3 ) 20

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Supplemental cash flow information:

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Income taxes paid, net of refunds $ 456 $ 356 $ 341

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Extinguishment of debt with borrowings from same creditors $ — $ 494 $ —

Non-cash consideration for the Merger with Avast $ 2,141 $ — $ —

Financial Instruments and Fair Value Measurements

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

April 1, 2022 April 2, 2021

March 31, 2023 April 1, 2022

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

Money market funds $ 174 $ 174 $ — $ 1,278 $ 1,278 $ —

Certificates of deposit — — — 1 — 1

Corporate bonds — — — 4 — 4

Interest rate swaps (1)

Total $ 174 $ 174 $ — $ 1,282 $ 1,278 $ 4

The following table presents the contractual maturities of our investments in debt securities as of April 1, 2022:

(In millions) Fair Value

Due in one year or less $ 4

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

Financial instruments not recorded at fair value on a recurring basis include our non-marketable equity investments, equity method investment, and our long-term debt.

(1) The fair value of our interest rate swaps is less than $ 1 million as of March 31, 2023.

We did not have any interest rate swaps as of April 1, 2022.

Financial instruments not recorded at fair value on a recurring basis include our non-marketable equity investments and our long-term debt.

Non-marketable equity investments

As of April 1, 2022 and April 2, 2021, the carrying value of our non-marketable equity investments was $ 178 million and $ 185 million, respectively.

Equity method investment

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

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

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

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.

DigiCert’s results were reported on a three month lag prior to our divestiture of our investment.

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)

Revenue $ 350

Gross profit $ 293

Net loss $ ( 102 )

As of March 31, 2023 and April 1, 2022, the carrying value of our non-marketable equity investments was $ 176 million and $ 178 million, respectively.

Current and long-term debt

As of April 1, 2022 and April 2, 2021, the total fair value of our current and long-term fixed rate debt was $ 2,021 million and $ 2,400 million, respectively.

As of March 31, 2023 and April 1, 2022, the total fair value of our current and long-term fixed rate debt was $ 2,593 million and $ 2,021 million, respectively.

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

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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 2023, 2022 and 2021:

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Operating lease costs $ 16 $ 16 $ 17

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Other information related to our operating leases for fiscal 2023, 2022 and 2021 was as follows:

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

March 31, 2023 April 1, 2022 April 2, 2021

Weighted-average remaining lease term 2.8 years 4.7 years 4.4 years

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

As of April 1, 2022, the maturities of our lease liabilities by fiscal year are as follows:

As of March 31, 2023, the maturities of our lease liabilities by fiscal year are as follows:

(In millions)

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The following table summarizes components of our debt:

April 1, 2022 April 2, 2021

March 31, 2023 April 1, 2022

(In millions, except percentages) Amount Effective

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Interest Rate

New 2.50 % Convertible Senior Notes due April 1, 2022

$ — 2.63 % $ 250 2.63 %

3.95 % Senior Notes due June 15, 2022

400 4.05 % 400 4.05 %

— N/A 400 4.05 %

New 2.00 % Convertible Unsecured Notes due August 15, 2022

525 2.62 % 625 2.62 %

— N/A 525 2.62 %

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)

Initial Term Loan due May 7, 2026 — N/A 1,010 LIBOR plus (2)

Delayed Term Loan due May 7, 2026 — N/A 703 LIBOR plus (2)

Term A Facility due September 12, 2027 3,861 SOFR + % (3)

6.75 % Senior Notes due September 30, 2027

900 6.75 % — N/A

Term B Facility due September 12, 2029 3,431 SOFR + % (4)

1.29 % Avira Mortgage due December 30, 2029 (1)

4 1.29 % 5 1.29 %

7.125 % Senior Notes due September 30, 2030

600 7.13 % — N/A

0.95 % Avira Mortgage due December 30, 2030 (1)

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Total long-term portion $ 9,529 $ 2,736

(1) The term loans bear interest at a rate equal to the LIBOR plus a margin based on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt, and our underlying loan agreements.

(1) The Avira Mortgages are denominated in a foreign currency so the balances of these mortgages may fluctuate based on changes in foreign currency exchange rates.

(2) The term loans bear interest at a rate equal to LIBOR plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement.

(3) Term A Facility due 2027 bears interest at a rate equal to Term SOFR plus a credit spread adjustment (CSA) plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement.

(4) Term B Facility due 2029 bears interest at a rate equal to Term SOFR plus CSA plus 2.00 %.

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

April 1, 2022 April 2, 2021

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:

March 31, 2023 April 1, 2022

Term A Facility due September 12, 2027 6.66 % N/A

Term B Facility due September 12, 2029 6.91 % N/A

Initial Term Loan due May 7, 2026 N/A 1.75 %

Delayed Term Loan due May 7, 2026 N/A 1.75 %

As of March 31, 2023, the future contractual maturities of debt by fiscal year are as follows:

(In millions)

Thereafter 3,849

Total future maturities of debt $ 9,899

Credit Facility

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

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

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

The First Amendment also 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 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 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.

Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the credit agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus a margin ranging from 0.125 % to 0.75 %, and in the case of LIBOR loans, LIBOR, as adjusted for statutory reserves, plus a margin ranging from 1.125 % to 1.75 %.

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

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

As of April 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.

We had a credit agreement with financial institutions, which provided a revolving line of credit of $ 1 billion, a 5-year term loan of $ 500 million (the Initial Term Loan), and a delayed draw 5-year term loan commitment of $ 750 million (the Delayed Draw Term Loan).

An amendment to the credit agreement (the First Amendment) also provided for an incremental increase under the Initial Term Loan of $ 525 million.

All term loans and revolver credit facilities were to mature in May 2026, and the credit facilities remained senior secured.

The principal amount of the Initial Term Loan and the additional borrowings under the First Amendment were to be repaid in quarterly installments on the last business day of each calendar quarter 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 were to be repaid in quarterly installments on the last business day of each calendar quarter in an amount equal to 1.25 % of aggregate principal amount as of the borrowing date of the Delayed Draw Term Loan.

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

Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the credit agreement, loans borrowed bore interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus a margin ranging from 0.125 % to 0.75 %, and in the case of LIBOR loans, LIBOR, as adjusted for statutory reserves, plus a margin ranging from 1.125 % to 1.75 %.

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

On September 12, 2022, we fully repaid the outstanding principal and accrued interest under the Initial Term Loan and Delay Draw Term Loan, which had an aggregate principal amount outstanding of $ 1,703 million.

