Portions of the registrant’s definitive proxy statement for the 2020 annual meeting of stockholders are incorporated herein by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended April 3, 2020.

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Device Security (Norton Security): Our Norton Security solution provides real-time protection for PCs, Macs and mobile devices against malware, viruses, adware, ransomware and other online threats. It monitors and blocks unauthorized traffic from the internet to the device to help protect private and sensitive information when customers are online. For mobile devices, Norton Security alerts customers of risky apps, safeguards against fraudulent and malicious websites, identifies Wi-Fi networks that are under attack, enables stolen device recovery, and blocks unwanted spam and potential fraud calls. Norton Security includes 24x7 support by trained support agents. We provide on-call support and offer a money-back guarantee if we cannot remove viruses from infected devices through our Virus Protection Promise.

•	Identity Protection (LifeLock Identity Theft Protection): Our LifeLock identity theft protection solution includes monitoring, alerts and restoration services to protect the safety of our customers. We monitor events that may present a risk of identity theft, such as new account openings and applications. If we detect that a customer’s personally identifiable

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Online Privacy (Norton Secure VPN and SurfEasy VPN): As people are exchanging more sensitive information through digital channels - be it personal healthcare information to enable tele-health or financial information for personal accounting, having a VPN has become even more crucial. Our Norton Secure VPN and SurfEasy VPN enhance security and online privacy by providing an encrypted data tunnel. This allows customers to securely transmit and access private information such as passwords, bank details and credit card numbers when using public Wi-Fi on PCs, Macs and mobile iOS and Android devices. Our VPN service allows customers to browse the Web anonymously to protect their online privacy and prevent tracking by online advertisers and other companies. Customers can also change their virtual location when they are traveling internationally to allow them to connect to their favorite apps, websites and online streaming services as if they are in their home-country.

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Home and Family (Norton Family): As entire households now spend hours online, whether for school, work, or personal use, protecting the home and family in a simple way is even more of a need. Norton Family brings the protection and security of our products to every member of the family across multiple devices and platforms. Norton Family also provides Parental Controls tools for parents to monitor kids’ online activities, including videos watched, websites visited, terms searched, and apps downloaded. Parents can manage how much time kids spend online and block access to inappropriate websites. Norton Family also provides GPS location monitoring for mobile devices and content filtering for PCs.

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•	Device Security. Our principal competitors in this market are Avast, Kaspersky, McAfee, Microsoft, Sophos, and Trend Micro.

•	Identity Protection. Our principal competitors in this market are credit bureaus Equifax, Experian, and TransUnion, as well as certain credit monitoring and identity theft protection solutions from others such as Allstate, Credit Karma, and McAfee.

•	Online Privacy. Our principal competitors in this market are Avast, Kape, ExpressVPN, McAfee, NordVPN, and Pango.

•	Home and Family. Our principal competitors in this market are Avast, Life360, and McAfee.

•	Other Competitors. In addition to competition from large consumer security companies such as Avast and McAfee, we also face competition from smaller companies that may develop competing products.

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•	Lengthy development cycles;

•	Evolving industry and regulatory standards and technological developments by our competitors and customers;

•	Rapidly changing customer preferences;

•	Evolving platforms, operating systems, and hardware products, such as mobile devices, and related product and service interoperability challenges;

•	Entering into new or unproven markets; and

•	Executing new product and service strategies.

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•	Our resellers, distributors and OEMs are generally not subject to minimum sales requirements or any obligation to market our solutions to their customers;

•	Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time without cause and our OEM partners may terminate or renegotiate their arrangements with us and new terms may be less favorable due to competitive conditions in our markets and other factors;

•	Our resellers, distributors and OEMs may encounter issues or have violations of applicable law or regulatory requirements or otherwise cause damage to our reputation through their actions;

•	Our resellers and distributors frequently market and distribute competing solutions and may, from time to time, place greater emphasis on the sale of these solutions due to pricing, promotions, and other terms offered by our competitors;

•	Any consolidation of electronics retailers can increase their negotiating power with respect to software providers such as us and any decline in the number of physical retailers could decrease the channels of distribution for us;

•	The continued consolidation of online sales through a small number of larger channels has been increasing, which could reduce the channels available for online distribution of our solutions; and

•	Sales through our partners are subject to changes in general economic conditions, strategic direction, competitive risks, and other issues that could result in a reduction of sales.

