- Revenue within guided range; Operating
margin and EPS at the high end of guided range
- Enterprise Security continues its
growth trajectory, adjusting for currency; Consumer Security
margins expand year-over-year to 55%
- Board of Directors authorizes $500
million accelerated share repurchase
Symantec Corp. (NASDAQ:SYMC) today reported the results of its
second quarter of fiscal year 2016, ended October 2, 2015.
Michael A. Brown, president and CEO, said, “With a
security-focused Symantec, we continue to increase our momentum as
the global leader in cybersecurity. We drove growth in Enterprise
Security for the second consecutive quarter, partly due to a 10
percent revenue increase in Information Protection solutions
including another record quarter for DLP. To set the stage for
continued progress, we will deliver more than a dozen
new products and services over the next three
quarters.”
Thomas Seifert, executive vice president and CFO, said,
“This was an important quarter for Symantec. On October 3, we
completed the operational separation as planned, and Symantec and
Veritas are now running as standalone businesses. The close of the
Veritas sale is on track to occur by the end of Q3 and we have
received board authorization to accelerate the return of $2 billion
to shareholders, beginning with a $500 million accelerated share
repurchase.”
Results for the Second Quarter of Fiscal Year 2016 (Dollars
in millions, except EPS)
2Q16
2Q15
Reported Y/YChange
FX AdjustedY/Y Change
GAAP
Revenue $1,498 $1,617 (7%) (1%)
Operating Margin 13.6% 21.5% (790) bps
(600) bps
Net Income $156 $244
(36%) N/A
Deferred Revenue $3,271
$3,417 (4%) 0%
EPS (Diluted) $0.23
$0.35 (34%) N/A
CFFO $134
$173 (23%) N/A
Non-GAAP
Operating Margin
28.1% 28.7% (60) bps 50 bps
Net Income
$301 $332 (9%) N/A
EPS (Diluted)
$0.44 $0.48 (8%) N/A
Third Quarter and Fourth Quarter of Fiscal Year 2016 Guidance
(Dollars in millions, except EPS and FX rate)
New Security Company Guidance
3Q16
FX Adj. Y/YGrowth
4Q16
FX Adj. Y/YGrowth
GAAP
Revenue $890 - $920 (5%) - (2%) $885 -
$915
(4%) - (1%)
Enterprise Security $480 - $500 (2%) - 2% $480
- $500 (1%) - 3% Consumer Security $410 - $420
(8%) - (6%) $405 - $415 (8%) - (5%) Information
Management
--
--
--
--
Operating Margin 8.5% - 10.5%
17.5% - 19.5%
EPS (Diluted)* $0.22 -
$0.25 $0.16 - $0.19
Non-GAAP
Operating Margin 25.5% - 27.5%
26.5% - 28.5%
EPS (Diluted)
$0.22 - $0.25 $0.24 - $0.27
Tax Rate 29.5% 29.5%
Share Count 665 million
653 million
FX Rate (€/$) $1.13
$1.13
*Note: The impact from our information management business is
included in 3Q16 GAAP EPS, but excluded from 3Q16 non-GAAP EPS. In
addition, we are currently unable to estimate any potential gain on
the proposed sale of our information management business and it has
therefore been excluded from our guidance.
Symantec's Board of Directors has declared a quarterly cash
dividend of $0.15 per common share to be paid on December 16, 2015
to all shareholders of record as of the close of business on
November 23, 2015. The ex-dividend date will be November 19,
2015.
Conference Call
Symantec has scheduled a conference call for 8:30 a.m. ET/5:30
a.m. PT today to discuss its second quarter of fiscal year 2016
results, ended October 2, 2015 and to review guidance. Interested
parties may access the conference call on the Internet at
http://www.symantec.com/invest. To listen to the live call, please
go to the website at least 15 minutes early to register, download
and install any necessary audio software. A replay and our prepared
remarks will be available on the investor relations home page
shortly after the call is completed.
