Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 26, 2020 | Feb. 19, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 26, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | McAfee Corp. | |
Entity Central Index Key | 0001783317 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-26 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Entity Public Float | $ 1,577,717,468 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | MCFE | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-39651 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2467341 | |
Entity Address, Address Line One | 6220 America Center Drive | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95002 | |
City Area Code | 866 | |
Local Phone Number | 622-3911 | |
Document Annual Report | true | |
Document Transition Report | false | |
ICFR Auditor Attestation Flag | false | |
Documents Incorporated by Reference | Portions of the registrant’s proxy statement related to its 2021 Annual Stockholders’ Meeting to be filed subsequently are incorporated by reference into Part II of this Form 10-K. Except as expressly incorporated by reference, the registrant’s proxy statement shall not be deemed to be part of this report. | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 162,331,379 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 267,065,127 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 231 | $ 167 |
Accounts receivable, net | 392 | 409 |
Deferred costs | 233 | 187 |
Other current assets | 58 | 68 |
Total current assets | 914 | 831 |
Property and equipment, net | 149 | 171 |
Goodwill | 2,431 | 2,428 |
Identified intangible assets, net | 1,644 | 2,071 |
Deferred tax assets | 67 | 55 |
Other long-term assets | 223 | 232 |
Total assets | 5,428 | 5,788 |
Current liabilities: | ||
Accounts payable and other current liabilities | 266 | 196 |
Accrued compensation and benefits | 197 | 209 |
Accrued marketing | 124 | 94 |
Income taxes payable | 14 | 15 |
Long-term debt, current portion | 44 | 43 |
Lease liabilities, current portion | 25 | 29 |
Deferred revenue | 1,715 | 1,574 |
Total current liabilities | 2,385 | 2,160 |
Long-term debt, net | 3,943 | 4,669 |
Deferred tax liabilities | 12 | 160 |
Other long-term liabilities | 204 | 175 |
Deferred revenue, less current portion | 684 | 718 |
Total liabilities | 7,228 | 7,882 |
Commitments and contingencies (Note 19) | ||
Redeemable noncontrolling interests | 4,840 | |
Stockholders’ equity/members’ deficit: | ||
Members’ deficit | (647) | |
Additional paid-in capital | (6,477) | |
Accumulated deficit | (118) | (1,385) |
Accumulated other comprehensive income (loss) | (45) | (62) |
Total deficit | (6,640) | |
Total deficit | (2,094) | |
Total liabilities, redeemable noncontrolling interests and deficit | $ 5,428 | $ 5,788 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 26, 2020$ / sharesshares |
Class A Common Stock | |
Common Stock, par value | $ / shares | $ 0.001 |
Common Stock, shares authorized | 1,500,000,000 |
Common Stock, shares issued | 161,267,412 |
Common Stock, shares outstanding | 161,267,412 |
Class B Common Stock | |
Common Stock, par value | $ / shares | $ 0.001 |
Common Stock, shares authorized | 300,000,000 |
Common Stock, shares issued | 267,065,127 |
Common Stock, shares outstanding | 267,065,127 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Statement [Abstract] | |||
Net revenue | $ 2,906 | $ 2,635 | $ 2,409 |
Cost of sales | 875 | 843 | 840 |
Gross profit | 2,031 | 1,792 | 1,569 |
Operating expenses: | |||
Sales and marketing | 826 | 770 | 815 |
Research and development | 475 | 380 | 406 |
General and administrative | 332 | 272 | 253 |
Amortization of intangibles | 220 | 222 | 232 |
Restructuring and transition charges (Note 9) | 25 | 22 | 36 |
Total operating expenses | 1,878 | 1,666 | 1,742 |
Operating income (loss) | 153 | 126 | (173) |
Interest expense and other, net | (308) | (295) | (307) |
Foreign exchange gain (loss), net | (104) | 20 | 30 |
Loss before income taxes | (259) | (149) | (450) |
Provision for income tax expense | 30 | 87 | 62 |
Net loss | (289) | $ (236) | $ (512) |
Less: Net loss attributable to redeemable noncontrolling interests | (171) | ||
Net loss attributable to McAfee Corp. | $ (118) | ||
Net loss per share, basic and diluted(1) | $ (0.73) | ||
Weighted-average shares outstanding, basic | 162.3 | ||
Weighted-average shares outstanding, diluted | 433.9 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Statement Of Other Comprehensive Income [Abstract] | |||
Net loss | $ (289) | $ (236) | $ (512) |
Interest rate cash flow hedges: | |||
Loss on interest rate cash flow hedges, net of tax | (98) | (67) | (6) |
Reclassification adjustments for loss on interest rate cash flow hedges | 40 | 4 | 8 |
Pension and postretirement benefits loss, net of tax | (1) | (1) | |
Total comprehensive loss | (348) | $ (300) | $ (510) |
Less: Comprehensive loss attributable to redeemable noncontrolling interests | (234) | ||
Total comprehensive loss attributable to McAfee Corp. | $ (114) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (289) | $ (236) | $ (512) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 491 | 536 | 543 |
Equity-based compensation | 313 | 25 | 28 |
Deferred taxes | (10) | 18 | 9 |
Foreign exchange (gain) loss, net | 104 | (20) | (30) |
Other operating activities | 70 | 53 | 18 |
Change in assets and liabilities: | |||
Accounts receivable, net | 15 | (60) | 29 |
Deferred costs | (46) | (22) | (26) |
Other assets | (9) | (71) | (54) |
Other current liabilities | 41 | 28 | 1 |
Deferred revenue | 106 | 186 | 309 |
Other liabilities | (26) | 59 | 4 |
Net cash provided by operating activities | 760 | 496 | 319 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | (5) | (2) | (615) |
Additions to property and equipment | (42) | (56) | (61) |
Other investing activities | (4) | (5) | (1) |
Net cash used in investing activities | (51) | (63) | (677) |
Cash flows from financing activities: | |||
Proceeds from IPO, net of underwriters discount and commissions | 586 | ||
Use of proceeds from issuance of Class A common stock to purchase Foundation Technology Worldwide LLC ("FTW") units | (33) | ||
Proceeds from the issuance of Member units | 2 | 1 | |
Proceeds from Excess Separation Note from Member of FTW | 20 | ||
Payment for the long-term debt due to third party | (869) | (67) | (87) |
Proceeds from long-term debt | 685 | 504 | |
Payment for debt issuance costs | (5) | (6) | (10) |
Net change in principal due to debt modification | 52 | ||
Distributions to members of FTW | (277) | (1,334) | |
Payment of tax withholding for shares and units withheld | (24) | (8) | (10) |
Payment of IPO related expenses | (8) | ||
Other financing activities | (23) | (5) | (10) |
Net cash provided by (used in) financing activities | (651) | (734) | 459 |
Effect of exchange rate fluctuations on cash and cash equivalents | 6 | (4) | |
Change in cash and cash equivalents | 64 | (301) | 97 |
Cash and cash equivalents, beginning of period | 167 | 468 | 371 |
Cash and cash equivalents, end of period | 231 | 167 | 468 |
Supplemental disclosures of noncash investing and financing activities and cash flow information: | |||
Acquisition of property and equipment included in current liabilities | (2) | (8) | (5) |
Distributions to members of FTW included in liabilities | (27) | (4) | |
Dividends payable included in liabilities | (14) | ||
Tax withholding for shares and units withheld included in liabilities | (4) | ||
Other | (3) | (2) | |
Cash paid during the period for: | |||
Interest, net of cash flow hedges | (268) | (281) | (290) |
Income taxes, net of refunds | $ (49) | $ (47) | $ (49) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS - USD ($) $ in Millions | Total | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Other Comprehensive Income (Loss) | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Other Comprehensive Income (Loss)Activity Prior To Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Other Comprehensive Income (Loss)Activity in Connection with Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsMembers' Equity (Deficit) | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsMembers' Equity (Deficit)Activity Prior To Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsMembers' Equity (Deficit)Activity in Connection with Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated Deficit | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated DeficitActivity Prior To Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated DeficitActivity in Connection with Reorganization Transactions and IPO | Foundation Technology Worldwide L L C Prior To Reorganization TransactionsAccumulated DeficitCumulative Effect, Period of Adoption, Adjustment | McAfee Corp. Stockholders' Equity | McAfee Corp. Stockholders' EquityActivity Prior To Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityActivity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityRedeemable Noncontrolling Interests | McAfee Corp. Stockholders' EquityRedeemable Noncontrolling InterestsActivity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityCumulative Effect, Period of Adoption, Adjustment | McAfee Corp. Stockholders' EquityAccumulated Other Comprehensive Income (Loss) | McAfee Corp. Stockholders' EquityAccumulated Other Comprehensive Income (Loss)Activity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityAccumulated Deficit | McAfee Corp. Stockholders' EquityCommon StockClass A Common Stock | McAfee Corp. Stockholders' EquityCommon StockClass A Common StockActivity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityCommon StockClass B Common Stock | McAfee Corp. Stockholders' EquityCommon StockClass B Common StockActivity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityAdditional Paid-in Capital | McAfee Corp. Stockholders' EquityAdditional Paid-in CapitalActivity in Connection with Reorganization Transactions and IPO | McAfee Corp. Stockholders' EquityTotal Parent Entity Deficit | McAfee Corp. Stockholders' EquityTotal Parent Entity DeficitActivity in Connection with Reorganization Transactions and IPO |
Balance at Dec. 30, 2017 | $ 663 | $ (607) | $ (29) | $ 56 | $ (29) | |||||||||||||||||||||||
Accounting Standards Update Extensible List | us-gaap:AccountingStandardsUpdate201409Member | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | $ 2 | $ 2 | ||||||||||||||||||||||||||
Equity-based awards expense, net of equity withheld to cover taxes | 19 | 19 | ||||||||||||||||||||||||||
Unit repurchases | (7) | (7) | ||||||||||||||||||||||||||
Net income (loss) | $ (512) | (512) | (512) | |||||||||||||||||||||||||
Balance at Dec. 29, 2018 | 2 | 675 | (1,148) | $ (1) | $ (471) | $ (1) | ||||||||||||||||||||||
Accounting Standards Update Extensible List | us-gaap:AccountingStandardsUpdate201602Member | |||||||||||||||||||||||||||
Distributions to Members | (1,338) | $ (1,338) | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | (64) | (64) | ||||||||||||||||||||||||||
Equity-based awards expense, net of equity withheld to cover taxes | 17 | 17 | ||||||||||||||||||||||||||
Unit issuances | 1 | 1 | ||||||||||||||||||||||||||
Unit repurchases | (2) | (2) | ||||||||||||||||||||||||||
Net income (loss) | (236) | (236) | (236) | |||||||||||||||||||||||||
Balance at Dec. 28, 2019 | (2,094) | (62) | (647) | (1,385) | (2,094) | |||||||||||||||||||||||
Distributions to Members | $ (276) | $ (276) | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | $ (71) | (71) | ||||||||||||||||||||||||||
Equity-based awards expense, net of equity withheld to cover taxes | 24 | 24 | ||||||||||||||||||||||||||
Unit issuances | 2 | 2 | ||||||||||||||||||||||||||
Unit repurchases | (10) | (10) | ||||||||||||||||||||||||||
Reclassification of redeemable units (Note 7) | (41) | (41) | ||||||||||||||||||||||||||
Reclassification of redeemable units (Note 7) | 41 | 41 | ||||||||||||||||||||||||||
Net income (loss) | $ 26 | 26 | ||||||||||||||||||||||||||
Other | $ 2 | $ 2 | ||||||||||||||||||||||||||
Impact of reorganization transactions | $ 133 | $ 905 | $ 1,359 | $ (133) | $ (2,264) | $ (2,397) | ||||||||||||||||||||||
Issuance of Class A common stock, net of costs, Shares | 126,314,024 | |||||||||||||||||||||||||||
Issuance of Class B common stock, Shares | 268,779,392 | |||||||||||||||||||||||||||
Initial effect of the Reorganization Transactions and IPO on redeemable noncontrolling interests | $ (1,052) | $ 84 | 968 | 1,052 | ||||||||||||||||||||||||
Proceeds from IPO on sale of Class A shares | $ 586 | 586 | 586 | |||||||||||||||||||||||||
Proceeds from IPO on sale of Class A shares, Shares | 30,982,558 | |||||||||||||||||||||||||||
Purchase of FTW LLC units | (33) | (33) | (33) | |||||||||||||||||||||||||
Purchase of FTW LLC Units, Shares | (1,714,265) | |||||||||||||||||||||||||||
IPO costs capitalized | (11) | (11) | (11) | |||||||||||||||||||||||||
Deferred tax adjustment | $ 148 | $ 148 | $ 148 | |||||||||||||||||||||||||
Balance subsequent to Reorganization Transactions and IPO at Oct. 21, 2020 | (1,707) | $ (49) | $ (606) | $ (655) | ||||||||||||||||||||||||
Balance subsequent to Reorganization Transactions and IPO, Shares at Oct. 21, 2020 | 157,296,582 | 267,065,127 | ||||||||||||||||||||||||||
Temporary equity, Balance subsequent to Reorganization Transactions and IPO at Oct. 21, 2020 | $ (1,052) | |||||||||||||||||||||||||||
Balance at Dec. 28, 2019 | (2,094) | $ (62) | $ (647) | $ (1,385) | (2,094) | |||||||||||||||||||||||
Dividend declared | (14) | |||||||||||||||||||||||||||
Net income (loss) | (289) | |||||||||||||||||||||||||||
Balance at Dec. 26, 2020 | (6,640) | (1,800) | (45) | $ (118) | (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 | (24) | |||||||||||||||||||||||||||
Temporary equity, Distributions to RNCI | (24) | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 12 | 4 | 4 | |||||||||||||||||||||||||
Temporary equity, Other comprehensive income (loss), net of tax | 8 | |||||||||||||||||||||||||||
Dividend declared | (14) | (14) | (14) | |||||||||||||||||||||||||
Stock compensation expense, net of withholding to cover taxes | 261 | 261 | 261 | |||||||||||||||||||||||||
Stock compensation expense, net of withholding to cover taxes, Shares | 3,970,830 | |||||||||||||||||||||||||||
Net income (loss) | (315) | (118) | (118) | |||||||||||||||||||||||||
Temporary equity, Net income (loss) | (197) | |||||||||||||||||||||||||||
Other | (13) | (13) | (13) | |||||||||||||||||||||||||
Fair value adjustment for RNCI | (5,931) | (5,931) | ||||||||||||||||||||||||||
Impact of change in ownership in RNCI | (174) | (174) | ||||||||||||||||||||||||||
Temporary equity, Impact of change in ownership in RNCI | 174 | |||||||||||||||||||||||||||
Temporary equity, Fair value adjustment for RNCI | 5,931 | |||||||||||||||||||||||||||
Balance at Dec. 26, 2020 | (6,640) | $ (1,800) | $ (45) | $ (118) | $ (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 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 26, 2020 | |
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, small and medium-sized businesses, large enterprises, and governments. Security technologies from McAfee use a unique, predictive capability that is powered by McAfee Global Threat Intelligence, which enables home users and businesses to stay one step ahead of the next wave of fileless attacks, viruses, malware, and other online threats. McAfee Corp. (the “Corporation”) was incorporated in Delaware on July 19, 2019. The Corporation was formed for the purpose of completing an initial public offering (the “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”). 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 the IPO pursuant to which the Corporation and selling stockholders sold an aggregate of 37 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”). 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 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. Financial information includes the accounts of McAfee and was prepared in accordance with U.S. GAAP. All intercompany balances and transactions within McAfee have been eliminated in consolidation. We have reclassified certain prior period amounts to conform to our current period presentation. 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 18 Our functional currency for all of our subsidiaries is USD. Use of Estimates The preparation of the 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: • determining the nature and timing of satisfaction of performance obligations, assessing associated material rights and determining the standalone selling price (“SSP”) of performance obligations; • determining our technology constrained customer life; • projections of future cash flows related to revenue-share and related agreements with our personal computer original equipment manufacturer partners; • fair value estimates for assets and liabilities acquired in business combinations; • 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; and • amount of liability related to the tax receivable agreement 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 ended December 29, 2018 is a 52-week year starting on December 31, 2017 and ending on December 29, 2018. The year ended December 28, 2019 is a 52-week year starting on December 30, 2018 and ending on December 28, 2019. The year ended December 26, 2020 is a 52-week year starting on December 29, 2019 and ending on December 26, 2020. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 26, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition We derive revenue from the sale of security products, subscriptions, software as a service (“SaaS”) offerings, support and maintenance, professional services, or a combination of these items, primarily through our indirect relationships with our partners or direct relationships with end customers through our internal sales force. On December 31, 2017, we adopted ASC Topic 606 under the modified retrospective approach with the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings. Results for the reporting period beginning December 31, 2017 are presented under ASC Topic 606, while prior period amounts were not adjusted. We recognize revenue pursuant to the five-step framework within ASC Topic 606: 1. Identify the contract(s) with a customer : Contracts are generally evidenced by a binding and non-cancelable purchase order or agreement that creates enforceable rights and obligations. 2. Identify the performance obligations in the contract : Performance obligations are the promises contained in the contract to provide distinct goods or services. 3. Determine the transaction price : The amount of consideration we expect to be entitled for transferring the promised goods and services to the customer. 4. Allocate the transaction price to the performance obligations in the contract : SSP is determined for each performance obligation in the contract and a proportion of the overall transaction price is allocated to each performance obligation based on the relative value of its SSP in comparison to the transaction price except when a discount or variable consideration can be allocated to a specific performance obligation in the contract. 5. Recognize revenue when (or as) we satisfy a performance obligation : Recognition for a performance obligation may happen over time or at a point in time depending on the facts and circumstances. We generally consider our customer to be the entity with which we have a contractual agreement. This could be the end user, or when we sell products and services through the channel, our customer could be either the distributor or the reseller. As part of determining whether a contract exists, probability of collection is assessed on a customer-by-customer basis at the outset of the contract. Customers are subjected to a credit review process that evaluates the customers’ financial position and the ability and intention to pay. At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct — i.e., if a good or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or together with other resources that are readily available to the customer. To identify our performance obligations, we consider all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Determining whether products and services are considered distinct performance obligations or should be combined to create a single performance obligation may require significant judgment. We recognize revenue when (or as) we satisfy a performance obligation by transferring control of a good or service to a customer. The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer, adjusted for estimated variable consideration, if any. We typically estimate the transaction price impact of sales returns and discounts offered to the customers, including discounts for early payments on receivables, rebates or certain distribution partner incentives, including marketing programs. Constraints are applied when estimating variable considerations based on historical experience where applicable. Once we have determined the transaction price, we allocate it to each performance obligation in a manner depicting the amount of consideration to which we expect to be entitled in exchange for transferring the goods or services to the customer (the “allocation objective”). If the allocation objective is met at contractual prices, no allocations are made. Otherwise, we allocate the transaction price to each performance obligation identified in the contract on a relative SSP basis, except when the criteria are met for allocating variable consideration or a discount to one or more, but not all, performance obligations in the contract. To determine the SSP of our goods or services, we conduct a regular analysis to determine whether various goods or services have an observable SSP. If we do not have an observable SSP for a particular good or service, then SSP for that particular good or service is estimated using an approach that maximizes the use of observable inputs. We generally determine SSPs using various methodologies such as historical prices, expected cost plus margin, adjusted market assessment or non-standalone selling prices. We recognize revenue as control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the promised goods or services. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Control of the promised goods or services is transferred to our customers at either a point in time or over time, depending on the performance obligation. Nature of Products and Services Certain of our perpetual software licenses or hardware with integrated software are not distinct from their accompanying maintenance and support, as they are dependent upon regular threat updates. These contracts typically contain a renewal option that we have concluded creates a material right for our customer. The license, hardware and maintenance and support revenue is recognized over time, as control is transferred to the customer over the term of the initial contract period while the corresponding material right is recognized over time beginning at the end of the initial contractual period over the remainder of the technology constrained customer life. Alternatively, certain of our perpetual software licenses, hardware appliances, or hardware with integrated software provide a benefit to the customer that is separable from the related support as they are not dependent upon regular threat updates. Revenue for these products is recognized at a point in time when control is transferred to our customers, generally at shipment. The related maintenance and support represent a separate performance obligation and the associated transaction price allocated to it is recognized over time as control is transferred to the customer. The nature of our promise to the customer to provide our SaaS offerings and time-based software licenses and related support and maintenance is to stand ready to provide protection for a specified or indefinite period of time. Maintenance and support in these cases are typically not distinct performance obligations as the licenses are dependent upon regular threat updates to the customer. Instead the maintenance and support is combined with a software license to create a single performance obligation. We typically satisfy these performance obligations over time, as control is transferred to the customer as the services are provided. Revenue for professional services that are a separate and distinct performance obligation is recognized as services are provided to the customer. Additional Revenue Recognition Considerations Royalties and Managed Service Provider Revenues Our original equipment manufacturer (“OEM”) and managed service provider (“MSP”) sales channels have revenues derived from sales- or usage-based royalties. Such revenue is excluded from any variable consideration and transaction price calculations and is recognized at the later of when the sale or usage occurs, or the performance obligation is satisfied or partially satisfied. Consideration Payable to a Customer We make various payments to our channel partners, which may include revenue share, product placement fees and marketing development funds. Costs that are incremental to revenue, such as revenue share, are capitalized and amortized over time as cost of sales ( Note 4 Under certain of our channel partner agreements, the partners pay us royalties on our technology sold to their customers, which we recognize as revenue in accordance with our revenue recognition policy. In these situations, the payments made to our channel partners are recognized as consideration paid to a customer, and thus are recorded as reductions to revenue up to the amount of cumulative revenue recognized from the contract with the channel partner during the period of measurement. Payment Terms and Warranties Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. We provide assurance warranties on our products and services. The warranty timeframe varies depending on the product or service sold, and the resolution of any issues is at our discretion to either repair, replace, reperform or refund the fee. Contract Costs Contract acquisition costs consist mainly of sales commissions and associated fringe benefits, as well as revenue share under programs with certain of our distribution partners. For revenue share, the partner receives a percentage of the revenue we receive from an end user upon conversion to a paid customer or renewal. These costs would not have been incurred if the contract was not obtained and are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are capitalized and amortized over time in accordance with Accounting Standards Codification (“ASC”) 340-40. We typically recognize the initial commissions that are not commensurate with renewal commissions over the longer of the customer relationship (generally estimated to be four to five years) or over the same period as the initial revenue arrangement to which these costs relate. Renewal commissions paid are generally amortized over the renewal period. Contract fulfillment costs consist of hardware and software and related costs. These costs are incremental and recoverable and are capitalized and amortized on a systematic basis that is consistent with the pattern of transfer of the goods and services to which the asset relates. Advertising Expenses Marketing programs that are facilitated through third parties not considered customers are expensed as incurred. Total advertising expenses were $56 million, $53 million, and $62 million for the years ended December 26, 2020, December 28, 2019, and December 29, 2018, respectively, excluding amounts included in sales and marketing as discussed in the revenue recognition section above. Accounts Receivable We record accounts receivable at the invoiced amount and maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review accounts receivable to identify specific customers with known disputes or collectability issues and maintain an allowance for expected credit losses for all other receivables not included in the specific reserve by applying a set percentage for projected uncollectible amounts to the accounts receivable balance. In determining this percentage, judgment based on historical collection experience and current economic trends is applied. We recorded an allowance for credit losses of $5 million and less than $1 million as of December 26, 2020 and December 28, 2019, respectively. Cash and Cash Equivalents All highly liquid investments with original maturities of 95 days or less are considered cash equivalents. Goodwill Goodwill is recorded as the excess of consideration transferred over the acquisition-date fair values of assets acquired and liabilities assumed in a business combination. We assign goodwill to our reporting units based on the relative fair value expected at the time of the acquisition ( Note 10 We perform an annual impairment assessment on the first day of the third month in the fourth quarter or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of a reporting unit’s goodwill. For reporting units in which this assessment concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and we are not required to perform the quantitative goodwill impairment test. For reporting units in which the impairment assessment concludes that it is more likely than not that the fair value is less than its carrying value, we perform the quantitative goodwill impairment test, which compares the fair value of the reporting unit to its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value. Our goodwill impairment test considers the income method and/or market method to estimate a reporting unit’s fair value. Identified Intangible Assets We amortize all finite-lived intangible assets that are subject to amortization over their estimated useful life of economic benefit on a straight-line basis ( Note 10 For significant intangible assets subject to amortization, we perform a quarterly assessment to determine whether facts and circumstances indicate that the useful life is shorter than we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining useful lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If an asset’s useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the updated, shorter useful life. For our intangible assets not subject to amortization, we perform an annual impairment assessment on the first day of the third month in the fourth quarter, or more frequently if indicators of potential impairment exist, to determine whether it is more likely than not that the carrying value of the asset may not be recoverable. If necessary, a quantitative impairment test is performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value of the asset. Research and Development Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility is established. Research and development costs include salaries and benefits of researchers, supplies, and other expenses incurred during research and development efforts. Development costs are capitalized beginning when a product’s technological feasibility has been established and ending when the product is available for general release to customers. Technological feasibility is reached when the product reaches the working-model stage. To date, new products and enhancements generally have reached technological feasibility and have been released for sale at substantially the same time. All research and development costs to date have been expensed as incurred except for software subject to a hosting arrangement. Software development costs of both internal-use applications and software sold subject to hosting arrangements are capitalized when we have determined certain factors are present, including factors that indicate technology exists to achieve the performance requirements, the decision has been made to develop internally versus buy and our management has authorized the funding for the project. Capitalization of software costs ceases when the software is substantially complete and is ready for its intended use and capitalized costs are amortized over their estimated useful life of three to five years using the straight-line method. When events or circumstances indicate the carrying value of internal use software might not be recoverable, we assess the recoverability of these assets by determining whether the amortization of the asset balance over its remaining life can be recovered through undiscounted future operating cash flows. Equity-Based Awards We currently provide various equity-based compensation to those whom, in the opinion of the Board or its designee, are in a position to make a significant contribution to our success. Equity-based compensation cost is measured at the grant date based on the fair value of the award and recognized as expense over the appropriate service period. Determining the fair value of equity-based awards requires considerable judgment, including assumptions and estimates of the following: • fair value of the unit; • life of the award; • volatility of the unit price; and • dividend yield Before our IPO, the fair value of the unit was determined by the Board reasonably and in good faith. Generally, this involved a review of an independent valuation of our business, which requires judgmental inputs and assumptions such as our cash flow projections, peer company comparisons, market data, growth rates and discount rate. The Board reviewed its prior determination of fair value of a unit on a quarterly basis to decide whether any change was appropriate (including whether to obtain a new independent valuation), considering such factors as any significant financial, operational, or market changes affecting the business since the last valuation date. Due to us not having sufficient historical volatility, we used the historical volatilities of publicly traded companies which are similar to us in size, stage of life cycle and financial leverage. We will continue to use this peer group of companies unless a situation arises within the group that would require evaluation of which publicly traded companies are included or once sufficient data is available to use our own historical volatility. In addition, for awards where vesting is dependent upon achieving certain operating performance goals, we estimate the likelihood of achieving the performance goals. For goals dependent upon a qualifying liquidity event, (i.e., a change of control or public offering registered on a Form S-1 (or successor form), in either case, occurring on or before April 3, 2024) (a “Qualifying Liquidity Event”), we will not recognize any expense until the event occurs. Upon consummation of our IPO, we recognized a cumulative catch-up of expense based on the vesting dates for our time-based awards and expected vesting dates for our performance-based awards. We recognize forfeitures as they occur. For awards with only time-vesting requirement, we recognize the expense over a straight-line basis during the vesting period. After the close of our IPO, our outstanding Management Equity Participation Units (“MEPUs”) and Cash RSU (“CRSUs”) were converted into RSUs (“Replacement RSUs”), which are to be settled in Class A common stock. The fair value of these Replacement RSUs was our IPO price less the present value of the expected dividends not received during the vesting period. For all other RSU grants after our IPO, we utilize the closing price of our common stock on the day of the grant date, less the present value of expected dividends not received during the vesting period to determine grant date fair value. In addition, certain MEPU holders were also granted stock options with a strike price equal to our IPO price. For all other stock option grants after our IPO, we utilize the closing price of our common stock on the day of grant date to determine the strike price. All of our granted stock options are non-qualified and expire 10 years after grant. We utilize a Black-Scholes model to determine grant date fair value of our stock options. Our time-based awards generally vest evenly over the 16 quarters following grant date. For time-based awards granted to our new hires, the vesting period is generally 25% vest one year after grant date and quarterly thereafter for 12 quarters. Time-based awards granted to our non-employee directors vest one year from grant date. Generally, unvested awards are forfeited upon termination of employment with us, however, our executive officers may have provisions permitting acceleration or pro rata acceleration upon termination without cause (as defined in the respective award agreements). Our performance-based RSU awards (“PSU”s) are granted to executive officers and certain employees annually. These awards vest after approximately three years, with the number vesting based upon internal profitability targets that are communicated to employees in the year to which the targets relate. The number of shares of common stock issued will range from zero to stretch, with stretch typically defined as 130% of target. At the time our Board approves such grants, the targets for performance years other than the current year are not known or knowable by us nor our employees. Upon determination and communication of such targets in future years, grant date fair value is determined based upon the closing price, less the present value of expected dividends not received during the vesting period. A portion of our RSU awards and all of our performance-based stock option and performance-based MIU awards vest upon achievement of certain return of cash metrics. In January 2021, these awards were modified to vest annually in equal tranches over the three year anniversaries of our IPO. If the original return of cash performance is achieved prior to such anniversaries, the awards vest in full. In both cases, the unvested portion of the awards are forfeited upon termination. Upon the settlement of RSUs, we withhold a portion of the earned units to cover no more than the maximum statutory income and employment taxes and remit the net shares to an individual brokerage account. Authorized shares of our common stock are used to settle RSUs and stock options. Awards granted prior to our IPO and/or converted at the time of our IPO are covered under our 2017 Management Incentive Plan (“2017 Plan”). Stock options granted at our IPO and/or awards granted at our IPO or after are covered under our 2020 Equity Omnibus Plan (“2020 Plan”). No new awards may be authorized under our 2017 Plan. After the close of the separation from Intel, our employees were no longer eligible for Intel Awards (as defined below). Prior to the transaction, Intel’s stockholders approved the adoption of the Intel Corporation 2006 Equity Incentive Plan. The plan provides for the grant of stock options, stock appreciation rights, restricted stock, and restricted stock units (collectively “Intel Awards”) to eligible full-time and part-time employees and non-employee directors. These awards generally vested over three or four years. Stock options generally expire ten years from the date of grant. Awards were generally granted with only a time-vesting requirement, but may have had certain performance and/or market conditions required for vesting. All outstanding Intel Awards were replaced with fixed cash payouts (“retention awards”) or unvested Class A Unit awards ( Note 12 Note 6 Derivative and Hedging Instruments The fair values of each of our derivative instruments are recorded as an asset or liability on a net basis at the balance sheet date within other current or long-term assets or liabilities. The change in fair value of our derivative instruments is recorded through earnings in the line item on the Consolidated Statements of Operations to which the derivatives most closely relate, primarily in Interest expense and other, net. Changes in the fair value of the underlying assets and liabilities associated with the hedged risk are generally offset by the changes in the fair value of the related derivatives. We do not use derivative financial instruments for speculative trading purposes. To reduce the interest rate risk inherent in variable rate debt, we entered into certain interest rate swap agreements to convert a portion of our variable rate borrowing into a fixed rate obligation ( Note 15 Leases We adopted ASC Topic 842 which primarily requires leases to be recognized on the balance sheet. We adopted the standard using the modified retrospective approach with an effective date as of the beginning of our fiscal year, December 30, 2018. Prior year financial statements were not recast under the new standard. We determine if an arrangement contains a lease and classification of that lease, if applicable, at inception based on: • Whether the contract involves the use of a distinct identified asset; • Whether we obtain the right to obtain substantially all the economic benefits from the use of the asset throughout the period; and • Whether we have a right to direct the use of the asset. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. A ROU asset is initially measured at an amount which represents the lease liability, plus any initial direct costs incurred and less any lease incentives received. The lease liability is initially measured at lease commencement date based on the present value of minimum lease payments over the lease term. The lease term may include options to extend or terminate when it is reasonably certain that we will exercise the option. We have lease agreements with lease and non-lease components, and the non-lease components are generally accounted for separately and not included in our leased assets and corresponding liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Payments related to short-term leases are expensed on a straight-line basis over the lease term and reflected as a component of lease cost within our consolidated statements of operations. Lease payments generally consist of fixed amounts, as well as variable amounts based on a market rate or an index which are not material to our consolidated lease cost. Our leases do not contain significant terms and conditions for variable lease payments. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. For leases which commenced prior to our adoption of ASU No. 2016-02, Leases, and all related updates (collectively, “ASC Topic 842”), we estimated our incremental borrowing rate as of adoption date based on our credit rating, current economic conditions, and collateralized borrowing. |
Recent Accounting Standards
Recent Accounting Standards | 12 Months Ended |
Dec. 26, 2020 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Standards | NOTE 3: RECENT ACCOUNTING STANDARDS Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. We adopted Topic 326 on December 29, 2019 which had an immaterial impact on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which clarifies the accounting for implementation costs in cloud computing arrangements. We adopted ASU 2018-15 on December 29, 2019 prospectively, which had an immaterial impact on our consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. We adopted ASU 2020-04 on June 27, 2020 and it had no impact on our consolidated financial statements and related disclosures. The guidance is potentially applicable when we modify the current reference rate of LIBOR to another reference rate on our 1 st Note 13 Note 15 Recent Accounting Standards Not Yet Adopted 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. ASU 2019-12 is effective for us in the first quarter of fiscal year 2021. We have evaluated the impact of this standard on our accounting policies, processes and systems and do not believe it has a material impact on our consolidated financial statements. 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 are currently evaluating the impact of this update on our consolidated financial statements. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 12 Months Ended |
Dec. 26, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | NOTE 4: REVENUE FROM CONTRACTS WITH CUSTOMERS Deferred Revenue During the year ended December 26, 2020, we recognized $1,586 million in revenue from our beginning deferred revenue balance. During the year ended December 28, 2019, we recognized $1,450 million in revenue from our beginning deferred revenue balance. During the year ended December 29, 2018, we recognized $1,240 million in revenue from our beginning deferred revenue balance. We added $38 million to deferred revenue due to effect of business combinations. An additional $15 million was recognized from deferred revenue due to changes in estimates resulting from a release of revenue under reserve for a single customer in connection with such customer’s right under certain circumstances to claw-back revenue from us within twelve months of payment. Transaction Price Allocated to the Remaining Performance Obligations As of December 26, 2020, we have $2,542 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 revenue on approximately 71% over the next 12 months, 26% in the next 13 to 36 months, with the remaining balance recognized thereafter. Contract Costs The following tables summarize the various contract costs capitalized on our consolidated financial statements: (in millions) December 26, 2020 December 28, 2019 Capitalized acquisition costs within: Deferred costs $ 218 $ 175 Other long-term assets 89 91 Total capitalized acquisition costs $ 307 $ 266 Capitalized fulfillment costs within: Deferred costs $ 15 $ 12 Other long-term assets 19 19 Total capitalized fulfillment costs $ 34 $ 31 The following tables summarize the amortization of contract acquisitions and fulfillment costs on our consolidated financial statements: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Amortization of capitalized acquisition costs: Net revenue $ 17 $ 23 $ 25 Cost of sales 193 154 141 Sales and marketing 89 81 58 Total amortization of capitalized acquisition costs $ 299 $ 258 $ 224 Amortization of capitalized fulfillment costs: Cost of sales $ 13 $ 12 $ 11 Total amortization of capitalized acquisition costs $ 13 $ 12 $ 11 There were no impairment losses in relation to capitalized acquisition or fulfillments costs for the years ended December 26, 2020, December 28, 2019 and December 29, 2018. |
Leases
Leases | 12 Months Ended |
Dec. 26, 2020 | |
Leases [Abstract] | |
Leases | NOTE 5: LEASES As of December 26, 2020, we have operating leases for corporate offices and data centers and no significant finance leases. Information related to leases was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 38 $ 38 Right-of-use assets obtained in exchange for lease obligations 24 48 Total lease expense 37 46 Balance sheet information related to leases was as follows: (in millions) December 26, 2020 December 28, 2019 Other long-term assets $ 86 $ 97 Lease liabilities, current portion $ 25 $ 29 Other long-term liabilities 78 87 Total lease liabilities $ 103 $ 116 Weighted Average Remaining Lease Term (in years) 7 7 Weighted Average Discount Rate (percentage) 6.0 % 6.1 % Maturities of lease liabilities were as follows: (in millions) December 26, 2020 2021 $ 25 2022 20 2023 13 2024 11 2025 11 Thereafter 43 Total lease payments 123 Less imputed interest (20 ) Total lease liabilities $ 103 As of December 26, 2020, we had no additional operating lease commitments. Disclosures Related to Periods Prior to Adoption of ASC Topic 842 Rental expense related to our facilities was $32 million during the year ended December 29, 2018. |
Acquisitions _ Business Combina
Acquisitions / Business Combinations | 12 Months Ended |
Dec. 26, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS / BUSINESS COMBINATIONS | NOTE 6: ACQUISITIONS / BUSINESS COMBINATIONS Acquisition Overview Under the acquisition method of accounting, the total purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. Accordingly, the assets acquired and liabilities assumed are recorded at their respective fair values as of the date of the acquisition, with the residual consideration transferred recorded as goodwill. The determination of the fair values of the acquired assets and assumed liabilities requires significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, and the calculation of the fair value of inventory, property and equipment, deferred revenue and identified intangible assets. The fair values were determined primarily using the income method utilizing Level 3 inputs ( Note 15 Skyhigh Networks, Inc. Overview On January 3, 2018, we acquired 100% of the equity of Skyhigh Networks, Inc. (“Skyhigh”), enabling us to integrate their leading cloud access security broker technology within our product offerings. We acquired Skyhigh at a purchase price of $590 million, primarily funded through new debt issuance ( Note 13 TunnelBear Inc. Overview On February 26, 2018, we acquired certain assets and liabilities of TunnelBear, Inc. (“TunnelBear”), enabling us to integrate their leading consumer VPN technology within our own product platform. The TunnelBear acquisition is accounted for as a business combination. We acquired those assets and liabilities for a purchase price of $25 million with an additional amount recognized as deferred cash in the period in which certain key employees provide required continuing service. Deferred Cash and Equity In connection with the purchase of Skyhigh, we issued approximately 2.2 million Class A FTW LLC units with a fair value of $10.67 per unit to certain employees with a holdback provision (“Restricted Class A Units”). Since this holdback provision is akin to a service condition, we recognize expense for these units over the time period in which the restrictive holdback provision expires over 2 years past the acquisition date (“Restricted Class A Unit Vesting”). Additionally, in connection with our acquisitions during the year ended December 29, 2018, we are required to make deferred cash payments of $59 million over the service period required to be completed by certain employees. Deferred cash and equity are recognized as compensation cost. As of December 26, 2020, our outstanding deferred cash and equity, as it relates to all acquisitions are as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning outstanding deferred cash and equity balance $ 20 $ 13 $ — Accruals 12 35 39 Restricted Class A Unit Vesting (3 ) (12 ) (9 ) Cash payment (16 ) (16 ) (17 ) Ending outstanding deferred cash and equity balance $ 13 $ 20 $ 13 As of December 26, 2020, we have unrecognized expense relating to deferred cash of $7 million to be recognized over a weighted average period of less than one year. Deferred cash is recorded within Accrued compensation and benefits and Other long-term liabilities on the consolidated balance sheets for amounts due in the next 12 months and amounts due after 12 months, respectively. Deferred equity is recorded within Members’ equity (deficit) on the consolidated balance sheets. |