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•	our customers’ levels of satisfaction or dissatisfaction with our solutions;

•	the quality, breadth, and prices of our solutions;

•	our general reputation and events impacting that reputation;

•	the services and related pricing offered by our competitors;

•	disruption by new services or changes in law or regulations that impact the need for efficacy of our products and services;

•	our customer service and responsiveness to any customer complaints;

•	customer dissatisfaction if they do not receive the full benefit of our services due to their failure to provide all relevant data;

•	customer dissatisfaction with the methods or extent of our remediation services;

•	our guarantee may not meet our customers’ expectations; and

•	changes in our target customers’ spending levels as a result of general economic conditions or other factors.

•	Complexity, time, and costs associated with managing these transactions, including the integration of acquired and the winding down of divested business operations, workforce, products, IT systems, and technologies;

•	Diversion of management time and attention;

•	Loss or termination of employees, including costs associated with the termination or replacement of those employees;

•	Assumption of liabilities of the acquired and divested business or assets, including pending or future litigation, investigations or claims related to the acquired business or assets;

•	The addition of acquisition-related debt;

•	Increased or unexpected costs and working capital requirements;

•	Dilution of stock ownership of existing stockholders;

•	Unanticipated delays or failure to meet contractual obligations; and

•	Substantial accounting charges for acquisition-related costs, amortization of intangible assets, and higher levels of stock-based compensation expense.

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•	Potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced;

•	Requirements of foreign laws and other governmental controls, including tariffs, trade barriers and labor restrictions, and related laws that reduce the flexibility of our business operations;

•	Potential changes in trade relations arising from policy initiatives or other political factors;

•	Regulations or restrictions on the use, import, or export of encryption technologies that could delay or prevent the acceptance and use of encryption products and public networks for secure communications;

•	Local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;

•	Central bank and other restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the U.S.;

•	Fluctuations in currency exchange rates, economic instability, and inflationary conditions could make our solutions more expensive or could increase our costs of doing business in certain countries;

•	Limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations;

•	Difficulties in staffing, managing, and operating our international operations;

•	Difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations;

•	Costs and delays associated with developing software and providing support in multiple languages; and

•	Political unrest, war, or terrorism, or regional natural disasters, particularly in areas in which we have facilities.

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•	Fluctuations in demand for our solutions;

•	Disruptions in our business operations or target markets caused by, among other things, terrorism or other intentional acts, outbreaks of disease, such as the COVID-19 pandemic, or earthquakes, floods, or other natural disasters;

•	Entry of new competition into our markets;

•	Our ability to achieve targeted operating income and margins and revenues;

•	Competitive pricing pressure for one or more of our solutions;

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•	Our ability to timely complete the release of new or enhanced versions of our solutions;

•	The amount and timing of commencement and termination of major marketing campaigns;

•	The number, severity, and timing of threat outbreaks (e.g. worms, viruses, malware, ransomware, and other malicious threats) and cyber security incidents (e.g., large scale data breaches);

•	Loss of customers or strategic partners;

•	Changes in the mix or type of solutions and subscriptions sold and changes in consumer retention rates;

•	The rate of adoption of new technologies and new releases of operating systems, and new business processes;

•	Consumer confidence and spending changes, which could be impacted by market changes and general economic conditions, among other reasons;

•	The impact of litigation, regulatory inquiries, or investigations;

•	The impact of acquisitions and divestitures and our ability to achieve expected synergies or attendant cost savings;

•	Fluctuations in foreign currency exchange rates;

•	Movements in interest rates;

•	Changes in tax laws, rules, and regulations; and

•	Changes in consumer protection laws and regulations.

•	Changes to the U.S. federal income tax laws, including impacts of the Tax Cuts and Jobs Act (H.R.1) (the 2017 Tax Act) arising from future interpretations of the 2017 Tax Act;

•	Changes to other tax laws, regulations, and interpretations in multiple jurisdictions in which we operate, including actions resulting from the Organisation for Economic Co-operation and Development's base erosion and profit shifting project, proposed actions by international bodies such as digital services taxation, as well as the requirements of certain tax rulings;

•	Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

•	The tax effects of significant infrequently occurring events that may cause fluctuations between reporting periods;

•	Tax assessments, or any related tax interest or penalties, that could significantly affect our income tax expense for the period in which the settlements take place;

•	Taxes arising in connection with the Broadcom sale;

•	Taxes arising in connection to changes in our workforce, corporate entity structure or operations as they relate to tax incentives and tax rates.