About Symantec
Symantec Corporation (NASDAQ: SYMC) is the global leader in
cybersecurity. Operating one of the world’s largest cyber
intelligence networks, we see more threats, and protect more
customers from the next generation of attacks. We help companies,
governments and individuals secure their most important data
wherever it lives.
Symantec, the Symantec Logo and the Checkmark logo are
trademarks or registered trademarks of Symantec Corporation or its
affiliates in the U.S. and other countries. Other names may be
trademarks of their respective owners.
FORWARD-LOOKING STATEMENTS: This press release contains
statements regarding our projected financial and business results,
capital allocation plans and our proposed divestiture of our
Veritas business, which may be considered forward-looking within
the meaning of the U.S. federal securities laws. These include
statements regarding the anticipated closing of the Veritas sale
and product development plans, as well as projections of future
revenue, operating margin and earnings per share, amortization of
acquisition-related intangibles, stock-based compensation, and
restructuring, separation and transition charges. These statements
are subject to known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity,
performance or achievements to differ materially from results
expressed or implied in this press release. Such risk factors
include those related to: the satisfaction of the conditions to
closing of the Veritas divestiture; general economic conditions;
risks related to the proposed divestiture of Veritas; maintaining
customer and partner relationships; the anticipated growth of
certain market segments, particularly with regard to security and
storage; the competitive environment in the software industry;
changes to operating systems and product strategy by vendors of
operating systems; fluctuations in currency exchange rates; the
timing and market acceptance of new product releases and upgrades;
the successful development of new products and integration of
acquired businesses, and the degree to which these products and
businesses gain market acceptance. Actual results may differ
materially from those contained in the forward-looking statements
in this press release. We assume no obligation, and do not intend,
to update these forward-looking statements as a result of future
events or developments. Additional information concerning these and
other risks factors is contained in the Risk Factors sections of
our Form 10-K for the year ended April 3, 2015.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations
have undergone significant change due to the impact of litigation
accruals, stock-based compensation, restructuring, transition, and
separation matters, charges related to the amortization of
intangible assets, and certain other income and expense items that
management considers unrelated to Symantec’s core operations. To
help our readers understand our past financial performance and our
future results, we supplement the financial results that we provide
in accordance with generally accepted accounting principles, or
GAAP, with non-GAAP financial measures. The method we use to
produce non-GAAP results is not computed according to GAAP and may
differ from the methods used by other companies. Non-GAAP financial
measures are supplemental, should not be considered a substitute
for financial information presented in accordance with GAAP and
should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. Our management team
uses these non-GAAP financial measures in assessing Symantec’s
operating results, as well as when planning, forecasting and
analyzing future periods. Investors are encouraged to review the
reconciliation of our non-GAAP financial measures to the comparable
GAAP results, which is attached to our quarterly earnings release
and which can be found, along with other financial information, on
the investor relations page of our website at:
http://www.symantec.com/invest.
SYMANTEC CORPORATION
Condensed Consolidated Balance Sheets (Dollars in
millions, unaudited)
October 2,2015
April 3,2015 (1)
ASSETS Current
assets: Cash and cash equivalents $ 3,097 $ 2,874 Short-term
investments 260 1,017 Accounts receivable, net 738 993 Deferred
income taxes 207 152 Deferred commissions 112 131 Other current
assets 250 255
Total current assets 4,664
5,422 Property and equipment, net 1,262
1,205 Intangible assets, net 572 628 Goodwill 5,847 5,847 Long-term
deferred commissions 14 26 Other long-term assets 101
105
Total assets $ 12,460
$ 13,233
LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 326 $ 213 Accrued compensation and benefits 289
398 Deferred revenue 2,766 3,109 Current portion of long-term debt
- 350 Other current liabilities 348
383
Total current liabilities
3,729 4,453
Long-term debt 1,740 1,746 Long-term deferred revenue 505 555
Long-term deferred tax liabilities 381 308 Long-term income taxes
payable 132 134 Other long-term obligations 81
102
Total liabilities
6,568 7,298
Total stockholders' equity 5,892
5,935
Total liabilities and stockholders'
equity $ 12,460 $ 13,233
(1) Derived from
audited consolidated financial statements.
