What changed in this filing

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Item 1. Financial Statements

2024-02-05 compared with 2023-11-07 · 193 added, 174 removed, 693 unchanged (35% of the section changed)

3 unchanged sentences

(Unaudited, in millions, except par value per share amounts)

September 29, 2023 March 31, 2023

December 29, 2023 March 31, 2023

Current assets:

30 unchanged sentences

3,000 shares authorized;

641 and 640 shares issued and outstanding as of September 29, 2023 and March 31, 2023, respectively

637 and 640 shares issued and outstanding as of December 29, 2023 and March 31, 2023, respectively

Accumulated other comprehensive income (loss) 19 ( 15 )

6 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended Six Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Net revenues $ 951 $ 936 $ 2,845 $ 2,391

23 unchanged sentences

(Unaudited, in millions)

Three Months Ended Six Months Ended

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Net income (loss) $ 144 $ 165 $ 482 $ 434

1 unchanged sentence

Foreign currency translation gain (loss) 32 ( 13 ) 28 ( 24 )

Net unrealized gain (loss) on derivative instruments 6 — 25 —

Net unrealized gain (loss) on interest rate derivative instruments ( 19 ) — 6 —

Other comprehensive income (loss), net of taxes 13 ( 13 ) 34 ( 24 )

4 unchanged sentences

(Unaudited, in millions, except share amounts)

Three months ended September 29, 2023

Three months ended December 29, 2023

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

Shares Amount

Balance as of June 30, 2023 639 $ 2,697 $ 36 $ ( 396 ) $ 2,337

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 247 ) $ 2,414

Net income (loss) — — — 144 144

Other comprehensive income (loss), net of taxes — — 13 — 13

Common stock issued under employee stock incentive plans 2 6 — — 6

Shares withheld for taxes related to vesting of stock units — ( 6 ) — — ( 6 )

Repurchases of common stock ( 4 ) ( 100 ) — — ( 100 )

Cash dividends declared ($ 0.125 per share of common stock) and dividend equivalents accrued

1 unchanged sentence

Stock-based compensation — 35 — — 35

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 247 ) $ 2,414

Six months ended September 29, 2023 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Balance as of December 29, 2023 637 $ 2,502 $ 19 $ ( 103 ) $ 2,418

Nine months ended December 29, 2023 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

8 unchanged sentences

Stock-based compensation — 107 — — 107

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 247 ) $ 2,414

Balance as of December 29, 2023 637 $ 2,502 $ 19 $ ( 103 ) $ 2,418

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(Unaudited, in millions, except share amounts)

Three months ended September 30, 2022 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Three Months Ended December 30, 2022 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of July 1, 2022 571 $ 1,479 $ ( 44 ) $ ( 1,734 ) $ ( 299 )

Balance as of September 30, 2022 661 $ 3,378 $ ( 15 ) $ ( 1,665 ) $ 1,698

Net income (loss) — — — 165 165

1 unchanged sentence

Common stock issued under employee stock incentive plans 1 — — — —

Shares withheld for taxes related to vesting of stock units

— ( 1 ) — — ( 1 )

Repurchases of common stock ( 23 ) ( 500 ) — — ( 500 )

2 unchanged sentences

Stock-based compensation — 42 — — 42

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

Merger consideration 94 2,141 — — 2,141

Balance as of September 30, 2022 661 $ 3,378 $ ( 15 ) $ ( 1,665 ) $ 1,698

Six months ended September 30, 2022

Balance as of December 30, 2022 639 $ 2,838 $ ( 28 ) $ ( 1,500 ) $ 1,310

Nine months ended December 30, 2022

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

14 unchanged sentences

Merger consideration 94 2,141 — — 2,141

Balance as of September 30, 2022 661 $ 3,378 $ ( 15 ) $ ( 1,665 ) $ 1,698

Balance as of December 30, 2022 639 $ 2,838 $ ( 28 ) $ ( 1,500 ) $ 1,310

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3 unchanged sentences

(Unaudited, in millions)

Six Months Ended

September 29, 2023 September 30, 2022

Nine Months Ended

December 29, 2023 December 30, 2022

OPERATING ACTIVITIES:

46 unchanged sentences

On September 12, 2022, we completed our acquisition of Avast, plc (Avast).