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•	We must use a substantial portion of our cash flow from operations to pay interest and principal on the term loans and revolving credit facility, our existing senior notes, and other indebtedness, which reduces funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes, and potential acquisitions;

•	We may be unable to refinance our indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions, or general corporate purposes;

•	We are exposed to fluctuations in interest rates because borrowings under our senior credit facilities bear interest at variable rates;

•	Our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions;

•	We may be more vulnerable to an economic downturn and adverse developments in our business;

•	We may be unable to comply with financial and other covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in acceleration of certain of our debt and would have an adverse effect on our business and prospects and could force us into bankruptcy or liquidation;

•	Changes by any rating agency to our outlook or credit rating could negatively affect the value of our debt and/or our common stock, adversely affect our access to debt markets, and increase the interest we pay on outstanding or future debt; and

•	Conversion of our convertible notes could result in significant dilution of our common stock, which could result in significant dilution to our existing stockholders and cause the market price of our common stock to decline.

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•	Incur additional debt;

•	Create liens on certain assets to secure debt;

•	Enter into certain sale and leaseback transactions;

•	Pay dividends on or make other distributions in respect of our capital stock or make other restricted payments; and

•	Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.

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(1)	We have a 52/53-week fiscal year. Our fiscal 2020 was a 53-week year, whereas fiscal 2019, 2018, 2017, and 2016 each consisted of 52 weeks.

(2)

In fiscal 2020, we completed the sale of certain assets and the assumption of certain liabilities of our Enterprise Security business to Broadcom Inc. (the Broadcom sale) and recognized a gain of $5,434 million before income taxes, which is presented within income from income from discontinued operations. In connection with the Broadcom sale, we made a distribution to our stockholders through a special dividend of $12 per share of common stock. The aggregate amount of such dividend payments was $7.2 billion. We also recognized gains of $379 million and $250 million before income taxes on our sale of equity interest in DigiCert and divestiture of ID Analytics, respectively. Both gains were recognized within continuing operations.

(3)	In the first quarter of fiscal 2019, we adopted the new revenue recognition accounting standard on a modified retrospective basis. The results for fiscal 2020 and 2019 are presented under the new revenue recognition accounting standard, while prior years are not adjusted.

(4)	In fiscal 2018, we sold Website Security and Public Key Infrastructure solutions and recognized a gain of $653 million before income taxes associated with the sale (see Note 3 to the Consolidated Financial Statements), and we recognized an income tax benefit of $659 million as a result of the enactment of the Tax Cuts and Jobs Act (H.R.1).

(5)	In fiscal 2017, we acquired Blue Coat and LifeLock, and the results of operations of those entities were included from their respective dates of acquisition.

(6)	In fiscal 2016, we recorded $1.1 billion in income tax expense related to unremitted earnings of foreign subsidiaries from the proceeds of the sale of our Veritas information management business. This charge was recognized within continuing operations. As a result of the sale of Veritas, a net gain of $3.0 billion was recognized within discontinued operations, net of income taxes.

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

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•	In October 2019, we sold our equity interest in DigiCert Parent Inc. for $380 million and realized a gain of $379 million, on which we paid income taxes of $53 million.

•	On November 4, 2019, we completed the Broadcom sale under which Broadcom purchased certain of our Enterprise Security assets and assumed certain liabilities for a purchase price of $10.7 billion. As a result, we realized a gain of $5,434 million on which we paid income taxes of $1.9 billion as of April 3, 2020.

•	In November 2019, we entered into a credit facility and drew down $500 million of a 5-year term loan to repay an existing term loan of $500 million. The credit facility also provides a revolving a line of credit of $1.0 billion and a delayed 5-year term loan commitment of $750 million through September 15, 2020.

•	In November 2019, our Board of Directors approved a restructuring plan in connection with the strategic decision to divest our Enterprise Security business. We incurred costs of $423 million under this plan in fiscal 2020, primarily related to workforce reduction, contract termination, and asset write-offs and impairment charges.

•	In connection with the Broadcom sale, in January 2020, we made a distribution to our stockholders through a special dividend of $12 per share of common stock. The aggregate amount of such dividend payments was $7.2 billion.

•	In January 2020, we completed the sale of our ID Analytics solutions for $375 million in net cash proceeds, resulting in a gain of $250 million.