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

The repayments resulted in a loss on extinguishment of $ 2 million.

We also terminated our undrawn revolving line of credit of $ 1,000 million, resulting in a loss on extinguishment of $ 4 million.

Senior credit facilities

Upon the close of the Merger, on September 12, 2022, we entered into the Amended and Restated Credit Agreement (Credit Agreement) with certain financial institutions, in which they agreed to provide us with (i) a $ 1,500 million revolving credit facility (Revolving Facility), (ii) a $ 3,910 million term loan A facility (Term A Facility), (iii) a $ 3,690 million term loan B facility (Term B Facility) and (iv) a $ 750 million tranche A bridge loan (Bridge Loan) (collectively, the senior credit facilities).

The Bridge Loan was undrawn and immediately terminated upon the Merger’s close, resulting in a loss on extinguishment of $ 3 million.

The Credit Agreement provides that we have the right at any time, subject to customary conditions, to request incremental revolving commitments and incremental term loans up to an unlimited amount, subject to certain customary conditions precedent and other provisions.

The lenders under these facilities will not be under any obligation to provide any such incremental loans or commitments.

We drew down the aggregate principal amounts of the Term A Facility and Term B Facility to finance the cash consideration payable for the transaction and to fully repay the outstanding principal and accrued interest of the existing credit facilities.

The Credit Agreement replaced the existing credit facilities upon the close of the transaction.

The Revolving Facility and Term A Facility will mature in September 2027, and the Term Facility B will mature in September 2029;

the senior credit facilities remain senior secured.

The principal amounts of Term A Facility must be repaid in quarterly installments on the last business day of each calendar quarter equal to 1.25 % of the aggregate principal amount as of the date of the Credit Agreement.

The principal amounts of Term Facility B must be repaid in quarterly installments on the last business day of each calendar quarter equal to 0.25 % of the aggregate principal amount as of the date of the Credit Agreement.

Quarterly installment payments commence on March 31, 2023.

We may voluntarily repay outstanding principal balances under the Revolving Facility and both Term Loan facilities without penalty.

As of March 31, 2023, there were no borrowings outstanding under our Revolving Facility;

however, from time to time we utilize letters of credits as part of our ordinary course of business.

Letters of credit reduce our Revolving Facility commitment amounts.

Interest on borrowings under the Credit Agreement can be based on a base rate or the SOFR at our election.

Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the Credit Agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus CSA plus a margin ranging from 0.125 % to 0.75 %, and in the case of the SOFR loans, SOFR, as adjusted for statutory reserves, plus a margin ranging from 1.125 % to 1.75 %.

On January 19, 2023 and April 28, 2023, we made a voluntary prepayment of $ 250 million and $ 150 million, respectively, pursuant to Section 2.05(a) of the Credit Agreement dated September 12, 2022.

The prepayment amount was applied exclusively to the Term B Facility.

Debt covenant compliance

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants.

Each of the Revolving Facility and Term A Facility will be subject to a covenant that we maintain a consolidated leverage ratio less than or equal to (i) 6.0 to 1.0 from the Closing Date through the last day of the fourth full fiscal quarter following the Closing Date, (ii) 5.75 to 1.0 following the last day of the fourth fiscal quarter after the Closing Date through the last day of the eighth full fiscal quarter following the Closing Date and (iii) 5.25 to 1.0 for each fiscal quarter thereafter;

provided that such maximum consolidated leverage ratio will increase to 5.75 to 1.0 for the four fiscal quarters ending immediately should we acquire property, business or assets in an aggregate amount greater than $ 250 million.

In addition, the Credit Agreement contains customary events of default under which our payment obligations may be accelerated, including, among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of certain covenants, payment and acceleration cross defaults with certain other indebtedness, certain undischarged judgments, bankruptcy, insolvency or inability to pay debts, change of control, the occurrence of certain events related to the Employee Retirement Income Security Act of 1974 (ERISA), and the Company experiencing a change of control.

As of March 31, 2023 we were in compliance with all debt covenants.

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).

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

On June 1, 2022, we fully repaid the principal and accrued interest under the 3.95 % Senior Notes due June 2022, which had an aggregate principal amount outstanding of $ 400 million.

In addition, we paid $ 7 million of accrued and unpaid interest through the redemption date.

O n September 19, 2022, we issued two series of senior notes, consisting of 6.75 % Senior Notes due 2027 and 7.125 % Senior Notes due 2030, for an aggregate principal of $ 1,500 million.

They are senior unsecured obligations that rank equally in right of payment with all of our existing and future senior, unsecured, unsubordinated obligations and may be redeemed at any time, subject to the make-whole provisions contained in the applicable indenture relating to such series of notes.

Interest on these series of notes is payable semi-annually in arrears on March 31 and September 30 for both the 6.75 % Senior Notes and 7.125 % Senior Notes, commencing on March 31, 2023.

We may redeem some or all of the 6.75 % Senior Notes due 2027 and 7.125 % Senior Notes due 2030 at any time, subject to a prepayment penalty that expires one year prior to the maturity of each respective note.

The First Call Dates of the 6.75 % Senior Notes due 2027 and 7.125 % Senior Notes due 2030 are September 30, 2024 and September 30, 2025, respectively.

Convertible Senior Notes

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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:

April 1, 2022 April 2, 2021

As described in Note 2, on April 2, 2022, we adopted ASU 2020-06 using the modified retrospective method.

Prior to the adoption of this guidance, we accounted for our convertible debt instruments under the cash conversion model, requiring the convertible notes to be separated into an equity and liability component.

W e recognized $ 56 million in equity, net of tax, which consisted of $ 9 million in debt discount, representing the difference between the fair value of the liability component and par value, and $ 47 million in substantial premium due to the fiscal year 2020 amendment, which was accounted for as a debt extinguishment and resulted in the recognition of the New 2.0 % Convertible Notes.

Upon adoption of ASU 2020-06, the cash conversion model was eliminated.

We de-recognized the remaining unamortized debt discount of $ 1 million on the New 2.0 % Convertible Notes and therefore no longer recognized the related amortization as interest expense.

Additionally, we recorded a cumulative adjustment to retained earnings of $ 6 million, net of tax, for the debt discount amortization incurred from issuance through April 2, 2022.

The remaining $ 47 million of substantial premium remained in equity, as the new guidance did not eliminate the substantial premium model for convertible instruments.

On August 15, 2022, we settled the $ 525 million principal and conversion rights of our New 2.0 % Convertible Notes in cash.

