Item 15. Exhibits, Financial Statement Schedules

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Item 15. Exhibits, Financial Statement Schedules

(a)

(1). Financial Statements

Upon written request, we will provide, without charge, a copy of this annual report, including the Consolidated Financial Statements and financial statement schedule. All requests should be sent to:

NortonLifeLock Inc.

Attn: Investor Relations

60 E. Rio Salado, Suite 1000

Tempe, Arizona 85281

(650) 527-8000

The following documents are filed as part of this report:

Page
1.Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm38
Consolidated Balance Sheets40
Consolidated Statements of Operations41
Consolidated Statements of Comprehensive Income (Loss)42
Consolidated Statements of Stockholders’ Equity43
Consolidated Statements of Cash Flows44
Notes to the Consolidated Financial Statements45
Note 1. Description of Business and Significant Accounting Policies45
Note 2. Recent Accounting Standards50
Note 3. Divestitures and Discontinued Operations51
Note 4. Acquisitions53
Note 5. Revenues53
Note 6. Goodwill and Intangible Assets53
Note 7. Supplementary Information54
Note 8. Financial Instruments and Fair Value Measurements57
Note 9. Leases58
Note 10. Debt59
Note 11. Derivatives62
Note 12. Restructuring, Transition and Other Costs62
Note 13. Income Taxes64
Note 14. Stockholders’ Equity67
Note 15. Stock-Based Compensation and Other Benefit Plans67
Note 16. Net Income Per Share71
Note 17. Segment and Geographic Information72
Note 18. Commitments and Contingencies73
Note 19. Subsequent Events76
Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.
2.Exhibits: The information required by this Item is set forth in the Exhibit Index that precedes the signature page of this Annual Report.76

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

NortonLifeLock Inc.:

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

We have audited the accompanying consolidated balance sheets of NortonLifeLock Inc. and subsidiaries (the Company) as of April 3, 2020 and March 29, 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended April 3, 2020, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of April 3, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 3, 2020 and March 29, 2019 and the results of its operations and its cash flows for each of the years in the three-year period ended April 3, 2020, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 3, 2020 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 2 and 9 to the consolidated financial statements, the Company has changed its method of accounting for leases as of March 30, 2019, due to the adoption of Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 842, Leases.

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for revenue from contracts with customers as of March 31, 2018, due to the adoption of ASC Topic 606, Revenue from Contracts with Customers.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting under Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of uncertain tax positions

As discussed in notes 1 and 13 to the consolidated financial statements, as of April 3, 2020 the Company recognized uncertain tax positions. The Company recognizes tax benefits from uncertain tax positions when there is more than a 50% likelihood that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. As of April 3, 2020, the Company has recorded a liability for gross unrecognized tax benefits of $724 million.

We identified the assessment of uncertain tax positions as a critical audit matter. Complex auditor judgment, including the involvement of tax professionals with specialized skills and knowledge, was required to evaluate the Company’s interpretation and application of tax law globally across its multiple subsidiaries.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s uncertain tax positions process, including controls related to the interpretation of tax law, its application in the liability estimation process, and determination of the final uncertain tax position. We involved tax professionals with specialized skills and knowledge, who assisted in:

•Obtaining an understanding of the Company’s overall tax structure across multiple subsidiaries and assessing the Company’s compliance with tax laws globally,
•Evaluating tax law, and assessing the interpretation under the relevant jurisdictions’ tax law,
•Inspecting settlements with taxing authorities to assess the Company’s determination of its tax positions and having more than a 50% likelihood to be sustained upon examination, and
•Performing an assessment of the Company’s tax positions and comparing the results to the Company’s assessment.

In addition, we evaluated the Company’s ability to accurately estimate its gross unrecognized tax benefits by comparing historical gross unrecognized tax benefits to actual outcome upon conclusion of tax examinations.

Evaluation of the exchange of the 2.0% and 2.5% Convertible Notes

As discussed in Note 10 to the consolidated financial statements, in February 2020, the Company exchanged $250 million of its 2.5% Convertible Notes and $625 million of its 2.0% Convertible Notes for new convertible notes of the same principal amounts and paid the holders of the new convertible notes total cash consideration of $546 million in lieu of conversion price adjustments related to a $12 per share cash payment to the exchanged note holders. As a result, the Company recorded $865 million as the liability component, recorded a reduction of additional paid-in capital of $546 million and a $2 million gain on extinguishment.

We identified the evaluation of the exchange of debt for the 2.0% and 2.5% Convertible Notes as a critical audit matter. Complex auditor judgment, was required to evaluate the Company’s accounting treatment and appropriate accounting guidance in relation to the debt extinguishment and the cash payments in connection with the amended Convertible Senior Notes.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s debt process, including controls over the Company’s evaluation of the accounting guidance, including treatment and assessment of the extinguishment of debt and the cash payments. We read the Company’s amended debt agreements and features included within the agreements and evaluated the accounting guidance. We evaluated management’s accounting treatment and analysis of the debt extinguishment, cash payments, and classification within the consolidated financial statements.

/s/ KPMG LLP

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

Santa Clara, California

May 28, 2020

NORTONLIFELOCK INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value per share amounts)

April 3, 2020March 29, 2019
ASSETS
Current assets:
Cash and cash equivalents$2,177$1,791
Short-term investments86252
Accounts receivable, net111708
Other current assets435286
Assets held for sale270—
Current assets of discontinued operations—149
Total current assets3,0793,186
Property and equipment, net238663
Operating lease assets88—
Intangible assets, net1,0671,202
Goodwill2,5852,677
Other long-term assets6781,160
Long-term assets of discontinued operations—7,050
Total assets$7,735$15,938
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$87$165
Accrued compensation and benefits115250
Current portion of long-term debt756491
Contract liabilities1,0491,032
Current operating lease liabilities28—
Other current liabilities587524
Current liabilities of discontinued operations—1,304
Total current liabilities2,6223,766
Long-term debt3,4653,961
Long-term contract liabilities2727
Deferred income tax liabilities149577
Long-term income taxes payable1,3101,076
Long-term operating lease liabilities73—
Other long-term liabilities7978
Long-term liabilities of discontinued operations—715
Total liabilities7,72510,200
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.01 par value: 1 shares authorized; no shares issued and outstanding——
Common stock and additional paid-in capital, $0.01 par value: 3,000 shares authorized; 589 and 630 shares issued and outstanding as of April 3, 2020 and March 29, 2019, respectively3,3564,812
Accumulated other comprehensive loss(16)(7)
Retained earnings (accumulated deficit)(3,330)933
Total stockholders’ equity105,738
Total liabilities and stockholders’ equity$7,735$15,938

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

NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

Year Ended
April 3, 2020March 29, 2019March 30, 2018
Net revenues$2,490$2,456$2,559
Cost of revenues393455463
Gross profit2,0972,0012,096
Operating expenses:
Sales and marketing701712841
Research and development328420455
General and administrative368410487
Amortization of intangible assets798087
Restructuring, transition and other costs266221380
Total operating expenses1,7421,8432,250
Operating income (loss)355158(154)
Interest expense(196)(208)(256)
Other income (expense), net660(57)654
Income (loss) from continuing operations before income taxes819(107)244
Income tax expense (benefit)2413(720)
Income (loss) from continuing operations578(110)964
Income from discontinued operations3,309141174
Net income$3,887$31$1,138
Income (loss) per share - basic:
Continuing operations$0.94$(0.17)$1.56
Discontinued operations$5.38$0.22$0.28
Net income per share - basic (1)$6.32$0.05$1.85
Income (loss) per share - diluted:
Continuing operations$0.90$(0.17)$1.44
Discontinued operations$5.15$0.22$0.26
Net income per share - diluted (1)$6.05$0.05$1.70
Weighted-average shares outstanding:
Basic615632616
Diluted643632668

(1) Net income per share amounts may not add due to rounding.

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

NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

Year Ended
April 3, 2020March 29, 2019March 30, 2018
Net income$3,887$31$1,138
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments:
Translation adjustments(11)(13)(4)
Reclassification adjustments for net loss included in net income——5
Net foreign currency translation adjustments(11)(13)1
Unrealized gain (loss) on available-for-sale securities:
Unrealized gain (loss)13(5)
Reclassification adjustments for gain included in net income——(4)
Net unrealized gain (loss) on available-for-sale securities13(9)
Other comprehensive income (loss) from equity method investee:
Other comprehensive income (loss) from equity method investee2(1)—
Reclassification adjustments for income included in net income(1)——
Net other comprehensive income (loss) from equity method investee1(1)—
Other comprehensive loss, net of taxes(9)(11)(8)
Comprehensive income$3,878$20$1,130

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

NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity
SharesAmount
Balance as of March 31, 2017608$4,236$12$(761)$3,487
Net income———1,1381,138
Other comprehensive loss——(8)—(8)
Common stock issued under employee stock incentive plans22121——121
Shares withheld for taxes related to vesting of restricted stock units(4)(107)——(107)
Equity awards assumed in acquisitions—1——1
Repurchases of common stock(2)————
Cash dividends declared ($0.30 per share of common stock) and dividend equivalents accrued—(144)—(49)(193)
Stock-based compensation—584——584
Balance as of March 30, 20186244,69143285,023
Cumulative effect from adoption of accounting standards———939939
Net income———3131
Other comprehensive loss——(11)—(11)
Common stock issued under employee stock incentive plans2419——19
Shares withheld for taxes related to vesting of restricted stock units(8)(173)——(173)
Repurchases of common stock(10)(84)—(168)(252)
Cash dividends declared ($0.30 per share of common stock) and dividend equivalents accrued———(197)(197)
Stock-based compensation—359——359
Balance as of March 29, 20196304,812(7)9335,738
Net income———3,8873,887
Other comprehensive loss——(9)—(9)
Common stock issued under employee stock incentive plans32123——123
Shares withheld for taxes related to vesting of restricted stock units(4)(86)——(86)
Repurchases of common stock(69)(902)—(661)(1,563)
Cash dividends declared ($12.40 per share of common stock) and dividend equivalents accrued—(76)—(7,489)(7,565)
Stock-based compensation—338——338
Short-swing profit disgorgement—9——9
Exchange and extinguishment of convertible debt—(862)——(862)
Balance as of April 3, 2020589$3,356$(16)$(3,330)$10

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

NORTONLIFELOCK INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Year Ended
April 3, 2020March 29, 2019March 30, 2018
OPERATING ACTIVITIES:
Net income$3,887$31$1,138
Adjustments:
Amortization and depreciation361615640
Impairments of long-lived assets741081
Stock-based compensation expense312352610
Loss from equity interest3110126
Deferred income taxes16(70)(1,848)
Gain on divestitures(5,684)—(653)
Gain on sale of equity method investment(379)——
Non-cash operating lease expense40——
Other(4)(14)45
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable, net583113(170)
Accounts payable(61)6(4)
Accrued compensation and benefits(117)2(33)
Contract liabilities(121)196491
Income taxes payable38367880
Other assets(81)(26)(167)
Other liabilities(101)112(86)
Net cash provided by (used in) operating activities(861)1,495950
INVESTING ACTIVITIES:
Purchases of property and equipment(89)(207)(142)
Payments for acquisitions, net of cash acquired—(180)(401)
Proceeds from divestitures, net of cash contributed and transaction costs10,918—933
Purchases of short-term investments——(436)
Proceeds from maturities and sales of short-term investments16713949
Proceeds from sale of property—26—
Proceeds from sale of equity method investment380——
Other3(19)(24)
Net cash provided by (used in) investing activities11,379(241)(21)
FINANCING ACTIVITIES:
Repayments of debt and related equity component(868)(600)(3,210)
Proceeds from issuance of debt, net of issuance costs300——
Net proceeds from sales of common stock under employee stock incentive plans12319121
Tax payments related to restricted stock units(78)(173)(107)
Dividends and dividend equivalents paid(7,481)(217)(211)
Repurchases of common stock(1,581)(234)—
Cash consideration paid in the exchange of convertible debt(546)——
Short-swing profit disgorgement9——
Other(1)(4)(68)
Net cash used in financing activities(10,123)(1,209)(3,475)
Effect of exchange rate fluctuations on cash and cash equivalents(9)(28)73
Change in cash and cash equivalents38617(2,473)
Beginning cash and cash equivalents1,7911,7744,247
Ending cash and cash equivalents$2,177$1,791$1,774

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

NORTONLIFELOCK INC.

Notes to the Consolidated Financial Statements

Note 1**. Description of Business and Significant Accounting Policies**

Business

We are a leading provider of Cyber Safety solutions for consumers. During fiscal year 2020, we completed the sale of our Enterprise Security Assets to Broadcom Inc. (Broadcom) and the sale of our ID Analytics business to LexisNexis® Risk Solutions, part of RELX Inc. With the sale of our enterprise assets, we have transformed ourselves into a pure consumer company and changed our name from Symantec Corporation to NortonLifeLock Inc. Our NortonLifeLock branded solutions help customers protect their devices, online privacy, identity and home networks.

Recent Corporate Name Change

In connection with the sale of certain assets of our Enterprise Security business as disclosed in Discontinued operations below, effective November 4, 2019, we changed our corporate name from Symantec Corporation to NortonLifeLock Inc.

