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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 1, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      
For the Transition Period from                to                
Commission File Number 000-17781
 NortonLifeLock Inc.
(Exact name of the registrant as specified in its charter)
Delaware
77-0181864
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer Identification no.)
60 E. Rio Salado Parkway,
Suite 1000,
Tempe,
Arizona
85281
(Address of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code:
(650527-8000
Former name or former address, if changed since last report:
Not applicable
  ________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock,
par value $0.01 per share
NLOK
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
þ
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No þ
The number of shares of NortonLifeLock common stock, $0.01 par value per share, outstanding as of October 28, 2021 was 581,755,019 shares.


NORTONLIFELOCK INC.
FORM 10-Q
Quarterly Period Ended October 1, 2021
“NortonLifeLock,” “we,” “us,” “our,” and “the Company” refer to NortonLifeLock Inc. and all of its subsidiaries. NortonLifeLock, the NortonLifeLock Logo, the Checkmark Logo, Norton, LifeLock, and the LockMan Logo are trademarks or registered trademarks of NortonLifeLock Inc. or its affiliates in the United States (U.S.) and other countries. Other names may be trademarks of their respective owners.
2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except par value per share amounts)
October 1, 2021April 2, 2021
ASSETS
Current assets:
Cash and cash equivalents$1,526 $933 
Short-term investments15 18 
Accounts receivable, net108 117 
Other current assets243 237 
Assets held for sale58 233 
Total current assets1,950 1,538 
Property and equipment, net67 78 
Operating lease assets93 76 
Intangible assets, net1,064 1,116 
Goodwill2,896 2,867 
Other long-term assets663 686 
Total assets$6,733 $6,361 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable$81 $52 
Accrued compensation and benefits72 107 
Current portion of long-term debt1,073 313 
Contract liabilities1,159 1,210 
Current operating lease liabilities20 26 
Other current liabilities409 428 
Total current liabilities2,814 2,136 
Long-term debt2,779 3,288 
Long-term contract liabilities54 55 
Deferred income tax liabilities140 137 
Long-term income taxes payable1,034 1,119 
Long-term operating lease liabilities88 66 
Other long-term liabilities56 60 
Total liabilities6,965 6,861 
Commitments and contingencies (Note 18)

Stockholders’ equity (deficit):
Common stock and additional paid-in capital, $0.01 par value: 3,000 shares authorized; 582 and 580 shares issued and outstanding as of October 1, 2021 and April 2, 2021, respectively
1,996 2,229 
Accumulated other comprehensive income34 47 
Retained earnings (accumulated deficit)(2,262)(2,776)
Total stockholders’ equity (deficit)(232)(500)
Total liabilities and stockholders’ equity (deficit)$6,733 $6,361 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3

NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share amounts)
Three Months EndedSix Months Ended
 
October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Net revenues$692 $626 $1,378 $1,240 
Cost of revenues100 90 202 176 
Gross profit592 536 1,176 1,064 
Operating expenses:
Sales and marketing150 143 306 288 
Research and development66 63 134 128 
General and administrative63 68 108 121 
Amortization of intangible assets21 18 42 36 
Restructuring, transition and other costs5 14 12 141 
Total operating expenses305 306 602 714 
Operating income287 230 574 350 
Interest expense(31)(37)(63)(77)
Other income (expense), net177 38 174 57 
Income (loss) from continuing operations before income taxes433 231 685 330 
Income tax expense (benefit)100 65 171 15 
Income (loss) from continuing operations333 166 514 315 
Income (loss) from discontinued operations (102) (133)
Net income$333 $64 $514 $182 
Income (loss) per share - basic:
Continuing operations$0.57 $0.28 $0.88 $0.53 
Discontinued operations$ $(0.17)$ $(0.23)
Net income per share - basic (1)
$0.57 $0.11 $0.88 $0.31 
Income (loss) per share - diluted:
Continuing operations$0.56 $0.28 $0.87 $0.52 
Discontinued operations$ $(0.17)$ $(0.22)
Net income per share - diluted$0.56 $0.11 $0.87 $0.30 
Weighted-average shares outstanding:
Basic
582 592 581 591 
Diluted
591 600 591 607 
(1) Net income per share amounts may not add due to rounding.
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4

NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in millions)
 
Three Months EndedSix Months Ended
 
October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Net income$333 $64 $514 $182 
Other comprehensive income, net of taxes:
Foreign currency translation adjustments(15)26 (13)37 
Net unrealized gain (loss) on available-for-sale securities   1 
Other comprehensive income, net of taxes(15)26 (13)38 
Comprehensive income$318 $90 $501 $220 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5

NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited, in millions, except per share amounts)
Three months ended October 1, 2021
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of July 2, 2021581 $2,049 $49 $(2,595)$(497)
Net income— — — 333 333 
Other comprehensive income, net of taxes— — (15)— (15)
Common stock issued under employee stock incentive plans1 7 — — 7 
Cash dividends declared ($0.125 per share of common stock) and dividend equivalents accrued
— (73)— — (73)
Stock-based compensation— 13 — — 13 
Balance as of October 1, 2021582 $1,996 $34 $(2,262)$(232)

Six months ended October 1, 2021
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of April 2, 2021580 $2,229 $47 $(2,776)$(500)
Net income— — — 514 514 
Other comprehensive income, net of taxes— — (13)— (13)
Common stock issued under employee stock incentive plans3 8 — — 8 
Shares withheld for taxes related to vesting of restricted stock units(1)(15)— — (15)
Cash dividends declared ($0.250 per share of common stock) and dividend equivalents accrued
— (147)— — (147)
Stock-based compensation— 33 — — 33 
Extinguishment of convertible debt— (112)— — (112)
Balance as of October 1, 2021582 $1,996 $34 $(2,262)$(232)
















6


NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited, in millions, except per share amounts)
Three months ended October 2, 2020
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of July 3, 2020591 $2,713 $(4)$(3,212)$(503)
Net income— — — 64 64 
Other comprehensive income, net of taxes— — 26 — 26 
Common stock issued under employee stock incentive plans1 8 — — 8 
Shares withheld for taxes related to vesting of restricted stock units— (4)— — (4)
Repurchases of common stock— (5)— — (5)
Cash dividends declared ($0.125 per share of common stock) and dividend equivalents accrued
— (82)— — (82)
Stock-based compensation— 20 — — 20 
Balance as of October 2, 2020592 $2,650 $22 $(3,148)$(476)

Six months ended October 2, 2020
Common Stock and Additional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Stockholders’ Equity (Deficit)
SharesAmount
Balance as of April 3, 2020589 $3,356 $(16)$(3,330)$10 
Net income— — — 182 182 
Other comprehensive income, net of taxes— — 38 — 38 
Common stock issued under employee stock incentive plans4 10 — — 10 
Shares withheld for taxes related to vesting of restricted stock units(1)(21)— — (21)
Repurchases of common stock— (5)— — (5)
Cash dividends declared ($0.250 per share of common stock) and dividend equivalents accrued
— (154)— — (154)
Stock-based compensation— 45 — — 45 
Extinguishment of convertible debt— (581)— — (581)
Balance as of October 2, 2020592 $2,650 $22 $(3,148)$(476)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7

NORTONLIFELOCK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Six Months Ended
October 1, 2021October 2, 2020
OPERATING ACTIVITIES:
Net income$514 $182 
Adjustments:
Amortization and depreciation71 85 
Impairments and write-offs of current and long-lived assets3 88 
Stock-based compensation expense33 45 
Deferred income taxes13 30 
Loss (gain) on extinguishment of debt5 (20)
Gain on sale of property(175)(35)
Non-cash operating lease expense11 11 
Other5 38 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net9 13 
Accounts payable27 (24)
Accrued compensation and benefits(36)(36)
Contract liabilities(47)(25)
Income taxes payable(97)(299)
Other assets(5)21 
Other liabilities(13)(17)
Net cash provided by (used in) operating activities318 57 
INVESTING ACTIVITIES:
Purchases of property and equipment(2)(3)
Payments for acquisition, net of cash acquired(40) 
Proceeds from the maturities and sales of short-term investments4 47 
Proceeds from the sale of property355 118 
Other(4)(5)
Net cash provided by (used in) investing activities313 157 
FINANCING ACTIVITIES:
Repayments of debt and related equity component(382)(1,929)
Proceeds from issuance of debt, net of issuance costs512 750 
Net proceeds from sales of common stock under employee stock incentive plans8 10 
Tax payments related to restricted stock units(14)(30)
Dividends and dividend equivalents paid(157)(187)
Repurchases of common stock (5)
Net cash provided by (used in) financing activities(33)(1,391)
Effect of exchange rate fluctuations on cash and cash equivalents(5)9 
Change in cash and cash equivalents593 (1,168)
Beginning cash and cash equivalents933 2,177 
Ending cash and cash equivalents$1,526 $1,009 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
8

