The New
Investor Presentation
February 2017
DISCLAIMER
This presentation contains "forward-looking" statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may
differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited
to, regarding Symantec’s anticipated scale, growth and profitability, Symantec’s operating efficiencies and the anticipated benefits therefrom, the pace of Symantec’s deleveraging plan, Symantec’s
acquisition of LifeLock and the expected benefits of the acquisition to Symantec, including without limitation expected revenue and subscriber growth, product integration, improvements to total
addressable market and value proposition, earnings accretion and cost savings, statements regarding cost reduction, integration and synergy efforts, and the potential benefits to be derived therefrom,
any statements of the anticipated benefits of the Blue Coat acquisition, and the size and growth outlook of the Consumer Security and Enterprise Security businesses, and any statements of assumptions
underlying any of the items mentioned. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual
results could differ materially from our current expectations as a result of many factors, including but not limited to: general economic conditions; the ability of Symantec to successfully execute strategic
plans and maintain customer and partner relationships, including retention rates; lower than anticipated growth of certain market segments; fluctuations in tax rates and currency exchange rates; the
timing and market acceptance of new product releases and upgrades; challenges associated with integration of acquired businesses, including the products and services therefrom; and other risks that
may impact our business are set forth in the section entitled “Risk Factors” of Symantec's Form 10-K for the fiscal year ended April 1, 2016 and the Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2016. We assume no obligation to, and do not currently intend to, update any such forward-looking statements.
Items identified as “pro forma” throughout this presentation are provided for illustrative purposes. The amounts referred to as “pro forma” are calculated as footnoted to enable the reader to better
understand the combined businesses and may not comply with the definition of “pro forma” under U.S. generally accepted accounting principles, or GAAP, or ASC standards. Unless otherwise indicated
herein, all financial measures described as “LTM” are presented as the sum of (x) the applicable financial measure for the twelve months ended December 30, 2016 as adjusted to give pro forma effect to
Symantec’s acquisition of Blue Coat, Inc. as if it had occurred on April 4, 2015, plus (y) the midpoint of preliminary range for the corresponding LifeLock, Inc. financial measure for the year ended
December 31, 2016 as reported in the Form 8-K furnished to Securities and Exchange Commission by LifeLock, Inc. on February 1, 2017.
This presentation includes non-GAAP financial measures. The most directly comparable GAAP information and a reconciliation of the GAAP financial measures to the non-GAAP financial measures are
provided in the Appendix. 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.
2
Copyright © 2017 Symantec Corporation
Experienced Management Team with Proven Operational
Success and Deep Cybersecurity Knowledge
Greg Clark, CEO
•
•
•
•
CEO, Blue Coat
CEO, E2OPEN
CEO, Mincom
Founder, Dascom
(IBM Tivoli Security)
Michael Fey,
President & COO
• President & COO, Blue
Coat
• CTO, Intel Security
• EVP / GM, McAfee
Enterprise Business
• SVP, Opsware Field
Engineering
Nicholas Noviello, CFO
• Distinguished Engineer,
IBM
• Security Systems AT&T
• AT&T Bell Labs
•
•
•
•
Fran Rosch, EVP &
GM of Norton
• EVP, User Protection and
Productivity, Symantec
• VP, Identity and
Authentication Services,
Symantec
• VP, Authentication,
VeriSign
CFO, Blue Coat
CFO, NetApp
CFO, Honeywell (2 Global Strategic Business Units)
Audit, Tax & M&A PwC
Roxane Divol, EVP &
GM Website Security
• Board Member,
Wolverine Worldwide
• Board Member, Global
Fund for Women
• Partner, McKinsey
3
Symantec | At a Glance
175M endpoints
under protection
$5.0B
LTM* non-GAAP revenue1
2,100+ patents
350,000+
3,500+
9 SOCs threat
customers worldwide
R&D engineers
response centers
* See slide 2 (Disclaimer) for a description of this term.