Discontinued operations

On August 8, 2019, we entered into a definitive agreement with Broadcom under which Broadcom agreed to purchase certain of our Enterprise Security assets and assume certain liabilities for a purchase price of $10.7 billion (the Broadcom sale). On November 4, 2019, we completed the transaction. The divestiture of our Enterprise Security business allowed us to shift our operational focus to our consumer business and represents a strategic shift in our operations. As a result, the majority of results of our Enterprise Security business were classified as discontinued operations in our Consolidated Statements of Operations and thus excluded from both continuing operations and segment results for all periods presented. We have operated in one reportable segment since the second quarter of fiscal 2020. The Enterprise Security business was part of our Enterprise Security segment. Results of discontinued operations include all revenues and expenses directly derived from the Enterprise Security business, with the exception of revenues and associated costs of our ID Analytics solutions, which were formerly included in the Enterprise Security segment, and general corporate overhead which were previously allocated to the Enterprise Security segment but are not allocated to discontinued operations. These revenues and expenses are now included in continuing operations. The assets acquired by and liabilities sold to Broadcom, as specified in the August 8, 2019 definitive agreement, are classified as discontinued operations in our Consolidated Balance Sheets, subject to changes set forth in the agreement. See Note 3 for additional information about the divestiture of our Enterprise Security business.

Principles of consolidation

The accompanying Consolidated Financial Statements of NortonLifeLock and our wholly-owned subsidiaries are prepared in conformity with generally accepted accounting principles in the United States (GAAP). All significant intercompany accounts and transactions have been eliminated in consolidation.

Fiscal calendar

We have a 52/53-week fiscal year ending on the Friday closest to March 31. Our fiscal year 2020 consisted of 53 weeks whereas fiscal years 2019 and 2018 were each 52-week years.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are based upon historical factors, current circumstances, and the experience and judgment of management. Management evaluates its assumptions and estimates on an ongoing basis and may engage outside subject matter experts to assist in its valuations. Significant items subject to such estimates and assumptions include valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, and valuation of assets and liabilities and results of operations of our discontinued operations. Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the COVID-19 pandemic.

Significant Accounting Policies

Revenue recognition

On March 31, 2018, the first day of our fiscal 2019, we adopted the new revenue standard, Revenue Recognition - Contracts with Customers, on a modified retrospective basis, applying the practical expedient to all uncompleted contracts as of March 31, 2018. Accordingly, results of our fiscal 2020 and 2019 are presented under the new revenue recognition guidance, while prior period amounts are not adjusted and continue to be reported under the prior revenue recognition guidance. The adoption of the new revenue standard did not have a significant impact on our net revenues.

We sell products and services directly to end-users and packaged software products through a multi-tiered distribution channel. We recognize revenue when control of the promised products or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for such products or services. Performance periods are generally one year or less, and payments are generally collected up front. Revenue is recognized net of allowances for partner incentives and rebates, and any taxes collected from customers and subsequently remitted to governmental authorities.

We offer various channel rebates for our products. Our estimated reserves for channel volume incentive rebates are based on distributors’ and resellers’ performance compared to the terms and conditions of volume incentive rebate programs, which are typically entered into quarterly. Our reserves for rebates are estimated based on the terms and conditions of the promotional program, actual sales during the promotion, the amount of redemptions received, historical redemption trends by product and by type of promotional program, and the value of the rebate. We record estimated reserves for rebates as an offset to revenue or contract liabilities. Reserves for rebates, recorded in Other current liabilities, were $10 million and $17 million as of April 3, 2020 and March 29, 2019, respectively. For products that include content updates, rebates are recognized as a ratable offset to revenue or contract liabilities over the term of the subscription.

Performance obligations

At contract inception, we assess the products and services promised in the contract to identify each performance obligation and evaluate whether the performance obligations are capable of being distinct and are distinct within the context of the contract. Performance obligations that are not both capable of being distinct and distinct within the context of the contract are combined and treated as a single performance obligation in determining the allocation and recognition of revenue. Our software solutions typically consist of a term-based subscription as well as when-and-if available software updates and upgrades. We have determined that our promises to transfer the software license subscription and the related support and maintenance are not separately identifiable because:

•the licensed software and the software updates and upgrades are highly interdependent and highly interrelated, working together to deliver continuously updated protection to customers;
•by identifying and addressing new threats, the software updates and upgrades significantly modify the licensed software and are integral to maintaining its utility; and
•given the rapid pace with which new threats are identified, the value of the licensed software diminishes rapidly without the software updates and upgrades.

We therefore consider the software license and related support obligations represent a single, combined performance obligation with revenue recognized over time as our solutions are delivered.

Fair value measurements

For assets and liabilities measured at fair value, fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider assumptions that market participants would use when pricing the asset or liability.

The three levels of inputs that may be used to measure fair value are:

•Level 1: Quoted prices in active markets for identical assets or liabilities.
•Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in less active markets or model-derived valuations. All significant inputs used in our valuations, such as discounted cash flows, are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.
•Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities. We monitor and review the inputs and results of these valuation models to help ensure the fair value measurements are reasonable and consistent with market experience in similar asset classes.

Assets measured and recorded at fair value

Cash equivalents. We consider all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are carried at amounts that approximate fair value due to the short period of time to maturity.

Short-term investments. Short-term investments consist primarily of corporate bonds. They are classified as available-for-sale and recognized at fair value using Level 1 and Level 2 inputs, which are quoted using market prices, independent pricing vendors, or other sources, to determine the fair value. Unrealized gains and losses, net of tax, are included in Accumulated other comprehensive loss (AOCI). We regularly review our investment portfolio to identify and evaluate investments that have indications of impairment. Factors considered in determining whether a loss is other-than-temporary include: the length of time and extent to which the fair value has been lower than the cost basis, the financial condition and near-term prospects of the investee, credit quality, likelihood of recovery, and our ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

Derivatives. We have entered into foreign exchange forward contracts with up to 12 months in duration to mitigate our foreign currency risk. The forward contracts designated as net investment hedges are used to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. Gain or loss on these forward contracts are recognized in the translation adjustments component of AOCI and is reclassified to net earnings in the period in which the hedged subsidiary is either sold or substantially liquidated. We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness and recognize these changes in Other income (expense), net in our Consolidated Statements of Operations.

The foreign exchange forward contracts not designated as hedges are used to hedge foreign currency balance sheet exposure. These forward contracts are recognized at fair value using Level 2 inputs to determine the fair value.

Non-marketable investments

Our non-marketable investments consist of equity investments in privately-held companies without a readily determinable fair value. We measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Gains and losses on these investments, whether realized or unrealized, are recognized in Other income (expense), net in our Consolidated Statements of Operations. Prior to fiscal 2019, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment.

We accounted for the investment in common stock of DigiCert Parent Inc. (DigiCert) that we received as a portion of the net consideration in the sale of our website security (WSS) and public key infrastructure (PKI) solutions under the equity method. We recorded our interest in the net earnings (loss) of DigiCert based on the most recently available financial statements of DigiCert, which were provided to us on a three-month lag, along with adjustments for amortization of basis differences, in Other income (expense), net in our Consolidated Statements of Operations. This investment was sold in October 2019.

We assess the recoverability of our non-marketable investments by reviewing various indicators of impairment. If indicators are present, a fair value measurement is made by performing a discounted cash flow analysis of the investment. We immediately recognize the impairment to our non-marketable equity investments if the carrying value exceeds the fair value. For our equity method investment, if a decline in value is determined to be other than temporary, impairment is recognized and included in Other income (expense), net in our Consolidated Statements of Operations.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and are not interest bearing. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review our accounts receivables by aging category to identify specific customers with known disputes or collectability issues. In addition, we maintain an allowance for all other receivables not included in the specific reserve by applying specific percentages of projected uncollectible receivables to the various aging categories. In determining these percentages, we use judgment based on our historical collection experience and current economic trends. We also offset deferred revenue against accounts receivable when channel inventories are in excess of specified levels and for transactions where collection of a receivable is not considered probable.

Assets Held for Sale

Long-lived assets held for sale are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets and external data available.

Property and equipment

Property, equipment, and leasehold improvements are stated at cost, net of accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives. Estimated useful lives for financial reporting purposes are as follows: buildings, 20 to 30 years; building improvements, 7 to 20 years; leasehold improvements, the lesser of the life of the improvement or the initial lease term, and computer hardware and software, and office furniture and equipment, 3 to 5 years.

Software development costs

The costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. Because our current process for developing software is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for any of the periods presented.

Internal-use software development costs

We capitalize qualifying costs incurred during the application development stage related to software developed for internal-use and amortize them over the estimated useful life of 3 to 10 years. We expense costs incurred related to the planning and post-implementation phases of development as incurred. As of April 3, 2020 and March 29, 2019, capitalized costs, net of amortization, were $24 million and $43 million, respectively.

Leases

Beginning March 30, 2019, operating lease assets and liabilities are included in our Consolidated Balance Sheets. We determine if an arrangement is a lease at inception. We have elected to not recognize a lease liability or right-of-use (ROU) asset for short-term leases (leases with a term of twelve months or less that do not include an option to purchase the underlying asset). Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The interest rate we use to determine the present value of future payments is our incremental borrowing rate because the rate implicit in our leases is not readily determinable. Our incremental borrowing rate is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors. Our operating lease assets also include adjustments for prepaid lease payments, lease incentives and initial direct costs.

Certain lease contracts include obligations to pay for other services, such as operations and maintenance. We elected the practical expedient whereby we record all lease components and the related minimum non-lease components as a single lease component. Cash payments made for variable lease costs are not included in the measurement of our operating lease assets and liabilities. Many of our lease terms include one or more options to renew. We do not assume renewals in our determination of the lease term unless it is reasonably certain that we will exercise that option. Lease costs for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. Our lease agreements do not contain any residual value guarantees.

Business combinations

We use the acquisition method of accounting under the authoritative guidance on business combinations. We allocate the purchase price of our acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Each acquired company’s operating results are included in our Consolidated Financial Statements starting on the date of acquisition.

Goodwill

Goodwill is recorded when consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired.

We perform an impairment assessment of goodwill at the reporting unit level at least annually in the fourth quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The accounting guidance gives us the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed.

In fiscal 2020, based on our qualitative assessments, we concluded that it is more likely than not that the fair values are more than their carrying values. Accordingly, there was no indication of impairment, and further quantitative testing was not required.

Long-lived assets

In connection with our acquisitions, we generally recognize assets for customer relationships, developed technology, finite-lived trade names, patents, and indefinite-lived trade names. Finite-lived intangible assets are carried at cost less accumulated amortization. Such amortization is provided on a straight-line basis over the estimated useful lives of the respective assets, generally from 1 to 7 years. Amortization for developed technology is recognized in cost of revenue. Amortization for customer relationships and certain trade names is recognized in operating expenses. Indefinite-lived intangible assets are not subject to amortization but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets, including finite-lived intangible assets and property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows independent of other assets. An impairment loss is recognized when estimated undiscounted future cash flows generated from the assets are less than their carrying amount. Measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair value. During the year ended April 3, 2020, we recognized an impairment loss of $74 million associated with our property and equipment as a result of our restructuring activities. There was no impairment associated with our intangible assets.

Contract liabilities

Contract liabilities consist of deferred revenue and customer deposit liabilities and represent cash payments received or due in advance of fulfilling our performance obligations. Deferred revenue represents billings under non-cancelable contracts before the related product or service is transferred to the customer. Certain arrangements include terms that allow the customer to terminate the contract and receive a pro-rata refund for a period of time. In these arrangements, we have concluded there are no enforceable rights and obligations during the period in which the option to cancel is exercisable by the customer, and therefore the consideration received or due from the customer is recorded as a customer deposit liability.

Debt

Our debt includes senior unsecured notes, senior term loans, convertible senior notes, and a senior unsecured revolving credit facility. Our senior unsecured notes are recorded at par value at issuance less a discount representing the amount by which the face value exceeds the fair value at the date of issuance and an amount which represents issuance costs. Our senior term loans are recorded at par value less debt issuance costs, which are recorded as a reduction in the carrying value of the debt. Our convertible senior notes are recorded at par value less the fair value of the equity component of the notes, at their issuance date, determined using Level 2 inputs and less any issuance costs. The discount and issuance costs associated with the various notes are amortized using the effective interest rate method over the term of the debt as a non-cash charge to interest expense. Borrowings under our revolving credit facility, if any, are recognized at principal balance plus accrued interest based upon stated interest rates. Debt maturities are classified as current liabilities on our Consolidated Balance Sheets if we are contractually obligated to repay them in the next twelve months or, prior to the balance sheet date, we have the authorization and intent to repay them prior to their contractual maturities and within the next twelve months.

Treasury stock

We account for treasury stock under the cost method. Shares repurchased under our share repurchase program are retired. Upon retirement, we allocate the value of treasury stock between Paid-in capital and Retained earnings.

Restructuring

Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and assets write-offs. Employee-related severance charges are largely based upon substantive severance plans, while some charges result from mandated requirements in certain foreign jurisdictions. These charges are reflected in the period when both the actions are probable, and the amounts are estimable. Contract termination costs reflect costs that will continue to be incurred under a contract for its remaining term without future economic benefit. These charges are reflected in the period when a contract is terminated. Asset impairments, including those related to ROU lease assets, are recognized in the period that an asset is decommissioned or a facility ceases to be used.

Income taxes

We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities and for operating losses and tax credit carryforwards in each jurisdiction in which we operate. We measure deferred tax assets and liabilities using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled.

We also assess the likelihood that deferred tax assets will be realized from future taxable income and based on this assessment establish a valuation allowance, if required. The determination of our valuation allowance involves assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate. To the extent we establish a valuation allowance or change the valuation allowance in a period, we reflect the change with a corresponding increase or decrease to our tax expense.

We record accruals for uncertain tax positions when we believe that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. We adjust these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The provision for income taxes includes the effects of adjustments for uncertain tax positions as well as any related interest and penalties.