The aggregate settlement amount of $ 630 million was based on $ 20.41 per underlying share into which the New 2.0 % Convertible Notes were convertible.

In addition, we paid $ 5 million of accrued and unpaid interest through the date of settlement.

The repayments resulted in an adjustment to stockholders’ equity of $ 100 million.

As of March 31, 2023, we have extinguished all remaining convertible debt instruments.

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

April 1, 2022

(In millions) New 2.0 % Convertible Notes

New 2.5 % Convertible Notes

New 2.0 % Convertible Notes

Liability component:

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Equity component, net of tax $ 56

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 1, 2022 April 2, 2021 April 3, 2020

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Contractual interest expense $ 4 $ 12 $ 20

1 unchanged sentence

Payments in lieu of conversion price adjustments (1)

$ 8 $ 12 $ 11

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

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flow associated with changes in foreign currency exchange rates and interest rates.

These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign exchange rate and interest rate movements.

We do not use our derivative instruments for speculative trading purposes.

By using derivative financial instruments to hedge exposures to changes in foreign exchange and interest rates, we are exposed to credit risk;

however, we mitigate this risk by entering into hedging instruments with highly rated institutions that can be expected to fully perform under the terms of the applicable contracts.

Foreign currency exchange forward contracts

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

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 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.

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

As part of our foreign currency risk mitigation strategy, we have entered into monthly foreign exchange forward contracts to hedge foreign currency balance sheet exposure.

These forward contracts are not designated as hedging instruments.

As of April 1, 2022 and April 2, 2021, the fair value of these contracts was immaterial.

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

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

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

The fair value of our foreign exchange forward contracts is presented on a gross basis in our Consolidated Balance Sheets.

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

The effect of netting on our derivative assets and liabilities was not material as of April 1, 2022 and April 2, 2021.

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

dollar equivalent was as follows:

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

Foreign exchange forward contracts purchased $ 155 $ 270

Foreign exchange forward contracts sold $ 191 $ 68

We do not hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates.

Interest rate swap

In March 2023, we entered into interest rate swap agreements to mitigate risks associated with the variable interest rate of our Term A Facility.

These pay-fixed, receive-floating rate interest rate swaps have the economic effect of hedging the variability of forecasted interest payments until their maturity on March 31, 2026.

Pursuant to the agreements, we will effectively convert $ 1 billion of our variable rate borrowings under Term A Facility to fixed rates, with $ 500 million at a fixed rate of 3.762 % and $ 500 million at a fixed rate of 3.55 %.

These arrangements are designated as cash flow hedges for accounting purposes and as such, we will recognize the changes in the fair value of these interest rate swaps in Accumulated other comprehensive income (loss) (AOCI), and the periodic settlements or accrued settlements of the swap will be recognized within or against interest expense in our Consolidated Statements of Operations.

Cash flows related to these hedges are classified under operating activities in our Consolidated Statement of Cash Flows.

The effect of our interest rate swaps on AOCI was immaterial during fiscal 2023.

The related gain (loss) recognized within or against interest expense in our Consolidated Statement of Operations was immaterial during fiscal 2023.

We did not have any interest rate swaps during fiscal 2022 and 2021.

As of March 31, 2023, we estimate that $ 9 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

Summary of derivative instruments

The following table summarizes our outstanding derivative instruments as of March 31, 2023 and April 1, 2022:

Notional Amount Fair Value of Derivative Assets Fair Value of Derivative Liabilities

(In millions) March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022

Foreign exchange contracts not designated as hedging instrument (1)

$ 291 $ 346 $ — $ — $ — $ —

Interest rate swap contract designed as cash flow hedge 1,000 — 1 — 2 —

Total $ 1,291 $ 346 $ 1 $ — $ 2 $ —

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of March 31, 2023 and April 1, 2022.

The following table summarizes the related gain (loss) recognized in Other income (expense), net in our Consolidated Statements of Operations during the periods indicated:

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Foreign exchange contracts not designated as hedging instrument $ ( 7 ) $ ( 7 ) $ 15

Restructuring and Other Costs

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

Our restructuring and other costs consist primarily of severance and termination benefits, contract cancellation charges, asset write-offs and impairments and other exit and disposal costs.

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

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.

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

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

September 2022 Plan

In connection with the Merger, our Board of Directors approved a restructuring plan (the September 2022 Plan) to realize cost savings and operational synergies, which became effective upon the close of the Merger on September 12, 2022.

Actions under this plan include the reduction of our workforce, contract terminations, facilities closures, and the sale of underutilized facilities as well as stock-based compensation charges for accelerated equity awards to certain terminated employees.

We expect that we will incur total costs up to $ 150 million, with $ 120 million and $ 30 million estimated to be incurred within the first and second full years, respectively, following the completion of the Merger.

These actions are expected to be completed by fiscal 2024.

As of March 31, 2023, we have incurred costs of $ 69 million related to the September 2022 Plan.

December 2020 Plan

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

As of April 1, 2022, we have incurred $ 127 million of stock-based compensation related to our equity-based severance program.

We incurred $ 127 million of stock-based compensation related to our equity-based severance program.

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

August 2019 Plan

On August 6, 2019, our Board of Directors approved a restructuring plan (the August 2019 Plan) to improve productivity and reduce complexity in the way we manage the business.

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

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Severance and termination benefit costs $ 40 $ 5 $ 31

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Other exit and disposal costs 12 18 11

Separation costs — — 1

Total restructuring and other $ 69 $ 31 $ 161

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.

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 fiscal 2021.

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

There was no discontinued operations activity during the years ended March 31, 2023 and April 1, 2022.