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In February 2020, we exchanged $250 million of our 2.5% Convertible Notes and $625 million of our 2.0% Convertible Notes for new convertible notes of the same principal amounts and paid the holders of the new convertible notes a total cash consideration of $546 million in lieu of conversion price adjustments related to our $12 special dividend to the exchanged notes. We adjusted the conversion price of the remaining $250 million of our 2.5% Convertible Notes and the remaining $625 million of our 2.0% Convertible Notes and extended the maturity date by one year.

•	In March 2020, we settled $250 million of our 2.5% Convertible Notes for $566 million, which included a cash settlement of the equity conversion feature.

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•	Net revenues increased $34 million primarily due to the favorable impact from the additional week in the fiscal 2020.

•	Operating income increased $197 million primarily due to lower compensation expense, lower outside service expense, and lower technical support expense that we achieved as a result of our cost reduction programs, partially offset by higher advertising and promotional expense and higher costs recognized in connection with our restructuring plans.

•	Income (loss) from continuing operations increased $688 million primarily due to higher operating income and the gains on the sale of the DigiCert equity method investment and our ID Analytics solutions, partially offset by higher income tax expense.

•	Income from discontinued operations increased $3,168 million, net of taxes, primarily due to the gain on the Broadcom sale.

•	Net income and net income per share increased primarily due to higher income from both continuing operations and discontinued operations for the reasons discussed above.

•	Net cash used in operating activities was $861 million, compared to cash provided by operating activities of $1,495 million in fiscal 2019, primarily due to income tax payments related to our gains on the divestitures described above.

•	Cash, cash equivalents and short-term investments increased $220 million compared to March 29, 2019, primarily due to cash proceeds from the divestitures described above, largely offset by payments of quarterly and special dividends, stock repurchases, and net cash used in operating activities.

•	Contract liabilities increased $17 million compared to March 29, 2019, reflecting higher billings than recognized net revenues.

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(1)	In May 2020, we repaid $625 million of our 2.0% Convertible Notes. See Note 10 and Note 19 to the Consolidated Financial Statements for further information on our debt.

(2)	Interest payments were calculated based on the contractual terms of the related Senior Notes, Convertible Senior Notes, and credit facility. Interest on variable rate debt was calculated using the interest rate in effect as of April 3, 2020. See Note 10 to the Consolidated Financial Statements for further information on the Senior Notes, Convertible Senior Notes, and credit facility.

(3)

These amounts are associated with agreements for purchases of goods or services generally including agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. The table above also includes agreements to purchase goods or services that have cancellation provisions requiring little or no payment. The amounts under such contracts are included in the table above because management believes that cancellation of these contracts is unlikely, and we expect to make future cash payments according to the contract terms or in similar amounts for similar materials.

(4)	These amounts represent the transition tax on previously untaxed foreign earnings of foreign subsidiaries under the 2017 Tax Act which may be paid through July 2025.

(5)	We have entered into various non-cancelable operating lease agreements that expire on various dates through fiscal 2029. The amounts in the table above exclude expected sublease income. See Note 9 to the Consolidated Financial Statements for further information on leases.

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(1)	During the fourth quarter of fiscal 2020, we recognized a pre-tax gain of $250 million on our divestiture of ID Analytics solutions, which is presented as part of income (loss) from continuing operations.

(2)

During the third quarter of fiscal 2020, we completed the sale of certain assets and the assumption of certain liabilities of our Enterprise Security business to Broadcom for a net gain of $2.6 billion, which is presented as part of income (loss) from discontinued operations. In addition, we recognized a pre-tax gain of $379 million on our sale of our DigiCert equity method investment, which is presented as part of income (loss) from continuing operations.

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

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•	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.

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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.

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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.

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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.

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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.

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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.

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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

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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, 2020			March 29, 2019
Customer A	N/A			16	%
Customer B	N/A			15	%
Customer C	39	%		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.

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.

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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.

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 Broadcom	109
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, net	934
Goodwill	5,773
Other long-term assets	256
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, net	670
Liabilities, net of other assets	(222		)
Net assets sold	$	450

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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 liabilities	646
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, 2020				March 29, 2019				March 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, net	1,048
Goodwill	5,773
Other long-term assets	229
Total assets of discontinued operations	$	7,199
Liabilities:
Current contract liabilities	$	1,288
Other current liabilities	16
Long-term contract liabilities	709
Other long-term liabilities	6
Total liabilities of discontinued operations	$	2,019

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

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

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.

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.

Goodwill

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

(In millions)
Balance as of March 30, 2018	$	2,673
Acquisitions	6
Other adjustments	(2		)
Balance as of March 29, 2019	2,677
Divestitures	(88		)
Other adjustments	(4		)
Balance as of April 3, 2020	$	2,585

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Intangible assets, net

	April 3, 2020												March 29, 2019
(In millions)	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Customer relationships	$	505			$	(230	)		$	275			$	541			$	(168	)		$	373
Developed technology	133				(85		)		48				143				(61		)		82
Other	—				—				—				6				(3		)		3
Total finite-lived intangible assets	638				(315		)		323				690				(232		)		458
Indefinite-lived trade names	744				—				744				744				—				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 Ended												Statements of Operations Classification
(In millions)	April 3, 2020				March 29, 2019				March 30, 2018
Customer relationships and other	$	79			$	80			$	87			Operating expenses
Developed technology	30				30				31				Cost 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
2022		92
2023		72
2024		60
2025		1
Thereafter		—
Total		$	323

Cash and cash equivalents:

	April 3, 2020				March 29, 2019
Cash	$	483			$	376
Cash equivalents	1,694				1,415
Total cash and cash equivalents	$	2,177			$	1,791

Accounts receivable, net:

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

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Other current assets:

	April 3, 2020				March 29, 2019
Prepaid expenses	$	110			$	136
Income tax receivable and prepaid income taxes	150				61
Other tax receivable	88				69
Other	87				20
Total other current assets	$	435			$	286

Property and equipment, net:

	April 3, 2020				March 29, 2019
Land	$	7			$	65
Computer hardware and software	746				814
Office furniture and equipment	88				105
Buildings	108				364
Leasehold improvements	128				327
Construction in progress	1				9
Total property and equipment, gross	1,078				1,684
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, 2020				March 29, 2019
Non-marketable equity investments	$	187			$	184
Equity method investment	—				32
Long-term income tax receivable and prepaid income taxes	38				34
Deferred income tax assets	387				830
Other	66				80
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, 2020				March 29, 2019
Deferred revenue	$	709			$	527
Customer deposit liabilities	340				505
Total short-term contract liabilities	$	1,049			$	1,032

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Other current liabilities:

		April 3, 2020				March 29, 2019
Income taxes payable		$	195			$	103
Other taxes payable		141				143
Other accrued liabilities		251				278
Total other current liabilities		$	587			$	524

Long-term income taxes payable:

	April 3, 2020				March 29, 2019
Deemed repatriation tax payable	$	615			$	703
Uncertain tax positions (including interest and penalties)	695				373
Total long-term income taxes payable	$	1,310			$	1,076

Other income (expense), net:

	Year Ended
	April 3, 2020				March 29, 2019				March 30, 2018
Interest income	$	80			$	42			$	24
Loss from equity interest	(31		)		(101		)		(26		)
Foreign exchange loss	(6		)		(11		)		(18		)
Gain on divestitures	250				—				653
Gain on sale of equity method investment	379				—				—
Transition service expense, net	(19		)		—				—
Other	7				13				21
Total other income (expense), net	$	660			$	(57	)		$	654

Supplemental cash flow information:

	Year Ended
	April 3, 2020				March 29, 2019				March 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			$	—			$	—

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

	April 3, 2020												March 29, 2019
(In millions)	Fair Value				Level 1				Level 2				Fair Value				Level 1				Level 2
Assets:
Money market funds	$	1,346			$	1,346			$	—			$	1,415			$	1,415			$	—
Certificates of deposit	348				—				348				1				—				1
Corporate bonds	86				—				86				251				—				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 years	27
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.

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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 costs	8
Variable lease costs	21
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 term	4.5 years
Weighted-average discount rate	4.05	%

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
2022	25
2023	18
2024	17
2025	10
Thereafter	9
Total lease payments	111
Less: Imputed interest	10
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
2021	49
2022	40
2023	32
2024	26
Thereafter	42
Total minimum future lease payments	$	244

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The following table summarizes components of our debt:

	April 3, 2020							March 29, 2019
(In millions, except percentages)	Amount				Effective Interest Rate			Amount				Effective Interest Rate
4.2% Senior Notes due September 15, 2020	750				4.25	%		750				4.25	%
Senior Term Loan A-5 due August 1, 2021	—				N/A			500				LIBOR plus (1)
2.5% Convertible Senior Notes due April 1, 2022	—				N/A			500				3.76	%
New 2.5% Convertible Senior Notes due April 1, 2022	250				2.63	%		—				N/A
3.95% Senior Notes due June 15, 2022	400				4.05	%		400				4.05	%
2.0% Convertible Senior Notes due August 15, 2022	625				2.66	%		1,250				2.66	%
New 2.0% Convertible Senior Notes due August 15, 2022	625				2.62	%		—				N/A
Term Loan due November 4, 2024	500				LIBOR plus (1)			—				N/A
5.0% Senior Notes due April 15, 2025	1,100				5.23	%		1,100				5.23	%
Total principal amount	4,250							4,500
Less: unamortized discount and issuance costs	(29		)					(48		)
Total debt	4,221							4,452
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, 2020			March 29, 2019
Senior Term Loan A-5 due August 1, 2021	N/A			4.24	%
Term Loan due November 4, 2024	2.88	%		N/A

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

(In millions)
2021		$	756
2022		275
2023		1,675
2024		25
2025		419
Thereafter		1,100
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

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$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

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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, 2020												March 29, 2019
(In millions)	New 2.5% Convertible Notes				2.0% Convertible Notes (1)				New 2.0% Convertible Notes				2.5% Convertible Notes				2.0% 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.

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

	Year Ended
(In millions)	April 3, 2020				March 29, 2019				March 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			$	—			$	—

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, 2020				March 29, 2019				March 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, 2020				March 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

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

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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, 2020				March 29, 2019				March 30, 2018
Severance and termination benefit costs	$	90			$	19			$	33
Contract cancellation charges	101				—				—
Stock-based compensation charges	20				—				—
Asset write-offs and impairments	47				2				25
Other exit and disposal costs	7				12				50
Separation costs	1				3				88
Transition costs	—				185				184
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, 2020				March 29, 2019				March 30, 2018
Severance and termination benefit costs	$	121			$	9			$	28
Contract cancellation charges	5				—				—
Stock-based compensation charges	97				—				—
Asset write-offs	13				—				—
Other exit and disposal costs	—				3				2
Separation costs	25				—				—
Transition costs	—				8				—
Total restructuring, transition and other	$	261			$	20			$	30

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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, 2019				Net Charges				Cash Payments				Non-Cash Items				Liability 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, 2019				Net Charges				Cash Payments				Non-Cash Items				Liability 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, 2019				Net Charges				Cash Payments				Non-Cash Items				Liability Balance as of April 3, 2020
Severance and termination benefit costs	$	11			$	23			$	(34	)		$	—			$	—
Other exit and disposal costs	2				2				(4		)		—				—
Total	$	13			$	25			$	(38	)		$	—			$	—

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, 2020				March 29, 2019				March 30, 2018
Current:
Federal	$	208			$	58			$	1,102
State	33				4				14
International	3				(14		)		(148		)
Total	244				48				968
Deferred:
Federal	(23		)		(35		)		(1,551		)
State	3				(3		)		(136		)
International	17				(7		)		(1		)
Total	(3		)		(45		)		(1,688		)
Income tax expense (benefit)	$	241			$	3			$	(720	)

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

	Year Ended
	April 3, 2020			March 29, 2019			March 30, 2018
U.S. federal statutory income tax rate	21.0	%		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, 2020				March 29, 2019				March 30, 2018
Federal statutory tax expense (benefit)	$	172			$	(23	)		$	77
State taxes, net of federal benefit	22				(11		)		(14		)
Foreign earnings taxed at other than the federal rate	4				(25		)		(154		)
Transition tax	—				(2		)		893
Federal research and development credit	(2		)		(4		)		(6		)
Valuation allowance increase (decrease)	(57		)		26				7
Change in uncertain tax positions	60				44				(3		)
Stock-based compensation	5				8				(23		)
Nondeductible goodwill	18				—				59
Effect of tax rate change on deferred taxes	—				—				(131		)
Re-assessment of deferred taxes on foreign earnings	—				—				(1,420		)
Return to provision adjustment	2				(16		)		—
Other, net	17				6				(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, 2020				March 29, 2019
Deferred tax assets:
Tax credit carryforwards	$	6			$	54
Net operating loss carryforwards of acquired companies	21				51
Other accruals and reserves not currently tax deductible	46				64
Operating lease liabilities	12				—
Deferred revenue	2				54
Property and equipment	10				—
Intangible assets	117				384
Loss on investments not currently tax deductible	1				35
Stock-based compensation	21				87
Other	44				25
Gross deferred tax assets	280				754
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

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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, 2020				March 29, 2019				March 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 positions	77				16				35
Decrease related to prior period tax positions	(11		)		(11		)		—
Increase related to current year tax positions	232				75				98
Increase due to acquisition	—				8				4
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

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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.

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, 2020				March 29, 2019
Number of shares repurchased	68				11
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 Adjustments				Unrealized Gain (Loss) On Available-For-Sale Securities				Equity Method Investee				Total 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		)		1				2				(8		)
Reclassification to net income	—				—				(1		)		(1		)
Balance as of April 3, 2020	$	(16	)		$	—			$	—			$	(16	)

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

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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 Shares			Weighted- Average Grant Date Fair Value
Outstanding and unvested at March 29, 2019	21			$	23.36
Granted	13			$	19.65
Vested	(15	)		$	22.38
Forfeited	(12	)		$	21.90
Outstanding and unvested at April 3, 2020	7			$	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 Shares			Weighted- Average Grant Date Fair Value
Outstanding and unvested at March 29, 2019	2			$	27.04
Granted	3			$	21.69
Vested (1)	—			$	28.25
Canceled	(1	)		$	21.46
Forfeited	(2	)		$	23.81
Unvested at April 3, 2020	2			$	22.68
Vested and unreleased at April 3, 2020 (1)	—
Outstanding at April 3, 2020	2

(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.

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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, 2020				March 29, 2019				March 30, 2018
Expected term	1.9 years				2.7 years				2.8 years
Expected volatility	38.1		%		34.2		%		23.2		%
Risk-free interest rate	1.7		%		2.7		%		1.5		%
Expected dividend yield	1.1		%		—		%		—		%
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 Shares			Weighted- Average Exercise Price (1)				Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at March 29, 2019	12			$	7.83
Granted	3			$	19.85
Exercised	(11	)		$	7.30
Canceled	(1	)		$	19.85
Forfeited and expired	(1	)		$	4.42
Outstanding at April 3, 2020	2			$	6.85
Exercisable at April 3, 2020	1			$	5.30			4.0		$	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.

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

	Year Ended
(In millions)	April 3, 2020				March 29, 2019				March 30, 2018
Shares issued under the ESPP	2				—				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, 2020				March 29, 2019				March 30, 2018
Cost of revenues	$	2			$	6			$	14
Sales and marketing	29				42				62
Research and development	30				34				64
General and administrative	58				76				161
Restructuring, transition and other costs	20				—				—
Other income (expense), net	1				—				—
Total stock-based compensation from continuing operations	140				158				301
Discontinued operations	172				194				$	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.

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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, 2020				March 29, 2019				March 30, 2018
401(k) matching contributions	$	16			$	23			$	25

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, 2020				March 29, 2019				March 30, 2018
Income (loss) from continuing operations	$	578			$	(110	)		$	964
Income from discontinued operations, net of income taxes	3,309				141				174
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 - basic	615				632				616
Dilutive potentially issuable shares:
Convertible debt	20				—				32
Employee equity awards	8				—				20
Weighted-average shares outstanding - diluted	643				632				668
Anti-dilutive shares excluded from diluted net income (loss) per share calculation:
Convertible debt	5				91				—
Employee equity awards	2				47				1
Total	7				138				1

(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

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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.

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, 2020				March 29, 2019				March 30, 2018
Consumer security	$	1,474			$	1,471			$	1,504
Identity and information protection	970				937				776
WSS and PKI	—				—				238
ID Analytics	46				48				41
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, 2020				March 29, 2019				March 30, 2018
Americas	$	1,831			$	1,786			$	1,749
EMEA	376				392				470
APJ	283				278				340
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, 2020				March 29, 2019
U.S.	$	1,345			$	1,544
International	918				499
Total cash, cash equivalents and short-term investments	$	2,263			$	2,043

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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, 2020				March 29, 2019
U.S.	$	174			$	568
Ireland	34				41
Other countries (1)	30				54
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
India	11
Japan	10
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.

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
2022		29
2023		24
2024		19
2025		14
Thereafter		6
Total purchase obligations		$	439

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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
2022		68
2023		68
2024		128
2025		171
Thereafter		180
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

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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.

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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.

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.

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