false2022Q100008493994/100008493992021-04-032021-07-02xbrli:shares00008493992021-07-27iso4217:USD00008493992021-07-0200008493992021-04-02iso4217:USDxbrli:shares00008493992020-04-042020-07-030000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-04-020000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-020000849399us-gaap:RetainedEarningsMember2021-04-020000849399us-gaap:RetainedEarningsMember2021-04-032021-07-020000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-032021-07-020000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-04-032021-07-020000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2021-07-020000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-020000849399us-gaap:RetainedEarningsMember2021-07-020000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-04-030000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-030000849399us-gaap:RetainedEarningsMember2020-04-0300008493992020-04-030000849399us-gaap:RetainedEarningsMember2020-04-042020-07-030000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-042020-07-030000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-04-042020-07-030000849399us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2020-07-030000849399us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-030000849399us-gaap:RetainedEarningsMember2020-07-0300008493992020-07-030000849399us-gaap:DiscontinuedOperationsDisposedOfBySaleMembernlok:EnterpriseSecurityMember2020-04-042020-07-030000849399us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-04-042020-07-030000849399nlok:MountainViewBuildingsMemberus-gaap:SubsequentEventMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2021-07-140000849399nlok:MountainViewBuildingsMemberus-gaap:SubsequentEventMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2021-07-142021-07-140000849399nlok:AviraMember2021-01-082021-01-080000849399nlok:AviraMember2021-01-0800008493992021-01-082021-01-08xbrli:pure00008493992021-07-032021-07-020000849399us-gaap:CustomerRelationshipsMember2021-07-020000849399us-gaap:CustomerRelationshipsMember2021-04-020000849399us-gaap:DevelopedTechnologyRightsMember2021-07-020000849399us-gaap:DevelopedTechnologyRightsMember2021-04-020000849399us-gaap:TradeNamesMember2021-07-020000849399us-gaap:TradeNamesMember2021-04-020000849399us-gaap:CustomerRelationshipsMemberus-gaap:OperatingExpenseMember2021-04-032021-07-020000849399us-gaap:CustomerRelationshipsMemberus-gaap:OperatingExpenseMember2020-04-042020-07-030000849399us-gaap:DevelopedTechnologyRightsMemberus-gaap:CostOfSalesMember2021-04-032021-07-020000849399us-gaap:DevelopedTechnologyRightsMemberus-gaap:CostOfSalesMember2020-04-042020-07-030000849399us-gaap:MaterialReconcilingItemsMember2021-04-032021-07-020000849399us-gaap:MaterialReconcilingItemsMember2020-04-042020-07-030000849399us-gaap:LandAndBuildingMember2021-07-020000849399us-gaap:LandAndBuildingMember2021-04-020000849399us-gaap:ComputerEquipmentMember2021-07-020000849399us-gaap:ComputerEquipmentMember2021-04-020000849399us-gaap:OfficeEquipmentMember2021-07-020000849399us-gaap:OfficeEquipmentMember2021-04-020000849399us-gaap:BuildingMember2021-07-020000849399us-gaap:BuildingMember2021-04-020000849399us-gaap:LeaseholdsAndLeaseholdImprovementsMember2021-07-020000849399us-gaap:LeaseholdsAndLeaseholdImprovementsMember2021-04-020000849399us-gaap:ConstructionInProgressMember2021-07-020000849399us-gaap:ConstructionInProgressMember2021-04-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-07-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2021-04-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2021-07-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2021-04-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-07-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-07-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-07-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-04-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-04-020000849399us-gaap:CorporateDebtSecuritiesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-04-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-07-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-07-020000849399us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-04-020000849399us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-04-020000849399us-gaap:FairValueInputsLevel2Member2021-07-020000849399us-gaap:FairValueInputsLevel2Member2021-04-020000849399nlok:FacilitiesMembersrt:MinimumMember2021-07-020000849399nlok:FacilitiesMembersrt:MaximumMember2021-07-020000849399srt:MinimumMemberus-gaap:EquipmentMember2021-07-020000849399srt:MaximumMemberus-gaap:EquipmentMember2021-07-020000849399srt:MinimumMembernlok:DataCenterColocationsMember2021-07-020000849399srt:MaximumMembernlok:DataCenterColocationsMember2021-07-020000849399nlok:EllisMemberus-gaap:SubsequentEventMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember2021-07-142021-07-140000849399us-gaap:ConvertibleDebtMembernlok:New25ConvertibleSeniorNotesDueApril12022Member2021-07-020000849399us-gaap:ConvertibleDebtMembernlok:New25ConvertibleSeniorNotesDueApril12022Member2021-04-020