Printmgr File
Total Page：16
File Type：pdf, Size：1020Kb
2016 Annual Report Proxy Statement and Form 10-K FORWARD-LOOKING STATEMENT: This annual report (including the Shareholder Letter) contains forward-looking statements that are subject to safe harbors under the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. Statements that refer to projections of our future financial performance, anticipated growth and trends in our businesses and in our industries, the actions we intend to take as part of our new strategy and the expected impact thereof, the anticipated impact of our acquisitions, our intent to pay quarterly cash dividends in the future, and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions, based on our current expectations about future events and may not prove to be accurate. We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising afterthedateof this report. These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several factors, including those that we discuss in the “Risk Factors” section and throughout our 2016 Form 10-K, which is included in this Annual Report. We encourage you to read that section carefully. Two Year Summary of Selected Financial Data1 (In millions, except per share data) FY2016 FY2015 GAAP Financial Results Net revenue $3,600 $3,956 Operating income 457 154 Net income $2,488 $878 Diluted earnings per share $3.71 $1.26 Diluted weighted-average shares outstanding 670 696 Cash position (including short-term investments) $6,025 $3,860 Total assets 11,767 13,233 Deferred revenue $2,638 $2,871 Current portion of long-term debt - 350 Long-term debt 2,207 1,746 Total stockholders' equity 3,676 5,935 Cash flow from operations $796 $1,312 Non-GAAP Financial Results Net revenue $3,600 $3,986 Operating income 1,026 1,305 Operating margin 28.5% 32.7% Net income $698 $908 Diluted earnings per share $1.03 $1.30 Diluted weighted-average shares outstanding 676 696 Reconciliation of Non-GAAP Adjustments Gross profit EDS & NDI contingency $ - $30 Unallocated corporate charges 22 41 Stock-based compensation 10 15 Amortization of intangible assets 28 35 Total gross profit adjustment $60 $121 Operating expenses Unallocated corporate charges $164 $663 Stock-based compensation 151 116 Amortization of intangible assets 57 87 Restructuring, separation, and transition 136 164 Total operating expense adjustment $509 $1,030 Operating income adjustment $569 $1,151 Net income Income tax effect on above items 950 (352) Net income adjustment from discontinued operations (3,309) (769) Total net Income adjustment ($1,790) $30 Diluted earnings per share Net income adjustment from continuing operations per share $2.26 $1.15 Net income adjustment from discontinued operations per share (4.94) (1.10) Total diluted earnings per share adjustment ($2.68) $0.04 During fiscal 2016, the Company began presenting the financial results of Veritas within discontinued operations. This presentation reflects the financial results of Veritas within discontinued operations for both fiscal years. 1 Non-GAAP financial measures adjust for the following items: stock-based compensation expense; charges related to the amortization of intangible assets; certain other income and expense items that management considers unrelated to the Company’s core operations; and the associated income tax effects of the adjustments. We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management team uses these non-GAAP financial measures in assessing the Company’s operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company’s performance to prior periods and to our peers and that investors benefit from an understanding of the non-GAAP financial measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. Dear Fellow Shareholders: Fiscal year 2016 began a new era for Symantec. After completing the sale of Veritas and the acquisition of Blue Coat, we are now the world’s leading pure-play cybersecurity company protecting consumers, enterprises, and governments from an increasingly dangerous cyber threat environment. Below are some updates at Symantec that we would like to highlight for our shareholders: Completed the Sale of Veritas and Returned Significant Cash to Shareholders: In February, we completed the divestiture of Veritas and received approximately $5.3 billion in after-tax cash proceeds. Our management team and Board believe proper capital allocation is key to maximizing long-term shareholder value, and we have demonstrated this with a consistent track record of returning capital through dividends and share buy backs. In fiscal year 2016, the Board declared and paid a special dividend of $4.00 per share (equaling approximately $2.7 billion), returned $1.9 billion through share