Gen Digital (GEN) 10-K risk factor changes: FY2017 vs FY2016

These transitions have involved [removed: significant turnover in] [added: changes to] management and other key personnel, [removed: changes] [added: shifts] in our strategic direction and, more recently, [added: changes to our corporate structure as a result of] the divestiture of [removed: Veritas.][added: Veritas and the acquisition of Blue Coat.]

Transitions of [removed: the magnitude we have experienced and are experiencing] [added: these kind] can be disruptive, [added: can] result in [added: the] loss of institutional focus and employee morale and make the execution of business strategies more difficult.

We are also focused on addressing dynamic and accelerating market trends, such as the continued decline in the PC market, the market shifts towards mobility, the [added: continued] transition towards cloud-based solutions and architectural shifts in the provision of security, all of which has made it more difficult for us to compete effectively and requires us to improve our product and service offerings.

| • | Obtaining sufficient licenses to technology and technical access from operating system software vendors on reasonable terms to enable the development and deployment of interoperable products, including source code [added: licenses for certain products with deep technical integration into operating systems.] |

We operate in intensely competitive markets that experience rapid technological developments, changes in industry [removed: standards, changes in customer requirements and frequent new product introductions and improvements.]

[removed: We face growing competition from network equipment, computer hardware manufacturers, large operating system providers and other technology companies that] [added: Many of these competitors] are increasingly developing and incorporating into their products data protection software that competes at some levels with our product offerings.

Fluctuations in our quarterly financial results have affected the [added: trading] price of our [removed: common stock] [added: outstanding securities] in the past and could affect [removed: our stock] [added: the trading] price [added: of outstanding securities] in the future.

If our quarterly financial results or our predictions of future financial results fail to meet our expectations or the expectations of securities analysts and investors, [removed: our stock] [added: the trading] price [added: of our outstanding securities] could be negatively affected.

| • | [removed: Reduced] [added: Fluctuations in] demand for any of our products and services; |

| • | How well we execute our strategy and operating plans and the impact of changes in our business [added: operations or business] model that could result in significant restructuring charges; |

| • | The number, severity, and timing of threat outbreaks (e.g. worms, viruses, malware, [removed: ransomeware] [added: ransomware] and other malicious threats); |

Any of the foregoing factors could cause the trading price of our [removed: common stock] [added: outstanding securities] to fluctuate significantly.

We are [added: making significant investments in, and] devoting significant resources to develop and [removed: deploy] [added: deploy,] our own SaaS [removed: strategies.][added: strategies, including our acquisition of Blue Coat in August 2016.]

Additionally, the increasing prevalence of cloud and SaaS delivery models offered by us and our competitors may unfavorably impact pricing in both our on-premise enterprise software business and our cloud business, as well as overall demand for our on-premise [added: software product and service offerings, which could reduce our revenues and profitability.]

[removed: Some of] [added: We or] our competitors may bundle products for promotional purposes or as a long-term [added: go-to-market or] pricing strategy or provide guarantees of prices and product implementations.

If we do not adapt our pricing models to reflect changes in customer use of our products or changes in customer [removed: demand, our revenues could decrease.]

The personal information we [removed: collect, use, store or disclose (collectively, “Process”), including from employees and customers,] [added: process] is subject to an increasing number of federal, state, local and foreign laws regarding privacy and data security, as well as contractual commitments.

While we continue to focus on managing our costs and expenses, over the long term, we also intend to invest significantly in [removed: research and development activities as we focus on organic growth through internal innovation in each of our business segments.]

We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive [removed: position.][added: position, and that the level of these investments will increase in future periods as the Blue Coat acquisition has expanded our focus areas.]

In response to changes in industry and market [removed: conditions and in connection with the recent divestiture of Veritas,] [added: conditions,] we may be required to strategically reallocate our resources and consider restructuring, disposing of or otherwise exiting businesses.

Although we endeavor to ensure there is redundancy in these systems and that they are regularly backed-up, there are no assurances that data recovery in the event of a disaster would be effective or occur in an efficient [removed: manner.][added: manner, including the operation of our global civilian cyber intelligence threat network.]

Interruptions in our products and [removed: services] [added: services, including the operation of our global civilian cyber intelligence threat network,] could impact our revenues or cause customers to cease doing business with us.

[removed: We have grown,] [added: Our acquisitions] and [removed: may continue to grow, through acquisitions, which gives rise to] [added: divestitures create special] risks and challenges that could adversely affect our future financial results.

[removed: Acquisitions] [added: These activities] can involve a number of special risks and challenges, including:

| • | Complexity, [removed: time,] [added: time] and costs associated with [added: managing these transactions, including] the integration of acquired business operations, workforce, products, and technologies; |

| • | Assumption of liabilities of the acquired [removed: business,] [added: business or assets,] including litigation related to the acquired [removed: business;] [added: business or assets;] |

| • | Dilution of stock ownership of existing stockholders; [removed: and] |

To integrate acquired businesses, we must [removed: implement our technology systems in the acquired operations and] integrate and manage the personnel [added: and technology systems] of the acquired operations.

Any of the foregoing, and other factors, could harm our ability to achieve anticipated levels of profitability [added: or other financial benefits] from our [added: divested or] acquired businesses or [added: assets or] to realize other anticipated benefits of [removed: acquisitions.][added: divestitures or acquisitions, such as anticipated operating efficiencies or other cost savings.]

We [removed: plan to expand] [added: have expanded through] our [added: acquisition of Blue Coat and expect further expansion of our] international operations, but such expansion is contingent upon our identification of growth opportunities.

[added: Many of] our end-user customers use our products in applications that are critical to their businesses and may have a greater sensitivity to defects in our products than to defects in other, less critical, software products.

We have [added: initiated and] been named as a party to lawsuits, including patent litigation, class actions and governmental [removed: claims,] [added: claims] and we may be named in additional litigation.

The expense of [added: initiating and] defending such litigation may be costly and divert management’s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations, and cash flows.

If we are not successful in defending such claims, we could be required to stop selling, delay shipments of, or redesign our products, pay monetary amounts as damages, enter into royalty or licensing arrangements, or satisfy indemnification obligations that we have [removed: with some of our customers.]

[added: During challenging economic times and periods of high unemployment, current or potential customers] may delay or forgo decisions to license new products or additional instances of existing products, upgrade their existing hardware or operating environments (which upgrades are often a catalyst for new purchases of our software), or purchase services.

Further, while no customer accounted for more than 10% of our total net revenues in [removed: each] [added: any] of fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015, two distributors and] one distributor accounted for 10% of our gross accounts receivable as of [added: March 31, 2017 and] April 1, [removed: 2016.][added: 2016, respectively.]

The onset or continuation of adverse economic conditions may make it more difficult to obtain financing for our operations, investing activities (including potential [removed: acquisitions)] [added: acquisitions] or [added: divestitures) or] financing activities.

[removed: If additional financing is not available when required or is not available on acceptable terms, we may be unable to successfully develop or enhance our software and] services through acquisitions in order to take advantage of business opportunities or respond to competitive pressures, which could have a material adverse effect on our software and services offerings, revenues, results of operations and financial condition.

[removed: The maintenance of our debt levels could adversely affect our flexibility to take advantage] [added: Any] of [removed: certain corporate opportunities and] [added: the foregoing] could adversely affect our [added: business,] financial condition [removed: and] [added: or] results of operations.

[removed: Furthermore, if] [added: If] prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase.

In particular, in connection with our acquisition of Blue Coat, we experienced changes to our executive team during the second and third quarters of fiscal 2017, appointing three former Blue Coat executive officers to the positions of Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President and Chief Financial Officer.

Additionally, since Blue Coat’s business historically experienced a major product refresh cycle approximately once every five

years, as hardware appliances reach the end of their useful life, we anticipate that we will experience fluctuations in demand as we enter and exit cycles in which many of our customers refresh their install base of hardware appliance products with our latest equipment, replacing older versions of the hardware that have reached the end of their useful life and are no longer supported under maintenance contracts.

Our appliances generally have a five year end-of-life date from the date of purchase, which we expect will extend refresh cycles for our hardware appliances over a multi-year period and reduce the impact of a product refresh cycle in any one period.

However, we cannot assure you that we will not experience uneven demand for these products in any one period, causing our business and results of operations to be adversely affected.

A refresh cycle also creates an opportunity for our competitors to try to displace our existing product deployments for our customers, who may be more inclined to consider other product solutions at a time when they otherwise need to replace our existing products that have reached the end of their useful life.

The extent to which customers decide to refresh by purchasing products from our current or future competitors as opposed to purchasing our new products may significantly impact our current period product revenues as well as future service revenue.

For example, we have been increasingly investing in solutions that address the cloud security market, particularly our acquisition of Blue Coat, but we cannot be certain that the cloud security market will develop at a rate or in the manner we expect or that we will be able to compete successfully with more established competitors in the cloud security market.

standards, changes in customer requirements and frequent new product introductions and improvements.

We face growing competition from network equipment, computer hardware manufacturers, large operating system providers and other technology companies, as well as from companies in the identity threat protection space such as credit bureaus.

Reduced trust in our SSL/TLS certificates could adversely affect our website security business.

Our website security business depends on the widespread acceptance of the digital certificates we provide to enable communications security infrastructure.

We have in the past issued, and may in the future issue, SSL/TLS certificates out of compliance with the requirements of the Certificate Authority and Browser Forum Baseline Requirements.

Failures of this kind could cause popular browsers to reduce or eliminate trust in our SSL/TSL certificates or the related roots or otherwise disrupt our position as a leading certificate authority.

For example, Google recently issued a proposal to reduce trust in our SSL/TSL certificates based on our past issuance of non-compliant certificates.

If any popular browser reduced trust in our SSL/TSL certificates or roots, it would damage our brand and cause our SSL/TSL certificates to fail to interoperate, resulting in customer attrition for our website security business, which could adversely affect our results of operations and our stock price.

| • | The impact of future acquisitions; |

| • | Our sales cycle, which may lengthen as the complexity of products and competition in our markets increases; |

| • | The timing of and rate and discounts at which customers replace older versions of the hardware that reach end of life; |

demand, our revenues could decrease.

We collect, use, store or disclose (collectively, “process”) an increasingly large amount of personal information, including from employees and customers, in connection with the operation of our business.

The volume, variety and velocity of the personal information we process increased significantly as a result of our acquisition of LifeLock in February 2017, as its identity and fraud protection offerings rely on large data repositories of personal information and consumer transactions.

As part of our business strategy, we may acquire or divest businesses or assets.

| • | Increased or unexpected costs, unanticipated delays or failure to meet contractual obligations; and |

Moreover, to be successful, some acquisitions, particularly acquisitions of large, complex companies, such as Blue Coat and LifeLock, depend on large-scale product, technology and sales force integrations that are difficult to complete on a timely basis or at all, and may be more susceptible to the special risks and

challenges described above.

research and development activities as we focus on organic growth through internal innovation in each of our business segments.

We may experience difficulties in realizing the expected benefits of the acquisition of Blue Coat and LifeLock and may continue to incur significant acquisition-related costs and transition costs in connection with these acquisitions.

We completed the acquisition of Blue Coat in the second quarter of fiscal 2017 and LifeLock in the fourth quarter of fiscal 2017.

We have invested and continue to invest substantial monetary and other resources in the integration of these companies.

The success of each acquisition depends in part on our ability to realize the anticipated business opportunities, including certain cost savings and operational efficiencies or synergies and growth prospects from combining the respective companies with Symantec in an efficient and effective manner.

We may never realize these business opportunities and growth prospects.

We may incur additional costs to maintain employee morale and to retain key employees.

Management cannot ensure that the elimination of duplicative costs or the realization of other efficiencies will offset the transaction and integration costs in the near term or at all.

Additionally, we may encounter difficulties surrounding the integration of these companies, which could delay or prevent our achievement of the expected benefits from the respective acquisition.