(In millions) April 2, 2021

Severance and termination benefit costs $ 64

Contract cancellation charges — 5

Stock-based compensation charges — 97

Asset write-offs and impairments — 13

Separation costs 2

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Restructuring summary

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

Our activities and liability balances related to our September 2022 Plan are presented in the tables below:

(In millions) Liability Balance as of April 1, 2022 Net Charges Cash Payments Non-Cash Items Liability Balance as of March 31, 2023

Severance and termination benefit costs $ — $ 40 $ ( 33 ) $ — $ 7

Stock-based compensation charges — 11 — ( 11 ) —

Asset write-offs — 4 — ( 4 ) —

Other exit and disposal costs — 12 ( 10 ) ( 2 ) —

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Domestic $ 350 $ 791 $ 607

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Federal $ ( 479 ) $ 217 $ 133

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Total ( 137 ) ( 81 ) 20

Income tax expense $ 206 $ 176 $ 241

Income tax expense (benefit) $ ( 545 ) $ 206 $ 176

federal statutory income tax rates we have applied for fiscal 2023, 2022 and 2021 are as follows:

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

March 31, 2023 April 1, 2022 April 2, 2021

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 1, 2022 April 2, 2021 April 3, 2020

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Federal statutory tax expense (benefit) $ 169 $ 219 $ 183

5 unchanged sentences

Stock-based compensation 9 7 5

Nondeductible goodwill — — 18

Favorable ruling on foreign withholding tax 19 — ( 35 )

1 unchanged sentence

Return to provision adjustment 1 ( 8 ) 1

Other, net — 2 17

Irish FX remeasurement ( 17 ) ( 19 ) 17

Income tax expense $ 206 $ 176 $ 241

Capital loss ( 910 ) — —

Other, net 2 — 2

Income tax expense (benefit) $ ( 545 ) $ 206 $ 176

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

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

(In millions) March 31, 2023 April 1, 2022

Deferred tax assets:

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Net operating loss carryforwards of acquired companies 60 16

Interest 37 —

Other accruals and reserves not currently tax deductible 95 84

Operating lease liabilities 11 28

Deferred revenue 16 —

Property and equipment 16 13

Intangible assets — 123

Capitalized research and experimental expenditures 46 —

Loss on investments not currently tax deductible 68 —

Stock-based compensation 15 8

5 unchanged sentences

Goodwill ( 10 ) ( 6 )

Intangible assets ( 328 ) —

Deferred revenue — ( 2 )

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Prepaids and deferred expenses ( 2 ) ( 1 )

Discount on convertible debt — ( 2 )

Deferred tax liabilities ( 363 ) ( 46 )

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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.

The valuation allowance provided against our deferred tax assets as of March 31, 2023, increased primarily due to a valuation allowance on capital loss carryforwards and change in tax credit carryforwards.

The ending valuation allowance of $ 97

million is provided primarily against state and foreign capital loss carryforwards and certain tax credits.

During fiscal 2023, we acquired deferred tax assets through the Merger with Avast that had a valuation allowance provided against the deferred tax assets.

Due to a change in facts, we released the valuation allowance provided against some of the deferred tax assets.

As of March 31, 2023, we have U.S.

federal net operating losses attributable to various acquired companies of approximately $ 193 million, which, if not used, will expire between fiscal 2024 and 2039.

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

We have concluded that this positive evidence outweighs the negative evidence and, thus, that the deferred tax assets as of April 1, 2022, are realizable on a “more likely than not” basis.

We have concluded that this positive evidence outweighs the negative evidence and, thus, that the deferred tax assets as of March 31, 2023, are realizable on a “more likely than not” basis.

In fiscal 2023 as part of Avast integration plan we undertook a legal entity and operational restructuring that resulted in tax capital losses.

We plan to carry the entirety of the capital losses back to the fiscal 2020 tax return to offset a capital gain, which is expected to result in a tax refund on our federal and state tax returns for the 2020 tax year.

The Company estimates that the tax refund will be $ 910 million.

In order to obtain the refunds, we intend to file claims for refund shortly after filing our fiscal 2023 tax return.

As part of this process, we have recorded a net tax receivable in an amount less than the $ 910 million, due to the complexity of applying evolving tax laws and uncertainties with respect to sustaining the Company’s refunds claims, the success of which we believe is more likely than not.

This net amount takes into account the Company’ best estimate of the likely outcome of the refund claim given the information available to us at this time.

The Company’s ability to recognize the financial statement benefit of the refund claim is subject to change based on a number of factors, including but not limited to, changes in facts and circumstances, changes in tax laws, correspondence with both IRS and State tax authorities, and the results of tax audits and related proceedings, which may take several years or more to resolve.

We intend to vigorously defend our position if challenged by the tax authorities and will contest any proposed adjustments.

If we are not able to resolve any proposed adjustments at the examination level, we plan to pursue all available administrative and, if necessary, judicial remedies.

If we do not ultimately prevail on some or all of the components of our position, we would be required to pay the IRS and the states some or all of any cash tax refund, along with interest on such amount, and penalties, if assessed.

As with all actual and potential tax audits and related proceedings, there can be no assurances on the final outcome.

To the extent the final outcome is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our Consolidated Balance Sheets and Statements of Operations.

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Balance at beginning of year $ 527 $ 548 $ 724

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Increase related to current year tax positions 259 8 11

Increase due to acquisition 28 — —

Balance at end of year $ 710 $ 527 $ 548

There was a change of $ 21 million in gross unrecognized tax benefits during the year ended April 1, 2022, as disclosed above.

There was a change of $ 183 million in gross unrecognized tax benefits during the year ended March 31, 2023, as disclosed above, mainly on account of a reserve against the tax receivable.

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

Of the total unrecognized tax benefits at April 1, 2022, $ 486 million, if recognized, would affect our effective tax rate.

Of the total unrecognized tax benefits at March 31, 2023, $ 674 million, if recognized, would affect our effective tax rate.

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

At April 1, 2022, before any tax benefits, we had $ 87 million of accrued interest and penalties on unrecognized tax benefits.

At March 31, 2023, before any tax benefits, we had $ 100 million of accrued interest and penalties on unrecognized tax benefits.

Interest included in our provision for income taxes was an expense of approximately $ 22 million for fiscal 2023.

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state and foreign jurisdictions.

Our most significant tax jurisdictions are the U.S.

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

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

During the fourth quarter of fiscal 2023, we closed our fiscal years 2014 through 2017 IRS audit.

Our fiscal years prior to 2018 have been settled and closed with the IRS.

Our fiscal years 2018 through 2022 remain subject to examination by the IRS for U.S.

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

federal tax purposes.

Our fiscal years

2018 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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We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the expected tolling of the statute of limitations in various taxing jurisdictions.

We provide U.S.

income taxes on the earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered permanently reinvested outside the U.S.

or are exempted from further taxation.

As of March 31, 2023, the unrecognized deferred tax liability on the undistributed earnings is approximately $ 15 million.

Stockholders' Equity

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

However, the $ 4 million unvested RSUs assumed in connection with the Merger will not be entitled to DERs.

See Note 15 for further information about these equity awards.

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

Stock repurchase program

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

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

As of March 31, 2023, we have $ 870 million remaining under the authorization to be completed in future periods with no expiration date.