NORTONLIFELOCK INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Description of Business and Significant Accounting Policies
Business
NortonLifeLock, Inc. is a leading provider of consumer Cyber Safety solutions globally. We help customers protect their devices, online privacy, identity and home networks.
Basis of presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America for interim financial information. 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 included in our Annual Report on Form 10-K for the fiscal year ended April 2, 2021. The results of operations for the six months ended October 1, 2021 are not necessarily indicative of the results expected for the entire fiscal year.
Fiscal calendar
We have a 52/53-week fiscal year ending on the Friday closest to March 31. Unless otherwise stated, references to three and six month periods in this report relate to fiscal periods ended October 1, 2021 and October 2, 2020. The three and six months ended October 1, 2021 and October 2, 2020 each consisted of 13 and 26 weeks, respectively. Our 2022 fiscal year consists of 52 weeks and ends on April 1, 2022.
Use of estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such estimates include, but are not limited to, valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions and valuation of assets and liabilities and results of operations of our discontinued operations. On an ongoing basis, management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable. Third-party valuation specialists are also utilized for certain estimates. Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the COVID-19 pandemic, and such differences may be material to the Condensed Consolidated Financial Statements.
Significant accounting policies
There have been no material changes to our significant accounting policies as of and for the six months ended October 1, 2021, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended April 2, 2021.
9

Note 2. Recent Accounting Standards
Recently adopted authoritative guidance
Income Taxes. In December 2019, the FASB issued new guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The guidance also clarifies and amends existing guidance to improve consistent application. On April 3, 2021, the first day of fiscal 2022, we adopted this guidance prospectively. The adoption of this guidance did not have a material impact on our Condensed Consolidated Financial Statements.
Recently issued authoritative guidance not yet adopted
Business Combinations, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. In October 2021, the FASB issued new guidance which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting. This new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The standard will be effective for us in our first quarter of fiscal 2024, with early adoption permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.
Debt with Conversion and Other Options. In August 2020, the FASB issued new guidance that simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes from GAAP the separation models for convertible debt with embedded conversion features. As a result, after adopting the guidance, entities will no longer separately present embedded conversion features in equity. Instead, they will account for the convertible debt wholly as debt. The new guidance also requires use of the if-converted method when calculating the dilutive impact of convertible debt on earnings per share. The standard will be effective for us in our first quarter of fiscal 2023. It may be applied retrospectively to each prior period presented or retrospectively with cumulative effect recognized in retained earnings as of the date of adoption. We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.
Reference Rate Reform. In March 2020, the FASB issued new guidance providing temporary optional expedients and exceptions to ease the financial reporting burden of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The standard was effective upon issuance and may generally be applied through December 31, 2022, to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR. We continue to evaluate our contractual arrangements and hedging relationships that reference LIBOR.
Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had, or will have, a material impact on our Condensed Consolidated Financial Statements and disclosures.
Note 3. Discontinued Operations and Assets Held for Sale
Discontinued operations
On November 4, 2019, we completed the sale of certain of our Enterprise Security assets and certain liabilities to Broadcom Inc. (the Broadcom sale). Certain costs associated with the divestiture of our Enterprise Security business are classified as discontinued operations in our Condensed Consolidated Statements of Operations. During the three and six months ended October 2, 2020, costs included severance and termination benefits as part of our November 2019 restructuring plan. These activities were completed during fiscal 2021. See Note 12 for information associated with our restructuring activities.
On October 1, 2020, we entered into multiple agreements with Broadcom for an aggregate amount of $200 million. We licensed Broadcom’s enterprise software, multiple security engines and related telemetry for 5.6 years, which will be amortized to continuing operations over the term of license. In addition, we resolved all outstanding payments and certain claims related to the asset purchase and transition services agreements, which is included in discontinued operations.
In connection with the Broadcom sale, we entered into a transition services agreement under which we provided assistance to Broadcom including, but not limited to, business support services and information technology services. During fiscal 2021, the transition services were completed. Dedicated direct costs, net of charges to Broadcom, for these transition services were $1 million and $9 million during the three and six months ended October 2, 2020, respectively. These direct costs were presented as part of Other income (expense), net in the Condensed Consolidated Statements of Operations.
The following table presents information regarding certain components of income (loss) from discontinued operations, net of income taxes during the three and six months ended October 2, 2020. There was no discontinued operations activity during the three and six months ended October 1, 2021.
10

Three Months EndedSix Months Ended
(In millions)
October 2, 2020October 2, 2020
Net revenues
$ $ 
Gross profit$ $ 
Operating income (loss)$(133)$(175)
Income (loss) before income taxes$(132)$(173)
Income tax expense (benefit)$(30)$(40)
Income (loss) from discontinued operations$(102)$(133)
Assets held for sale
During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to assets held for sale when the properties were approved for immediate sale in their present condition and the sale was expected to be completed within one year.
We continue to actively market the properties for sale; however, during fiscal 2022, the commercial real estate market continues to be adversely affected by the COVID-19 pandemic, which has delayed the expected timing of sale. We have taken into consideration the current real estate values and demand, and continue to execute plans to sell these properties. As of October 1, 2021, these assets are classified as assets held for sale. During the three and six months ended October 1, 2021, there were no impairments because the fair value of the properties less costs to sell either equals or exceeds their carrying value.
On July 14, 2021, we completed the sale of certain land and buildings in Mountain View, California for cash consideration of $355 million, net of selling costs. We recognized a gain of $175 million on the sale. In conjunction with the sale, we signed a 7-year leaseback agreement for a portion of the property. See Note 9 for further information related to the sale leaseback.
Note 4. Business Combinations
Proposed Merger with Avast
On August 10, 2021, we announced a transaction under which we intend to acquire the entire issued and to be issued ordinary share capital of Avast plc, a public company incorporated in England and Wales and a global leader of digital security and privacy headquartered in Prague, Czech Republic (Avast and such transaction, the Proposed Merger). The Proposed Merger will be implemented by means of a court-sanctioned scheme of arrangement under the UK Companies Act 2006, as amended (the Scheme), and remains subject to a certain number of conditions. Under the terms of the Proposed Merger, Avast shareholders will be entitled to elect to receive, for each ordinary share of Avast held, in respect of their entire holding of Avast shares, either: (i) $7.61 in cash and 0.0302 of a new share of our common stock (such option, the Majority Cash Option); or (ii) $2.37 in cash and 0.1937 of a new share of our common stock (such option, the Majority Stock Option).The estimated purchase price range, based on our undisturbed closing share price of $27.20 on July,13 2021, for the Avast shares under the Proposed Merger is $8.1 billion to $8.6 billion, depending on the Avast shareholders elections. Each of the directors of Avast who holds shares has undertaken to elect for the Majority Stock Option in respect of their entire beneficial holdings of Avast shares. We plan to finance the Proposed Merger with existing cash, cash to be generated by operations and new debt financing.
In conjunction with the Proposed Merger, on August 10, 2021, we entered into an agreement (as amended, the Interim Facilities Agreement) with certain financial institutions, in which they agreed to provide us with (i) a $3,600 million term loan interim facility B (Interim Facility B), (ii) $750 million term loan interim facility A1 (Interim Facility A1) and $3,500 million term loan interim facility A2 (Interim Facility A2), and (iii) a $1,500 million interim revolving facility (Interim Revolving Facility) (collectively, the Interim Facilities) and a commitment letter (as amended, the Commitment Letter) to finance the cash consideration payable in connection with the Proposed Merger. The Interim Facilities will be financed by a syndicate of lenders led by Bank of America, N.A. and Wells Fargo Bank N.A. The Interim Facilities Agreement contains, and any definitive financing documentation entered into in connection with the Commitment Letter will contain, customary representations and warranties, events of default and covenants for transactions of this type. Definitive financing documentation entered into in connection with the Commitment Letter will replace the existing credit facility agreement upon the close of the transactions contemplated thereby.
In conjunction with the Proposed Merger, on August 10, 2021, we entered into a Co-operation Agreement (the Co-operation Agreement) with Nitro Bidco Limited, our wholly-owned subsidiary (Bidco), and Avast, pursuant to which we and Bidco agreed to, among other things, use all reasonable endeavors for the purposes of obtaining any regulatory authorizations which are required to implement the Proposed Merger, and we, Bidco and Avast agreed to cooperate with each other in preparing required transaction documents and certain other matters in connection with the Proposed Merger. The Co-operation Agreement also contains certain termination rights. The Co-operation Agreement also provides that, subject to certain exceptions, in connection with a failure to satisfy specified events, conditions or regulatory approvals, we may be required to pay Avast a break fee ranging from $100 million to $300 million.
The Proposed Merger has been approved by our Board of Directors, the Board of Directors of Avast and our shareholders. The Proposed Merger is subject to approval by the Avast shareholders. The Proposed Merger is expected to close by mid-calendar year 2022, subject to regulatory approvals and the satisfaction or waiver of other customary closing conditions.
11