Transactions with Members, Shar
Transactions with Members, Shareholders and Related Parties | 12 Months Ended |
Dec. 26, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Members, Shareholders and Related Parties | NOTE 7: TRANSACTIONS WITH MEMBERS, SHAREHOLDERS AND RELATED PARTIES FTW declared tax and excess cash distributions to its members during the years ended December 26, 2020 and December 28, 2019 in aggregate of $314 million and $1,338 million, respectively. The distributions declared by FTW during the year ended December 26, 2020, included $38 million of which $24 million goes to Continuing LLC Owners and $14 million goes to McAfee Corp. McAfee Corp. used its share to declare a dividend of $0.087 per share of Class A common stock in December 2020. The $38 million in distributions and dividends was recorded within Accounts payable and other current liabilities on the consolidated balance sheet as of December 26, 2020 and was paid in January 2021. The 2019 distributions to FTW members were partially funded through debt issued on June 13, 2019 ( Note 13 McAfee Corp. made a one-time payment of $13 million to members that exchanged their FTW LLC Units for Class A common shares in McAfee Corp. at the time of the IPO. The payment was reflected as a reduction to Additional paid-in capital on the consolidated balance sheet as of December 26, 2020. 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. In October 2020, the Board of FTW approved and effected a four-for-one unit split of its member units. All unit and per unit data included in these consolidated financial statements give effect to the unit split and have been retroactively adjusted for all periods. We had the following transactions with TPG, Intel or other Continuing LLC Owners and companies owned or partially owned by those parties $22 million to certain affiliates of TPG, Thoma Bravo and Intel upon the termination of the Management Services Agreement subsequent to the IPO. Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Sales with related parties: Intel $ 1 $ 10 $ 3 TPG 1 — — TPG affiliates 2 4 5 Other 2 2 1 Total $ 6 $ 16 $ 9 Payments to related parties: Intel $ 15 $ 6 $ 7 TPG 17 6 5 TPG affiliates 30 29 35 Other 16 21 6 Total $ 78 $ 62 $ 53 R evenue from the sales transactions are recognized in accordance with our revenue recognition policy. Our receivable from Intel, net consisted of the following: (in millions) December 26, 2020 December 28, 2019 Intel receivable (1) Tax indemnity $ 8 $ 10 Total 8 10 Intel payable (1) Tax indemnity (2 ) (4 ) Total (2 ) (4 ) Total, net (2) $ 6 $ 6 (1) We have the contractual right of offset of our receivables and payables with Intel. (2) As of December 26, 2020, $3 million and $3 million are recorded in Accounts payable and other current liabilities and Other long-term assets on the consolidated balance sheet, respectively. As of December 28, 2019, $2 million and $4 million are recorded in Other current assets and Other long-term assets on the consolidated balance sheet, respectively. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 26, 2020 | |
Segment Reporting [Abstract] | |
Operating Segments | NOTE 8: OPERATING SEGMENTS We have two operating segments, which also represent our reporting units: • Consumer — Includes security solutions for consumers. • Enterprise — Includes computer solutions for small and medium-sized businesses, large enterprises, and governments. We manage our business activities primarily based on a product-segmentation basis and whether they serve consumers or enterprises. The Chief Operating Decision Maker (“CODM”) allocates resources to and assesses the performance of each operating segment primarily using information about its operating income (loss), net revenue, and depreciation and amortization. The CODM does not evaluate operating segments using discrete asset information. We allocate all shared expenses to the operating segments. Significant information by segment is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Net revenue: Consumer $ 1,558 $ 1,303 $ 1,161 Enterprise 1,348 1,332 1,248 Total $ 2,906 $ 2,635 $ 2,409 Depreciation and amortization: Consumer $ 272 $ 278 $ 283 Enterprise 219 258 260 Total $ 491 $ 536 $ 543 Operating income (loss): Consumer $ 333 $ 277 $ 107 Enterprise (180 ) (151 ) (280 ) Total $ 153 $ 126 $ (173 ) A significant portion of the operating segments’ operating expenses are derived from shared resources including research and development, accounting, real estate, information technology, treasury, human resources, procurement and other corporate infrastructure expenses. We allocated these operating expenses to the operating segments based on the estimated utilization of services provided to or benefits received by the operating segments. Revenue by geographic region based on the sell-to address of the end-users is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 United States $ 1,603 $ 1,408 $ 1,252 Other 1,303 1,227 1,157 Total net revenue $ 2,906 $ 2,635 $ 2,409 Customer Information There was no end-user Customer that represented 10% or more of our Accounts receivable, net, as of December 26, 2020, and December 28, 2019. There was no end-user Customer that represented 10% or more of total Net revenue for the years ended December 26, 2020, December 28, 2019, and December 29, 2018. Many of our revenue transactions are conducted through distributors. As such, we had one distributor which exceeded 10% of our Net revenue and two which exceeded 10% of our Accounts receivable, net: Total Revenue Year Ended (in percent) December 26, 2020 December 28, 2019 December 29, 2018 Ingram Micro Inc. 14 % 15 % 15 % Total Accounts Receivable (in percent) December 26, 2020 December 28, 2019 Ingram Micro Inc. 26 % 29 % Verizon 11 % 2 % |
Restructuring and Transition Ch
Restructuring and Transition Charges | 12 Months Ended |
Dec. 26, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring and Transition Charges | NOTE 9: RESTRUCTURING AND TRANSITION 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. Transition charges include legal, advisory, consulting and other costs directly incurred due to the separation from Intel and are generally paid when incurred. For the year ended December 29, 2018 transition charges were $6 million and $1 million for Enterprise and Consumer segments, respectively. Restructuring and transition charges are as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Employee severance and benefits $ 25 $ 20 $ 27 Facility Restructuring — 2 2 Transition Charges — — 7 Total $ 25 $ 22 $ 36 In January 2018, we announced the second phase of the McAfee Acceleration Program to further our alignment toward core business. During the fiscal year ended December 29, 2018, we incurred additional employee severance and benefits and facility restructuring costs of $27 million and $2 million, respectively. In January 2019, we announced the “Transformation 2019” initiative, in which we realigned our staffing across various departments. As part of the initiative, we incurred employee severance and benefits costs and facility restructuring of $20 million and $2 million, respectively. In January 2020, we commenced the 2020 transformation initiative, in which we are realigning our staffing across various departments. As part of the initiative, we have incurred employee severance and benefits costs of $9 million recorded in restructuring charges in the consolidated statement of operations. 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 to complete these activities in the first half of fiscal year 2021. As part of the initiative, in December 2020 we recognized $16 million in connection with the workforce reduction and other restructuring activities, consisting primarily of one-time termination benefits to the impacted employees, including severance payments and healthcare and other accrued benefits recorded in Restructuring and transition charges in the consolidated statement of operations. We expect to recognize additional severance and other restructuring expense ranging between $30 million and $35 million in the first half of fiscal year 2021 in connection with this action. We expect substantially all of the costs associated with these activities to result in cash expenditures. The balance of our restructuring activities are as follows: (in millions) Consumer Enterprise Total Employee severance and benefits As of December 30, 2017 $ 1 $ 3 $ 4 Additional accruals 5 22 27 Cash payments (6 ) (24 ) (30 ) As of December 29, 2018 — 1 1 Additional accruals 2 18 20 Cash payments (2 ) (17 ) (19 ) As of December 28, 2019 — 2 2 Additional accruals 2 23 25 Cash payments (1 ) (10 ) (11 ) As of December 26, 2020 $ 1 $ 15 $ 16 Facility Restructuring As of December 30, 2017 $ 1 $ 6 $ 7 Additional accruals — 2 2 Cash payments (1 ) (4 ) (5 ) As of December 29, 2018 — 4 4 Adjustment (1) — (4 ) (4 ) As of December 28, 2019 — — — Additional accruals — — — Cash payments — — — As of December 26, 2020 $ — $ — $ — (1) Represents a reclassification to reduce ROU assets as part of the transition to ASC Topic 842. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 26, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | NOTE 10: GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Goodwill activity was as follows: (in millions) Consumer Enterprise Total Balance as of December 29, 2018 $ 1,018 $ 1,408 $ 2,426 Additions — 2 2 Balance as of December 28, 2019 1,018 1,410 2,428 Additions — 3 3 Balance as of December 26, 2020 $ 1,018 $ 1,413 $ 2,431 During the fourth quarter of each year, we performed our annual impairment assessment. No impairment loss for goodwill or intangibles was recorded during the years ended December 26, 2020 or December 28, 2019. Intangible Assets, Net December 26, 2020 December 28, 2019 (in millions) Gross Assets Accumulated Amortization Net Gross Assets Accumulated Amortization Net Intangible assets subject to amortization: Customer relationships and other $ 1,445 $ (839 ) $ 606 $ 1,445 $ (619 ) $ 826 Acquired and developed technology 1,223 (886 ) 337 1,215 (670 ) 545 Total intangible assets subject to amortization 2,668 (1,725 ) 943 2,660 (1,289 ) 1,371 Intangible assets not subject to amortization: In-process research and development 4 — 4 3 — 3 Brand 697 — 697 697 — 697 Total intangible assets not subject to amortization 701 — 701 700 — 700 Total intangible assets $ 3,369 $ (1,725 ) $ 1,644 $ 3,360 $ (1,289 ) $ 2,071 Amortization expense for purchased and developed intangible assets is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Statements of Operations Classification Customer relationships and other $ 220 $ 222 $ 232 Amortization of intangibles Acquired and developed technology 216 246 252 Cost of sales Total $ 436 $ 468 $ 484 Based on identified intangible assets that are subject to amortization as of December 26, 2020, we expect future amortization expense to be as follows: (in millions) Total 2021 $ 334 2022 221 2023 156 2024 110 2025 95 Thereafter 27 Total $ 943 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 26, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 11: PROPERTY AND EQUIPMENT Property and equipment, net was as follows: (in millions) December 26, 2020 December 28, 2019 Land, buildings and leasehold improvements $ 86 $ 78 Computer equipment, software and other 229 240 Construction in progress 24 24 Total property and equipment 339 342 Less: accumulated depreciation (190 ) (171 ) Total property and equipment, net $ 149 $ 171 We computed depreciation using the straight-line method over the estimated useful life of 10-25 years for buildings and 2-5 years for computer equipment, software and other. For the years ended December 26, 2020, December 28, 2019 and December 29, 2018, our depreciation expense was $55 million, $68 million and $60 million, respectively. |
Employee Incentives _ Benefit P
Employee Incentives / Benefit Plans | 12 Months Ended |
Dec. 26, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Incentives / Benefit Plans | NOTE 12: EMPLOYEE INCENTIVE / BENEFIT PLANS Equity-Based Compensation Equity-based compensation costs recognized in our consolidated statements of operations were: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Cost of sales $ 37 $ 1 $ 1 Sales and marketing 102 5 6 Research and development 112 12 13 General and administrative 62 7 8 Total equity-based compensation expense $ 313 $ 25 $ 28 During 2020, the tax benefit that we realized for the tax deduction from share-based awards totaled $5 million. Class A Share Awards RSU activity was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — Grants 2.0 $ 15.97 Grants replacing pre-IPO Awards 27.6 $ 17.39 Vested at IPO (5.7 ) $ 20.00 Vested (0.1 ) $ 8.38 Forfeited (0.3 ) $ 19.35 Balance as of December 26, 2020 23.5 $ 16.65 Upon consummation of the IPO in October 2020, we modified the terms of our unvested FTW RSUs, outstanding CRSUs, and outstanding MEPUs to permit settlement in the Corporation’s Class A common stock, par value $0.001 per share (“Class A common stock”) (collectively, “Replacement RSUs”) in lieu of cash settlement, at the Corporation’s election. No service or performance vesting terms were changed at the time of modification. Upon completion of the modification, all Replacement RSUs are equity classified due to the Corporation’s intent and ability to settle the awards in Class A common stock. MEPUs and CRSUs which had previously met the time-vesting requirement were vested at IPO. We withheld 1.8 million shares to settle our vested RSUs during the quarter ending December 26, 2020. As of December 26, 2020, our unrecognized compensation costs related to the Class A Unit grants was $235 million with a remaining weighted-average service period of 2.1 years. PSU PSU activity was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — Grants replacing pre-IPO CRSUs 0.2 $ 19.28 Grants replacing pre-IPO RSUs 0.1 $ 8.25 Balance as of December 26, 2020 0.3 $ 14.30 As of December 26, 2020, our remaining unrecognized compensation costs related to the PSU grants was $3 million with a remaining weighted-average service period of 2.1 years. Stock Options Stock options activity was as follows: Time-based Performance-based Number of Units (in millions) Weighted Average Grant-Date Fair Value Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — — $ — Grants 0.5 $ 6.35 — Grants in connection with IPO 1.3 $ 7.70 0.6 $ 7.84 Vested (0.5 ) $ 7.84 — Balance as of December 26, 2020 1.3 $ 7.29 0.6 $ 7.84 Exercisable as of December 26, 2020 0.5 — Weighted average strike price $ 20.00 $ — The Company granted stock options with a strike price equal to the IPO price to certain holders of MEPUs with distribution thresholds not fully satisfied at the time of modification. The stock options have service and/or performance conditions identical to the original MEPU conditions. As of December 26, 2020, our remaining unrecognized compensation costs related to the stock options grants was $12 million with a remaining weighted-average service period of 2.0 years. The weighted average estimated value of the stock options granted during the year ended December 26, 2020 was valued using the Black-Scholes model with the following inputs: Year Ended December 26, 2020 Estimated values $15.48 - $20.00 Expected life (in years) 5.02 - 10.00 Risk-free interest rate 0.37% - 0.83% Dividend yield 1.50% - 2.25% Volatility 40.00% Management Incentive and Equity Participation Unit Awards We granted MIUs and MEPUs to certain employees. The time-based awards’ fair value was calculated using the Black-Scholes model. The performance-based awards’ fair value was calculated using Monte Carlo simulations. The performance-based portion of both awards and the time-based portion of the MEPUs required a Qualifying Liquidity Event to be eligible to vest. Management Incentive Units MIU activity was as follows: Time-based Performance-based Number of Units (in millions) Weighted Average Grant-Date Fair Value Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of December 28, 2019 4.9 $ 2.98 6.0 $ 1.14 Grants 5.6 $ 3.42 — Vested (2.2 ) $ 4.15 (0.9 ) $ 8.64 Forfeited (1.6 ) $ 2.64 (2.4 ) $ 0.92 Balance as of December 26, 2020 6.7 $ 3.47 2.7 $ 1.41 As of December 26, 2020, unrecognized compensation costs of the time-based awards were $22 million with a remaining weighted average service period of 3.0 years. The unrecognized compensation costs of the performance-based awards were $2 million. Under the terms of our 2017 Plan, we will no longer grant further MIUs. The weighted average estimated value of the time-based portion of MIUs granted during the years ended December 26, 2020, December 28, 2019 and December 29, 2018 was valued using the Black-Scholes model with the following inputs: Year Ended December 26, 2020 December 28, 2019 December 29, 2018 Estimated values $8.64 - $14.32 $ 8.64 $10.67 - $10.85 Expected life (in years) 2.82 - 3.10 3.17 - 3.22 3.69 - 4.68 Risk-free interest rate 0.18% - 1.34% 1.43% - 1.67% 2.2% - 2.91% Dividend yield 0.0 % 0.0 % 0.0 % Volatility 35.00% - 40.97% 35.91% - 36.37% 40.35% - 43.31% During February 2020, we modified the terms of certain MIU grants to provide for vesting subject to the satisfaction of certain conditions, which resulted in the recognition of $12 million in incremental compensation expense for the modified awards at their modification date. Class A Unit Awards As of December 26, 2020, all outstanding FTW RSUs were converted into Class A Share awards. FTW RSU activity during the year ended December 26, 2020 was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of December 28, 2019 2.9 $ 8.08 Grants 4.3 $ 9.46 Vested (1.4 ) $ 8.80 Forfeited (0.7 ) $ 9.14 Converted into Class A Share RSUs (5.1 ) $ 8.13 Balance as of December 26, 2020 — $ — Management Equity Participation Units As of December 26, 2020, all outstanding MEPUs were converted into Class A Share awards. MEPU activity during the year ended December 26, 2020 was as follows: (in millions) Number of Time-based Units Number of Performance- based Units Balance as of December 28, 2019 4.1 4.3 Grants 1.4 — Time-vested (1.5 ) — Forfeited (0.8 ) (0.8 ) Converted into Class A Share RSUs (3.2 ) (3.5 ) Balance as of December 26, 2020 — — Cash RSU (“CRSU”) As of December 26, 2020, all outstanding CRSUs were converted into Class A Share awards. CRSU activity during the year ended December 26, 2020 was as follows: (in millions) Number of Units Balance as of December 28, 2019 5.2 Grants 9.7 Time-vested (2.5 ) Forfeited (1.0 ) Converted into Class A Share RSUs (11.4 ) Balance as of December 26, 2020 — Cash-Based The activities related to cash-based retention awards within Accrued compensation and benefits on our consolidated balance sheets were as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning retention awards balance $ 7 $ 11 $ 29 Accruals, net of forfeitures 8 19 36 Cash payments (15 ) (23 ) (51 ) Reclass to Intel Receivable — — (3 ) Ending retention awards balance $ — $ 7 $ 11 As of December 26, 2020, our remaining unrecognized compensation costs related to the cash-based retention awards were $3 million with a remaining weighted-average period of 1.1 years. Defined Contribution Plans We provide tax-qualified retirement contribution plans in the United States for the benefit of all full-time employees. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis. Additionally, our operations in certain countries require we make payments to defined contribution plans for the benefit of our employees. Under the United States’ 401(k) and the foreign countries’ various defined contribution plans, we expensed $35 million, $36 million and $32 million during the years ended December 26, 2020, December 28, 2019 and December 29, 2018, respectively. Defined Benefit Plans In certain jurisdictions outside the United States, we are required to provide a defined benefit obligation and certain post-retirement benefits. As of December 26, 2020 and December 28, 2019, our net benefit obligation of $11 million and $8 million, respectively, is included within Accrued compensation and benefits and Other long-term liabilities on the consolidated balance sheets. |
Debt
Debt | 12 Months Ended |