1. LTM pro forma financials calculated as the sum of $4,299mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock
financial metric for the year ended December 31, 2016. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
4
Summary
Global cybersecurity leader protecting enterprises, governments and consumers
• Largest pure-play cybersecurity company in the world,1 with leadership positions in enterprise and consumer cybersecurity
• Integrated Enterprise Cyber Defense platform across web, users, information, and messaging
• Digital Safety Platform protecting consumers’ information, devices and identity
Technology leader across multiple segments, with unmatched breadth of cybersecurity capabilities
• Leader in four of Gartner’s magic quadrants for enterprise cybersecurity2
• Combining the leading identity protection solution (LifeLock) with the leading consumer security suite (Norton)
Attractive growth outlook driven by differentiated capabilities and strong secular trends
• Focused on cybersecurity end market which is expected to benefit from strong secular growth drivers
• Growth trajectory accelerated by Blue Coat and LifeLock acquisitions3
Strong financial profile4
• Operating at scale globally, with LTM* non-GAAP revenue of $5.0bn and adj. EBITDA of $1.6bn
• Large, diversified install base with highly predictable revenue model
Disciplined capital structure
• Conservative financial policies with expectation of rapid deleveraging
* See slide 2 (Disclaimer) for a description of this term.
1. As measured by revenue. Source: Gartner 2015.
2. Source: Gartner Magic Quadrants for Endpoint Prevention, Secure Web Gateway, Data Loss Prevention, and Managed Security Services markets, 2015-2016.
3. LifeLock acquisition expected to close in the 1st calendar quarter of 2017.
4. LTM pro forma revenue calculated as the sum of $4,299mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock
financial metric for the year ended December 31, 2016. LTM pro forma adj. EBITDA calculated as the sum of $1,468mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30,
2016 plus $93mm preliminary estimated LifeLock financial metric for the year ended December 31, 2016. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
5
Symantec Overview
6
Market Leading Security & Safety Platforms
Shared Telemetry Across Major Control Points
Positioned To Help Enterprise Securely Move to the Cloud
Integrated For Faster Detection and Remediation of Threats
Protects Information Across PC’s, Macs and Mobile
Monitors, Alerts and Restores Your Identity
Protects the Connected Home and Family
Enterprise Security Platform
Consumer Digital Safety Platform
 Broad portfolio addressing the over $80bn1 spent annually on enterprise security
 Consumer Digital Safety market is approximately a $10bn2 opportunity
 Symantec is the leader in Gartner Magic Quadrants in DLP, MSS and EPP3
 Norton is the market share leader of paid consumer endpoint security4
 Blue Coat is market share leader and a leader in Gartner Magic Quadrant in SWG 5
 LifeLock is a leading provider of identity protection6
 Over 350k customers including ~90% of Fortune 1000
 Combined customer base of ~50mm consumers
 85%7 of revenue recognized ratably leading to high visibility
 Over 95%8 of revenue recognized ratably leading to high visibility
1.
2.
3.
4.
Source: Gartner 2016.
Source: Company estimates for 2021, Gartner, McKinsey.
Source: Gartner Magic Quadrants for Data Loss Prevention, Managed Security Services and Endpoint Protection
markets 2015-2016.
Source: Gartner 2015.
5.
6.
7.
8.
Source: IDC 2016. Gartner Magic Quadrant for Secure Web Gateway 2015-2016.
Source: Market research, McKinsey analysis.
Based on non-GAAP LTM Enterprise revenue pro forma for the Blue Coat acquisition as of fiscal Q1’17.
Adjusted to include preliminary estimated revenue of LifeLock as of fiscal Q1’17.