SYMANTEC CORPORATION Condensed Consolidated
Statements of Income (In millions, except per share data,
unaudited)
Year-Over-Year
Three Months Ended
Growth Rate
October 2,2015
October 3,2014
Actual
ConstantCurrency
(1)
Net revenue: Content, subscription, and
maintenance $ 1,333 $ 1,445 -8 % -2 % License 165
172
-4 % 2 %
Total net
revenue 1,498 1,617
-7 %
-1 %
Cost of revenue: Content,
subscription, and maintenance 225 240 License 29 25 Amortization of
intangible assets 10 13
Total cost of revenue 264
278
-5 % 0 %
Gross
profit 1,234 1,339
-8 %
-2 %
Operating expenses: Sales and
marketing 516 565 Research and development 293 276 General and
administrative 94 93 Amortization of intangible assets 17 27
Restructuring, separation, and transition 111
30
Total operating
expenses 1,031 991
4 %
8 %
Operating income 203
348
-42 % -29 % Interest
income 3 3 Interest expense (19 ) (19 ) Other income (expense), net
2 1
Income before income taxes 189
333
-43 % N/A
Provision for income taxes 33
89
Net income $ 156
$ 244
-36 % N/A
Net income per share -- basic $ 0.23 $ 0.35 Net income per
share -- diluted $ 0.23 $ 0.35 Weighted-average shares
outstanding -- basic 682 690 Weighted-average shares
outstanding -- diluted 687 696 Cash dividends declared per
common share $ 0.15
$ 0.15
(1) Management refers to growth rates adjusting for currency so
that the business results can be viewed without the impact of
fluctuations in foreign currency exchange rates. We compare the
percentage change in the results from one period to another period
in order to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than United States dollars are converted into United States dollars
at the actual exchange rates in effect during the respective prior
periods.
SYMANTEC CORPORATION
Condensed Consolidated Statements of Income (In millions,
except per share data, unaudited)
Year-Over-Year Six Months
Ended Growth Rate
(1)
October 2,2015
October 3,2014
Actual
ConstantCurrency
(2)
Net revenue: Content, subscription, and maintenance $
2,685 $ 3,019 -11 % -5 % License 312
333 -6 %
1 %
Total net revenue 2,997
3,352
-11 % -4 %
Cost of
revenue: Content, subscription, and maintenance 444 509 License
51 52 Amortization of intangible assets 23
26
Total cost of revenue
518 587
-12 % -7 %
Gross profit
2,479 2,765
-10 % -4 %
Operating expenses: Sales and marketing 1,037 1,209 Research
and development 577 584 General and administrative 190 196
Amortization of intangible assets 36 56 Restructuring, separation,
and transition 235 50
Total operating expenses 2,075
2,095 -1 %
3 %
Operating income 404
670
-40 % -24 % Interest income 6 6
Interest expense (39 ) (40 ) Other income (expense), net
(9 ) 2
Income before income
taxes 362 638
-43 % N/A
Provision for income taxes 89
158
Net income $ 273 $ 480
-43 % N/A
Net income per share -- basic $ 0.40 $ 0.69 Net income per
share -- diluted $ 0.40 $ 0.69 Weighted-average shares
outstanding -- basic 682 691 Weighted-average shares
outstanding -- diluted 689 697 Cash dividends declared per
common share $ 0.30 $ 0.30
(1) We have a 52/53 week fiscal accounting year. The six months
ended October 2, 2015 consisted of 26 weeks, whereas the six months
ended October 3, 2014 consisted of 27 weeks.
(2) Management refers to growth rates adjusting for currency so
that the business results can be viewed without the impact of
fluctuations in foreign currency exchange rates. We compare the
percentage change in the results from one period to another period
in order to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than United States dollars are converted into United States dollars
at the actual exchange rates in effect during the respective prior
periods.