Dec. 26, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 13: DEBT Our long-term debt balance consisted of the following: (in millions) December 26, 2020 December 28, 2019 Long-term debt, net: 1 st (1) $ 2,701 $ 3,020 1 st (2) 1,298 1,200 2 nd (3) — 509 Long-term debt, net of unamortized discounts 3,999 4,729 Unamortized deferred financing costs (12 ) (17 ) Current installments of long-term debt (44 ) (43 ) Total $ 3,943 $ 4,669 (1) During the year ended December 26, 2020, the weighted average interest rate was 4.4% (2) During the year ended December 26, 2020, the weighted average interest rate was 3.5% (3) During the year ended December 26, 2020, the weighted average interest rate was 9.7% As of December 26, 2020, the material terms of our outstanding debt was as follows: Debt Issue Date Issue Principal Interest Rate (1) Interest Payment Frequency Maturity Date 1 st June 2019 $ 3,087 375 pts above LIBOR Monthly September 2024 1 st June 2019 € 1,092 350 pts above EURIBOR Quarterly September 2024 Additions to and Modifications of Debt In January 2018, in order to finance the acquisition of Skyhigh ( Note 6 st st st In November 2018, we modified the material terms of our 1 st nd In June, 2019, McAfee, LLC entered into an agreement to increase our term loans under the 1 st st st st nd st Note 7 Subsequent to the IPO of McAfee Corp. in October 2020, we repaid all outstanding principal obligations with respect to our 2 nd nd On December 24, 2020, we prepaid $300 million of the outstanding 1 st st As of December 26, 2020, our debt repayment obligations for the five succeeding fiscal years and thereafter are as follows: (in millions) 2021 $ 44 2022 45 2023 44 2024 3,905 2025 — Thereafter — Total debt repayment obligations $ 4,038 Revolving Credit Facility In March 2020, we borrowed $300 million under our Revolving Credit Facility. The funds were borrowed for general corporate purposes due to seasonality in cash flow generation and as a precautionary measure in response to general market conditions. In June 2020, we repaid the Revolving Credit Facility in full and have no outstanding balance on the Revolving Credit Facility as of December 26, 2020. During the fiscal year ended December 26, 2020, the weighted average interest rate was 4.3% for borrowings outstanding. In October 2020, McAfee, LLC entered into an agreement to extend the maturity date of, and increased the amount available to us under, a portion of the commitments under the Revolving Credit Facility. As a result of this agreement, the Revolving Credit Facility consists of a $164 million tranche that will mature on September 29, 2022 and a $500 million tranche that will mature on September 29, 2024. As of 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. As of December 28, 2019, we had a letter of credit of $4 million issued against the Revolving Credit Facility and $496 million of undrawn capacity under the Revolving Credit Facility. The commitment fee for the unused portion of the revolving credit facility varies from 0.375% up to 0.50%, and the LIBOR margin of the outstanding borrowings and letters of credit varies from 3.25% to 3.75%, respectively, based upon our 1 st st Debt Covenants and Restrictions Our credit facilities contain customary covenants, including a customary springing financial maintenance covenant under our revolving credit facility, events of default and change of control provisions. In the event we have outstanding loans and letters of credit under the revolving credit facility of more than $175 million at our reporting date (other than cash collateralized letters of credit and up to $30 million of undrawn letters of credit), we are required to maintain a 1 st We may be required to make a mandatory prepayment in excess of the 0.25% per quarter amortization of the 1 st • 100% of net cash proceeds above a threshold amount of certain asset sales and casualty events, subject to (i) step-downs to (x) 50% if our first lien net leverage ratio is less than or equal to 3.25 to 1.00, but greater than 2.50 to 1.00 and (y) 0% if our first lien net leverage ratio is less than or equal to 2.50 to 1.00 and (ii) reinvestment rights and certain other exceptions; • 100% of net cash proceeds of the incurrence of certain debt, other than certain debt permitted under the 1st Lien Credit Facility; and • 50% of annual excess cash flow, subject to (i) a step-down to 25% if our first lien net leverage ratio is less than or equal to 3.25 to 1.00, but greater than 2.50 to 1.00, and (ii) a step-down to 0% if our first lien net leverage ratio is less than or equal to 2.50 to 1.00; provided that such a prepayment is required only in the amount (if any) by which such prepayment exceeds $35 million in such fiscal year. Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations. We are not in default of any of our debt obligations as of December 26, 2020 and have not been required to make any additional payments above the 0.25% per quarter amortization. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 26, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 14: 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 account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities (“DTAs” and “DTLs”) for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. We recognize DTAs to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If we determine that we would be able to realize our DTAs in the future in excess of their net recorded amount, we would make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Loss before income taxes expense includes the following components: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 U.S. $ (282 ) $ (282 ) $ (548 ) Non-U.S. 23 133 98 Loss before income taxes $ (259 ) $ (149 ) $ (450 ) The provision for income tax expense consists of the following: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Current: State $ 2 $ — $ 3 Non-U.S. 40 68 49 Total current 42 68 52 Deferred: Federal 2 13 4 State (1 ) 2 1 Non-U.S. (13 ) 4 5 Total deferred (12 ) 19 10 Provision for income tax expense $ 30 $ 87 $ 62 The difference between the tax provision and the tax provision computed at the U.S. federal statutory income tax rate for each period was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Income taxes computed at the U.S. federal statutory rate $ (54 ) $ (31 ) $ (94 ) Non-U.S. income taxed at different rates 11 9 5 Withholding taxes 20 18 24 State tax expense — 2 4 Partnership earnings flow through to partners 8 72 121 Redeemable noncontrolling interest 32 — — Valuation allowances 25 3 — Foreign tax credits (4 ) (2 ) (2 ) Uncertain tax positions (8 ) 15 3 Other — 1 1 Provision for income tax expense $ 30 $ 87 $ 62 A portion of net income taxes has been indemnified by Intel ( Note 7 The components of the deferred tax assets and liabilities are as follows: (in millions) December 26, 2020 December 28, 2019 Deferred tax assets: Accrued compensation and other benefits $ 4 $ 6 Deferred revenue 57 51 Share-based compensation 12 — Net operating losses 77 32 Credits 51 10 Intangibles 147 — Interest expense carryforward 5 2 Other 1 — Total deferred tax assets 354 101 Deferred tax liabilities: Licenses and intangibles — (9 ) Unremitted earnings of non-US subsidiaries (4 ) (5 ) Investment in partnership (81 ) (188 ) Other (1 ) — Total deferred tax liabilities (86 ) (202 ) Valuation allowance (213 ) (4 ) Net deferred tax assets (liabilities) $ 55 $ (105 ) Reported as: Deferred tax assets $ 67 $ 55 Deferred tax liabilities (12 ) (160 ) Net deferred tax assets (liabilities) $ 55 $ (105 ) As of December 26, 2020, our deferred tax assets include net operating losses, credits and intangibles acquired in connection with the reorganization transactions and amounts related to deferred revenue. As of December 28, 2019, our deferred tax assets were primarily comprised of deferred revenue in certain foreign jurisdictions and are expected to be fully realized as the related entities are expected to have future income. Our deferred tax liabilities were primarily comprised of outside basis differences due to the Reorganization Transactions and prior acquisitions ( Note 6 As of December 26, 2020, we had federal, state, and non-U.S. net operating loss carryforwards of $319 million, $154 million, and $2 million, respectively, available to reduce future taxable income. The federal and state net operating loss carryforwards include $319 million and $154 million, respectively, that is not likely to be recovered and have been reduced by valuation allowance. The non-U.S. net operating loss carryforwards have no expiration date. The federal and U.S. state net operating loss carryforwards expire at various dates through 2037. The net operating loss carryforwards and credits in the U.S. relate to the Reorganization Transactions and, as a result, are limited in the amount that can be recognized in any one year. As of December 26, 2020, we are not permanently reinvested; therefore, we have recognized deferred taxes for all of our undistributed earnings of certain foreign subsidiaries. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 26, 2020. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 26, 2020, a valuation allowance of $213 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. A reconciliation of the aggregate changes in the balance of gross unrecognized tax benefits was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning gross unrecognized tax benefits $ 27 $ 12 $ 10 Settlements with taxing authorities — — (1 ) Increases in tax positions for prior years — — 1 Decreases in tax positions for prior years (14 ) — (1 ) Increases in tax positions for current year 4 15 3 Ending gross unrecognized tax benefits $ 17 $ 27 $ 12 We recognize interest and penalties related to unrecognized tax benefits within the Provision for income tax expense on the consolidated statements of operations. 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 December 26, 2020 and December 28, 2019, we had uncertain tax positions of $16 million and $27 million, including interest and penalties, respectively, recorded within Other long-term liabilities on the consolidated balance sheets. In the next 12 months, it is reasonably possible to have an audit closure or statue 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 uncertain taxes positions has been indemnified by Intel ( Note 7 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. As of December 26, 2020, we are no longer subject to review by the state and local taxing authorities prior to 2015 and foreign taxing authorities prior to 2004. 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. Tax Receivable Agreement Pursuant to our election under Section 754 of the Internal Revenue Code (the “Code”), we expect to obtain an increase in our share of the tax basis in the net assets of FTW when FTW LLC Units are redeemed or exchanged by the Continuing LLC Owners and MIUS are redeemed or exchanged by Management Owners. We intend to treat any redemptions and exchanges of LLC Units as direct purchases of LLC Units for United States federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In October 2020, we entered into a TRA that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of: (i) all or a portion of the Corporation’s allocable share of existing tax basis in the assets of FTW (and its subsidiaries) acquired in connection with the Reorganization Transactions, (ii) increases in the Corporation’s allocable share of existing tax basis in the assets of FTW (and its subsidiaries) and tax basis adjustments in the assets of FTW (and its subsidiaries) as a result of sales or exchanges of LLC Units after the IPO, (iii) certain tax attributes of the corporations acquired by McAfee Corp. in connection with the Reorganization Transactions (including their allocable share of existing tax basis in the assets of FTW (and its subsidiaries)), and (iv) certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. The Corporation generally will retain the benefit of the remaining 15% of the applicable tax savings. The payment obligations under the tax receivable agreement are obligations of the Corporation. As realizability of the net deferred tax assets has not met the more likely than not recognition criteria, the liability under the Tax Receivable Agreement has not met the probable recognition criteria in the accompanying consolidated balance sheet as of December 26, 2020, except for the $2 million current portion of the Tax Receivable Agreement liability recorded within Accounts payable and other accrued liabilities in the consolidated balance sheet. If the net deferred tax assets had not been reduced by a valuation allowance, we would have also recorded a long-term Tax Receivable Agreement liability of $274 million in the consolidated balance sheet. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments and Interest Rate Swaps | 12 Months Ended |
Dec. 26, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Interest Rate Swaps | NOTE 15: 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 December 26, 2020 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred issuance costs (Note 13) $ — $ (4,033 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ (119 ) $ — As of December 28, 2019 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred issuance costs (Note 13) $ — $ (4,817 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ (61 ) $ — 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 and Accounts payable and accrued liabilities on the 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 consolidated balance sheets, on a recurring basis and have classified 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. Transfers between fair value measurement levels are recognized at the end of the reporting period. Interest Rate Swaps As of December 26, 2020, the outstanding effective hedging arrangements were as follows: Notional Value (in millions) Effective Date Expiration Date Fixed Rate $225 January 29, 2018 January 29, 2021 2.33% $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% On March 2, 2020, we cancelled an existing interest rate swap with a notional value of $750 million and accepted an off-market fixed rate on a new interest rate swap to offset the cost of the fair value of the original swap. At the time of the cancellation, the original interest rate swap had a negative fair value of $37 million and was recorded in Accounts payable and other current liabilities and Other long-term liabilities on the consolidated balance sheet. The liability associated with the original interest rate swap was incorporated into the fair value of the new interest rate swap. The gross amounts of our interest rate swaps, which are subject to master netting arrangements, were as follows: (in millions) Gross amounts recognized Gross amount offset in Balance Sheets Net amounts presented in Balance Sheets As of December 26, 2020 Accounts payable and other current liabilities $ (43 ) $ — $ (43 ) Other long-term liabilities (76 ) — (76 ) As of December 28, 2019 Accounts payable and other current liabilities $ (19 ) $ — $ (19 ) Other long-term liabilities (42 ) — (42 ) |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 12 Months Ended |
Dec. 26, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | NOTE 16: 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. In connection with the IPO, the New LLC Agreement was adopted, allowing the Continuing LLC Owners (or certain permitted transferees), subject to certain restrictions, to 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. In connection with the Reorganization Transactions and IPO, McAfee Corp. issued a net 267.1 million shares of Class B common stock to the Continuing LLC Owners. As of December 26, 2020, McAfee Corp. had 161.3 million shares of Class A common stock outstanding, which are represented by an equivalent ownership of LLC Units and an economic interest in FTW of 37.2%. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 26, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 17: NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss attributable to McAfee Corp. for the period 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 net loss per share has been computed in a manner consistent with that of basic net loss 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, net loss per unit information has not been presented for the portion of the fiscal year ended prior to the completion of the Reorganization Transactions, or for the fiscal years ended December 28, 2019 and December 29, 2018. 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 net loss 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 net loss per share of Class A common stock for the fiscal year ended December 26, 2020. The basic and diluted net loss per share for the year ended December 26, 2020 represents only the period from October 22, 2020 to December 26, 2020, the period wherein the Corporation had outstanding Class A common stock. Year Ended (in millions except per share data) December 26, 2020 Numerator: Net loss $ (289 ) Less: Net income attributable to FTW prior to the Reorganization Transactions (26 ) Less: Net loss attributable to redeemable noncontrolling interests after the Reorganization Transactions 197 Net loss attributable to McAfee Corp., basic $ (118 ) Add: Net loss attributable to dilutive redeemable noncontrolling interests after the Reorganization Transactions (197 ) Less: Provision for income tax expense (1) (1 ) Net income attributable to McAfee Corp., diluted $ (316 ) Denominator: Weighted average shares of Class A common stock outstanding, basic 162.3 Conversion of outstanding LLC units and MIUs (2) 271.6 Weighted average shares of Class A common stock outstanding, diluted 433.9 Net loss per share, basic and diluted $ (0.73 ) (1) Represents incremental income tax provision we would have recognized had our dilutive non-controlling interests been converted into Class A common stock as of the beginning of the period. (2) Represents a one for one conversion of our RNCI’s 267.1 million LLC units and an exchange of 5.4 million MIUs for their common equivalent of Class A common stock, based on the value of such MIUs relative to their applicable distribution threshold. (3) 25.2 million |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 26, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Variable Interest Entities | NOTE 18: 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, which was 37.2% as of December 26, 2020. Management considers this exposure to be significant to FTW. 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. McAfee Corp.’s relationship with FTW results in no recourse to the general credit of McAfee Corp. FTW and its consolidated subsidiaries represent McAfee Corp.’s sole investment. McAfee Corp. shares in the income and losses of FTW in direct proportion to McAfee Corp.’s economic ownership percentage. Further, The following table reflects the balance sheet of FTW that is consolidated within the 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) December 26, 2020 Assets Current assets: Cash and cash equivalents $ 231 Accounts receivable, net 392 Deferred costs 233 Other current assets 58 Total current assets 914 Property and equipment, net 149 Goodwill 2,431 Identified intangible assets, net 1,644 Deferred tax assets 67 Receivable from Parent, net 46 Other long-term assets 223 Total assets $ 5,474 Liabilities and deficit Current liabilities: Accounts payable and other current liabilities $ 250 Accrued compensation and benefits 197 Accrued marketing 124 Income taxes payable 14 Long-term debt, current portion 44 Lease liabilities, current portion 25 Deferred revenue 1,715 Total current liabilities 2,369 Long-term debt, net 3,943 Deferred tax liabilities 12 Other long-term liabilities 204 Deferred revenue, less current portion 684 Total liabilities 7,212 Members’ deficit: Deficit attributable to Continuing LLC Owners (1,092 ) Deficit attributable to McAfee Corp. (646 ) Total deficit (1,738 ) Total liabilities and deficit $ 5,474 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 26, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 19: COMMITMENTS AND CONTINGENCIES As of December 26, 2020, we have unconditional purchase obligations of $149 million that expire at various dates through 2025 and guarantees of $12 million that expire at various dates through 2028. As of December 26, 2020, excluding the amounts related to lease obligations which are disclosed in Note 5 (in millions) 2021 $ 49 2022 45 2023 39 2024 12 2025 4 Thereafter — Total $ 149 Subsequent to December 26, 2020, we have executed contracts with additional unconditional purchase commitments in the amount of $315 million that we expect to incur in the years 2021 through 2026. 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. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 26, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | 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 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. Financial information includes the accounts of McAfee and was prepared in accordance with U.S. GAAP. All intercompany balances and transactions within McAfee have been eliminated in consolidation. We have reclassified certain prior period amounts to conform to our current period presentation. 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 18 Our functional currency for all of our subsidiaries is USD. |
Use of Estimates | Use of Estimates The preparation of the 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: • determining the nature and timing of satisfaction of performance obligations, assessing associated material rights and determining the standalone selling price (“SSP”) of performance obligations; • determining our technology constrained customer life; • projections of future cash flows related to revenue-share and related agreements with our personal computer original equipment manufacturer partners; • fair value estimates for assets and liabilities acquired in business combinations; • 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; and • amount of liability related to the tax receivable agreement 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 | Fiscal Calendar We maintain a 52- or 53-week fiscal year that ends on the last Saturday in December. The year ended December 29, 2018 is a 52-week year starting on December 31, 2017 and ending on December 29, 2018. The year ended December 28, 2019 is a 52-week year starting on December 30, 2018 and ending on December 28, 2019. The year ended December 26, 2020 is a 52-week year starting on December 29, 2019 and ending on December 26, 2020. |
Revenue Recognition | Revenue Recognition We derive revenue from the sale of security products, subscriptions, software as a service (“SaaS”) offerings, support and maintenance, professional services, or a combination of these items, primarily through our indirect relationships with our partners or direct relationships with end customers through our internal sales force. On December 31, 2017, we adopted ASC Topic 606 under the modified retrospective approach with the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings. Results for the reporting period beginning December 31, 2017 are presented under ASC Topic 606, while prior period amounts were not adjusted. We recognize revenue pursuant to the five-step framework within ASC Topic 606: 1. Identify the contract(s) with a customer : Contracts are generally evidenced by a binding and non-cancelable purchase order or agreement that creates enforceable rights and obligations. 2. Identify the performance obligations in the contract : Performance obligations are the promises contained in the contract to provide distinct goods or services. 3. Determine the transaction price : The amount of consideration we expect to be entitled for transferring the promised goods and services to the customer. 4. Allocate the transaction price to the performance obligations in the contract : SSP is determined for each performance obligation in the contract and a proportion of the overall transaction price is allocated to each performance obligation based on the relative value of its SSP in comparison to the transaction price except when a discount or variable consideration can be allocated to a specific performance obligation in the contract. 5. Recognize revenue when (or as) we satisfy a performance obligation : Recognition for a performance obligation may happen over time or at a point in time depending on the facts and circumstances. We generally consider our customer to be the entity with which we have a contractual agreement. This could be the end user, or when we sell products and services through the channel, our customer could be either the distributor or the reseller. As part of determining whether a contract exists, probability of collection is assessed on a customer-by-customer basis at the outset of the contract. Customers are subjected to a credit review process that evaluates the customers’ financial position and the ability and intention to pay. At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct — i.e., if a good or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or together with other resources that are readily available to the customer. To identify our performance obligations, we consider all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Determining whether products and services are considered distinct performance obligations or should be combined to create a single performance obligation may require significant judgment. We recognize revenue when (or as) we satisfy a performance obligation by transferring control of a good or service to a customer. The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer, adjusted for estimated variable consideration, if any. We typically estimate the transaction price impact of sales returns and discounts offered to the customers, including discounts for early payments on receivables, rebates or certain distribution partner incentives, including marketing programs. Constraints are applied when estimating variable considerations based on historical experience where applicable. Once we have determined the transaction price, we allocate it to each performance obligation in a manner depicting the amount of consideration to which we expect to be entitled in exchange for transferring the goods or services to the customer (the “allocation objective”). If the allocation objective is met at contractual prices, no allocations are made. Otherwise, we allocate the transaction price to each performance obligation identified in the contract on a relative SSP basis, except when the criteria are met for allocating variable consideration or a discount to one or more, but not all, performance obligations in the contract. To determine the SSP of our goods or services, we conduct a regular analysis to determine whether various goods or services have an observable SSP. If we do not have an observable SSP for a particular good or service, then SSP for that particular good or service is estimated using an approach that maximizes the use of observable inputs. We generally determine SSPs using various methodologies such as historical prices, expected cost plus margin, adjusted market assessment or non-standalone selling prices. We recognize revenue as control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the promised goods or services. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Control of the promised goods or services is transferred to our customers at either a point in time or over time, depending on the performance obligation. Nature of Products and Services Certain of our perpetual software licenses or hardware with integrated software are not distinct from their accompanying maintenance and support, as they are dependent upon regular threat updates. These contracts typically contain a renewal option that we have concluded creates a material right for our customer. The license, hardware and maintenance and support revenue is recognized over time, as control is transferred to the customer over the term of the initial contract period while the corresponding material right is recognized over time beginning at the end of the initial contractual period over the remainder of the technology constrained customer life. Alternatively, certain of our perpetual software licenses, hardware appliances, or hardware with integrated software provide a benefit to the customer that is separable from the related support as they are not dependent upon regular threat updates. Revenue for these products is recognized at a point in time when control is transferred to our customers, generally at shipment. The related maintenance and support represent a separate performance obligation and the associated transaction price allocated to it is recognized over time as control is transferred to the customer. The nature of our promise to the customer to provide our SaaS offerings and time-based software licenses and related support and maintenance is to stand ready to provide protection for a specified or indefinite period of time. Maintenance and support in these cases are typically not distinct performance obligations as the licenses are dependent upon regular threat updates to the customer. Instead the maintenance and support is combined with a software license to create a single performance obligation. We typically satisfy these performance obligations over time, as control is transferred to the customer as the services are provided. Revenue for professional services that are a separate and distinct performance obligation is recognized as services are provided to the customer. Additional Revenue Recognition Considerations Royalties and Managed Service Provider Revenues Our original equipment manufacturer (“OEM”) and managed service provider (“MSP”) sales channels have revenues derived from sales- or usage-based royalties. Such revenue is excluded from any variable consideration and transaction price calculations and is recognized at the later of when the sale or usage occurs, or the performance obligation is satisfied or partially satisfied. Consideration Payable to a Customer We make various payments to our channel partners, which may include revenue share, product placement fees and marketing development funds. Costs that are incremental to revenue, such as revenue share, are capitalized and amortized over time as cost of sales ( Note 4 Under certain of our channel partner agreements, the partners pay us royalties on our technology sold to their customers, which we recognize as revenue in accordance with our revenue recognition policy. In these situations, the payments made to our channel partners are recognized as consideration paid to a customer, and thus are recorded as reductions to revenue up to the amount of cumulative revenue recognized from the contract with the channel partner during the period of measurement. Payment Terms and Warranties Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. We provide assurance warranties on our products and services. The warranty timeframe varies depending on the product or service sold, and the resolution of any issues is at our discretion to either repair, replace, reperform or refund the fee. Contract Costs Contract acquisition costs consist mainly of sales commissions and associated fringe benefits, as well as revenue share under programs with certain of our distribution partners. For revenue share, the partner receives a percentage of the revenue we receive from an end user upon conversion to a paid customer or renewal. These costs would not have been incurred if the contract was not obtained and are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are capitalized and amortized over time in accordance with Accounting Standards Codification (“ASC”) 340-40. We typically recognize the initial commissions that are not commensurate with renewal commissions over the longer of the customer relationship (generally estimated to be four to five years) or over the same period as the initial revenue arrangement to which these costs relate. Renewal commissions paid are generally amortized over the renewal period. Contract fulfillment costs consist of hardware and software and related costs. These costs are incremental and recoverable and are capitalized and amortized on a systematic basis that is consistent with the pattern of transfer of the goods and services to which the asset relates. |
Advertising Expenses | Advertising Expenses Marketing programs that are facilitated through third parties not considered customers are expensed as incurred. Total advertising expenses were $56 million, $53 million, and $62 million for the years ended December 26, 2020, December 28, 2019, and December 29, 2018, respectively, excluding amounts included in sales and marketing as discussed in the revenue recognition section above. |
Accounts Receivable | Accounts Receivable We record accounts receivable at the invoiced amount and maintain an allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review accounts receivable to identify specific customers with known disputes or collectability issues and maintain an allowance for expected credit losses for all other receivables not included in the specific reserve by applying a set percentage for projected uncollectible amounts to the accounts receivable balance. In determining this percentage, judgment based on historical collection experience and current economic trends is applied. We recorded an allowance for credit losses of $5 million and less than $1 million as of December 26, 2020 and December 28, 2019, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with original maturities of 95 days or less are considered cash equivalents. |
Goodwill | Goodwill Goodwill is recorded as the excess of consideration transferred over the acquisition-date fair values of assets acquired and liabilities assumed in a business combination. We assign goodwill to our reporting units based on the relative fair value expected at the time of the acquisition ( Note 10 We perform an annual impairment assessment on the first day of the third month in the fourth quarter or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of a reporting unit’s goodwill. For reporting units in which this assessment concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and we are not required to perform the quantitative goodwill impairment test. For reporting units in which the impairment assessment concludes that it is more likely than not that the fair value is less than its carrying value, we perform the quantitative goodwill impairment test, which compares the fair value of the reporting unit to its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value. Our goodwill impairment test considers the income method and/or market method to estimate a reporting unit’s fair value. |
Identified Intangible Assets | Identified Intangible Assets We amortize all finite-lived intangible assets that are subject to amortization over their estimated useful life of economic benefit on a straight-line basis ( Note 10 For significant intangible assets subject to amortization, we perform a quarterly assessment to determine whether facts and circumstances indicate that the useful life is shorter than we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess recoverability by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining useful lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If an asset’s useful life is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the updated, shorter useful life. For our intangible assets not subject to amortization, we perform an annual impairment assessment on the first day of the third month in the fourth quarter, or more frequently if indicators of potential impairment exist, to determine whether it is more likely than not that the carrying value of the asset may not be recoverable. If necessary, a quantitative impairment test is performed to compare the fair value of the indefinite-lived intangible asset with its carrying value. Impairments, if any, are based on the excess of the carrying amount over the fair value of the asset. |
Research and Development | Research and Development Costs incurred in the research and development of new software products are expensed as incurred until technological feasibility is established. Research and development costs include salaries and benefits of researchers, supplies, and other expenses incurred during research and development efforts. Development costs are capitalized beginning when a product’s technological feasibility has been established and ending when the product is available for general release to customers. Technological feasibility is reached when the product reaches the working-model stage. To date, new products and enhancements generally have reached technological feasibility and have been released for sale at substantially the same time. All research and development costs to date have been expensed as incurred except for software subject to a hosting arrangement. Software development costs of both internal-use applications and software sold subject to hosting arrangements are capitalized when we have determined certain factors are present, including factors that indicate technology exists to achieve the performance requirements, the decision has been made to develop internally versus buy and our management has authorized the funding for the project. Capitalization of software costs ceases when the software is substantially complete and is ready for its intended use and capitalized costs are amortized over their estimated useful life of three to five years using the straight-line method. When events or circumstances indicate the carrying value of internal use software might not be recoverable, we assess the recoverability of these assets by determining whether the amortization of the asset balance over its remaining life can be recovered through undiscounted future operating cash flows. |
Equity-Based Awards | Equity-Based Awards We currently provide various equity-based compensation to those whom, in the opinion of the Board or its designee, are in a position to make a significant contribution to our success. Equity-based compensation cost is measured at the grant date based on the fair value of the award and recognized as expense over the appropriate service period. Determining the fair value of equity-based awards requires considerable judgment, including assumptions and estimates of the following: • fair value of the unit; • life of the award; • volatility of the unit price; and • dividend yield Before our IPO, the fair value of the unit was determined by the Board reasonably and in good faith. Generally, this involved a review of an independent valuation of our business, which requires judgmental inputs and assumptions such as our cash flow projections, peer company comparisons, market data, growth rates and discount rate. The Board reviewed its prior determination of fair value of a unit on a quarterly basis to decide whether any change was appropriate (including whether to obtain a new independent valuation), considering such factors as any significant financial, operational, or market changes affecting the business since the last valuation date. Due to us not having sufficient historical volatility, we used the historical volatilities of publicly traded companies which are similar to us in size, stage of life cycle and financial leverage. We will continue to use this peer group of companies unless a situation arises within the group that would require evaluation of which publicly traded companies are included or once sufficient data is available to use our own historical volatility. In addition, for awards where vesting is dependent upon achieving certain operating performance goals, we estimate the likelihood of achieving the performance goals. For goals dependent upon a qualifying liquidity event, (i.e., a change of control or public offering registered on a Form S-1 (or successor form), in either case, occurring on or before April 3, 2024) (a “Qualifying Liquidity Event”), we will not recognize any expense until the event occurs. Upon consummation of our IPO, we recognized a cumulative catch-up of expense based on the vesting dates for our time-based awards and expected vesting dates for our performance-based awards. We recognize forfeitures as they occur. For awards with only time-vesting requirement, we recognize the expense over a straight-line basis during the vesting period. After the close of our IPO, our outstanding Management Equity Participation Units (“MEPUs”) and Cash RSU (“CRSUs”) were converted into RSUs (“Replacement RSUs”), which are to be settled in Class A common stock. The fair value of these Replacement RSUs was our IPO price less the present value of the expected dividends not received during the vesting period. For all other RSU grants after our IPO, we utilize the closing price of our common stock on the day of the grant date, less the present value of expected dividends not received during the vesting period to determine grant date fair value. In addition, certain MEPU holders were also granted stock options with a strike price equal to our IPO price. For all other stock option grants after our IPO, we utilize the closing price of our common stock on the day of grant date to determine the strike price. All of our granted stock options are non-qualified and expire 10 years after grant. We utilize a Black-Scholes model to determine grant date fair value of our stock options. Our time-based awards generally vest evenly over the 16 quarters following grant date. For time-based awards granted to our new hires, the vesting period is generally 25% vest one year after grant date and quarterly thereafter for 12 quarters. Time-based awards granted to our non-employee directors vest one year from grant date. Generally, unvested awards are forfeited upon termination of employment with us, however, our executive officers may have provisions permitting acceleration or pro rata acceleration upon termination without cause (as defined in the respective award agreements). Our performance-based RSU awards (“PSU”s) are granted to executive officers and certain employees annually. These awards vest after approximately three years, with the number vesting based upon internal profitability targets that are communicated to employees in the year to which the targets relate. The number of shares of common stock issued will range from zero to stretch, with stretch typically defined as 130% of target. At the time our Board approves such grants, the targets for performance years other than the current year are not known or knowable by us nor our employees. Upon determination and communication of such targets in future years, grant date fair value is determined based upon the closing price, less the present value of expected dividends not received during the vesting period. A portion of our RSU awards and all of our performance-based stock option and performance-based MIU awards vest upon achievement of certain return of cash metrics. In January 2021, these awards were modified to vest annually in equal tranches over the three year anniversaries of our IPO. If the original return of cash performance is achieved prior to such anniversaries, the awards vest in full. In both cases, the unvested portion of the awards are forfeited upon termination. Upon the settlement of RSUs, we withhold a portion of the earned units to cover no more than the maximum statutory income and employment taxes and remit the net shares to an individual brokerage account. Authorized shares of our common stock are used to settle RSUs and stock options. Awards granted prior to our IPO and/or converted at the time of our IPO are covered under our 2017 Management Incentive Plan (“2017 Plan”). Stock options granted at our IPO and/or awards granted at our IPO or after are covered under our 2020 Equity Omnibus Plan (“2020 Plan”). No new awards may be authorized under our 2017 Plan. After the close of the separation from Intel, our employees were no longer eligible for Intel Awards (as defined below). Prior to the transaction, Intel’s stockholders approved the adoption of the Intel Corporation 2006 Equity Incentive Plan. The plan provides for the grant of stock options, stock appreciation rights, restricted stock, and restricted stock units (collectively “Intel Awards”) to eligible full-time and part-time employees and non-employee directors. These awards generally vested over three or four years. Stock options generally expire ten years from the date of grant. Awards were generally granted with only a time-vesting requirement, but may have had certain performance and/or market conditions required for vesting. All outstanding Intel Awards were replaced with fixed cash payouts (“retention awards”) or unvested Class A Unit awards ( Note 12 Note 6 |
Derivative and Hedging Instruments | Derivative and Hedging Instruments The fair values of each of our derivative instruments are recorded as an asset or liability on a net basis at the balance sheet date within other current or long-term assets or liabilities. The change in fair value of our derivative instruments is recorded through earnings in the line item on the Consolidated Statements of Operations to which the derivatives most closely relate, primarily in Interest expense and other, net. Changes in the fair value of the underlying assets and liabilities associated with the hedged risk are generally offset by the changes in the fair value of the related derivatives. We do not use derivative financial instruments for speculative trading purposes. To reduce the interest rate risk inherent in variable rate debt, we entered into certain interest rate swap agreements to convert a portion of our variable rate borrowing into a fixed rate obligation ( Note 15 |
Leases | Leases We adopted ASC Topic 842 which primarily requires leases to be recognized on the balance sheet. We adopted the standard using the modified retrospective approach with an effective date as of the beginning of our fiscal year, December 30, 2018. Prior year financial statements were not recast under the new standard. We determine if an arrangement contains a lease and classification of that lease, if applicable, at inception based on: • Whether the contract involves the use of a distinct identified asset; • Whether we obtain the right to obtain substantially all the economic benefits from the use of the asset throughout the period; and • Whether we have a right to direct the use of the asset. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. A ROU asset is initially measured at an amount which represents the lease liability, plus any initial direct costs incurred and less any lease incentives received. The lease liability is initially measured at lease commencement date based on the present value of minimum lease payments over the lease term. The lease term may include options to extend or terminate when it is reasonably certain that we will exercise the option. We have lease agreements with lease and non-lease components, and the non-lease components are generally accounted for separately and not included in our leased assets and corresponding liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Payments related to short-term leases are expensed on a straight-line basis over the lease term and reflected as a component of lease cost within our consolidated statements of operations. Lease payments generally consist of fixed amounts, as well as variable amounts based on a market rate or an index which are not material to our consolidated lease cost. Our leases do not contain significant terms and conditions for variable lease payments. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. For leases which commenced prior to our adoption of ASU No. 2016-02, Leases, and all related updates (collectively, “ASC Topic 842”), we estimated our incremental borrowing rate as of adoption date based on our credit rating, current economic conditions, and collateralized borrowing. |
Recently Adopted Accounting Standards and Recent Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. We adopted Topic 326 on December 29, 2019 which had an immaterial impact on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which clarifies the accounting for implementation costs in cloud computing arrangements. We adopted ASU 2018-15 on December 29, 2019 prospectively, which had an immaterial impact on our consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. We adopted ASU 2020-04 on June 27, 2020 and it had no impact on our consolidated financial statements and related disclosures. The guidance is potentially applicable when we modify the current reference rate of LIBOR to another reference rate on our 1 st Note 13 Note 15 Recent Accounting Standards Not Yet Adopted 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. ASU 2019-12 is effective for us in the first quarter of fiscal year 2021. We have evaluated the impact of this standard on our accounting policies, processes and systems and do not believe it has a material impact on our consolidated financial statements. 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 are currently evaluating the impact of this update on our consolidated financial statements. |
Revenue from Contract with Cu_2
Revenue from Contract with Customers (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Various Contract Costs Capitalized on Consolidated Financial Statements | The following tables summarize the various contract costs capitalized on our consolidated financial statements: (in millions) December 26, 2020 December 28, 2019 Capitalized acquisition costs within: Deferred costs $ 218 $ 175 Other long-term assets 89 91 Total capitalized acquisition costs $ 307 $ 266 Capitalized fulfillment costs within: Deferred costs $ 15 $ 12 Other long-term assets 19 19 Total capitalized fulfillment costs $ 34 $ 31 |
Summary of Amortization of Contract Acquisitions and Fulfillment Costs on Consolidated Financial Statements | The following tables summarize the amortization of contract acquisitions and fulfillment costs on our consolidated financial statements: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Amortization of capitalized acquisition costs: Net revenue $ 17 $ 23 $ 25 Cost of sales 193 154 141 Sales and marketing 89 81 58 Total amortization of capitalized acquisition costs $ 299 $ 258 $ 224 Amortization of capitalized fulfillment costs: Cost of sales $ 13 $ 12 $ 11 Total amortization of capitalized acquisition costs $ 13 $ 12 $ 11 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Leases [Abstract] | |
Schedule of Information Related to Leases | As of December 26, 2020, we have operating leases for corporate offices and data centers and no significant finance leases. Information related to leases was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 38 $ 38 Right-of-use assets obtained in exchange for lease obligations 24 48 Total lease expense 37 46 |
Schedule of Balance Sheet Information Related to Leases | Balance sheet information related to leases was as follows: (in millions) December 26, 2020 December 28, 2019 Other long-term assets $ 86 $ 97 Lease liabilities, current portion $ 25 $ 29 Other long-term liabilities 78 87 Total lease liabilities $ 103 $ 116 Weighted Average Remaining Lease Term (in years) 7 7 Weighted Average Discount Rate (percentage) 6.0 % 6.1 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities were as follows: (in millions) December 26, 2020 2021 $ 25 2022 20 2023 13 2024 11 2025 11 Thereafter 43 Total lease payments 123 Less imputed interest (20 ) Total lease liabilities $ 103 |
Acquisitions _ Business Combi_2
Acquisitions / Business Combinations (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Business Combinations [Abstract] | |
Schedule of Outstanding Deferred Cash and Equity Related to Acquisitions | As of December 26, 2020, our outstanding deferred cash and equity, as it relates to all acquisitions are as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning outstanding deferred cash and equity balance $ 20 $ 13 $ — Accruals 12 35 39 Restricted Class A Unit Vesting (3 ) (12 ) (9 ) Cash payment (16 ) (16 ) (17 ) Ending outstanding deferred cash and equity balance $ 13 $ 20 $ 13 |
Transactions with Members, Sh_2
Transactions with Members, Shareholders and Related Parties (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Transactions with Related Parties | We had the following transactions with TPG, Intel or other Continuing LLC Owners and companies owned or partially owned by those parties $22 million to certain affiliates of TPG, Thoma Bravo and Intel upon the termination of the Management Services Agreement subsequent to the IPO. Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Sales with related parties: Intel $ 1 $ 10 $ 3 TPG 1 — — TPG affiliates 2 4 5 Other 2 2 1 Total $ 6 $ 16 $ 9 Payments to related parties: Intel $ 15 $ 6 $ 7 TPG 17 6 5 TPG affiliates 30 29 35 Other 16 21 6 Total $ 78 $ 62 $ 53 |