7
Symantec’s Transformation
Refocused on
Cybersecurity
Improve Enterprise
Security Business
Acquisition
Acquisition
Divested Security & Storage
Driving operational improvement
following the divestiture of Veritas
Transforming Enterprise Security
with Integrated Cyber Defense Platform
Transforming Consumer Security
to a Digital Safety Platform
• Leadership across information, users,
web, and messaging
• ~50mm combined customer base
• Blue Coat is the market share leader
in Secure Web Gateway
• Leading market share
• $400mm projected net cost
savings
Enabled Symantec to focus on growing
its security business
• Streamlining operational
processes
• Eliminating stranded costs postVeritas divestiture
2
1
• Partnering with SilverLake to
drive financial discipline
3
• $150mm of projected cost synergies
• Continuing partnership with
SilverLake & Bain
Two leading business segments with scale, focused
management teams, and strong financial profiles
(growth, profitability, cash flow)
LTM* Non-GAAP Revenue:
$2.7bn1
• $80mm of projected cost synergies
4
• Bundle Norton & LifeLock products
LTM* Non-GAAP Revenue:
$2.3bn2
* See slide 2 (Disclaimer) for a description of this term. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
1. $2.7 bn LTM pro forma revenue represents $2,688mm standalone Symantec Enterprise business segment (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016.
2. $2.3bn LTM pro forma revenue calculated as the sum of $1,611mm standalone Symantec Consumer business segment for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock financial metric for
the year ended December 31, 2016.
8
Enterprise Security Platform
9
Expanding Enterprise Network
Evolving Attack Surface
Encrypted Network
Multi-Phased and Multi-Staged Attacks
10
Expanding Enterprise Network
Security Stack
Headquarters
Data Center
Regional
Office
11
Expanding Enterprise Network
Security Stack
Headquarters
Data Center
Regional
Office
Roaming
Users
Personal Devices
12
Evolving Attack Surface
Security Stack
Headquarters
Data Center
Regional
Office
Roaming
Users
Personal Devices
13
Encrypted Network
Direct Connect Creates Expanded Networks to Protect
SSL Encryption
Security Stack
Headquarters
Data Center
SSL Encryption
Regional
Office
Roaming
Users
SSL Encryption
Personal Devices
IOT Devices
14
Multi-Phased and Multi-Staged Attacks
SSL Encryption
Security Stack
Headquarters
Data Center
SSL Encryption
Regional
Office
Roaming
Users
SSL Encryption
Personal Devices
IOT Devices
15
Innovation for the Cloud Generation:
Ensuring Safe Cloud Usage
Headquarters
Data Center
Regional
Office
Roaming
Users
Personal Devices
IOT Devices
16
Consumer Digital Safety Platform
Protecting your information, devices, identity and ~50mm consumers every day
Monitors, Alerts and Restores Your Identity
Protects the Connected Home and Family
17
Cybercrime is a Large and Growing Problem For Consumers
689 million people globally
were victims of cybercrime
Every
2 seconds
someone is a victim of identity theft
39% of Americans
experienced cybercrime
in the past year
new account fraud
doubled in 2015
429
million
Total Reported
Identities Exposed
Identity theft has been a top FTC complaint in the
U.S. for the last 15 years, with complaints up 47% to
a combined 27% of all consumer complaints to the
FTC between ID Theft and Imposter Scams
~$10 billion Digital Safety TAM growing at 7% a year
Source: Symantec ISTR, Javeline (2016), FTC (2015), ID Theft Center (2015).
1. CAGR over the next four years. Includes Endpoint Security, Identity Protection, Private VPN and Connected Home Security markets.
1
18
Symantec’s Consumer Security Journey
Consumer Digital Safety Platform
Known and Trusted Brand
Strong Security Expertise
Identity and Fraud Protection
Protecting personal information and identity
across the device, network, and cloud
IoT and Connected Home
Deep Technology
Leadership
Outstanding
Service & Support
Protecting homes and family
Protecting all Consumer Devices
against Malware, Ransomware,
Phishing Scams and Trojans
Protecting online activity and information
across Microsoft, Android, Mac and iOS
devices
19
LifeLock is a Leading Provider of Identity Protection
Compelling Value Proposition, Competitive Differentiation, High Retention, Scale & Growth
Monitor
Alert
Restore
Detect identity
related incidents
Alert members of
suspicious activity
Addresses fraud-related issues
on behalf of victims
ID Analytics proprietary Data Platform powers LifeLock Identity Protection offerings
Constantly increasing the value to members and to the financial and insurance institutions contributing content to the platform
4.4
$147
64
Million
Members in
the U.S.
ARPU1
Net Promoter
Score2
85.5% 6.7 year
Retention
Rate3
Implied
Customer Life
400+
$668mm $93mm $91mm
Enterprises
2016
2016
4
Leveraging
Total Revenue Adj. EBITDA4,6
Data Analytics (up from $587mm5 (up from $72mm5
in 2015)
in 2015)
2016
Free Cash
Flow4,6
(up from $89mm5
in 2015)
Note: This information is based on information provided in the LifeLock public filings. Information is derived from internal analysis by LifeLock’s management.
1. Source: LifeLock SEC filings: the product of 12 multiplied by the monthly average revenue per member reported as of September 30, 2016.
2. Source: NPS® Benchmarks 2015.
3. Source: LifeLock SEC filings: member retention rate is the percentage of members on the last day of the prior year period who remain members on the last day of the current year period.
4. LifeLock SEC filings: represent preliminary estimated year-end December 31, 2016 revenue, adjusted EBITDA, and free cash flow and are calculated based on the mid-point of range provided in the 8-K filed on February 1, 2017.
5. Source: LifeLock SEC filings.
6. Financial metrics are non-GAAP.
20
Value Proposition Has Driven Strong Member Growth and High Retention
Growing Members…with Robust Retention Rate
Subscriber Profile
40+
Years Old
Cumulative Ending Members (mm)1
4.5
4.4mm members in
Q3 2016
4.0
Homeowner’s
Insurance
3.5
3.0
2.5
2.0
1.5
2010
2011
~$80K Income
2012
2013
2014
2016
Member Retention Rate2
Children
87.1%
87.8%
87.7%
86.5%
85.5%
2012
2013
2014
2015
First 3Q 2016
82.7%
3 Credit Cards
2015
Auto Insurance
2011
Note: This information is based on information provided in the LifeLock public filings. Information is derived from internal analysis by LifeLock’s management.
1. Source: LifeLock SEC filings.
2. Source: LifeLock SEC filings: member retention rate is the percentage of members on the last day of the prior year period who remain members on the last day of the current year period.
21
Creating the First Comprehensive Digital Safety Platform
Consumer Digital Safety Platform
• Multi-Device Security
supporting Microsoft,
Mac, Android and iOS
platforms
•
•
•
•
Parental controls
Consumer IoT
Private VPN
Backup
Protects Information Across PC’s, Macs and Mobile
Monitors, Alerts and Restores Your Identity
Protects the Connected Home and Family
Protects and Monitors Your Digital Life
Prevents,
remediatesActivity
malware
Alertsdetects,
You toandMalicious
across PCs, laptops, and mobile
Restores Your Identity When Compromised
Secure multi-device VPN
Protects consumer IoT devices
Identity protection from fraudulent activity*
• Identity Protection
• Credit Reports
• Identity Threat Notification • Service Guarantee
Note: LifeLock does not monitor all transactions at all businesses. No one can prevent all identity theft.