Moreover, risks specific to the acquired businesses could

also delay or prevent our achievement of the expected benefits from the respective acquisition.

For example, since LifeLock’s identity and fraud protection products depend extensively upon continued access to and receipt of credible, timely and complete data from external sources, including data received from customers, vendors who are also competitors and fulfillment partners, the value we derive from the LifeLock acquisition, our competitive position and our business, results of operations, and financial condition could be harmed as a result of our loss of access to data sources or reliance on sources that prove to be ineffective or inaccurate.

As a result of our acquisition of LifeLock, our Consumer Digital Safety segment became subject to increased regulation, which could impede our ability to market and provide our services or adversely affect our business, financial position and results of operations.

As a result of our acquisition of LifeLock, a portion of our Consumer Digital Safety segment became subject to increased regulation, including a wide variety of federal, state, and local laws and regulations, including the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Federal Trade Commission Act (“FTC Act”), and comparable state laws that are patterned after the FTC Act.

We may not achieve the intended benefits of the divestiture of Veritas.

On January 29, 2016, we completed the divestiture of Veritas, however, we may not realize some or all of the anticipated benefits from the transaction.

The resource constraints as a result of our prior focus on completing the transaction which included the loss of employees could have a continuing impact on the execution of our business strategy and our overall operating results.

Additionally, in connection with the divestiture, our Board of Directors committed to returning the proceeds of the sale of Veritas to stockholders in the form of a capital return program, which included the payment of a special dividend in March 2016, entry into multiple share accelerated transactions, and continued repurchases under current and future share repurchase programs.

The use of proceeds in this manner could impair the Company’s future financial growth.

licenses for certain products with deep technical integration into operating systems.

software product and service offerings, which could reduce our revenues and profitability.

We have in the past acquired, and we expect to acquire in the future, other businesses, business units, and technologies.

Many of

During challenging economic times and periods of high unemployment, current or potential customers

Our financial condition and results of operations could be adversely affected if we do not effectively manage our liabilities.

As a result of the sale of our 4.20% Senior Notes (“4.20% notes due 2020”) in September 2010, and our 2.75% Senior Notes (“2.75 notes due 2017”) and 3.95% Senior Notes (“3.95% notes due 2022”) in June 2012 and 2.50% Convertible Senior (“2.50% senior convertible notes due 2021”) in March 2016, we have notes outstanding in an aggregate principal amount of $2.3 billion that mature at specific dates in calendar years 2017, 2020, 2021 and 2022.

In addition, we have entered into a credit facility with a borrowing capacity of $1.0 billion.

From time to time in the future, we may also incur indebtedness in addition to the amount available under our credit facility.

We may be required to use all or a substantial portion of our cash balance to repay these notes on maturity unless we can obtain new financing.

There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing may not be as favorable as the terms of our existing debt.

These risks could adversely affect our financial condition and results of operations.

If we are unable to hire and retain qualified employees, or conversely, if we fail to manag

For example, we recently announced that for the third time in four years, we are initiating a Chief Executive Officer transition process, and appointed an interim President and Chief Operating Officer.

Accounting charges may cause fluctuations in our quarterly financial results.

Our financial results have been in the past, and may continue to be in the future, materially affected by non-cash and other accounting charges, including:

| • | Amortization of intangible assets; |

| • | Depreciation of property, plant and equipment; |

| • | Impairment of goodwill and other long-lived assets; |

| • | Stock-based compensation expense; |

| • | Restructuring charges; and |

| • | Loss on sale of a business and similar write-downs of assets held for sale. |

The price of our common stock could decline if our financial results are materially affected by an adverse change in our effective tax rate.

If the ultimate

Our stock price may be volatile in the future, and you could lose the value of your investment.

The market price of our common stock has experienced significant fluctuations in the past and may continue to fluctuate in the future, and as a result you could lose the value of your investment.

The market price of our common stock may be affected by a number of factors, including:

| • | Announcements of quarterly operating results and revenue and earnings forecasts by us that fail to meet or be consistent with our earlier projections or the expectations of our investors or securities analysts; |

| • | Announcements by either our competitors or customers that fail to meet or be consistent with their earlier projections or the expectations of our investors or securities analysts; |

| ▪ | Rumors, announcements or press articles regarding our or our competitors’ operations, management, organization, financial condition, or financial statements; |

| ▪ | Changes in revenue and earnings estimates by us, our investors or securities analysts; |

| ▪ | Accounting charges, including charges relating to the impairment of goodwill; |

| ▪ | Announcements of planned acquisitions or dispositions by us or by our competitors; |

| ▪ | Announcements of new or planned products by us, our competitors, or our customers; |

| ▪ | Gain or loss of a significant customer, partner, reseller or distributor; |

Fiscal calendar [added: and basis of presentation]

Unless otherwise stated, references to years in this report relate to fiscal year and periods ended [added: March 31, 2017,] April 1, [removed: 2016,] [added: 2016 and] April 3, [removed: 2015 and March 28, 2014.][added: 2015.]

Our fiscal [removed: 2016] [added: 2017] and [removed: 2014] [added: 2016] were 52-week years whereas our fiscal 2015 was a 53-week year.

See Note [removed: 6 of the Notes] [added: 4] to [added: the] Consolidated Financial Statements for [removed: more] [added: further] information on [removed: severance, facilities and separation costs related to] our [removed: fiscal 2015 plans to separate our security] [added: restructuring, separation, transition,] and [removed: information management businesses.][added: other related costs.]

[removed: | • | Enterprise Security:] Our Enterprise Security segment protects organizations so they can securely conduct business while leveraging new platforms and data. [removed: Our Enterprise Security segment includes our threat protection products, information protection products, cyber security services, and website security offerings, previously named trust services. |]

[removed: For further description of our operating segments see] [added: | (1) | See] Note 8 [removed: of the Notes] to [added: the] Consolidated Financial Statements [removed: in this annual report.][added: for further information on our debt. |]

Financial [removed: results] [added: highlights] and [added: business] trends

The following [removed: table provides] [added: charts provide] an overview of key financial metrics for each of the last three fiscal [removed: years:][added: years in millions, except for percentage of revenues.]

[removed: | |] 2016 [removed: | | | |] [added: compared to] 2015 [removed: | | | | 2014 | | |]

See Note [removed: 8 of the Notes] [added: 1] to [added: the] Consolidated Financial Statements in this annual report for [removed: more] [added: further] information on [removed: unallocated corporate charges.][added: our critical accounting estimates and policies.]

We expect our operating [removed: margins] [added: margin] to fluctuate in future periods as a result of a number of factors, including our operating results and the timing and amount of expenses incurred.

[removed: We believe that the] [added: The methods,] estimates [removed: described below represent] [added: and judgments that we use in applying] our [removed: critical] accounting policies [removed: and estimates, as they] have [removed: the greatest potential] [added: a significant] impact on our [added: financial position and the results that we report in our] Consolidated Financial Statements.

See [removed: also] Note [removed: 1 of the Notes] [added: 5] to [added: the] Consolidated Financial Statements [removed: included in this annual report.][added: for more information.]

Revenue [removed: recognition][added: Recognition - Contracts with Customers.]

See Note [removed: 1 of the Notes] [added: 5] to [added: the] Consolidated Financial Statements [removed: in this annual report] for [removed: additional] [added: further] information.

[removed: | |] 2016 [removed: | | |] [added: compared to] 2015 [removed: | | | 2014 | |]

[removed: |] Restructuring, separation, [added: transition,] and [removed: transition | 4 | % | | 4 | % | | 6 | % |][added: other]

Net revenues by [added: geographical region by] fiscal year

In addition, [removed: net revenues] [added: revenue] decreased partially due to the impact of the additional week from the 53-week fiscal 2015 year.

[removed: |] Enterprise Security [removed: | 54 | | % | | 52 | | % | | 51 | | % | | | | | | |][added: Segment by fiscal year]

[removed: Consumer Security operating] [added: Operating] income decreased $58 [removed: million] [added: million, or 6%,] primarily due to the decreases in revenue in this segment, which were partially offset by reductions in cost of [removed: revenues,] [added: revenue,] sales and marketing and research and development expenses.

[removed: Enterprise Security revenue] [added: Revenue] decreased $139 [removed: million] [added: million, or 7%,] primarily due to unfavorable foreign currency fluctuations of $90 million, as well as decrease in sales of endpoint management [added: solutions] and our mail cloud security products.

[removed: The decrease of $191 million in operating] [added: Operating] income [removed: was] [added: decreased $191 million, or 65%,] primarily due to decreased revenue and increased allocation of stranded costs.

Fluctuations in the U.S. dollar compared to foreign currencies [removed: unfavorably] [added: favorably] impacted our international revenue by approximately [removed: $92] [added: $20] million for fiscal [removed: 2015] [added: 2017] as compared to fiscal [removed: 2014.][added: 2016.]

As a result, [added: we expect] revenue [removed: is expected] to continue to be affected by foreign currency exchange rates as compared to the U.S. dollar.

Cost of revenues consists primarily of technical support costs, costs of billable services, [removed: and] fees to OEMs under revenue-sharing [removed: agreements.][added: agreements, hardware costs, and fulfillment costs, as well as intangible asset amortization, and is presented below in millions except for percentage of revenues.]

Our cost of revenues decreased $112 million [removed: for fiscal 2016 compared to fiscal 2015] primarily due to favorable currency effects, a decrease in OEM royalty fees, and a decrease in service related and content delivery expenses.

[removed: Refer to] [added: See] Note 8 [removed: of the Notes] [added: and Note 13] to [added: the] Consolidated Financial Statements [removed: in this annual report] for more information about our [removed: unallocated corporate charges.][added: debt and TSAs.]

[removed: For further information on restructuring, separation, and transition costs, see] [added: See] Note [removed: 6 of the Notes] [added: 8] to [added: the] Consolidated Financial Statements [removed: in this annual report.][added: for further information on our debt repayments and borrowings.]

[removed: The $90 million increase in research] [added: Research] and development expense [removed: for fiscal 2015 was] [added: increased $75 million] primarily [removed: due to higher unallocated corporate charges] [added: as a result of the acquisition of Blue Coat] and [added: an increase of $54 million of] stock-based compensation expense.

[removed: For further information on restructuring and transition costs, see] [added: See] Note [removed: 6 of the Notes] [added: 4] to [added: the] Consolidated Financial Statements [removed: in this annual report.][added: for more information on our restructuring plans.]

[added: | • |] See Note [removed: 3] [added: 6] of the [removed: Notes to] Consolidated Financial Statements [removed: in this annual report] for additional [removed: information.][added: information about our acquisitions. |]

[removed: Tax expense] [added: The increase] in [removed: fiscal] [added: our effective tax rate in] 2016 [added: compared to 2015] was primarily driven by [removed: (1)] $1.1 billion of tax expense [added: in 2016] for providing U.S. taxes on certain undistributed foreign earnings, primarily those attributable to the sale of [removed: Veritas, and (2) $10 million of tax expense attributable to recording valuation allowances for certain deferred tax assets.][added: Veritas.]

[removed: Our results of operations would be adversely affected to the extent that our geographical mix of income becomes more weighted toward] jurisdictions with higher tax rates and would be favorably affected to the extent the relative geographic mix shifts to lower tax jurisdictions.

[removed: For further information on the impact of foreign earnings on our effective tax rate, see] [added: Refer to] Note [removed: 11 of the Notes] [added: 12] to [added: the] Consolidated Financial Statements [removed: in this annual report.][added: for further information on our indemnifications.]

Sources [added: and uses] of cash

We have historically relied on cash flow from operations, borrowings under [removed: a] credit [removed: facility,] [added: facilities,] issuances of debt and equity securities, and sale of business, more recently, for our liquidity needs.