Stock-based compensation

We measure and recognize stock-based compensation for all stock-based awards, including restricted stock units (RSU), performance-based restricted stock units (PRU), stock options, and rights to purchase shares under our employee stock purchase plan (ESPP), based on their estimated fair value on the grant date. We recognize the costs in our financial statements on a straight-line basis over the award’s requisite service period except for PRUs with graded vesting, for which we recognize the costs on a graded basis. For awards with performance conditions, the amount of compensation cost we recognize over the requisite service period is based on the actual or estimated achievement of the performance condition. We estimate the number of stock-based awards that will be forfeited due to employee turnover.

The fair value of each RSU and PRU that does not contain a market condition is equal to the market value of our common stock on the date of grant. The fair value of each PRU that contains a market condition is estimated using the Monte Carlo simulation model. The fair values of RSUs and PRUs are not discounted by the dividend yield because our RSUs and PRUs include dividend-equivalent rights. We use the Black-Scholes model to determine the fair value of stock options and the fair value of rights to acquire shares of common stock under our ESPP. The Black-Scholes valuation model incorporates a number of variables, including our expected stock price volatility over the expected life of the awards, actual and projected employee exercise and forfeiture behaviors, risk-free interest rates, and expected dividends.

We have certain liability-classified stock-based compensation awards for which the service inception date precedes the grant date. For these awards, we recognize stock-based compensation expense on a straight-line basis over the service period. The liability is reclassified to Additional paid-in capital in our Consolidated Balance Sheets when the award is granted.

Foreign currency

For foreign subsidiaries whose functional currency is the local currency, assets and liabilities are translated to U.S. dollars at exchange rates in effect at the balance sheet date. Gains and losses resulting from translation of these foreign currency financial statements into U.S. dollars are recorded in AOCI. Remeasurement adjustments are recorded in Other income (expense), net.

Concentrations of risk

A significant portion of our revenue is derived from international sales. Fluctuations of the U.S. dollar against foreign currencies, changes in local regulatory or economic conditions, or piracy could adversely affect our operating results.

Financial instruments that potentially subject us to concentrations of risk consist principally of cash and cash equivalents, short-term investments, and trade accounts receivable. Our investment policy limits the amount of credit risk exposure to any one issuer and to any one country. A majority of our trade receivables are derived from sales to distributors and retailers. The credit risk in our trade accounts receivable is substantially mitigated by our credit evaluation process, reasonably short collection

terms, and the geographical dispersion of sales transactions. Customers which are distributors that accounted for over 10% of our net accounts receivable, are as follows:

April 3, 2020March 29, 2019
Customer AN/A16%
Customer BN/A15%
Customer C39%N/A

Advertising and other promotional costs

Advertising and other promotional costs are charged to operations as incurred and included in sales and marketing expenses. These costs totaled $343 million, $279 million, and $319 million for fiscal 2020, 2019, and 2018, respectively.

Contingencies

We evaluate contingent liabilities including threatened or pending litigation in accordance with the authoritative guidance on contingencies. We assess the likelihood of any adverse judgments or outcomes from potential claims or proceedings, as well as potential ranges of probable losses, when the outcomes of the claims or proceedings are probable and reasonably estimable. A determination of the amount of an accrual required, if any, for these contingencies is made after the analysis of each separate matter. Because of uncertainties related to these matters, we base our estimates on the information available at the time of our assessment. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates.

Note 2**. Recent Accounting Standards**

Recently adopted authoritative guidance

Leases. In February 2016, the FASB issued new guidance on lease accounting which requires lessees to recognize assets and liabilities on their balance sheet for the rights and obligations created by operating leases and also requires disclosures designed to give users of financial statements information on the amount, timing, and uncertainty of cash flows arising from leases. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

On March 30, 2019, the first day of our fiscal 2020, we adopted the new guidance using the alternative modified retrospective transition method under which we continue to apply the legacy lease accounting guidance, including its disclosure requirements, in comparative periods prior to fiscal 2020. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard that allowed us not to reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. We currently do not have any finance leases. We combine the lease and non-lease components in determining the operating lease assets and liabilities.

The adoption of the new lease accounting standard resulted in the recognition of ROU assets and lease liabilities of $182 million and $209 million, respectively, as of March 30, 2019 related to our operating leases. The adoption of the standard also resulted in elimination of deferred rent liabilities of $17 million, as of March 30, 2019, which are now recorded as a reduction of the ROU assets. The standard did not have an impact on our Consolidated Statements of Operations or Statements of Cash Flows.

Recently issued authoritative guidance not yet adopted

Credit Losses. In June 2016, the FASB issued new authoritative guidance on credit losses which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, we will be required to use a new forward-looking “expected loss” model. Additionally, for available-for-sale debt securities with unrealized losses, we will measure credit losses in a manner similar to today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. The standard will be effective for us in our first quarter of fiscal 2021. We do not expect the adoption of this guidance will have a material impact on our Consolidated Financial Statements or disclosures.

Internal-Use Software. In August 2018, the FASB issued new guidance that clarifies the accounting for implementation costs in a cloud computing arrangement. The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will be effective for us in our first quarter of fiscal 2021. We do not expect the adoption of this guidance will have a material impact on our Consolidated Financial Statements.

Income taxes. In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by removing certain exceptions in the current guidance. It also simplifies accounting in areas related to franchise taxes that are partially based on income, transactions that result in a step-up in tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The standard will be effective for us in our first quarter of fiscal 2023, with early adoption permitted. We are currently evaluating the adoption date and the impact of the adoption of this guidance on our Consolidated Financial Statements and disclosures.

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

Note 3**. Divestitures and Discontinued Operations**

Divestitures

Enterprise Security assets

On November 4, 2019, we sold certain of our Enterprise Security assets and certain liabilities to Broadcom for a purchase price of $10.7 billion. The following table presents the gain before income taxes associated with the sale, presented in the results of our discontinued operations below.

(In millions)
Cash proceeds$10,582
Income taxes withheld by Broadcom109
Net assets sold(5,211)
Transaction costs(39)
Foreign exchange impact(7)
Total gain on sale$5,434

The carrying value of the net assets sold was as follows:

(In millions)
Current assets$158
Intangible assets, net934
Goodwill5,773
Other long-term assets256
Current contract liabilities(1,210)
Other current liabilities(28)
Long-term contract liabilities(634)
Other long-term liabilities(38)
Total net assets sold$5,211

In connection with the Broadcom sale, we entered into a transition services agreement under which we will provide assistance to Broadcom including, but not limited to, business support services and information technology services for a period of up to six months. Dedicated direct cost, net of charges to Broadcom, for these transition services was $19 million in fiscal 2020 and was recorded as part of Other income (expense), net in our Consolidated Statements of Operations.

ID Analytics solutions

On January 31, 2020, we completed the sale of our ID Analytics solutions for $375 million in net cash proceeds. We recognized a gain on sale of $250 million, which was included in Other income (expense), net in our Consolidated Statements of Operations. Total net assets sold was $125 million, consisting of goodwill and net intangible assets of $114 million and net assets, net of other liabilities, of $11 million. We incurred tax expense of $86 million related to the gain.

Website Security and Public Key Infrastructure solutions

On October 31, 2017, we completed the sale of our WSS and PKI solutions to DigiCert. In accordance with the terms of the agreement, we received aggregate consideration of $1.1 billion, consisting of approximately $951 million in cash and shares of common stock representing an approximate 28% interest in the outstanding common stock of DigiCert valued at $160 million as of October 31, 2017.

The carrying value of the net assets sold was as follows:

(In millions)
Cash and cash equivalents$2
Goodwill and intangible assets, net670
Liabilities, net of other assets(222)
Net assets sold$450

As of the transaction close date, we also had $8 million in cumulative currency translation losses related to subsidiaries that were sold, which was reclassified from AOCI to Other income (expense), net. In addition, we incurred direct costs of $8 million, which was recorded as part of Other income (expense), net, and tax expense of $123 million.

The following table presents the gain before income taxes associated with the divestiture, presented as part of Other income (expense), net:

(In millions)
Gain on sale of short-term investment$7
Gain on sale of other assets and liabilities646
Total gain on divestiture$653

The gain on sale of short-term investment represents the gain on the sale of a short-term investment that was included in the transaction and resulted in the reclassification on the transaction close date of $7 million of unrealized gains from AOCI to Other income (expense), net.

Income before income taxes for our WSS and PKI solutions in fiscal 2018 was $66 million, which is included in income from continuing operations.

Discontinued Operations

The following table presents information regarding certain components of income from discontinued operations, net of income taxes:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Net revenues$1,368$2,288$2,329
Gross profit$1,035$1,693$1,737
Operating income$4$234$214
Gain on sale$5,434$—$—
Income before income taxes$5,431$228$203
Income tax expense$2,122$87$29
Income from discontinued operations$3,309$141$174

Our discontinued operations consist of our divested Enterprise Security assets and results of our previously divested Veritas information management business (Veritas). There was no income from Veritas during fiscal 2020. Revenue from Veritas was $13 million and $54 million during fiscal 2019 and 2018, respectively. Income from Veritas, net of taxes was $15 million and $11 million during fiscal 2019 and 2018, respectively.

We recorded income tax expense from discontinued operations of $2,122 million in fiscal 2020, primarily related to the gain on the Broadcom sale.

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations as of March 29, 2019:

(In millions)
Assets:
Current assets$149
Intangible assets, net1,048
Goodwill5,773
Other long-term assets229
Total assets of discontinued operations$7,199
Liabilities:
Current contract liabilities$1,288
Other current liabilities16
Long-term contract liabilities709
Other long-term liabilities6
Total liabilities of discontinued operations$2,019

The following table presents significant non-cash items and capital expenditures of discontinued operations:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Amortization and depreciation$130$368$370
Stock-based compensation expense$172$193$309
Purchases of property and equipment$43$65$58

Note 4**.** Acquisitions

Fiscal 2019 acquisitions

In February 2019, we completed our acquisition of Israel-based Luminate Security (Luminate). The total aggregate consideration for the acquisition, primarily consisting of cash, was $139 million, net of $5 million cash acquired. The net purchase price was allocated to $112 million of goodwill, $33 million of intangible assets, and $6 million of liabilities assumed.

In addition, we completed acquisitions of other companies for an aggregate purchase price of $42 million, net of $3 million cash acquired. The purchase prices were primarily allocated to goodwill and intangible assets.

Fiscal 2018 acquisitions

In July 2017, we completed our acquisitions of Israel-based Fireglass Ltd. (Fireglass) and Skycure Ltd. (Skycure). The total aggregate consideration for these acquisitions, primarily consisting of cash, was $345 million, net of $15 million cash acquired. The net purchase price was allocated to $247 million of goodwill, $134 million of intangible assets, and $36 million of liabilities assumed, primarily consisting of deferred income tax liabilities.

In addition, we completed acquisitions of other companies for an aggregate purchase price of $66 million, net of $1 million cash acquired. Of the aggregate purchase price, $48 million was recorded to goodwill.

Pro forma results of operations for our fiscal 2019 and 2018 acquisitions have not been presented because they were not material to our consolidated results of operations, either individually or in the aggregate.

Note 5**. Revenues**

Contract liabilities

During fiscal 2020 and 2019, we recognized $1,017 million and $1,051 million of revenue, respectively, from the contract liabilities balance at the beginning of the respective fiscal years.

Remaining performance obligations

Remaining performance obligations represent contracted revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods. As of April 3, 2020, we had $736 million of remaining performance obligations, which does not include customer deposit liabilities of $340 million, of which we expect to recognize approximately 96% as revenue over the next 12 months.

Note 6**. Goodwill and Intangible Assets**

Goodwill

The changes in the carrying amount of goodwill are as follows:

(In millions)
Balance as of March 30, 2018$2,673
Acquisitions6
Other adjustments(2)
Balance as of March 29, 20192,677
Divestitures(88)
Other adjustments(4)
Balance as of April 3, 2020$2,585

Intangible assets, net

April 3, 2020March 29, 2019
(In millions)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Customer relationships$505$(230)$275$541$(168)$373
Developed technology133(85)48143(61)82
Other———6(3)3
Total finite-lived intangible assets638(315)323690(232)458
Indefinite-lived trade names744—744744—744
Total intangible assets$1,382$(315)$1,067$1,434$(232)$1,202

Goodwill and intangible assets disposed of as a result of the Broadcom sale were included in assets of discontinued operations in our Consolidated Balance Sheets as of March 29, 2019, and were derecognized on November 4, 2019 upon the close of the sale, and accordingly, are excluded from the tables above.

Amortization expense for purchased intangible assets is summarized below:

Year EndedStatements of Operations Classification
(In millions)April 3, 2020March 29, 2019March 30, 2018
Customer relationships and other$79$80$87Operating expenses
Developed technology303031Cost of revenues
Total$109$110$118

As of April 3, 2020, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions)April 3, 2020
2021$98
202292
202372
202460
20251
Thereafter—
Total$323

Note 7**. Supplementary Information (in millions)**

Cash and cash equivalents:

April 3, 2020March 29, 2019
Cash$483$376
Cash equivalents1,6941,415
Total cash and cash equivalents$2,177$1,791

Accounts receivable, net:

April 3, 2020March 29, 2019
Accounts receivable$123$713
Allowance for doubtful accounts(12)(5)
Accounts receivable, net$111$708

Other current assets:

April 3, 2020March 29, 2019
Prepaid expenses$110$136
Income tax receivable and prepaid income taxes15061
Other tax receivable8869
Other8720
Total other current assets$435$286

Property and equipment, net:

April 3, 2020March 29, 2019
Land$7$65
Computer hardware and software746814
Office furniture and equipment88105
Buildings108364
Leasehold improvements128327
Construction in progress19
Total property and equipment, gross1,0781,684
Accumulated depreciation and amortization(840)(1,021)
Total property and equipment, net$238$663

During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to Assets held for sale in our Consolidated Balance Sheets. The properties have been approved for immediate sale in their present condition and are being actively marketed. We expect to sell the properties within the next twelve months and it is unlikely that significant changes to the plan will be made. As a result, we recognized an impairment of $24 million in fiscal 2020, which was included in restructuring costs, representing the difference between the estimated net sales price and the carrying value of one of our properties. The fair value of the other properties held for sale, net of costs to sell, exceeded their carrying value as of April 3, 2020.