000849399nlok:ThreePointNineFiveSeniorNotesMemberus-gaap:SeniorNotesMember2021-07-020000849399nlok:ThreePointNineFiveSeniorNotesMemberus-gaap:SeniorNotesMember2021-04-020000849399nlok:New20ConvertibleSeniorNotesDueAugust152022Memberus-gaap:ConvertibleDebtMember2021-07-020000849399nlok:New20ConvertibleSeniorNotesDueAugust152022Memberus-gaap:ConvertibleDebtMember2021-04-020000849399us-gaap:SeniorNotesMembernlok:A50SeniorNotesDue2025Member2021-07-020000849399us-gaap:SeniorNotesMembernlok:A50SeniorNotesDue2025Member2021-04-020000849399nlok:InitialTermLoanDueMay72026Memberus-gaap:UnsecuredDebtMember2021-07-020000849399nlok:InitialTermLoanDueMay72026Memberus-gaap:UnsecuredDebtMember2021-04-020000849399nlok:DelayedTermLoanDueMay72026Memberus-gaap:UnsecuredDebtMember2021-07-020000849399nlok:DelayedTermLoanDueMay72026Memberus-gaap:UnsecuredDebtMember2021-04-020000849399us-gaap:MortgagesMembernlok:A095AviraMortgageDueDecember302030Member2021-07-020000849399us-gaap:MortgagesMembernlok:A095AviraMortgageDueDecember302030Member2021-04-020000849399nlok:A129AviraMortgageDueDecember302029Memberus-gaap:MortgagesMember2021-07-020000849399nlok:A129AviraMortgageDueDecember302029Memberus-gaap:MortgagesMember2021-04-020000849399us-gaap:ConvertibleDebtMembernlok:A20ConvertibleSeniorNotesDueAugust152022Member2020-05-310000849399us-gaap:ConvertibleDebtMembernlok:A20ConvertibleSeniorNotesDueAugust152022Member2020-05-012020-05-3100008493992021-05-102021-05-100000849399nlok:New20ConvertibleSeniorNotesDueAugust152022Memberus-gaap:ConvertibleDebtMember2021-04-032021-07-020000849399us-gaap:ConvertibleDebtMember2021-04-032021-07-020000849399us-gaap:ConvertibleDebtMember2020-04-042020-07-030000849399us-gaap:RevolvingCreditFacilityMember2019-11-040000849399nlok:TermLoanDueNovember42024Member2019-11-042019-11-040000849399nlok:TermLoanDueNovember42024Member2019-11-040000849399nlok:DelayedDrawTermLoanDueNovember42024Member2019-11-042019-11-040000849399nlok:DelayedDrawTermLoanDueNovember42024Member2019-11-0400008493992020-09-142020-09-140000849399nlok:FirstAmendmentAdditionalTermLoanDueMay72026Member2021-05-070000849399nlok:CreditAgreementFirstAmendmentMember2021-05-070000849399nlok:DelayedDrawTermLoanDueNovember42024Member2021-05-070000849399us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2021-07-020000849399us-gaap:BaseRateMembernlok:A2019CreditFacilityMembersrt:MinimumMember2021-05-072021-05-070000849399us-gaap:BaseRateMembernlok:A2019CreditFacilityMembersrt:MaximumMember2021-05-072021-05-070000849399nlok:A2019CreditFacilityMembersrt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-05-072021-05-070000849399nlok:A2019CreditFacilityMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-05-072021-05-070000849399nlok:A2019CreditFacilityMembersrt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2021-05-072021-05-070000849399nlok:A2019CreditFacilityMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2021-05-072021-05-070000849399nlok:A2019CreditFacilityMember2021-05-070000849399us-gaap:ForeignExchangeForwardMember2021-04-032021-07-020000849399us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-04-032021-07-020000849399us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2020-04-042020-07-030000849399us-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-07-020000849399us-gaap:LongMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-04-020000849399us-gaap:ForeignExchangeForwardMemberus-gaap:ShortMemberus-gaap:NondesignatedMember2021-07-020000849399us-gaap:ForeignExchangeForwardMemberus-gaap:ShortMemberus-gaap:NondesignatedMember2021-04-020000849399nlok:December2020PlanMember2020-12-310000849399nlok:December2020PlanMember2021-07-020000849399nlok:November2019PlanMember2021-07-020000849399nlok:EquityBasedSeveranceProgramMembernlok:November2019PlanMember2021-07-020000849399us-gaap:EmployeeSeveranceMemberus-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399us-gaap:EmployeeSeveranceMemberus-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399us-gaap:ContractTerminationMemberus-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399us-gaap:ContractTerminationMemberus-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399nlok:StockBasedCompensationChargesMemberus-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399nlok:StockBasedCompensationChargesMemberus-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399nlok:AssetWriteoffsMemberus-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399nlok:AssetWriteoffsMemberus-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399us-gaap:OtherRestructuringMemberus-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399us-gaap:OtherRestructuringMemberus-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399us-gaap:SegmentContinuingOperationsMember2021-04-032021-07-020000849399us-gaap:SegmentContinuingOperationsMember2020-04-042020-07-030000849399us-gaap:EmployeeSeveranceMemberus-gaap:SegmentDiscontinuedOperationsMember2020-04-042020-07-030000849399us-gaap:SegmentDiscontinuedOperationsMembernlok:SeparationCostsMember2020-04-042020-07-030000849399us-gaap:SegmentDiscontinuedOperationsMember2020-04-042020-07-030000849399us-gaap:EmployeeSeveranceMembernlok:December2020PlanMember2021-04-020000849399us-gaap:EmployeeSeveranceMembernlok:December2020PlanMember2021-04-032021-07-020000849399us-gaap:EmployeeSeveranceMembernlok:December2020PlanMember2021-07-020000849399us-gaap:SubsequentEventMember2021-07-272021-07-2700008493992021-05-042021-05-040000849399us-gaap:AccumulatedTranslationAdjustmentMember2021-04-020000849399us-gaap:AccumulatedTranslationAdjustmentMember2021-04-032021-07-020000849399us-gaap:AccumulatedTranslationAdjustmentMember2021-07-020000849399us-gaap:SellingAndMarketingExpenseMember2021-04-032021-07-020000849399us-gaap:SellingAndMarketingExpenseMember2020-04-042020-07-030000849399us-gaap:ResearchAndDevelopmentExpenseMember2021-04-032021-07-020000849399us-gaap:ResearchAndDevelopmentExpenseMember2020-04-042020-07-030000849399us-gaap:GeneralAndAdministrativeExpenseMember2021-04-032021-07-020000849399us-gaap:GeneralAndAdministrativeExpenseMember2020-04-042020-07-030000849399us-gaap:RestructuringChargesMember2021-04-032021-07-020000849399us-gaap:RestructuringChargesMember2020-04-042020-07-030000849399us-gaap:NonoperatingIncomeExpenseMember2021-04-032021-07-020000849399us-gaap:NonoperatingIncomeExpenseMember2020-04-042020-07-030000849399us-gaap:SegmentDiscontinuedOperationsMember2021-04-032021-07-020000849399nlok:LiabilityClassifiedAwardsMember2021-07-020000849399nlok:LiabilityClassifiedAwardsMember2021-04-032021-07-020000849399us-gaap:RestrictedStockUnitsRSUMember2021-04-032021-07-020000849399us-gaap:RestrictedStockUnitsRSUMember2020-04-042020-07-030000849399us-gaap:RestrictedStockUnitsRSUMember2021-07-020000849399us-gaap:RestrictedStockUnitsRSUMember2020-07-030000849399us-gaap:PerformanceSharesMember2021-04-032021-07-020000849399us-gaap:PerformanceSharesMember2020-04-042020-07-030000849399us-gaap:PerformanceSharesMember2021-07-020000849399us-gaap:PerformanceSharesMember2020-07-030000849399us-gaap:EmployeeStockOptionMember2021-04-032021-07-020000849399us-gaap:EmployeeStockOptionMember2020-04-042020-07-030000849399us-gaap:EmployeeStockOptionMember2021-07-020000849399us-gaap:EmployeeStockOptionMember2020-07-030000849399us-gaap:EmployeeStockOptionMembersrt:MaximumMember2021-07-020000849399us-gaap:EmployeeStockOptionMembersrt:MaximumMember2020-07-030000849399srt:MinimumMember2021-07-020000849399srt:MaximumMember2021-07-020000849399nlok:ContinuingOperationsRestructuringCostsMember2020-04-042020-07-030000849399nlok:EmployeeEquityAwardsMember2020-04-042020-07-030000849399nlok:EmployeeEquityAwardsMember2021-04-032021-07-020000849399us-gaap:ConvertibleDebtMembernlok:A20ConvertibleSeniorNotesDueAugust152022Member2020-05-260000849399us-gaap:ConvertibleDebtMembernlok:New25ConvertibleSeniorNotesDueApril12022Member2021-05-130000849399us-gaap:ConvertibleDebtMembernlok:A20ConvertibleSeniorNotesDueAugust152022Member2021-07-020000849399us-gaap:ConvertibleDebtMembernlok:A20ConvertibleSeniorNotesDueAugust152022Member2020-07-030000849399us-gaap:ConvertibleDebtMembernlok:New25ConvertibleSeniorNotesDueApril12022Member2020-07-030000849399nlok:New20ConvertibleSeniorNotesDueAugust152022Memberus-gaap:ConvertibleDebtMember2020-07-03nlok:segment0000849399nlok:CoreConsumerSecurityMember2021-04-032021-07-020000849399nlok:CoreConsumerSecurityMember2020-04-042020-07-030000849399nlok:LifeLockIdentityandFraudProtectionMember2021-04-032021-07-020000849399nlok:LifeLockIdentityandFraudProtectionMember2020-04-042020-07-030000849399srt:AmericasMember2021-04-032021-07-020000849399srt:AmericasMember2020-04-042020-07-030000849399us-gaap:EMEAMember2021-04-032021-07-020000849399us-gaap:EMEAMember2020-04-042020-07-030000849399srt:AsiaPacificMember2021-04-032021-07-020000849399srt:AsiaPacificMember2020-04-042020-07-030000849399country:US2021-04-032021-07-020000849399country:US2020-04-042020-07-030000849399country:US2021-07-020000849399country:US2021-04-020000849399us-gaap:NonUsMember2021-07-020000849399us-gaap:NonUsMember2021-04-020000849399country:IE2021-07-020000849399country:IE2021-04-020000849399country:DE2021-07-020000849399country:DE2021-04-020000849399nlok:OtherForeignCountriesMember2021-07-020000849399nlok:OtherForeignCountriesMember2021-04-020000849399country:IN2021-07-020000849399country:IN2021-04-020000849399nlok:CustomerAMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-04-032021-07-020000849399nlok:CustomerAMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2020-04-042021-04-0200008493992021-05-242021-05-2400008493992021-06-082021-06-080000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember2007-01-012012-09-300000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember2014-01-012014-01-310000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember2019-10-212019-10-210000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember2021-05-132021-05-130000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMember2021-07-020000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMembersrt:MinimumMember2021-07-020000849399nlok:GeneralServicesAdministrationGsaMultipleAwardScheduleContractMembersrt:MaximumMember2021-07-02