[removed: As of April 1, 2016, we had cash, cash equivalents and short-term investments of $6.0 billion and] [added: We also have] an unused credit facility of $1.0 billion resulting in a liquidity position of approximately [removed: $7.0] [added: $5.3] billion.

As of [removed: April 1, 2016, $4.9] [added: March 31, 2017, $3.3] billion in cash, cash equivalents, and short-term investments were held by our foreign subsidiaries.

Our principal cash requirements [removed: include] [added: primarily consists of acquisitions, payment of taxes, operating expenses and] working capital, capital expenditures, [removed: payments] [added: payment] of principal and interest on debt, and [removed: payments of taxes.][added: restructuring and integration costs.]

Please read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related Notes thereto included under Item 15 of this Annual Report on Form 10-K.

 


In fiscal 2017, we made two key acquisitions to expand our offerings in both our operating segments:

| • | In August 2016, we acquired Blue Coat, a provider of advanced web security solutions for global enterprises and governments. The addition of Blue Coat’s suite of network and cloud security products to our Enterprise Security segment has enhanced our existing portfolio of threat protection and information protection products while positioning us to provide new cybersecurity solutions that address the ever-evolving threat landscape. |

| • | In February 2017, we acquired LifeLock, a provider of proactive identity theft protection services for consumers and consumer risk management services for enterprises. The addition of LifeLock’s identity and fraud protection offerings to our Consumer Digital Safety segment allows us to provide a comprehensive digital safety solution designed to protect information across devices and users in the connected home and family. |

Here are our key financial results for continuing operations in fiscal 2017 as compared to fiscal 2016:

| • | Consolidated revenue increased by 12%, primarily driven by a 22% increase in revenue from our Enterprise Security segment due to the acquisition of Blue Coat. |

| • | Consumer Digital Safety segment revenue remained relatively flat as the Norton-branded product revenue decline of 4% was largely offset by increased revenue of $67 million due to the acquisition of LifeLock. During fiscal 2017, the Norton-branded product revenue decline improved year-over-year as we benefited from the shift to subscription-based contracts. |

| | |

| --- | --- |

| • | Our gross margin decreased four percentage points primarily due to lower relative gross margins on Blue Coat and LifeLock revenue as a result of the impact of acquisition-related write-downs of pre-acquisition deferred revenues. Additionally, our gross margin was negatively impacted by amortization of $122 million of acquired Blue Coat and LifeLock intangible assets and the write-up of acquired inventory of $24 million related to the Blue Coat acquisition. |

| | |

| --- | --- |

| • | Our operating margin decreased fifteen percentage points primarily due to increased operating expenses as a result of Blue Coat and LifeLock post-acquisition operating expenses including stock-based compensation from assumed equity awards and amortization of acquired intangible assets. We also incurred acquisition-related and integration expenses of $120 million related to the Blue Coat and LifeLock acquisitions. In addition, restructuring, transition, and other related costs increased year-over-year as a result of the implementation of new cost saving initiatives. |

| | |

| --- | --- |

| • | Cash paid for income taxes increased $779 million, primarily due to the one-time payment related to the gain on sale from the divestiture of Veritas during fiscal 2016. |

| | |

| --- | --- |

| • | Deferred revenue increased 6% to $2.8 billion from $2.6 billion as of March 31, 2017 and April 1, 2016, respectively, mainly as a result of our Blue Coat and LifeLock acquisitions. The increase was partly offset by the amortization of deferred revenue from Veritas retained contracts. |

Segment operating results

The following tables are in millions except for percentage of revenues.

 

2017 compared to 2016

Revenue increased $425 million, or 22%, primarily due to $427 million in revenue from sales of Blue Coat network protection products.

Due to the fair value adjustment of deferred revenue as a result of the accounting for the Blue Coat acquisition, we excluded revenue of $116 million in the post-acquisition period.

In addition, services revenue increased $16 million while revenue from sales of endpoint management solutions decreased $23 million.

Operating income increased $85 million, or 83%, primarily due to increased revenue, a reduction of expenses from new and ongoing cost savings initiatives, and favorable currency fluctuations of $16 million, and a decrease in unallocated corporate charges of $22 million.

These increases were partially offset by increased expenses associated with the Blue Coat acquisition in the post-acquisition period, and acquired inventory write-up related to the Blue Coat acquisition of $24 million.

Consumer Digital Safety Segment by fiscal year

Our Consumer Digital Safety segment focuses making it simple for customers to be productive and protected at home and at work.

The following tables are in millions except for percentage of revenues.

 

2017 compared to 2016

Revenue decreased $6 million primarily due to a decline in revenue from sales of Norton-branded products of $73 million as the revenue generated from customer additions was not sufficient to replace revenue lost through customer attrition.

The decline was largely offset by a $67 million increase in revenue due to the acquisition of LifeLock.

Due to the fair value adjustment of deferred revenue as a result of the accounting for the LifeLock acquisition, we excluded revenue of $28 million in the post-acquisition period.

While the trend of declining revenues from sales of Norton-branded products continued in fiscal 2017, we began to benefit from the shift to subscription-based contracts, resulting in a lower decline in fiscal 2017 as compared to the prior two fiscal years.

Operating income decreased $85 million, or 9%, primarily due to the Norton revenue decline coupled with a loss from LifeLock’s operations.

Our business

Symantec Corporation is a global leader in security.

We operate our business on a global civilian cyber intelligence threat network and track a vast number of threats across the Internet from hundreds of millions of mobile devices, endpoints, and servers across the globe.

We believe one of our competitive advantages is our database of threat indicators which allows us to reduce the number of false positives and provide faster and better protection for customers through our products.

Through the delivery of new and enhanced solutions, we are integrating our security offerings across our portfolio.

We are also developing novel solutions in growing markets like cloud, advanced threat protection, information protection and cyber security services.

Founded in 1982, Symantec has operations in more than 35 countries and our principal executive offices are located at 350 Ellis Street, Mountain View, California, 94043.

Strategy

Our security strategy is to deliver a unified security analytics platform that provides big data analytics, utilizes our vast telemetry, provides visibility into real-time global threats, and powers Symantec and third-party security analytics applications; leverage this analytics platform to provide best-in-class consumer and enterprise security products; and offer cyber security services that provide a full-suite of services from monitoring to incident response to threat intelligence, all supported by over 500 cyber security experts and nine global security response centers.

After closing the divestiture of Veritas, as the world leader in cybersecurity, we are more focused than ever on the following priorities: delivering upon our Unified Security strategy, building our enterprise security pipeline and go-to-market capabilities, improving our cost structure, and fulfilling our commitment to allocate capital to our stockholders.

Divestiture of Veritas

In August 2015, we entered into a definitive agreement to sell the assets of Veritas to Carlyle and amended the terms in January 2016.

Based on the amended terms of the definitive agreement, we received net consideration of $6.6 billion in cash, excluding transaction costs, and 40 million B common shares of Veritas and Veritas assumed certain liabilities in connection with the acquisition.

The transaction closed on January 29, 2016.

The disposition resulted in a net gain of $3.0 billion, which is presented as part of income from discontinued operations, net of income taxes in the Consolidated Statements of Operations for fiscal 2016.

Furthermore, Veritas' assets and liabilities were removed from our Consolidated Balance Sheet upon consummation of its sale on January 29, 2016, and have been classified as discontinued operations on our Consolidated Balance Sheet as of April 3, 2015.

Our operating segments

Our operating segments are significant strategic business units that offer different products and services distinguished by customer needs.

The two reporting segments, which are the same as our operating segments, are:

| • | Consumer Security: Our Consumer Security segment focuses on making it simple for customers to be productive and protected at home and at work. Our Norton-branded services provide multi-layer security and identity protection on major desktop and mobile operating systems, to defend against increasingly complex online threats to individuals, families, and small businesses. |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (In millions, except percentages) | | | | | | | | | | |

| Consolidated Statements of Operations Data: | | | | | | | | | | | |

| Net revenues | $ | 3,600 | | | $ | 3,956 | | | $ | 4,183 | |

| Gross profit | 2,985 | | | | 3,229 | | | | 3,392 | | |

| Operating income | 457 | | | | 154 | | | | 144 | | |

| Operating margin percentage | 13 | | % | | 4 | | % | | 3 | | % |

| Consolidated Cash Flow Data: | | | | | | | | | | | |

| Net cash provided by continuing operating activities | $ | 1,456 | | | $ | 17 | | | $ | 108 | |

Net revenues decreased $356 million for fiscal 2016 as compared to fiscal 2015, primarily due to unfavorable foreign currency fluctuations, declines in our consumer security revenue, and the impact of the additional week from the 53-week fiscal 2015 year.

Gross margin increased to 83% for fiscal 2016 compared to 82% for fiscal 2015, primarily driven by decreases in OEM royalty fees and service related and content delivery expenses.

Operating income increased $303 million year over year as the reduction in our operating expenses was greater than the decline in our net revenues.

The lower operating expenses were primarily due to a decrease in corporate charges previously allocated to our information management business but not classified within discontinued operations.

These corporate charges were included in cost of revenues and expenses from continuing operations and include legal, accounting, real estate, information technology services, treasury, human resources and other corporate infrastructure expenses ("unallocated corporate charges").

We anticipate that we will not have unallocated corporate charges in fiscal 2017 and therefore our fiscal 2017 operating income will benefit from a reduction of unallocated corporate charges as compared to fiscal 2016.

Net cash provided by operating activities was $1.5 billion for fiscal 2016 due to increases in deferred income taxes of $1.1 billion and income taxes payable of $693 million.

These amounts were partially offset by a loss from continuing operations, net of income taxes of $821 million, including non-cash items depreciation and amortization charges of $304 million and stock-based compensation expense of $161 million.

Total deferred revenue decreased from $2.9 billion in fiscal 2015 to $2.6 billion in fiscal 2016 primarily driven by a decline in sales and the amortization of retained contracts associated with Veritas.

The preparation of our Consolidated Financial Statements and related notes included in this annual report in accordance with generally accepted accounting principles in the U.S. requires us to make estimates, including judgments and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities.

As of April 1, 2016, we had $2.3 billion in principal amount of fixed-rate Senior Notes [removed: and Convertible Senior Notes] outstanding, with a carrying amount of $2.2 billion and a fair value of $2.3 billion, [removed: which fair value was] based on level 2 inputs.

As of [removed: April 3, 2015,] [added: March 31, 2017,] we had [removed: $2.1] [added: $4.6] billion in principal amount of fixed-rate Senior Notes [added: and Convertible Senior Notes] outstanding, with a carrying amount of [removed: $2.1] [added: $4.6] billion and a fair value of [removed: $2.2] [added: $4.6] billion, [removed: which was] based on level 2 inputs.

We conduct business in [removed: approximately 38] [added: numerous] currencies through our worldwide operations and, as such, we are exposed to foreign currency risk.

Our entities conduct their businesses in the primary local currency in which they operate, however, they may [added: also] conduct business in other currencies.

To the [removed: extend] [added: extent] our entities hold monetary assets or liabilities, earn revenues or [removed: expend] [added: incur] costs in currencies other than [removed: that entity's] [added: the entity’s] functional currency, they [removed: will be] [added: are] exposed to foreign exchange gains or losses and impacts to margins as a result.

We have considered historical trends in exchange rates and determined that it is possible that adverse changes in exchange rates for any currency could [removed: be experienced.][added: occur.]