Avast has been included in our consolidated results of operations since the acquisition date.

Avast has been included in our Condensed Consolidated Statements of Operations since the acquisition date.

See Note 4 for further information about this business combination.

3 unchanged sentences

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

The results of operations for the three and six months ended September 29, 2023 are not necessarily indicative of the results expected for the entire fiscal year.

The results of operations for the three and nine months ended December 29, 2023 are not necessarily indicative of the results expected for the entire fiscal year.

Fiscal calendar

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

Unless otherwise stated, references to three and six month periods in this report relate to fiscal periods ended September 29, 2023 and September 30, 2022.

The three and six months ended September 29, 2023 and September 30, 2022 each consisted of 13 and 26 weeks, respectively.

Unless otherwise stated, references to three and nine month periods in this report relate to fiscal periods ended December 29, 2023 and December 30, 2022.

The three and nine months ended December 29, 2023 and December 30, 2022 each consisted of 13 and 39 weeks, respectively.

Our 2024 fiscal year consists of 52 weeks and ends on March 29, 2024.

8 unchanged sentences

Significant accounting policies

With the exception of those discussed in Note 2, there have been no material changes to our significant accounting policies as of and for the three and six months ended September 29, 2023, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Management periodically re-evaluates and revises its significant accounting policies and disclosure as the business evolves or circumstances change.

We have updated a component of our revenue recognition disclosure to reflect the ongoing revenue growth and mix changes post-acquisition of Avast, as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, below.

We sell products and services directly to end-users and through multiple partner distribution channels.

Revenue recognition begins when we transfer control of the promised products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for such products or services.

Our customer definition aligns with the control principles as outlined under Accounting Standards Codification (ASC) 606.

Performance periods are generally one year or less, and payments are generally collected up front.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Our customers are primarily users of our products and solutions who sign up on our e-commerce platform and have a direct billing relationship with us.

However, our customers, also include users who do not have a direct billing relationship with us but register on our e-commerce site through our e-commerce partners.

When referring to e-commerce partners, we are referring to those that are our fulfillment and payment processors who perform primarily administrative functions, such as collecting payment and remitting any required sales tax to governmental authorities.

Revenue from these e-commerce partners is recognized on a gross basis, excluding fees paid to e-commerce partners.

With the exception of those discussed in Note 2 and our revised revenue recognition disclosure, there have been no material changes to our significant accounting policies as of and for the three and nine months ended December 29, 2023, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Recent Accounting Standards

Recently adopted authoritative guidance

There have been no material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

Recently issued authoritative guidance not yet adopted

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

In November 2023, the Financial Accounting Standards Board (FASB) issued new guidance to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

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

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

In December 2023, the FASB issued new guidance to update income tax disclosure requirements, requiring disaggregated information about an entity’s effective tax rate reconciliation as well as income taxes paid.

This is effective for fiscal years beginning after December 15, 2024.

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

There have been no other material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

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 Condensed Consolidated Financial Statements and disclosures.

6 unchanged sentences

The remaining land and building in Dublin, Ireland, remains as held for sale.

Subsequent to September 29, 2023, on October 12, 2023, we completed the sale of certain land and buildings in Tucson, Arizona, which were previously classified as held for sale as of September 29, 2023 and March 31, 2023, for cash consideration of $ 12 million, net of selling costs.

We recognized a gain on sale of $ 5 million during the third quarter of fiscal 2024.

During the third quarter of fiscal 2024, we completed the sale of certain land and buildings in Tucson, Arizona, which were previously classified as held for sale as of March 31, 2023, for cash consideration of $ 12 million, net of selling costs.

We recognized a gain on sale of $ 5 million.

We have taken into consideration the current real estate values and demand and continue to execute pla ns to sell the remaining property.

As of September 29, 2023, the property is classified as held for sale.