buy backs, and continued to pay a quarterly dividend of 7.5¢ per share. Acquisition of Blue Coat and Appointment of Greg Clark as CEO: On August 1, 2016, we completed the acquisition of Blue Coat for approximately $4.65 billion. Blue Coat is the leader in cloud security with number one market share in the secure web gateway segment. In its last fiscal year, ended April 30th, Blue Coat generated $755 million in non-GAAP revenue, growing 14% year-over-year. Following the close of the transaction, we appointed Greg Clark as CEO of Symantec. Greg, formerly the CEO of Blue Coat, brings significant leadership experience, deep security expertise, a long history of successful acquisition integrations, and a proven track record of delivering profitable growth at scale. We believe he is the right person to lead Symantec as we advance our position as the leader in cybersecurity. Defining the Future of Cybersecurity: With Blue Coat, we believe we can help solve today’s biggest security challenges, including: (1) securing enterprises, governments, and consumers from advanced attacks, (2) protecting the mobile workforce that resides outside the network firewall, accessing cloud services and corporate data directly from a variety of devices, and (3) helping customers securely embrace the cloud as they increase the use of cloud-based applications and services. Combined, our product portfolio distinguishes us as one of the most strategic security players in the industry, with a portfolio of solutions that we estimate addresses over 50 percent of enterprise security budgets, or an approximately $40 billion of total addressable market. Strategic Investment by Silver Lake Partners and Bain Capital: During fiscal 2016 and 2017, Silver Lake Partners and Bain Capital made strategic investments in Symantec totaling $1.75 billion in the form of convertible notes. We believe this is a strong vote of confidence in both our transformation as well as our future as the world leader in cybersecurity. We also announced that Ken Hao, managing partner and managing director of Silver Lake and David Humphrey, managing director of Bain and member of the board of directors of Blue Coat joined our Board. We are excited to have both contributing their deep expertise in technology and track record of creating value. Leadership in Corporate Responsibility: We announced an ambitious environmental goal in fiscal 2016, pledging to reduce greenhouse gas emissions by 30 percent by 2025. We confirmed our focus on diversity and inclusion, and continued our investment in the Symantec Cyber Career Connection (SC3) to help close the cyber security workforce gap while creating meaningful career paths for underrepresented young adults and veterans. Symantec remains committed to leading with strong values and to making the world a better and safer place. Looking ahead, we are focused on reigniting growth for Symantec, improving our operating efficiency and defining the future of cybersecurity by intelligently protecting our customers from advanced attacks, protecting the workforce of the future, and helping customers embrace the cloud generation. Thank you for your continued support. Regards, the Board of Directors of Symantec Corporation Daniel H. Schulman, Chairman [THIS PAGE INTENTIONALLY LEFT BLANK] 350 Ellis Street Mountain View, California 94043 NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS to be held on: November 1, 2016 9:00 a.m. Pacific Time Dear Stockholder: You are cordially invited to attend our 2016 Annual Meeting of Stockholders, which will be held at 9:00 a.m. (Pacific Time) on Tuesday, November 1, 2016, at Symantec Corporation’s offices located at 350 Ellis Street, Mountain View, California 94043. For your convenience, we are pleased to offer a live and re-playable webcast of the Annual Meeting at investor.symantec.com. We are holding the Annual Meeting for the following purposes, which are more fully described in the proxy state- ment: 1. To elect the eleven nominees named in the proxy statement to Symantec’s Board of Directors; 2. To ratify the appointment of KPMG LLP as Symantec’s independent registered public accounting firm for the 2017 fiscal year; 3. To approve amendments to our 2013 Equity Incentive Plan, as amended, to increase the number of shares authorized for issuance thereunder by 17,000,000 shares and to include a one year minimum vesting requirement for stock options and SAR awards; 4. To hold an advisory vote to approve executive compensation; and 5. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. We are furnishing proxy materials to our stockholders primarily via the Internet to expedite stockholders’ receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources.