Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 27, 2021 | Apr. 27, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 27, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | McAfee Corp. | |
Entity Central Index Key | 0001783317 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-25 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | MCFE | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-39651 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2467341 | |
Entity Address, Address Line One | 6220 America Center Drive | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95002 | |
City Area Code | 866 | |
Local Phone Number | 622-3911 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 165,321,497 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 265,737,919 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 346 | $ 231 |
Accounts receivable, net | 76 | 72 |
Deferred costs | 155 | 137 |
Other current assets | 44 | 42 |
Current assets of discontinued operations | 312 | 432 |
Total current assets | 933 | 914 |
Property and equipment, net | 111 | 115 |
Goodwill | 1,018 | 1,018 |
Identified intangible assets, net | 666 | 729 |
Deferred tax assets | 24 | 24 |
Other long-term assets | 86 | 68 |
Long-term assets of discontinued operations | 2,524 | 2,560 |
Total assets | 5,362 | 5,428 |
Current liabilities: | ||
Accounts payable and other current liabilities | 239 | 227 |
Accrued compensation and benefits | 118 | 179 |
Accrued marketing | 108 | 118 |
Income taxes payable | 9 | 14 |
Long-term debt, current portion | 44 | 44 |
Lease liabilities, current portion | 10 | 10 |
Deferred revenue | 915 | 823 |
Current liabilities of discontinued operations | 947 | 970 |
Total current liabilities | 2,390 | 2,385 |
Long-term debt, net | 3,893 | 3,943 |
Deferred tax liabilities | 6 | 5 |
Other long-term liabilities | 134 | 153 |
Deferred revenue, less current portion | 92 | 80 |
Long-term liabilities of discontinued operations | 630 | 662 |
Total liabilities | 7,145 | 7,228 |
Redeemable noncontrolling interests | 6,177 | 4,840 |
Stockholders’ equity/members’ deficit: | ||
Additional paid-in capital | (7,835) | (6,477) |
Accumulated deficit | (88) | (118) |
Accumulated other comprehensive income (loss) | (37) | (45) |
Total deficit | (7,960) | (6,640) |
Total liabilities, redeemable noncontrolling interests and deficit | 5,362 | 5,428 |
Class A Common Stock | ||
Stockholders’ equity/members’ deficit: | ||
Common stock | 0 | 0 |
Class B Common Stock | ||
Stockholders’ equity/members’ deficit: | ||
Common stock | $ 0 | $ 0 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 27, 2021 | Dec. 26, 2020 |
Class A Common Stock | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common Stock, shares issued | 162,372,554 | 161,267,412 |
Common Stock, shares outstanding | 162,372,554 | 161,267,412 |
Class B Common Stock | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 300,000,000 | 300,000,000 |
Common Stock, shares issued | 267,065,127 | 267,065,127 |
Common Stock, shares outstanding | 267,065,127 | 267,065,127 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 442 | $ 354 |
Cost of sales | 116 | 99 |
Gross profit | 326 | 255 |
Operating expenses: | ||
Sales and marketing | 85 | 60 |
Research and development | 44 | 38 |
General and administrative | 48 | 58 |
Amortization of intangibles | 36 | 36 |
Restructuring charges (Note 9) | 8 | 1 |
Total operating expenses | 221 | 193 |
Operating income | 105 | 62 |
Interest expense and other, net | 60 | 75 |
Foreign exchange gain (loss), net | 35 | 11 |
Income (loss) from continuing operations before income taxes | 80 | (2) |
Provision for income tax expense (benefit) | (3) | (10) |
Income from continuing operations | 83 | 8 |
Income from discontinued operations, net of taxes | 11 | 1 |
Net income | 94 | $ 9 |
Less: Net income attributable to redeemable noncontrolling interests | 64 | |
Net income attributable to McAfee Corp. | 30 | |
Net income attributable to McAfee Corp.: | ||
Income from continuing operations attributable to McAfee Corp. | 27 | |
Income from discontinued operations attributable to McAfee Corp. | 3 | |
Net income attributable to McAfee Corp. | $ 30 | |
Earnings per share attributable to McAfee Corp., basic: | ||
Continuing operations | $ 0.17 | |
Discontinued operations | 0.02 | |
Earnings per share, basic | 0.18 | |
Earnings per share attributable to McAfee Corp., diluted: | ||
Continuing operations | 0.16 | |
Discontinued operations | 0.02 | |
Earnings per share, diluted | $ 0.18 | |
Weighted-average shares outstanding, basic | 162.4 | |
Weighted-average shares outstanding, diluted | 176.3 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Statement Of Other Comprehensive Income [Abstract] | ||
Net income | $ 94 | $ 9 |
Interest rate cash flow hedges: | ||
Gain (loss) on interest rate cash flow hedges, net of tax | 9 | (79) |
Reclassification adjustments for gain on interest rate cash flow hedges | 12 | 4 |
Pension and postretirement benefits gain, net of tax | 1 | 0 |
Total comprehensive income (loss) | 116 | $ (66) |
Less: Comprehensive income attributable to redeemable noncontrolling interests | 78 | |
Total comprehensive income attributable to McAfee Corp. | $ 38 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 94 | $ 9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 110 | 132 |
Equity-based compensation | 26 | 15 |
Deferred taxes | 1 | 1 |
Foreign exchange (gain) loss, net | (35) | (11) |
Other operating activities | 4 | 17 |
Change in assets and liabilities: | ||
Accounts receivable, net | 118 | 168 |
Deferred costs | (20) | (9) |
Other assets | (34) | (13) |
Other current liabilities | (2) | (21) |
Deferred revenue | 45 | (18) |
Other liabilities | (48) | (99) |
Net cash provided by operating activities | 259 | 171 |
Cash flows from investing activities: | ||
Additions to property and equipment | (11) | (20) |
Other investing activities | 0 | (1) |
Net cash used in investing activities | (11) | (21) |
Cash flows from financing activities: | ||
Proceeds from Long-term Lines of Credit | 0 | 300 |
Payment for the long-term debt due to third party | (11) | (11) |
Distributions to members of FTW | (79) | (50) |
Payment of dividends | (14) | 0 |
Payment of tax withholding for shares and units withheld | (23) | 0 |
Payment of IPO related expenses | (3) | 0 |
Net cash provided by (used in) financing activities | (130) | 239 |
Effect of exchange rate fluctuations on cash and cash equivalents | (3) | (4) |
Change in cash and cash equivalents | 115 | 385 |
Cash and cash equivalents, beginning of period | 231 | 167 |
Cash and cash equivalents, end of period | 346 | 552 |
Supplemental disclosures of noncash investing and financing activities and cash flow information: | ||
Acquisition of property and equipment included in current liabilities | (3) | (4) |
Distributions to members of FTW included in liabilities | (35) | 0 |
Dividends payable included in liabilities | (19) | 0 |
Liability for equity units repurchase | 0 | (10) |
Other | (3) | 2 |
Cash paid during the period for: | ||
Interest, net of cash flow hedges | (50) | (71) |
Income taxes, net of refunds | $ (14) | $ (14) |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS - USD ($) $ in Millions | Total | Redeemable Noncontrolling Interests | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Other Comprehensive Income (Loss) | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsMembers' Equity (Deficit) | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Deficit | McAfee Corp. Stockholders' Equity | McAfee Corp. Stockholders' EquityRedeemable Noncontrolling Interests | McAfee Corp. Stockholders' EquityAccumulated Other Comprehensive Income (Loss) | McAfee Corp. Stockholders' EquityAccumulated Deficit | McAfee Corp. Stockholders' EquityCommon StockClass A Common Stock | McAfee Corp. Stockholders' EquityCommon StockClass B Common Stock | McAfee Corp. Stockholders' EquityAdditional Paid-in Capital | McAfee Corp. Stockholders' EquityTotal Parent Entity Deficit |
Balance at Dec. 28, 2019 | $ (62) | $ (647) | $ (1,385) | $ (2,094) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Balance, Shares at Dec. 28, 2019 | 0 | 0 | |||||||||||
Temporary equity, Balance at Dec. 28, 2019 | $ 0 | ||||||||||||
Distributions to Members | $ (50) | (50) | |||||||||||
Other comprehensive loss, net of tax | (75) | (75) | |||||||||||
Equity-based awards expense, net of equity withheld to cover taxes | 15 | 15 | |||||||||||
Unit repurchases (Note 6) | (10) | (10) | |||||||||||
Reclassification of redeemable units (Note 6) | (17) | (17) | |||||||||||
Net income | 9 | 9 | |||||||||||
Other | 2 | 2 | |||||||||||
Balance at Mar. 28, 2020 | (137) | (707) | (1,376) | (2,220) | 0 | 0 | $ 0 | $ 0 | 0 | 0 | |||
Balance, Shares at Mar. 28, 2020 | 0 | 0 | |||||||||||
Temporary equity, Balance at Mar. 28, 2020 | 0 | ||||||||||||
Balance at Dec. 26, 2020 | (6,640) | 0 | 0 | 0 | (1,800) | (45) | (118) | $ 0 | $ 0 | (6,477) | (6,640) | ||
Balance, Shares at Dec. 26, 2020 | 161,267,412 | 267,065,127 | |||||||||||
Temporary equity, Balance at Dec. 26, 2020 | 4,840 | 4,840 | |||||||||||
Distributions to RNCI | (87) | $ (87) | |||||||||||
Dividend declared | (19) | (19) | (19) | ||||||||||
Other comprehensive loss, net of tax | 22 | 14 | 8 | 8 | |||||||||
Stock-based awards expense, net of equity withheld to cover taxes | 7 | 7 | 7 | ||||||||||
Stock-based awards expense, net of equity withheld to cover taxes, Shares | 1,105,142 | ||||||||||||
Net income | 94 | 64 | 30 | 30 | |||||||||
Impact of change in ownership in RNCI | 4 | (4) | (4) | ||||||||||
Fair value adjustment for RNCI | $ 1,342 | (1,342) | (1,342) | ||||||||||
Balance at Mar. 27, 2021 | (7,960) | $ 0 | $ 0 | $ 0 | $ (1,783) | $ (37) | $ (88) | $ 0 | $ 0 | $ (7,835) | $ (7,960) | ||
Balance, Shares at Mar. 27, 2021 | 162,372,554 | 267,065,127 | |||||||||||
Temporary equity, Balance at Mar. 27, 2021 | $ 6,177 | $ 6,177 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 27, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | NOTE 1: BASIS OF PRESENTATION Background McAfee is a leading-edge cybersecurity company that provides advanced security solutions to consumers. Security technologies from McAfee use a unique, predictive capability that is powered by McAfee Global Threat Intelligence, which enables home users to stay one step ahead of the next wave of fileless attacks, viruses, malware, and other online threats. McAfee Corp. (the “Corporation”) was formed as a Delaware corporation on July 19, 2019 for the purpose of facilitating an initial public offering (“IPO”) and related transactions in order to carry on the business of Foundation Technology Worldwide LLC (“FTW”) and its subsidiaries (the Corporation, FTW and its subsidiaries are collectively the “Company,” “we,” “us” or “our”). On October 21, 2020, the Corporation became the sole managing member and holder of 100 % of the voting power of FTW due to the reorganization transactions described below. With respect to the Corporation and FTW, each entity owns only the respective entities below it in the corporate structure and each entity has no other material operations, assets, or liabilities. In October 2020, the Corporation completed an IPO pursuant to which the Corporation and selling stockholders sold an aggregate of 37.0 million shares of Class A common stock par value $ 0.001 per share (“Class A common stock”) at a public offering price of $ 20.00 per share. The Corporation issued 31 million shares and received $ 586 million in proceeds, net of underwriting discounts and commissions, of which $ 553 million was used to purchase newly-issued limited liability company units (“LLC Units”) and $ 33 million was used to purchase LLC Units from existing holders (“Continuing LLC Owners”) of interests in FTW, at a purchase price per unit equal to the public offering price per share of Class A common stock, less underwriting discounts and commissions. We refer to the holders of management incentive units of FTW (“MIUs”) as well as members of management who hold LLC Units following the closing of the offering or are to receive Class A common stock in satisfaction of existing incentive awards as “Management Owners.” We refer to those of our pre-IPO investors and certain of their affiliates who received shares of Class A common stock in connection with the Reorganization Transactions (as defined below) and who do not hold LLC Units as “Continuing Corporate Owners,” and together with the Continuing LLC Owners, as “Continuing Owners.” The Reorganization Transactions Reorganization In connection with the closing of the IPO, the following Reorganization Transactions were consummated: a new limited liability company operating agreement (“New LLC Agreement”) was adopted for FTW making the Corporation the sole managing member of FTW; the Corporation’s certificate of incorporation was amended and restated to, among other things, (i) provide for Class A common stock and Class B common stock and (ii) issue shares of Class B common stock to the Continuing Owners and Management Owners, on a one -to-one basis with the number of LLC Units they own (except that Management Owners will not receive shares of Class B common stock in connection with their exchange of Management Incentive Units (“MIUs”)), the exchange of which will be settled in cash or shares of Class A common stock, at the option of the Company, for nominal consideration; the Corporation (i) issued 126.3 million shares of its Class A common stock to certain of the Continuing Owners in exchange for their contribution of LLC units or the equity of certain other entities, which pursuant to the Reorganization Transactions, became its direct or indirect subsidiaries and (ii) settled 5.7 million restricted stock units (“RSUs”) with shares of its Class A common stock, net of tax withholding, held by certain employees, which were satisfied in connection with the Reorganization Transactions; and the Corporation entered into (i) a tax receivable agreement (“TRA”) with certain of our Continuing Owners and certain Management Owners (collectively “TRA Beneficiaries”) and (ii) a stockholders agreement and a registration rights agreement with investment funds affiliated with or advised by TPG Global, LLC (“TPG”) and Thoma Bravo, L.P. (“Thoma Bravo”), respectively, and Intel Americas, Inc. (“Intel”). Planned Divestiture of Enterprise Business On March 6, 2021, we entered into a definitive agreement with a consortium led by Symphony Technology Group (“STG”) under which STG agreed to purchase certain of our Enterprise assets together with certain of our Enterprise liabilities (“Enterprise Business”), representing substantially all of our Enterprise segment, for an all cash purchase price of $ 4.0 billion with an expected closing date by the end of 2021, subject to certain closing conditions. The divestiture of our Enterprise Business will allow us to shift our operational focus to our Consumer business and represents a strategic shift in our operations. As a result, the results of our Enterprise Business were classified as discontinued operations in our condensed consolidated statements of operations and excluded from both continuing operations and segment results for all periods presented. Starting in the first quarter of fiscal 2021, we operate in one reportable segment as the Enterprise Business was substantially all of our Enterprise segment. Results of discontinued operations include all revenues and expenses directly derived from our Enterprise Business, with the exception of general corporate overhead which were previously allocated to our Enterprise segment but are not allocated to discontinued operations. The Enterprise Business, as specified in the March 6, 2021 definitive agreement, was classified as discontinued operations in our condensed consolidated balance sheets, subject to changes set forth in the agreement. See Note 3 for additional information about the divestiture of our Enterprise Business. Principles of Consolidation Subsequent to the Reorganization Transactions and IPO, the Corporation is a holding company, and its sole material asset held directly or through wholly-owned subsidiaries is its equity interest in FTW. The Corporation, as the sole managing member of FTW, exclusively operates and controls the business and affairs of FTW. The Corporation consolidates the financial results of FTW and reports a redeemable noncontrolling interest (“RNCI”) related to the LLC Units held by the Continuing LLC Owners and vested MIUs held by Management Owners (Note 14 and 16). As the Continuing LLC Owners control both the Corporation and FTW, before and after the Reorganization Transactions, the Reorganization Transactions were accounted for as a reorganization of entities under common control. As a result, the financial statements for periods prior to the IPO and the Reorganization Transactions are the financial statements of FTW as the predecessor to the Corporation for accounting and reporting purposes. Financial information includes the accounts of the Company and was prepared in accordance with U.S. GAAP. All intercompany balances and transactions within the Company have been eliminated in consolidation. We have reclassified certain prior period amounts to conform to our current period presentation. These unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of our financial information. The condensed consolidated balance sheet as of December 26, 2020, has been derived from the audited financial statements as of that date, but it does not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying Notes thereto included in our Annual Report on Form 10-K for the year ended December 26, 2020. The results of operations for the three months ended March 27, 2021 are not necessarily indicative of the results expected for the entire fiscal year. We consolidate entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. We also consider for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it (Note 16). Our functional currency for all of our subsidiaries is the US dollar (“USD”). Use of Estimates The preparation of the condensed consolidated financial statements required us to make certain estimates and judgments that affect the amounts reported. Actual results may differ materially from our estimates. The accounting estimates that required our most significant and subjective judgments include: projections of future cash flows related to revenue share and related agreements with our personal computer original equipment manufacturer partners; amounts classified as discontinued operations; the valuation and recoverability of identified intangible assets and goodwill; recognition and measurement of current and deferred income taxes as well as our uncertain tax positions; fair value of our equity awards; fair value of long-term debt and related swaps; amount of liability related to the tax receivable agreement; determining the nature and timing of satisfaction of performance obligations, assessing any associated material rights and determining the standalone selling price (“SSP”) of performance obligations; and determining our technology constrained customer life. The effect of the novel coronavirus (“COVID-19”) pandemic on our business, operations, and financial results is dependent upon future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are unknown at this time. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, several of our estimates and assumptions may change materially in future periods due to the impact of the COVID-19 pandemic. Fiscal Calendar We maintain a 52- or 53-week fiscal year that ends on the last Saturday in December. The year ending December 25, 2021 is a 52-week year starting on December 27, 2020. These condensed consolidated financial statements are presented as of March 27, 2021 and December 26, 2020, and for the periods from December 27, 2020 through March 27, 2021 and December 29, 2019 through March 28, 2020. Significant Accounting Policies There have been no material changes to our significant accounting policies as of and for the three months ended March 27, 2021, except for those related to discontinued operations and those noted in Note 2, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 26, 2020. Discontinued Operations We review the presentation of planned business dispositions in the condensed consolidated financial statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business, and if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial results. In addition, we evaluate whether the business has met the criteria as a business held for sale. In order for a planned disposition to be classified as a business held for sale, the established criteria must be met as of the reporting date, including an active program to market the business and the expected disposition of the business within one year. Planned business dispositions are presented as discontinued operations when all the criteria described above are met. For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the condensed consolidated balance sheets. Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the condensed consolidated statements of operations. Results of discontinued operations include all revenues and expenses directly derived from such businesses; general corporate overhead is not allocated to discontinued operations. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Mar. 27, 2021 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Standards | NOTE 2: RECENT ACCOUNTING STANDARDS Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. We adopted ASU 2019-12 on December 28, 2020 and it had no material impact on our consolidated financial statements and related disclosures. Recent Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which simplifies current guidance for convertible financial instruments. ASU 2020-06 also amends derivatives guidance for certain contracts in an entity’s own equity. Finally, ASU 2020-06 amends earnings per share guidance related to convertible instruments. ASU 2020-06 is effective for us in the first quarter of fiscal year 2022. We do not expect adoption of ASU 2020-06 to have a material effect on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 26, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 3: DISCONTINUED OPERATIONS On March 6, 2021, we entered into a definitive agreement with a consortium led by STG, pursuant to which STG agreed to purchase our Enterprise Business for an all cash purchase price of $ 4.0 billion, subject to certain closing conditions. In connection with the divestiture of the Enterprise Business, we expect to enter into a transition service agreement under which we will provide assistance to STG including, but not limited to, business support services and information technology services as well as a commercial services agreement under which we will provide certain product services and licensed technology. The following table presents the aggregate amounts of the classes of assets and liabilities to be sold under the definitive agreement with STG: (in millions) March 27, 2021 December 26, 2020 Assets: Accounts receivable, net $ 196 $ 320 Deferred costs 98 96 Other current assets 18 16 Total current assets of discontinued operations 312 432 Property and equipment, net 30 34 Intangible assets, net 881 915 Goodwill 1,413 1,413 Deferred tax assets 42 43 Other long-term assets 158 155 Total assets of discontinued operations $ 2,836 $ 2,992 Liabilities: Accounts payable and other current liabilities $ 33 $ 39 Accrued compensation and benefits 17 18 Accrued marketing 6 6 Lease liabilities, current portion 18 15 Deferred revenue 873 892 Total current liabilities of discontinued operations 947 970 Deferred tax liabilities 7 7 Other long-term liabilities 59 51 Deferred revenue, less current portion 564 604 Total liabilities of discontinued operations $ 1,577 $ 1,632 The following table presents information regarding certain components of income from discontinued operations, net of taxes: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Net revenue $ 331 $ 331 Operating income $ 19 $ 9 Income before income taxes $ 18 $ 9 Income tax expense $ 7 $ 8 Income from discontinued operations, net of taxes $ 11 $ 1 The following table presents significant non-cash items and capital expenditures of discontinued operations: Three Months Ended March 27, 2021 March 28, 2020 Amortization and depreciation $ 39 $ 62 Equity-based compensation expense $ 12 $ 1 Purchases of property and equipment $ 1 $ 3 |
Revenue from Contract with Cust
Revenue from Contract with Customers | 3 Months Ended |
Mar. 27, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 4: REVENUE FROM CONTRACTS WITH CUSTOMERS Deferred Revenue During the three months ended March 27, 2021, we recognized $ 310 million from our deferred revenue balance as of December 26, 2020. During the three months ended March 28, 2020, we recognized $ 275 million in revenue from our deferred revenue balance as of December 28, 2019. Transaction Price Allocated to the Remaining Performance Obligations As of March 27, 2021, we have $ 1,007 million in estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied), which includes deferred revenue and amounts that will be billed and recognized as revenue in future periods. We expect to recognize approximately 91 % as revenue over the next 12 months, 9 % in next 13 to 36 months, with the remaining balance recognized thereafter. |
Leases
Leases | 3 Months Ended |
Mar. 27, 2021 | |
Leases [Abstract] | |
Leases | NOTE 5: LEASES As of March 27, 2021, we have operating leases primarily for corporate offices and data centers and no significant finance leases. Information related to operating leases, including leases associated with our discontinued operations, was as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 10 $ 10 Right-of-use assets obtained in exchange for lease obligations $ 18 $ 7 Lease expense from continuing operations $ 4 $ 8 Lease expense from discontinued operations 4 5 Total lease expense $ 8 $ 13 Balance sheet information related to leases, excluding leases associated with our discontinued operations, was as follows: (in millions) March 27, 2021 December 26, 2020 Other long-term assets $ 32 $ 33 Lease liabilities, current portion $ 10 $ 10 Other long-term liabilities 35 37 Total lease liabilities $ 45 $ 47 Weighted Average Remaining Lease Term (in years) 9 8 Weighted Average Discount Rate (percentage) 6.3 % 6.3 % Maturities of lease liabilities, excluding lease liabilities associated with our discontinued operations, were as follows: (in millions) March 27, 2021 Remainder of 2021 $ 11 2022 7 2023 6 2024 5 2025 5 Thereafter 26 Total lease payments 60 Less imputed interest ( 15 ) Total lease liabilities $ 45 |
Transactions with Members, Shar
Transactions with Members, Shareholders and Related Parties | 3 Months Ended |
Mar. 27, 2021 | |
Related Party Transactions [Abstract] | |
Transactions with Members, Shareholders and Related Parties | NOTE 6: TRANSACTIONS WITH MEMBERS, SHAREHOLDERS AND RELATED PARTIES FTW declared tax and excess cash distributions to its members during the three months ended March 27, 2021 and March 28, 2020 in aggregate of $ 106 million and $ 50 million, respectively. The distributions declared by FTW during the three months ended March 27, 2021, included $ 87 million to Continuing LLC Owners and $ 19 million to McAfee Corp. McAfee Corp. used its share to declare a dividend of $ 0.115 per share of Class A common stock in March 2021. Distributions and dividends of $ 54 million were recorded primarily within Accounts payable and other current liabilities on the condensed consolidated balance sheet as of March 27, 2021 and $ 50 million was paid in April 2021. McAfee Corp. declared or paid the following dividends during the three months ended March 27, 2021: Declaration Date Record Date Payment Date Dividend per Share Amount December 9, 2020 December 24, 2020 January 7, 2021 $ 0.087 $ 14 March 11, 2021 March 26, 2021 April 9, 2021 $ 0.115 $ 19 In February 2020, we entered into an agreement with our former President and Chief Executive Officer to repurchase equity units for an aggregate repurchase price of $ 10 million. We also agreed to repurchase his remaining outstanding equity units in April 2021 at fair market value, contingent on the satisfaction of certain terms and conditions. Upon a sale of the company or an IPO prior to the repurchase date, the units were not required to be repurchased. The units were classified as temporary equity within Redeemable units from the time of the agreement until the IPO when they were reclassified to permanent equity. We had these additional transactions, inclusive of discontinued operations, with TPG, Intel or other Continuing LLC Owners and companies owned or partially owned by those parties that therefore qualify as related parties. These transactions include sales of our products and purchases of various goods or services. Three Months Ended (in millions) March 27, 2021 March 28, 2020 Sales with related parties: TPG affiliates $ 1 $ 1 Total $ 1 $ 1 Payments to related parties: Intel $ 1 $ — TPG — 1 TPG affiliates 10 8 Other — 7 Total $ 11 $ 16 Revenue from the sales transactions are recognized in accordance with our revenue recognition policy. Our Intel receivable, net consisted of the following: (in millions) March 27, 2021 December 26, 2020 Intel receivable (1) Tax indemnity $ 9 $ 8 Total 9 8 Intel payable (1) Tax indemnity ( 3 ) ( 2 ) Total ( 3 ) ( 2 ) Total, net (2) $ 6 $ 6 (1) We have the contractual right of offset of our receivables and payables with Intel. (2) As of March 27, 2021, $ 5 million and $ 1 million are recorded in Other current assets and Other long-term assets, respectively, on the condensed consolidated balance sheet. As of December 26, 2020, $ 3 million and $ 3 million are recorded in Other current assets and Other long-term assets, respectively, on the condensed consolidated balance sheet. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 27, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | NOTE 7: GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets to be disposed of as a result of our agreement with STG to sell certain assets of Enterprise Business were included in assets of discontinued operations in our condensed consolidated balance sheets as of March 27, 2021 and December 26, 2020, and accordingly, are excluded from the tables below. Goodwill Goodwill was $ 1,018 million as of March 27, 2021 and December 26, 2020. Intangible Assets, Net March 27, 2021 December 26, 2020 (in millions) Gross Assets Accumulated Net Gross Assets Accumulated Net Intangible assets subject to amortization: Customer relationships and other $ 758 $ ( 592 ) $ 166 $ 758 $ ( 556 ) $ 202 Acquired and developed technology 517 ( 428 ) 89 517 ( 401 ) 116 Total intangible assets subject to 1,275 ( 1,020 ) 255 1,275 ( 957 ) 318 Intangible assets not subject to amortization: Brand 411 — 411 411 — 411 Total intangible assets not subject to 411 — 411 411 — 411 Total intangible assets $ 1,686 $ ( 1,020 ) $ 666 $ 1,686 $ ( 957 ) $ 729 Amortization expense for purchased and developed intangible assets is as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Statements of Operations Classification Customer relationships and other $ 36 $ 36 Amortization of intangibles Acquired and developed technology 27 27 Cost of sales Total $ 63 $ 63 Based on identified intangible assets that are subject to amortization as of March 27, 2021, we expect future amortization expense to be as follows: (in millions) Total Remainder of 2021 $ 107 2022 76 2023 28 2024 20 2025 19 Thereafter 5 Total $ 255 |
Segment And Geographic Informat
Segment And Geographic Information | 3 Months Ended |
Mar. 27, 2021 | |
Segment Reporting [Abstract] | |
Segment And Geographic Information | NOTE 8: SEGMENT AND GEOGRAPHIC INFORMATION Historically, we had two operating segments, which also represented our reportable segments and reporting units. The Consumer segment focused on providing security solutions for consumers. The Enterprise segment focused on providing security solutions for large enterprise, governments, small and medium-sized businesses. On March 6, 2021, we entered into a definitive agreement to sell certain assets together with certain liabilities of our Enterprise Business to STG, representing substantially all of our Enterprise segment. The divestiture of the Enterprise Business allows us to shift our operational focus to our Consumer business and represents a strategic shift in our operations. Therefore, the results of our Enterprise Business were classified as discontinued operations in our condensed consolidated statements of operations and thus excluded from both continuing operations and segment results for all periods presented. Accordingly, we now have one reportable segment with the change reflected in all periods presented. Revenue by geographic region based on the sell-to address of the end-users is as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 United States $ 268 $ 210 Other 174 144 Total net revenue $ 442 $ 354 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 27, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges | NOTE 9: RESTRUCTURING CHARGES Restructuring charges generally include significant actions impacting the way we manage our business. Employee severance and benefit charges are largely based upon substantive severance plans, while some charges result from mandated requirements in certain foreign jurisdictions. These charges include items such as employee severance, ongoing benefits, and excess payroll costs directly attributable to the restructuring plan. Restructuring charges attributable to continuing operations are as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Employee severance and benefits $ 8 $ 1 Total $ 8 $ 1 In connection with the agreement to sell certain assets of our Enterprise Business, a portion of our Restructuring charges were classified to discontinued operations for all periods presented. Our Restructuring charges attributable to discontinued operations are as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Employee severance and benefits $ 22 $ 8 Facility restructuring 1 — Total $ 23 $ 8 In January 2020, we commenced the 2020 transformation initiative, in which we realigned our staffing across various departments. As part of the initiative, we incurred employee severance and benefits costs of $ 9 million recorded in restructuring charges in the condensed consolidated statement of operations for the three months ended March 28, 2020. In December 2020, we initiated a workforce reduction and other restructuring activities designed to continue to improve operating margins in connection with the reorientation of our Enterprise Business and realignment of staffing in other departments, which was announced in February 2021 following the notification of affected employees. We expect the majority of these activities to complete by the third quarter of fiscal 2021. As part of the initiative, in December 2020 we recognized $ 16 million in connection with the workforce reduction and other restructuring activities. During the three months ended March 27, 2021 we recognized $ 31 million in restructuring charges. These charges consist primarily of one-time termination benefits to the impacted employees, including severance payments and healthcare and other accrued benefits. We expect to recognize additional severance and other restructuring expense ranging between $ 1 million and $ 2 million in connection with this action. We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the workforce reduction. The balance of our restructuring activities are as follows: (in millions) Total Employee severance and benefits As of December 26, 2020 $ 16 Additional accruals 30 Cash payments ( 29 ) As of March 27, 2021 $ 17 |
Employee Incentives
Employee Incentives | 3 Months Ended |
Mar. 27, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Incentives | NOTE 10: EMPLOYEE INCENTIVES Equity-Based Compensation Equity-based compensation costs recognized in our condensed consolidated statements of operations were: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Cost of sales $ 1 $ — Sales and marketing 3 1 Research and development 3 — General and administrative 7 13 Total equity-based compensation expense from continuing operations 14 14 Discontinued operations 12 1 Total equity-based compensation expense $ 26 $ 15 As of March 27, 2021, there was $ 239 million of unrecognized equity-based compensation cost, which is expected to be recognized over a weighted average vesting period of 2.4 years. During the three months ended March 27, 2021, we granted 0.7 million Restricted Stock Units (“RSU”s) with a grant date fair value of $ 14 million. RSUs are generally expected to vest over a four-year period. The Company also granted 0.5 million Performance Stock Units (“PSU”s) with a fair value of $ 12 million. PSUs are generally expected to vest over a weighted average three-year period. Deferred Cash and Equity As of March 27, 2021, our outstanding deferred cash and equity related to our acquisitions is as follows: (in millions) Outstanding deferred cash and equity balance at December 26, 2020 $ 13 Accruals 2 Cash payment ( 11 ) Outstanding deferred cash and equity balance at March 27, 2021 $ 4 As of March 27, 2021, we have unrecognized expense relating to deferred cash of $ 4 million with a remaining weighted average service period of 1.0 years. Deferred cash is recorded within Accrued compensation and benefits on the condensed consolidated balance sheet for amounts due in the next 12 months. |
Debt
Debt | 3 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 11: DEBT Our long-term debt balance consisted of the following: (in millions) March 27, 2021 December 26, 2020 Long-term debt, net: 1 st Lien USD Term Loan (1) $ 2,696 $ 2,701 1 st Lien Euro Term Loan (2) 1,253 1,298 Long-term debt, net of unamortized discounts 3,949 3,999 Unamortized deferred financing costs ( 12 ) ( 12 ) Current installments of long-term debt ( 44 ) ( 44 ) Total $ 3,893 $ 3,943 (1) During the three months ended March 27, 2021, the weighted average interest rate was 3.9 % (2) During the three months ended March 27, 2021, the weighted average interest rate was 3.5 % Long-Term Debt As of March 27, 2021, the material terms of our outstanding debt remain unchanged from those described in our consolidated financial statements as of December 26, 2020. Revolving Credit Facility As of March 27, 2021 and December 26, 2020, we had a letter of credit of $ 4 million issued against the Revolving Credit Facility and $ 660 million of undrawn capacity under the Revolving Credit Facility, for which our commitment fee on the unused portion was 0.375 %. Debt Covenants and Restrictions No event of default had occurred under any of our debt obligations as of March 27, 2021. We were not required to make any additional prepayments above the 0.25 % per quarter amortization of the 1 st Lien Term Loans during the three months ended March 27, 2021. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 12: INCOME TAX McAfee Corp. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from FTW based upon McAfee Corp.’s economic interest in FTW. FTW is a pass through entity for U.S. federal income tax purposes and will not incur any federal income taxes either for itself or its U.S. subsidiaries that are also pass through or disregarded subsidiaries. Taxable income or loss for these entities will flow through to its respective members for U.S. tax purposes. FTW does have certain U.S. and foreign subsidiaries that are corporations and are subject to income tax in their respective jurisdiction. We consider many factors when evaluating and estimating our tax positions, which may require periodic adjustments and may not accurately anticipate actual outcomes. Tax position recognition is a matter of judgment based on the individual facts and circumstances of our position evaluated in light of all available evidence. As of March 27, 2021 and December 26, 2020, we had uncertain tax positions, including interest and penalties, of $ 7 million and $ 16 million, respectively, primarily recorded within Other long-term liabilities and Other long-term assets on the condensed consolidated balance sheets. In the next 12 months, it is reasonably possible to have an audit closure or statute expirations in one of our foreign jurisdictions. We do not believe the amount to have a significant impact to our consolidated financial statements. A portion of income taxes and uncertain tax positions has been indemnified by Intel (Note 6). Tax Receivable Agreement As realizability of the net deferred tax assets has not met the more likely than not recognition criteria, the liability under the TRA has not met the probable recognition criteria in the accompanying condensed consolidated balance sheet as of March 27, 2021, except for the $ 2 million current portion and $ 6 million long-term portion of the TRA liability recorded within Accounts payable and other accrued liabilities and Other long-term liabilities, respectively, in the condensed consolidated balance sheet. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Interest Rate Swaps | 3 Months Ended |
Mar. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Interest Rate Swaps | NOTE 13: FAIR VALUE OF FINANCIAL INSTRUMENTS AND INTEREST RATE SWAPS Fair Value of Financial Instruments For assets and liabilities that are measured using quoted prices in active markets (Level 1), total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs, discounts or blockage factors. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities (Level 2), adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques (Level 3) and not based on market exchange, dealer or broker traded transactions. These valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The fair value of our financial instruments are as follows: (in millions) Level 1 Level 2 Level 3 As of March 27, 2021 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred $ — $ ( 3,987 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ ( 98 ) $ — As of December 26, 2020 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred $ — $ ( 4,033 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ ( 119 ) $ — The fair value of the debt is based on third party quotations and is therefore classified as Level 2. The fair value of our derivative financial instruments, including interest rate swaps, are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 fair value measurement inputs such as spot rates, foreign currency exchange rates, and the instrument’s term, notional amount and discount rate. The fair values of our financial instruments included in Cash and cash equivalents, Accounts receivable, net, Other current assets, Accounts payable and other current liabilities on the condensed consolidated balance sheets approximate their carrying amounts due to their short maturities. We measure the fair value of money market accounts, included in Cash and cash equivalents on the condensed consolidated balance sheets, on a recurring basis and have classified them as Level 1 because the fair value is measured with quoted prices in active markets. These amounts have been excluded from the table. There were no transfers of assets or liabilities between fair value measurement levels. Transfers between fair value measurement levels are recognized at the end of the reporting period. Interest Rate Swaps We have multiple interest rate swaps in order to fix the LIBOR portion of our USD denominated variable rate borrowings (Note 11). As of March 27, 2021, the outstanding effective arrangements were as follows: Notional Value Effective Date Expiration Date Fixed Rate $ 250 January 29, 2018 January 29, 2022 2.41 % $ 275 January 29, 2018 January 29, 2023 2.48 % $ 275 January 29, 2018 January 29, 2023 2.49 % $ 475 March 29, 2019 March 29, 2024 2.40 % $ 750 March 4, 2020 September 29, 2024 2.07 % $ 250 March 29, 2020 March 29, 2024 0.93 % $ 225 January 29, 2021 January 29, 2024 0.42 % The gross amounts of our interest rate swaps, which are subject to master netting arrangements, were as follows: (in millions) Gross Gross Net amounts As of March 27, 2021 Accounts payable and other current liabilities $ ( 42 ) $ — $ ( 42 ) Other long-term liabilities ( 56 ) — ( 56 ) As of December 26, 2020 Accounts payable and other current liabilities $ ( 43 ) $ — $ ( 43 ) Other long-term liabilities ( 76 ) — ( 76 ) |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 27, 2021 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | NOTE 14: REDEEMABLE NONCONTROLLING INTERESTS We report a RNCI based on the LLC Units of FTW held by Continuing LLC Owners and vested MIUs held by Management Owners. The Continuing LLC Owners (or certain permitted transferees), subject to certain restrictions, can exchange their LLC Units for shares of Class A common stock on a one -for-one basis (simultaneously cancelling an equal number of shares of Class B common stock of the exchanging member), subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and other similar transactions, or, at the option of the Company, for cash (based on the market price of the shares of our Class A common stock). The holders of MIUs also have the right, from time to time and subject to certain restrictions, to exchange their MIUs for LLC Units, which will then be immediately redeemed for cash or shares of Class A common stock, at the option of the Company, based on the value of such MIUs relative to their applicable distribution threshold. The Company’s decision of whether to exchange LLC Units for Class A common stock or cash is currently made solely at the discretion of the Continuing LLC Owners through their control of our Board of Directors. Accordingly, the LLC Units owned by the Continuing LLC Owners are treated as RNCI as the holders have the option to exchange their LLC Units for cash or for shares of the Corporation’s Class A common stock. The RNCI is reported at the greater of the redemption value of the units or the carrying value as of the balance sheet date, with a corresponding adjustment to Additional paid-in capital. The redemption value of our redeemable noncontrolling interests was derived from the closing stock price of the Company’s Class A common stock on the last day of the period. Future redemptions or direct exchanges of LLC Units by the Continuing LLC Owners will result in a change in ownership and reduce or increase the carrying value of the RNCI and increase or decrease Additional paid-in capital when FTW has positive or negative net assets, respectively. The following table summarizes the ownership and economic interest in FTW LLC: March 27, 2021 December 26, 2020 (in millions except percentages) Units Outstanding Ownership % Units Outstanding Ownership % Number of LLC Units held by McAfee Corp. 162.4 37.3 % 161.3 37.2 % Number of LLC Units and vested MIUs held by RNCI 273.1 62.7 % 272.5 62.8 % Total LLC Units and vest MIUs outstanding 435.5 100.0 % 433.8 100.0 % |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 27, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 15: EARNINGS PER SHARE Basic earnings per share is computed by dividing net income attributable to McAfee Corp. for the periods subsequent to the Reorganization Transactions by the weighted average number of shares of Class A common stock outstanding for the same period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted earnings per share has been computed in a manner consistent with that of basic net income per share while giving effect to shares of potentially dilutive common stock that were outstanding during the period. Prior to the Reorganization Transactions, the FTW capital structure primarily included FTW LLC Units. Certain holders of these units exchanged their FTW LLC units for Class A common stock of the Corporation in the Reorganization Transactions with the remaining FTW LLC Units reflecting RNCI in the Corporation. The completion of the Reorganization Transactions created the Corporation’s current capital structure, which is not reflective of the capital structure of FTW’s business prior to the Reorganization Transactions. Therefore, earnings per share information has not been presented for the three months ended March 28, 2020. Shares of Class B common stock do not share in the earnings or losses attributable to McAfee Corp. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related FTW LLC Units, are exchangeable into shares of Class A common stock on a one -for-one basis. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the three months ended March 27, 2021, the period wherein the Corporation had outstanding Class A common stock. Three Months Ended (in millions except per share data) March 27, 2021 Continuing Operations Discontinued Operations Total Numerator: Net income attributable to McAfee Corp., basic $ 27 $ 3 $ 30 Net income attributable to change in ownership percentage due to dilutive equity awards 2 — 2 Less: Provision for income tax expense (1) — — — Net income attributable to McAfee Corp., diluted $ 29 $ 3 $ 32 Denominator: Weighted average shares of Class A common stock outstanding, basic 162.4 162.4 162.4 Dilutive impact of equity awards (2) 13.9 13.9 13.9 Weighted average shares of Class A common stock outstanding, diluted 176.3 176.3 176.3 Earnings per share attributable to McAfee Corp., basic Earnings per share, basic (3) $ 0.17 $ 0.02 $ 0.18 Earnings per share attributable to McAfee Corp., diluted Earnings per share, diluted (4) $ 0.16 $ 0.02 $ 0.18 (1) Represents incremental income tax provision we would have recognized due to change in ownership. (2) Represents the dilutive impact of equity awards. (3) Amounts may not add due to rounding. (4) 274.0 million weighted average units were excluded from dilution. The excluded units consist of RSUs, PSUs, stock options, unvested MIUs, and RNCI that were excluded from dilution because their effects would have been anti-dilutive for the three months ended March 27, 2021. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 27, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Variable Interest Entities | NOTE 16: VARIABLE INTEREST ENTITIES Upon completion of our IPO, McAfee Corp. became the managing member of FTW with 100 % of the management and voting power in FTW. In its capacity as managing member, McAfee Corp. has the sole authority to make decisions on behalf of FTW and bind FTW to signed agreements. Further, FTW maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that FTW is a limited partnership or similar legal entity as contemplated in ASC 810, Consolidation. Further, management concluded that McAfee Corp. is FTW’s primary beneficiary based on two conditions. First, McAfee Corp., in its capacity as managing member with sole voting rights, has the power to direct the activities of FTW that most significantly impact its economic performance, including selecting, terminating and setting the compensation of management responsible for FTW’s policies and procedures, as well as establishing the strategic, operating and capital decisions of FTW in the ordinary course of business. Second, McAfee Corp. has an obligation to absorb potential losses of FTW or the right to receive potential benefits from FTW in proportion to its equity interest. As the primary beneficiary, McAfee Corp. consolidates the results of FTW for financial reporting purposes under the variable interest consolidation model guidance in ASC 810. The following table reflects the balance sheet of FTW that is consolidated within the condensed consolidated balance sheets, including Receivable from Parent, net and McAfee Corp.’s interest in the variable interest entity (“VIE”) that are eliminated upon consolidation. (in millions) March 27, 2021 December 26, 2020 Assets Current assets: Cash and cash equivalents $ 344 $ 231 Accounts receivable, net 76 72 Deferred costs 155 137 Other current assets 44 42 Current assets of discontinued operations 312 432 Total current assets 931 914 Property and equipment, net 111 115 Goodwill 1,018 1,018 Identified intangible assets, net 666 729 Deferred tax assets 24 25 Receivable from Parent, net 31 46 Other long-term assets 86 67 Long-term assets of discontinued operations 2,524 2,560 Total assets $ 5,391 $ 5,474 Liabilities and deficit Current liabilities: Accounts payable and other current liabilities $ 217 $ 211 Accrued compensation and benefits 118 179 Accrued marketing 108 118 Income taxes payable 9 14 Long-term debt, current portion 44 44 Lease liabilities, current portion 10 10 Liability to Parent 19 — Deferred revenue 915 823 Current liabilities of discontinued operations 947 970 Total current liabilities 2,387 2,369 Long-term debt, net 3,893 3,943 Deferred tax liabilities 6 5 Other long-term liabilities 128 153 Deferred revenue, less current portion 92 80 Long-term liabilities of discontinued operations 630 662 Total liabilities 7,136 7,212 Members’ deficit: Deficit attributable to Continuing LLC Owners ( 1,094 ) ( 1,092 ) Deficit attributable to McAfee Corp. ( 651 ) ( 646 ) Total deficit ( 1,745 ) ( 1,738 ) Total liabilities and deficit $ 5,391 $ 5,474 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 27, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17: COMMITMENTS AND CONTINGENCIES As of March 27, 2021, including amounts associated with our discontinued operations, we have unconditional purchase obligations of $ 445 million that expire at various dates through 2026 and guarantees of $ 11 million that expire at various dates through 2028 . Subsequent to March 27, 2021, we have executed contracts with additional unconditional purchase commitments in the amount of $ 16 million that we expect to incur in the years 2021 through 2024 . We are a party to various legal proceedings that have arisen in the ordinary course of our business. At present, we do not expect that any ordinary course legal proceedings, individually or in the aggregate, will have a material adverse effect on our business, results of operations, financial condition or cash flows. In the ordinary course of our business, we are subject to examination by taxing authorities for both direct and indirect taxes in many of the domestic and foreign jurisdictions in which we operate. We are unable to make a reasonably reliable estimate as to when or if settlements with taxing authorities may occur. However, we do not anticipate that the resolution of these tax matters or any events related thereto will have a material adverse effect on our business, results of operations, financial condition or cash flows. |
Recent Accounting Standards (Po
Recent Accounting Standards (Policies) | 3 Months Ended |
Mar. 27, 2021 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. We adopted ASU 2019-12 on December 28, 2020 and it had no material impact on our consolidated financial statements and related disclosures. |
Recent Accounting Standards Not Yet Adopted | Recent Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which simplifies current guidance for convertible financial instruments. ASU 2020-06 also amends derivatives guidance for certain contracts in an entity’s own equity. Finally, ASU 2020-06 amends earnings per share guidance related to convertible instruments. ASU 2020-06 is effective for us in the first quarter of fiscal year 2022. We do not expect adoption of ASU 2020-06 to have a material effect on our consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities to be Sold | The following table presents the aggregate amounts of the classes of assets and liabilities to be sold under the definitive agreement with STG: (in millions) March 27, 2021 December 26, 2020 Assets: Accounts receivable, net $ 196 $ 320 Deferred costs 98 96 Other current assets 18 16 Total current assets of discontinued operations 312 432 Property and equipment, net 30 34 Intangible assets, net 881 915 Goodwill 1,413 1,413 Deferred tax assets 42 43 Other long-term assets 158 155 Total assets of discontinued operations $ 2,836 $ 2,992 Liabilities: Accounts payable and other current liabilities $ 33 $ 39 Accrued compensation and benefits 17 18 Accrued marketing 6 6 Lease liabilities, current portion 18 15 Deferred revenue 873 892 Total current liabilities of discontinued operations 947 970 Deferred tax liabilities 7 7 Other long-term liabilities 59 51 Deferred revenue, less current portion 564 604 Total liabilities of discontinued operations $ 1,577 $ 1,632 |
Summary of Components of Income | The following table presents information regarding certain components of income from discontinued operations, net of taxes: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Net revenue $ 331 $ 331 Operating income $ 19 $ 9 Income before income taxes $ 18 $ 9 Income tax expense $ 7 $ 8 Income from discontinued operations, net of taxes $ 11 $ 1 |
Summary of Significant Non-Cash Items and Capital Expenditures | The following table presents significant non-cash items and capital expenditures of discontinued operations: Three Months Ended March 27, 2021 March 28, 2020 Amortization and depreciation $ 39 $ 62 Equity-based compensation expense $ 12 $ 1 Purchases of property and equipment $ 1 $ 3 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Leases [Abstract] | |
Schedule of Information Related to Leases | Information related to operating leases, including leases associated with our discontinued operations, was as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 10 $ 10 Right-of-use assets obtained in exchange for lease obligations $ 18 $ 7 Lease expense from continuing operations $ 4 $ 8 Lease expense from discontinued operations 4 5 Total lease expense $ 8 $ 13 |
Schedule of Balance Sheet Information Related to Leases | Balance sheet information related to leases, excluding leases associated with our discontinued operations, was as follows: (in millions) March 27, 2021 December 26, 2020 Other long-term assets $ 32 $ 33 Lease liabilities, current portion $ 10 $ 10 Other long-term liabilities 35 37 Total lease liabilities $ 45 $ 47 Weighted Average Remaining Lease Term (in years) 9 8 Weighted Average Discount Rate (percentage) 6.3 % 6.3 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities, excluding lease liabilities associated with our discontinued operations, were as follows: (in millions) March 27, 2021 Remainder of 2021 $ 11 2022 7 2023 6 2024 5 2025 5 Thereafter 26 Total lease payments 60 Less imputed interest ( 15 ) Total lease liabilities $ 45 |
Transactions with Members, Sh_2
Transactions with Members, Shareholders and Related Parties (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Related Party Transactions [Abstract] | |
Summary of Dividends Declared or Paid | McAfee Corp. declared or paid the following dividends during the three months ended March 27, 2021: Declaration Date Record Date Payment Date Dividend per Share Amount December 9, 2020 December 24, 2020 January 7, 2021 $ 0.087 $ 14 March 11, 2021 March 26, 2021 April 9, 2021 $ 0.115 $ 19 |
Summary of Transactions with Related Parties | These transactions include sales of our products and purchases of various goods or services. Three Months Ended (in millions) March 27, 2021 March 28, 2020 Sales with related parties: TPG affiliates $ 1 $ 1 Total $ 1 $ 1 Payments to related parties: Intel $ 1 $ — TPG — 1 TPG affiliates 10 8 Other — 7 Total $ 11 $ 16 |
Schedule of Receivable, Net | Our Intel receivable, net consisted of the following: (in millions) March 27, 2021 December 26, 2020 Intel receivable (1) Tax indemnity $ 9 $ 8 Total 9 8 Intel payable (1) Tax indemnity ( 3 ) ( 2 ) Total ( 3 ) ( 2 ) Total, net (2) $ 6 $ 6 (1) We have the contractual right of offset of our receivables and payables with Intel. (2) As of March 27, 2021, $ 5 million and $ 1 million are recorded in Other current assets and Other long-term assets, respectively, on the condensed consolidated balance sheet. As of December 26, 2020, $ 3 million and $ 3 million are recorded in Other current assets and Other long-term assets, respectively, on the condensed consolidated balance sheet. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible Assets, Net March 27, 2021 December 26, 2020 (in millions) Gross Assets Accumulated Net Gross Assets Accumulated Net Intangible assets subject to amortization: Customer relationships and other $ 758 $ ( 592 ) $ 166 $ 758 $ ( 556 ) $ 202 Acquired and developed technology 517 ( 428 ) 89 517 ( 401 ) 116 Total intangible assets subject to 1,275 ( 1,020 ) 255 1,275 ( 957 ) 318 Intangible assets not subject to amortization: Brand 411 — 411 411 — 411 Total intangible assets not subject to 411 — 411 411 — 411 Total intangible assets $ 1,686 $ ( 1,020 ) $ 666 $ 1,686 $ ( 957 ) $ 729 |
Schedule of Amortization Expense For Purchased and Developed Intangible Assets | Amortization expense for purchased and developed intangible assets is as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Statements of Operations Classification Customer relationships and other $ 36 $ 36 Amortization of intangibles Acquired and developed technology 27 27 Cost of sales Total $ 63 $ 63 |
Schedule of Future Amortization Expense | Based on identified intangible assets that are subject to amortization as of March 27, 2021, we expect future amortization expense to be as follows: (in millions) Total Remainder of 2021 $ 107 2022 76 2023 28 2024 20 2025 19 Thereafter 5 Total $ 255 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | Revenue by geographic region based on the sell-to address of the end-users is as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 United States $ 268 $ 210 Other 174 144 Total net revenue $ 442 $ 354 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring Charges | Restructuring charges attributable to continuing operations are as follows: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Employee severance and benefits $ 8 $ 1 Total $ 8 $ 1 Three Months Ended (in millions) March 27, 2021 March 28, 2020 Employee severance and benefits $ 22 $ 8 Facility restructuring 1 — Total $ 23 $ 8 |
Schedule of Balance of Restructuring Activities | (in millions) Total Employee severance and benefits As of December 26, 2020 $ 16 Additional accruals 30 Cash payments ( 29 ) As of March 27, 2021 $ 17 |
Employee Incentives (Tables)
Employee Incentives (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Schedule of Equity Based Compensation Costs Recognized | Equity-based compensation costs recognized in our condensed consolidated statements of operations were: Three Months Ended (in millions) March 27, 2021 March 28, 2020 Cost of sales $ 1 $ — Sales and marketing 3 1 Research and development 3 — General and administrative 7 13 Total equity-based compensation expense from continuing operations 14 14 Discontinued operations 12 1 Total equity-based compensation expense $ 26 $ 15 As of March 27, 2021, there was $ 239 million of unrecognized equity-based compensation cost, which is expected to be recognized over a weighted average vesting period of 2.4 years. |
Schedule of Outstanding Deferred Cash and Equity Related to Acquisitions | As of March 27, 2021, our outstanding deferred cash and equity related to our acquisitions is as follows: (in millions) Outstanding deferred cash and equity balance at December 26, 2020 $ 13 Accruals 2 Cash payment ( 11 ) Outstanding deferred cash and equity balance at March 27, 2021 $ 4 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Our long-term debt balance consisted of the following: (in millions) March 27, 2021 December 26, 2020 Long-term debt, net: 1 st Lien USD Term Loan (1) $ 2,696 $ 2,701 1 st Lien Euro Term Loan (2) 1,253 1,298 Long-term debt, net of unamortized discounts 3,949 3,999 Unamortized deferred financing costs ( 12 ) ( 12 ) Current installments of long-term debt ( 44 ) ( 44 ) Total $ 3,893 $ 3,943 (1) During the three months ended March 27, 2021, the weighted average interest rate was 3.9 % (2) During the three months ended March 27, 2021, the weighted average interest rate was 3.5 % |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Interest Rate Swaps (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Instruments | The fair value of our financial instruments are as follows: (in millions) Level 1 Level 2 Level 3 As of March 27, 2021 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred $ — $ ( 3,987 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ ( 98 ) $ — As of December 26, 2020 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred $ — $ ( 4,033 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ ( 119 ) $ — |
Schedule of Interest Rate Outstanding Effective Arrangements | As of March 27, 2021, the outstanding effective arrangements were as follows: Notional Value Effective Date Expiration Date Fixed Rate $ 250 January 29, 2018 January 29, 2022 2.41 % $ 275 January 29, 2018 January 29, 2023 2.48 % $ 275 January 29, 2018 January 29, 2023 2.49 % $ 475 March 29, 2019 March 29, 2024 2.40 % $ 750 March 4, 2020 September 29, 2024 2.07 % $ 250 March 29, 2020 March 29, 2024 0.93 % $ 225 January 29, 2021 January 29, 2024 0.42 % |
Schedule of Gross Amounts of Interest Rate Swaps Subject to Master Netting Arrangements | The gross amounts of our interest rate swaps, which are subject to master netting arrangements, were as follows: (in millions) Gross Gross Net amounts As of March 27, 2021 Accounts payable and other current liabilities $ ( 42 ) $ — $ ( 42 ) Other long-term liabilities ( 56 ) — ( 56 ) As of December 26, 2020 Accounts payable and other current liabilities $ ( 43 ) $ — $ ( 43 ) Other long-term liabilities ( 76 ) — ( 76 ) |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Noncontrolling Interest [Abstract] | |
Summary of the Ownership and Economic Interest in FTW LLC | The following table summarizes the ownership and economic interest in FTW LLC: March 27, 2021 December 26, 2020 (in millions except percentages) Units Outstanding Ownership % Units Outstanding Ownership % Number of LLC Units held by McAfee Corp. 162.4 37.3 % 161.3 37.2 % Number of LLC Units and vested MIUs held by RNCI 273.1 62.7 % 272.5 62.8 % Total LLC Units and vest MIUs outstanding 435.5 100.0 % 433.8 100.0 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the three months ended March 27, 2021, the period wherein the Corporation had outstanding Class A common stock. Three Months Ended (in millions except per share data) March 27, 2021 Continuing Operations Discontinued Operations Total Numerator: Net income attributable to McAfee Corp., basic $ 27 $ 3 $ 30 Net income attributable to change in ownership percentage due to dilutive equity awards 2 — 2 Less: Provision for income tax expense (1) — — — Net income attributable to McAfee Corp., diluted $ 29 $ 3 $ 32 Denominator: Weighted average shares of Class A common stock outstanding, basic 162.4 162.4 162.4 Dilutive impact of equity awards (2) 13.9 13.9 13.9 Weighted average shares of Class A common stock outstanding, diluted 176.3 176.3 176.3 Earnings per share attributable to McAfee Corp., basic Earnings per share, basic (3) $ 0.17 $ 0.02 $ 0.18 Earnings per share attributable to McAfee Corp., diluted Earnings per share, diluted (4) $ 0.16 $ 0.02 $ 0.18 (1) Represents incremental income tax provision we would have recognized due to change in ownership. (2) Represents the dilutive impact of equity awards. (3) Amounts may not add due to rounding. (4) 274.0 million weighted average units were excluded from dilution. The excluded units consist of RSUs, PSUs, stock options, unvested MIUs, and RNCI that were excluded from dilution because their effects would have been anti-dilutive for the three months ended March 27, 2021. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 27, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table reflects the balance sheet of FTW that is consolidated within the condensed consolidated balance sheets, including Receivable from Parent, net and McAfee Corp.’s interest in the variable interest entity (“VIE”) that are eliminated upon consolidation. (in millions) March 27, 2021 December 26, 2020 Assets Current assets: Cash and cash equivalents $ 344 $ 231 Accounts receivable, net 76 72 Deferred costs 155 137 Other current assets 44 42 Current assets of discontinued operations 312 432 Total current assets 931 914 Property and equipment, net 111 115 Goodwill 1,018 1,018 Identified intangible assets, net 666 729 Deferred tax assets 24 25 Receivable from Parent, net 31 46 Other long-term assets 86 67 Long-term assets of discontinued operations 2,524 2,560 Total assets $ 5,391 $ 5,474 Liabilities and deficit Current liabilities: Accounts payable and other current liabilities $ 217 $ 211 Accrued compensation and benefits 118 179 Accrued marketing 108 118 Income taxes payable 9 14 Long-term debt, current portion 44 44 Lease liabilities, current portion 10 10 Liability to Parent 19 — Deferred revenue 915 823 Current liabilities of discontinued operations 947 970 Total current liabilities 2,387 2,369 Long-term debt, net 3,893 3,943 Deferred tax liabilities 6 5 Other long-term liabilities 128 153 Deferred revenue, less current portion 92 80 Long-term liabilities of discontinued operations 630 662 Total liabilities 7,136 7,212 Members’ deficit: Deficit attributable to Continuing LLC Owners ( 1,094 ) ( 1,092 ) Deficit attributable to McAfee Corp. ( 651 ) ( 646 ) Total deficit ( 1,745 ) ( 1,738 ) Total liabilities and deficit $ 5,391 $ 5,474 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | Mar. 06, 2021USD ($) | Oct. 21, 2020 | Oct. 31, 2020USD ($)$ / sharesshares | Mar. 27, 2021Segment$ / shares | Dec. 26, 2020Segment$ / shares |
Basis Of Presentation [Line Items] | |||||
Business, formation date | Jul. 19, 2019 | ||||
Proceeds from divesture of businesses | $ | $ 4,000 | ||||
Number of reportable segments | Segment | 1 | 2 | |||
Class A Common Stock | |||||
Basis Of Presentation [Line Items] | |||||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Shares settlement, exchange ratio | 1 | 1 | |||
Stock issued for exchange of ownership | shares | 126.3 | ||||
Class A Common Stock | RSUs | |||||
Basis Of Presentation [Line Items] | |||||
Settled restricted stock units | shares | 5.7 | ||||
Initial Public Offering | |||||
Basis Of Presentation [Line Items] | |||||
Common stock, shares, issued | shares | 31 | ||||
Proceeds from issuance of common stock | $ | $ 586 | ||||
Initial Public Offering | Class A Common Stock | |||||
Basis Of Presentation [Line Items] | |||||
Common stock, shares, issued | shares | 37 | ||||
Common Stock, par value | $ / shares | $ 0.001 | ||||
Common stock per share | $ / shares | $ 20 | ||||
Foundation Technology Worldwide L L C | |||||
Basis Of Presentation [Line Items] | |||||
Percentage of ownership after the reorganization transaction | 100.00% | 100.00% | |||
LLC Units | Initial Public Offering | |||||
Basis Of Presentation [Line Items] | |||||
Purchase of issued and outstanding LLC units cost | $ | $ 553 | ||||
Continuing LLC Owners | Initial Public Offering | |||||
Basis Of Presentation [Line Items] | |||||
Purchase of issued and outstanding LLC units cost | $ | $ 33 |
Recent Accounting Standards - A
Recent Accounting Standards - Additional Information (Details) | Mar. 27, 2021 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, immaterial effect | true |
ASU 2019-12 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in accounting principle, accounting standards update, adopted | true |
Change in accounting principle, accounting standards update, adoption date | Dec. 28, 2020 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Millions | Mar. 06, 2021 | Mar. 27, 2021 | Mar. 28, 2020 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Proceeds from divesture of businesses | $ 4,000 | ||
Income tax benefit in discontinued operations | $ (7) | $ (8) |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities to be Sold (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Assets: | ||
Accounts receivable, net | $ 196 | $ 320 |
Deferred costs | 98 | 96 |
Other current assets | 18 | 16 |
Total current assets of discontinued operations | 312 | 432 |
Property and equipment, net | 30 | 34 |
Intangible assets, net | 881 | 915 |
Goodwill | 1,413 | 1,413 |
Deferred tax assets | 42 | 43 |
Other long-term assets | 158 | 155 |
Total assets of discontinued operations | 2,836 | 2,992 |
Liabilities: | ||
Accounts payable and other current liabilities | 33 | 39 |
Accrued compensation and benefits | 17 | 18 |
Accrued marketing | 6 | 6 |
Lease liabilities, current portion | 18 | 15 |
Deferred revenue | 873 | 892 |
Total current liabilities of discontinued operations | 947 | 970 |
Deferred tax liabilities | 7 | 7 |
Other long-term liabilities | 59 | 51 |
Deferred revenue, less current portion | 564 | 604 |
Total liabilities of discontinued operations | $ 1,577 | $ 1,632 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Components of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net revenue | $ 331 | $ 331 |
Operating income | 19 | 9 |
Income before income taxes | 18 | 9 |
Income tax expense (benefit) | 7 | 8 |
Income from discontinued operations, net of taxes | $ 11 | $ 1 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of Significant Non-Cash Items and Capital Expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Amortization and depreciation | $ 39 | $ 62 |
Equity-based compensation expense | 26 | 15 |
Purchases of property and equipment | 1 | 3 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Equity-based compensation expense | $ 12 | $ 1 |
Revenue from Contract with Cu_2
Revenue from Contract with Customers - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Revenue From Contract With Customers [Line Items] | ||
Deferred revenue recognized | $ 310 | $ 275 |
Estimated revenue expected to be recognized | $ 1,007 |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Additional Information (Details1) | Mar. 27, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-03-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, remaining performance obligation, percentage | 91.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-03-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue, remaining performance obligation, percentage | 9.00% |
Leases - Schedule of Informatio
Leases - Schedule of Information Related to Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 10 | $ 10 |
Right-of-use assets obtained in exchange for lease obligations | 18 | 7 |
Lease expense from continuing operations | 4 | 8 |
Lease expense from discontinued operations | 4 | 5 |
Total lease expense | $ 8 | $ 13 |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Leases [Abstract] | ||
Other long-term assets | $ 32 | $ 33 |
Lease liabilities, current portion | 10 | 10 |
Other long-term liabilities | $ 35 | $ 37 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Total lease liabilities | $ 45 | $ 47 |
Weighted Average Remaining Lease Term (in years) | 9 years | 8 years |
Weighted Average Discount Rate (percentage) | 6.30% | 6.30% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Remainder of 2021 | $ 11 | |
2022 | 7 | |
2023 | 6 | |
2024 | 5 | |
2025 | 5 | |
Thereafter | 26 | |
Total lease payments | 60 | |
Less imputed interest | (15) | |
Total lease liabilities | $ 45 | $ 47 |
Transactions with Members, Sh_3
Transactions with Members, Shareholders and Related Parties - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | |
Feb. 29, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | Apr. 30, 2021 | |
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | $ 19 | |||
Former President and Chief Executive Officer | Member Unit | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Repurchase of equity units | $ 10 | |||
Class A Common Stock | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Dividend declared | $ 0.115 | |||
Foundation Technology Worldwide L L C | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | $ 106 | $ 50 | ||
Foundation Technology Worldwide L L C | Accounts Payable and Other Current Liabilities | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | 54 | |||
McAfee Corp | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | 19 | |||
Continuing LLC Owners | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | $ 87 | |||
Subsequent Event | Foundation Technology Worldwide L L C | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Dividend paid in cash | $ 50 |
Transactions with Members, Sh_4
Transactions with Members, Shareholders and Related Parties - Summary of Dividends Declared or Paid (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 27, 2021USD ($)$ / shares | |
Dividends Payable [Line Items] | |
Amount | $ 19 |
Dividend Declared One [Member] | |
Dividends Payable [Line Items] | |
Declaration Date | Dec. 9, 2020 |
Record Date | Dec. 24, 2020 |
Payment Date | Jan. 7, 2021 |
Dividend per Share | $ / shares | $ 0.087 |
Amount | $ 14 |
Dividend Declared Two [Member] | |
Dividends Payable [Line Items] | |
Declaration Date | Mar. 11, 2021 |
Record Date | Mar. 26, 2021 |
Payment Date | Apr. 9, 2021 |
Dividend per Share | $ / shares | $ 0.115 |
Amount | $ 19 |
Transactions with Members, Sh_5
Transactions with Members, Shareholders and Related Parties - Summary of Transactions with Related Parties (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Related Party Transaction [Line Items] | ||
Sales with related parties | $ 1 | $ 1 |
Payments to related parties | 11 | 16 |
Intel | ||
Related Party Transaction [Line Items] | ||
Payments to related parties | 1 | 0 |
TPG | ||
Related Party Transaction [Line Items] | ||
Payments to related parties | 0 | 1 |
TPG Affiliates | ||
Related Party Transaction [Line Items] | ||
Sales with related parties | 1 | 1 |
Payments to related parties | 10 | 8 |
Other | ||
Related Party Transaction [Line Items] | ||
Payments to related parties | $ 0 | $ 7 |
Transactions with Members, Sh_6
Transactions with Members, Shareholders and Related Parties - Schedule of Receivable, Net (Details) - Intel - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Intel receivable | ||
Tax indemnity | $ 9 | $ 8 |
Total | 9 | 8 |
Intel payable | ||
Tax indemnity | (3) | (2) |
Total | (3) | (2) |
Total, net | $ 6 | $ 6 |
Transactions with Members, Sh_7
Transactions with Members, Shareholders and Related Parties - Schedule of Receivable, Net (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Other Current Assets | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 3 | |
Intel | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 6 | 6 |
Intel | Other Long-term Assets | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | 1 | $ 3 |
Intel | Other Current Assets | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 5 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,018 | $ 1,018 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | $ 1,275 | $ 1,275 |
Intangible Assets Subject to Amortization, Accumulated Amortization | 1,020 | 957 |
Intangible Assets Subject to Amortization, Net | 255 | 318 |
Intangible Assets Not Subject to Amortization, Gross Assets | 411 | 411 |
Intangible Assets Not Subject to Amortization, Accumulated Amortization | 0 | 0 |
Intangible Assets Not Subject to Amortization, Net | 411 | 411 |
Intangible Assets, Gross Assets | 1,686 | 1,686 |
Intangible Assets, Accumulated Amortization | 1,020 | 957 |
Intangible Assets, Gross Net | 666 | 729 |
Brand | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Not Subject to Amortization, Gross Assets | 411 | 411 |
Intangible Assets Not Subject to Amortization, Accumulated Amortization | 0 | 0 |
Intangible Assets Not Subject to Amortization, Net | 411 | 411 |
Customer Relationships and Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | 758 | 758 |
Intangible Assets Subject to Amortization, Accumulated Amortization | 592 | 556 |
Intangible Assets Subject to Amortization, Net | 166 | 202 |
Acquired and Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | 517 | 517 |
Intangible Assets Subject to Amortization, Accumulated Amortization | 428 | 401 |
Intangible Assets Subject to Amortization, Net | $ 89 | $ 116 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Amortization Expense For Purchased and Developed Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense for purchased intangible assets | $ 63 | $ 63 |
Customer Relationships and Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense for purchased intangible assets | 36 | 36 |
Acquired and Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense for purchased intangible assets | $ 27 | $ 27 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Schedule of Future Amortization Expense (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2021 | $ 107 | |
2022 | 76 | |
2023 | 28 | |
2024 | 20 | |
2025 | 19 | |
Thereafter | 5 | |
Intangible Assets Subject to Amortization, Net | $ 255 | $ 318 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) - Segment | 3 Months Ended | 12 Months Ended |
Mar. 27, 2021 | Dec. 26, 2020 | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 2 | |
Number of reportable segments | 1 | 2 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Revenues from External Customers [Line Items] | ||
Total net revenue | $ 442 | $ 354 |
United States | ||
Revenues from External Customers [Line Items] | ||
Total net revenue | 268 | 210 |
Other | ||
Revenues from External Customers [Line Items] | ||
Total net revenue | $ 174 | $ 144 |
Restructuring Charges - Schedul
Restructuring Charges - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Continuing Operations [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee severance and benefits | $ 8 | $ 1 |
Total | 8 | 1 |
Discontinued Operations [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Employee severance and benefits | 22 | 8 |
Facility Restructuring | 1 | |
Total | $ 23 | $ 8 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | Dec. 26, 2020 | |
Minimum | Severance and Other Restructuring Expense | |||
Restructuring Cost And Reserve [Line Items] | |||
Expected to recognize additional severance and other restructuring expense | $ 1 | ||
Maximum | Severance and Other Restructuring Expense | |||
Restructuring Cost And Reserve [Line Items] | |||
Expected to recognize additional severance and other restructuring expense | 2 | ||
Restructuring Charges | |||
Restructuring Cost And Reserve [Line Items] | |||
Employee severance and benefits costs | $ 31 | $ 9 | $ 16 |
Restructuring Charges - Sched_2
Restructuring Charges - Schedule of Balance of Restructuring Activities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Additional accruals | $ 8 | $ 1 |
Employee Severance and Benefits | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring Reserve | 16 | |
Additional accruals | 30 | |
Cash payments | (29) | |
Restructuring Reserve | $ 17 |
Employee Incentives - Schedule
Employee Incentives - Schedule of Equity Based Compensation Costs Recognized (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | $ 26 | $ 15 |
Discontinued Operations | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | 12 | 1 |
Continuing Operations | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | 14 | 14 |
Continuing Operations | Cost of Sales | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | 1 | |
Continuing Operations | Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | 3 | 1 |
Continuing Operations | Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | 3 | |
Continuing Operations | General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Equity-based compensation expense | $ 7 | $ 13 |
Employee Incentives - Additiona
Employee Incentives - Additional Information (Details) shares in Millions, $ in Millions | 3 Months Ended |
Mar. 27, 2021USD ($)shares | |
Compensation Related Costs [Line Items] | |
Unrecognized expense relating to deferred cash | $ 4 |
Weighted average remaining service period | 1 year |
Replacement RSUs | |
Compensation Related Costs [Line Items] | |
Unrecognized equity-based compensation expense | $ 239 |
Unrecognized compensation expense, weighted average period for recognition | 2 years 4 months 24 days |
Class A Share Awards | |
Compensation Related Costs [Line Items] | |
Shares issued | shares | 0.7 |
Fair value of shares issued | $ 14 |
Vesting period | 4 years |
Performance Shares | |
Compensation Related Costs [Line Items] | |
Shares issued | shares | 0.5 |
Fair value of shares issued | $ 12 |
Vesting period | 3 years |
Employee Incentives - Schedul_2
Employee Incentives - Schedule of Outstanding Deferred Cash and Equity Related to Acquisitions (Details) $ in Millions | 3 Months Ended |
Mar. 27, 2021USD ($) | |
Compensation Related Costs [Line Items] | |
Outstanding deferred cash and equity balance at December 26, 2020 | $ 13 |
Accruals | 2 |
Cash payment | 11 |
Outstanding deferred cash and equity balance at March 27, 2021 | $ 4 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 | |
Schedule Of Debts [Line Items] | |||
Long-term debt, net of unamortized discounts | $ 3,949 | $ 3,999 | |
Unamortized deferred financing costs | 12 | 12 | |
Current installments of long-term debt | (44) | (44) | |
Total | 3,893 | 3,943 | |
1st Lien USD Term Loan | |||
Schedule Of Debts [Line Items] | |||
Long-term debt, net of unamortized discounts | [1] | 2,696 | 2,701 |
1st Lien Euro Term Loan | |||
Schedule Of Debts [Line Items] | |||
Long-term debt, net of unamortized discounts | [2] | $ 1,253 | $ 1,298 |
[1] | During the three months ended March 27, 2021, the weighted average interest rate was 3.9 % | ||
[2] | During the three months ended March 27, 2021, the weighted average interest rate was 3.5 % |
Debt - Schedule of Long-term _2
Debt - Schedule of Long-term Debt (Parenthetical) (Details) | 3 Months Ended |
Mar. 27, 2021 | |
1st Lien USD Term Loan | |
Schedule Of Debts [Line Items] | |
Long term debt, weighted average interest rate | 3.90% |
1st Lien Euro Term Loan | |
Schedule Of Debts [Line Items] | |
Long term debt, weighted average interest rate | 3.50% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 27, 2021 | Dec. 26, 2020 | |
Schedule Of Debts [Line Items] | ||
Minimum additional prepayment percentage per quarter amortization | 0.25% | |
Revolving Credit Facility | ||
Schedule Of Debts [Line Items] | ||
Letter of credit issued | $ 4 | $ 4 |
Amount of undrawn capacity under the Revolving Credit Facility | $ 660 | $ 660 |
Commitment fee percentage on the unused portion of the facility | 0.375% | 0.375% |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Tax Receivable Agreement | McAfee Corp. Stockholders' Equity | ||
Income Tax Contingency [Line Items] | ||
Accounts payable and other current liabilities | $ 2 | |
Deferred tax assets, corresponding to income tax benefit | 150 | |
Deferred tax liabilities, long-term tax receivable agreement liability and expense | 200 | |
Other Long-term Liabilities | ||
Income Tax Contingency [Line Items] | ||
Uncertain tax positions, including interest and penalties | 7 | $ 16 |
Other Long-term Liabilities | Tax Receivable Agreement | McAfee Corp. Stockholders' Equity | ||
Income Tax Contingency [Line Items] | ||
Deferred Tax Liabilities Noncurrent, Tax Receivable Agreement Accounts Payable and Other Accrued Liabilities | $ 6 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments and Interest Rate Swaps - Summary of Fair Value of Financial Instruments (Details) - Level 2 - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Financial Instruments not Carried at Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, gross of discounts and deferred issuance costs (Note 11) | $ (3,987) | $ (4,033) |
Financial Instruments Carried at Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | $ (98) | $ (119) |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Interest Rate Swaps - Schedule of Interest Rate Swaps Outstanding Effective Arrangements (Details) | 3 Months Ended |
Mar. 27, 2021USD ($) | |
Interest Rate Swaps at 2.41% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 250,000,000 |
Effective Date | Jan. 29, 2018 |
Expiration Date | Jan. 29, 2022 |
Fixed Rate | 2.41% |
Interest Rate Swaps at 2.48% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 275,000,000 |
Effective Date | Jan. 29, 2018 |
Expiration Date | Jan. 29, 2023 |
Fixed Rate | 2.48% |
Interest Rate Swaps at 2.49% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 275,000,000 |
Effective Date | Jan. 29, 2018 |
Expiration Date | Jan. 29, 2023 |
Fixed Rate | 2.49% |
Interest Rate Swaps at 2.40% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 475,000,000 |
Effective Date | Mar. 29, 2019 |
Expiration Date | Mar. 29, 2024 |
Fixed Rate | 2.40% |
Interest Rate Swaps at 2.07% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 750,000,000 |
Effective Date | Mar. 4, 2020 |
Expiration Date | Sep. 29, 2024 |
Fixed Rate | 2.07% |
Interest Rate Swaps at 0.93% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 250,000,000 |
Effective Date | Mar. 29, 2020 |
Expiration Date | Mar. 29, 2024 |
Fixed Rate | 0.93% |
Interest Rate Swaps at 0.42% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 225,000,000 |
Effective Date | Jan. 29, 2021 |
Expiration Date | Jan. 29, 2024 |
Fixed Rate | 0.42% |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments and Interest Rate Swaps - Schedule of Gross Amounts of Interest Rate Swaps Subject to Master Netting Arrangements (Details) - Interest Rate Swaps - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Accounts Payable and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | $ (42) | $ (43) |
Net amounts presented in Balance Sheets | (42) | (43) |
Other Long-term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | (56) | (76) |
Net amounts presented in Balance Sheets | $ (56) | $ (76) |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Additional Information (Details) | 3 Months Ended |
Mar. 27, 2021 | |
Class A Common Stock | McAfee Corp. | |
Minority Interest [Line Items] | |
Stockholders' equity note, stock split, conversion ratio | 1 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Summary of the Ownership and Economic Interest in FTW LLC (Details) - shares shares in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Continuing LLC Owners And Management Owners | ||
Minority Interest [Line Items] | ||
Unit Outstanding | 273.1 | 272.5 |
LLC Units and vest MIUs | ||
Minority Interest [Line Items] | ||
Unit Outstanding | 435.5 | 433.8 |
Ownership percentage by noncontrolling owners | 100.00% | 100.00% |
McAfee Corp. | ||
Minority Interest [Line Items] | ||
Unit Outstanding | 162.4 | 161.3 |
McAfee Corp. | LLC Units | ||
Minority Interest [Line Items] | ||
Ownership percentage by noncontrolling owners | 37.30% | 37.20% |
McAfee Corp. | Foundation Technology Worldwide L L C | ||
Minority Interest [Line Items] | ||
Ownership percentage by noncontrolling owners | 62.70% | 62.80% |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | 1 Months Ended | 3 Months Ended |
Oct. 31, 2020 | Mar. 27, 2021 | |
Class A Common Stock | ||
Earnings Per Share Basic [Line Items] | ||
Exchanged class A common stock | 1 | 1 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Net Loss Per Share (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 27, 2021USD ($)$ / sharesshares | |
Earnings Per Share [Line Items] | |
Net income attributable to McAfee Corp., basic | $ | $ 30 |
Net income attributable to change in ownership percentage due to dilutive equity awards | $ | 2 |
Net income attributable to McAfee Corp., diluted | $ | $ 32 |
Weighted average shares of Class A common stock outstanding, basic | 162.4 |
Dilutive impact of equity awards | 13.9 |
Weighted average shares of Class A common stock outstanding, diluted | 176.3 |
Earnings per share attributable to McAfee Corp., basic: | |
Earnings per share, basic | $ / shares | $ 0.18 |
Earnings per share attributable to McAfee Corp., diluted: | |
Earnings per share, diluted | $ / shares | $ 0.18 |
Class A Common Stock | |
Earnings Per Share [Line Items] | |
Weighted average shares of Class A common stock outstanding, basic | 162.4 |
Weighted average shares of Class A common stock outstanding, diluted | 176.3 |
Continuing Operations | |
Earnings Per Share [Line Items] | |
Net income attributable to McAfee Corp., basic | $ | $ 27 |
Net income attributable to change in ownership percentage due to dilutive equity awards | $ | 2 |
Net income attributable to McAfee Corp., diluted | $ | $ 29 |
Dilutive impact of equity awards | 13.9 |
Earnings per share attributable to McAfee Corp., basic: | |
Earnings per share, basic | $ / shares | $ 0.17 |
Earnings per share attributable to McAfee Corp., diluted: | |
Earnings per share, diluted | $ / shares | $ 0.16 |
Continuing Operations | Class A Common Stock | |
Earnings Per Share [Line Items] | |
Weighted average shares of Class A common stock outstanding, basic | 162.4 |
Weighted average shares of Class A common stock outstanding, diluted | 176.3 |
Discontinued Operations | |
Earnings Per Share [Line Items] | |
Net income attributable to McAfee Corp., basic | $ | $ 3 |
Net income attributable to McAfee Corp., diluted | $ | $ 3 |
Dilutive impact of equity awards | 13.9 |
Earnings per share attributable to McAfee Corp., basic: | |
Earnings per share, basic | $ / shares | $ 0.02 |
Earnings per share attributable to McAfee Corp., diluted: | |
Earnings per share, diluted | $ / shares | $ 0.02 |
Discontinued Operations | Class A Common Stock | |
Earnings Per Share [Line Items] | |
Weighted average shares of Class A common stock outstanding, basic | 162.4 |
Weighted average shares of Class A common stock outstanding, diluted | 176.3 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Net Loss Per Share (Parenthetical) (Details) shares in Millions | 3 Months Ended |
Mar. 27, 2021shares | |
Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share amount, shares | 274 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) | Oct. 21, 2020 | Mar. 27, 2021 |
Foundation Technology Worldwide L L C | ||
Variable Interest Entity [Line Items] | ||
Percentage of ownership after the reorganization transaction | 100.00% | 100.00% |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 27, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 346 | $ 231 |
Accounts receivable, net | 76 | 72 |
Deferred costs | 155 | 137 |
Other current assets | 44 | 42 |
Current assets of discontinued operations | 312 | 432 |
Total current assets | 933 | 914 |
Property and equipment, net | 111 | 115 |
Goodwill | 1,018 | 1,018 |
Identified intangible assets, net | 666 | 729 |
Deferred tax assets | 24 | 24 |
Other long-term assets | 86 | 68 |
Long-term assets of discontinued operations | 2,524 | 2,560 |
Total assets | 5,362 | 5,428 |
Current liabilities: | ||
Accounts payable and other current liabilities | 239 | 227 |
Accrued compensation and benefits | 118 | 179 |
Accrued marketing | 108 | 118 |
Income taxes payable | 9 | 14 |
Long-term debt, current portion | 44 | 44 |
Lease liabilities, current portion | 10 | 10 |
Deferred revenue | 915 | 823 |
Current liabilities of discontinued operations | 947 | 970 |
Total current liabilities | 2,390 | 2,385 |
Long-term debt, net | 3,893 | 3,943 |
Deferred tax liabilities | 6 | 5 |
Other long-term liabilities | 134 | 153 |
Deferred revenue, less current portion | 92 | 80 |
Long-term liabilities of discontinued operations | 630 | 662 |
Total liabilities | 7,145 | 7,228 |
Stockholders’ equity/members’ deficit: | ||
Total deficit | (7,960) | (6,640) |
Total liabilities, redeemable noncontrolling interests and deficit | 5,362 | 5,428 |
Variable Interest Entity, Primary Beneficiary | ||
Current assets: | ||
Cash and cash equivalents | 344 | 231 |
Accounts receivable, net | 76 | 72 |
Deferred costs | 155 | 137 |
Other current assets | 44 | 42 |
Current assets of discontinued operations | 312 | 432 |
Total current assets | 931 | 914 |
Property and equipment, net | 111 | 115 |
Goodwill | 1,018 | 1,018 |
Identified intangible assets, net | 666 | 729 |
Deferred tax assets | 24 | 25 |
Receivable from Parent, net | 31 | 46 |
Other long-term assets | 86 | 67 |
Long-term assets of discontinued operations | 2,524 | 2,560 |
Total assets | 5,391 | 5,474 |
Current liabilities: | ||
Accounts payable and other current liabilities | 217 | 211 |
Accrued compensation and benefits | 118 | 179 |
Accrued marketing | 108 | 118 |
Income taxes payable | 9 | 14 |
Long-term debt, current portion | 44 | 44 |
Lease liabilities, current portion | 10 | 10 |
Liability to Parent | 19 | 0 |
Deferred revenue | 915 | 823 |
Current liabilities of discontinued operations | 947 | 970 |
Total current liabilities | 2,387 | 2,369 |
Long-term debt, net | 3,893 | 3,943 |
Deferred tax liabilities | 6 | 5 |
Other long-term liabilities | 128 | 153 |
Deferred revenue, less current portion | 92 | 80 |
Long-term liabilities of discontinued operations | 630 | 662 |
Total liabilities | 7,136 | 7,212 |
Stockholders’ equity/members’ deficit: | ||
Members’ deficit | (651) | (646) |
Total deficit | (1,745) | (1,738) |
Total liabilities, redeemable noncontrolling interests and deficit | 5,391 | 5,474 |
Variable Interest Entity, Not Primary Beneficiary | Continuing LLC Owners | ||
Stockholders’ equity/members’ deficit: | ||
Members’ deficit | $ (1,094) | $ (1,092) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Mar. 28, 2021 | Mar. 27, 2021 |
Commitments And Contingencies Disclosure [Abstract] | ||
Unconditional purchase obligations | $ 16 | $ 445 |
Unconditional purchase obligations, expire | expire at various dates through 2026 | |
Guarantees | $ 11 | |
Guarantees, expire | expire at various dates through 2028 | |
Unconditional purchase commitments, expect to incur | expect to incur in the years 2021 through 2024 |