During the three and six months ended September 29, 2023 , there were no impairments because the fair value less costs to sell either equals or exceeds its carrying value.

As of December 29, 2023, the property is classified as held for sale.

During the three and nine months ended December 29, 2023 , there were no impairments because the fair value less costs to sell either equals or exceeds its carrying value.

Business Combinations

23 unchanged sentences

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

During the three and six months ended September 29, 2023, we recorded measurement period adjustments resulting in a net decrease to goodwill of $ 14 million, resulting from updated information regarding deferred tax liabilities, which resulted in a decrease of $ 14 million of long-term deferred tax liabilities.

During the nine months ended December 29, 2023, we recorded measurement period adjustments resulting in a net decrease to goodwill of $ 14 million, resulting from updated information regarding deferred tax liabilities, which resulted in a decrease of $ 14 million of long-term deferred tax liabilities.

Unaudited pro forma information

The following unaudited pro forma financial information represents the combined historical results for the three and six months ended September 30, 2022, as if the acquisition had been completed on April 3, 2021, the first day of fiscal 2022.

The following unaudited pro forma financial information represents the combined historical results for the three and nine months ended December 30, 2022, as if the acquisition 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 acquisition, and acquisition-related transaction costs, and the income tax effect of the other pro forma adjustments.

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 acquisition, 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 acquisition.

The following table summarizes the unaudited pro forma financial information:

September 30, 2022

(In millions) Three Months Ended Six Months Ended

December 30, 2022

(In millions) Three Months Ended Nine Months Ended

Net revenues $ 936 $ 2,857

2 unchanged sentences

Contract liabilities

During the three and six months ended September 29, 2023, we recognized $ 693 million and $ 1,206 million from the contract liabilities balances as of June 30, 2023 and March 31, 2023, respectively.

During the three and six months ended September 30, 2022, we recognized $ 502 million and $ 875 million from the contract liabilities balances as of July 1, 2022 and April 1, 2022, respectively.

During the three and nine months ended December 29, 2023, we recognized $ 688 million and $ 1,536 million from the contract liabilities balances as of September 29, 2023 and March 31, 2023, respectively.

During the three and nine months ended December 30, 2022, we recognized $ 686 million and $ 1,116 million from the contract liabilities balances as of September 30, 2022 and April 1, 2022, respectively.

Remaining performance obligations

Remaining performance obligations represent contract 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 September 29, 2023, we had $ 1,148 million of remaining performance obligations, excluding customer deposit liabilities of $ 524 million, of which we expect to recognize approximately 94 % as revenue over the next 12 months.

As of December 29, 2023, we had $ 1,147 million of remaining performance obligations, excluding customer deposit liabilities of $ 597 million, of which we expect to recognize approximately 93 % as revenue over the next 12 months.

See Note 17 for tabular disclosures of disaggregated revenue by solution and geographic region.

5 unchanged sentences

Translation adjustments

Balance as of September 29, 2023 $ 10,199

Balance as of December 29, 2023 $ 10,231

Intangible assets, net

September 29, 2023 March 31, 2023

December 29, 2023 March 31, 2023

(In millions) Gross

10 unchanged sentences

Amortization expense for purchased intangible assets is summarized below:

Three Months Ended Six Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Customer relationships and other $ 61 $ 61 $ 183 $ 111 Operating expenses

1 unchanged sentence

Total $ 118 $ 118 $ 355 $ 189

As of September 29, 2023, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

As of December 29, 2023, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions)

4 unchanged sentences

Cash and cash equivalents:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Cash $ 372 $ 576

2 unchanged sentences

Accounts receivable, net:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Accounts receivable $ 162 $ 169

2 unchanged sentences

Other current assets:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Prepaid expenses $ 131 $ 122

3 unchanged sentences

Property and equipment, net:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Land $ 13 $ 13

8 unchanged sentences

Other long-term assets:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Non-marketable equity investments $ 176 $ 176

4 unchanged sentences

Short-term contract liabilities:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Deferred revenue $ 1,069 $ 1,153

2 unchanged sentences

Other current liabilities:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Income taxes payable $ 194 $ 172

5 unchanged sentences

Other long-term liabilities:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Long-term accrued legal fees $ 592 $ —

1 unchanged sentence

Long-term income taxes payable:

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Deemed repatriation tax payable $ 139 $ 310

2 unchanged sentences

Total long-term income taxes payable $ 1,210 $ 820

As of September 29, 2023, total deferred income taxes changed by $ 984 million, which primarily relates to goodwill of $ 592 million, intangibles of $ 112 million, and other accruals and reserves not currently tax deductible of $ 192 million, and current year unrecognized tax benefits and penalties, which increased by $ 450 million and $ 90 million, respectively.

As of December 29, 2023, total deferred income taxes changed by $ 975 million, which primarily relates to goodwill of $ 592 million, intangibles of $ 104 million, and other accruals and reserves not currently tax deductible of $ 156 million, and current year unrecognized tax benefits and penalties, which increased by $ 436 million and $ 87 million, respectively.

As of December 29, 2023, income tax receivable and prepaid income taxes increased $ 702 million, accompanied by an offsetting decrease in long-term income tax receivable and prepaid taxes by $ 702 million due to the timing of refund processing related to the filing of our fiscal 2023 tax return.

Other income (expense), net:

Three Months Ended Six Months Ended

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Interest income $ 5 $ 5 $ 17 $ 10

1 unchanged sentence

Gain (loss) on early extinguishment of debt — — — ( 9 )

Gain on sale of properties — — 4 —

Gain (loss) on sale of properties

Other 2 4 3 10

1 unchanged sentence

Supplemental cash flow information:

Six Months Ended

(In millions) September 29, 2023 September 30, 2022

Nine Months Ended

(In millions) December 29, 2023 December 30, 2022

Income taxes paid, net of refunds $ 395 $ 378

3 unchanged sentences

Operating lease assets obtained in exchange for operating lease liabilities $ — $ 23

Reduction of operating lease assets as a result of lease terminations and modifications $ ( 7 ) $ 30

Reduction (Increase) of operating lease assets as a result of lease terminations and modifications

Non-cash investing and financing activities:

12 unchanged sentences

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

September 29, 2023 March 31, 2023

December 29, 2023 March 31, 2023

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

1 unchanged sentence

Interest rate swaps (1)

24 — 24 — — —

Total $ 124 $ 118 $ 6 $ 174 $ 174 $ —

2 unchanged sentences

Non-marketable equity investments

As of September 29, 2023 and March 31, 2023, the carrying value of our non-marketable equity investments was $ 176 million.

As of December 29, 2023 and March 31, 2023, the carrying value of our non-marketable equity investments was $ 176 million.

Current and long-term debt

As of September 29, 2023 and March 31, 2023, the total fair value of our current and long-term fixed rate debt was $ 2,550 million and $ 2,593 million, respectively.

As of December 29, 2023 and March 31, 2023, the total fair value of our current and long-term fixed rate debt was $ 2,639 million and $ 2,593 million, respectively.

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

The fair values of all our debt obligations were based on Level 2 inputs.

We lease certain of our facilities, equipment and data center co-locations under operating leases that expire on various dates through fiscal 2030.

We lease certain facilities, equipment and data center co-locations under operating leases that expire on various dates through fiscal 2030.

Our leases generally have terms that range from 1 year to 8 years for our facilities, 1 year to 3 years for equipment and 1 year to 5 years for data center co-locations.

1 unchanged sentence

The following summarizes our lease costs:

Three Months Ended Six Months Ended

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Operating lease costs $ 3 $ 5 $ 9 $ 12

3 unchanged sentences

Other information related to our operating leases was as follows:

September 29, 2023 March 31, 2023

December 29, 2023 March 31, 2023

Weighted-average remaining lease term 4.0 years 2.8 years

1 unchanged sentence

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

As of September 29, 2023, the maturities of our lease liabilities by fiscal year are as follows:

As of December 29, 2023, the maturities of our lease liabilities by fiscal year are as follows:

(In millions)

5 unchanged sentences

(In millions, except percentages)

September 29, 2023 March 31, 2023 Effective

December 29, 2023 March 31, 2023 Effective

Interest Rate

19 unchanged sentences

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

September 29, 2023 March 31, 2023

December 29, 2023 March 31, 2023

Term A Facility due September 12, 2027 6.96 % 6.66 %

Term B Facility due September 12, 2029 7.46 % 6.91 %

As of September 29, 2023, the future contractual maturities of debt by fiscal year are as follows:

As of December 29, 2023, the future contractual maturities of debt by fiscal year are as follows:

(In millions)

15 unchanged sentences

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

As of September 29, 2023, there were no borrowings outstanding under our Revolving Facility;

As of December 29, 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.

2 unchanged sentences

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 October 13, 2023 and October 27, 2023, we made voluntary prepayments of $ 100 million each, pursuant to Section 2.05(a) of the Credit Agreement dated September 12, 2022.

The prepayments were applied exclusively to the Term B Facility.

Debt covenant compliance

3 unchanged sentences

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 September 29, 2023 , we were in compliance with all debt covenants.

As of December 29, 2023 , we were in compliance with all debt covenants.

On February 9, 2017, we issued $ 1,100 million aggregate principal amount of our 5.0 % Senior Notes due April 15, 2025 (the 5.0 % Senior Notes).

8 unchanged sentences

The following table sets forth total interest expense recognized related to our Convertible Senior Notes:

September 30, 2022

(In millions) Three Months Ended Six Months Ended

Nine Months Ended

(In millions) December 30, 2022

Contractual interest expense $ 4

2 unchanged sentences

(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.

During the three and six months ended September 29, 2023, we did no t recognize any interest expense related to our Convertible Senior Notes as they were settled during the second quarter of fiscal year 2023.

During the three and nine months ended December 29, 2023 and three months ended December 30, 2022, we did no t recognize any interest expense related to our Convertible Senior Notes as they were settled during the second quarter of fiscal year 2023.

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.

16 unchanged sentences

Summary of derivative instruments

The following table summarizes our outstanding derivative instruments as of September 29, 2023 and March 31, 2023:

The following table summarizes our outstanding derivative instruments as of December 29, 2023 and March 31, 2023:

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

(In millions) September 29, 2023 March 31, 2023 September 29, 2023 March 31, 2023 September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023 December 29, 2023 March 31, 2023 December 29, 2023 March 31, 2023

Foreign exchange contracts not designated as hedging instrument (1)

$ 306 $ 291 $ — $ — $ — $ —

Interest rate swap contracts designed as cash flow hedge 1,000 1,000 24 1 — 2

Interest rate swap contracts designated as cash flow hedge

1,000 1,000 6 1 — 2

Total $ 1,306 $ 1,291 $ 6 $ 1 $ — $ 2

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of September 29, 2023 and March 31, 2023.

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of December 29, 2023 and March 31, 2023.

The following table summarizes the effect of our cash flow hedges on AOCI during the periods indicated:

September 29, 2023

(In millions) Three Months Ended Six Months Ended

Interest rate swap contracts designed as cash flow hedge $ ( 10 ) $ ( 32 )

During the three and six months ended September 30, 2022, there was no effect of our cash flow hedges on AOCI as interest rate swaps were not effective until the fourth quarter of fiscal 2023.

December 29, 2023

(In millions) Three Months Ended Nine Months Ended

Interest rate swap contracts designated as cash flow hedge

$ 15 $ ( 17 )

During the three and nine months ended December 30, 2022, there was no effect of our cash flow hedges on AOCI as interest rate swaps were not effective until the fourth quarter of fiscal 2023.

The related gain (loss) recognized in our Condensed Consolidated Statements of Operations, with presentation location was as follows:

Three Months Ended Six Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Foreign exchange contracts not designated as hedging instrument $ 3 $ 2 $ ( 6 ) $ ( 8 ) Other income (expense), net

Interest rate swap contracts designed as cash flow hedge 4 — 7 — Interest expense

Interest rate swap contracts designated as cash flow hedge

4 — 11 — Interest expense

Total $ 7 $ 2 $ 5 $ ( 8 )

As of September 29, 2023, we estimate that $ 16 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

As of December 29, 2023, we estimate that $ 10 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

Restructuring and Other Costs

7 unchanged sentences

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 following the completion of acquisition.

We expect that we will incur total costs up to $ 150 million following the completion of the acquisition.

These actions are expected to be completed by the end of fiscal 2024.

As of September 29, 2023, we have incurred total costs of $ 102 million related to the September 2022 Plan.

As of December 29, 2023, we have incurred total costs of $ 104 million related to the September 2022 Plan.

Our activities and liabilities related to our September 2022 Plan are presented in the table below:

(in millions) Liability Balance as of March 31, 2023 Costs, Net of Adjustments Cash Payments Non-Cash Items Liability Balance as of September 29, 2023

(in millions) Liability Balance as of March 31, 2023 Costs, Net of Adjustments Cash Payments Non-Cash Items Liability Balance as of December 29, 2023

Severance and termination benefit costs $ 7 $ 21 $ ( 23 ) $ — $ 5

1 unchanged sentence

Stock-based compensation charges — 1 — ( 1 ) —

Asset write-offs and impairments — 1 — ( 1 ) —

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

3 unchanged sentences

Our restructuring and other costs are presented in the table below:

Three Months Ended Six Months Ended

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Severance and termination benefit costs $ ( 1 ) $ 31 $ 21 $ 32

1 unchanged sentence

Stock-based compensation charges — 8 1 8

Asset write-offs and impairments 1 2 1 2

Other exit and disposal costs ( 1 ) 2 8 12

1 unchanged sentence

Occasionally, we incur costs related to past restructuring plans.

These charges were immaterial for the three and six months ended September 29, 2023.

These charges were immaterial for the three and nine months ended December 29, 2023.

The following table summarizes our effective tax rate for the periods presented:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

(In millions, except percentages)

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Income (loss) before income taxes $ 181 $ 216 $ 244 $ 640

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Effective tax rate 20 % 24 % ( 98 ) % 32 %

Our effective tax rate for the three and six months ended September 29, 2023, differs from the federal statutory income tax rate primarily due to tax benefits related to the set up and write-off of deferred tax items resulting from an internal restructuring, partially offset by state taxes, changes in unrecognized tax benefits and related interest and penalties, and the U.S.

Our effective tax rate for the three and nine months ended December 29, 2023, differs from the federal statutory income tax rate primarily due to tax benefits related to the set up and write-off of deferred tax items resulting from an internal restructuring, partially offset by state taxes, changes in unrecognized tax benefits and related interest and penalties, and the U.S.

taxation on foreign earnings.

Our effective tax rate for the three and six months ended September 30, 2022, differs from the federal statutory income tax rate primarily due to state taxes and the U.S.

taxation on foreign earnings, and certain items this quarter including the tax impacts of internal restructuring, deductibility of transaction costs from our acquisition with Avast, and the limitations of foreign taxes due to the increase of interest expense.

Our effective tax rate for the three and nine months ended December 30, 2022, differs from the federal statutory income tax rate primarily due to state taxes and the U.S.

taxation on foreign earnings, and certain discrete items including the tax impacts of internal restructuring, deductibility of transaction costs from the Merger, and the limitations of foreign taxes due to the increase of interest expense.

In the second quarter of fiscal 2024, as part of the Avast integration plan, which geographically realigned and simplified our business, we undertook a legal entity and operational restructuring.

As part of that process, we distributed certain assets within the legal entity operating structure and as a result, we recorded a net tax benefit of $ 268 million.

Differences between the final outcome and recorded amounts will impact the provision for income taxes in the period in which such a determination is made and could have a material impact on our Condensed Consolidated Balance Sheet and Statement of Operations in future years.

As part of that process, we distributed certain assets within the legal entity operating structure and as a result, we recorded a net tax benefit of $ 285 million during the nine months ended December 29, 2023.

Stockholders' Equity

On November 7, 2023, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in December 2023.

On February 1, 2024, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in March 2024.

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

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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 September 29, 2023, we had $ 829 million remaining under the authorization to be completed in future periods with no expiration date.

No shares were repurchased during the three months ended September 29, 2023.

The following table summarizes activity related to this program during six months ended September 29, 2023 and September 30, 2022:

Six Months Ended

As of December 29, 2023, we had $ 729 million remaining under the authorization to be completed in future periods with no expiration date.

The following table summarizes activity related to this program during three and nine months ended December 29, 2023 and December 30, 2022:

Three Months Ended Nine Months Ended

(In millions, except per share amounts)

September 29, 2023 September 30, 2022

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Number of shares repurchased 5 23 7 40

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Other comprehensive income (loss), net of taxes 28 6 34

Balance as of September 29, 2023 $ ( 19 ) $ 25 $ 6

Balance as of December 29, 2023 $ 13 $ 6 $ 19

Stock-Based Compensation

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The following table sets forth the stock-based compensation expense recognized for our equity incentive plans:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

(In millions)

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Cost of revenues $ 1 $ 1 $ 3 $ 3

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Income tax benefit for stock-based compensation expense

As of September 29, 2023, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 265 million, which will be recognized over an estimated weighted-average amortization period of 2.1 years.

$ ( 4 ) $ ( 5 ) $ ( 13 ) $ ( 13 )

As of December 29, 2023, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 225 million, which will be recognized over an estimated weighted-average amortization period of 1.9 years.

The following table summarizes additional information related to our stock-based awards:

Six Months Ended

(In millions, except per grant data) September 29, 2023 September 30, 2022

Nine Months Ended

(In millions, except per grant data) December 29, 2023 December 30, 2022

Restricted stock units (RSUs):

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

As of September 29, 2023 and March 31, 2023, current dividends payable related to DER was $ 4 million and $ 5 million, respectively, recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 2 million, recorded as part of Other long-term liabilities.

As of December 29, 2023 and March 31, 2023, current dividends payable related to DER was $ 4 million and $ 5 million, respectively, recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 3 million and $ 2 million, respectively, recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Net Income Per Share

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

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

(In millions, except per share amounts)

September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Net income (loss) $ 144 $ 165 $ 482 $ 434

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We operate as one reportable segment.

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

Our Chief Operating Decision Maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis to evaluate company performance and to allocate and prioritize resources.

The following table summarizes net revenues for our major solutions:

Three Months Ended Six Months Ended

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Consumer security revenues $ 602 $ 590 $ 1,804 $ 1,428

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$ 951 $ 936 $ 2,845 $ 2,391

(1) During the three months ended September 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 7 million from our consumer security solutions.

During the six months ended September 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 16 million from our consumer security solutions.

(1) During the three months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 2 million from our consumer security solutions.

During the nine months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 18 million from our consumer security solutions.

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

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The following table represents net revenues by geographic area at the end of each period presented:

Three Months Ended Six Months Ended

(In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Americas $ 621 $ 622 $ 1,857 $ 1,659

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APJ includes Asia Pacific and Japan.

(1) During the three months ended September 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 7 million, consisting of $ 6 million from EMEA and $ 1 million from APJ.

During the six months ended September 29, 2023, total net revenues includes an unfavorable foreign exchange impact of $ 16 million, consisting of $ 13 million from EMEA and $ 3 million from APJ.

(1) During the three months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 2 million primarily from APJ.

During the nine months ended December 29, 2023, total net revenues includes an unfavorable foreign exchange impact of $ 18 million, consisting of $ 13 million from EMEA and $ 5 million from APJ.

Revenues from customers inside the U.S.

were $ 562 million and $ 1,127 million during the three and six months ended September 29, 2023, respectively, and $ 493 million and $ 972 million during the three and six months ended September 30, 2022 ,respectively.

were $ 563 million and $ 1,690 million during the three and nine months ended December 29, 2023, respectively, and $ 537 million and $ 1,509 million during the three and nine months ended December 30, 2022, respectively.

No other individual country accounted for more than 10% of revenues.

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and internationally in various foreign subsidiaries.

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

International 417 572

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

(In millions) September 29, 2023 March 31, 2023

(In millions) December 29, 2023 March 31, 2023

Czech Republic 7 16

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

Our operating lease assets by geographic area, based on the physical location of the asset, at the end of each period presented, are as follows:

(In millions) September 29, 2023 March 31, 2023

Czech Republic 7 12

Other countries (1)

Total operating lease assets $ 39 $ 43

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

Significant customers and channel partners

No individual, end-user customer accounted for 10% or more of our net revenues during the six months ended September 29, 2023 and September 30, 2022.

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

September 29, 2023 March 31, 2023

Distributor A 15 % 13 %

Distributor B 17 % 14 %

Significant customers and e-commerce partners

No individual, end-user customer accounted for 10% or more of our net revenues during the nine months ended December 29, 2023 and December 30, 2022.

E-commerce partners that accounted for over 10% of our total billed and unbilled accounts receivable were as follows:

December 29, 2023 March 31, 2023

E-commerce partner A

E-commerce partner B

Commitments and Contingencies

32 unchanged sentences

We have complied with the court’s order and submitted a stipulation regarding the final calculations of all outstanding interest, royalties and attorneys’ fees.

We have posted the required surety bond, and notice our appeal.

At this time, our current estimate of the low end of the range of probable estimated losses from this matter is approximately $ 576 million, which we have accrued.

We have posted the required surety bond and have noticed our appeal of the judgement to the Federal Circuit Court of Appeals.

At this time, our current estimate of the low end of the range of probable estimated losses from this matter is approximately $ 580 million, which we have accrued and recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets .

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

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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 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.

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

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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.

Purported shareholder derivative lawsuits were 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.

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

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

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

All three shareholder derivative lawsuits are now resolved.

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 the Kukard matter, including expenses for the reimbursement of legal fees of present and former directors under indemnification obligations.

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

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

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

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

The parties have reached a settlement in principle, subject to Court approval.

The impact of settlement was not material.

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

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

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

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

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

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On September 16, 2014, the states of California and Florida intervened in the lawsuit, and the state of New York notified the Court that it would not intervene.

On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific damages amount.

On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific

damages amount.

On October 17, 2014, California and Florida combined their claims with those of the DOJ and the relator on behalf of New York in an Omnibus Complaint, and a First Amended Omnibus Complaint was filed on October 8, 2015;

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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.

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.

On January 16, 2024, the Court granted in part and denied in part the United States’ Motion to Amend and awarded $ 53 million in damages and penalties.

The State of California’s Motion to Amend was denied.

The January 2023 judgment amount has been paid, and at this time, our current estimate of the low end of the range of probable estimated losses from this matter is $ 53 million, which we have accrued and recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets.

We are assessing our appeal options.

It is possible an appeal of the Court’s amended 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.

Additionally, 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.

Jumpshot Matters

6 unchanged sentences

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.

We have been engaged in ongoing negotiations with the FTC staff and have reached an agreement on the terms of a settlement resolving this investigation, subject to the Commission’s approval, the terms of which are not expected to have a material impact on current or ongoing operations.

This includes a provision for a non-material amount of monetary relief, which has been accrued.

Absent a final 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 reaching a favorable settlement or in litigation.

Any remedies or compliance requirements resulting from a litigation or other legal proceedings could adversely affect our ability to operate our business or have a materially adverse impact on our financial results.

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.

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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.

The Complaint was dismissed in part, with leave to amend, and Plaintiffs have now filed a First Amended Complaint which we intend to move to dismiss.

The complaint was dismissed in part, with leave to amend, and plaintiffs have now filed a First Amended Complaint which we have again moved to dismiss.

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.

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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.

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.

2 unchanged sentences

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

Subsequent Events

On January 26, 2024, we received an $ 899 million income tax refund related to the filing of our fiscal 2023 tax return, which was recorded net of allowances as part of Other current assets in the Condensed Consolidated Balance Sheets as of December 29, 2023.

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-Q

Item 1. Financial Statements