SYMC
$25.04
Symantec
($.04)
(.16%)
Earnings Details
1st Quarter June 2016
Thursday, August 04, 2016 4:05:08 PM
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Summary

Symantec Beats

Symantec (SYMC) reported 1st Quarter June 2016 earnings of $0.28 per share on revenue of $884.0 million. The consensus earnings estimate was $0.25 per share on revenue of $878.2 million. The Earnings Whisper number was $0.27 per share. Revenue fell 41.0% compared to the same quarter a year ago.

The company said it expects second quarter non-GAAP earnings of $0.18 to $0.21 per share on revenue of $960.0 million to $990.0 million. The current consensus earnings estimate is $0.26 per share on revenue of $879.2 million for the quarter ending September 30, 2016. The company also said it with the Blue Coat acquisition it expects fiscal 2017 earnings of $1.08 to $1.14 per share on revenue of $4.04 billion to $4.12 billion. The company's previous guidance was earnings of $1.06 to $1.10 per share on revenue of $3.49 billion to $3.58 billion and the current consensus earnings estimate is $1.08 per share on revenue of $3.53 billion for the year ending March 31, 2017.

Symantec Corp provides security, backup and availability solutions. Its products and services protect people and information in any environment, from the smallest mobile device, to the enterprise data center, to cloud-based systems.

Results
Reported Earnings
$0.28
Earnings Whisper
$0.27
Consensus Estimate
$0.25
Reported Revenue
$884.0 Mil
Revenue Estimate
$878.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Symantec Reports First Quarter Fiscal Year 2017 Results

Reiterates commitment to maintain quarterly dividend at $0.075

$550 million in net cost savings underway, as a result of cost savings initiative and synergies from Blue Coat acquisition

Symantec Corp. (SYMC) today reported the results of its first quarter of fiscal year 2017, ended July 1, 2016.

Greg Clark, Symantec CEO, said, "We are pleased to have quickly and successfully completed the Blue Coat acquisition, allowing us to begin executing our integration strategy. Symantec is now positioned to take advantage of the vast market opportunities in helping customers embrace the cloud, protecting the mobile workforce and securing enterprises, governments and consumers from advanced attacks. We have a deep bench of talent across all functions focused on executing our strategic initiatives, maintaining strong sales performance and achieving our financial targets."

Thomas Seifert, Symantec CFO, said, "Our revenue was above the mid-point of our guided range for Q1, driven by improved performance within Enterprise Security and continued in-line results from Consumer Security. With the Blue Coat acquisition complete, we are well positioned to accelerate our strategy as the world’s largest pure play cyber security company and achieve alignment across the organization. In addition, we continue to make progress in realizing cost efficiencies and synergies by the end of fiscal 2018."

Results for the First Quarter of Fiscal Year 2017 (Dollars in millions, except EPS)

Reported Y/Y
FX Adjusted
1Q17
1Q16
Change
Y/Y Change
GAAP
Revenue
$884
$912
(3%)
(4%)
Operating Margin
12.0%
9.1%
290 bps
140 bps
Net Income
$135
$117
15%
N/A
Deferred Revenue
$2,417
N/A
N/A
N/A
EPS (Diluted)
$0.22
$0.17
29%
N/A
CFFO
($772)
$300
(357%)
N/A
Non-GAAP
Revenue
$884
$912
(3%)
(4%)
Operating Margin
28.6%
30.2%
(160) bps
(280) bps
Net Income
$177
$183
(3%)
N/A
EPS (Diluted)
$0.29
$0.26
12%
N/A

Second Quarter and Fiscal Year 2017 Guidance (Dollars in millions, except EPS)