Depreciation and amortization expense of property and equipment was $122 million, $139 million, and $151 million in fiscal 2020, 2019, and 2018, respectively.

Other long-term assets:

April 3, 2020March 29, 2019
Non-marketable equity investments$187$184
Equity method investment—32
Long-term income tax receivable and prepaid income taxes3834
Deferred income tax assets387830
Other6680
Total other long-term assets$678$1,160

Deferred income tax assets as of April 3, 2020 reflect a $454 million decrease as a result of the Broadcom sale.

Short-term contract liabilities:

April 3, 2020March 29, 2019
Deferred revenue$709$527
Customer deposit liabilities340505
Total short-term contract liabilities$1,049$1,032

Other current liabilities:

April 3, 2020March 29, 2019
Income taxes payable$195$103
Other taxes payable141143
Other accrued liabilities251278
Total other current liabilities$587$524

Long-term income taxes payable:

April 3, 2020March 29, 2019
Deemed repatriation tax payable$615$703
Uncertain tax positions (including interest and penalties)695373
Total long-term income taxes payable$1,310$1,076

Other income (expense), net:

Year Ended
April 3, 2020March 29, 2019March 30, 2018
Interest income$80$42$24
Loss from equity interest(31)(101)(26)
Foreign exchange loss(6)(11)(18)
Gain on divestitures250—653
Gain on sale of equity method investment379——
Transition service expense, net(19)——
Other71321
Total other income (expense), net$660$(57)$654

Supplemental cash flow information:

Year Ended
April 3, 2020March 29, 2019March 30, 2018
Income taxes paid, net of refunds$1,985$112$354
Interest expense paid$179$183$199
Cash paid for amounts included in the measurement of operating lease liabilities$51$—$—
Non-cash operating activities:
Operating lease assets obtained in exchange for operating lease liabilities$15$—$—
Reduction of operating lease assets as a result of lease terminations and modifications$34$—$—
Non-cash investing and financing activities:
Purchases of property and equipment in current liabilities$—$23$26
Equity investment received as consideration in divestitures$—$—$160
Extinguishment and exchange of debt with borrowings from same creditors$1,073$—$—

Note 8**. Financial Instruments and Fair Value Measurements**

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

April 3, 2020March 29, 2019
(In millions)Fair ValueLevel 1Level 2Fair ValueLevel 1Level 2
Assets:
Money market funds$1,346$1,346$—$1,415$1,415$—
Certificates of deposit348—3481—1
Corporate bonds86—86251—251
Total$1,780$1,346$434$1,667$1,415$252

The following table presents the contractual maturities of our investments in debt securities as of April 3, 2020:

(In millions)Fair Value
Due in one year or less$407
Due after one year through five years27
Total$434

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

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

Non-marketable equity investments

As of April 3, 2020 and March 29, 2019, the carrying value of our non-marketable equity investments was $187 million and $184 million, respectively.

Equity method investment

Our investment in equity securities that was accounted for using the equity method was included in Other long-term assets in our Consolidated Balance Sheets and consisted of our equity investment in DigiCert that had a carrying value of $32 million at March 29, 2019. On October 16, 2019, Clearlake Capital Group, L.P, a private investment firm, and TA Associates, an investor of DigiCert and private equity firm, completed a joint investment in DigiCert. As a result, we sold our equity investment in DigiCert for $380 million in cash and recognized a gain on sale of $379 million.

We recorded a loss from our equity interest of $31 million, $101 million and $26 million during fiscal 2020, 2019 and 2018, respectively, in Other income (expense), net in our Consolidated Statements of Operations. This loss was reflected as a reduction in the carrying amount of our investment in equity interests in our Consolidated Balance Sheets. DigiCert’s results were reported on a three month lag prior to our divestiture of our investment.

The following table summarizes DigiCert’s results of operations through October 16, 2019, the date of our investment sale.

(In millions)Period from January 1, 2019 to October 16, 2019 (unaudited)Year Ended December 31, 2018
Revenue$350$313
Gross profit$293$250
Net loss$(102)$(342)

The following table summarizes DigiCert’s balance sheet information as of December 31, 2018, its last fiscal year end prior to the sale of our equity investment.

(In millions)
Current assets$168
Long-term assets$1,641
Current liabilities$331
Long-term liabilities$1,862

Current and long-term debt

As of April 3, 2020 and March 29, 2019, the total fair value of our current and long-term fixed rate debt was $3,634 million and $3,964 million, respectively. The fair value of our variable rate debt approximated their carrying value. The fair values of all our debt obligations were based on Level 2 inputs.

Note 9**. Leases**

We lease certain of our facilities, equipment, and data center co-locations under operating leases that expire on various dates through fiscal 2029. Our leases generally have terms that range from 1 year to 15 years for our facilities, 1 year to 6 years for equipment, and 1 year to 6 years for data center co-locations. Some of our leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives.

The following summarizes our lease costs for fiscal 2020:

(In millions)
Operating lease costs$34
Short-term lease costs8
Variable lease costs21
Total lease costs$63

Rent expense under operating leases was $58 million and $62 million for fiscal 2019 and 2018, respectively.

Other information related to our operating leases as of April 3, 2020 as follows:

Weighted-average remaining lease term4.5 years
Weighted-average discount rate4.05%

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

As of April 3, 2020, the maturities of our lease liabilities by fiscal year are as follows:

(In millions)
2021$32
202225
202318
202417
202510
Thereafter9
Total lease payments111
Less: Imputed interest10
Present value of lease liabilities$101

As of March 29, 2019, the minimum future rentals on non-cancelable operating leases, which includes leases associated with our discontinued operations and is based on the previous lease accounting standard, by fiscal year were as follows:

(In millions)
2020$55
202149
202240
202332
202426
Thereafter42
Total minimum future lease payments$244

Note 10**. Debt**

The following table summarizes components of our debt:

April 3, 2020March 29, 2019
(In millions, except percentages)AmountEffective Interest RateAmountEffective Interest Rate
4.2% Senior Notes due September 15, 20207504.25%7504.25%
Senior Term Loan A-5 due August 1, 2021—N/A500LIBOR plus (1)
2.5% Convertible Senior Notes due April 1, 2022—N/A5003.76%
New 2.5% Convertible Senior Notes due April 1, 20222502.63%—N/A
3.95% Senior Notes due June 15, 20224004.05%4004.05%
2.0% Convertible Senior Notes due August 15, 20226252.66%1,2502.66%
New 2.0% Convertible Senior Notes due August 15, 20226252.62%—N/A
Term Loan due November 4, 2024500LIBOR plus (1)—N/A
5.0% Senior Notes due April 15, 20251,1005.23%1,1005.23%
Total principal amount4,2504,500
Less: unamortized discount and issuance costs(29)(48)
Total debt4,2214,452
Less: current portion(756)(491)
Total long-term portion$3,465$3,961
(1)The term loans bear interest at a rate equal to the LIBOR plus a margin based on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt, and our underlying loan agreements. The interest rates for the outstanding term loans are as follows:
April 3, 2020March 29, 2019
Senior Term Loan A-5 due August 1, 2021N/A4.24%
Term Loan due November 4, 20242.88%N/A

As of April 3, 2020, the future contractual maturities of debt by fiscal year are as follows:

(In millions)
2021$756
2022275
20231,675
202425
2025419
Thereafter1,100
Total future maturities of debt$4,250

Senior Term Loan A-5

On August 1, 2016, we entered into a term loan agreement that provides for a 5-year term loan (the Senior Term Loan A-5) that bears interest at a floating rate of interest plus an applicable margin, which is based on our senior unsecured credit agency rating. For the duration of Senior Term Loan A-5, quarterly payments are due in aggregate annual amounts equal to 10% of the original principal amount. We may voluntarily repay outstanding principal balances under the Senior Term Loan A-5 at any time without premium or penalty, and prepayments must be applied to reduce the subsequent scheduled and outstanding required payments.

In connection with the credit agreement entered on November 4, 2019 as described below, we fully prepaid the principal amount of $500 million of our Senior Term Loan A-5. This transaction was accounted for as an extinguishment of debt and resulted in accelerated recognition of interest expense for unamortized debt issuance costs, which was not significant. Out of the repayments, $198 million was replaced by borrowings under the term loan of $500 million issued on November 4, 2019 to the same creditors.

Credit facility

On November 4, 2019, we entered into a credit agreement with financial institutions, which provides a revolving line of credit of $1,000 million through November 2024, a 5-year term loan of $500 million, and a delayed 5-year term loan commitment of

$750 million through September 15, 2020. At our option, we may increase commitments under the revolving line of credit or the term loan facility by an aggregate amount of up to $500 million, subject to customary conditions. Interest on borrowings under the credit agreement can be based on a base rate or a LIBOR at our election. Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the credit agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus a margin ranging from 0.125% to 0.75%, and in the case of LIBOR loans, LIBOR, as adjusted for statutory reserves, plus a margin ranging from 1.125% to 1.75%. The unused revolving line of credit is subject to a commitment fee ranging from 0.125% to 0.30% per annum. The principal amount of the term loan is repayable in quarterly installments on the last business day of each calendar quarter commencing with the quarter ended March 31, 2021 in an amount equal to 1.25% of the aggregate principal amount of the term loan and in the outstanding principal amount upon the November 2024 maturity date. We may voluntarily repay outstanding principal balances without penalty.

The credit agreement contains customary representations and warranties, non-financial covenants for financial reporting, affirmative and negative covenants, including a covenant that we maintain a consolidated leverage ratio of not more than 5.25 to 1.0, or 5.75 to 1.0 if we acquire assets or business in an aggregate amount greater than $250 million, and restrictions on indebtedness, liens, investments, stock repurchases, and dividends (with exceptions permitting our regular quarterly dividend and other specific capital returns). As of April 3, 2020, we were in compliance with all debt covenants.

Concurrently with this credit agreement, we terminated our existing revolving line of credit. As of April 3, 2020 and March 29, 2019, there were no borrowings outstanding under our revolving credit facilities.

Senior Notes

On February 9, 2017, we issued $1.1 billion aggregate principal amount of our 5.0% Senior Notes due April 15, 2025 (the 5.0% Senior Notes). The 5.0% Senior Notes bear interest at a rate of 5.00% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2017.

We may redeem some or all of the 5.0% Senior Notes at any time prior to April 15, 2020 at a price equal to 100% of the principal amount of the 5.0% Senior Notes redeemed, plus accrued and unpaid interest, if any, and a premium, as described in the supplemental indenture to the 5.0% Senior Notes. On or after April 15, 2020, we may redeem some or all of the 5.0% Senior Notes at the applicable redemption prices set forth in the supplemental indenture, plus accrued and unpaid interest.

In addition, we have two series of senior notes, the 4.2% Senior Notes and 3.95% Senior Notes that are senior unsecured obligations that rank equally in right of payment with all of our existing and future senior, unsecured, unsubordinated obligations and may be redeemed at any time, subject to the make-whole provisions contained in the applicable indenture relating to such series of notes. Interest on each series of these notes is payable semi-annually in arrears, on September 15 and March 15 for the 4.2% Senior Notes, and June 15 and December 15 for the 3.95% Senior Notes.

Convertible Senior Notes

On March 4, 2016, we issued $500 million of convertible notes which would mature on April 1, 2021 and bear interest at an annual rate of 2.5% (2.5% Convertible Notes). On August 1, 2016, we issued an additional $1.25 billion of convertible notes which would mature on August 15, 2021 and bear interest at an annual rate of 2.0% (2.0% Convertible Notes). Both the 2.5% Convertible Notes and the 2.0% Convertible Notes (collectively, Convertible Senior Notes) provided for coupon interest payable semiannually in arrears in cash due on October 1 and April 1 of each year in the case of the 2.5% Convertible Notes, and February 15 and August 15 in the case of the 2.0% Convertible Notes. As of March 29, 2019, the principal amount and associated unamortized discount and issuance costs of the 2.5% Convertible Notes were classified as current because upon the 4-year anniversary of the issuance of the notes, holders of thereof had the option to require us to repurchase the notes, in cash, equal to the principal amount and accrued and unpaid interest of the 2.5% Convertible Notes (the Repurchase Right).

Holders of the Convertible Senior Notes could convert the notes into our common stock at any time up to the maturity date of each note. The conversion rate for the 2.0% Convertible Notes was 48.9860 shares of common stock per $1,000 principal amount of the notes, which represented an initial conversion price of approximately $20.41 per share. The conversion rate for the 2.5% Convertible Notes was 59.6341 shares of common stock per $1,000 principal amount of the notes, which represented an initial conversion price of approximately $16.77 per share. If holders of the Convertible Senior Notes converted them in connection with a fundamental change, such as a sale of substantially all our assets, a change of the control of NortonLifeLock, or a plan for our liquidation or dissolution, we would be required to provide a make-whole premium in the form of an increased conversion rate, subject to a maximum amount, based on the effective date of the fundamental change as set forth in a table contained in the indenture governing each of the Convertible Senior Notes. The conversion rates under the Convertible Senior Notes also included customary anti-dilution adjustments. If the holders requested a conversion, we retained the option to settle the par amount of the Convertible Senior Notes using cash, shares of our common stock, or a combination of cash and shares with the cash settlement not exceeding the principal amount and accrued and unpaid interest of the Convertible Senior Notes.