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 2, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      
For the Transition Period from                to                
Commission File Number 000-17781
 NortonLifeLock Inc.
(Exact name of the registrant as specified in its charter)
Delaware
77-0181864
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer Identification no.)
60 E. Rio Salado Parkway,
Suite 1000,
Tempe,
Arizona
85281
(Address of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code:
(650527-8000
Former name or former address, if changed since last report:
Not applicable
  ________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock,
par value $0.01 per share
NLOK
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
þ
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No þ
The number of shares of NortonLifeLock common stock, $0.01 par value per share, outstanding as of July 27, 2021 was 581,268,447 shares.


Table of Contents
NORTONLIFELOCK INC.
FORM 10-Q
Quarterly Period Ended July 2, 2021
TABLE OF CONTENTS
Page
“NortonLifeLock,” “we,” “us,” “our,” and “the Company” refer to NortonLifeLock Inc. and all of its subsidiaries. NortonLifeLock, the NortonLifeLock Logo, the Checkmark Logo, Norton, LifeLock, and the LockMan Logo are trademarks or registered trademarks of NortonLifeLock Inc. or its affiliates in the United States (U.S.) and other countries. Other names may be trademarks of their respective owners.
2

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except par value per share amounts)
July 2, 2021April 2, 2021
ASSETS
Current assets:
Cash and cash equivalents$1,230 $933 
Short-term investments15 18 
Accounts receivable, net105 117 
Other current assets198 237 
Assets held for sale238 233 
Total current assets1,786 1,538 
Property and equipment, net71 78 
Operating lease assets71 76 
Intangible assets, net1,096 1,116 
Goodwill2,863 2,867 
Other long-term assets678 686 
Total assets$6,565 $6,361 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable$76 $52 
Accrued compensation and benefits66 107 
Current portion of long-term debt438 313 
Contract liabilities1,176 1,210 
Current operating lease liabilities24 26 
Other current liabilities441 428 
Total current liabilities2,221 2,136 
Long-term debt3,422 3,288 
Long-term contract liabilities55 55 
Deferred income tax liabilities146 137 
Long-term income taxes payable1,103 1,119 
Long-term operating lease liabilities60 66 
Other long-term liabilities55 60 
Total liabilities7,062 6,861 
Commitments and contingencies (Note 18)

Stockholders’ equity (deficit):
Common stock and additional paid-in capital, $0.01 par value: 3,000 shares authorized; 581 and 580 shares issued and outstanding as of July 2, 2021 and April 2, 2021, respectively
2,049 2,229 
Accumulated other comprehensive income49 47 
Retained earnings (accumulated deficit)(2,595)(2,776)
Total stockholders’ equity (deficit)(497)(500)
Total liabilities and stockholders’ equity (deficit)$6,565 $6,361 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3

Table of Contents
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
Three Months Ended
 
July 2, 2021July 3, 2020
Net revenues$686 $614 
Cost of revenues102 86 
Gross profit584 528 
Operating expenses:
Sales and marketing156 145 
Research and development68 65 
General and administrative45 53 
Amortization of intangible assets21 18 
Restructuring, transition and other costs7 127 
Total operating expenses297 408 
Operating income287 120 
Interest expense(32)(40)
Other income (expense), net(3)19 
Income (loss) from continuing operations before income taxes252 99 
Income tax expense (benefit)71 (50)
Income (loss) from continuing operations181 149 
Income (loss) from discontinued operations (31)
Net income$181 $118 
Income (loss) per share - basic:
Continuing operations$0.31 $0.25 
Discontinued operations$ $(0.05)
Net income per share - basic$0.31 $0.20 
Income (loss) per share - diluted:
Continuing operations$0.31 $0.24 
Discontinued operations$ $(0.05)
Net income per share - diluted$0.31 $0.19 
Weighted-average shares outstanding:
Basic
580 590 
Diluted
591 614 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4

Table of Contents
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in millions)
 
Three Months Ended
 
July 2, 2021July 3, 2020
Net income$181 $118 
Other comprehensive income, net of taxes:
Foreign currency translation adjustments2 11 
Net unrealized gain (loss) on available-for-sale securities 1 
Other comprehensive income, net of taxes2 12 
Comprehensive income$183 $130 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5

Table of Contents
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited, in millions, except per share amounts)
Three months ended July 2, 2021
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of April 2, 2021
580 $2,229 $47 $(2,776)$(500)
Net income— — — 181 181 
Other comprehensive income— — 2 — 2 
Common stock issued under employee stock incentive plans2 1 — — 1 
Shares withheld for taxes related to vesting of restricted stock units(1)(15)— — (15)
Cash dividends declared ($0.125 per share of common stock) and dividend equivalents accrued
— (74)— — (74)
Stock-based compensation— 20 — — 20 
Extinguishment of convertible debt— (112)— — (112)
Balance as of July 2, 2021
581 $2,049 $49 $(2,595)$(497)

Three months ended July 3, 2020
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of April 3, 2020
589 $3,356 $(16)$(3,330)$10 
Net income— — — 118 118 
Other comprehensive income— — 12 — 12 
Common stock issued under employee stock incentive plans3 2 — — 2 
Shares withheld for taxes related to vesting of restricted stock units(1)(17)— — (17)
Cash dividends declared ($0.125 per share of common stock) and dividend equivalents accrued
— (72)— — (72)
Stock-based compensation— 25 — — 25 
Extinguishment of convertible debt— (581)— — (581)
Balance as of July 3, 2020
591 $2,713 $(4)$(3,212)$(503)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6