Monitors identity in “dark web”
Provides identity remediation services
22
Transforming Symantec’s Consumer Business
•
Expands Consumer
Market Opportunity
•
Consumer Security
Revenue Growth
Expectations
•
•
•
•
Strong Margin
Expectations
•
•
•
Additional Upside
Opportunities
•
•
Digital Safety Platform protecting your information, devices and identity
Accelerating position in identity protection with acquisition of LifeLock
Combines the leading consumer security and identity protection providers to serve ~50 million
consumers globally
Improving revenue growth
High visibility, subscription revenue model
Estimated $30 million annual cost synergies by end of FY18, expected to increase to
$80 million by end of FY20
Incremental operating income and healthy margins
Meaningful leverage across operations and overhead
Cross-sell identity protection into large Norton US customer base
Optimize retention of LifeLock customer base by adding cyber defense value from Norton
security offerings
International expansion of LifeLock offering
23
Financial Summary
24
Financial Transformation of Symantec
•
•
•
•
•
Pure play cyber security company
$5.0bn LTM* non-GAAP revenue and $1.6bn adj. EBITDA1
Highly recurring and predictable revenue model and industry-leading profitability
Strong and sustainable cash flow generation with significant liquidity and strong balance sheet
$4.4bn of pre-payable or maturing debt; expect to pay down debt rapidly
• Blue Coat acquisition accelerates transformation of enterprise business
• LifeLock acquisition enables transformation of consumer business to growth
• Integrated cyber defense platform of $2.7bn2 in LTM* non-GAAP revenue
• Consumer digital safety platform of $2.3bn2 in LTM* non-GAAP revenue
• Substantial improvement in profitability
• Incremental operating income and healthy margins
• Benefiting from $400mm cost savings and $150mm Blue Coat synergies
• $80mm expected synergies from LifeLock acquisition
* See slide 2 (Disclaimer) for a description of this term.
1. LTM pro forma revenue calculated as the sum of $4,299mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock
financial metric for the year ended December 31, 2016. LTM pro forma adj. EBITDA calculated as the sum of $1,468mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30,
2016 plus $93mm preliminary estimated LifeLock financial metric for the year ended December 31, 2016. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
2. $2.7 bn LTM pro forma revenue represents $2,688mm standalone Symantec Enterprise business segment (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016. $2.3bn LTM pro forma
revenue calculated as the sum of $1,611mm standalone Symantec Consumer business segment for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock financial metric for the year ended December 25
31, 2016.
Transition to Profitable Growth at Scale
Non-GAAP Revenue1 ($mm)
Adj. EBITDA1,2 ($mm)
LTM Pro Forma for
LTM Pro Forma for
$4,967
Standalone
4
Standalone
$1,561
$3,986
4
$4,299
$3,600
$1,548
$1,468
$1,239
3
FY15A
1.
2.
3.
4.
FY16A
LTM
3
3
FY15A
FY16A
LTM
3
Historical amounts in USD. All amounts and adjustments are from continuing operations (excluding the impact of Veritas).
Adj. EBITDA is calculated as Non-GAAP operating income plus depreciation.
LTM pro forma revenue calculated as the sum of $4,299mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30, 2016 plus $668mm preliminary estimated LifeLock
financial metric for the year ended December 31, 2016. LTM pro forma adj. EBITDA calculated as the sum of $1,468mm standalone Symantec (pro forma adjusted for Blue Coat financial metric) for the twelve months ended December 30,
2016 plus $93mm preliminary estimated LifeLock financial metric for the year ended December 31, 2016. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
26
Source: LifeLock SEC filings: represent preliminary estimated year-end December 31, 2016 revenue and adjusted EBITDA are calculated based on mid-point of range provided in the 8-K filed on February 1, 2017.
Symantec + LifeLock: Well Balanced, Highly Predictable Revenue Model
Most Recent Quarter Revenue1,2
Highly Predictable Revenue Model
Enterprise:
•
•
•
45%
55%
•
•
Large install base with 350K+ customers
Strong renewal rates
Significant deferred revenue
Up-sell/cross-sell opportunity
85%3 of revenue ratably recognized
Consumer:
•
•
•
Enterprise
Consumer
•
•
Combined customer base of ~50mm consumers
High visibility, subscription revenue model
Auto-renewals driving strong retention
95%4 of revenue ratably recognized
LifeLock retention rate 85%+5
Source: Symantec SEC filings, 8-K filed on February 1, 2017; please refer to the 10-Q when it is available. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
1. Historical amounts in USD and are on a non-GAAP basis. All amounts are from continuing operations, excluding the impacts of Veritas.