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:

The following table summarizes activity related to our stock repurchase program during the years ended March 31, 2023 and April 2, 2021:

(In millions, except per share amounts)

April 2, 2021 April 3, 2020

March 31, 2023 April 2, 2021

Number of shares repurchased 40 15

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Aggregate purchase price $ 904 $ 304

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)

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

Accumulated other comprehensive income (loss), net of taxes, consisted of foreign currency translation adjustments:

(In millions) Foreign Currency

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Balance as of April 2, 2021 $ 47

Other comprehensive income (loss) before reclassifications 63

Balance as of April 2, 2021 47

Other comprehensive income (loss) before reclassifications ( 51 )

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

Balance as of April 1, 2022 ( 4 )

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

Balance as of March 31, 2023 $ ( 15 )

Stock-Based Compensation and Benefit Plans

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

As of April 1, 2022, 11 million shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting.

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

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

Stock options granted under the 2013 Plan expire no more than 10 years from the date of grant.

In connection with the Merger, we assumed the outstanding equity awards under two of Avast’s equity incentive plans (the Avast Holding B.V.

2014 Share Option Plan and the Rules of the Avast plc Long Term Incentive Plan (collectively, the Avast Plans)), which consisted of $ 4 million unvested RSUs.

The assumed RSUs generally retain the terms and conditions under which they were originally granted.

We intend to grant all additional shares that remain available for issuance under the Avast Plans.

Upon vesting, these assumed RSUs and any additional shares granted will settle into shares of our common stock.

See Note 4 for further information about this business combination.

As of March 31, 2023, 9 million shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting.

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

Shares Weighted-

Grant Date Fair Value

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Forfeited ( 1 ) $ 22.38

Outstanding as of April 1, 2022 6 $ 21.80

Outstanding as of March 31, 2023 9 $ 22.45

RSUs generally vest over a three-year period.

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Forfeited ( 1 ) $ 26.70

Unvested at April 1, 2022 3 $ 28.50

Vested and unreleased as of April 1, 2022 —

Outstanding as of April 1, 2022 3

Unvested at March 31, 2023 4 $ 28.01

Vested and unreleased as of March 31, 2023 1

Outstanding as of March 31, 2023 5

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

The total fair value of PRUs released in fiscal 2023, 2022 and 2021 was $ 5 million, $ 0 million , and $ 43 million, respectively, which represents the market value of our common stock on the date the PRUs were released.

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Typically, these PRUs have a three-year vest period.

PRUs granted in fiscal 2022 and 2021 contain a combination of our company’s performance and market conditions whereas our fiscal 2020 PRUs only contain market conditions.

The performance conditions are based on the achievement of specified one-year non-GAAP financial metrics.

The market conditions are based on the achievement of our relative total shareholder return over a two - and three-year period.

PRUs granted in fiscal 2023, 2022 and 2021 contain a combination of our company’s performance and market conditions.

The performance conditions are based on the achievement of specified two-year non-GAAP financial metrics.

The market conditions are based on the achievement of our relative total shareholder return over a three - and five-year period.

Typically, 0 % to 200 % of target shares are eligible to be earned based on the achievement of the performance and market conditions.

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

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

March 31, 2023 April 1, 2022 April 2, 2021

Expected term 3.3 years 3.9 years 2.7 years

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Outstanding as of April 1, 2022 (1)

Granted — $ —

Exercised (1)

Canceled — $ —

Forfeited and expired (1)

Outstanding as of April 1, 2022 (1)

Exercisable as of April 1, 2022 (1)

Outstanding as of March 31, 2023 (1)

Exercisable as of March 31, 2023 (1)

— $ 5.97 3.84 $ 2

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The total intrinsic value of options exercised during fiscal 2023, 2022 and 2021 was $ 1 million, $ 3 million, and $ 18 million, respectively.

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

No options were granted in fiscal 2023, 2022 and 2021.

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

As of April 1, 2022, 38 million shares have been issued under this plan, and 32 million shares remained available for future issuance.

As of March 31, 2023, 39 million shares have been issued under this plan, and 31 million shares remained available for future issuance.

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Shares issued under the ESPP 1 1 1

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Dividend equivalent rights (DERs)

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

Our RSUs and PRUs, except for the $ 4 million unvested RSUs assumed under the Avast Plans, contain DERs that entitles the recipient of an award to receive cash dividend payments when the associated award is released.

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

As of April 1, 2022 and April 2, 2021, current dividends payable related to DER was $ 11 million and $ 12 million, respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 2 million and $ 10 million, respectively, recorded as part of Other long-term liabilities.

As of March 31, 2023 and April 1, 2022, current dividends payable related to DER was $ 5 million and $ 11 million, respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 2 million and $ 2 million, respectively, recorded as part of Other long-term liabilities.

Stock-based award modifications

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(In millions)

April 2, 2021 April 3, 2020

April 2, 2021

Sales and marketing $ 2

6 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 1, 2022 April 2, 2021 April 3, 2020

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Cost of revenues $ 3 $ 2 $ 1

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Income tax benefit for stock-based compensation expense $ ( 20 ) $ ( 11 ) $ ( 18 )

As of April 1, 2022, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 160 million, which will be recognized over an estimated weighted-average amortization period of 2.2 years.

As of March 31, 2023, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 226 million, which will be recognized over an estimated weighted-average amortization period of 2.0 years.

Other employee benefit plans

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

401(k) matching contributions $ 4 $ 3 $ 3

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

Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding during the period using the treasury stock method.

Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding.

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

Our remaining convertible debt was extinguished on August 15, 2022.

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

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

(In millions, except per share amounts) March 31, 2023 April 1, 2022 April 2, 2021

Income (loss) from continuing operations $ 1,349 $ 836 $ 696

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Net income (loss) $ 1,349 $ 836 $ 554

Income (loss) per share - basic:

Net income (loss) per share - basic

Continuing operations $ 2.20 $ 1.44 $ 1.18

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Employee equity awards — 1 —

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.

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

The remaining Convertible Senior Notes received conversion price adjustments.

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

Upon adoption of ASU 2020-06 under the modified retrospective method, we are required to apply the if-converted method to our calculation of diluted earnings per share.

For fiscal 2023, we adjust for the dilutive effect of the maximum number of potential shares to be issued upon settlement of our outstanding convertible debt instruments.

Prior period earnings per share amounts are not restated under the modified retrospective method.

For fiscal 2022, the dilutive effect of our debt instruments is calculated using the treasury stock method, under which our convertible debt instruments generally had 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.

The initial adoption of ASU 2020-06 had a $ 0.01 impact on dilutive earnings per share, with the dilutive shares underlying the convertible debt increasing by $ 18 million shares.