Table of Contents
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Three Months Ended
July 2, 2021July 3, 2020
OPERATING ACTIVITIES:
Net income$181 $118 
Adjustments:
Amortization and depreciation36 46 
Impairments and write-offs of current and long-lived assets 85 
Stock-based compensation expense20 25 
Deferred income taxes1 20 
Loss (gain) on extinguishment of debt5 (20)
Non-cash operating lease expense5 6 
Other7 24 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net12 5 
Accounts payable24 (28)
Accrued compensation and benefits(42)(39)
Contract liabilities(34)(29)
Income taxes payable21 (88)
Other assets41 62 
Other liabilities(19)(17)
Net cash provided by (used in) operating activities258 170 
INVESTING ACTIVITIES:
Purchases of property and equipment(1)(1)
Proceeds from the maturities and sales of short-term investments4 29 
Other(4)(5)
Net cash provided by (used in) investing activities(1)23 
FINANCING ACTIVITIES:
Repayments of debt and related equity component(372)(1,179)
Proceeds from issuance of debt, net of issuance costs512  
Net proceeds from sales of common stock under employee stock incentive plans1 2 
Tax payments related to restricted stock units(13)(23)
Dividends and dividend equivalents paid(84)(105)
Net cash provided by (used in) financing activities44 (1,305)
Effect of exchange rate fluctuations on cash and cash equivalents(4)8 
Change in cash and cash equivalents297 (1,104)
Beginning cash and cash equivalents933 2,177 
Ending cash and cash equivalents$1,230 $1,073 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7

Table of Contents
NORTONLIFELOCK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Description of Business and Significant Accounting Policies
Business
NortonLifeLock, Inc. is a leading provider of consumer Cyber Safety solutions globally. We help customers protect their devices, online privacy, identity and home networks.
Basis of presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America for interim financial information. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended April 2, 2021. The results of operations for the three months ended July 2, 2021 are not necessarily indicative of the results expected for the entire fiscal year.
Fiscal calendar
We have a 52/53-week fiscal year ending on the Friday closest to March 31. Unless otherwise stated, references to three-month periods in this report relate to fiscal periods ended July 2, 2021 and July 3, 2020. The three months ended July 2, 2021 and July 3, 2020 each consisted of 13 weeks. Our 2022 fiscal year consists of 52 weeks and ends on April 1, 2022.
Use of estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, 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. On an ongoing basis, management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable. Third-party valuation specialists are also utilized for certain estimates. 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, and such differences may be material to the Condensed Consolidated Financial Statements.
Significant accounting policies
With the exception of those discussed in Note 2, there have been no material changes to our significant accounting policies as of and for the three months ended July 2, 2021, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended April 2, 2021.
8

Table of Contents
Note 2. Recent Accounting Standards
Recently adopted authoritative guidance
Income Taxes. In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The guidance also clarifies and amends existing guidance to improve consistent application. On April 3, 2021, the first day of fiscal 2022, we adopted this guidance prospectively. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements.
Recently issued authoritative guidance not yet adopted
Debt with Conversion and Other Options. In August 2020, the FASB issued new guidance that simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes from GAAP the separation models for convertible debt with embedded conversion features. As a result, after adopting the guidance, entities will no longer separately present embedded conversion features in equity. Instead, they will account for the convertible debt wholly as debt. The new guidance also requires use of the if-converted method when calculating the dilutive impact of convertible debt on earnings per share. The standard will be effective for us in our first quarter of fiscal 2023, with early adoption permitted beginning in the first quarter of fiscal 2022. It may be applied retrospectively to each prior period presented or retrospectively with cumulative effect recognized in retained earnings as of the date of adoption. We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.
Reference Rate Reform. In March 2020, the FASB issued new guidance providing temporary optional expedients and exceptions to ease the financial reporting burden of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. We continue to evaluate our contractual arrangements and hedging relationships that reference LIBOR.
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 Condensed Consolidated Financial Statements and disclosures.
Note 3. Discontinued Operations and Assets Held for Sale
Discontinued operations
On November 4, 2019, we completed the sale of certain of our Enterprise Security assets and certain liabilities to Broadcom Inc. (the Broadcom sale). Certain costs associated with the divestiture of our Enterprise Security business are classified as discontinued operations in our Condensed Consolidated Statements of Operations. During the three months ended July 3, 2020, costs primarily consisted of severance and termination benefits as part of our November 2019 restructuring plan. These activities were completed during fiscal 2021. See Note 12 for information associated with our restructuring activities.
In connection with the Broadcom sale, we entered into a transition services agreement under which we provided assistance to Broadcom including, but not limited to, business support services and information technology services. During fiscal 2021, the transition services were completed. Dedicated direct costs, net of charges to Broadcom, for these transition services were $8 million during the three months ended July 3, 2020. These direct costs were presented as part of Other income (expense), net in the Condensed Consolidated Statements of Operations.
The following table presents information regarding certain components of income (loss) from discontinued operations, net of income taxes during the three months ended July 3, 2020. There was no discontinued operations activity during the three months ended July 2, 2021.
Three Months Ended
(In millions)
July 3, 2020
Net revenues
$ 
Gross profit$ 
Operating income (loss)$(42)
Income (loss) before income taxes$(41)
Income tax expense (benefit)$(10)
Income (loss) from discontinued operations$(31)
Assets held for sale
During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to assets held for sale when the properties were approved for immediate sale in their present condition and the sale was expected to be completed within one year.
9