2. Fiscal Q3’17 metrics, pro forma for LifeLock financials as reported by the company (LifeLock SEC filings: represents preliminary estimated quarter-end December 31, 2016 revenue and is calculated as based on mid-point of range
provided in the 8-K filed on February 1, 2017).
3. Based on LTM Enterprise non-GAAP revenue pro forma for the Blue Coat acquisition as of fiscal Q1’17.
4. Adjusted to include preliminary estimated revenue of LifeLock as of fiscal Q1’17.
5. LifeLock SEC filings.
27
Cost Savings & Synergies Initiatives
Standalone Cost Savings
(announced Q4 FY16)
$400 million
Transaction Cost Synergies
$150 million
$80 million
Committed Transaction Cost Synergies
TSA & Stranded Costs
Procurement
Headcount
Sales and
Marketing
G&A and
Facilities
Products
IT
Real Estate Utilization
Cost Savings Initiatives and Blue Coat Integration on Track
28
Source: Company press release, earnings call.
Financial Philosophy
• Committed to strong balance sheet
Balance Sheet
• Expected to have total liquidity of $5.2bn1 at close including $1.0bn under revolving credit facility
Rapid
Deleveraging
• Conservative financial policies with expectation of rapid deleveraging
• Majority of capital return extended / redeployed to fund LifeLock
Capital Allocation
• Maintain $0.30 annual dividend
• Strategy not dependent on future acquisitions, focus on integrating Blue Coat and LifeLock
M&A
• Disciplined approach when evaluating future acquisition opportunities
1.
Adjusted for the portion of the LifeLock equity purchase price, net of LifeLock cash and cash equivalents as of September 30, 2016, estimated to be financed with cash on hand and for estimated transaction fees and expenses. Not adjusted
for the $500M ASR to be completed in Q4’FY17.
29
Capital Structure and Debt Maturity Profile
$mm
Current Debt Maturity Profile
Q3’FY17
PF Q3’FY17
(ex. ASR)
$5,575
$4,2191
Notes
1,750
2,850
Int'l Term Loan A
Pre-payable loans
3,755
3,755
Bonds
Convertible notes
1,750
1,750
Convertible Notes
Total debt
$7,255
$8,355
Net Debt
$1,680
$3,936
Cash and cash equivalents
US Term Loan A
Revolver
$1,000
$380
$1,250
$500
1,800
$750
$600
$45
FY17
$180
$180
FY18
FY19
$400
$180
FY20
FY21
$1,100
$990
FY22
FY23
FY24
FY25
Source: Symantec SEC filings, 8-K filed on February 1, 2017; please refer to the 10-Q when it is available. See appendix for reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
1. Adjusted for the portion of the LifeLock equity purchase price, net of LifeLock cash and cash equivalents as of September 30, 2016, estimated to be financed with cash on hand and for estimated transaction fees and expenses. Not adjusted
for the $500mm ASR to be completed in Q4’FY17.