Non-GAAP Guidance
FX Neutral
($M in Guided Rates)
2Q17
Y/Y growth
Revenue
$960 - $990
4% - 8%
Enterprise Security
$565 - $590
14% - 20%
Consumer Security
$395 - $400
(7%)
Operating Margin
21% - 24%
N/A
EPS (Diluted)
$0.18 - $0.21
N/A
Share Count (Diluted)
640M
N/A
Effective Tax Rate
29%
N/A
EUR =
$1.11
N/A
Non-GAAP Guidance
FX Neutral
($M in Guided Rates)
FY17
Y/Y growth
Revenue
$4,040 - $4,120
11% - 13%
Operating Margin
26% - 28%
N/A
EPS (Diluted)
$1.08 - $1.14
N/A
Share Count (Diluted)
616M
N/A
Effective Tax Rate
29%
N/A
EUR =
$1.11
N/A

Symantec’s Board of Directors has declared a quarterly cash dividend of 7.5 cents per common share to be paid on September 14, 2016 to all shareholders of record as of the close of business on August 22, 2016. The ex-dividend date will be August 18, 2016.

No reconciliation of the forecasted range for non-GAAP guidance is included in this release because it would be unreasonably burdensome to forecast the acquisition and other charges associated with the Blue Coat acquisition that may impact the GAAP measure. The impact, which may be significant, of purchase accounting on revenue, non-cash compensation expense and other non-cash charges, are not yet known and subject to change, and the variability of these charges could have a significant, and unpredictable, impact on Symantec’s future GAAP financial results.

Conference Call

Symantec has scheduled a conference call for 5:00 p.m. ET/2:00 p.m. PT today to discuss its first quarter of fiscal year 2017 results, ended July 1, 2016 and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For telephone access to the conference, call (877) 475-6198 within the United States or (970) 297-2372 from outside the United States. Please call 15 minutes early and give the operator conference ID number 47963069. A replay and our prepared remarks will be available on the investor relations home page shortly after the call is completed.

About Symantec

Symantec Corporation (SYMC) is the global leader in cyber security. Operating one of the world’s largest cyber intelligence networks, we see more threats, and protect more customers from the next generation of attacks. We help companies, governments and individuals secure their most important data wherever it lives.

Forward-Looking Statements

This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements regarding our projected financial and business results, the expected benefits to Symantec, its customers, stockholders and investors from completing the acquisition of Blue Coat, Inc. ("Blue Coat"), including without limitation expected growth, cross-sell and upsell opportunities, earnings accretion and cost savings, statements regarding the share repurchase program and cost reduction efforts. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: the potential impact on the businesses of Blue Coat and Symantec due to uncertainties in connection with the acquisition; the retention of employees of Blue Coat and the ability of Symantec to successfully integrate Blue Coat and to achieve expected benefits; general economic conditions; fluctuations and volatility in Symantec’s stock price; the ability of Symantec to successfully execute strategic plans; the ability to maintain customer and partner relationships; fluctuations in tax rates and currency exchange rates; the timing and market acceptance of new product releases and upgrades; and the successful development of new products, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Symantec assumes no obligation, and does not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors section of Symantec’s Form 10-K for the year ended April 1, 2016.

Use of Non-GAAP Financial Information

Our results of operations have undergone or are expected to undergo significant change due to the impact of litigation accruals, discontinued operations, stock-based compensation, restructuring, transition and separation matters, charges related to the amortization of intangible assets, the impact of purchase accounting on revenue from the Blue Coat acquisition, and certain other income and expense items that management considers unrelated to the Company’s core operations. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management team uses these non-GAAP financial measures in assessing Symantec’s operating results, as well as when planning, forecasting and analyzing future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our press release and which can be found, along with other financial information, on the investor relations page of our website at: http://www.symantec.com/invest.