SYMANTEC CORPORATION Condensed Consolidated
Statements of Cash Flows (Dollars in millions,
unaudited)
Six Months Ended
October 2,2015
October 3,2014
OPERATING ACTIVITIES: Net income $ 273 $ 480 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation 143 145 Amortization of intangible assets 59 82
Amortization of debt issuance costs and discounts 2 2 Stock-based
compensation expense 133 89 Deferred income taxes 17 30 Excess
income tax benefit from the exercise of stock options (6 ) (5 )
Other 9 3 Net change in assets and liabilities, excluding effects
of acquisitions: Accounts receivable, net 255 268 Deferred
commissions 30 (3 ) Accounts payable 50 (77 ) Accrued compensation
and benefits (107 ) (50 ) Deferred revenue (397 ) (374 ) Income
taxes payable (22 ) (101 ) Other assets 12 33 Other liabilities
(17 ) (56 )
Net cash
provided by operating activities 434
466
INVESTING
ACTIVITIES: Purchases of property and equipment (149 ) (199 )
Payments for acquisitions, net of cash acquired (4 ) (19 )
Purchases of short-term investments (327 ) (1,071 ) Proceeds from
maturities of short-term investments 1,019 411 Proceeds from sales
of short-term investments 76
156
Net cash provided by (used in)
investing activities
615
(722 )
FINANCING ACTIVITIES: Repayments of debt and other
obligations (367 ) (18 ) Net proceeds from sales of common stock
under employee stock benefit plans 44 66 Excess income tax benefit
from the exercise of stock options 6 5 Tax payments related to
restricted stock units (37 ) (34 ) Dividends and dividend
equivalents paid (210 ) (207 ) Repurchases of common stock (250 )
(250 ) Proceeds from other financing, net -
34
Net cash used in financing
activities (814 )
(404 ) Effect of exchange rate fluctuations on cash and cash
equivalents (12 ) (75 )
Change in cash and cash equivalents 223 (735 ) Beginning cash and
cash equivalents 2,874
3,707 Ending cash and cash equivalents $ 3,097
$ 2,972
SYMANTEC
CORPORATION Reconciliation of Selected GAAP Measures to
Non-GAAP Measures (1) (In millions, except per share
data, unaudited) Year-Over-Year Three Months
Ended Non-GAAP
Growth Rate October 2, 2015
October 3, 2014
Constant
Currency (2) GAAP
Adj Non-GAAP
GAAP
Adj Non-GAAP
Actual Net
revenue $ 1,498 $ -
$ 1,498
$ 1,617 $ -
$ 1,617
-7 % -1 %
Gross profit: $ 1,234
$ 18 $ 1,252 $ 1,339 $ 19 $ 1,358 -8 % -2 % Stock-based
compensation 8 6 Amortization of intangible assets
10
13
Gross margin % 82.4 %
1.2 % 83.6 %
82.8 %
1.2 % 84.0 %
-40 bps -20 bps
Operating expenses: $ 1,031 $ 200 $ 831 $ 991 $ 97 $ 894 -7
% -3 % Stock-based compensation 72 40 Amortization of intangible
assets 17 27 Restructuring, separation, and transition
111
30
Operating expenses as a % of revenue 68.8 %
-13.3 %
55.5 % 61.3
% -6.0 %
55.3 % 20 bps
-80 bps
Operating income $ 203
$ 218 $ 421
$ 348
$ 116 $ 464
-9 % 0 %
Operating margin % 13.6 %
14.5 % 28.1 %
21.5 %
7.2 % 28.7 %
-60 bps 50 bps
Net income: $ 156 $ 145 $ 301 $ 244 $ 88 $ 332 -9 % N/A
Gross profit adjustment 18 19 Operating expense adjustment 200 97
Income tax effect on above items
(73 )
(28
)
Diluted net income per
share $ 0.23 $ 0.21
$ 0.44
$ 0.35 $ 0.13
$ 0.48
-8 % N/A
Diluted
weighted-average shares outstanding 687
-
687
696 -
696
-1 % N/A
(1) This presentation includes non-GAAP measures. Non-GAAP
financial measures are supplemental and should not be considered a
substitute for financial information presented in accordance with
GAAP. For a detailed explanation of these non-GAAP measures, please
see Appendix A.