Table of Contents
We continue to actively market the properties for sale; however, during fiscal 2022, the commercial real estate market continues to be adversely affected by the COVID-19 pandemic, which has delayed the expected timing of sale. We have taken into consideration the current real estate values and demand, and continue to execute plans to sell these properties. As of July 2, 2021, these assets are classified as assets held for sale. During the three months ended July 2, 2021, there were no impairments because the fair value of the properties less costs to sell either equals or exceeds their carrying value.
On July 14, 2021, we completed the sale of certain land and buildings in Mountain View, which were previously classified as held for sale as of July 2, 2021, for cash consideration of $358 million. We will recognize a gain on sale of $176 million.
Note 4. Acquisitions
Fiscal 2021 acquisition
On January 8, 2021, we completed our acquisition of Avira. Avira provides a consumer-focused portfolio of cybersecurity and privacy solutions primarily in Europe and key emerging markets. The total aggregate consideration for the acquisition was $344 million, net of $32 million cash acquired.
Our current allocation of the aggregate purchase price for the acquisition as of January 8, 2021, is as follows:
(In millions, except useful lives)January 8, 2021
Assets:
Current assets$12 
Intangible assets162 
Goodwill264 
Other long-term asset21 
Total assets acquired459 
Liabilities:
Current liabilities29 
Contract liabilities54 
Other long-term obligations32 
Total liabilities assumed115 
Total purchase price$344 
The allocation of the purchase price above was based upon a preliminary valuation performed during the fourth quarter of fiscal 2021 and reflects adjustments made during the three months ended July 2, 2021. Our estimates and assumptions are subject to refinement within the measurement period, which may be up to one year from the acquisition date. Adjustments to the purchase price may require adjustments to goodwill prospectively. The primary area of preliminary purchase price allocation that is not yet finalized relates to certain tax matters.
Note 5. Revenues
Contract liabilities
During the three months ended July 2, 2021, we recognized $498 million from the contract liabilities balance at April 2, 2021. During the three months ended July 3, 2020, we recognized $442 million from the contract liabilities balance at April 3, 2020.
Remaining performance obligations
Remaining performance obligations represent contract 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 July 2, 2021, we had $881 million of remaining performance obligations, excluding customer deposit liabilities of $350 million, of which we expect to recognize approximately 94% as revenue over the next 12 months.
See Note 17 for tabular disclosures of disaggregated revenue by solution and geographic region.
Note 6. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill were as follows:
(In millions)
Balance as of April 2, 2021$2,867 
Purchase accounting adjustment(4)
Balance as of July 2, 2021$2,863 
10

Table of Contents
Intangible assets, net
 July 2, 2021April 2, 2021
(In millions)Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Customer relationships$567 $(320)$247 $556 $(299)$257 
Developed technology210 (114)96 210 (104)106 
Other7 (1)6 7 (1)6 
Total finite-lived intangible assets784 (435)349 773 (404)369 
Indefinite-lived trade names747 — 747 747 — 747 
Total intangible assets$1,531 $(435)$1,096 $1,520 $(404)$1,116 
Amortization expense for purchased intangible assets is summarized below:
Three Months EndedCondensed Statements of Operations Classification
(In millions)July 2, 2021July 3, 2020
Customer relationships and other$21 $18 Operating expenses
Developed technology10 7 Cost of revenues
Total$31 $25 
As of July 2, 2021, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:
(In millions)
Remainder of 2022$90 
2023101 
202488 
202529 
202624 
Thereafter17 
Total$349 
Note 7. Supplementary Information
Cash and cash equivalents:
(In millions)July 2, 2021April 2, 2021
Cash$702 $650 
Cash equivalents528 283 
Total cash and cash equivalents$1,230 $933 
Accounts receivable, net:
(In millions)July 2, 2021April 2, 2021
Accounts receivable$106 $118 
Allowance for doubtful accounts(1)(1)
Total accounts receivable, net$105 $117 
Other current assets:
(In millions)July 2, 2021April 2, 2021
Prepaid expenses$99 $95 
Income tax receivable and prepaid income taxes64 96 
Other tax receivable19 31 
Other16 15 
Total other current assets$198 $237 
11

Table of Contents
Property and equipment, net:
(In millions)July 2, 2021April 2, 2021
Land$3 $3 
Computer hardware and software481 479 
Office furniture and equipment52 63 
Buildings29 29 
Leasehold improvements59 58 
Construction in progress1 1 
Total property and equipment, gross625 633 
Accumulated depreciation and amortization(554)(555)
Total property and equipment, net$71 $78 
Other long-term assets:
(In millions)July 2, 2021April 2, 2021
Non-marketable equity investments$185 $185 
Long-term income tax receivable and prepaid income taxes30 30 
Deferred income tax assets348 355 
Long-term prepaid royalty66 70 
Other49 46 
Total other long-term assets$678 $686 
Short-term contract liabilities:
(In millions)July 2, 2021April 2, 2021
Deferred revenue$826 $795 
Customer deposit liabilities350 415 
Total short-term contract liabilities$1,176 $1,210 
Other current liabilities:
(In millions)July 2, 2021April 2, 2021
Income taxes payable$140 $111 
Other taxes payable74 82 
Accrued legal fees69 66 
Accrued royalties45 46 
Other113 123 
Total other current liabilities$441 $428 
Long-term income taxes payable:
(In millions)July 2, 2021April 2, 2021
Deemed repatriation tax payable$511 $525 
Other long-term income taxes29 29 
Uncertain tax positions (including interest and penalties)563 565 
Total long-term income taxes payable$1,103 $1,119 
12