30
Summary
Global cybersecurity leader protecting enterprises, governments and consumers
Technology leader across multiple segments, with unmatched breadth of
cybersecurity capabilities
Attractive growth outlook driven by differentiated capabilities and strong secular
trends
Strong financial profile and disciplined capital structure
Experienced management team with deep cybersecurity background and vision
31
Appendix
32
Symantec Net Revenue Reconciliation
$mm
Year ended
($mm)
Six months ended
01-Apr-16
03-Apr-15
28-Mar-14
30-Sep-16
02-Oct-15
$3,600
$3,956
$4,183
$1,863
$1,818
Deferred revenue fair value adjustment
–
–
–
36
–
GSA investigation
–
–
25
–
–
EDS & NDI contingency
–
30
–
–
–
$3,600
$3,986
$4,208
$1,899
$1,818
Net revenues
Adjustments:
Non-GAAP net revenues
33
Symantec Adj. EBITDA Reconciliation
$mm
Year ended
($mm)
Six months ended
01-Apr-16
03-Apr-15
28-Mar-14
30-Sep-16
02-Oct-15
(821)
109
91
(3)
78
65
67
73
70
34
1,213
(8)
16
50
69
Depreciation and amortization
299
351
367
190
151
EBITDA
756
519
547
307
332
Stock-based compensation expense
161
131
105
134
80
Other corporate expenses(1)
322
868
897
185
252
Impact of purchase accounting(2)
–
–
–
47
–
Significant litigation charges(3)
–
30
25
–
–
1,239
1,548
1,574
673
664
Income (loss) from continuing operations
Net interest expense
Income tax expense (benefit)
Adjustments:
Adjusted EBITDA
1.
2.
3.
Represent restructuring, separation and transition costs, unallocated corporate charges, acquisition and integration costs, financial sponsor and debt financing fees and debt extinguishment and refinancing costs.
Represents the non-cash effects of acquisition fair value adjustments, including for deferred revenue and inventory.
Represents costs related to certain extraordinary litigation. See Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K..
34
Symantec Pro Forma non-GAAP Revenue Reconciliation
$mm
($mm)
Twelve months ended
1-Apr-16
Nine months ended
30-Dec-16
01-Jan-16
Twelve months ended
30-Dec-16
Consumer Security net revenues
1,670
1,205
1,264
1,611
Enterprise Security net revenues
2,528
1,922
1,888
2,562
157
104
135
126
2,685
2,025
2,023
2,688
Adjustments:
Deferred revenue fair value adjustment(1)
Non-GAAP Enterprise Security revenue
1.
Reflects deferred revenue fair value adjustments related to the Blue Coat Acquisition by us on August 1, 2016 and the acquisition of Blue Coat by affiliates of Bain Capital Investors, LLC on May 22, 2015.
35
Symantec Pro Forma Adj. EBITDA Reconciliation
$mm
($mm)
Loss from continuing operations
Twelve months ended
1-Apr-16
Nine months ended
30-Dec-16
01-Jan-16
Twelve months ended
30-Dec-16
1,270
160
162
1,268
177
153
132
198
1,051
(12)
(38)
1,077
Depreciation and amortization
617
437
464
590
EBITDA
575
418
396
598
Stock-based compensation expense
309
264
226
347
Other corporate expenses(1)
398
301
365
334
Impact of purchase accounting(2)
185
128
164
149
–
40
–
40
1,467
1,152
1,150
1,468
Net interest expense
Income tax expense (benefit)
Adjustments:
Significant litigation charges(3)
Adjusted EBITDA
1.
2.
3.
Represents restructuring, separation and transition costs, unallocated corporate charges, acquisition and integration costs, financial sponsor and debt financing fees, debt extinguishment and refinancing costs.
Represents the non-cash effects of acquisition fair value adjustments, including for deferred revenue and inventory.
Represents costs related to certain extraordinary litigation. See Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K.
36
LifeLock non-GAAP Reconciliation
$mm
CY15
CY16
$587
$667 - $668
(51)
14 - 15
Depreciation and amortization
19
22
Stock-based compensation
27
34
Income tax (benefit) expense
(33)
8
Legal reserves and settlement
99
6
Expenses related to the FTC litigation
10
4
Acquisition related expenses
3
5
$72
$92 - $93
Net cash provided by (used in) operating activities
$(4)
$77 - $78
Acquisition of property and equipment
(14)
(14)
Legal settlement
100
21
7
6
$89.5
$90 - $91
Revenue
Net income (loss)
Adjusted EBITDA
Expenses paid for the FTC litigation
Adjusted FCF
37