Basis Of Presentation | 6 Months Ended |
Sep. 27, 2013 |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | Note 1. Basis of Presentation |
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The accompanying unaudited condensed consolidated financial statements of Symantec Corporation (“Symantec,” “we,” “us,” “our,” and “the Company” refer to Symantec Corporation and all of its subsidiaries) as of September 27, 2013 and March 29, 2013, and for the three and six months ended September 27, 2013 and September 28, 2012, have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.”) for interim financial information and with the instructions on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, we have omitted certain information and notes normally provided in our annual Consolidated Financial Statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of our financial position, results of operations, and cash flows for the interim periods. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 29, 2013. The results of operations for the three and six months ended September 27, 2013 are not necessarily indicative of the results expected for the entire fiscal year. |
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Segment reporting change |
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We modified our segment reporting structure to match our new operating structure and how our Chief Operating Decision Maker (“CODM”) views the business and allocates resources, beginning from the first quarter of fiscal 2014. The CODM function is comprised of our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and President of Products and Services. Reclassifications of prior period financial information have been made to conform to the current period presentation. This change does not impact previously reported Condensed Consolidated Financial Statements of the Company. See Note 9 for additional information on our segment reporting change. |
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Significant Accounting Policies |
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Contingencies |
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We evaluate contingent liabilities including threatened or pending litigation and government investigations in accordance with the authoritative guidance on contingencies. We assess the likelihood of any adverse judgments or outcomes from potential claims or proceedings, as well as potential ranges of probable losses, when the outcomes of the claims or proceedings are probable and reasonably estimable. A determination of the amount of accrued liabilities required, if any, for these contingencies is made after the analysis of each separate matter. Because of uncertainties related to these matters, we base our estimates on the information available at the time of our assessment. As additional information becomes available, we reassess the potential liability related to our pending claims, litigation and government investigations, and may revise our estimates. Any revisions in the estimates of potential liabilities could have a material impact on our operating results and financial position. |
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Change in Accounting Policy for Sales Commissions |
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Effective March 30, 2013, we changed our accounting policy for sales commissions that are incremental and directly related to customer sales contracts in which revenue is deferred. These commission costs are accrued and capitalized upon execution of a non-cancelable customer contract, and subsequently expensed over the term of such contract in proportion to the related future revenue streams. For commission costs where revenue is recognized, the related commission costs are recorded in the period of revenue recognition. Prior to this change in accounting policy, commission costs were expensed in the period in which they were incurred. The adoption of this accounting policy change has been applied retrospectively to all periods presented in this Quarterly Report on Form 10-Q, in which the cumulative effect of the change has been reflected as of the beginning of the first period presented. Deferred commissions as of September 27, 2013 and March 29, 2013 were $142 million and $159 million, respectively. During the three and six months ended September 27, 2013, we capitalized $29 million and $84 million of commission costs and amortized $55 million and $104 million to sales expense, respectively. During the three and six months ended September 28, 2012, we deferred $44 million and $77 million of commission costs and amortized $53 million and $105 million to sales expense, respectively. |
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We believe this change in accounting policy is preferable as the direct and incremental commission costs are closely related to the revenue, and therefore they should be recorded as an asset and recognized as an expense over the same period that the related revenue is recognized. |