Table of Contents
Other income (expense), net:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Interest income$ $2 
Foreign exchange gain1 1 
Gain (loss) on early extinguishment of debt(5)20 
Transition service expense, net (8)
Other1 4 
Other income (expense), net$(3)$19 
Supplemental cash flow information:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Income taxes paid, net of refunds$14 $2 
Interest expense paid$44 $45 
Cash paid for amounts included in the measurement of operating lease liabilities$8 $9 
Non-cash operating activities:
Operating lease assets obtained in exchange for operating lease liabilities$ $2 
Reduction of operating lease assets as a result of lease terminations and modifications$ $23 
Non-cash investing and financing activities:
Extinguishment of debt with borrowings from same creditors$494 $ 
Note 8. Financial Instruments and Fair Value Measurements
For financial instruments 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 on a recurring basis
The following table summarizes our financial instruments measured at fair value on a recurring basis:
July 2, 2021April 2, 2021
(In millions)Fair ValueLevel 1Level 2Fair ValueLevel 1Level 2
Assets:
Money market funds$529 $529 $ $284 $284 $ 
Certificates of deposit1  1 1  1 
Corporate bonds14  14 17  17 
Total$544 $529 $15 $302 $284 $18 
The following table presents the contractual maturities of our investments in debt securities as of July 2, 2021:
(In millions)Fair Value
Due in one year or less$15 
Total$15 
13

Table of Contents
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 and long-term debt.
Non-marketable equity investments
As of July 2, 2021 and April 2, 2021, the carrying value of our non-marketable equity investments was $185 million and $185 million, respectively.
Current and long-term debt
As of July 2, 2021 and April 2, 2021, the total fair value of our fixed rate debt was $2,154 million and $2,400 million, respectively. The fair value of our variable rate debt approximated its 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 2028. Our leases generally have terms that range from 1 year to 10 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.
On July 14, 2021, we completed the sale of certain land and buildings in Mountain View for cash consideration of $358 million. In conjunction with the sale, we signed a 7-year leaseback agreement for a portion of the property, with an option to extend the lease for an additional 5 years. The leaseback agreement is effective as of the date of sale. The sale transaction and immediate leaseback qualified as a completed sale, and we will recognize a gain on sale of $176 million.
The following summarizes our lease costs:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Operating lease costs$4 $4 
Short-term lease costs1 1 
Variable lease costs1 3 
Total lease costs$6 $8 
Other information related to our operating leases was as follows:
Three Months Ended
July 2, 2021July 3, 2020
Weighted-average remaining lease term4.2 years4.1 years
Weighted-average discount rate4.11 %4.14 %
See Note 7 for cash flow information related to our operating leases.
As of July 2, 2021, the maturities of our lease liabilities by fiscal year are as follows:
(In millions)
Remainder of 2022$20 
202322 
202419 
202514 
20267 
Thereafter9 
Total lease payments91 
Less: Imputed interest(7)
Present value of lease liabilities$84 
14

Table of Contents
Note 10. Debt
The following table summarizes components of our debt:
(In millions, except percentages)
July 2, 2021April 2, 2021
Effective
Interest Rate
New 2.50% Convertible Senior Notes due April 1, 2022
$ $250 2.63 %
3.95% Senior Notes due June 15, 2022
400 400 4.05 %
New 2.00% Convertible Unsecured Notes due August 15, 2022
625 625 2.62 %
5.00% Senior Notes due April 15, 2025
1,100 1,100 5.00 %
Initial Term Loan due May 7, 20261,010 494 
LIBOR plus (1)
Delayed Term loan due May 7, 2026731 741 
LIBOR plus (1)
0.95% Avira Mortgage due December 30, 2030
5 5 0.95 %
1.29% Avira Mortgage due December 30, 2029
5 5 1.29 %
Total principal amount
3,876 3,620 
Less: unamortized discount and issuance costs
(16)(19)
Total debt3,860 3,601 
Less: current portion(438)(313)
Total long-term debt$3,422 $3,288 
(1) The term loans bear interest at a rate equal to LIBOR plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement. The interest rates for the outstanding term loans are as follows:
July 2, 2021April 2, 2021
Term Loan due May 7, 20261.50 %1.50 %
Delayed Term Loan due May 7, 20261.50 %1.50 %
As of July 2, 2021, the future contractual maturities of debt by fiscal year are as follows:
(In millions)
Remainder of 2022$29 
20231,101 
202489 
202589 
20261,189 
Thereafter1,379 
Total future maturities of debt$3,876 
Repayments of Convertible Senior Notes
In May 2021, we settled the $250 million principal and conversion rights of our New 2.5% Convertible Notes in cash. The aggregate settlement amount of $364 million was based on $24.40 per underlying share into which the New 2.5% Convertible Notes were convertible. In addition, we paid $1 million of accrued and unpaid interest through the date of settlement and $1 million of cash dividends that we declared on May 10, 2021. The repayments resulted in an adjustment to stockholders’ equity of $112 million and a loss on extinguishment of $2 million.
15