The New 2.0 % Convertible Notes were fully repaid on August 15, 2022.

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

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

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

2.5 % Convertible Senior Notes due April 1, 2022

N/A N/A $ 8.40

2.0 % Convertible Senior Notes due August 15, 2022

N/A N/A $ 10.23

April 1, 2022 April 2, 2021

New 2.5 % Convertible Senior Notes due April 1, 2022

N/A $ 16.77 $ 16.77

New 2.0 % Convertible Senior Notes due August 15, 2022

4 unchanged sentences

The following table summarizes net revenues for our major solutions:

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

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

Identity and information protection 1,127 1,038 994

ID Analytics — — 46

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Consumer security revenues $ 2,029 $ 1,623 $ 1,504

Identity and information protection revenues 1,244 1,127 1,038

Total Cyber Safety revenues 3,273 2,750 2,542

Legacy revenues 65 46 9

Total net revenues (1)

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

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

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

$ 3,338 $ 2,796 $ 2,551

(1) During the year ended March 31, 2023, total net revenues include an unfavorable foreign exchange impact of $ 113 million, consisting of $ 108 million from our consumer security solutions, $ 3 million from our identity and information protection solutions and $ 2 million from our legacy solutions.

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 includes revenues from our Norton 360 Security offerings, Norton Security, Avast Security offerings, Norton Secure VPN, Avira Security and other consumer security and device performance solutions through our direct, partner and small business channels.

Identity and information protection includes revenues from our Norton 360 with LifeLock offerings, LifeLock identity theft protection and other information protection and privacy solutions.

Legacy includes revenues from products or solutions from markets that we have exited and in which we no longer operate, have been discontinued or identified to be discontinued, or remain in maintenance mode as a result of integration and product portfolio decisions.

Geographic information

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

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

(In millions) March 31, 2023 April 1, 2022 April 2, 2021

Americas $ 2,282 $ 1,963 $ 1,827

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Total net revenues (1)

$ 3,338 $ 2,796 $ 2,551

The Americas include U.S., Canada, and Latin America;

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APJ includes Asia Pacific and Japan.

(1) During the year ended March 31, 2023, total net revenues include an unfavorable foreign exchange impact of $ 113 million, consisting of $ 2 million from Americas, $ 68 million from EMEA and $ 43 million from APJ.

Revenues from customers inside the U.S.

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and internationally in various foreign subsidiaries:

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

(In millions) March 31, 2023 April 1, 2022

$ 178 $ 1,220

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

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

Ireland 27 32

(In millions) March 31, 2023 April 1, 2022

Czech Republic 16 —

Germany 13 13

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

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

(In millions) March 31, 2023 April 1, 2022

Czech Republic 12 —

Other countries (1)

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(1) No individual country represented more than 10% of the respective totals.

Significant customers

In fiscal 2022, 2021 and 2020, no customer accounted for 10% or more of our net revenues.

See Note 1 for customers that accounted for over 10% of our net accounts receivable.

Significant customers and channel partners

In fiscal 2023, 2022 and 2021, no individual end-user customer accounted for 10% or more of our net revenues.

See Note 1 for distributors that accounted for over 10% of our total accounts receivable.

Commitments and Contingencies

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

The amount of purchase obligations reflects estimated future payments as of April 1, 2022.

(In millions) April 1, 2022

The amount of purchase obligations reflects estimated future payments as of March 31, 2023.

(In millions) March 31, 2023

Total purchase obligations $ 442

2 unchanged sentences

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

(In millions) April 1, 2022

(In millions) March 31, 2023

Total obligations $ 438

Indemnifications

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, subsidiaries, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of agreements or representations and warranties made by us.

In addition, our bylaws contain indemnification obligations to our directors, officers, employees, and agents, and we have entered into indemnification agreements with our directors and certain of our officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in our bylaws and to provide additional procedural protections.

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, subsidiaries and other parties with respect to certain matters, including, but not limited to, product warranties and losses arising out of our breach of agreements or representations and warranties made by us, including claims alleging that our software infringes on the intellectual property rights of a third party.

regarding the scope of the indemnification set forth in our bylaws and to provide additional procedural protections.

We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers.

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Such indemnification agreements might not be subject to maximum loss clauses.

We monitor the conditions that are subject to indemnification to identify if a loss has occurred.

Historically, we have not incurred material costs as a result of obligations under these agreements, and we have not accrued any material liabilities related to such indemnification obligations in our Consolidated Financial Statements.

In connection with the sale of Veritas and the sale of our Enterprise Security business to Broadcom, we assigned several leases to Veritas Technologies LLC or Broadcom and/or their related subsidiaries.

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.

In connection with the sale of our Enterprise Security business to Broadcom, we assigned several leases to Broadcom or certain of its subsidiaries.

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 Broadcom’s or such subsidiaries’ breach of payment obligations under the terms of such 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, 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.

We monitor the conditions that are subject to indemnification to identify if a loss has occurred.

Litigation contingencies

2 unchanged sentences

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.

As previously disclosed, 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 (Columbia) 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.

We 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.

We 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 found that our Norton Security products and Symantec Endpoint Protection products (the latter of which were sold by us to Broadcom as part of an Asset Purchase Agreement 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.

Columbia did not seek injunctive relief against us.

We intend to cease use of the technology found by the jury to infringe.

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

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

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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.

Post-verdict motions have been filed, and we intend 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 approximately $ 237 million, reflecting the jury award and prejudgment interest, 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.

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however, such loss cannot be reasonably estimated.

SEC Investigation

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

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

Securities and Exchange Commission (SEC) in April 2018.

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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District Court for the Northern District of California.

The lead plaintiff’s consolidated amended complaint alleged that, during a purported class period of May 11, 2017 to August 2, 2018, defendants made false and misleading statements in violation of Sections 10(b) and 20(a), and that certain individuals violated Section 20A, of the Securities Exchange Act.

Defendants filed motions to dismiss, which the Court granted in an order dated June 14, 2019.

Pursuant to that order, plaintiff filed a motion seeking leave to amend and a proposed first amended complaint on July 11, 2019.

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

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

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 closed on July 2, 2021.

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

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.

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, 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 us.

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.

District Courts for the District of Delaware and the Northern District of California, Delaware Chancery Court, and Delaware Superior Court, arising generally out of the same facts and circumstances as alleged in the securities class action and alleging claims for breach of fiduciary duty and related claims;

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

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.

which previously opted out of the securities class action, filed suit under the Exchange Act of 1934, the Arizona Securities Act, the 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.

On February 7, 2023, our Motion to Dismiss was granted in part and denied in part.

The parties have now settled the matter and the action was dismissed with prejudice on April 26, 2023.

The impact of settlement was not material.

Purported shareholder derivative lawsuits have been filed against us and certain of our former officers and current and former directors in the Delaware Court of Chancery ( In re Symantec Corp.

), Northern District of California ( Lee v.

Clark et al., ), and the District of Delaware ( Milliken vs.

These assert generally the same facts and circumstances as alleged in the securities class action and allege claims for breach of fiduciary duty and related claims.

On January 4, 2023, after reaching an agreement on the terms of the proposed settlement, which provides for, among other things, a payment of $ 12 million to the Company by the insurers of the Company’s directors and officers, the parties to the Chancery action filed a Stipulation and Agreement of Settlement, Compromise and Release in that Court, which was approved by the Court on May 4, 2023, over the objection of the Lee and Milliken plaintiffs, and releases all claims in the Chancery, Lee , and Milliken actions, as well as any other claims based on the same operative facts.

The parties in the Milliken action stipulated to a dismissal with prejudice, which was entered by the Court on May 12, 2023.

The Lee action has been stayed pending the settlement hearing in the Chancery Court and we intend to seek dismissal of the Lee action based on the preclusive effect of the approved release in the Chancery action.

A fourth lawsuit filed in the Delaware Superior Court, Kukard v.

Symantec , brings claims derivatively on behalf of our 2008 Employee Stock Purchase Plan.

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

We will continue to incur legal fees in connection with these pending cases, 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.

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the state claims also do not state specific damages amounts.

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

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

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

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

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

That discovery period has now closed.

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

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

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.

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

On January 19, 2023, the Court issued its Findings of Facts and Conclusions of Law in which it found in favor of the United States in part and awarded damages and penalties in the amount of $ 1.3 million.

The Court also found in favor of the State of California in part and awarded penalties in the amount of $ 0.4 million.

The resulting Judgment was filed by the Court on January 20, 2023.

On February 16, 2023, Plaintiffs filed Motions to Amend Judgment to revive the damages claimed at trial.

We have opposed and the motion is now fully briefed before the Court.

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 the 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 the relator to resolve all of the New York claims asserted in the litigation for $ 5 million.

The January 2023 Judgment has been paid, and at this time, our current estimate of the low end of the range of probable estimated losses from this matter was reduced to $ 1.4 million, which we have accrued.

It is possible that the Court could grant Plaintiffs’ Motions to Amend Judgment, in whole or in part, or an appeal of the Court’s Judgment by the Plaintiffs, if brought, could lead to further 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.

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however, such loss cannot be reasonably estimated.

NortonLifeLock

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

§ 934.01, et.

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

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

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

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

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.

Jumpshot Matters

At the end of 2019, Avast came under media scrutiny for provision of Avast customer data to its data analytics subsidiary Jumpshot Inc.

Jumpshot was a subsidiary of Avast with its own management team and technical experts.

Avast announced the decision to terminate its provision of data to, and wind down, Jumpshot on January 30, 2020.

As Avast has previously disclosed, it has been in communication with certain regulators and authorities prior to completion of the Merger, and we will continue cooperating fully in respect of all regulatory enquiries.

On December 23, 2019, the United States Federal Trade Commission (FTC) issued a Civil Investigative Demand (CID) to Avast seeking documents and information related to its privacy practices, including Jumpshot's past use of consumer information that was provided to it by Avast.

Avast responded cooperatively to the CID and related follow-up requests from the FTC.

On October 29, 2021, staff at the FTC sent Avast a draft complaint and proposed settlement order.

We have been engaged in ongoing negotiations with the FTC staff regarding the scope and terms of the proposed settlement.

Any negotiated settlement with the FTC, or absent settlement, any litigation or other legal proceeding between us and the FTC could result in material monetary remedies and/or compliance requirements that impose significant and material cost and resource burdens on us, and may impact our ability to use data in the future.

There can be no assurance that we will be successful in negotiating a favorable settlement or in litigation.

Any remedies or compliance requirements could adversely affect our ability to operate our business or have a materially adverse impact on our financial results.

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

On February 27, 2020, the Czech Office for Personal Data Protection (the Czech DPA) initiated offense proceedings concerning Avast`s practices with respect to Jumpshot, which remain ongoing and we continue to evaluate our options.

In addition, we received a letter and notification before action from Stichting CUIC – Privacy Foundation for Collective Redress, a Dutch foundation (the Foundation).

The Foundation has asserted it represents the interests of Avast customers in the Netherlands whose data was provided to Jumpshot and that by doing so Avast violated the requirements of the GDPR and other provisions in Dutch and European Union privacy and consumer law entitling those customers to damages and other compensation, all of which we dispute.

No specific amount of damages has been alleged and to date, no action has been filed.

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

On December 12, 2022, a putative class action, Lau v.

Gen Digital Inc.

and Jumpshot Inc ., was filed in the Northern District of California alleging violations of the Electronic Communications Privacy Act, California Invasion of Privacy Act, statutory larceny, unfair competition and various common law claims related to the provision of customer data to Jumpshot.

On February 24, 2023, we filed a Motion to Dismiss, which is still pending.

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

We dispute these claims and intend to defend them vigorously.

The outcome of the regulatory proceedings, government enforcement actions and litigation is difficult to predict, and the cost to defend, settle or otherwise resolve these matters may be significant.

Plaintiffs or regulatory agencies or authorities in these matters may seek recovery of large or indeterminate amounts or seek to impose sanctions, including significant monetary penalties, as well as equitable relief.

The monetary and other impact of these litigations, proceedings or actions may remain unknown for substantial periods of time.

Further, an unfavorable resolution of litigations, proceedings or actions could have a material adverse effect on our business, financial condition, and results of operations and cash flows.

The amount of time that will be required to resolve these matters is unpredictable, and these matters may divert management’s attention from the day-to-day operations of our business.

Any future investigations or additional lawsuits may also adversely affect our business, financial condition, results of operations and cash flows.

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

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(2) Financial Statement Schedule

NORTONLIFELOCK INC.

GEN DIGITAL INC.

VALUATION AND QUALIFYING ACCOUNTS

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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

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

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

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

2.04 Amended and Restated Agreement, dated as of July 15, 2022, by and between NortonLifeLock Inc., Nitro Bidco Limited, and Avast plc

8-K 000-17781 2.01 7/18/2022

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

10-Q 000-17781 3.01 11/9/2022

3.02 Amended and Restated Bylaws of Registrant.

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

4.01 Form of Common Stock Certificate.

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

4.01 Description of Securities.

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

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

4.02 of Form 8-K).