Additionally, we could redeem all or part of the principal of the 2.5% Convertible Notes, at our option, at a purchase price equal to the principal amount plus accrued interest on or after the 4-year anniversary of the issuance date of the 2.5% Convertible Notes (the Redemption Right), if the closing trading price of our common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading-day period preceding our exercise of the redemption right (including the last three such trading days) and provided that we have satisfied all regulatory common stock registration requirements. The 2.0% Convertible Notes are not redeemable at our option.

On November 11, 2019, we amended the Convertible Senior Notes agreements to provide that, if and when we pay a special dividend of $12 to our stockholders, we would exchange $250 million of the principal amount underlying the 2.5% Convertible

Notes for new notes to be issued pursuant to a new indenture (the New 2.5% Convertible Notes) and would also pay cash consideration of $12 for each share underlying the New 2.5% Convertible Notes, and exchange $625 million of the principal amount underlying the 2.0% Convertible Notes for new notes to be issued pursuant to a new indenture (the New 2.0% Convertible Notes) and would also pay cash consideration of $12 for each share underlying the New 2.0% Convertible Notes, in each case in lieu of conversion price adjustments (the Cash Note Payments). The remaining principal of the Convertible Senior Notes would receive a conversion price adjustment with respect to such special dividend.

The special dividend was payable to stockholders on January 31, 2020. On February 4, 2020, we issued the New 2.5% Convertible Notes, which mature on April 1, 2022, and the New 2.0% Convertible Notes, which mature on August 15, 2022, pursuant to two new indentures, and made the Cash Note Payments. The Cash Note Payments consisted of $179 million with respect to holders of the New 2.5% Convertible Notes and $367 million with respect to holders of the New 2.0% Convertible Notes. The exchange of the convertible notes was accounted for as extinguishment of debt and the consideration comprising the Cash Note Payments were recorded as charges to paid in capital. We recognized a gain of $2 million related to the exchange.

After giving effect to the conversion rate adjustment that was made in connection with the payment of the special dividend on January 31, 2020, the conversion rate for the remaining $250 million of the 2.5% Convertible Notes was 118.9814 shares of common stock per $1,000 principal amount of the notes, which represents an adjusted conversion price of approximately $8.40 per share and the conversion rate for the remaining $625 million of the 2.0% Convertible Notes was 97.7364 shares of common stock per $1,000 principal amount of the notes, which represented an adjusted conversion price of approximately $10.23 per share.

In addition, in connection with the amendments, the maturity dates of the 2.5% Convertible Notes and the 2.0% Convertible Notes were extended to April 1, 2022 and August 15, 2022, respectively. Holders of the Convertible Senior Notes would only be able to convert the notes in a period of six months prior to the extended maturity dates; and the Redemption Right and Repurchase Right were removed.

On March 5, 2020, we entered into an agreement to repay the full $250 million of principal and conversion rights of the 2.5% Convertible Notes for an aggregate amount of $566 million in cash. The payment was based on $19 per underlying share into which the 2.5% Convertible Notes were convertible. In addition, we paid $2 million of accrued and unpaid interest through the date of settlement, and $1 million in lieu of a proration of the cash dividend declared on February 6, 2020. The extinguishment was settled on March 10, 2020 and resulted in an adjustment to stockholders’ equity of $316 million and a loss on extinguishment of $1 million.

As of April 3, 2020 and March 29, 2019, the Convertible Senior Notes consisted of the following:

April 3, 2020March 29, 2019
(In millions)New 2.5% Convertible Notes2.0% Convertible Notes (1)New 2.0% Convertible Notes2.5% Convertible Notes2.0% Convertible Notes
Liability component:
Principal$250$625$625$500$1,250
Unamortized discount and issuance costs(1)(6)(9)(25)(59)
Net carrying amount$249$619$616$475$1,191
Equity component, net of tax$43$12$56$17$24

(1) In May 2020, we settled $625 million of our 2.0% Convertible Notes for $1.18 billion, which included a cash settlement of the equity conversion feature and payments for accrued and unpaid interests and dividend. See Note 19 for more information on the settlement.

Based on the closing price of our common stock of $18.29 on April 3, 2020, the if-converted values of the New 2.5% Convertible Notes and the 2.0% Convertible Notes exceeded the principal amount by approximately $23 million and $492 million, respectively. The if-converted value of the New 2.0% Convertible Notes is less than the principal amount.

In addition to the Cash Note Payments discussed above, during fiscal 2020, we made payments totaling $10 million to holders of the Convertible Notes in lieu of conversion price adjustments because our dividend of $0.125 per share to our common stockholders that was paid in December 2019 and March 2020 exceeded the amounts defined in the Convertible Senior Notes agreements.

The following table sets forth total interest expense recognized related to our convertible notes:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Contractual interest expense$37$38$38
Amortization of debt discount and issuance costs$13$16$16
Payments in lieu of conversion price adjustments$11$—$—

Note 11**. Derivatives**

We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, we are exposed to foreign exchange gains or losses which impacts our operating results. As part of our foreign currency risk mitigation strategy, we have entered into foreign exchange forward contracts with up to twelve months in duration. We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates.

To help protect the net investment in a foreign operation from adverse changes in foreign currency exchange rates, we conduct a program under which we may enter into foreign currency forward and option contracts to offset the changes in the carrying amounts of these investments due to fluctuations in foreign currency exchange rates. We exclude changes in forward points for the forward contracts from the assessment of hedge effectiveness. We recognize changes in the excluded component in Other income (expense), net. As of April 3, 2020, there were no outstanding notional amounts related to our net investment hedges. As of March 29, 2019, the fair value of these contracts was insignificant. The net gain recognized in Accumulated other comprehensive income was insignificant for all periods presented.

We also enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure. These forward contracts are not designated as hedging instruments. As of April 3, 2020 and March 29, 2019, the fair value of these contracts was insignificant. The related gain (loss) recognized in Other income (expense), net in our Consolidated Statements of Operations was as follows:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Foreign exchange forward contracts gain (loss)$(22)$(37)$25

The fair value of our foreign exchange forward contracts is presented on a gross basis in our Consolidated Balance Sheets. To mitigate losses in the event of nonperformance by counterparties, we have entered into master netting arrangements with our counterparties that allow us to settle payments on a net basis. The effect of netting on our derivative assets and liabilities was not material as of April 3, 2020 and March 29, 2019.

The notional amount of our outstanding foreign exchange forward contracts in U.S. dollar equivalent was as follows:

(In millions)April 3, 2020March 29, 2019
Net investment hedges
Foreign exchange forward contracts sold$—$116
Balance sheet contracts
Foreign exchange forward contracts purchased$362$963
Foreign exchange forward contracts sold$57$122

Note 12**. Restructuring, Transition and Other Costs**

Our restructuring, transition and other costs consist primarily of severance, contract cancellations, separation, transition, and other related costs. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. Included in other exit and disposal costs are advisory fees incurred in connection with restructuring events. Separation costs primarily consist of consulting costs incurred in connection with our divestitures. Transition costs are incurred in connection with Board of Directors approved discrete strategic information technology transformation initiatives and primarily consist of consulting charges associated with our enterprise resource planning and supporting systems and costs to automate business processes. Such transition projects were completed by the end of fiscal 2019.

November 2019 Plan

In November 2019, our Board of Directors approved a restructuring plan (the November 2019 Plan) in connection with the strategic decision to divest our Enterprise Security business. Actions under this plan include the reduction of our workforce by approximately 3,100 employees, as well as asset write-offs and impairments, contract terminations, facilities closures, and the

sale of underutilized facilities. As of April 3, 2020, we estimate that we will incur total costs of $550 million, excluding stock-based compensation expense, in connection with the November 2019 Plan, of which up to $200 million is expected to consist of cash expenditures for severance and termination benefits and $110 million of cash expenditures for contract terminations. Non-cash costs are estimated to be up to $240 million related to asset write-offs and other restructuring costs. These actions are expected to be completed by September 2020. As of April 3, 2020, we have incurred costs of $423 million related to our November 2019 Plan, including $117 million of stock-based compensation.

In addition, in connection with the Broadcom sale, our Board of Directors approved an equity-based severance program under which certain equity awards to certain terminated employees were accelerated. See Note 15 for more information on the impact of this program.

August 2019 Plan

On August 6, 2019, our Board of Directors approved a restructuring plan (the August 2019 Plan) to improve productivity and reduce complexity in the way we manage the business. Under the August 2019 Plan, we reduced our global headcount and closed certain facilities. These actions were completed in fiscal 2020. As of April 3, 2020, we have incurred costs of $53 million related to our August 2019 Plan, primarily consisting of severance and termination benefits.

August 2018 Plan

In August 2018, we announced a restructuring plan (the August 2018 Plan) under which we incurred costs of $48 million as of April 3, 2020. These actions were completed in fiscal 2020.

Restructuring, transition and other costs summary

Our restructuring, transition and other costs attributable to continuing operations are presented in the table below:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Severance and termination benefit costs$90$19$33
Contract cancellation charges101——
Stock-based compensation charges20——
Asset write-offs and impairments47225
Other exit and disposal costs71250
Separation costs1388
Transition costs—185184
Total restructuring, transition and other$266$221$380

In connection with the agreement to sell certain assets of our Enterprise Security business, a portion of our restructuring, transition and other costs were classified to discontinued operations for all periods presented. Our restructuring, transition and other costs attributable to discontinued operations are presented in the table below:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Severance and termination benefit costs$121$9$28
Contract cancellation charges5——
Stock-based compensation charges97——
Asset write-offs13——
Other exit and disposal costs—32
Separation costs25——
Transition costs—8—
Total restructuring, transition and other$261$20$30

Restructuring summary

Our activities related to our restructuring plans are presented in the tables below:

November 2019 Plan

(In millions)Liability Balance as of March 29, 2019Net ChargesCash PaymentsNon-Cash ItemsLiability Balance as of April 3, 2020
Severance and termination benefit costs$—$138$(103)$—$35
Contract cancellation charges—106(88)(11)7
Stock-based compensation charges—117—(117)—
Asset write-offs and impairments—57—(57)—
Other exit and disposal costs—5(5)——
Total$—$423$(196)$(185)$42

August 2019 Plan

(In millions)Liability Balance as of March 29, 2019Net ChargesCash PaymentsNon-Cash ItemsLiability Balance as of April 3, 2020
Severance and termination benefit costs$—$50$(50)$—$—
Asset write-offs—3—(3)—
Total$—$53$(50)$(3)$—

August 2018 Plan

(In millions)Liability Balance as of March 29, 2019Net ChargesCash PaymentsNon-Cash ItemsLiability Balance as of April 3, 2020
Severance and termination benefit costs$11$23$(34)$—$—
Other exit and disposal costs22(4)——
Total$13$25$(38)$—$—

The restructuring liabilities are included in Accounts payable and Other current liabilities in our Consolidated Balance Sheets.

Note 13**. Income Taxes**

Pre-tax income from international operations was $152 million, $72 million, and $497 million for fiscal 2020, 2019, and 2018, respectively.

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

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Current:
Federal$208$58$1,102
State33414
International3(14)(148)
Total24448968
Deferred:
Federal(23)(35)(1,551)
State3(3)(136)
International17(7)(1)
Total(3)(45)(1,688)
Income tax expense (benefit)$241$3$(720)

The U.S. federal statutory income tax rates we have applied for fiscal 2020, 2019, and 2018 are as follows:

Year Ended
April 3, 2020March 29, 2019March 30, 2018
U.S. federal statutory income tax rate21.0%21.0%31.6%

The difference between our effective income tax and the federal statutory income tax is as follows:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Federal statutory tax expense (benefit)$172$(23)$77
State taxes, net of federal benefit22(11)(14)
Foreign earnings taxed at other than the federal rate4(25)(154)
Transition tax—(2)893
Federal research and development credit(2)(4)(6)
Valuation allowance increase (decrease)(57)267
Change in uncertain tax positions6044(3)
Stock-based compensation58(23)
Nondeductible goodwill18—59
Effect of tax rate change on deferred taxes——(131)
Re-assessment of deferred taxes on foreign earnings——(1,420)
Return to provision adjustment2(16)—
Other, net176(5)
Income tax expense (benefit)$241$3$(720)

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

As of
(In millions)April 3, 2020March 29, 2019
Deferred tax assets:
Tax credit carryforwards$6$54
Net operating loss carryforwards of acquired companies2151
Other accruals and reserves not currently tax deductible4664
Operating lease liabilities12—
Deferred revenue254
Property and equipment10—
Intangible assets117384
Loss on investments not currently tax deductible135
Stock-based compensation2187
Other4425
Gross deferred tax assets280754
Valuation allowance(9)(105)
Deferred tax assets, net of valuation allowance$271$649
Deferred tax liabilities:
Property and equipment$—$(17)
Goodwill—(13)
Operating lease assets(10)—
Unremitted earnings of foreign subsidiaries(17)(316)
Prepaids and deferred expenses(2)(43)
Discount on convertible debt(4)(7)
Deferred tax liabilities(33)(396)
Net deferred tax assets (liabilities)$238$253

The valuation allowance provided against our deferred tax assets as of April 3, 2020 decreased primarily due to a corresponding decrease in capital losses from equity investments and the release of valuation allowance related to certain acquired net operating loss and tax credit carryforwards. The ending valuation allowance of $9 million is provided primarily against certain foreign tax credits and unrealized capital losses that are not expected to be realized.

As of April 3, 2020, we have U.S. federal net operating losses attributable to various acquired companies of approximately $128 million, which, if not used, will expire between fiscal 2021 and 2039. $34 million of the net operating loss carryforwards are subject to limitations which currently prevent their use, and therefore these attributes are not expected to be realized. The remaining net operating loss carryforwards are subject to an annual limitation under U.S. federal tax regulations but are expected to be fully realized. Furthermore, we have U.S. state net operating loss carryforwards attributable to various acquired companies of approximately $23 million. If not used, our U.S. state net operating losses will expire between fiscal 2021 and 2038. In addition, we have foreign net operating loss carryforwards attributable to various foreign companies of approximately $89 million, that can be carried forward indefinitely under current applicable foreign tax law. We have $6 million of foreign tax credits which, if not used, will expire beginning in fiscal 2030.

In assessing the ability to realize our deferred tax assets, we considered whether it is more likely than not that some portion or all the deferred tax assets will not be realized. We considered the following: we have historical cumulative book income, as measured by the current and prior two years; we have strong, consistent taxpaying history; we have substantial U.S. federal income tax carryback potential; and we have substantial amounts of scheduled future reversals of taxable temporary differences from our deferred tax liabilities. We have concluded that this positive evidence outweighs the negative evidence and, thus, that the deferred tax assets as of April 3, 2020 are realizable on a “more likely than not” basis.

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

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Balance at beginning of year$446$378$248
Settlements with tax authorities(5)(3)(4)
Lapse of statute of limitations(15)(17)(3)
Increase related to prior period tax positions771635
Decrease related to prior period tax positions(11)(11)—
Increase related to current year tax positions2327598
Increase due to acquisition—84
Balance at end of year$724$446$378

There was a change of $278 million in gross unrecognized tax benefits during the year ended April 3, 2020 as disclosed above. This gross liability does not include offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, interest deductions, and state income taxes.

Of the total unrecognized tax benefits at April 3, 2020, $593 million, if recognized, would favorably affect our effective tax rate.

We recognize interest and/or penalties related to uncertain tax positions in income tax expense. At April 3, 2020, before any tax benefits, we had $77 million of accrued interest and penalties on unrecognized tax benefits. Interest included in our provision for income taxes was an expense of approximately $43 million for fiscal 2020. If the accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced in the period that such determination is made and reflected as a reduction of the overall income tax provision.

On July 27, 2015, the United States Tax Court (Tax Court) issued its opinion in Altera v. Commissioner and concluded that related parties in a cost sharing arrangement are not required to share expenses related to stock-based compensation. The Commissioner of the Internal Revenue Service appealed the Tax Court decision to the Ninth Circuit. In June 2019, the U.S. Court of Appeals for the Ninth Circuit reversed the July 2015 decision of the U.S. Tax Court. As a result of this decision, we recorded a cumulative income tax expense of $62 million in the first quarter of fiscal 2020. On July 22, 2019, the taxpayer requested a rehearing before the full Ninth Circuit, but such request was denied on November 12, 2019. In February 2020, Altera requested a hearing before the Supreme Court of the United States. The final outcome of the case remains uncertain. If the Altera Ninth Circuit Opinion is reversed, we would anticipate recording an income tax benefit at that time.

We file income tax returns in the U.S. on a federal basis and in many U.S. state and foreign jurisdictions. Our most significant tax jurisdictions are the U.S., Ireland, and Singapore. Our tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. Our fiscal years 2014 through 2020 remain subject to examination by the IRS for U.S. federal tax purposes. Our fiscal years prior to 2014 have been settled and closed with the IRS. Our 2016 through 2020 fiscal years remain subject to examination by the appropriate governmental agencies for Irish tax purposes, and our 2016 through 2020 fiscal years remain subject to examination by the appropriate governmental agencies for Singapore tax purposes.

The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Although

potential resolution of uncertain tax positions involves multiple tax periods and jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could decrease (whether by payment, release, or a combination of both) in the next 12 months by $31 million. Depending on the nature of the settlement or expiration of statutes of limitations, we estimate $31 million could affect our income tax provision and therefore benefit the resulting effective tax rate.

In April 2020, we became aware of a new interpretation of a country specific withholding tax regulation that could be interpreted to apply to certain of our intra-group transactions. We are evaluating this new information and the effect, if any, on our tax positions. If it is determined that it does impact our previous transaction, this activity would be recorded in the financial statements in fiscal 2021. The amount of the potential impact, if any, on our Consolidated Financial Statements is not yet estimable given, in part, the level of information available at this time.

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

Note 14**. Stockholders’ Equity**

Preferred stock

Our Board of Directors has the authority to issue up to 1 million shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action by the stockholders. As of April 3, 2020 and March 29, 2019, there were no shares outstanding.

Stock repurchase program

Under our stock repurchase program, we may purchase shares of our outstanding common stock through open market and through accelerated stock repurchase (ASR) transactions. On August 6, 2019, our Board of Directors increased the share repurchase authorization to $1,600 million. As of April 3, 2020, we have $578 million remaining under the authorization to be completed in future periods with no expiration date.

The following table summarizes activity related to our stock repurchase program.

Year Ended
(In millions, except per share amounts)April 3, 2020March 29, 2019
Number of shares repurchased6811
Average price per share$22.97$22.68
Aggregate purchase price$1,562$252

In fiscal 2019, we executed share repurchases of $18 million for 1 million shares settled in fiscal 2020.

In addition, in fiscal 2018, we received 2 million shares at an average price of $30.51 per share from the final settlement of an ASR entered into in fiscal 2017.

Accumulated other comprehensive income (loss)

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

(In millions)Foreign Currency Translation AdjustmentsUnrealized Gain (Loss) On Available-For-Sale SecuritiesEquity Method InvesteeTotal AOCI
Balance as of March 30, 2018$8$(4)$—$4
Other comprehensive loss before reclassifications(13)3(1)(11)
Balance as of March 29, 2019(5)(1)(1)(7)
Other comprehensive income (loss) before reclassifications(11)12(8)
Reclassification to net income——(1)(1)
Balance as of April 3, 2020$(16)$—$—$(16)

Note 15**. Stock-Based Compensation and Other Benefit Plans**

Stock incentive plans

The purpose of our stock incentive plans is to attract, retain, and motivate eligible persons whose present and potential contributions are important to our success by offering them an opportunity to participate in our future performance through equity awards. We have one primary stock incentive plan: the 2013 Equity Incentive Plan (the 2013 Plan), under which incentive stock options may be granted only to employees (including officers and directors who are also employees), and other awards may be granted to employees, officers, directors, consultants, independent contractors, and advisors. As amended, our stockholders have approved and reserved 82 million shares of common stock for issuance under the 2013 Plan. As of April 3, 2020, 21 million

shares remained available for future grant, calculated using the maximum potential shares that could be earned and issued at vesting.

In connection with the acquisitions of various companies, we have assumed the equity awards granted under stock incentive plans of the acquired companies or issued equity awards in replacement thereof. No new awards will be granted under our acquired stock plans.

The following information related to our stock-based awards includes awards associated with our discontinued operations.

RSUs

(In millions, except per share and year data)Number of SharesWeighted- Average Grant Date Fair Value
Outstanding and unvested at March 29, 201921$23.36
Granted13$19.65
Vested(15)$22.38
Forfeited(12)$21.90
Outstanding and unvested at April 3, 20207$21.33

RSUs generally vest over a three-year period. The weighted-average grant date fair value per share of RSUs granted during fiscal 2020, 2019, and 2018 was $19.65, $21.77, and $30.01, respectively. The total fair value of RSUs released in fiscal 2020, 2019, and 2018 was $300 million, $214 million, and $294 million, respectively, which represents the market value of our common stock on the date the RSUs were released.

PRUs

(In millions, except per share and year data)Number of SharesWeighted- Average Grant Date Fair Value
Outstanding and unvested at March 29, 20192$27.04
Granted3$21.69
Vested (1)—$28.25
Canceled(1)$21.46
Forfeited(2)$23.81
Unvested at April 3, 20202$22.68
Vested and unreleased at April 3, 2020 (1)—
Outstanding at April 3, 20202

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

The total fair value of PRUs released in fiscal 2020, 2019, and 2018 was $39 million, $261 million, and $24 million, respectively, which represents the market value of our common stock on the date the PRUs were released.

We have granted PRUs to certain of our executives. Typically, these PRUs have a three-year vest period. PRUs granted in fiscal 2019 and 2018 contain a combination of our company’s performance and market conditions whereas our fiscal 2020 PRUs only contain market conditions. The performance conditions are based on the achievement of specified one-year non-GAAP financial metrics. The market conditions are based on the achievement of our relative total shareholder return over a two- and three-year period. Typically, 0% to 200% of target shares are eligible to be earned based on the achievement of the performance and market conditions.

Valuation of PRUs

The fair value of each PRU that does not contain a market condition is equal to the market value of our common stock on the date of grant. The fair value of each PRU that contains a market condition is estimated using the Monte Carlo simulation model. The valuation and the underlying weighted-average assumptions for PRUs are summarized below:

Year Ended
April 3, 2020March 29, 2019March 30, 2018
Expected term1.9 years2.7 years2.8 years
Expected volatility38.1%34.2%23.2%
Risk-free interest rate1.7%2.7%1.5%
Expected dividend yield1.1%—%—%
Weighted-average grant date fair value of PRUs$21.69$21.30$32.78

Stock options

(In millions, except per share and year data)Number of SharesWeighted- Average Exercise Price (1)Weighted- Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Outstanding at March 29, 201912$7.83
Granted3$19.85
Exercised(11)$7.30
Canceled(1)$19.85
Forfeited and expired(1)$4.42
Outstanding at April 3, 20202$6.85
Exercisable at April 3, 20201$5.304.0$9

(1) As a result of our special dividend of $12 per share paid in January 2020, we reduced the exercise price of 2 million options to the extent that their original exercise price equaled or exceeded $12. The weighted-average exercise prices in the table reflects the exercise price as of the date of the activity and the exercise price of outstanding and exercisable awards as of April 3, 2020 reflect the adjusted exercise prices.

The total intrinsic value of options exercised during fiscal 2020, 2019, and 2018 was $171 million, $23 million, and $131 million, respectively. The fair value of options granted in fiscal 2020 was $4.76 per share. No options were granted during fiscal 2019 and fiscal 2018.

Restricted stock

In connection with our fiscal 2018 acquisitions, we issued approximately 1 million restricted shares of our common stock for which we recognized an aggregate of $44 million of expense over the service period that ended in fiscal 2020. As of April 3, 2020, all of the restricted shares had been released.

Liability-classified awards settled in shares

In each of fiscal 2020 and 2019, we settled certain bonuses by issuing 2 million RSUs that vested shortly after the grant date. As of April 3, 2020, and March 29, 2019, the total liability associated with these liability-classified awards was $0 million and $22 million, respectively, and is presented in Accrued compensation and benefits in our Consolidated Balance Sheets.

ESPP

Under our 2008 Employee Stock Purchase Plan, employees may annually contribute up to 10% of their gross compensation, subject to certain limitations, to purchase shares of our common stock at a discounted price. Eligible employees are offered shares through a 12-month offering period, which consists of two consecutive 6-month purchase periods, at 85% of the lower of either the fair market value on the purchase date or the fair market value at the beginning of the offering period.

In August 2018, we cancelled the issuance of common stock under our ESPP for the 6-month purchase period ended August 15, 2018, as a result of the delayed filing of our Annual Report on Form 10-K for the fiscal year ended March 30, 2018. All participant contributions were refunded. In addition, the enrollment in the purchase period beginning August 16, 2018 was cancelled. On February 16, 2019, we opened enrollment in a new offering period. As of April 3, 2020, 37 million shares have been issued under this plan, and 33 million shares remained available for future issuance.

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

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Shares issued under the ESPP2—3
Proceeds from issuance of shares$39$—$69

The fair value of each stock purchase right under our ESPP is estimated using the Black-Scholes option pricing model. The weighted-average grant date fair value related to rights to acquire shares of common stock under our ESPP in fiscal 2020, 2019 and 2018 was $5.17 per share, $6.22 per share, and $6.53 per share, respectively.

Dividend equivalent rights

Our RSUs and PRUs contain dividend equivalent rights (DER) that entitles the recipient of an award to receive cash dividend payments when the associated award is released. The amount of DER equals to the cumulated dividends on the issued number of common stock that would have been payable since the date the associated award was granted. As of April 3, 2020 and March 29, 2019, current dividends payable related to DER was $62 million and $5 million, respectively, recorded as part of Other current liabilities in the Consolidated Balance Sheets, and long-term dividends payable related to DER was $31 million and $3 million, respectively, recorded as part of Other long-term liabilities.

Stock-based award modifications

In connection with the Broadcom sale, we approved severance and retention arrangements for certain executives. As a result, these executives are entitled to receive vesting of 50% of their unvested equity, subject to a service condition, and the remaining unvested equity will be earned at levels of 0% to 150%, subject to market and service conditions. In connection with restructuring activities related to the Broadcom sale, we entered into severance and retention arrangements with certain other employees. These arrangements provided for acceleration of either a portion or all of the vesting of their stock-based awards.

During fiscal 2020, we recognized $145 million of expense associated with these modifications, of which $20 million was recognized in General and administrative expense, $6 million in Sales and marketing expense, $20 million in continuing operations restructuring costs, $97 million in discontinued operations restructuring costs and $2 million in discontinued operations expense.

Stock-based compensation expense

Total stock-based compensation expense and the related income tax benefit recognized for all of our equity incentive plans in our Consolidated Statements of Operations were as follows:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Cost of revenues$2$6$14
Sales and marketing294262
Research and development303464
General and administrative5876161
Restructuring, transition and other costs20——
Other income (expense), net1——
Total stock-based compensation from continuing operations140158301
Discontinued operations172194$309
Total stock-based compensation expense$312$352$610
Income tax benefit for stock-based compensation expense$(55)$(73)$(116)

As of April 3, 2020, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $97 million, which will be recognized over an estimated weighted-average amortization period of 1.4 years.

Other employee benefit plans

401(k) plan

We maintain a salary deferral 401(k) plan for all of our U.S. employees. This plan allows employees to contribute their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Code. We match the first 3.5% of a participant’s eligible compensation up to $6,000 in a calendar year. Our employer matching contributions to the 401(k) plan were as follows, including contributions to employees of our discontinued operations:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
401(k) matching contributions$16$23$25

Note 16**. Net Income Per Share**

Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding during the period using the treasury stock method. Dilutive potentially issuable common shares include the dilutive effect of the shares underlying convertible debt and employee equity awards. Diluted income (loss) per share was the same as basic income (loss) per share for the year ended March 29, 2019, as there was a loss from continuing operations in the period and inclusion of potentially issuable shares was anti-dilutive.

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

Year Ended
(In millions, except per share amounts)April 3, 2020March 29, 2019March 30, 2018
Income (loss) from continuing operations$578$(110)$964
Income from discontinued operations, net of income taxes3,309141174
Net income$3,887$31$1,138
Income (loss) per share - basic:
Continuing operations$0.94$(0.17)$1.56
Discontinued operations$5.38$0.22$0.28
Net income per share - basic (1)$6.32$0.05$1.85
Income (loss) per share - diluted:
Continuing operations$0.90$(0.17)$1.44
Discontinued operations$5.15$0.22$0.26
Net income per share - diluted (1)$6.05$0.05$1.70
Weighted-average outstanding shares - basic615632616
Dilutive potentially issuable shares:
Convertible debt20—32
Employee equity awards8—20
Weighted-average shares outstanding - diluted643632668
Anti-dilutive shares excluded from diluted net income (loss) per share calculation:
Convertible debt591—
Employee equity awards2471
Total71381

(1) Net income per share amounts may not add due to rounding.

Under the treasury stock method, our convertible debt instruments will generally have a dilutive impact on net income per share when our average stock price for the period exceeds the conversion prices for the convertible debt instruments. Prior to February 4, 2020, the conversion price for the 2.5% Convertible Notes and the 2.0% Convertible Notes were $16.77 per share and $20.41 per share, respectively. On February 4, 2020, a portion of the 2.5% Convertible Notes were exchanged for the New 2.5% Convertible Notes and a portion of the 2.0% Convertible Notes were exchanged for the New 2.0% Convertible Notes. The remaining Convertible Senior Notes received conversion price adjustments. As a result, beginning February 4, 2020, the

conversion price for the 2.5% Convertible Notes, the 2.0% Convertible Notes, the New 2.5% Convertible Notes, and the New 2.0% Convertible Notes was $8.40 per share, $10.23 per share, $16.77 per share, and $20.41 per share, respectively. The 2.5% Convertible Notes were fully repaid on March 10, 2020. See Note 10 for more information on our convertible debt instruments.

The conversion features of the convertible debt instruments were anti-dilutive during fiscal 2019 due to a loss from continuing operations.

Note 17**. Segment and Geographic Information**

Prior to the Broadcom sale, we operated in two reportable segments: Enterprise Security and Consumer Cyber Safety. The Enterprise Security segment focused on providing our Integrated Cyber Defense solutions to help business and government customers unify cloud and on-premises security to deliver a more effective cyber defense solution, while driving down cost and complexity. The Consumer Cyber Safety segment focused on providing cyber safety solutions under our NortonLifeLock brand to help consumers protect their devices, online privacy, identities, and home networks. As a result of the divestiture, we now have one reportable segment. Our Chief Operating Decision Maker reviews financial information presented on a consolidated basis to evaluate company performance and to allocate resources. The change has been reflected in our segment reporting for all periods presented.

Disaggregated net revenues

The following table summarizes net revenues for our major solutions:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Consumer security$1,474$1,471$1,504
Identity and information protection970937776
WSS and PKI——238
ID Analytics464841
Total net revenues$2,490$2,456$2,559

Consumer security products include Norton security, Norton Secure VPN, and other consumer security solutions. Identity and information protection products include LifeLock identity theft protection and other information protection solutions. WSS and PKI solutions were divested on October 31, 2017. Our ID Analytics solutions were divested on January 31, 2020.

Geographic information

Net revenues by geography are based on the billing addresses of our customers. The following table represents net revenues by geographic area for the periods presented:

Year Ended
(In millions)April 3, 2020March 29, 2019March 30, 2018
Americas$1,831$1,786$1,749
EMEA376392470
APJ283278340
Total net revenues$2,490$2,456$2,559

Note: The Americas include U.S., Canada, and Latin America; EMEA includes Europe, Middle East, and Africa; APJ includes Asia Pacific and Japan

Revenues from customers inside the U.S. were $1,747 million, $1,700 million, and $1,647 million during fiscal 2020, 2019, and 2018, respectively. No other individual country accounted for more than 10% of revenues.

The table below represents cash, cash equivalents and short-term investments held in the U.S. and internationally in various foreign subsidiaries.

(In millions)April 3, 2020March 29, 2019
U.S.$1,345$1,544
International918499
Total cash, cash equivalents and short-term investments$2,263$2,043

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

(In millions)April 3, 2020March 29, 2019
U.S.$174$568
Ireland3441
Other countries (1)3054
Total property and equipment, net$238$663
(1)No individual country represented more than 10% of the respective totals.

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

(In millions)April 3, 2020
U.S.$40
India11
Japan10
Other countries (1)27
Total operating lease assets$88
(1)No individual country represented more than 10% of the respective totals.

Significant customers

In fiscal 2020, 2019, and 2018, no customer accounted for 10% or more of our net revenues. See Note 1 for customers that accounted for over 10% of our net accounts receivable.

Note 18**. Commitments and Contingencies**

Purchase obligations

We have purchase obligations that are associated with agreements for purchases of goods or services. Management believes that cancellation of these contracts is unlikely, and we expect to make future cash payments according to the contract terms.

The following reflects estimated future payments for purchase obligations by fiscal year, including purchase obligations associated with our discontinued operations. The amount of purchase obligations reflects estimated future payments as of April 3, 2020.

(In millions)April 3, 2020
2021$347
202229
202324
202419
202514
Thereafter6
Total purchase obligations$439

Deemed repatriation taxes

Under the Tax Cuts and Jobs Act (H.R.1), we are required to pay a one-time transition tax on untaxed foreign earnings of our foreign subsidiaries through July 2025. The following reflects estimated future payments for deemed repatriation taxes by fiscal year:

(In millions)April 3, 2020
2021$68
202268
202368
2024128
2025171
Thereafter180
Total obligations$683

Indemnifications

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, subsidiaries, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of agreements or representations and warranties made by us. In addition, our bylaws contain indemnification obligations to our directors, officers, employees, and agents, and we have entered into indemnification agreements with our directors and certain of our officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in our bylaws and to provide additional procedural protections. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements might not be subject to maximum loss clauses. Historically, we have not incurred material costs as a result of obligations under these agreements, and we have not accrued any material liabilities related to such indemnification obligations in our Consolidated Financial Statements.

In connection with the sale of Veritas and the sale of our Enterprise Security business to Broadcom, we assigned several leases to Veritas Technologies LLC or Broadcom and/or their related subsidiaries. As a condition to consenting to the assignments, certain lessors required us to agree to indemnify the lessor under the applicable lease with respect to certain matters, including, but not limited to, losses arising out of Veritas Technologies LLC, Broadcom, or their related subsidiaries’ breach of payment obligations under the terms of the lease. As with our other indemnification obligations discussed above and in general, it is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. As with our other indemnification obligations, such indemnification agreements might not be subject to maximum loss clauses, and to date, generally under our real estate obligations, we have not incurred material costs as a result of such obligations under our leases and have not accrued any liabilities related to such indemnification obligations in our Consolidated Financial Statements.

We provide limited product warranties, and the majority of our software license agreements contain provisions that indemnify licensees of our software from damages and costs resulting from claims alleging that our software infringes on the intellectual property rights of a third party. Historically, payments made under these provisions have been immaterial. We monitor the conditions that are subject to indemnification to identify if a loss has occurred.

Litigation contingencies

SEC Investigation

As previously disclosed in our public filings, the Audit Committee of our Board of Directors (the Audit Committee) completed its internal investigation (the Audit Committee Investigation) in September 2018. In connection with the Audit Committee Investigation, we voluntarily contacted the SEC in April 2018. The SEC commenced a formal investigation, and we continue to cooperate with that investigation. The outcome of such an investigation is difficult to predict. We have incurred, and will continue to incur, significant expenses related to legal and other professional services in connection with the SEC investigation. At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of the SEC’s investigation or estimate the range of any potential loss.

Securities Class Action and Derivative Litigation

Securities class action lawsuits, which have since been consolidated, were filed in May 2018 against us and certain of our former officers, in the U.S. District Court for the Northern District of California. The lead plaintiff’s consolidated amended complaint alleged that, during a purported class period of May 11, 2017 to August 2, 2018, defendants made false and misleading statements in violation of Sections 10(b) and 20(a), and that certain individuals violated Section 20A, of the Securities Exchange Act. Defendants filed motions to dismiss, which the Court granted in an order dated June 14, 2019. Pursuant to that order, plaintiff filed a motion seeking leave to amend and a proposed first amended complaint on July 11, 2019. The Court granted the motion in part on October 2, 2019 and the first amended complaint was filed on October 11, 2019. The Court’s order

dismissed certain claims against certain of our former officers. Defendants filed answers on November 7, 2019. No trial date has been set.

Purported shareholder derivative lawsuits have been filed against us and certain of our former officers and current and former directors in the U.S. District Courts for the District of Delaware and the Northern District of California, Delaware Chancery Court, and Delaware Superior Court, arising generally out of the same facts and circumstances as alleged in the securities class action and alleging claims for breach of fiduciary duty and related claims; these lawsuits include an action brought derivatively on behalf of our 2008 Employee Stock Purchase Plan. The derivative actions are currently voluntarily stayed in light of the securities class action. No specific amount of damages has been alleged in these lawsuits. We have also received demands from purported stockholders to inspect corporate books and records under Delaware law.

We will continue to incur legal fees in connection with these pending cases and demands, including expenses for the reimbursement of legal fees of present and former officers and directors under indemnification obligations. The expense of continuing to defend such litigation may be significant. We intend to defend these lawsuits vigorously, but there can be no assurance that we will be successful in any defense. If any of the lawsuits are decided adversely, we may be liable for significant damages directly or under our indemnification obligations, which could adversely affect our business, results of operations, and cash flows.

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

GSA

During the first quarter of fiscal 2013, we were advised by the Commercial Litigation Branch of the Department of Justice’s (DOJ) Civil Division and the Civil Division of the U.S. Attorney’s Office for the District of Columbia that the government is investigating our compliance with certain provisions of our U.S. General Services Administration (GSA) Multiple Award Schedule Contract No. GS-35F-0240T effective January 24, 2007, including provisions relating to pricing, country of origin, accessibility, and the disclosure of commercial sales practices.

As reported on the GSA’s publicly-available database, our total sales under the GSA Schedule contract were approximately $222 million from the period beginning January 2007 and ending September 2012. We fully cooperated with the government throughout its investigation, and in January 2014, representatives of the government indicated that their initial analysis of our actual damages exposure from direct government sales under the GSA schedule was approximately $145 million; since the initial meeting, the government’s analysis of our potential damages exposure relating to direct sales has increased. The government has also indicated they are going to pursue claims for certain sales to California, Florida, and New York as well as sales to the federal government through reseller GSA Schedule contracts, which could significantly increase our potential damages exposure.

In 2012, a sealed civil lawsuit was filed against us related to compliance with the GSA Schedule contract and contracts with California, Florida, and New York. On July 18, 2014, the Court-imposed seal expired, and the government intervened in the lawsuit. On September 16, 2014, the states of California and Florida intervened in the lawsuit, and the state of New York notified the Court that it would not intervene. On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific damages amount. On October 17, 2014, California and Florida combined their claims with those of the DOJ and the relator on behalf of New York in an Omnibus Complaint, and a First Amended Omnibus Complaint was filed on October 8, 2015; the state claims also do not state specific damages amounts. On June 6, 2019, we filed a motion seeking summary judgment on all claims asserted by all plaintiffs, and the plaintiffs filed a motion for partial summary judgment on elements of liability on their claims. On March 30, 2020, the Court issued an Order granting in part and denying in part our motion for summary judgment and granting in part and denying in part the United States’ motion for partial summary judgment.

It is possible that the litigation could lead to claims or findings of violations of the False Claims Act and could be material to our results of operations and cash flows for any period. Resolution of False Claims Act investigations can ultimately result in the payment of somewhere between one and three times the actual damages proven by the government, plus civil penalties in some cases, depending upon a number of factors. Our current estimate of the low end of the range of the probable estimated loss from this matter is $25 million, which we have accrued. This amount contemplates estimated losses from both the investigation of compliance with the terms of the GSA Schedule contract as well as possible violations of the False Claims Act. There is at least a reasonable possibility that a loss may have been incurred in excess of our accrual for this matter, however, we are currently unable to determine the high end of the range of estimated losses resulting from this matter.