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The cumulative effect of the change on accumulated deficit and accumulated other comprehensive income was $109 million and $3 million, respectively, as of March 30, 2012. The following tables present the changes to financial statement line items as a result of the accounting change for the periods presented in the accompanying unaudited Condensed Consolidated Financial Statements: |
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Condensed Consolidated Balance Sheet |
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| 29-Mar-13 | | | | | | | | | |
| As Reported | | Adjustment | | As Adjusted | | | | | | | | | |
| (Dollars in millions) | | | | | | | | | |
Deferred income taxes | $ | 198 | | $ | -29 | | $ | 169 | | | | | | | | | |
Deferred commissions | $ | - | | $ | 130 | | $ | 130 | | | | | | | | | |
Long-term deferred commissions | $ | - | | $ | 29 | | $ | 29 | | | | | | | | | |
Other long-term assets | $ | 124 | | $ | -1 | | $ | 123 | | | | | | | | | |
Other current liabilities | $ | 313 | | $ | 5 | | $ | 318 | | | | | | | | | |
Long-term deferred tax liabilities | $ | 403 | | $ | 23 | | $ | 426 | | | | | | | | | |
Accumulated other comprehensive income | $ | 197 | | $ | 2 | | $ | 199 | | | | | | | | | |
Accumulated deficit | $ | -2,096 | | $ | 99 | | $ | -1,997 | | | | | | | | | |
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Condensed Consolidated Statement of Income |
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| Three Months Ended | | Six Months Ended |
| 28-Sep-12 | | 28-Sep-12 |
| As Reported | | Adjustment | | As Adjusted | | As Reported | | Adjustment | | As Adjusted |
| (In millions, except per share data) |
Operating expenses: Sales and marketing | $ | 659 | | $ | 8 | | $ | 667 | | $ | 1,308 | | $ | 27 | | $ | 1,335 |
Provision for income taxes | $ | 80 | | $ | -4 | | $ | 76 | | $ | 145 | | $ | -11 | | $ | 134 |
Net income attributable to Symantec Corporation stockholders | $ | 193 | | $ | -4 | | $ | 189 | | $ | 365 | | $ | -16 | | $ | 349 |
Net income per share attributable to Symantec Corporation stockholders — basic | $ | 0.27 | | $ | - | | $ | 0.27 | | $ | 0.51 | | $ | -0.02 | | $ | 0.49 |
Net income per share attributable to Symantec Corporation stockholders — diluted | $ | 0.27 | | $ | - | | $ | 0.27 | | $ | 0.51 | | $ | -0.02 | | $ | 0.49 |
Weighted-average shares outstanding attributable to Symantec Corporation stockholders — basic | | 702 | | | - | | | 702 | | | 709 | | | - | | | 709 |
Weighted-average shares outstanding attributable to Symantec Corporation stockholders — diluted | | 708 | | | - | | | 708 | | | 714 | | | - | | | 714 |
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Condensed Consolidated Statement of Comprehensive Income |
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| Three Months Ended | | Six Months Ended |
| 28-Sep-12 | | 28-Sep-12 |
| As Reported | | Adjustment | | As Adjusted | | As Reported | | Adjustment | | As Adjusted |
| (Dollars in millions) |
Net income | $ | 193 | | $ | -4 | | $ | 189 | | $ | 365 | | $ | -16 | | $ | 349 |
Net foreign currency translation adjustments | $ | 12 | | $ | - | | $ | 12 | | $ | 16 | | $ | - | | $ | 16 |
Comprehensive income | $ | 202 | | $ | -1 | | $ | 201 | | $ | 381 | | $ | -15 | | $ | 366 |
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The change in accounting policy does not affect our balance of Cash and cash equivalents and as a result did not change net cash flows from operating, investing, or financing activities in our Condensed Consolidated Statement of Cash Flows for the six months ended September 28, 2012. |
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There have been no other material changes in our significant accounting policies for the three and six months ended September 27, 2013, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 29, 2013, other than as discussed above. |
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Recently Issued Authoritative Guidance |
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In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU permits the use of the Fed Funds Effective Swap Rate (also referred to as the Overnight Index Swap Rate), in addition to the U.S. government rate (“UST”) and London Interbank Offered Rate (“LIBOR”), as a U.S. benchmark interest rate for hedge accounting purposes under ASC Topic 815, Derivatives and Hedging. We adopted this guidance following its effective date of July 17, 2013 and it had no material impact on our Condensed Consolidated Financial Statements. |
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In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the Net Operating Loss or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We do not expect that this guidance will materially impact our Condensed Consolidated Financial Statements. |
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