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

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

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

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8-K 000-17781 10.02 11/12/2019

4.13 Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.00% Convertible Senior Notes Due 2022).

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

4.11 Second Supplemental Indenture, dated as of September 19, 2022, by and among the Company, each of the Guarantors (as defined therein) listed on the signature pages thereto and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee (including the form of 6.750% Senior Notes due 2027 and form of 7.125% Senior Notes due 2030).

8-K 000-17781 4.01 9/19/2022

4.14 Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.500% Convertible Senior Notes Due 2022).

4.12 Third Supplemental Indenture, dated as of September 19, 2022, by and among the Company, the Guarantors and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee.

8-K 000-17781 4.02 9/19/2022

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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.

10-K 000-17781 10.10 10/26/2018

10.08(*) Form of FY21 Performance Based Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan

10-Q 000-17781 10.03 8/6/2020

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

10-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

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

10.07(*) Form of Director Restricted Stock Unit Award Agreement under Gen Digital Inc.

2013 Equity Incentive Plan

10.08(*) Form of Employee Restricted Stock Unit Award Agreement under Gen Digital Inc.

2013 Equity Incentive Plan

10.09(*) Form of Performance Based Restricted Stock Unit Award Agreement under Gen Digital Inc.

2013 Equity Incentive Plan

10.10(*) Form of Restricted Stock Unit Award Agreement under Avast Limited Long Term Incentive Plan

10.11(*) Form of Performance Stock Unit Award Agreement under Avast Limited Long Term Incentive Plan

10.12 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-Q 000-17781 4.03 8/5/2016

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.13 Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

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10-Q 000-17781 4.01 2/3/2017

10.16 First Amendment, dated December 12, 2016, to the Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

10-Q 000-17781 4.02 2/3/2017

Incorporated by Reference Filed

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Exhibit Filing Date

10.15 First Amendment, dated December 12, 2016, to the Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.

10-Q 000-17781 4.02 2/3/2017

10.17 First Amendment, dated December 12, 2016, to the Credit Agreement, effective as of August 1, 2016, among the Registrant, the lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Term Loan A-1/Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan A-2 Administrative Agent, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Barclays Bank PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Lead Arrangers and Joint Bookrunners in respect of the Term A-2 Facility, Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd.

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

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

10.21(§§) Assignment of Copyright and Other Intellectual Property Rights, by and between Peter Norton and Peter Norton Computing, Inc., dated August 31, 1990.

8 unchanged sentences

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

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

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

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10-Q 000-17781 10.01 7/8/2020

10.28 Credit Agreement, effective as of November 4, 2019, among NortonLifeLock Inc., the issuing banks and lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BofA Securities, Inc., Mizuho Bank, Ltd., Barclays Bank PLC, and The Bank of Nova Scotia, as Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Mizuho Bank, Ltd., Barclays Bank PLC and The Bank of Nova Scotia, as Syndication Agents and and Goldman Sachs Bank USA, HSBC Securities (USA) Inc., MUFG Bank, Ltd., SunTrust Robinson Humphrey, Inc., Citizens Bank, N.A., BMO Capital Markets Corp., BNP Paribas Securities Corp.

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.27 Credit Agreement, effective as of November 4, 2019, among NortonLifeLock Inc., the issuing banks and lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BofA Securities, Inc., Mizuho Bank, Ltd., Barclays Bank PLC, and The Bank of Nova Scotia, as Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Mizuho Bank, Ltd., Barclays Bank PLC and The Bank of Nova Scotia, as Syndication Agents and Goldman Sachs Bank USA, HSBC Securities (USA) Inc., MUFG Bank, Ltd., SunTrust Robinson Humphrey, Inc., Citizens Bank, N.A., BMO Capital Markets Corp., BNP Paribas Securities Corp.

and Santander Bank, N.A., as Co-Documentation Agents.

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

10.34++ Restatement Agreement, dated as of September 12, 2022, by and among the Company, the other Loan Parties thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as term loan administrative agent and collateral agent under the Existing Credit Agreement, Wells Fargo Bank, National Association, as revolver administrative agent under the Existing Credit Agreement, and Bank of America, N.A., in its capacity as Successor Administrative Agent.

8-K 000-17781 10.01 9/12/2022

10.35(*) Avast Limited (formerly Avast plc) 2018 Long Term Incentive Plan

S-8 000-17781 99.01 9/12/2022

10.36(*) Form of Restricted Stock Unit Award Agreements under Avast Long-Term Incentive Plan

10-Q 000-17781 10.03 11/9/2022

Incorporated by Reference Filed

Exhibit Description Form File No.

Exhibit Filing Date

10.37(*) Form of FY23 Restricted Stock Unit Award Agreements for Non-Employee Directors under 2013 Equity Incentive Plan.

10-Q 000-17781 10.04 11/9/2022

10.38(*) Employment Agreement dated September 12, 2022, between AVAST Software s.r.o.

and Ondrej V l cek

10-Q 000-17781 10.05 11/9/2022

10.39(*) Form of Non-Competition and Non-Solicitation Agreement

10-Q 000-17781 10.06 11/9/2022

10.40 Registrant’s Non-Employee Director Compensation Policy

10-Q 000-17781 10.01 8/5/2022

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.

Incorporated by Reference Filed

Exhibit Description Form File No.

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):

101.00 The following financial information from Gen Digital Inc.'s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 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.

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+ Certain portions of this document that constitute confidential information have been redacted in accordance with Regulations S-K, Item 601(b)(10).

++ Certain schedules and similar attachments to the exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5)

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 24th day of May 2023.

NORTONLIFELOCK INC.

GEN DIGITAL INC.

/s/ Vincent Pilette

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Chief Executive Officer and Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vincent Pilette, Natalie Derse, and Bryan Ko, and each or any of them, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities to sign any and all amendments to this report on Form 10-K and any other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be signed in several counterparts.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated below.

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Natalie Derse

/s/ Ondrej Vlcek President and Director May 24, 2023

Dangeard Chairman of the Board May 24, 2023

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Sue Barsamian

/s/ Pavel Baudis Director May 24, 2023

Brandt Director May 24, 2023

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Feld Director May 24, 2023

/s/ Kenneth Y.

Hao Director May 20, 2022

/s/ Emily Heath Director May 24, 2023

2 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