SYMANTEC CORPORATION
Condensed Consolidated Balance Sheets
(Dollars in millions, unaudited)
July 1, 2016
April 1,2016 (1)
ASSETS
Current assets:
Cash and cash equivalents
$
6,108
$
5,983
Short-term investments
10
42
Accounts receivable, net
314
556
Other current assets
367
378
Total current assets
6,799
6,959
Property and equipment, net
904
957
Intangible assets, net
423
443
Goodwill
3,146
3,148
Equity investments
157
157
Other long-term assets
101
103
Total assets
$
11,530
$
11,767
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
115
$
175
Accrued compensation and benefits
166
219
Deferred revenue
2,085
2,279
Current portion of long-term debt
599
-
Income taxes payable
24
941
Other current liabilities
333
419
Total current liabilities
3,322
4,033
Long-term debt
2,605
2,207
Long-term deferred revenue
332
359
Long-term deferred tax liabilities
1,266
1,235
Long-term income taxes payable
154
160
Other long-term obligations
85
97
Total liabilities
7,764
8,091
Total stockholders’ equity
3,766
3,676
Total liabilities and stockholders’ equity
$
11,530
$
11,767
(1) Derived from audited consolidated financial
statements.
SYMANTEC CORPORATION
Condensed Consolidated Statements of Income
(In millions, except per share data, unaudited)
Year-Over-Year
Three Months Ended
Growth Rate
Constant
July 1, 2016
July 3, 2015
Actual
Currency (1)
Net revenues
$
884
$
912
-3 %
-4 %
Cost of revenues
149
158
-6 %
-5 %
Gross profit
735
754
-3 %
-4 %
Operating expenses:
Sales and marketing
291
340
Research and development
170
198
General and administrative
84
84
Amortization of intangible assets
14
14
Restructuring, separation, transition, and other
70
35
Total operating expenses
629
671
-6 %
-6 %
Operating income
106
83
28 %
10 %
Interest income
5
3
Interest expense
(27 )
(20 )
Other income (expense), net
13
(6 )
Income from continuing operations before income taxes
97
60
62 %
N/A
Income tax expense
31
35
Income from continuing operations
66
25
Income from discontinued operations, net of income taxes
69
92
Net income
$
135
$
117
15 %
N/A
Income per share - basic:
Continuing operations
$
0.11
$
0.04
Discontinued operations
0.11
0.13
Net income per share - basic
0.22
0.17
Income per share - diluted:
Continuing operations
$
0.11
$
0.04
Discontinued operations
0.11
0.13
Net income per share - diluted
0.22
0.17
Weighted-average shares outstanding - basic
613
682
Weighted-average shares outstanding - diluted
620
691
Cash dividends declared per common share
$
0.075
$
0.15
(1) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in
currencies other than United States dollars are converted into
United States dollars at the actual exchange rates in effect during
the respective prior periods.
SYMANTEC CORPORATION
Condensed Consolidated Statements of Cash Flows
(Dollars in millions, unaudited)
Three Months Ended
July 1, 2016
July 3, 2015
OPERATING ACTIVITIES:
Net income
$
135
$
117
Income from discontinued operations, net of income taxes
(69 )
(92 )
Adjustments to reconcile income from continuing operations to net
cash provided by (used in) continuing operating activities:
Depreciation and amortization
72
77
Stock-based compensation expense
49
35
Deferred income taxes
33
30
Excess income tax benefit from the exercise of stock options
(2 )
(5 )
Other
27
4
Net change in assets and liabilities, excluding effects of
acquisitions:
Accounts receivable, net
244
154
Accounts payable
(63 )
(34 )
Accrued compensation and benefits
(52 )
(62 )
Deferred revenue
(139 )
(111 )
Income taxes payable
(940 )
(47 )
Other assets
(2 )
17
Other liabilities
(35 )
(24 )
Net cash provided by (used in) continuing operating activities
(742 )
59
(30 )
241
Net cash provided by (used in) discontinued operating activities
Net cash provided by (used in) operating activities
(772 )
300
INVESTING ACTIVITIES:
Purchases of property and equipment
(22 )
(61 )
Purchases of short-term investments
-
(183 )
Proceeds from maturities of short-term investments
30
222
Proceeds from sales of short-term investments
-
76
Proceeds received from divestiture of information management
7
-
business, net of transaction costs
Net cash provided by continuing investing activities
15
54
Net cash used in discontinued investing activities
-
(17 )
Net cash provided by investing activities
15
37
FINANCING ACTIVITIES:
Repayments of debt and other obligations
(17 )
(17 )
Proceeds from debt issuance, net of issuance costs
994
-
Net proceeds from sales of common stock under employee stock benefit
1
4
plans
Excess income tax benefit from the exercise of stock options
2
5
Tax payments related to restricted stock units
(24 )
(22 )
Dividends and dividend equivalents paid
(68 )
(107 )
Repurchases of common stock
-
(90 )
Proceeds from other financing
10
-
Net cash provided by (used in) continuing financing activities
898
(227 )
Net cash used in discontinued financing activities
-
(11 )
Net cash provided by (used in) financing activities
898
(238 )
Effect of exchange rate fluctuations on cash and cash equivalents
(16 )
8
Change in cash and cash equivalents
125
107
Beginning cash and cash equivalents
5,983
2,874
Ending cash and cash equivalents
6,108
2,981
Less: Cash and cash equivalents of discontinued operations
-
245
Cash and cash equivalents of continuing operations
$
6,108
$
2,736
SYMANTEC CORPORATION
Reconciliation of Selected GAAP Measures to Non-GAAP Measures
(In millions, except per share data, unaudited)
Year-Over-Year
Three Months Ended
Non-GAAP Growth Rate
July 1, 2016
July 3, 2015
Constant
GAAP
Adj
Non-GAAP
GAAP
Adj
Non-GAAP
Actual
Currency (1)
Net revenues
$
884
$
-
$
884
$
912
$
-
$
912
-3 %
-4 %
Gross profit:
$
735
$
9
$
744
754
$
22
$
776
-4 %
-6 %
Unallocated corporate charges (2)
-
11
Stock-based compensation
3
2
Amortization of intangible assets
6
9
Gross margin %
83.1 %
1.1 %
84.2 %
82.7 %
2.4 %
85.1 %
-90 bps
-120 bps
Operating expenses:
$
629
$
138
$
491
671
$
170
$
501
-2 %
-2 %
Unallocated corporate charges (2)
-
88
Stock-based compensation
46
33
Amortization of intangible assets
14
14
Restructuring, separation, transition, and other
70
35
Acquisition costs
8
-
Operating expenses as a % of revenue
71.2 %
-15.7 %
55.5 %
73.6 %
-18.7 %
54.9 %
60 bps
160 bps
Operating income
$
106
$
147
$
253
$
83
$
192
$
275
-8 %
-13 %
Operating margin %
12.0 %
16.6 %
28.6 %
9.1 %
21.1 %
30.2 %
-160 bps
-280 bps
Net income:
$
135
$
42
$
177
$
117
$
66
$
183
-3 %
N/A
Gross profit adjustment
9
22
Operating expenses adjustment
138
170
Income tax effects and adjustments
(36 )
(34 )
Total net income adjustment from discontinued operations
(69 )
(92 )
Diluted income per share:
Income per share from continuing operations
$
0.11
$
0.18
$
0.29
$
0.04
$
0.22
$
0.26
Income per share from discontinued operations
0.11
(0.11 )
-
0.13
(0.13 )
-
Diluted net income per share
0.22
0.07
0.29
0.17
0.09
0.26
12 %
N/A
Diluted weighted-average shares outstanding
620
-
620
691
-
691
-10 %
N/A
(1) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how
our underlying businesses performed excluding the effect of
foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities
reporting in currencies other than United States dollars are
converted into United States dollars at the actual exchange rates
in effect during the respective prior periods.
(2) This item consists of charges previously allocated to
our discontinued information management business. Please see
Appendix A for further information.
SYMANTEC CORPORATION
Revenue and Deferred Revenue Detail
(Dollars in millions, unaudited)
Three Months Ended
July 1, 2016
July 3, 2015
GAAP Revenue
Content, subscription, maintenance and other
$
860
$
884
License
24
28
Total Revenue
$
884
$
912
GAAP Revenue - Y/Y Growth Rate
Content, subscription, maintenance and other
-3 %
-16 %
License
-14 %
0 %
Total Y/Y Growth Rate
-3 %
-16 %
GAAP Revenue - Y/Y Growth Rate in Constant Currency
(1)
Content, subscription, maintenance and other
-4 %
-10 %
License
-11 %
5 %
Total Y/Y Growth Rate in Constant Currency (1)
-4 %
-10 %
GAAP Revenue by Segment
Consumer Security
$
403
$
430
Enterprise Security
481
482
GAAP Revenue by Segment - Y/Y Growth Rate
Consumer Security
-6 %
-19 %
Enterprise Security
0 %
-13 %
GAAP Revenue by Segment - Y/Y Growth Rate in Constant Currency
(1)
Consumer Security
-8 %
-13 %
Enterprise Security
-1 %
-7 %
GAAP Revenue by Geography
International
$
425
$
439
U.S.
459
473
509
531
Americas (U.S., Latin America, Canada)
215
230
EMEA (Europe, Middle East & Africa)
160
151
Asia Pacific & Japan
GAAP Revenue by Geography - Y/Y Growth Rate
International
-3 %
-21 %
U.S.
-3 %
-11 %
Americas (U.S., Latin America, Canada)
-4 %
-11 %
EMEA (Europe, Middle East & Africa)
-7 %
-23 %
Asia Pacific & Japan
6 %
-21 %
GAAP Revenue by Geography - Y/Y Growth Rate in Constant Currency
(1)
International
-6 %
-9 %
U.S.
-3 %
-11 %
Americas (U.S., Latin America, Canada)
-4 %
-11 %
EMEA (Europe, Middle East & Africa)
-8 %
-6 %
Asia Pacific & Japan
0 %
-10 %
GAAP Deferred Revenue
$
2,417
- -
(1) Management refers to growth rates adjusting for
currency so that the business results can be viewed without the
impact of fluctuations in foreign currency exchange rates. We
compare the percentage change in the results from one period to
another period in order to provide a framework for assessing how our
underlying businesses performed. To exclude the effects of foreign
currency rate fluctuations, current and comparative prior period
results for entities reporting in currencies other than United
States dollars are converted into United States dollars at the
actual exchange rates in effect during the respective prior periods
(or, in the case of deferred revenue, converted into United States
dollars at the actual exchange rate in effect at the end of the
prior period).
SYMANTEC CORPORATION
Operating Margin by Segment Detail
(Dollars in millions, unaudited)
Three Months Ended
July 1, 2016
July 3, 2015
Operating Income by Segment
Consumer Security
$
225
$
245
Enterprise Security
28
30
Total Operating Income by Segment
253
275
Reconciling Items:
Unallocated corporate charges (1)
-
99
Stock-based compensation
49
35
Amortization of intangible assets
20
23
Restructuring, separation, transition, and other
70
35
Acquisition costs
8
-
Total Consolidated Operating Income
$
106
$
83
Operating Margin by Segment
Consumer Security
56 %
57 %
Enterprise Security
6 %
6 %
(1) This item consists of charges previously allocated
to our discontinued information management business. Please see
Appendix A for further information.