Avila v. LifeLock et al

On August 29, 2019 the Ninth Circuit issued a mandate remanding a securities class action lawsuit, originally filed on July 22, 2015, against our subsidiary, LifeLock, as well as certain of LifeLock’s former officers (the “LifeLock Defendants”) for further proceedings in the U.S. District Court for the District of Arizona. The Ninth Circuit had affirmed in part and reversed in part the August 21, 2017 decision of the District Court, which had dismissed the case with prejudice. The complaint in the remanded action alleges that, during a purported class period of July 30, 2014 to July 21, 2015, a period that predates our acquisition of LifeLock, the LifeLock Defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act. We have settled this lawsuit and will pay $20 million to the class in the settlement. The settlement is subject to approval by the United States District Court for the District of Arizona. As a result of this settlement, we recorded a charge of $20 million in General and administrative in fiscal 2020.

Other

We are involved in a number of other judicial and administrative proceedings that are incidental to our business. Although adverse decisions (or settlements) may occur in one or more of the cases, it is not possible to estimate the possible loss or losses from each of these cases. The final resolution of these lawsuits, individually or in the aggregate, is not expected to have a material adverse effect on our business, results of operations, financial condition or cash flows.

Note 19**. Subsequent Events**

Dividends

On May 14, 2020, we announced a cash dividend of $0.125 per share of common stock to be paid in June 2020. All shares of common stock issued and outstanding and all RSUs and PRUs as of the record date will be entitled to the dividend and dividend equivalents, respectively. Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.

Repayment of convertible debt

In May 2020, we settled the $625 million principal and conversion rights of the 2.0% Convertible Notes in cash. The aggregate settlement amount of $1.18 billion was based on $19.25 per underlying share into which the 2.0% Convertible Notes were convertible. The settlement is expected to have an immaterial impact on our Consolidated Statements of Operations in our first quarter of fiscal 2021.

(2) Financial Statement Schedule

Schedule II

NORTONLIFELOCK INC.

VALUATION AND QUALIFYING ACCOUNTS

All financial statement schedules have been omitted, since the required information is not applicable or is not present in material amounts, and/or changes to such amounts are immaterial to require submission of the schedule, or because the information required is included in our Consolidated Financial Statements and notes thereto included in this Form 10-K.

(3) Exhibits

Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
2.01(§)Asset Purchase Agreement, dated August 8, 2019, by and between Broadcom Inc. and Registrant.8-K000-177812.018/8/2019
3.01Amended and Restated Certificate of Incorporation of Registrant.S-8333-1198724.0110/21/2004
3.02Certificate of Amendment of Amended and Restated Certificate of Incorporation of Symantec Corporation.S-8333-1264034.037/6/2005
3.03Certificate of Amendment to Amended and Restated Certificate of Incorporation of Registrant.10-Q000-177813.018/5/2009
3.04Certificate of Amendment to Amended and Restated Certificate of Incorporation of Symantec Corporation.8-K000-177813.0111/4/2019
3.05Amended and Restated Bylaws of Registrant.8-K000-177813.0211/4/2019
3.06Certificate of Elimination of Series A Junior Preferred Stock.X
4.01Form of Common Stock Certificate.X
4.02Description of Securities.X
4.03Indenture, dated September 16, 2010, between Registrant and Wells Fargo Bank, National Association, as trustee.8-K000-177814.019/16/2010
4.04Form of Global Note for Symantec’s 4.200% Senior Note due 2020 (contained in Exhibit No. 4.02 of Form 8-K).8-K000-177814.049/16/2010
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
4.05Form of Global Note for Symantec’s 3.950% Senior Notes due 2022 (contained in Exhibit No. 4.02 of Form 8-K).8-K000-177814.046/14/2012
4.06Investment Agreement, dated as of February 3, 2016, by and among Registrant and Silver Lake Partners IV Cayman (AIV II), L.P.8-K000-1778110.012/9/2016
4.07First Amendment to Investment Agreement, dated as of March 2, 2016, by and among Registrant and Silver Lake Partners IV Cayman (AIV II), L.P.8-K000-1778110.013/7/2016
4.08Investment Agreement, dated as of June 12, 2016, by and among Registrant, Bain Capital Fund XI, L.P., Bain Capital Europe Fund IV, L.P. and Silver Lake Partners IV Cayman (AIV II), L.P. (including the form of Indenture attached as Exhibit A thereto).8-K000-177812.026/14/2016
4.09Amendment to Investment Agreement, dated as of July 31, 2016, by and among Registrant, Bain Capital Fund XI, L.P., Bain Capital Europe Fund IV, L.P. and Silver Lake Partners IV Cayman (AIV II), L.P.10-Q000-177812.038/5/2016
4.10Base Indenture, dated as of February 9, 2017, between Registrant and Wells Fargo Bank, National Association, as trustee.8-K000-177814.012/9/2017
4.11First Supplemental Indenture related to the 5% Senior Notes due 2025, dated as of February 9, 2017, between Registrant and Wells Fargo Bank, National Association, as trustee (including form of 5.00% Senior Note due 2025).8-K000-177814.022/9/2017
4.12Third Amendment to Investment Agreement, dated November 11, 2019, by and between NortonLifeLock Inc. and Silver Lake Partners IV Cayman (AIV II), L.P., SLP IV Seal Holdings, L.P. and SLP IV Seal II Holdings, L.P.8-K000-1778110.0111/12/2019
4.13Second Amendment to Investment Agreement, dated November 11, 2019, by and between NortonLifeLock Inc. and BC Bearcat SPV, LP, BCIP Venture Associates, BCIP Venture Associates-B, BCIP Associates IV (US), L.P., BCIP Associates IV-B (US), L.P., BCIP T Associates IV (US),8-K000-1778110.0211/12/2019
4.14Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.00% Convertible Senior Notes Due 2022).X
4.15Indenture, dated as of February 4, 2020, by and between Registrant and Wells Fargo Bank, National Association, as trustee (including the form of 2.500% Convertible Senior Notes Due 2022).X
10.01(*)Form of Indemnification Agreement for Officers, Directors and Key Employees (form for agreements entered into between January 17, 2006 and March 6, 2016).8-K000-1778110.011/23/2006
10.02(*)Form of Indemnification Agreement for Officers, Directors and Key Employees, as amended (form for agreements entered into after March 6, 2016).8-K000-1778110.033/7/2016
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
10.03(*)Registrant’s Deferred Compensation Plan, restated and amended January 1, 2010, as adopted December 15, 2009.10-K000-1778110.055/24/2010
10.04(*)Registrant’s 2000 Director Equity Incentive Plan, as amended.10-Q000-1778110.0111/1/2011
10.05(*)Registrant’s 2008 Employee Stock Purchase Plan, as amended.10-Q000-1778110.062/7/2020
10.06(*)Registrant’s 2013 Equity Incentive Plan, as amended.8-K000-1778110.0112/3/2018
10.07(*)Forms of award agreements under 2013 Equity Incentive Plan.10-K000-1778110.1010/26/2018
10.08(*)Form of FY20 Performance Based Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan10-Q000-1778110.038/9/2019
10.09(*)Form of Amended and Restated Restricted Stock Unit Award Agreements under 2013 Equity Incentive Plan10-Q000-1778110.048/9/2019
10.10(*)Blue Coat, Inc. 2016 Equity Incentive Plan, including forms of awards thereunder.S-8333-21284799.018/2/2016
10.11(*)Batman Holdings, Inc. 2015 Amended and Restated Equity Incentive Plan, including form of Stock Option Agreement thereunder.10-Q000-1778110.052/7/2020
10.12Amended and Restated Credit Agreement, effective as of August 1, 2016, among Registrant, the lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Term Loan A-1/Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan A-2 Administrative Agent, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Barclays Bank PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Lead Arrangers and Joint Bookrunners in respect of the Term A-2 Facility, Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd. And TD Securities (USA) LLC, as Co-Documentation Agents in respect of the Term A-2 Facility, and Bank of America, N.A., as Syndication Agent in respect of Term A-2 Facility.10-Q000-177814.038/5/2016
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
10.13Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.10-Q000-177814.058/5/2016
10.14Amendment Agreement, dated as of July 18, 2016, by and among Registrant, Symantec Operating Corporation, the Lenders and the New Term Lenders, Wells Fargo Bank, National Association, and JPMorgan Chase Bank, N.A.10-Q000-177814.028/5/2016
10.15Assignment and Assumption, dated October 3, 2016, to the Term Loan Agreement dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.10-Q000-177814.012/3/2017
10.16First Amendment, dated December 12, 2016, to the Term Loan Agreement, dated as of August 1, 2016, among Registrant, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd., and TD Securities (USA) LLC, as Co-Documentation Agents, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Bank, PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Joint Lead Arrangers and Joint Bookrunners.10-Q000-177814.022/3/2017
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
10.17First Amendment, dated December 12, 2016, to the Credit Agreement, effective as of August 1, 2016, among the Registrant, the lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Term Loan A-1/Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan A-2 Administrative Agent, JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Barclays Bank PLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Royal Bank of Canada and Mizuho Bank, Ltd., as Lead Arrangers and Joint Bookrunners in respect of the Term A-2 Facility, Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Royal Bank of Canada, Mizuho Bank, Ltd. And TD Securities (USA) LLC, as Co-Documentation Agents in respect of the Term A-2 Facility, and Bank of America, N.A., as Syndication Agent in respect of Term A-2 Facility.10-Q000-177814.032/3/2017
10.18(*)Registrant’s Senior Executive Incentive Plan, as amended and restated.8-K000-1778110.0310/25/2013
10.19(*)Registrant’s Executive Retention Plan, as amended and restated.10-K000-1778110.1810/26/2018
10.20(*)Registrant’s Executive Severance Plan.10-K000-1778110.1910/26/2018
10.21(*)FY20 Executive Annual Incentive Plan - Chief Executive Officer.10-Q000-1778110.018/9/2019
10.22(*)FY20 Executive Annual Incentive Plan - Senior Vice President and Executive Vice President.10-Q000-1778110.028/9/2019
10.23(§§)Assignment of Copyright and Other Intellectual Property Rights, by and between Peter Norton and Peter Norton Computing, Inc., dated August 31, 1990.S-433-3538510.376/13/1990
10.24(†)Environmental Indemnity Agreement, dated April 23, 1999, between Veritas and Fairchild Semiconductor Corporation, included as Exhibit C to that certain Agreement of Purchase and Sale, dated March 29, 1999, between Veritas and Fairchild Semiconductor of California.S-1/A333-8377710.278/6/1999
10.25Amendment, dated June 20, 2007, to the Amended and Restated Agreement Respecting Certain Rights of Publicity dated as of August 31, 1990, by and between Peter Norton and Registrant.10-Q000-1778110.018/7/2007
10.26Second Amendment and Limited Waiver to Amended and Restated Credit Agreement dated as of June 22, 2018.10-Q000-1778110.0111/16/2018
10.27Second Amendment and Limited Waiver to Term Loan dated as of June 22, 2018.10-Q000-1778110.0211/16/2018
10.28(*)Registrant’s Offer Letter with Matthew Brown.10-Q000-1778110.042/4/2019
10.30(*)Offer Letter with Vincent Pilette dated April 26, 2019.8-K000-1778110.025/9/2019
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
10.31Credit Agreement, effective as of November 4, 2019, among NortonLifeLock Inc., the issuing banks and lenders party thereto (the Lenders), Wells Fargo Bank, National Association, as Revolver Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A., as Term Loan Administrative Agent and Collateral Agent, JPMorgan Chase Bank, N.A., Wells Fargo Securities, LLC, BofA Securities, Inc., Mizuho Bank, Ltd., Barclays Bank PLC, and The Bank of Nova Scotia, as Lead Arrangers and Joint Bookrunners, Bank of America, N.A., Mizuho Bank, Ltd., Barclays Bank PLC and The Bank of Nova Scotia, as Syndication Agents and and Goldman Sachs Bank USA, HSBC Securities (USA) Inc., MUFG Bank, Ltd., SunTrust Robinson Humphrey, Inc., Citizens Bank, N.A., BMO Capital Markets Corp., BNP Paribas Securities Corp. and Santander Bank, N.A., as Co-Documentation Agents.8-K000-1778110.0111/4/2019
10.32(*)Symantec Corporation Broadcom Transaction Severance & Retention Plan dated August 21, 2019.10-Q000-1778110.0511/8/2019
10.33(*)Transitions Services Agreement by and between Richard S. Hill and Registrant dated August 30, 2019.10-Q000-1778110.0611/8/2019
10.34(*)Severance Benefit Agreement with Samir Kapuria dated December 5, 2019.8-K000-1778110.0112/10/2019
21.01Subsidiaries of Registrant.X
23.01Consent of Independent Registered Public Accounting Firm.X
24.01Power of Attorney (see Signature page to this annual report).X
31.01Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.X
31.02Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.X
32.01(††)Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.X
32.02(††)Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.X
Exhibit NumberIncorporated by ReferenceFiled Herewith
Exhibit DescriptionFormFile No.ExhibitFiling Date
101.00The following financial information from NortonLifeLock Inc.'s Annual Report on Form 10-K for the fiscal year ended April 3, 2020 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity, (vi) Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags.X
104.00Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)X
*Indicates a management contract, compensatory plan or arrangement.
**Filed by LifeLock, Inc.
§The exhibits and schedules to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally copies of any such exhibits and schedules to the SEC upon request.
§§Paper filing.
†Filed by Veritas Software Corporation.
††This exhibit is being furnished, rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

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