Table of Contents
As of July 2, 2021 and April 2, 2021, our Convertible Senior Notes consisted of the following:
July 2, 2021April 2, 2021
(In millions)
New 2.00% Convertible Notes
New 2.50% Convertible Notes
New 2.00% Convertible Notes
Liability components:
Principal$625 $250 $625 
Unamortized discount and issuance costs(4) (5)
Net carrying amount$621 $250 $620 
Equity component net of tax$56 $43 $56 
Based on the closing price of our common stock of $27.20 on July 2, 2021, the if-converted value of the New 2.0% Convertible Notes exceeded the principal amount by approximately $208 million.
The following table sets forth total interest expense recognized related to our Convertible Senior Notes:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Contractual interest expense$3 $6 
Amortization of debt discount and issuance costs$1 $1 
Payments in lieu of conversion price adjustments (1)
$2 $2 
(1) Payments in lieu of conversion price adjustments consist of amounts paid to holders of the Convertible Senior Notes when our quarterly dividend to our common stockholders exceeds the amounts defined in the Convertible Senior Notes agreements.
Credit facility
On November 4, 2019, we entered into a credit agreement with financial institutions, which provides a revolving line of credit of $1 billion, a 5-year term loan of $500 million (the Initial Term Loan) and a delayed draw 5-year term loan commitment of $750 million (the Delayed Draw Term Loan). On September 14, 2020, we drew $750 million on the Delayed Draw Term Loan.
On May 7, 2021, we entered into the first amendment to the credit agreement with financial institutions (the First Amendment), which extended the maturity of all term loans and revolver credit facilities from November 2024 to May 2026. The First Amendment also provided for an incremental increase under the Initial Term Loan of $525 million. This transaction was accounted for as a debt extinguishment of the Initial Term Loan and resulted in accelerated recognition of interest expense for unamortized debt issuance costs, which was immaterial. At the closing of the First Amendment, we did not borrow any funds under the revolving line of credit and fully borrowed the First Amendment under the Initial Term Loan, such that loans in an aggregate principal amount of $1,741 million were outstanding. The credit facilities remain senior secured.
The principal amount of the Initial Term Loan and the additional borrowings under the First Amendment must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the quarter ended September 30, 2022 in an amount equal to 1.25% of the aggregate principal amount, as of the date of the first amendment. The principal amount of the Delayed Draw Term Loan must be repaid in quarterly installments on the last business day of each calendar quarter commencing with the later of (i) the quarter ended March 31, 2021 and (ii) the first full fiscal quarter ended following the Borrowing of the Delayed Draw Term Loans in an amount equal to 1.25% of aggregate principal amount that are outstanding immediately after the borrowing of the Delayed Draw Term Loan. We may voluntarily repay outstanding principal balances without penalty. As of July 2, 2021, there were no borrowings outstanding under our revolving credit facilities.
Interest on borrowings under the credit agreement can be based on a base rate or the 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.
Debt covenant compliance
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 July 2, 2021, we were in compliance with all debt covenants.
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
16

Table of Contents
foreign exchange gains or losses, which impact our operating results. As part of our foreign currency risk mitigation strategy, we have entered into foreign exchange forward contracts with up to 12 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.
We enter into foreign currency forward contracts to hedge foreign currency balance sheet exposure. These forward contracts are not designated as hedging instruments. As of July 2, 2021 and April 2, 2021, the fair value of these contracts was immaterial. The related gain (loss) recognized in Other income (expense), net in our Condensed Consolidated Statements of Operations was as follows:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Foreign exchange forward contracts gain$3 $10 
The fair value of our foreign exchange forward contracts is presented on a gross basis in our Condensed 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 immaterial as of July 2, 2021 and April 2, 2021.
The notional amount of our outstanding foreign exchange forward contracts in U.S. dollar equivalent was as follows:
(In millions)July 2, 2021April 2, 2021
Foreign exchange forward contracts purchased$312 $270 
Foreign exchange forward contracts sold$112 $68 
Note 12. Restructuring and Other Costs
Our restructuring and other costs consist primarily of severance and termination benefits, contract cancellation charges and asset write-offs and impairments. Severance costs generally include severance payments, outplacement services, health insurance coverage and legal costs. Contract cancellation charges primarily include penalties for early termination of contracts and write-offs of related prepaid assets.
December 2020 Plan
In December 2020, our Board of Directors approved a restructuring plan (the December 2020 Plan) to consolidate facilities and reduce operating costs in connection with our acquisition of Avira. We estimate that we will incur total costs of up to $20 million. These actions are expected to be completed in fiscal 2022. As of July 2, 2021, we have incurred total costs of $15 million under the December 2020 Plan.
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 included the reduction of our workforce as well as asset write-offs and impairments, contract terminations, facilities closures, and the sale of underutilized facilities. These actions were completed in fiscal 2021. Any remaining costs or adjustments are immaterial. We incurred total costs of $513 million, excluding stock-based compensation expense, under the November 2019 Plan.
In connection with the Broadcom sale, our Board of Directors also approved an equity-based severance program under which certain equity awards held by certain terminated employees were accelerated. As of July 2, 2021, we have incurred $127 million of stock-based compensation related to our equity-based severance program. See Note 15 for further information on the impact of this program.
Restructuring and other costs summary
Our restructuring and other costs attributable to continuing operations are presented in the table below:
Three Months Ended
(In millions)July 2, 2021July 3, 2020
Severance and termination benefit costs$3 $14 
Contract cancellation charges1 48 
Stock-based compensation charges 7 
Asset write-offs 55 
Other exit and disposal costs3 3 
  Total restructuring and other costs$7 $127 
In connection with the agreement to sell certain assets of our Enterprise Security business, a portion of our restructuring and other costs were classified to discontinued operations during the three months ended July 3, 2020. Our restructuring and other costs attributable to discontinued operations are presented in the table below. There was no discontinued operations activity during the three months ended July 2, 2021.
17

Table of Contents
Three Months Ended
July 3, 2020
Severance and termination benefit costs$37 
Separation costs1 
  Total restructuring and other costs$38 
Restructuring summary
Our activities and liabilities related to our December 2020 Plan are presented in the table below:
(in millions)Liability Balance as of April 2, 2021Costs, Net of AdjustmentsCash PaymentsLiability Balance as of July 2, 2021
Severance and termination benefit costs$3 $3 $(4)$2 
Total$3 $3 $(4)$2 
The restructuring liabilities are included in Other current liabilities in our Condensed Consolidated Balance Sheets.
Note 13. Income Taxes
The following table summarizes our effective tax rate for the periods presented:
Three Months Ended
(In millions, except percentages)
July 2, 2021July 3, 2020
Income (loss) from continuing operations before income taxes$