(2) Management refers to growth rates adjusting for currency so
that the business results can be viewed without the impact of
fluctuations in foreign currency exchange rates. We compare the
percentage change in the results from one period to another period
in order to provide a framework for assessing how our underlying
businesses performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than United States dollars are converted into United States dollars
at the actual exchange rates in effect during the respective prior
periods.
SYMANTEC CORPORATION Revenue and Deferred Revenue
Detail (Dollars in millions, unaudited)
Three Months Ended October 2, 2015
October 3, 2014 GAAP Revenue
Content,
subscription, and maintenance $ 1,333 $ 1,445 License
165 172
Total Revenue $ 1,498
$ 1,617
GAAP Revenue - Y/Y
Growth Rate
Content, subscription, and maintenance -8 % -4 %
License -4 %
25 %
Total Y/Y Growth Rate
-7 % -1 %
GAAP
Revenue - Y/Y Growth Rate in Constant Currency (1)
Content, subscription, and maintenance -2 % -3 % License
2 % 25 %
Total Y/Y Growth Rate in Constant Currency (1)
-1 % -1 %
GAAP Revenue by Segment
Consumer Security $ 420 $ 485
Enterprise Security 485 511 Information Management
593 621
GAAP Revenue by Segment - Y/Y Growth Rate
Consumer
Security -13 % -6 % Enterprise Security -5 % -1 % Information
Management -5 %
3 %
GAAP Revenue by Segment - Y/Y Growth Rate in
Constant Currency (1)
Consumer Security -8 % -6 % Enterprise
Security 1 % -1 % Information Management
2 % 3 %
GAAP
Revenue by Geography
International $ 717 $ 847 U.S. 781 770
Americas (U.S., Latin America, Canada) 866 884 EMEA 387 455 Asia
Pacific & Japan 245
278
GAAP Revenue by Geography
- Y/Y Growth Rate
International -15 % 0 % U.S. 1 % -2 % Americas
(U.S., Latin America, Canada) -2 % -1 % EMEA -15 % 0 % Asia Pacific
& Japan -12 %
-4 %
GAAP Revenue by Geography - Y/Y Growth Rate
in Constant Currency (1)
International -4 % 1 % U.S. 1 %
-2 % Americas (U.S., Latin America, Canada) -2 % -1 % EMEA 0 % 0 %
Asia Pacific & Japan -1 %
-3 %
GAAP Deferred Revenue $ 3,271
$ 3,417
GAAP Deferred Revenue
- Y/Y Growth Rate -4 %
-4 %
GAAP Deferred Revenue - Y/Y
Growth Rate in Constant Currency (1)
0 % -1 %
(1) Management refers to growth rates adjusting for currency so
that the business results can be viewed without the impact of
fluctuations in foreign currency exchange rates. We compare the
percentage change in the results from one period to another period
in order to provide a framework for assessing how our underlying
businesses performed. To exclude the effects of foreign currency
rate fluctuations, current and comparative prior period results for
entities reporting in currencies other than United States dollars
are converted into United States dollars at the actual exchange
rates in effect during the respective prior periods (or, in the
case of deferred revenue, converted into United States dollars at
the actual exchange rate in effect at the end of the prior
period).
SYMANTEC CORPORATION
Operating Margin by Segment Detail (Dollars in millions,
unaudited)
Three Months Ended
October 2, 2015 October 3, 2014
Operating Income by Segment
Consumer Security $ 232 $ 257
Enterprise Security 50 85 Information Management
139 122
Total Operating Income by Segment 421
464 Reconciling Items:
Stock-based compensation 80 46 Amortization of intangible assets 27
40 Restructuring, separation, and transition
111 30
Total
Consolidated Operating Income $ 203
$ 348
Operating Margin by
Segment
Consumer Security 55 % 53 % Enterprise Security 10 % 17 %
Information Management 23 %
20 %
SYMANTEC CORPORATION
Guidance and Reconciliation of GAAP to
Non-GAAP Operating Margin and Earnings Per Share (1)
(Dollars in millions, except per share
data, unaudited)
Third Quarter Fiscal Year
2016
Revenue Guidance
(2)
Three Months Ended January 1,
2016
Year-Over-Year Growth
Rate
Range Actual Constant
Currency (3) Revenue range
$890 - $920 (8.2%) - (5.2%) (5.0%) - (1.8%)
Three Months Ended January 1,
2016
Year-Over-Year
Increase
Operating Margin Guidance and Reconciliation (2)
Range Actual Constant
Currency (3) GAAP operating margin 8.5% - 10.5%
--
--
Add back: Stock-based compensation 5.0% Other non-GAAP adjustments
12.0% Non-GAAP operating margin
25.5% - 27.5%
--
--
Three Months Ended January 1,
2016
Year-Over-Year Growth
Rate
Earnings Per Share Guidance and Reconciliation (4)
Range Actual GAAP
diluted earnings per share range $0.22 - $0.25
--
Add back: Stock-based compensation, net of taxes $0.05 Other
non-GAAP adjustments, net of taxes $0.11 Discontinued Operations,
net of taxes ($0.16) Non-GAAP diluted earnings per
share range $0.22 - $0.25
--
Fourth Quarter Fiscal Year
2016
Revenue Guidance (2)
Three Months Ended April 1,
2016
Year-Over-Year Growth
Rate (5)
Range Actual Constant
Currency (3) Revenue range
$885 - $915 (4.7%) - (1.5%) (4.3%) - (1.1%)
Three Months Ended April 1,
2016
Year-Over-Year
Increase
Operating Margin Guidance and Reconciliation (2)
Range Actual Constant
Currency (3) GAAP operating margin 17.5% - 19.5%
--
--
Add back: Stock-based compensation 5.0% Other non-GAAP adjustments
4.0% Non-GAAP operating margin
26.5% - 28.5%
--
--
Three Months Ended April 1,
2016
Year-Over-Year Growth
Rate
Earnings Per Share Guidance and Reconciliation (2)
Range Actual GAAP
diluted earnings per share range $0.16 - $0.19
--
Add back: Stock-based compensation, net of taxes $0.05 Other
non-GAAP adjustments, net of taxes $0.03 Non-GAAP diluted
earnings per share range $0.24 - $0.27
--
(1) This presentation includes non-GAAP
measures. Non-GAAP financial measures are supplemental and should
not be considered a substitute for financial information presented
in accordance with GAAP. For a detailed explanation of these
non-GAAP measures, please see Appendix A. (2) These figures
represent guidance for our expected continuing operations and
include our security business, which consists of Enterprise
Security and Consumer Security segments. (3) Management
refers to growth rates adjusting for currency fluctuations in
foreign currency exchange rates so that the business results can be
viewed without the impact of these fluctuations. We compare the
percent change of the results from one period to another period in
order to provide a consistent framework for assessing how our
underlying businesses performed. To exclude the effects of foreign
currency rate fluctuations, current and comparative prior period
results for entities reporting in currencies other than United
States dollars are converted into United States dollars at the
actual exchange rates in effect during the respective prior
periods. (4) The impact from our information management
business is included in GAAP EPS, but excluded from non-GAAP EPS.
In addition, we are currently unable to estimate any potential gain
on the proposed sale of our information management business and it
has therefore been excluded from our guidance. (5) Growth
rates are calculated using fourth quarter fiscal year 2015 non-GAAP
revenue.
SYMANTEC CORPORATIONExplanation of
Non-GAAP MeasuresAppendix A
Objective of non-GAAP measures: We
believe our presentation of non-GAAP financial measures, when taken
together with corresponding GAAP financial measures, provides
meaningful supplemental information regarding the Company’s
operating performance for the reasons discussed below. Our
management team uses these non-GAAP financial measures in assessing
the Company’s operating results, as well as when planning,
forecasting and analyzing future periods. We believe that these
non-GAAP financial measures also facilitate comparisons of the
Company’s performance to prior periods and to our peers and that
investors benefit from an understanding of the non-GAAP financial
measures. Non-GAAP financial measures are supplemental and should
not be considered a substitute for financial information presented
in accordance with GAAP.
Stock-based compensation: Consists
of expenses for employee stock options, restricted stock units,
performance based awards and our employee stock purchase plan
determined in accordance with the authoritative guidance on
stock-based compensation. When evaluating the performance of our
individual business units and developing short- and long-term
plans, we do not consider stock-based compensation charges. Our
management team is held accountable for cash-based compensation,
but we believe that management is limited in its ability to project
the impact of stock-based compensation and accordingly is not held
accountable for its impact on our operating results. In addition,
for comparability purposes, we believe it is useful to provide a
non-GAAP financial measure that excludes stock-based compensation
in order to better understand the long-term performance of our core
business and to facilitate the comparison of our results to the
results of our peer companies. Furthermore, unlike cash-based
compensation, the value of stock-based compensation is determined
using complex formulas that incorporate factors, such as market
volatility, that are beyond our control.
Three Months Ended
October 2,
2015
October 3,
2014
Cost of revenue $ 8 $ 6 Sales and marketing 29 18 Research and
development 30 15 General and administrative 13 7 Total
stock-based compensation $ 80 $ 46
Amortization of intangible assets:
When conducting internal development of intangible assets,
accounting rules require that we expense the costs as incurred. In
the case of acquired businesses, however, we are required to
allocate a portion of the purchase price to the accounting value
assigned to intangible assets acquired and amortize this amount
over the estimated useful lives of the acquired intangible assets.
The acquired company, in most cases, has itself previously expensed
the costs incurred to develop the acquired intangible assets, and
the purchase price allocated to these assets is not necessarily
reflective of the cost we would incur in developing the intangible
asset. We eliminate these amortization charges from our non-GAAP
operating results to provide better comparability of pre- and
post-acquisition operating results and comparability to results of
businesses utilizing internally developed intangible assets.
Restructuring, separation, and
transition: We have engaged in various restructuring,
separation, and transition activities over the past several years
that have resulted in costs associated with severance, facilities,
transition, and other related costs. Separation and other related
costs consist of consulting and disentanglement costs incurred to
separate our security and information management businesses into
standalone companies, as well as costs to prune selected product
lines that do not fit either the Company’s growth or margin
objectives. Transition and other related costs consist of
consulting charges associated with the implementation of new
Enterprise Resource Planning systems. Each restructuring,
separation, and transition activity has been a discrete event based
on a unique set of business objectives or circumstances, and each
has differed from the others in terms of its operational
implementation, business impact and scope. We do not engage in
restructuring, separation, or transition activities in the ordinary
course of business. While our operations previously benefited from
the employees and facilities covered by our various restructuring
and separation charges, these employees and facilities have
benefited different parts of our business in different ways, and
the amount of these charges has varied significantly from period to
period. We believe that it is important to understand these charges
and we believe that investors benefit from excluding these charges
from our operating results to facilitate a more meaningful
evaluation of current operating performance and comparisons to past
operating performance.
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version on businesswire.com: http://www.businesswire.com/news/home/20151105005558/en/
MEDIA CONTACT:Symantec Corp.Noah Edwardsen,
424-750-7574noah_edwardsen@symantec.comorINVESTOR
CONTACT:Symantec Corp.Jonathan Doros,
650-527-5523jonathan_doros@symantec.com
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