The estimated impacts of a ten percent appreciation or depreciation of foreign currency are as [removed: follows:][added: follows in millions:]

| | | [removed: April 1, 2016] [added: March 31, 2017] | | | | | | | | | | | | April [removed: 3, 2015] [added: 1, 2016] | | | | | | | | | | |

| Purchased | | $ | [removed: 693] [added: 492] | | | $ | [removed: 69] [added: 49] | | | $ | [removed: (69] [added: (49] | ) | | $ | [removed: 102] [added: 693] | | | $ | [removed: 10] [added: 69] | | | $ | [removed: (10] [added: (69] | ) |

| Sold | | [removed: (198] [added: (204] | | ) | | [removed: (19] [added: (20] | | ) | | [removed: 19] [added: 20] | | | | [removed: (195] [added: (198] | | ) | | (19 | | ) | | 19 | | |

| Total net outstanding contracts | | $ | [removed: 495] [added: 288] | | | $ | [removed: 50] [added: 29] | | | $ | [removed: (50] [added: (29] | ) | | $ | [removed: (93] [added: 495] | [removed: )] | | $ | [removed: (9] [added: 50] | [removed: )] | | $ | [removed: 9] [added: (50] | [added: )] |

We have considered the historical volatility of interest rates and determined that it is possible that adverse changes in interest rates related to our fixed and variable rate debt could occur.

A reasonably possible hypothetical adverse change of 50-basis points could result in a $92 million fair value reduction of our fixed-rate borrowings as of March 31, 2017, compared to a $41 million fair value reduction as of April 1, 2016.

A reasonably possible hypothetical adverse change of 50-basis points in the effective interest rate of our $3.7 billion of variable-rate borrowings could result in an incremental $19 million of pre-tax interest expense on an annualized basis.

We have performed sensitivity analysis as of April 1, 2016 and April 3, 2015 by using a modeling technique that measures the change in the fair values arising from a hypothetical 50 bps movement in the levels of market interest rates, with all other variables held constant.

On April 1, 2016 and April 3, 2015, a hypothetical 50 bps increase or decrease in market interest rates would change the fair value of the fixed-rate Senior Notes and Convertible Senior Notes by a decrease of approximately $41 million and $39 million, respectively and an increase of approximately $42 million and $40 million, respectively.

However, this hypothetical change in market interest rates would not impact the interest expense on the fixed-rate debt.

| | | (Dollars in millions) | | | | | | | | | | | | | | | | | | | | | | |

Symantec Corporation is a global leader in [removed: security.][added: cybersecurity.]

We operate our business on a global civilian cyber intelligence threat network [removed: and track] [added: that tracks] a vast number of threats across the Internet from hundreds of millions of mobile devices, endpoints, and servers across the globe.

[removed: We believe one of our competitive advantages is our] [added: This] database [removed: of threat indicators which] allows us to reduce the number of false positives and provide faster and better protection for customers through our products.

We are also [removed: developing novel] [added: pioneering] solutions in [removed: growing] markets [removed: like cloud,] [added: such as cloud security, digital safety,] advanced threat protection, [added: identity protection,] information protection and cyber security services.

[removed: Founded in 1982, Symantec has operations in more than 35 countries and our] [added: Our] principal executive offices are located at 350 Ellis Street, Mountain View, California, 94043.

During fiscal [removed: 2016,] [added: 2017,] we took the following actions in support of our business:

| [removed: •] [added: ▪] | We released new products and services: |

Operating [removed: segments and] [added: segments,] products [added: and services]

[removed: The two reporting segments, which are the same as our] [added: Our] operating [removed: segments,] [added: segments] are: Consumer [removed: Security] [added: Digital Safety] and Enterprise Security.

[removed: Our] [added: This solution includes our] Norton-branded [removed: services] [added: services, which] provide multi-layer security [removed: and identity protection on] [added: across] major desktop and mobile operating systems, [added: public Wi-Fi connections, and home networks,] to defend against increasingly complex online threats to individuals, [removed: families,] [added: families] and small [removed: businesses.][added: businesses, and our LifeLock-branded identity protection services.]

Our Enterprise Security segment includes our [removed: threat] [added: endpoint] protection products, [added: endpoint management, messaging protection products,] information protection products, cyber security services, [removed: and] website security [removed: offerings, previously named trust services.][added: and advanced web and cloud security offerings.]

Our enterprise endpoint [added: and network] security and management offerings support [removed: the] evolving [removed: endpoint,] [added: endpoints and networks,] providing advanced threat protection while helping reduce cost and complexity.

These solutions are delivered through various methods, such as software, appliance, Software-as-a-Service [removed: ("SaaS"),] [added: (“SaaS”)] and managed services.

For information regarding our revenue by segment, revenue by geographical area, and property and equipment by geographical area, see Note [removed: 8 of the Notes] [added: 2] to [added: the] Consolidated Financial Statements in this annual report.

We also maintain [removed: important] [added: strategic] relationships with a number of original equipment manufacturers (“OEMs”), Internet service providers (“ISPs”), [added: wireless carriers,] and retail and online stores through which we market and sell our products.

[removed: We bring these products to market through our e-commerce platform, distributors, direct marketers,] [added: In addition, we utilize] Internet-based resellers, system builders, ISPs, [added: employee benefits providers,] wireless carriers, [added: retailers,] and [removed: retailers] [added: OEMs to distribute our offerings] worldwide.

Our products and services are also available on our e-commerce platform, as well as through authorized distributors and [removed: OEMs who] [added: OEMs, which] incorporate our technologies into their products, bundle our products with their offerings, or serve as authorized resellers of our products.

Our security experts analyze threat telemetry collected through [removed: Symantec’s massive global sensor network, one of the largest] [added: our vast] cyber intelligence networks [removed: in the world,] to protect our customers against current and emerging threats.

Research and development expenses were [removed: $748] [added: $823] million, [removed: $812] [added: $748] million, and [removed: $722] [added: $812] million in fiscal [added: 2017,] 2016, [removed: 2015,] and [removed: 2014,] [added: 2015,] respectively, representing approximately [removed: 21%,] [added: 20%,] 21% and [removed: 17%] [added: 21%] of revenue in fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] respectively.

[removed: In addition,] [added: Most of] our Norton Security products come with [added: automatic downloads of the latest virus definitions, application bug fixes, and patches, as well as] a “Virus Protection Promise,” which in some markets provides free virus removal services to customers whose protected computers become infected.

In each of fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] no customer accounted for more than 10% of our total net revenues.

[removed: One] [added: Two distributors and one] distributor accounted for [added: more than] 10% of our gross accounts receivable as of [added: March 31, 2017 and] April 1, [removed: 2016.][added: 2016, respectively.]

[removed: We are focused on delivering] comprehensive customer solutions, integrating across our broad product portfolio and partnering with other technology providers to differentiate ourselves from the competition.

[added: | • |] Our primary security competitors are [added: McAfee (formerly] Intel [removed: Corporation,] [added: Security),] Microsoft Corporation (“Microsoft”), and Trend Micro Inc. There are also several freeware providers and regional security companies that we compete against. [added: |]

[added: | • |] For our consumer backup offerings, our primary competitors are Carbonite, Inc. and [removed: EMC Corporation.][added: Dell EMC. |]

[added: | • |] In the Secure Socket Layer Certificate market, our primary competitors are Comodo Group, [removed: Inc. and GoDaddy.com,] [added: Inc., DigiCert,] Inc. [removed: In the SaaS security market, our primary competitors are Proofpoint] and [removed: Microsoft.][added: Let’s Encrypt. |]

[added: | • |] Our primary competitors in the managed security services business are SecureWorks Corporation and [removed: IBM Corporation.][added: International Business Machines Corporation (“IBM”). |]

We have [removed: more than 1,700] [added: approximately 2,100] patents, in addition to foreign patents and pending U.S. and foreign patent applications, which relate to various aspects of our products and technology.

We believe one of our competitive advantages is our database of threat indicators.

We are leveraging our capabilities to deliver integrated platforms for customers.

Founded in 1982, Symantec has operations in more than 40 countries.

Our strategy is to deliver comprehensive cyber security platforms for both enterprises and consumers.

Our enterprise security strategy is to deliver an Integrated Cyber Defense Platform that allows Symantec products to share threat intelligence and improve security outcomes for customers across all control points.

Symantec is the leading vendor in protecting users, information, web and messaging across an integrated platform.

Our consumer digital safety strategy is to deliver the most comprehensive consumer digital safety solutions to help people protect their information, identities, devices and families.

Following the completion of the sale of our former information management business (“Veritas”) in the fourth quarter of fiscal 2016, we completed the acquisitions of Blue Coat, Inc. (“Blue Coat”) and LifeLock, Inc. (“LifeLock”) in fiscal 2017 in order to expand our offerings in both our operating segments, as described below.

| • | With the divestiture of Veritas completed, we refocused Symantec as a pure cybersecurity company. In the second fiscal quarter, we completed the acquisition of Blue Coat, a provider of advanced web and cloud security solutions for global enterprises and governments, to complement our Enterprise Security offerings. The aggregate purchase price of the Blue Coat acquisition was $4.7 billion in net consideration, of which $4.5 billion consisted of cash consideration including the repayment of approximately $1.9 billion in Blue Coat’s debt. Following the closing of the Blue Coat acquisition, we appointed Blue Coat’s Chief Executive Officer as our Chief Executive Officer and Blue Coat’s President and Chief Operating Officer as our President and Chief Operating Officer, respectively, in the second quarter of fiscal 2017. In addition, we appointed Blue Coat’s Chief Financial Officer to the position of our Executive Vice President and Chief Financial Officer in the third quarter of fiscal 2017. |

| • | In the fourth fiscal quarter, we completed the acquisition of LifeLock, a provider of proactive identity theft protection services for consumers and consumer risk management services for enterprises, for approximately $2.3 billion in net consideration. |

| • | We increased the size of our Board of Directors and appointed representatives of Silver Lake Partners and Bain Capital to our Board of Directors. |

| ◦ | We launched Symantec Endpoint Protection 14, a solution that fuses endpoint technologies with advanced machine learning and memory exploit mitigation in a single agent, delivering a multi-layered solution designed to stop a wide variety of advanced threats and respond at the endpoint. |

| ◦ | We introduced Symantec Endpoint Protection Cloud, a new solution for small and mid-sized businesses (SMBs) designed to protect them from targeted attacks and ransomware. Symantec Endpoint Protection Cloud is for organizations with fewer than 1,000 employees that are looking for an effective way to protect corporate and personal devices on the corporate network. |

| ◦ | We announced Cloud Workload Protection, a solution designed to deliver automated security policy enforcement and protect applications from unknown exploits inside of both Amazon Web Service and Microsoft Azure. Cloud Workload Protection automates security for public cloud workloads delivering metered usage billing, rapid workload discovery, increased visibility and elastic protection to help ensure safe cloud workload adoption. |

| ▪ | We integrated Blue Coat and Symantec products: |

| ◦ | We announced the integration of Symantec Data Loss Prevention (“DLP”) with Symantec CloudSOC (formerly Blue Coat’s Elastica CloudSOC Cloud Access Security Broker) and Cloud Data Protection products to address the needs of the cloud generation. This integrated solution provides visibility and control over all sensitive |

content that users upload, store and share via the cloud, protecting confidential information through the stages of its lifecycle.

| | |

| --- | --- |

| ◦ | We integrated our Symantec DLP with our cloud-delivered Web Security Service, providing a seamless platform to help ensure a safe web experience and protect organizational data. |

| | |

| --- | --- |

| ◦ | We combined Symantec and Blue Coat’s security telemetry which has led to a series of significant protection improvements as well as discoveries of new attack campaigns. |

| | |

| --- | --- |

| • | Symantec’s Board of Directors increased the company’s share repurchase authorization by $510 million. In the fourth fiscal quarter, Symantec entered into accelerated stock repurchase agreements to repurchase an aggregate of $500 million of the company’s common stock. |

Consumer Digital Safety

Our Consumer Digital Safety segment focuses on providing a comprehensive Digital Safety solution to protect information, devices, networks and the identities of consumers.

Our LifeLock-branded identity protection services primarily consist of identifying and notifying users of identity-related and other events and assisting users in remediating their impact.

With the addition of LifeLock-branded identity protection services, we are providing a comprehensive digital safety platform designed to protect information across devices, customer identities and the connected home and family and accelerating our leadership in Consumer Digital Safety to protect all aspects of consumers’ digital lives.

The addition of Blue Coat’s suite of network and cloud security products to our innovative Enterprise Security product portfolio has enhanced our threat protection and information protection products while providing us with complementary products, such as advanced web and cloud security solutions, that address the network and cloud security needs of enterprises.

This augmentation of our product portfolio, together with the integration of Blue Coat’s large threat database with our global civilian cyber intelligence threat network, allows us to provide an integrated cyber defense platform, addressing both endpoint and network security, and offer differentiated security solutions.

It also positions us well to introduce new cybersecurity solutions that address the ever-evolving threat landscape, the changes introduced by the shift to mobile and cloud along with the adoption of Internet of Things (IoT) devices.

Our enhanced portfolio also positions us well to address the challenges created by regulatory and privacy concerns.

We bring these products to market through direct marketing and co-marketing programs supported by our e-commerce and telesales platforms.

Our LifeLock offerings come with support 24x7x365 and remediation services during normal business hours.

See Note 6 to the Consolidated Financial Statements for information regarding our acquisitions in fiscal 2017.

We are focused on delivering

We view our competitive landscape as follows:

| | |

Through the delivery of new and enhanced solutions, we are integrating our security offerings across our portfolio.

Our security strategy is to deliver a unified security analytics platform that provides big data analytics, utilizes our vast telemetry, provides visibility into real-time global threats, and powers Symantec and third-party security analytics applications; leverage this analytics platform to provide best-in-class consumer and enterprise security products; and offer cyber security services that provide a full-suite of services from monitoring to incident response to threat intelligence, all supported by over 500 cyber security experts and nine global security response centers.

During fiscal 2016, we executed on our five priorities: running our business with a portfolio approach by managing certain businesses for operating margin; prioritizing investments for growth; further reducing costs and improving efficiencies; attracting top talent to our executive team; and continuing to return significant cash to stockholders.

After closing the divestiture of our information management business ("Veritas"), as the world leader in cybersecurity, we are more focused than ever on the following priorities: delivering upon our Unified Security strategy, building our enterprise security pipeline and go-to-market capabilities, improving our cost structure, and fulfilling our commitment to allocate capital to our stockholders.

Divestiture of Veritas

In August 2015, we entered into a definitive agreement to sell the assets of Veritas to The Carlyle Group and certain co-investors ("Carlyle").

The transaction closed on January 29, 2016, at which time, we received net consideration of $6.6 billion in cash, excluding transaction costs, and 40 million B common shares of Veritas and Veritas assumed certain liabilities.

We now have two reporting segments, Consumer Security and Enterprise Security.

| • | We completed the divestiture of Veritas and refocused Symantec as a pure cybersecurity company. |

| • | We launched our SecureOne channel partner program designed specifically to help security-focused partners grow their businesses. |

| • | In Enterprise Security, Symantec Endpoint Protection won AV-TEST’s “Best Protection 2015 Award” for corporate users. |

| • | In Consumer Security, Norton Security won AV-TEST’s coveted “Best Protection Award 2015” for “home user” security. |

| ◦ | We launched Advanced Threat Protection endpoint, email, and network solutions, which detect and remediate advanced threats across control points, from a single console with just a click, without deployment of new endpoint agents. |

| ◦ | We launched Encryption Everywhere, a website security package available through web hosting providers that integrates encryption into websites from the moment they are created. |

| • | We completed a $500 million strategic investment by Silver Lake Partners and in connection with this investment, Kenneth Hao joined our Board of Directors. |

| • | We increased our capital return program to $5.5 billion, including a $2.6 billion special dividend that was paid in March 2016 and a total of $1.5 billion in accelerated share repurchase ("ASR") transactions that were announced in November 2015 and March 2016. |

Consumer Security

Our Consumer Security segment focuses on making it simple for customers to be productive and protected at home and at work.

Our Norton Security products help customers protect against increasingly complex threats and address the need for identity protection, while also managing the rapid increase in mobile and digital data, such as personal financial records, photos, music, and videos.

These products and services help our customers secure their information in transit and wherever it resides in the network path, from the user’s device to the data’s resting place.

These products protect customer data from sophisticated threats such as advanced protection threats, malicious spam and phishing attacks, malware, drive-by website infections, hackers, and cyber criminals.

In addition, these products help to prevent the loss of confidential data by insiders, and help customers achieve and maintain compliance with laws and regulations.

Our dedicated renewals team remains focused on extending customer relationships and renewing customer contracts with us.

We also continued to streamline our indirect sales strategy to have fewer, more focused partners with specialized partner programs to enhance sales.

We believe these changes provide customers with a high-quality sales and post-sales support experience, while also enabling us to expand our business.

We also maintain a limited number of partnerships with OEMs globally to distribute our Internet security and online backup offerings.

We provide consumers with various levels of support offerings.

Consumers receive automatic downloads of the latest virus definitions, application bug fixes, and patches for most of our consumer products.

We did not make any material acquisitions during fiscal 2016.

As of April 1, 2016, we employed more than 11,000 people worldwide, approximately 46% of whom reside in the U.S. Approximately 3,000 employees work in sales and marketing, 4,000 in research and development, 2,000 in support and services, and 2,000 in management and administration.

Information with respect to this Item may be found under the heading “Litigation [removed: Contingencies”] [added: contingencies”] in Note [removed: 7 of the Notes] [added: 12] to [added: the] Consolidated Financial Statements in this [removed: annual report] [added: Annual Report on Form 10-K] which information is incorporated into this Item 3 by reference.

For the Fiscal Year Ended [removed: April 1, 2016][added: March 31, 2017]

| 350 Ellis [removed: Street,] [added: Street] | | |

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer”,] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| | | (Do not check if a smaller reporting company) | | | | [added: Emerging growth company o] |

Aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of Symantec common stock on [removed: October 2, 2015] [added: September 30, 2016] as reported on the NASDAQ Global Select Market: [removed: $13,338,113,735.][added: $15,559,432,822.]

Number of shares outstanding of the registrant’s common stock as of April [removed: 29, 2016: 612,292,085][added: 28, 2017: 608,240,301]

| Item 1. | [removed: [Business](#sF8A3ACCF509951FB7000C7A3EBB4E362)] [added: [Business](#sD5B37AE19CF7502D05BE1A5C60339302)] | [removed: [4](#sF8A3ACCF509951FB7000C7A3EBB4E362)] [added: [4](#sD5B37AE19CF7502D05BE1A5C60339302)] |

| Item 1A. | [Risk [removed: Factors](#s7BD2319D9849C7AE25D2C7A3FD492FF1)] [added: Factors](#sDCB8588951F4FBFA6D3A1A5C7CAFE358)] | [removed: [8](#s7BD2319D9849C7AE25D2C7A3FD492FF1)] [added: [8](#sDCB8588951F4FBFA6D3A1A5C7CAFE358)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#sA84560894AE757236747C7A3FD67AB66)] [added: Comments](#s7FE0FA44896B0C60B72A1A5C7CE1213D)] | [removed: [20](#sA84560894AE757236747C7A3FD67AB66)] [added: [21](#s7FE0FA44896B0C60B72A1A5C7CE1213D)] |

| Item 2. | [removed: [Properties](#sE2FFB723BE4480C0182AC7A3EC04076F)] [added: [Properties](#sF42ADED0F58CC7E821AC1A5C5FB2D38D)] | [removed: [21](#sE2FFB723BE4480C0182AC7A3EC04076F)] [added: [22](#sF42ADED0F58CC7E821AC1A5C5FB2D38D)] |

| Item 3. | [Legal [removed: Proceedings](#s566F08B4D50F3E243C74C7A3FDC153D9)] [added: Proceedings](#sE08AE8282BE49BECF20E1A5C7D2D65F2)] | [removed: [21](#s566F08B4D50F3E243C74C7A3FDC153D9)] [added: [22](#sE08AE8282BE49BECF20E1A5C7D2D65F2)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s9C05FD276C22C914EF92C7A3FDF36DDE)] [added: Disclosures](#s65E00CF36E7EC9F332191A5C7D588784)] | [removed: [21](#s9C05FD276C22C914EF92C7A3FDF36DDE)] [added: [22](#s65E00CF36E7EC9F332191A5C7D588784)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sAB0716AAC364F4FC7471C7A3EC0437AB)] [added: Securities](#sB9B2E3EEC1BD0F016DCE1A5C60C75B73)] | [removed: [22](#sAB0716AAC364F4FC7471C7A3EC0437AB)] [added: [23](#sB9B2E3EEC1BD0F016DCE1A5C60C75B73)] |

| Item 6. | [Selected Financial [removed: Data](#s250D3A649B6C40337B3FC7A3FE6161A0)] [added: Data](#s2BAFD97C3E0E8A0E36321A5C6060DED4)] | [removed: [23](#s250D3A649B6C40337B3FC7A3FE6161A0)] [added: [24](#s2BAFD97C3E0E8A0E36321A5C6060DED4)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s212B1D3A00B5F107E003C7A3FE93698B)] [added: Operations](#sF220A5ECA1C13732C8341A5C7E1E9F2B)] | [removed: [24](#s212B1D3A00B5F107E003C7A3FE93698B)] [added: [25](#sF220A5ECA1C13732C8341A5C7E1E9F2B)] |

| Item 7A. | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#sCBD4424A1420D7CF3BACC7A40005FFB2)] [added: Risk](#s8C5061BF373AED98DC851A5C7F7FA280)] | [removed: [38](#sCBD4424A1420D7CF3BACC7A40005FFB2)] [added: [36](#s8C5061BF373AED98DC851A5C7F7FA280)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s2380F8A8FC89AA704C56C7A40037214E)] [added: Data](#sEB61A55E2A1F9706ED681A5C60105745)] | [removed: [38](#s2380F8A8FC89AA704C56C7A40037214E)] [added: [37](#sEB61A55E2A1F9706ED681A5C60105745)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s6F922DCD8A6B158EA162C7A40055B049)] [added: Disclosure](#sB849A4C0E47838501B151A5C7FC694A7)] | [removed: [38](#s6F922DCD8A6B158EA162C7A40055B049)] [added: [37](#sB849A4C0E47838501B151A5C7FC694A7)] |

| Item 9A. | [Controls and [removed: Procedures](#s32828661B8F324424DAAC7A400870723)] [added: Procedures](#s685F5338048C5A221E0D1A5C7FE8A8A9)] | [removed: [38](#s32828661B8F324424DAAC7A400870723)] [added: [37](#s685F5338048C5A221E0D1A5C7FE8A8A9)] |

| Item 9B. | [Other [removed: Information](#s40C755D1BB2EAC565927C7A400AF9B67)] [added: Information](#sE4A152CE9599D2ECB33B1A5C80198D22)] | [removed: [39](#s40C755D1BB2EAC565927C7A400AF9B67)] [added: [38](#sE4A152CE9599D2ECB33B1A5C80198D22)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s92C7E3FE9206A173BEAFC7A400FF6F9D)] [added: Governance](#sD7398063C21A613F78BD1A5C806D068D)] | [removed: [40](#s92C7E3FE9206A173BEAFC7A400FF6F9D)] [added: [39](#sD7398063C21A613F78BD1A5C806D068D)] |

| Item 11. | [Executive [removed: Compensation](#s62AB3A148395707B1CADC7A40145D0B7)] [added: Compensation](#s8989A9056D974D8FF34E1A5C809CC718)] | [removed: [40](#s62AB3A148395707B1CADC7A40145D0B7)] [added: [39](#s8989A9056D974D8FF34E1A5C809CC718)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s1D31B67EFABAF4176617C7A4014F8C03)] [added: Matters](#s1F043E5BFE729EC43F301A5C80E1000C)] | [removed: [40](#s1D31B67EFABAF4176617C7A4014F8C03)] [added: [39](#s1F043E5BFE729EC43F301A5C80E1000C)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sACCC0312902EE8108CDDC7A40181F911)] [added: Independence](#s107A09371D388BAAB31D1A5C80E76C69)] | [removed: [40](#sACCC0312902EE8108CDDC7A40181F911)] [added: [39](#s107A09371D388BAAB31D1A5C80E76C69)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#s08DD33F779531CA7D9FAC7A401A9203D)] [added: Services](#s1868D61F7E75092BF62A1A5C81136B8C)] | [removed: [40](#s08DD33F779531CA7D9FAC7A401A9203D)] [added: [39](#s1868D61F7E75092BF62A1A5C81136B8C)] |

| Item 15. | [Exhibits, Financial Statement [removed: Schedules](#s7E6AD842DD2CB444095EC7A401F977DE)] [added: Schedules](#sBC2371348C70433D31A91A5C8167D814)] | [removed: [41](#s7E6AD842DD2CB444095EC7A401F977DE)] [added: [40](#sBC2371348C70433D31A91A5C8167D814)] |

In addition, projections of our future financial performance, anticipated growth and trends in our businesses and in our industries, the anticipated impacts of acquisitions, [added: and of] our [added: restructurings, our] intent to pay quarterly cash dividends in the future, the actions we intend to take as part of our new strategy, the expected impact of our new strategy and other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several [removed: factors, including those that we discuss under Item 1A, Risk Factors.][added: factors.]