SYMANTEC CORPORATION Explanation of Non-GAAP Measures Appendix A

Objective of non-GAAP measures: We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management team uses these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company’s performance to prior periods and to our peers and that investors benefit from an understanding of the non-GAAP financial measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP.

No reconciliation of the forecasted range for non-GAAP guidance is included in this release because it would be unreasonably burdensome to forecast the acquisition and other charges associated with the Blue Coat acquisition that may impact the GAAP measure. The impact, which may be significant, of purchase accounting on revenue, non-cash compensation expense and other non-cash charges, are not yet known and subject to change, and the variability of these charges could have a significant, and unpredictable, impact on Symantec’s future GAAP financial results.

Discontinued operations: In August 2015, we entered into a definitive agreement to sell the assets of our information management business ("Veritas") to Carlyle. In January 2016, the Company and Carlyle amended the terms of the purchase agreement for Carlyle’s acquisition of the information management business, Veritas. The transaction closed on January 29, 2016. The results of Veritas are presented as discontinued operations in our Consolidated Statements of Operations and thus have been excluded from continuing operations and segment results for all reported periods. Furthermore, Veritas’ assets and liabilities were removed from our Consolidated Balance Sheet as of April 1, 2016.

Unallocated corporate charges: A significant portion of the segments’ expenses arise from shared services and infrastructure that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources. These expenses, collectively called corporate charges, include legal, accounting, real estate, information technology services, treasury, human resources and other corporate infrastructure expenses. Charges were allocated to the segments, and the allocations were determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to or benefits received by the segments. Corporate charges previously allocated to our information management business, but not classified within discontinued operations, were not reallocated to our other segments. We eliminate these unallocated corporate charges from our non-GAAP operating results to facilitate a more meaningful comparison of past operating performance to current operating results.

Acquisition costs: On June 12, 2016, we entered into a definitive agreement (the "Agreement") to acquire Blue Coat, Inc. ("Blue Coat"), for approximately $4.65 billion in cash. The transaction closed on August 1, 2016, subsequent to our quarter ended July 1, 2016. Unless otherwise indicated, the discussions in this document relate to Symantec as a stand-alone entity and do not reflect the impact of the business combination transaction with Blue Coat. Acquisition costs include financial advisory, legal and accounting professional services costs incurred as a result of the Company’s acquisitions during the period. We exclude these expenses because we believe they are not reflective of ongoing operating results in the period incurred and not directly related to the operation of the Company’s business.

Stock-based compensation: Consists of expenses for employee stock options, restricted stock units, performance based awards and our employee stock purchase plan determined in accordance with the authoritative guidance on stock-based compensation. When evaluating the performance of our individual business units and developing short- and long-term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies.

Three Months Ended
July 1,
July 3,
2016
2015
Cost of revenue
$
3
$
2
Sales and marketing
14
11
Research and development
15
12
General and administrative
17
10
$
49
$
35
Total continuing operations stock-based compensation

Amortization of intangible assets: When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangible assets. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate these amortization charges from our non-GAAP operating results to provide better comparability of pre- and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets.

Income Tax Effects and Adjustments: Our non-GAAP tax rate for Q1 FY17 was 27.5%. The Company uses a projected long-term non-GAAP tax rate in order to provide better consistency across the interim financial reporting periods by eliminating the effects of stock based compensation, amortization of acquisition related intangibles and restructuring, separation, transition and other related charges. Additionally, the use of a long-term projected non-GAAP tax rate eliminates the effects of certain discontinued operations accounting policy elections and unique GAAP reporting requirements under discontinued operations as a result of the sale of the information management business. This long-term rate could be subject to change for a variety of reasons, such as significant changes in the geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where the company operates. The Company will evaluate and assess the appropriateness of this rate annually, giving due consideration to the impacts of significant events and structural changes in the Company.

Restructuring, separation, transition, and other: We have engaged in various restructuring, separation, transition, and other activities over the past several years that have resulted in costs associated with severance, facilities, transition, and other related costs. Separation and associated costs consist of consulting and disentanglement costs incurred to separate our security and information management businesses into standalone companies, as well as costs to prune selected product lines that do not fit either the Company’s growth or margin objectives. Transition and associated costs consist of consulting charges associated with the implementation of new Enterprise Resource Planning systems. Additionally, other costs primarily consist of asset write-offs and advisory fees incurred in connection with restructuring events. Each restructuring, separation, transition, and other activity has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring, separation, transition, or other activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring and separation charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges and we believe that investors benefit from excluding these charges from our operating results to facilitate a more meaningful evaluation of current operating performance and comparisons to past operating performance.

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SOURCE: Symantec Corporation

Symantec Corp.
Media
Kristen Batch, 503-516-6297
kristen_batch@symantec.com
or
Investor
Jonathan Doros, 650-527-5523
jonathan_doros@symantec.com