Schedule of Receivable, Net | R evenue from the sales transactions are recognized in accordance with our revenue recognition policy. Our receivable from Intel, net consisted of the following: (in millions) December 26, 2020 December 28, 2019 Intel receivable (1) Tax indemnity $ 8 $ 10 Total 8 10 Intel payable (1) Tax indemnity (2 ) (4 ) Total (2 ) (4 ) Total, net (2) $ 6 $ 6 (1) We have the contractual right of offset of our receivables and payables with Intel. (2) As of December 26, 2020, $3 million and $3 million are recorded in Accounts payable and other current liabilities and Other long-term assets on the consolidated balance sheet, respectively. As of December 28, 2019, $2 million and $4 million are recorded in Other current assets and Other long-term assets on the consolidated balance sheet, respectively. |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Information by Segment | Significant information by segment is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Net revenue: Consumer $ 1,558 $ 1,303 $ 1,161 Enterprise 1,348 1,332 1,248 Total $ 2,906 $ 2,635 $ 2,409 Depreciation and amortization: Consumer $ 272 $ 278 $ 283 Enterprise 219 258 260 Total $ 491 $ 536 $ 543 Operating income (loss): Consumer $ 333 $ 277 $ 107 Enterprise (180 ) (151 ) (280 ) Total $ 153 $ 126 $ (173 ) |
Schedule of Revenue by Geographic Region | Revenue by geographic region based on the sell-to address of the end-users is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 United States $ 1,603 $ 1,408 $ 1,252 Other 1,303 1,227 1,157 Total net revenue $ 2,906 $ 2,635 $ 2,409 |
Schedule of Distributors Accounts on Net Revenue and Accounts Receivable, Net | Many of our revenue transactions are conducted through distributors. As such, we had one distributor which exceeded 10% of our Net revenue and two which exceeded 10% of our Accounts receivable, net: Total Revenue Year Ended (in percent) December 26, 2020 December 28, 2019 December 29, 2018 Ingram Micro Inc. 14 % 15 % 15 % Total Accounts Receivable (in percent) December 26, 2020 December 28, 2019 Ingram Micro Inc. 26 % 29 % Verizon 11 % 2 % |
Restructuring and Transition _2
Restructuring and Transition Charges (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Restructuring and transition Charges | Restructuring and transition charges are as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Employee severance and benefits $ 25 $ 20 $ 27 Facility Restructuring — 2 2 Transition Charges — — 7 Total $ 25 $ 22 $ 36 |
Schedule of Balance of Restructuring Activities | The balance of our restructuring activities are as follows: (in millions) Consumer Enterprise Total Employee severance and benefits As of December 30, 2017 $ 1 $ 3 $ 4 Additional accruals 5 22 27 Cash payments (6 ) (24 ) (30 ) As of December 29, 2018 — 1 1 Additional accruals 2 18 20 Cash payments (2 ) (17 ) (19 ) As of December 28, 2019 — 2 2 Additional accruals 2 23 25 Cash payments (1 ) (10 ) (11 ) As of December 26, 2020 $ 1 $ 15 $ 16 Facility Restructuring As of December 30, 2017 $ 1 $ 6 $ 7 Additional accruals — 2 2 Cash payments (1 ) (4 ) (5 ) As of December 29, 2018 — 4 4 Adjustment (1) — (4 ) (4 ) As of December 28, 2019 — — — Additional accruals — — — Cash payments — — — As of December 26, 2020 $ — $ — $ — (1) Represents a reclassification to reduce ROU assets as part of the transition to ASC Topic 842. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activity | Goodwill activity was as follows: (in millions) Consumer Enterprise Total Balance as of December 29, 2018 $ 1,018 $ 1,408 $ 2,426 Additions — 2 2 Balance as of December 28, 2019 1,018 1,410 2,428 Additions — 3 3 Balance as of December 26, 2020 $ 1,018 $ 1,413 $ 2,431 |
Schedule of Intangible Assets, Net | December 26, 2020 December 28, 2019 (in millions) Gross Assets Accumulated Amortization Net Gross Assets Accumulated Amortization Net Intangible assets subject to amortization: Customer relationships and other $ 1,445 $ (839 ) $ 606 $ 1,445 $ (619 ) $ 826 Acquired and developed technology 1,223 (886 ) 337 1,215 (670 ) 545 Total intangible assets subject to amortization 2,668 (1,725 ) 943 2,660 (1,289 ) 1,371 Intangible assets not subject to amortization: In-process research and development 4 — 4 3 — 3 Brand 697 — 697 697 — 697 Total intangible assets not subject to amortization 701 — 701 700 — 700 Total intangible assets $ 3,369 $ (1,725 ) $ 1,644 $ 3,360 $ (1,289 ) $ 2,071 |
Schedule of Amortization Expense For Purchased and Developed Intangible Assets | Amortization expense for purchased and developed intangible assets is as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Statements of Operations Classification Customer relationships and other $ 220 $ 222 $ 232 Amortization of intangibles Acquired and developed technology 216 246 252 Cost of sales Total $ 436 $ 468 $ 484 |
Schedule of Future Amortization Expense | Based on identified intangible assets that are subject to amortization as of December 26, 2020, we expect future amortization expense to be as follows: (in millions) Total 2021 $ 334 2022 221 2023 156 2024 110 2025 95 Thereafter 27 Total $ 943 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net was as follows: (in millions) December 26, 2020 December 28, 2019 Land, buildings and leasehold improvements $ 86 $ 78 Computer equipment, software and other 229 240 Construction in progress 24 24 Total property and equipment 339 342 Less: accumulated depreciation (190 ) (171 ) Total property and equipment, net $ 149 $ 171 |
Employee Incentives _ Benefit_2
Employee Incentives / Benefit Plans (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Schedule of Equity Based Compensation Costs Recognized | Equity-Based Compensation Equity-based compensation costs recognized in our consolidated statements of operations were: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Cost of sales $ 37 $ 1 $ 1 Sales and marketing 102 5 6 Research and development 112 12 13 General and administrative 62 7 8 Total equity-based compensation expense $ 313 $ 25 $ 28 |
Schedule of Performance Stock Units Activity | PSU activity was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — Grants replacing pre-IPO CRSUs 0.2 $ 19.28 Grants replacing pre-IPO RSUs 0.1 $ 8.25 Balance as of December 26, 2020 0.3 $ 14.30 |
Schedule of Stock Options Activity | Stock Options Stock options activity was as follows: Time-based Performance-based Number of Units (in millions) Weighted Average Grant-Date Fair Value Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — — $ — Grants 0.5 $ 6.35 — Grants in connection with IPO 1.3 $ 7.70 0.6 $ 7.84 Vested (0.5 ) $ 7.84 — Balance as of December 26, 2020 1.3 $ 7.29 0.6 $ 7.84 Exercisable as of December 26, 2020 0.5 — Weighted average strike price $ 20.00 $ — |
Schedule of Estimated Value Black Scholes Model | The weighted average estimated value of the time-based portion of MIUs granted during the years ended December 26, 2020, December 28, 2019 and December 29, 2018 was valued using the Black-Scholes model with the following inputs: Year Ended December 26, 2020 December 28, 2019 December 29, 2018 Estimated values $8.64 - $14.32 $ 8.64 $10.67 - $10.85 Expected life (in years) 2.82 - 3.10 3.17 - 3.22 3.69 - 4.68 Risk-free interest rate 0.18% - 1.34% 1.43% - 1.67% 2.2% - 2.91% Dividend yield 0.0 % 0.0 % 0.0 % Volatility 35.00% - 40.97% 35.91% - 36.37% 40.35% - 43.31% |
Schedule of Management Incentive Units Activity | MIU activity was as follows: Time-based Performance-based Number of Units (in millions) Weighted Average Grant-Date Fair Value Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of December 28, 2019 4.9 $ 2.98 6.0 $ 1.14 Grants 5.6 $ 3.42 — Vested (2.2 ) $ 4.15 (0.9 ) $ 8.64 Forfeited (1.6 ) $ 2.64 (2.4 ) $ 0.92 Balance as of December 26, 2020 6.7 $ 3.47 2.7 $ 1.41 |
Schedule of Management Equity Participation Units Activity | As of December 26, 2020, all outstanding MEPUs were converted into Class A Share awards. MEPU activity during the year ended December 26, 2020 was as follows: (in millions) Number of Time-based Units Number of Performance- based Units Balance as of December 28, 2019 4.1 4.3 Grants 1.4 — Time-vested (1.5 ) — Forfeited (0.8 ) (0.8 ) Converted into Class A Share RSUs (3.2 ) (3.5 ) Balance as of December 26, 2020 — — |
Schedule of Cash Restricted Stock Units Activity | As of December 26, 2020, all outstanding CRSUs were converted into Class A Share awards. CRSU activity during the year ended December 26, 2020 was as follows: (in millions) Number of Units Balance as of December 28, 2019 5.2 Grants 9.7 Time-vested (2.5 ) Forfeited (1.0 ) Converted into Class A Share RSUs (11.4 ) Balance as of December 26, 2020 — |
Schedule of Cash-Based Retention Awards Activities within Accrued Compensation and Benefits | The activities related to cash-based retention awards within Accrued compensation and benefits on our consolidated balance sheets were as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning retention awards balance $ 7 $ 11 $ 29 Accruals, net of forfeitures 8 19 36 Cash payments (15 ) (23 ) (51 ) Reclass to Intel Receivable — — (3 ) Ending retention awards balance $ — $ 7 $ 11 |
Class A Share Awards | |
Schedule of Restricted Stock Units Activity | RSU activity was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of October 21, 2020 — $ — Grants 2.0 $ 15.97 Grants replacing pre-IPO Awards 27.6 $ 17.39 Vested at IPO (5.7 ) $ 20.00 Vested (0.1 ) $ 8.38 Forfeited (0.3 ) $ 19.35 Balance as of December 26, 2020 23.5 $ 16.65 |
Stock Options | |
Schedule of Estimated Value Black Scholes Model | The weighted average estimated value of the stock options granted during the year ended December 26, 2020 was valued using the Black-Scholes model with the following inputs: Year Ended December 26, 2020 Estimated values $15.48 - $20.00 Expected life (in years) 5.02 - 10.00 Risk-free interest rate 0.37% - 0.83% Dividend yield 1.50% - 2.25% Volatility 40.00% |
Class A Unit Awards | |
Schedule of Restricted Stock Units Activity | As of December 26, 2020, all outstanding FTW RSUs were converted into Class A Share awards. FTW RSU activity during the year ended December 26, 2020 was as follows: Number of Units (in millions) Weighted Average Grant-Date Fair Value Balance as of December 28, 2019 2.9 $ 8.08 Grants 4.3 $ 9.46 Vested (1.4 ) $ 8.80 Forfeited (0.7 ) $ 9.14 Converted into Class A Share RSUs (5.1 ) $ 8.13 Balance as of December 26, 2020 — $ — |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Our long-term debt balance consisted of the following: (in millions) December 26, 2020 December 28, 2019 Long-term debt, net: 1 st (1) $ 2,701 $ 3,020 1 st (2) 1,298 1,200 2 nd (3) — 509 Long-term debt, net of unamortized discounts 3,999 4,729 Unamortized deferred financing costs (12 ) (17 ) Current installments of long-term debt (44 ) (43 ) Total $ 3,943 $ 4,669 (1) During the year ended December 26, 2020, the weighted average interest rate was 4.4% (2) During the year ended December 26, 2020, the weighted average interest rate was 3.5% (3) During the year ended December 26, 2020, the weighted average interest rate was 9.7% |
Schedule of Material Terms of Outstanding Debt | As of December 26, 2020, the material terms of our outstanding debt was as follows: Debt Issue Date Issue Principal Interest Rate (1) Interest Payment Frequency Maturity Date 1 st June 2019 $ 3,087 375 pts above LIBOR Monthly September 2024 1 st June 2019 € 1,092 350 pts above EURIBOR Quarterly September 2024 |
Schedule of Debt Repayment Obligations | As of December 26, 2020, our debt repayment obligations for the five succeeding fiscal years and thereafter are as follows: (in millions) 2021 $ 44 2022 45 2023 44 2024 3,905 2025 — Thereafter — Total debt repayment obligations $ 4,038 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Taxes Expense | Loss before income taxes expense includes the following components: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 U.S. $ (282 ) $ (282 ) $ (548 ) Non-U.S. 23 133 98 Loss before income taxes $ (259 ) $ (149 ) $ (450 ) |
Schedule of Provision for Income Tax Expense | The provision for income tax expense consists of the following: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Current: State $ 2 $ — $ 3 Non-U.S. 40 68 49 Total current 42 68 52 Deferred: Federal 2 13 4 State (1 ) 2 1 Non-U.S. (13 ) 4 5 Total deferred (12 ) 19 10 Provision for income tax expense $ 30 $ 87 $ 62 |
Difference Between Tax Provision and Tax Provision Computed at U.S. Federal Statutory Income Tax Rate | The difference between the tax provision and the tax provision computed at the U.S. federal statutory income tax rate for each period was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Income taxes computed at the U.S. federal statutory rate $ (54 ) $ (31 ) $ (94 ) Non-U.S. income taxed at different rates 11 9 5 Withholding taxes 20 18 24 State tax expense — 2 4 Partnership earnings flow through to partners 8 72 121 Redeemable noncontrolling interest 32 — — Valuation allowances 25 3 — Foreign tax credits (4 ) (2 ) (2 ) Uncertain tax positions (8 ) 15 3 Other — 1 1 Provision for income tax expense $ 30 $ 87 $ 62 |
Components of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities are as follows: (in millions) December 26, 2020 December 28, 2019 Deferred tax assets: Accrued compensation and other benefits $ 4 $ 6 Deferred revenue 57 51 Share-based compensation 12 — Net operating losses 77 32 Credits 51 10 Intangibles 147 — Interest expense carryforward 5 2 Other 1 — Total deferred tax assets 354 101 Deferred tax liabilities: Licenses and intangibles — (9 ) Unremitted earnings of non-US subsidiaries (4 ) (5 ) Investment in partnership (81 ) (188 ) Other (1 ) — Total deferred tax liabilities (86 ) (202 ) Valuation allowance (213 ) (4 ) Net deferred tax assets (liabilities) $ 55 $ (105 ) Reported as: Deferred tax assets $ 67 $ 55 Deferred tax liabilities (12 ) (160 ) Net deferred tax assets (liabilities) $ 55 $ (105 ) |
Reconciliation Aggregate Changes in Balance of Gross Unrecognized Tax Benefits | A reconciliation of the aggregate changes in the balance of gross unrecognized tax benefits was as follows: Year Ended (in millions) December 26, 2020 December 28, 2019 December 29, 2018 Beginning gross unrecognized tax benefits $ 27 $ 12 $ 10 Settlements with taxing authorities — — (1 ) Increases in tax positions for prior years — — 1 Decreases in tax positions for prior years (14 ) — (1 ) Increases in tax positions for current year 4 15 3 Ending gross unrecognized tax benefits $ 17 $ 27 $ 12 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments and Interest Rate Swaps (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
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 December 26, 2020 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred issuance costs (Note 13) $ — $ (4,033 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ (119 ) $ — As of December 28, 2019 Financial instruments not carried at fair value: Long-term debt, gross of discounts and deferred issuance costs (Note 13) $ — $ (4,817 ) $ — Financial instruments carried at fair value: Interest rate swaps $ — $ (61 ) $ — |
Schedule of Interest Rate Outstanding Effective Arrangements | As of December 26, 2020, the outstanding effective hedging arrangements were as follows: Notional Value (in millions) Effective Date Expiration Date Fixed Rate $225 January 29, 2018 January 29, 2021 2.33% $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 amounts recognized Gross amount offset in Balance Sheets Net amounts presented in Balance Sheets As of December 26, 2020 Accounts payable and other current liabilities $ (43 ) $ — $ (43 ) Other long-term liabilities (76 ) — (76 ) As of December 28, 2019 Accounts payable and other current liabilities $ (19 ) $ — $ (19 ) Other long-term liabilities (42 ) — (42 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | Year Ended (in millions except per share data) December 26, 2020 Numerator: Net loss $ (289 ) Less: Net income attributable to FTW prior to the Reorganization Transactions (26 ) Less: Net loss attributable to redeemable noncontrolling interests after the Reorganization Transactions 197 Net loss attributable to McAfee Corp., basic $ (118 ) Add: Net loss attributable to dilutive redeemable noncontrolling interests after the Reorganization Transactions (197 ) Less: Provision for income tax expense (1) (1 ) Net income attributable to McAfee Corp., diluted $ (316 ) Denominator: Weighted average shares of Class A common stock outstanding, basic 162.3 Conversion of outstanding LLC units and MIUs (2) 271.6 Weighted average shares of Class A common stock outstanding, diluted 433.9 Net loss per share, basic and diluted $ (0.73 ) (1) Represents incremental income tax provision we would have recognized had our dilutive non-controlling interests been converted into Class A common stock as of the beginning of the period. (2) Represents a one for one conversion of our RNCI’s 267.1 million LLC units and an exchange of 5.4 million MIUs for their common equivalent of Class A common stock, based on the value of such MIUs relative to their applicable distribution threshold. (3) 25.2 million |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
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 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) December 26, 2020 Assets Current assets: Cash and cash equivalents $ 231 Accounts receivable, net 392 Deferred costs 233 Other current assets 58 Total current assets 914 Property and equipment, net 149 Goodwill 2,431 Identified intangible assets, net 1,644 Deferred tax assets 67 Receivable from Parent, net 46 Other long-term assets 223 Total assets $ 5,474 Liabilities and deficit Current liabilities: Accounts payable and other current liabilities $ 250 Accrued compensation and benefits 197 Accrued marketing 124 Income taxes payable 14 Long-term debt, current portion 44 Lease liabilities, current portion 25 Deferred revenue 1,715 Total current liabilities 2,369 Long-term debt, net 3,943 Deferred tax liabilities 12 Other long-term liabilities 204 Deferred revenue, less current portion 684 Total liabilities 7,212 Members’ deficit: Deficit attributable to Continuing LLC Owners (1,092 ) Deficit attributable to McAfee Corp. (646 ) Total deficit (1,738 ) Total liabilities and deficit $ 5,474 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 26, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Payments Under All Unconditional Purchase Obligations | As of December 26, 2020, excluding the amounts related to lease obligations which are disclosed in Note 5 (in millions) 2021 $ 49 2022 45 2023 39 2024 12 2025 4 Thereafter — Total $ 149 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | Oct. 21, 2020 | Oct. 31, 2020USD ($)$ / sharesshares | Dec. 26, 2020$ / shares |
Basis Of Presentation [Line Items] | |||
Business, formation date | Jul. 19, 2019 | ||
Class A Common Stock | |||
Basis Of Presentation [Line Items] | |||
Common Stock, par value | $ / shares | $ 0.001 | ||
Shares settlement, exchange ratio | 1 | 1 | |
Stock issued for exchange of ownership | 126.3 | ||
Class A Common Stock | RSUs | |||
Basis Of Presentation [Line Items] | |||
Settled restricted stock units | 5.7 | ||
Initial Public Offering | |||
Basis Of Presentation [Line Items] | |||
Common stock, shares, issued | 31 | ||
Proceeds from issuance of common stock | $ | $ 586 | ||
Initial Public Offering | Class A Common Stock | |||
Basis Of Presentation [Line Items] | |||
Common stock, shares, issued | 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 |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Significant Accounting Policies [Line Items] | ||||
Sales and marketing expense | $ 826,000,000 | $ 770,000,000 | $ 815,000,000 | |
Total advertising expenses | 56,000,000 | 53,000,000 | 62,000,000 | |
Allowance for credit losses | $ 5,000,000 | |||
Cash equivalents, original maturities | 95 days | |||
Subsequent Event | ||||
Significant Accounting Policies [Line Items] | ||||
Awards vesting period | 3 years | |||
Time-based Awards | ||||
Significant Accounting Policies [Line Items] | ||||
Awards vesting period | 48 months | |||
Awards vesting rights, description | vesting period is generally 25% vest one year after grant date and quarterly thereafter for 12 quarters | |||
Awards vesting percentage in year one | 25.00% | |||
Non Qualified Stock Options | ||||
Significant Accounting Policies [Line Items] | ||||
Stock options expiration period | 10 years | |||
Performance Shares | ||||
Significant Accounting Policies [Line Items] | ||||
Awards vesting period | 3 years | |||
Target percentage required to issue common stock | 130.00% | |||
Stock Options | Intel Corporation 2006 Equity Incentive Plan | ||||
Significant Accounting Policies [Line Items] | ||||
Stock options expiration period | 10 years | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated recognition period of initial commissions not commensurate with renewal commissions | 4 years | |||
Minimum | Intel Corporation 2006 Equity Incentive Plan | ||||
Significant Accounting Policies [Line Items] | ||||
Awards vesting period | 3 years | |||
Minimum | Computer Software, Intangible Asset | ||||
Significant Accounting Policies [Line Items] | ||||
Capitalized software costs, estimated useful life | 3 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated recognition period of initial commissions not commensurate with renewal commissions | 5 years | |||
Allowance for credit losses | 1,000,000 | |||
Maximum | Intel Corporation 2006 Equity Incentive Plan | ||||
Significant Accounting Policies [Line Items] | ||||
Awards vesting period | 4 years | |||
Maximum | Computer Software, Intangible Asset | ||||
Significant Accounting Policies [Line Items] | ||||
Capitalized software costs, estimated useful life | 5 years | |||
Product Placement Fees and Marketing Development Funds | ||||
Significant Accounting Policies [Line Items] | ||||
Sales and marketing expense | $ 187,000,000 | $ 142,000,000 | $ 170,000,000 | |
ASC Topic 606 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, accounting standards update, adopted | true | |||
Change in accounting principle, accounting standards update, adoption date | Dec. 31, 2017 | |||
ASC Topic 842 | ||||
Significant Accounting Policies [Line Items] | ||||
Change in accounting principle, accounting standards update, adopted | true | |||
Change in accounting principle, accounting standards update, adoption date | Dec. 30, 2018 |
Recent Accounting Standards - A
Recent Accounting Standards - Additional Information (Details) | 12 Months Ended |
Dec. 26, 2020 | |
ASU 2016-13 | |
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. 29, 2019 |
Change in accounting principle, accounting standards update, immaterial effect | true |
ASU 2018-15 | |
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. 29, 2019 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Change in accounting principle, accounting standards update, transition option elected [Extensible List] | us-gaap:AccountingStandardsUpdate201815ProspectiveMember |
ASU 2020-04 | |
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 | Jun. 27, 2020 |
Change in accounting principle, accounting standards update, immaterial effect | true |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Revenue From Contract With Customers [Line Items] | |||
Deferred revenue recognized | $ 1,586,000,000 | $ 1,450,000,000 | $ 1,240,000,000 |
Deferred revenue due to effect of business combinations | 38,000,000 | ||
Additional deferred revenue recognized | 15,000,000 | ||
Estimated revenue expected to be recognized | 2,542,000,000 | ||
Capitalized Acquisition Costs | |||
Revenue From Contract With Customers [Line Items] | |||
Impairment losses in relation to capitalized costs | 0 | 0 | 0 |
Capitalized Fulfillment Costs | |||
Revenue From Contract With Customers [Line Items] | |||
Impairment losses in relation to capitalized costs | $ 0 | $ 0 | $ 0 |
Revenue from Contract with Cu_4
Revenue from Contract with Customers - Additional Information (Details1) | Dec. 26, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-12-27 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 71.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-12-26 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 26.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Revenue from Contract with Cu_5
Revenue from Contract with Customers - Summary of Various Contract Costs Capitalized on Consolidated Financial Statements (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Capitalized costs within: | ||
Deferred costs | $ 233 | $ 187 |
Capitalized Acquisition Costs | ||
Capitalized costs within: | ||
Total capitalized costs | 307 | 266 |
Capitalized Acquisition Costs | Deferred Costs | ||
Capitalized costs within: | ||
Deferred costs | 218 | 175 |
Capitalized Acquisition Costs | Other Long-term Assets | ||
Capitalized costs within: | ||
Capitalized costs, non-current | 89 | 91 |
Capitalized Fulfillment Costs | ||
Capitalized costs within: | ||
Total capitalized costs | 34 | 31 |
Capitalized Fulfillment Costs | Deferred Costs | ||
Capitalized costs within: | ||
Deferred costs | 15 | 12 |
Capitalized Fulfillment Costs | Other Long-term Assets | ||
Capitalized costs within: | ||
Capitalized costs, non-current | $ 19 | $ 19 |
Revenue from Contract with Cu_6
Revenue from Contract with Customers - Summary of Amortization of Contract Acquisitions and Fulfillment Costs on Consolidated Financial Statements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Capitalized Acquisition Costs | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | $ 299 | $ 258 | $ 224 |
Capitalized Acquisition Costs | Net Revenue | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | 17 | 23 | 25 |
Capitalized Acquisition Costs | Cost of Sales | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | 193 | 154 | 141 |
Capitalized Acquisition Costs | Sales and Marketing | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | 89 | 81 | 58 |
Capitalized Fulfillment Costs | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | 13 | 12 | 11 |
Capitalized Fulfillment Costs | Cost of Sales | |||
Capitalized Contract Cost [Line Items] | |||
Amortization of capitalized costs | $ 13 | $ 12 | $ 11 |
Leases - Schedule of Informatio
Leases - Schedule of Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 26, 2020 | Dec. 28, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 38 | $ 38 |
Right-of-use assets obtained in exchange for lease obligations | 24 | 48 |
Total lease expense | $ 37 | $ 46 |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information Related to Leases (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Leases [Abstract] | ||
Other long-term assets | $ 86 | $ 97 |
Lease liabilities, current portion | 25 | 29 |
Other long-term liabilities | $ 78 | $ 87 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Total lease liabilities | $ 103 | $ 116 |
Weighted Average Remaining Lease Term (in years) | 7 years | 7 years |
Weighted Average Discount Rate (percentage) | 6.00% | 6.10% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 25 | |
2022 | 20 | |
2023 | 13 | |
2024 | 11 | |
2025 | 11 | |
Thereafter | 43 | |
Total lease payments | 123 | |
Less imputed interest | (20) | |
Total lease liabilities | $ 103 | $ 116 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 26, 2020 | |
Leases [Abstract] | ||
Additional operating lease commitments | $ 0 | |
Rental expense related to our facilities | $ 32,000,000 |
Acquisitions _ Business Combi_3
Acquisitions / Business Combinations - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Jan. 03, 2018 | Dec. 26, 2020 | Dec. 29, 2018 | Feb. 26, 2018 |
Business Acquisition [Line Items] | ||||
Deferred cash payments | $ 59 | |||
Unrecognized expense relating to deferred cash | $ 7 | |||
Unrecognized expense relating to weighted average period | 1 year | |||
Skyhigh Networks, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interest acquired | 100.00% | |||
Purchase price | $ 590 | |||
Skyhigh Networks, Inc. | Restricted Class A Units | ||||
Business Acquisition [Line Items] | ||||
Stock issued in connection with acquisition | 2.2 | |||
Stock issued, fair value | $ 10.67 | |||
Stock issued, expiration period from acquisition date | 2 years | |||
TunnelBear, Inc. | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 25 |
Acquisitions _ Business Combi_4
Acquisitions / Business Combinations - Schedule of Outstanding Deferred Cash and Equity Related to Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Business Combinations [Abstract] | |||
Beginning outstanding deferred cash and equity balance | $ 20 | $ 13 | |
Accruals | 12 | 35 | $ 39 |
Restricted Class A Unit Vesting | (3) | (12) | (9) |
Cash payment | (16) | (16) | (17) |
Ending outstanding deferred cash and equity balance | $ 13 | $ 20 | $ 13 |
Transactions with Members, Sh_3
Transactions with Members, Shareholders and Related Parties - Additional Information (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Feb. 29, 2020USD ($) | Dec. 26, 2020USD ($)$ / shares | Dec. 28, 2019USD ($) | |
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | $ 14 | |||
Dividends date of record | Dec. 26, 2020 | |||
Dividends paid, year and month | 2021-01 | |||
Stockholders' equity note, stock split | In October 2020, the Board of FTW approved and effected a four-for-one unit split of its member units. | |||
Stockholders' equity note, stock split, conversion ratio | 4 | |||
Management Services Agreement | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Payments of termination fees | $ 22 | |||
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 | $ / shares | $ 0.087 | |||
Class A Common Stock | Initial Public Offering | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
One-time payment for units exchanged | $ 13 | |||
Foundation Technology Worldwide L L C | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | 314 | $ 1,338 | ||
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 | 38 | |||
Continuing LLC Owners | ||||
Transactions With Members Shareholders And Related Parties [Line Items] | ||||
Tax and excess cash distributions declared | $ 24 |
Transactions with Members, Sh_4
Transactions with Members, Shareholders and Related Parties - Summary of Transactions with Related Parties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Related Party Transaction [Line Items] | |||
Sales with related parties | $ 6 | $ 16 | $ 9 |
Payments to related parties | 78 | 62 | 53 |
Intel | |||
Related Party Transaction [Line Items] | |||
Sales with related parties | 1 | 10 | 3 |
Payments to related parties | 15 | 6 | 7 |
TPG | |||
Related Party Transaction [Line Items] | |||
Sales with related parties | 1 | ||
Payments to related parties | 17 | 6 | 5 |
TPG Affiliates | |||
Related Party Transaction [Line Items] | |||
Sales with related parties | 2 | 4 | 5 |
Payments to related parties | 30 | 29 | 35 |
Other | |||
Related Party Transaction [Line Items] | |||
Sales with related parties | 2 | 2 | 1 |
Payments to related parties | $ 16 | $ 21 | $ 6 |
Transactions with Members, Sh_5
Transactions with Members, Shareholders and Related Parties - Schedule of Receivable, Net (Details) - Intel - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Intel receivable | ||
Tax indemnity | $ 8 | $ 10 |
Total | 8 | 10 |
Intel payable | ||
Tax indemnity | (2) | (4) |
Total | (2) | (4) |
Total, net | $ 6 | $ 6 |
Transactions with Members, Sh_6
Transactions with Members, Shareholders and Related Parties - Schedule of Receivable, Net (Parenthetical) (Details) - Intel - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 6 | $ 6 |
Accounts Payable and Other Current Liabilities | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | 3 | |
Other Long-term Assets | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 3 | 4 |
Other Current Assets | ||
Related Party Transaction [Line Items] | ||
Tax indemnity net | $ 2 |
Operating Segments - Additional
Operating Segments - Additional Information (Details) | 12 Months Ended |
Dec. 26, 2020SegmentDistributor | |
Segment Reporting Information [Line Items] | |
Number of operating segments | Segment | 2 |
Number of reportable segments | Segment | 2 |
Net Revenue | |
Segment Reporting Information [Line Items] | |
Number of distributors which exceeded 10% of net revenue and accounts receivable, net | Distributor | 1 |
Accounts Receivable, Net | |
Segment Reporting Information [Line Items] | |
Number of distributors which exceeded 10% of net revenue and accounts receivable, net | Distributor | 2 |
Operating Segments - Schedule o
Operating Segments - Schedule of Information by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Net revenue: | |||
Net revenue | $ 2,906 | $ 2,635 | $ 2,409 |
Depreciation and amortization: | |||
Depreciation and amortization | 491 | 536 | 543 |
Operating income (loss): | |||
Operating income (loss) | 153 | 126 | (173) |
Consumer | |||
Net revenue: | |||
Net revenue | 1,558 | 1,303 | 1,161 |
Depreciation and amortization: | |||
Depreciation and amortization | 272 | 278 | 283 |
Operating income (loss): | |||
Operating income (loss) | 333 | 277 | 107 |
Enterprise | |||
Net revenue: | |||
Net revenue | 1,348 | 1,332 | 1,248 |
Depreciation and amortization: | |||
Depreciation and amortization | 219 | 258 | 260 |
Operating income (loss): | |||
Operating income (loss) | $ (180) | $ (151) | $ (280) |
Operating Segments - Schedule_2
Operating Segments - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Revenues from External Customers [Line Items] | |||
Total net revenue | $ 2,906 | $ 2,635 | $ 2,409 |
United States | |||
Revenues from External Customers [Line Items] | |||
Total net revenue | 1,603 | 1,408 | 1,252 |
Other | |||
Revenues from External Customers [Line Items] | |||
Total net revenue | $ 1,303 | $ 1,227 | $ 1,157 |
Operating Segments - Schedule_3
Operating Segments - Schedule of Distributors Accounts on Net Revenue and Accounts Receivable, Net (Details) - Customer Concentration Risk | Dec. 26, 2020 | Dec. 28, 2019 | Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 |
Net Revenue | Ingram Micro Inc. | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 14.00% | 15.00% | 15.00% | ||
Accounts Receivable, Net | Ingram Micro Inc. | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 26.00% | 29.00% | |||
Accounts Receivable, Net | Verizon | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 11.00% | 2.00% |
Restructuring and Transition _3
Restructuring and Transition Charges - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Restructuring Cost And Reserve [Line Items] | |||
Transition charges | $ 7 | ||
Employee severance and benefits costs | $ 25 | $ 20 | 27 |
Facility restructuring costs | 2 | 2 | |
Minimum | Severance and Other Restructuring Expense | |||
Restructuring Cost And Reserve [Line Items] | |||
Expected to recognize additional severance and other restructuring expense | 30 | ||
Maximum | Severance and Other Restructuring Expense | |||
Restructuring Cost And Reserve [Line Items] | |||
Expected to recognize additional severance and other restructuring expense | 35 | ||
Restructuring and Transition Charges | |||
Restructuring Cost And Reserve [Line Items] | |||
Employee severance and benefits costs | 16 | 20 | 27 |
Facility restructuring costs | $ 2 | 2 | |
Restructuring Charges | |||
Restructuring Cost And Reserve [Line Items] | |||
Employee severance and benefits costs | $ 9 | ||
Enterprise | |||
Restructuring Cost And Reserve [Line Items] | |||
Transition charges | 6 | ||
Consumer | |||
Restructuring Cost And Reserve [Line Items] | |||
Transition charges | $ 1 |
Restructuring and Transition _4
Restructuring and Transition Charges - Schedule of Restructuring Charges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Restructuring And Related Activities [Abstract] | |||
Employee severance and benefits | $ 25 | $ 20 | $ 27 |
Facility Restructuring | 2 | 2 | |
Transition charges | 7 | ||
Total | $ 25 | $ 22 | $ 36 |
Restructuring and Transition _5
Restructuring and Transition Charges - Schedule of Balance of Restructuring Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Restructuring Cost And Reserve [Line Items] | |||
Additional accruals | $ 25 | $ 22 | $ 36 |
Employee Severance and Benefits | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 2 | 1 | 4 |
Additional accruals | 25 | 20 | 27 |
Cash payments | (11) | (19) | (30) |
Restructuring Reserve | 16 | 2 | 1 |
Facility Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 4 | 7 | |
Additional accruals | 2 | ||
Cash payments | (5) | ||
Adjustment | (4) | ||
Restructuring Reserve | 4 | ||
Consumer | Employee Severance and Benefits | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 1 | ||
Additional accruals | 2 | 2 | 5 |
Cash payments | (1) | (2) | (6) |
Restructuring Reserve | 1 | ||
Consumer | Facility Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 1 | ||
Cash payments | (1) | ||
Enterprise | Employee Severance and Benefits | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 2 | 1 | 3 |
Additional accruals | 23 | 18 | 22 |
Cash payments | (10) | (17) | (24) |
Restructuring Reserve | $ 15 | 2 | 1 |
Enterprise | Facility Restructuring | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring Reserve | 4 | 6 | |
Additional accruals | 2 | ||
Cash payments | (4) | ||
Adjustment | $ (4) | ||
Restructuring Reserve | $ 4 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill Activity (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 26, 2020 | Dec. 28, 2019 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 2,428 | $ 2,426 |
Additions | 3 | 2 |
Ending Balance | 2,431 | 2,428 |
Consumer | ||
Goodwill [Line Items] | ||
Beginning Balance | 1,018 | 1,018 |
Ending Balance | 1,018 | 1,018 |
Enterprise | ||
Goodwill [Line Items] | ||
Beginning Balance | 1,410 | 1,408 |
Additions | 3 | 2 |
Ending Balance | $ 1,413 | $ 1,410 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 26, 2020 | Dec. 28, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Impairment loss for goodwill or intangibles | $ 0 | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | $ 2,668 | $ 2,660 |
Intangible Assets Subject to Amortization, Accumulated Amortization | (1,725) | (1,289) |
Intangible Assets Subject to Amortization, Net | 943 | 1,371 |
Intangible Assets Not Subject to Amortization, Gross Assets | 701 | 700 |
Intangible Assets Not Subject to Amortization, Net | 701 | 700 |
Intangible Assets, Gross Assets | 3,369 | 3,360 |
Intangible Assets, Accumulated Amortization | (1,725) | (1,289) |
Intangible Assets, Gross Net | 1,644 | 2,071 |
In-process research and development | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Not Subject to Amortization, Gross Assets | 4 | 3 |
Intangible Assets Not Subject to Amortization, Net | 4 | 3 |
Brand | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Not Subject to Amortization, Gross Assets | 697 | 697 |
Intangible Assets Not Subject to Amortization, Net | 697 | 697 |
Customer Relationships and Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | 1,445 | 1,445 |
Intangible Assets Subject to Amortization, Accumulated Amortization | (839) | (619) |
Intangible Assets Subject to Amortization, Net | 606 | 826 |
Acquired and Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible Assets Subject to Amortization, Gross Assets | 1,223 | 1,215 |
Intangible Assets Subject to Amortization, Accumulated Amortization | (886) | (670) |
Intangible Assets Subject to Amortization, Net | $ 337 | $ 545 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Amortization Expense For Purchased and Developed Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Finite Lived Intangible Assets [Line Items] | |||
Amortization expense for purchased intangible assets | $ 436 | $ 468 | $ 484 |
Customer Relationships and Other | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization expense for purchased intangible assets | 220 | 222 | 232 |
Acquired and Developed Technology | |||
Finite Lived Intangible Assets [Line Items] | |||
Amortization expense for purchased intangible assets | $ 216 | $ 246 | $ 252 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, Net - Schedule of Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2021 | $ 334 | |
2022 | 221 | |
2023 | 156 | |
2024 | 110 | |
2025 | 95 | |
Thereafter | 27 | |
Intangible Assets Subject to Amortization, Net | $ 943 | $ 1,371 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 55 | $ 68 | $ 60 |
Buildings | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 10 years | ||
Buildings | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 25 years | ||
Computer Equipment, Software and Other | Minimum | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 2 years | ||
Computer Equipment, Software and Other | Maximum | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 5 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 339 | $ 342 |
Less: accumulated depreciation | (190) | (171) |
Total property and equipment, net | 149 | 171 |
Land, Buildings and Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 86 | 78 |
Computer Equipment, Software and Other | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 229 | 240 |
Construction In Progress | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 24 | $ 24 |
Employee Incentives _ Benefit_3
Employee Incentives / Benefit Plans - Schedule of Equity Based Compensation Costs Recognized (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Equity-based compensation expense | $ 313 | $ 25 | $ 28 |
Cost of Sales | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Equity-based compensation expense | 37 | 1 | 1 |
Sales and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Equity-based compensation expense | 102 | 5 | 6 |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Equity-based compensation expense | 112 | 12 | 13 |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Equity-based compensation expense | $ 62 | $ 7 | $ 8 |
Employee Incentives _ Benefit_4
Employee Incentives / Benefit Plans - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Feb. 29, 2020 | Dec. 26, 2020 | Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | Oct. 31, 2020 | |
Compensation Related Costs [Line Items] | ||||||
Equity based compensation tax benefits realized for tax deduction from share based awards | $ 5 | |||||
Recognition of amount in incremental compensation expense | $ 12 | |||||
Accrued Compensation and Benefits and Other Long-term Liabilities | ||||||
Compensation Related Costs [Line Items] | ||||||
Defined benefit plan, net benefit obligation | $ 11 | $ 11 | $ 8 | |||
Defined Benefit Plan, Type [Extensible List] | us-gaap:PensionPlansDefinedBenefitMember | us-gaap:PensionPlansDefinedBenefitMember | us-gaap:PensionPlansDefinedBenefitMember | |||
Defined Benefit Plan, Sponsor Location [Extensible List] | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | us-gaap:ForeignPlanMember | |||
Tax-Qualified | ||||||
Compensation Related Costs [Line Items] | ||||||
Defined contribution plans, expense | $ 35 | $ 36 | $ 32 | |||
Stock Options Activity | ||||||
Compensation Related Costs [Line Items] | ||||||
Unrecognized equity-based compensation expense | $ 12 | $ 12 | ||||
Unrecognized compensation expense, weighted average period for recognition | 2 years | |||||
Class A Common Stock | ||||||
Compensation Related Costs [Line Items] | ||||||
Common Stock, par value | $ 0.001 | $ 0.001 | ||||
Replacement RSUs | ||||||
Compensation Related Costs [Line Items] | ||||||
Number of shares vested in period | 1.8 | |||||
Replacement RSUs | Class A Common Stock | ||||||
Compensation Related Costs [Line Items] | ||||||
Common Stock, par value | $ 0.001 | |||||
Class A Share Awards | ||||||
Compensation Related Costs [Line Items] | ||||||
Number of shares vested in period | 0.1 | |||||
Unrecognized equity-based compensation expense | $ 235 | $ 235 | ||||
Unrecognized compensation expense, weighted average period for recognition | 2 years 1 month 6 days | |||||
Performance Shares | ||||||
Compensation Related Costs [Line Items] | ||||||
Unrecognized equity-based compensation expense | 3 | $ 3 | ||||
Unrecognized compensation expense, weighted average period for recognition | 2 years 1 month 6 days | |||||
Unrecognized compensation costs | 2 | $ 2 | ||||
Time-based Awards | ||||||
Compensation Related Costs [Line Items] | ||||||
Unrecognized compensation expense, weighted average period for recognition | 3 years | |||||
Unrecognized compensation costs | 22 | $ 22 | ||||
Cash-Based Retention Awards | ||||||
Compensation Related Costs [Line Items] | ||||||
Unrecognized compensation expense | $ 3 | $ 3 | ||||
Unrecognized compensation expense, weighted average period for recognition | 1 year 1 month 6 days |
Employee Incentives _ Benefit_5
Employee Incentives / Benefit Plans - Schedule of Restricted Stock Units Activity (Details) - $ / shares shares in Millions | 2 Months Ended | 12 Months Ended |
Dec. 26, 2020 | Dec. 26, 2020 | |
Class A Share Awards | ||
Compensation Related Costs [Line Items] | ||
Number of Units, Grants | 2 | |
Number of Units, Grants replacing pre-IPO awards | 27.6 | |
Number of Units, Vested at IPO | (5.7) | |
Number of Units, Vested | (0.1) | |
Number of Units, Forfeited | (0.3) | |
Number of Units, Ending Balance | 23.5 | 23.5 |
Weighted Average Grant Date Fair Value, Grants | $ 15.97 | |
Weighted Average Grant Date Fair Value, Grants replacing pre-IPO awards | 17.39 | |
Weighted Average Grant Date Fair Value, Vested at IPO | 20 | |
Weighted Average Grant Date Fair Value, Vested | 8.38 | |
Weighted Average Grant Date Fair Value, Forfeited | 19.35 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ 16.65 | $ 16.65 |
Class A Unit Awards | Foundation Technology Worldwide L L C | ||
Compensation Related Costs [Line Items] | ||
Number of Units, Beginning Balance | 2.9 | |
Number of Units, Grants | 4.3 | |
Number of Units, Vested | (1.4) | |
Number of Units, Forfeited | (0.7) | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ 8.08 | |
Weighted Average Grant Date Fair Value, Grants | 9.46 | |
Weighted Average Grant Date Fair Value, Vested | 8.80 | |
Weighted Average Grant Date Fair Value, Forfeited | $ 9.14 | |
Number of Units, Converted into Class A Share RSUs | (5.1) | |
Weighted Average Grant Date Fair Value, Converted into Class A Share RSUs | $ 8.13 |
Employee Incentives _ Benefit_6
Employee Incentives / Benefit Plans - Schedule of Performance Stock Units Activity (Details) - Performance Shares shares in Millions | 2 Months Ended |
Dec. 26, 2020$ / sharesshares | |
Compensation Related Costs [Line Items] | |
Number of Units, Grants replacing pre-IPO CRSUs | shares | 0.2 |
Number of Units, Grants replacing pre-IPO RSUs | shares | 0.1 |
Number of Units, Ending Balance | shares | 0.3 |
Weighted Average Grant Date Fair Value, Grants replacing pre-IPO CRSUs | $ / shares | $ 19.28 |
Weighted Average Grant Date Fair Value, Grants replacing pre-IPO RSUs | $ / shares | 8.25 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 14.30 |
Employee Incentives _ Benefit_7
Employee Incentives / Benefit Plans - Schedule of Stock Options Activity (Details) shares in Millions | 2 Months Ended | 12 Months Ended |
Dec. 26, 2020$ / sharesshares | Dec. 28, 2019$ / shares | |
Compensation Related Costs [Line Items] | ||
Weighted Average Grant Date Fair Value, Vested | $ 8.64 | |
Time-based Stock Options | ||
Compensation Related Costs [Line Items] | ||
Number of Units, Grants | shares | 0.5 | |
Number of Units, Grants in connection with IPO | shares | 1.3 | |
Number of Units, Vested | shares | (0.5) | |
Number of Units, Ending Balance | shares | 1.3 | |
Number of Units, Exercisable | shares | 0.5 | |
Number of Units, Weighted average strike price | $ 20 | |
Weighted Average Grant Date Fair Value, Grants | 6.35 | |
Weighted Average Grand Date Fair Value, Grants in connection with IPO | 7.70 | |
Weighted Average Grant Date Fair Value, Vested | 7.84 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ 7.29 | |
Performance-based Stock Options | ||
Compensation Related Costs [Line Items] | ||
Number of Units, Grants in connection with IPO | shares | 0.6 | |
Number of Units, Ending Balance | shares | 0.6 | |
Weighted Average Grand Date Fair Value, Grants in connection with IPO | $ 7.84 | |
Weighted Average Grant Date Fair Value, Ending Balance | $ 7.84 |
Employee Incentives _ Benefit_8
Employee Incentives / Benefit Plans - Schedule of Estimated Value Black Scholes Model (Details) - $ / shares | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Compensation Related Costs [Line Items] | |||
Estimated values | $ 8.64 | ||
Risk-free interest rate, minimum | 0.18% | 1.43% | 2.20% |
Risk-free interest rate, maximum | 1.34% | 1.67% | 2.91% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Volatility, minimum | 35.00% | 35.91% | 40.35% |
Volatility, maximum | 40.97% | 36.37% | 43.31% |
Minimum | |||
Compensation Related Costs [Line Items] | |||
Estimated values | $ 8.64 | $ 10.67 | |
Expected life (in years) | 2 years 9 months 25 days | 3 years 2 months 1 day | 3 years 8 months 8 days |
Maximum | |||
Compensation Related Costs [Line Items] | |||
Estimated values | $ 14.32 | $ 10.85 | |
Expected life (in years) | 3 years 1 month 6 days | 3 years 2 months 19 days | 4 years 8 months 4 days |
Stock Options | |||
Compensation Related Costs [Line Items] | |||
Risk-free interest rate, minimum | 0.37% | ||
Risk-free interest rate, maximum | 0.83% | ||
Volatility | 40.00% | ||
Stock Options | Minimum | |||
Compensation Related Costs [Line Items] | |||
Estimated values | $ 15.48 | ||
Expected life (in years) | 5 years 7 days | ||
Dividend yield | 1.50% | ||
Stock Options | Maximum | |||
Compensation Related Costs [Line Items] | |||
Estimated values | $ 20 | ||
Expected life (in years) | 10 years | ||
Dividend yield | 2.25% |
Employee Incentives _ Benefit_9
Employee Incentives / Benefit Plans - Schedule of Management Incentive Units Activity (Details) shares in Millions | 12 Months Ended |
Dec. 26, 2020$ / sharesshares | |
Time-based Management Incentive Units | |
Compensation Related Costs [Line Items] | |
Number of Units, Beginning Balance | shares | 4.9 |
Number of Units, Grants | shares | 5.6 |
Number of Units, Vested | shares | (2.2) |
Number of Units, Forfeited | shares | (1.6) |
Number of Units, Ending Balance | shares | 6.7 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 2.98 |
Weighted Average Grant Date Fair Value, Grants | $ / shares | 3.42 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 4.15 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 2.64 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 3.47 |
Performance-based Management Incentive Units | |
Compensation Related Costs [Line Items] | |
Number of Units, Beginning Balance | shares | 6 |
Number of Units, Vested | shares | (0.9) |
Number of Units, Forfeited | shares | (2.4) |
Number of Units, Ending Balance | shares | 2.7 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 1.14 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 8.64 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 0.92 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 1.41 |
Employee Incentives _ Benefi_10
Employee Incentives / Benefit Plans - Schedule of Management Equity Participation Units Activity (Details) shares in Millions | 12 Months Ended |
Dec. 26, 2020shares | |
Time-based Management Equity Participation Units | |
Compensation Related Costs [Line Items] | |
Number of Units, Beginning Balance | 4.1 |
Number of Units, Grants | 1.4 |
Number of Units, Vested | (1.5) |
Number of Units, Forfeited | (0.8) |
Number of Units, Converted into Class A Share RSUs | (3.2) |
Performance-based Management Equity Participation Units | |
Compensation Related Costs [Line Items] | |
Number of Units, Beginning Balance | 4.3 |
Number of Units, Forfeited | (0.8) |
Number of Units, Converted into Class A Share RSUs | (3.5) |
Employee Incentives _ Benefi_11
Employee Incentives / Benefit Plans - Schedule of Cash Restricted Stock Units Activity (Details) - Cash Restricted Stock Units shares in Millions | 12 Months Ended |
Dec. 26, 2020shares | |
Compensation Related Costs [Line Items] | |
Number of Units, Beginning Balance | 5.2 |
Number of Units, Grants | 9.7 |
Number of Units, Vested | (2.5) |
Number of Units, Forfeited | (1) |
Number of Units, Converted into Class A Share RSUs | (11.4) |
Employee Incentives _ Benefi_12
Employee Incentives / Benefit Plans - Schedule of Cash-Based Retention Awards Activities within Accrued Compensation and Benefits (Details) - Cash-Based Retention Awards - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Compensation Related Costs [Line Items] | |||
Beginning retention awards balance | $ 7 | $ 11 | $ 29 |
Accruals, net of forfeitures | 8 | 19 | 36 |
Cash payments | $ (15) | (23) | (51) |
Reclass to Intel Receivable | (3) | ||
Ending retention awards balance | $ 7 | $ 11 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Schedule Of Debts [Line Items] | ||
Long-term debt, net of unamortized discounts | $ 3,999 | $ 4,729 |
Unamortized deferred financing costs | (12) | (17) |
Current installments of long-term debt | (44) | (43) |
Total | 3,943 | 4,669 |
1st Lien USD Term Loan | ||
Schedule Of Debts [Line Items] | ||
Long-term debt, net of unamortized discounts | 2,701 | 3,020 |
1st Lien Euro Term Loan | ||
Schedule Of Debts [Line Items] | ||
Long-term debt, net of unamortized discounts | $ 1,298 | 1,200 |
Second Lien USD Term Loan | ||
Schedule Of Debts [Line Items] | ||
Long-term debt, net of unamortized discounts | $ 509 |
Debt - Schedule of Long-term _2
Debt - Schedule of Long-term Debt (Parenthetical) (Details) | 12 Months Ended |
Dec. 26, 2020 | |
1st Lien USD Term Loan | |
Schedule Of Debts [Line Items] | |
Long term debt, weighted average interest rate | 4.40% |
1st Lien Euro Term Loan | |
Schedule Of Debts [Line Items] | |
Long term debt, weighted average interest rate | 3.50% |
Second Lien USD Term Loan | |
Schedule Of Debts [Line Items] | |
Long term debt, weighted average interest rate | 9.70% |
Debt - Schedule of Material Ter
Debt - Schedule of Material Terms of Outstanding Debt (Details) - 12 months ended Dec. 28, 2019 | USD ($) | EUR (€) |
1st Lien USD Term Loan | ||
Debt Instrument [Line Items] | ||
Issue Date | Jun. 30, 2019 | |
Issue Principal | $ | $ 3,087,000,000 | |
Interest Rate | 375 pts above LIBOR | |
Interest Payment Frequency | Monthly | |
Maturity Date | Sep. 30, 2024 | |
1st Lien Euro Term Loan | ||
Debt Instrument [Line Items] | ||
Issue Date | Jun. 30, 2019 | |
Issue Principal | € | € 1,092,000,000 | |
Interest Rate | 350 pts above EURIBOR | |
Interest Payment Frequency | Quarterly | |
Maturity Date | Sep. 30, 2024 |
Debt - Additional Information (
Debt - Additional Information (Details) € in Millions | Dec. 24, 2020USD ($) | Nov. 01, 2018USD ($) | Oct. 24, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Nov. 30, 2018USD ($) | Nov. 30, 2018EUR (€) | Jan. 31, 2018USD ($) | Jan. 31, 2018EUR (€) | Dec. 26, 2020USD ($) | Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Mar. 28, 2020USD ($) |
Schedule Of Debts [Line Items] | ||||||||||||||
Repayments of long-term debt | $ 869,000,000 | $ 67,000,000 | $ 87,000,000 | |||||||||||
Minimum additional prepayment percentage per quarter amortization | 0.25% | |||||||||||||
1st Lien Credit Facility | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Debt Issuance Costs, Net | $ 6,000,000 | $ 10,000,000 | ||||||||||||
Loss on extinguishment for remaining unamortized discounts and deferred financing costs | $ 4,000,000 | |||||||||||||
Prepaid outstanding term loan | $ 300,000,000 | |||||||||||||
Revolving Credit Facility | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Line of credit | $ 0 | $ 300,000,000 | ||||||||||||
Repayment of line of credit | $ 300,000,000 | |||||||||||||
Long term debt, weighted average interest rate | 4.30% | |||||||||||||
Letter of credit issued | 4,000,000 | $ 4,000,000 | ||||||||||||
Amount of undrawn capacity under the Revolving Credit Facility | $ 660,000,000 | $ 496,000,000 | ||||||||||||
Commitment fee percentage on the unused portion of the facility | 0.375% | |||||||||||||
Revolving Credit Facility | Letter of Credit | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Line of credit | $ 175,000,000 | |||||||||||||
Letter of credit outstanding under revolving credit facility | $ 30,000,000 | |||||||||||||
Net leverage ratio | 6.30% | |||||||||||||
Revolving Credit Facility | Minimum | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Commitment fee percentage on the unused portion of the facility | 0.375% | |||||||||||||
Revolving Credit Facility | Minimum | LIBOR | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 3.25% | |||||||||||||
Revolving Credit Facility | Maximum | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Commitment fee percentage on the unused portion of the facility | 0.50% | |||||||||||||
Revolving Credit Facility | Maximum | LIBOR | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||||
1st Lien USD Term Loan | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Increase in maximum borrowing capacity | $ 300,000,000 | $ 324,000,000 | ||||||||||||
Issued discount par at price percentage | 99.24% | 99.60% | ||||||||||||
(Decrease) increase in outstanding principal amount | $ (50,000,000) | |||||||||||||
Capitalized consent fees | $ 12,000,000 | |||||||||||||
Repayments of long-term debt | $ 35,000,000 | |||||||||||||
Long term debt, weighted average interest rate | 4.40% | |||||||||||||
Percentage of mandatory prepayment per quarter amortization | 0.25% | |||||||||||||
Percentage of net cash proceeds above threshold amount of certain assets and casualty events | 100.00% | |||||||||||||
Percentage of net cash proceeds of incurrence of certain debt | 100.00% | |||||||||||||
Percentage of annual excess cash flow | 50.00% | |||||||||||||
1st Lien USD Term Loan | Minimum | 50% If our First Lien Net Leverage Ratio is Less Than or Equal to 3.25 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 2.50% | |||||||||||||
1st Lien USD Term Loan | Minimum | A step-down to 25% if our First Lien Net Leverage Ratio is Less Than or Equal to 3.25 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 2.50% | |||||||||||||
1st Lien USD Term Loan | Maximum | 50% If our First Lien Net Leverage Ratio is Less Than or Equal to 3.25 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 3.25% | |||||||||||||
1st Lien USD Term Loan | Maximum | 0% If our First Lien Net Leverage Ratio is Less Than or Equal to 2.50 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 2.50% | |||||||||||||
1st Lien USD Term Loan | Maximum | A step-down to 25% if our First Lien Net Leverage Ratio is Less Than or Equal to 3.25 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 3.25% | |||||||||||||
1st Lien USD Term Loan | Maximum | A step-down to 0% if our First Lien Net Leverage Ratio is Less Than or Equal to 2.50 to 1.00 | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Net leverage ratio | 2.50% | |||||||||||||
1st Lien Euro Term Loan | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Increase in maximum borrowing capacity | € | € 355 | € 150 | ||||||||||||
Issued discount par at price percentage | 99.50% | 99.98% | ||||||||||||
(Decrease) increase in outstanding principal amount | € | € 90 | |||||||||||||
Long term debt, weighted average interest rate | 3.50% | |||||||||||||
1st Lien USD and Euro Term Loans | Interest Expense and Other, Net | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Refinancing fees | $ 3,000,000 | |||||||||||||
Second Lien USD Term Loan | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Prepayment of borrowing amount | $ 50,000,000 | |||||||||||||
Long term debt, weighted average interest rate | 9.70% | |||||||||||||
Second Lien USD Term Loan | Interest Expense and Other, Net | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Refinancing fees | $ 2,000,000 | |||||||||||||
2nd Lien Term Loan | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Repayments of long-term debt | $ 525,000,000 | |||||||||||||
Accrued interest | 4,000,000 | |||||||||||||
Loss on extinguishment for remaining unamortized discounts and deferred financing costs | 14,000,000 | |||||||||||||
Tranche One | Revolving Credit Facility | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Line of credit | $ 164,000,000 | |||||||||||||
Line of credit facility, maturity date | Sep. 29, 2022 | |||||||||||||
Tranche Two | Revolving Credit Facility | ||||||||||||||
Schedule Of Debts [Line Items] | ||||||||||||||
Line of credit | $ 500,000,000 | |||||||||||||
Line of credit facility, maturity date | Sep. 29, 2024 |
Debt - Schedule of Debt Repayme
Debt - Schedule of Debt Repayment Obligations (Details) $ in Millions | Dec. 26, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 44 |
2022 | 45 |
2023 | 44 |
2024 | 3,905 |
Total debt repayment obligations | $ 4,038 |
Income Tax - Schedule of Loss B
Income Tax - Schedule of Loss Before Income Taxes Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (282) | $ (282) | $ (548) |
Non-U.S. | 23 | 133 | 98 |
Loss before income taxes | $ (259) | $ (149) | $ (450) |
Income Tax - Schedule of Provis
Income Tax - Schedule of Provision for Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Current: | |||
State | $ 2 | $ 3 | |
Non-U.S. | 40 | $ 68 | 49 |
Total current | 42 | 68 | 52 |
Deferred: | |||
Federal | 2 | 13 | 4 |
State | (1) | 2 | 1 |
Non-U.S. | (13) | 4 | 5 |
Total deferred | (12) | 19 | 10 |
Provision for income tax expense | $ 30 | $ 87 | $ 62 |
Income Tax - Difference Between
Income Tax - Difference Between Tax Provision and Tax Provision Computed at U.S. Federal Statutory Income Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income taxes computed at the U.S. federal statutory rate | $ (54) | $ (31) | $ (94) |
Non-U.S. income taxed at different rates | 11 | 9 | 5 |
Withholding taxes | 20 | 18 | 24 |
State tax expense | 2 | 4 | |
Partnership earnings flow through to partners | 8 | 72 | 121 |
Redeemable noncontrolling interest | 32 | ||
Valuation allowances | 25 | 3 | |
Foreign tax credits | (4) | (2) | (2) |
Uncertain tax positions | (8) | 15 | 3 |
Other | 1 | 1 | |
Provision for income tax expense | $ 30 | $ 87 | $ 62 |
Income Tax - Components of Defe
Income Tax - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 |
Deferred tax assets: | ||
Accrued compensation and other benefits | $ 4 | $ 6 |
Deferred revenue | 57 | 51 |
Share-based compensation | 12 | |
Net operating losses | 77 | 32 |
Credits | 51 | 10 |
Intangibles | 147 | |
Interest expense carryforward | 5 | 2 |
Other | 1 | |
Total deferred tax assets | 354 | 101 |
Deferred tax liabilities: | ||
Licenses and intangibles | (9) | |
Unremitted earnings of non-US subsidiaries | (4) | (5) |
Investment in partnership | (81) | (188) |
Other | (1) | |
Total deferred tax liabilities | (86) | (202) |
Valuation allowance | (213) | (4) |
Net deferred tax assets (liabilities) | 55 | |
Deferred tax assets | 67 | 55 |
Deferred tax liabilities | $ (12) | (160) |
Net deferred tax assets (liabilities) | $ (105) |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 26, 2020 | Dec. 28, 2019 | |
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards, expiration description | The non-U.S. net operating loss carryforwards have no expiration date. The federal and U.S. state net operating loss carryforwards expire at various dates through 2037. | |
Operating loss carryforwards related to an acquisition limited in the amount that can be recognized | any one year | |
Deferred tax assets valuation allowance | $ 213 | $ 4 |
Income tax examination, description | As of December 26, 2020, we are no longer subject to review by the state and local taxing authorities prior to 2015 and foreign taxing authorities prior to 2004. | |
Tax Receivable Agreement | McAfee Corp. Stockholders' Equity | ||
Income Tax Contingency [Line Items] | ||
TRA beneficiaries, cash savings percentage | 85.00% | |
Remaining cash savings percentage | 15.00% | |
Deferred tax liabilities current, tax receivable agreement, accounts payable and other accrued liabilities | $ 2 | |
Deferred tax liabilities, long-term tax receivable agreement liability | 274 | |
Other Long-term Liabilities | ||
Income Tax Contingency [Line Items] | ||
Uncertain tax positions, including interest and penalties | 16 | $ 27 |
Federal | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 319 | |
Operating loss carryforwards, valuation allowance | 319 | |
State | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 154 | |
Operating loss carryforwards, valuation allowance | 154 | |
Non-U.S | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | $ 2 | |
Federal and U.S. State and Local Jurisdiction | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards expiration year | 2037 |
Income Tax - Reconciliation Agg
Income Tax - Reconciliation Aggregate Changes in Balance of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |||
Beginning gross unrecognized tax benefits | $ 27 | $ 12 | $ 10 |
Settlements with taxing authorities | (1) | ||
Increases in tax positions for prior years | 1 | ||
Decreases in tax positions for prior years | (14) | (1) | |
Increases in tax positions for current year | 4 | 15 | 3 |
Ending gross unrecognized tax benefits | $ 17 | $ 27 | $ 12 |
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 | Dec. 26, 2020 | Dec. 28, 2019 |
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 13) | $ (4,033) | $ (4,817) |
Financial Instruments Carried at Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | $ (119) | $ (61) |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments and Interest Rate Swaps - Schedule of Interest Rate Swaps Outstanding Effective Arrangements (Details) | 12 Months Ended |
Dec. 26, 2020USD ($) | |
Interest Rate Swaps at 2.33% Fixed Rate | |
Derivative [Line Items] | |
Notional Value | $ 225,000,000 |
Effective Date | Jan. 29, 2018 |
Expiration Date | Jan. 29, 2021 |
Fixed Rate | 2.33% |
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 - Additional Information (Details) $ in Millions | Mar. 02, 2020USD ($) |
Accounts Payable and Other Current Liabilities and Other Long Term Liabilities | |
Derivative [Line Items] | |
Amount owed for swap | $ 37 |
Interest Rate Swaps | |
Derivative [Line Items] | |
Derivative Cancelled Amount | $ 750 |
Fair Value of Financial Instr_6
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 | Dec. 26, 2020 | Dec. 28, 2019 |
Accounts Payable and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | $ (43) | $ (19) |
Net amounts presented in Balance Sheets | (43) | (19) |
Other Long-term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | (76) | (42) |
Net amounts presented in Balance Sheets | $ (76) | $ (42) |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests - Additional Information (Details) | 1 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Dec. 26, 2020shares | |
Minority Interest [Line Items] | ||
Stockholders' equity note, stock split, conversion ratio | 4 | |
McAfee Corp. | LLC Units | ||
Minority Interest [Line Items] | ||
Ownership percentage by parent | 37.20% | |
McAfee Corp. | Continuing LLC Owners And Management Owners | ||
Minority Interest [Line Items] | ||
Common stock units held | 272,500,000 | |
McAfee Corp. | Foundation Technology Worldwide L L C | ||
Minority Interest [Line Items] | ||
Ownership percentage by noncontrolling owners | 62.80% | |
Class B Common Stock | ||
Minority Interest [Line Items] | ||
Common stock units issued | 267,065,127 | |
Common stock units, outstanding | 267,065,127 | |
Class B Common Stock | McAfee Corp. | ||
Minority Interest [Line Items] | ||
Common stock units issued | 267,100,000 | |
Class A Common Stock | ||
Minority Interest [Line Items] | ||
Common stock units issued | 161,267,412 | |
Common stock units, outstanding | 161,267,412 | |
Class A Common Stock | McAfee Corp. | ||
Minority Interest [Line Items] | ||
Common stock units, outstanding | 161,300,000 | |
Class A Common Stock | McAfee Corp. | ||
Minority Interest [Line Items] | ||
Stockholders' equity note, stock split, conversion ratio | 1 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) | 1 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Dec. 26, 2020 | |
Class A Common Stock | ||
Earnings Per Share Basic [Line Items] | ||
Exchanged class A common stock | 1 | 1 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 | |
Earnings Per Share [Line Items] | |||
Net loss | $ (289) | $ (236) | $ (512) |
Less: Net income attributable to FTW prior to the Reorganization Transactions | (26) | ||
Less: Net loss attributable to redeemable noncontrolling interests after the Reorganization Transactions | 197 | ||
Net loss attributable to McAfee Corp., basic | (118) | ||
Add: Net loss attributable to dilutive redeemable noncontrolling interests after the Reorganization Transactions | (197) | ||
Less: Provision for income tax expense | (1) | ||
Net income attributable to McAfee Corp., diluted | $ (316) | ||
Weighted-average shares outstanding, basic | 162.3 | ||
Conversion of outstanding LLC units and MIUs | 271.6 | ||
Weighted average shares of Class A common stock outstanding, diluted | 433.9 | ||
Net loss per share, basic and diluted(1) | $ (0.73) | ||
Class A Common Stock | |||
Earnings Per Share [Line Items] | |||
Weighted-average shares outstanding, basic | 162.3 | ||
Weighted average shares of Class A common stock outstanding, diluted | 433.9 |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Net Loss Per Share (Parenthetical) (Details) shares in Millions | 12 Months Ended |
Dec. 26, 2020$ / sharesshares | |
Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share amount, shares | 25.2 |
Shares outstanding on unvested management incentive units | 9.3 |
Weighted average unsatisfied distribution threshold | $ / shares | $ 5.91 |
Management Incentive Units | Class A Common Stock | |
Earnings Per Share [Line Items] | |
Conversion of outstanding shares | 5.4 |
LLC Units | |
Earnings Per Share [Line Items] | |
Conversion of outstanding shares | 267.1 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - Foundation Technology Worldwide L L C | Oct. 21, 2020 | Dec. 26, 2020 |
Variable Interest Entity [Line Items] | ||
Percentage of ownership after the reorganization transaction | 100.00% | 100.00% |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, economic interest percentage | 37.20% | |
Methodology use for determining whether enterprise is primary beneficiary | 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, which was 37.2% as of December 26, 2020. Management considers this exposure to be significant to FTW. 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. |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 26, 2020 | Dec. 28, 2019 | Dec. 29, 2018 |
Current assets: | |||
Cash and cash equivalents | $ 231 | $ 167 | |
Accounts receivable, net | 392 | 409 | |
Deferred costs | 233 | 187 | |
Other current assets | 58 | 68 | |
Total current assets | 914 | 831 | |
Property and equipment, net | 149 | 171 | |
Goodwill | 2,431 | 2,428 | $ 2,426 |
Identified intangible assets, net | 1,644 | 2,071 | |
Deferred tax assets | 67 | 55 | |
Other long-term assets | 223 | 232 | |
Total assets | 5,428 | 5,788 | |
Current liabilities: | |||
Accounts payable and other current liabilities | 266 | 196 | |
Accrued compensation and benefits | 197 | 209 | |
Accrued marketing | 124 | 94 | |
Income taxes payable | 14 | 15 | |
Long-term debt, current portion | 44 | 43 | |
Lease liabilities, current portion | 25 | 29 | |
Deferred revenue | 1,715 | 1,574 | |
Total current liabilities | 2,385 | 2,160 | |
Long-term debt, net | 3,943 | 4,669 | |
Deferred tax liabilities | 12 | 160 | |
Other long-term liabilities | 204 | 175 | |
Deferred revenue, less current portion | 684 | 718 | |
Total liabilities | 7,228 | 7,882 | |
Stockholders’ equity/members’ deficit: | |||
Members’ deficit | (647) | ||
Total deficit | (6,640) | ||
Total liabilities, redeemable noncontrolling interests and deficit | 5,428 | $ 5,788 | |
Variable Interest Entity, Primary Beneficiary | |||
Current assets: | |||
Cash and cash equivalents | 231 | ||
Accounts receivable, net | 392 | ||
Deferred costs | 233 | ||
Other current assets | 58 | ||
Total current assets | 914 | ||
Property and equipment, net | 149 | ||
Goodwill | 2,431 | ||
Identified intangible assets, net | 1,644 | ||
Deferred tax assets | 67 | ||
Receivable from Parent, net | 46 | ||
Other long-term assets | 223 | ||
Total assets | 5,474 | ||
Current liabilities: | |||
Accounts payable and other current liabilities | 250 | ||
Accrued compensation and benefits | 197 | ||
Accrued marketing | 124 | ||
Income taxes payable | 14 | ||
Long-term debt, current portion | 44 | ||
Lease liabilities, current portion | 25 | ||
Deferred revenue | 1,715 | ||
Total current liabilities | 2,369 | ||
Long-term debt, net | 3,943 | ||
Deferred tax liabilities | 12 | ||
Other long-term liabilities | 204 | ||
Deferred revenue, less current portion | 684 | ||
Total liabilities | 7,212 | ||
Stockholders’ equity/members’ deficit: | |||
Members’ deficit | (646) | ||
Total deficit | (1,738) | ||
Total liabilities, redeemable noncontrolling interests and deficit | 5,474 | ||
Variable Interest Entity, Not Primary Beneficiary | Continuing LLC Owners | |||
Stockholders’ equity/members’ deficit: | |||
Members’ deficit | $ (1,092) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Feb. 23, 2021 | Dec. 26, 2020 |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Unconditional purchase obligations | $ 149 | |
Unconditional purchase obligations, expire | Expire at various dates through 2025 | |
Guarantees | $ 12 | |
Guarantees, expire | Expire at various dates through 2028 | |
Subsequent Event | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Unconditional purchase obligations | $ 315 | |
Unconditional purchase commitments, expect to incur | Expect to incur in the years 2021 through 2025 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule Of Future Minimum Payments Under All Unconditional Purchase Obligations (Details) $ in Millions | Dec. 26, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2021 | $ 49 |
2022 | 45 |
2023 | 39 |
2024 | 12 |
2025 | 4 |
Total | $ 149 |