10-K 1 symc33117-10k.htm 10-K

| | | | | | | |

| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | | | | | | |

Portions of the registrant’s definitive Proxy Statement for the 2017 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Annual Report on Form 10-K where indicated.

Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended March 31, 2017.

For the Fiscal Year Ended March 31, 2017

| [Signatures](#s4F82E88E3209A3E5032C1A5C85C3A956) | | [73](#s4F82E88E3209A3E5032C1A5C85C3A956) |

These and other risks are described under Item 1A, Risk Factors.

10-K 1 symc4116-10k.htm 10-K

The information called for by Part III will be included in an amendment to this Form 10-K or incorporated by reference from the registrant’s definitive Proxy Statement to be filed pursuant to Regulation 14A.

| [Signatures](#s826E430991934CA6402BC7A4068B4A9C) | | [73](#s826E430991934CA6402BC7A4068B4A9C) |

Our corporate headquarters is located in Mountain View, California where we occupy facilities totaling approximately [removed: 793,000] [added: 794,000] square feet, of which 723,000 square feet is owned and [removed: 70,000] [added: 71,000] square feet is leased.

We also lease an additional [removed: 67,000] [added: 116,000] square feet in the San Francisco Bay Area.

The following table presents the approximate square footage of our facilities as of [removed: April 1, 2016:][added: March 31, 2017:]

| | Approximate [removed: Total] Square Footage (1) | | | | |

| Americas (U.S., Canada and Latin America) | 1,512 | | | [removed: 539] [added: 952] | |

| EMEA (Europe, Middle East and Africa) | 177 | | | [removed: 318] [added: 295] | |

| APJ (Asia Pacific and Japan) | — | | | [removed: 1,044] [added: 1,088] | |

| (1) | Included in the total square footage above are vacant and available-for-lease properties totaling approximately [removed: 80,000] [added: 196,000] square feet. Total square footage excludes approximately [removed: 766,000] [added: 588,000] square feet relating to facilities subleased to third parties. |

| Total approximate square footage | 1,689 | | | 2,335 | |

| Total | 1,689 | | | 1,901 | |

Price [removed: Range] [added: range] of [removed: Common Stock][added: common stock and number of stockholders]

[removed: Our common stock is traded on the NASDAQ Global Select Market under the symbol “SYMC.”] The high and low closing sales prices set forth below are as reported on the NASDAQ Global Select Market during each quarter of the two most recent fiscal years.

During fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] we declared and paid aggregate cash dividends [added: and dividend equivalents] of [removed: $3.0 billion] [added: $222 million] or [removed: $4.60] [added: $0.30] per common share, [removed: $413 million] [added: $3.0 billion] or [removed: $0.60] [added: $4.60] per common share, and [removed: $418] [added: $413] million or $0.60 per common share, respectively.

Dividends declared and paid each quarter during fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] were [added: $0.075,] $0.15 [added: and $0.15] per [removed: share.][added: share, respectively.]

All future dividends [removed: and dividend equivalents] are subject to the approval of our Board of Directors.

Through our stock repurchase programs we have repurchased shares [removed: on a quarterly basis] [added: of our common stock] since the fourth quarter of fiscal 2004.

Under these programs, shares may be repurchased on the open market and through [removed: ASR] [added: accelerated stock repurchase (“ASR”)] transactions.

[removed: The maximum dollar value] [added: | (In millions, except per share data) | | Total Number] of [removed: shares that may yet be purchased under] [added: Shares Purchased (1) | | | Average Price Paid per Share (1) | | | | Total Number of Shares Purchased as Part of Publicly Announced Program | | | Maximum Dollar Value of Shares That May Yet Be Purchased Under] the [removed: plans] [added: Plans] or [removed: programs is $790 million.][added: Programs (2) | | |]

See Note [removed: 9 of our Notes] [added: 10] to [added: the] Consolidated Financial Statements for additional information regarding our [removed: stock repurchase programs.][added: dividends.]

The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Composite Index and the S&P Information Technology Index for the five [added: fiscal] years ended [removed: April 1, 2016] [added: March 31, 2017] (assuming the [added: initial] investment of $100 in our common stock and in each of the other indices on the last day of trading for fiscal 2011, and the reinvestment of all dividends).

The comparisons in the graph below are based on historical data and are not [added: indicative of, nor] intended to forecast the possible future performance of our common stock.

[removed: ][added: ]

Our common stock is traded on the NASDAQ Global Select Market under the symbol “SYMC.” As of March 31, 2017, there were 1,763 stockholders of record.

| | 2017 | | | | | | | | | | | | | | | | 2016 | | | | | | | | | | | | | | |

| High | $ | 30.83 | | | $ | 25.45 | | | $ | 25.27 | | | $ | 21.24 | | | $ | 20.88 | | | $ | 21.37 | | | $ | 23.47 | | | $ | 25.90 | |

| Low | $ | 24.01 | | | $ | 23.49 | | | $ | 20.28 | | | $ | 16.60 | | | $ | 16.62 | | | $ | 19.50 | | | $ | 19.33 | | | $ | 23.03 | |

Stock repurchases during the three months ended March 31, 2017, were as follows:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| December 31, 2016 to January 27, 2017 | | — | | | $ | — | | | — | | | $ | 1,300 | |

| January 28, 2017 to February 24, 2017 | | — | | | $ | — | | | — | | | $ | 1,300 | |

| February 25, 2017 to March 31, 2017 | | 14.2 | | | $ | — | | | 14.2 | | | $ | 800 | |

| Total number of shares repurchased | | 14.2 | | | | | | | 14.2 | | | | | |

| | |

| --- | --- |

| (1) | Pursuant to the March 2017 ASR, we made an upfront payment of $500 million and received and retired an initial delivery of 14.2 million shares of our common stock in March 2017. On May 19, 2017, which was in our first quarter of fiscal 2018, the ASR was completed, which, per the terms of the agreements, resulted in us receiving an additional 2.2 million shares of our common stock (these shares were excluded from the table above, as they were received after March 31, 2017). The total shares received under the terms of the ASR were 16.4 million, with an average price paid per share of $30.51. See Note 10 to the Consolidated Financial Statements for additional information regarding our stock repurchase programs. |

| | |

| --- | --- |

| (2) | The approximate dollar value of the shares that may yet be purchased under the plans or programs for the period from February 25, 2017 to March 31, 2017 is reduced by the $500 million that reflects the aggregate value of the stock held back by the financial institutions pending final settlement of our ASR agreement. The remaining $800 million authorization, to be completed in future periods, does not have an expiration date. |

During the fourth quarter of fiscal 2016, we paid a special dividend of $4.00 per share, resulting in a substantial decline in the sales price of our common stock on March 4, 2016.

| | 2016 | | | | | | | | | | | | | | | | 2015 | | | | | | | | | | | | | | |

| High | $ | 20.88 | | | $ | 21.37 | | | $ | 23.47 | | | $ | 25.90 | | | $ | 26.69 | | | $ | 26.58 | | | $ | 24.77 | | | $ | 23.04 | |

| Low | $ | 16.62 | | | $ | 19.50 | | | $ | 19.33 | | | $ | 23.03 | | | $ | 23.28 | | | $ | 21.94 | | | $ | 22.42 | | | $ | 19.97 | |

Stockholders

As of April 1, 2016, there were 1,849 stockholders of record.

Our restricted stock and performance-based stock units have dividend equivalent rights entitling holders to dividend equivalents to be paid in the form of cash upon vesting, for each share of the underlying units.

On May 12, 2016, we declared a cash dividend of $0.075 per share of common stock to be paid on June 22, 2016, to all stockholders of record as of the close of business on June 8, 2016.

In November 2015, we entered into an ASR transaction with a financial institution to repurchase $500 million of our common stock.

In January 2016, the purchase period for this ASR ended and we received an additional 5.0 million shares of our common stock.

The total shares received and retired under the terms of this ASR transaction were 24.9 million, with an average price paid per share of $20.08.

In March 2016, we entered into multiple ASR transactions with financial institutions to repurchase an aggregate of $1 billion of our common stock.

In exchange for an up-front payment of $1 billion, the financial institutions committed to deliver shares during the purchase period for these ASRs, which will end in or before the third quarter of fiscal 2017.

During the fourth quarter of fiscal 2016, 42.4 million shares were delivered and retired under these ASRs, and the final number of shares to be delivered and the average price paid per share will be determined at the conclusion of the purchase period.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2011 | | | | 2012 | | | | 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | |

| Symantec Corporation | $ | 100.00 | | | $ | 101.30 | | | $ | 133.69 | | | $ | 110.03 | | | $ | 134.25 | | | $ | 134.02 | |

| S&P 500 | $ | 100.00 | | | $ | 108.00 | | | $ | 123.08 | | | $ | 148.80 | | | $ | 169.03 | | | $ | 173.18 | |

| S&P Information Technology | $ | 100.00 | | | $ | 120.31 | | | $ | 118.96 | | | $ | 148.18 | | | $ | 175.60 | | | $ | 192.33 | |

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations, and Note 3 of the Notes to Consolidated Financial Statements in this annual report.][added: Operations.]

| Summary of operations: | [removed: |] Year Ended (1) | | | | | | | | | | | | | | | | | | |

| [added: (In millions)] | [added: March 31, 2017 (6) (9)] | [added: | | |] April 1, 2016 [added: (8)] | | | | April 3, 2015 | | | | March 28, 2014 [added: (7)] | | | | March 29, 2013 | | | [removed: | March 30, 2012 | | |]

| [removed: | |] (In millions, except per share data) | [added: March 31, 2017 (2)] | | | | [added: April 1, 2016 (3)] | | | | [added: April 3, 2015] | | | | [added: March 28, 2014] | | | | [added: March 29, 2013] | | [added: |]

| Net revenues | [removed: |] $ | [removed: 3,600] [added: 4,019] | | | $ | [removed: 3,956] [added: 3,600] | | | $ | [removed: 4,183] [added: 3,956] | | | $ | [removed: 4,268] [added: 4,183] | | | $ | [removed: 4,175] [added: 4,268] | |

| Operating income (loss) | [removed: | 457] [added: $] | [added: (100] | [added: )] | | [removed: 154] [added: $] | [added: 457] | | | [removed: 144] [added: $] | [added: 154] | | | [removed: (60] [added: $] | [added: 144] | [removed: )] | | [removed: (50] [added: $] | [added: (60] | ) |

| Income (loss) from continuing operations [removed: (2)] | [removed: | (821] [added: $] | [added: (236] | ) | | [removed: 109] [added: $] | [added: (821] | [added: )] | | [removed: 91] [added: $] | [added: 109] | | | [removed: (138] [added: $] | [added: 91] | [removed: )] | | [removed: 123] [added: $] | [added: (138] | [added: )] |

| Income from discontinued operations, net of income taxes [removed: (3) |] [added: (4)] | [removed: 3,309] [added: $] | [added: 130] | | | [removed: 769] [added: $] | [added: 3,309] | | | [removed: 807] [added: $] | [added: 769] | | | [removed: 893] [added: $] | [added: 807] | | | [removed: 1,064] [added: $] | [added: 893] | |

| Net income [removed: (4) |] [added: (loss)] | [removed: 2,488] [added: $] | [added: (106] | [added: )] | | [removed: 878] [added: $] | [added: 2,488] | | | [removed: 898] [added: $] | [added: 878] | | | [removed: 755] [added: $] | [added: 898] | | | [removed: 1,187] [added: $] | [added: 755] | |

| Income (loss) per share - basic: (5) | | | | | | | | | | | | | | | | | | | | [removed: |]

| Continuing operations | [added: $] | [added: (0.38 | ) | |] $ | (1.23 | ) | | $ | 0.16 | | | $ | 0.13 | | | $ | (0.20 | ) | [removed: | $ | 0.17 | |]

| Discontinued operations | [removed: |] $ | [removed: 4.94] [added: 0.21] | | | $ | [removed: 1.12] [added: 4.94] | | | $ | [removed: 1.16] [added: 1.12] | | | $ | [removed: 1.27] [added: 1.16] | | | $ | [removed: 1.44] [added: 1.27] | |

| Net income [added: (loss)] per share - basic | [removed: |] $ | [removed: 3.71] [added: (0.17] | [added: )] | | $ | [removed: 1.27] [added: 3.71] | | | $ | [removed: 1.29] [added: 1.27] | | | $ | [removed: 1.08] [added: 1.29] | | | $ | [removed: 1.60] [added: 1.08] | |

| Income (loss) per share - diluted: (5) | | | | | | | | | | | | | | | | | | | | [removed: |]

| Continuing operations | [added: $] | [added: (0.38 | ) | |] $ | (1.23 | ) | | $ | 0.16 | | | $ | 0.13 | | | $ | (0.20 | ) | [removed: | $ | 0.16 | |]

| Discontinued operations | [removed: |] $ | [removed: 4.94] [added: 0.21] | | | $ | [removed: 1.10] [added: 4.94] | | | $ | [removed: 1.15] [added: 1.10] | | | $ | [removed: 1.27] [added: 1.15] | | | $ | [removed: 1.42] [added: 1.27] | |

| Net income [added: (loss)] per share - diluted | [removed: |] $ | [removed: 3.71] [added: (0.17] | [added: )] | | $ | [removed: 1.26] [added: 3.71] | | | $ | [removed: 1.28] [added: 1.26] | | | $ | [removed: 1.08] [added: 1.28] | | | $ | [removed: 1.59] [added: 1.08] | |

| Weighted-average shares outstanding: | | | | | | | | | | | | | | | | | | | | [removed: |]

| Basic | [added: 618] | [added: | | |] 670 | | | | 689 | | | | 696 | | | | 701 | | | [removed: | 741 | | |]

| Diluted | [added: 618] | [added: | | |] 670 | | | | 696 | | | | 704 | | | | 701 | | | [removed: | 748 | | |]

| Cash dividends declared per common share | [removed: |] $ | [removed: 4.60] [added: 0.30] | | | $ | [removed: 0.60] [added: 4.60] | | | $ | 0.60 | | | $ | [removed: —] [added: 0.60] | | | $ | — | |

| Consolidated Balance Sheets Data: | | | | | | | | | | | | | | | | | | | | [removed: |]

| Total assets | [removed: |] $ | [removed: 11,767] [added: 18,174] | | | $ | [removed: 13,233] [added: 11,767] | | | $ | [removed: 13,539] [added: 13,233] | | | $ | [removed: 14,508] [added: 13,539] | | | $ | [removed: 13,158] [added: 14,508] | |

| Long-term [removed: obligations (6) (7) |] [added: debt] | [removed: 2,207] [added: $] | [added: 6,876] | | | [removed: 1,746] [added: $] | [added: 2,207] | | | [removed: 2,095] [added: $] | [added: 1,746] | | | [removed: 2,094] [added: $] | [added: 2,095] | | | [removed: 2,039] [added: $] | [added: 2,094] | |

| Total stockholders’ equity [removed: (8)] | [removed: | 3,676] [added: $] | [added: 3,487] | | | [removed: 5,935] [added: $] | [added: 3,676] | | | [removed: 5,797] [added: $] | [added: 5,935] | | | [removed: 5,476] [added: $] | [added: 5,797] | | | [removed: 5,237] [added: $] | [added: 5,476] | |

| (1) | We have a 52/53-week fiscal year. Our fiscal 2015 was a 53-week year whereas fiscal [added: 2017,] 2016, 2014, [removed: 2013,] and [removed: 2012,] [added: 2013,] each consisted of 52 weeks. |

| [removed: (2)] [added: (3)] | In fiscal 2016, [removed: the Company] [added: we] recorded $1.1 billion in income tax expense related to unremitted earnings of foreign subsidiaries from the proceeds of the sale of Veritas. This charge is presented in loss from continuing operations in the Consolidated Statements of Operations for fiscal 2016. See Note [removed: 11 of the Notes] [added: 5] to [added: the] Consolidated Financial Statements [removed: in this annual report] for more information. |

| [removed: (3)] [added: (4)] | In fiscal 2016, [removed: the Company] [added: we] sold the assets of Veritas to Carlyle for a net gain of $3.0 billion, which is presented as part of income from discontinued operations, net of income taxes in the Consolidated Statements of Operations for fiscal 2016. [added: See Note 13 to the Consolidated Financial Statements for more information.] |

| [removed: (6)] [added: (7)] | [removed: On June 15, 2013,] [added: In fiscal 2014,] the principal balance on [removed: the Company's] [added: our] 1.00% Convertible Senior Notes matured and was settled by a cash payment of [removed: $1] [added: $1.0] billion. At the time of issuance of the 1.00% notes, we granted warrants to affiliates of certain initial purchasers of the notes whereby they had the option to purchase up to 52.7 million shares of our common stock. All the warrants expired unexercised during the second quarter of fiscal 2014. In the fourth quarter of fiscal 2016, we issued $500 million in principal amount of 2.50% Convertible Senior Notes, due in April of 2021. [removed: See Note 5 of the Notes to Consolidated Financial Statements in this annual report for more information on the Company's long-term obligations.] |

| [removed: (7)] [added: (8)] | [removed: During the second quarter of] [added: In] fiscal 2016, the principal balance on [removed: the Company's] [added: our] 2.75% Senior Notes due September 15, 2015, matured and was settled by a cash payment of $350 million. [removed: See Note 5 of the Notes to Consolidated Financial Statements in this annual report for more information.] |

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| (2) | We acquired Blue Coat on August 1, 2016 and LifeLock on February 9, 2017 and the results of operations of those entities are included from their respective dates of acquisition. See Note 6 to the Consolidated Financial Statements for more information. |

| (6) | In fiscal 2017, we acquired total assets of $5.9 billion and $2.9 billion from Blue Coat and LifeLock, respectively. See Note 6 to the Consolidated Financial Statements for more information on our acquisitions. |

| | |

| --- | --- |

| (9) | In fiscal 2017, we issued $3.8 billion in Senior Term Facilities due at various dates from May 2019 to August 2021, $1.25 billion in 2.0% Convertible Senior Notes due in August of 2021 and $1.1 billion in 5% Senior Notes due in April of 2025. The proceeds from these issuances were used primarily to fund our Blue Coat and LifeLock acquisitions. In addition, we reclassified $710 million to short-term obligations due to our Board’s approval to prepay some of our Senior Term Facility and $600 million of our 2.75% Senior Notes due June 15, 2017. See Note 8 to the Consolidated Financial Statements for more information on the Company’s long-term debt. |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | (In millions) | | | | | | | | | | | | | | | | | | |

| (4) | In fiscal 2012, we sold our ownership interest in a joint venture for $530 million in cash. The net gain of $526 million, offset by costs to sell the joint venture of $4 million, was included in gain from sale of joint venture in our fiscal 2012 Consolidated Statements of Operations. |

| (8) | Includes noncontrolling interest in subsidiary of $78 million in fiscal 2012. |

Selected [removed: quarterly financial data][added: Quarterly Financial Data (Unaudited)]

| | Fiscal [removed: 2016] [added: 2017] | | | | | | | | | | | | | | | | Fiscal [removed: 2015] [added: 2016] | | | | | | | | | | | | | | |

| [added: (In millions, except per share data)] | Fourth Quarter | | | | Third Quarter | | | | Second Quarter | | | | First Quarter | | | | Fourth Quarter | | | | Third Quarter | | | | Second Quarter | | | | First Quarter | | |

| Net revenues | $ | [removed: 873] [added: 1,115] | | | $ | [removed: 909] [added: 1,041] | | | $ | [removed: 906] [added: 979] | | | $ | [removed: 912] [added: 884] | | | $ | [removed: 899] [added: 873] | | | $ | [removed: 970] [added: 909] | | | $ | [removed: 1,001] [added: 906] | | | $ | [removed: 1,086] [added: 912] | |

| Gross profit | [removed: 726] [added: 856] | | | | [removed: 759] [added: 806] | | | | [removed: 746] [added: 769] | | | | [removed: 754] [added: 735] | | | | [removed: 723] [added: 726] | | | | [removed: 793] [added: 759] | | | | [removed: 825] [added: 746] | | | | [removed: 888] [added: 754] | | |

| Operating income [added: (loss)] | [removed: 128] [added: (178] | | [added: )] | | [removed: 146] [added: (16] | | [added: )] | | [removed: 100] [added: (12] | | [added: )] | | [removed: 83] [added: 106] | | | | [removed: (49] [added: 128] | | [removed: )] | | [removed: 34] [added: 146] | | | | [removed: 96] [added: 100] | | | | [removed: 73] [added: 83] | | |

| Income (loss) from continuing operations | [removed: (1,013] [added: (177] | | ) | | [removed: 114] [added: (56] | | [added: )] | | [removed: 53] [added: (69] | | [added: )] | | [removed: 25] [added: 66] | | | | [removed: 55] [added: (1,013] | | [added: )] | | [removed: (25] [added: 114] | | [removed: )] | | [removed: 32] [added: 53] | | | | [removed: 47] [added: 25] | | |

| Income [added: (loss)] from discontinued operations, net of income taxes | [removed: 3,058] [added: 34] | | | | [removed: 56] [added: 102] | | | | [removed: 103] [added: (75] | | [added: )] | | [removed: 92] [added: 69] | | | | [removed: 121] [added: 3,058] | | | | [removed: 247] [added: 56] | | | | [removed: 212] [added: 103] | | | | [removed: 189] [added: 92] | | |

| Net income [added: (loss)] | [removed: 2,045] [added: (143] | | [added: )] | | [removed: 170] [added: 46] | | | | [removed: 156] [added: (144] | | [added: )] | | [removed: 117] [added: 135] | | | | [removed: 176] [added: 2,045] | | | | [removed: 222] [added: 170] | | | | [removed: 244] [added: 156] | | | | [removed: 236] [added: 117] | | |

| Continuing operations | $ | [removed: (1.56] [added: (0.29] | ) | | $ | [removed: 0.17] [added: (0.09] | [added: )] | | $ | [removed: 0.08] [added: (0.11] | [added: )] | | $ | [removed: 0.04] [added: 0.11] | | | $ | [removed: 0.08] [added: (1.56] | [added: )] | | $ | [removed: (0.04] [added: 0.17] | [removed: )] | | $ | [removed: 0.05] [added: 0.08] | | | $ | [removed: 0.07] [added: 0.04] | |

| Discontinued operations | $ | [removed: 4.70] [added: 0.06] | | | $ | [removed: 0.08] [added: 0.16] | | | $ | [removed: 0.15] [added: (0.12] | [added: )] | | $ | [removed: 0.13] [added: 0.11] | | | $ | [removed: 0.18] [added: 4.70] | | | $ | [removed: 0.36] [added: 0.08] | | | $ | [removed: 0.31] [added: 0.15] | | | $ | [removed: 0.27] [added: 0.13] | |

| Net income [added: (loss)] per share - basic | $ | [removed: 3.15] [added: (0.23] | [added: )] | | $ | [removed: 0.26] [added: 0.07] | | | $ | [removed: 0.23] [added: (0.23] | [added: )] | | $ | [removed: 0.17] [added: 0.22] | | | $ | [removed: 0.26] [added: 3.15] | | | $ | [removed: 0.32] [added: 0.26] | | | $ | [removed: 0.35] [added: 0.23] | | | $ | [removed: 0.34] [added: 0.17] | |

| Discontinued operations | $ | [removed: 4.70] [added: 0.06] | | | $ | [removed: 0.08] [added: 0.16] | | | $ | [removed: 0.15] [added: (0.12] | [added: )] | | $ | [removed: 0.13] [added: 0.11] | | | $ | [removed: 0.17] [added: 4.70] | | | $ | [removed: 0.36] [added: 0.08] | | | $ | [removed: 0.30] [added: 0.15] | | | $ | [removed: 0.27] [added: 0.13] | |

| Net income [added: (loss)] per share - diluted | $ | [removed: 3.15] [added: (0.23] | [added: )] | | $ | [removed: 0.25] [added: 0.07] | | | $ | [removed: 0.23] [added: (0.23] | [added: )] | | $ | [removed: 0.17] [added: 0.22] | | | $ | [removed: 0.25] [added: 3.15] | | | $ | [removed: 0.32] [added: 0.25] | | | $ | [removed: 0.35] [added: 0.23] | | | $ | [removed: 0.34] [added: 0.17] | |

Note: Net income [added: (loss)] per share amounts may not add due to rounding.

| Continuing operations | $ | (0.29 | ) | | $ | (0.09 | ) | | $ | (0.11 | ) | | $ | 0.11 | | | $ | (1.56 | ) | | $ | 0.17 | | | $ | 0.08 | | | $ | 0.04 | |

Annual financial statements

| | (In millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal [added: control over financial reporting as of March 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).]

Our management has concluded that, as of [removed: April 1, 2016,] [added: March 31, 2017,] our internal control over financial reporting was effective at the reasonable assurance level based on these criteria.

The Company’s independent registered public accounting firm has issued an attestation report regarding its assessment of the Company’s internal control over financial reporting as of [removed: April 1, 2016,] [added: March 31, 2017,] which is included in Part IV, Item 15 of this annual report.

There were no changes in our internal control over financial reporting during the quarter ended [removed: April 1, 2016,] [added: March 31, 2017,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred.

Our management’s evaluation of internal control over financial reporting excluded the internal control activities of Blue

Coat and LifeLock, which we acquired in August 2016 and February 2017, respectively, as discussed in Note 6 to the Consolidated Financial Statements.

We have included the financial results of Blue Coat and LifeLock in the Consolidated Financial Statements from the dates of acquisition.

Total revenues subject to Blue Coat’s internal control over financial reporting represented approximately 11% of our consolidated revenues for the fiscal year ended March 31, 2017.

Total assets subject to Blue Coat’s internal control over financial reporting represented approximately 4% of our consolidated total assets as of March 31, 2017.

Total revenues subject to LifeLock’s internal control over financial reporting represented approximately 2% of our consolidated revenues for the fiscal year ended March 31, 2017.

Total assets subject to LifeLock’s internal control over financial reporting represented approximately 2% of our consolidated total assets as of March 31, 2017.

Blue Coat’s and LifeLock’s goodwill and intangible assets were subject to our management’s evaluation of internal control over financial reporting.

control over financial reporting as of April 1, 2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

The information below is reported in lieu of information that would be reported under Items 5.03 under Form 8-K.

On May 17, 2017, our Board of Directors (the “Board”) adopted amendments to our Bylaws, as amended (the “Bylaws”), to implement proxy access.

As amended, the Bylaws include a new Section 1.13 permitting a stockholder, or a group of up to 50 stockholders, owning continuously for at least three years a number of shares of our common stock that constitutes at least 3% of the outstanding shares of our common stock, to nominate and include in our proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the Bylaws.

The amended Bylaws also reflect certain conforming and clarifying changes in Section 1.12 of the Bylaws.

The description of the Bylaws contained herein is qualified in its entirety by reference to the Bylaws, a copy of which is filed herewith as Exhibit 3.05 and is incorporated herein by reference.

None.

The information required by this item will be included under the caption “Directors, Executive Officers, and Corporate Governance” in our Proxy Statement for the 2017 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended March 31, 2017 (“2017 Proxy Statement”) and is incorporated herein by reference.

The information required by this item will be included in an amendment to this annual report on Form 10-K or incorporated by reference from Symantec’s definitive proxy statement to be filed pursuant to Regulation 14A.

The information required by this item will be included under the caption “Executive Compensation” in our 2017 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in an amendment to this annual report on Form 10-K or incorporated by reference from Symantec’s definitive proxy statement to be filed pursuant to Regulation 14A.

The information required by this item will be included under the caption “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in our 2017 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in an amendment to this annual report on Form 10-K or incorporated by reference from Symantec’s definitive proxy statement to be filed pursuant to Regulation 14A.

The information required by this item will be included under the caption “Certain Relationships and Related Transactions, and Director Independence” in our 2017 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in an amendment to this annual report on Form 10-K or incorporated by reference from Symantec’s definitive proxy statement to be filed pursuant to Regulation 14A.

The information required by this item will be included under the caption “Principal Accountant Fees and Services” in our 2017 Proxy Statement and is incorporated herein by reference.

The information required by this item will be included in an amendment to this annual report on Form 10-K or incorporated by reference from Symantec’s definitive proxy statement to be filed pursuant to Regulation 14A.

[removed: 650-527-8000][added: (650) 527-8000]

| | [Report of Independent Registered Public Accounting [removed: Firm](#s3308B2E82B3DEE6FE2A1C7A4022B173C)] [added: Firm](#s79FA1E76111FDD427E251A5C81918C72)] | [removed: [42](#s3308B2E82B3DEE6FE2A1C7A4022B173C)] [added: [41](#s79FA1E76111FDD427E251A5C81918C72)] |

[removed: | | [Notes] [added: Notes] to [added: the] Consolidated Financial [removed: Statements](#sD723DED01E2FB7C30B92C7A403897186) | [48](#sD723DED01E2FB7C30B92C7A403897186) |][added: Statements]

| 2. | [Exhibits: The information required by this Item is set forth in the Exhibit Index that follows the signature page of this Annual [removed: Report.](#s0C963F2C6D9D2131F90AC7A406BD8E06)] [added: Report.](#sFB852C3EFC7D69CB18D61A5C8619576A)] | [removed: [75](#s0C963F2C6D9D2131F90AC7A406BD8E06)] [added: [74](#sFB852C3EFC7D69CB18D61A5C8619576A)] |

We have audited the accompanying consolidated balance sheets of Symantec Corporation and subsidiaries as of [removed: April 1, 2016] [added: March 31, 2017] and April [removed: 3, 2015,] [added: 1, 2016,] and the related consolidated statements of operations, comprehensive [removed: income,] [added: income (loss),] stockholders’ equity, and cash flows for each of the years in the three-year period ended [removed: April 1, 2016.][added: March 31, 2017.]

We also have audited Symantec Corporation’s internal control over financial reporting as of [removed: April 1, 2016,] [added: March 31, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Symantec Corporation and subsidiaries as of [removed: April 1, 2016] [added: March 31, 2017] and April [removed: 3, 2015,] [added: 1, 2016,] and the results of their operations and their cash flows for each of the years in the three-year period ended [removed: April 1, 2016,] [added: March 31, 2017,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, Symantec Corporation maintained, in all material respects, effective internal control over financial reporting as of [removed: April 1, 2016,] [added: March 31, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

| | [added: March 31, 2017 | | | |] April 1, 2016 | | | | April 3, 2015 | | |

| Cash and cash equivalents | $ | [removed: 5,983] [added: 4,247] | | | $ | [removed: 2,843] [added: 5,983] | |

| [removed: Short-term] [added: Purchases of short-term] investments | [removed: 42] [added: —] | | | | [removed: 1,017] [added: (378] | | [added: )] | [added: | (1,758 | | ) |]

| Deferred income taxes | [removed: —] [added: (168] | | [added: )] | | [removed: 152] [added: 1,082] | | | [added: | (29 | | ) |]

| Other current assets | [removed: 378 | | | | 295] [added: 65] | | |

| Total current assets | [removed: 6,959] [added: 5,324] | | | | [removed: 5,422] [added: 6,959] | | |

| Property and equipment, net | [removed: 957] [added: 937] | | | | [removed: 950] [added: 957] | | |

| Intangible assets, net | [removed: 443] [added: 3,004] | | | | [removed: 525] [added: 443] | | |

| Goodwill | [removed: 3,148] [added: 8,627] | | | | [removed: 3,146] [added: 3,148] | | |

| Equity investments | [removed: 157] [added: 158] | | | | [removed: 10] [added: 157] | | |

| Other long-term assets | [removed: 103] [added: 124] | | | | [removed: 70] [added: 103] | | |

| [removed: Long-term] [added: Other long-term] assets [removed: of discontinued operations] | [removed: — | | | | 3,110] [added: 9] | | |

| Total assets | $ | [removed: 11,767] [added: 18,174] | | | $ | [removed: 13,233] [added: 11,767] | |

| Accounts payable | $ | [removed: 175] [added: 180] | | | $ | [removed: 169] [added: 175] | |

| Accrued compensation and benefits | [removed: 219] [added: 272] | | | | [removed: 232] [added: 219] | | |

| Deferred revenue | [removed: 2,279] [added: 2,353] | | | | [removed: 2,427] [added: 2,279] | | |

| Current portion of long-term debt | [removed: —] [added: 1,310] | | | | [removed: 350] [added: —] | | |

| Income taxes payable | [removed: 941] [added: 30] | | | | [removed: 47] [added: 941] | | |

| Other current liabilities | [removed: 419] [added: 477] | | | | [removed: 292] [added: 419] | | |

| Total current liabilities | [removed: 4,033] [added: 4,622] | | | | [removed: 4,453] [added: 4,033] | | |

| Long-term debt | [removed: 2,207] [added: 6,876] | | | | [removed: 1,746] [added: 2,207] | | |

| Long-term deferred revenue | [removed: 359] [added: 434] | | | | [removed: 444] [added: 359] | | |

| Long-term deferred tax liabilities | [removed: 1,235] [added: 2,401] | | | | [removed: 308] [added: 1,235] | | |

| Long-term income taxes payable | [removed: 160] [added: 251] | | | | [removed: 134] [added: 160] | | |

| Other long-term obligations | [removed: 97 | | | | 79] [added: 19] | | |

| Total liabilities | [removed: 8,091] [added: 14,687] | | | | [removed: 7,298] [added: 8,091] | | |

| Common stock and additional paid-in capital, $0.01 par [removed: value, 3,000] [added: value: 3,000,000] shares authorized; [removed: 612] [added: 608,019] and [removed: 898] [added: 612,266] shares [removed: issued; 612] [added: issued] and [removed: 684 shares outstanding, respectively] [added: outstanding] | [removed: 4,309] [added: 4,236] | | | | [removed: 6,101] [added: 4,309] | | |