Fiscal 2021 Avira acquisition
On January 8, 2021, we completed our acquisition of Avira. Avira provides a consumer-focused portfolio of cybersecurity and privacy solutions primarily in Europe and key emerging markets. The total aggregate consideration for the acquisition was $344 million, net of $32 million cash acquired.
Our current allocation of the aggregate purchase price for the acquisition as of January 8, 2021, is as follows:
(In millions)January 8, 2021
Assets:
Current assets$12 
Intangible assets162 
Goodwill261 
Other long-term asset21 
Total assets acquired456 
Liabilities:
Current liabilities29 
Contract liabilities54 
Other long-term obligations29 
Total liabilities assumed112 
Total purchase price$344 
The allocation of the purchase price above was based upon a preliminary valuation performed during the fourth quarter of fiscal 2021 and reflects adjustments made during the six months ended October 1, 2021. Our estimates and assumptions are subject to refinement within the measurement period, which may be up to one year from the acquisition date. Adjustments to the purchase price may require adjustments to goodwill prospectively. The primary area of purchase price allocation that is not yet finalized relates to certain tax matters.
Note 5. Revenues
Contract liabilities
During the three and six months ended October 1, 2021, we recognized $506 million and $858 million from the contract liabilities balance at July 2, 2021 and April 2, 2021, respectively. During the three and six months ended October 2, 2020, we recognized $452 million and $762 million from the contract liabilities balance at July 3, 2020 and April 3, 2020, respectively.
Remaining performance obligations
Remaining performance obligations represent contract revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods. As of October 1, 2021, we had $794 million of remaining performance obligations, excluding customer deposit liabilities of $419 million, of which we expect to recognize approximately 93% as revenue over the next 12 months.
See Note 17 for tabular disclosures of disaggregated revenue by solution and geographic region.
Note 6. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill were as follows:
(In millions)
Balance as of April 2, 2021$2,867 
Acquisition40 
Purchase accounting adjustment(7)
Translation adjustments
(4)
Balance as of October 1, 2021$2,896 
On September 15, 2021, we completed an acquisition of an online reputation management and digital privacy solutions company for total aggregate consideration of $40 million. The purchase price was preliminarily allocated to goodwill and will be finalized during the third quarter of fiscal 2022.
12

Intangible assets, net
 October 1, 2021April 2, 2021
(In millions)Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Customer relationships$567 $(340)$227 $556 $(299)$257 
Developed technology210 (125)85 210 (104)106 
Other7 (1)6 7 (1)6 
Total finite-lived intangible assets784 (466)318 773 (404)369 
Indefinite-lived trade names746 — 746 747 — 747 
Total intangible assets$1,530 $(466)$1,064 $1,520 $(404)$1,116 
Amortization expense for purchased intangible assets is summarized below:
Three Months EndedSix Months Ended Condensed Statements of Operations Classification
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Customer relationships and other$21 $18 $42 $36 Operating expenses
Developed technology11 7 21 14 Cost of revenues
Total$32 $25 $63 $50 
As of October 1, 2021, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:
(In millions)
Remainder of 2022$59 
2023101 
202488 
202529 
202624 
Thereafter17 
Total$318 
Note 7. Supplementary Information
Cash and cash equivalents:
(In millions)October 1, 2021April 2, 2021
Cash$767 $650 
Cash equivalents759 283 
Total cash and cash equivalents$1,526 $933 
Accounts receivable, net:
(In millions)October 1, 2021April 2, 2021
Accounts receivable$109 $118 
Allowance for doubtful accounts(1)(1)
Total accounts receivable, net$108 $117 
Other current assets:
(In millions)October 1, 2021April 2, 2021
Prepaid expenses$97 $95 
Income tax receivable and prepaid income taxes112 96 
Other tax receivable16 31 
Other18 15 
Total other current assets$243 $237 
13

Property and equipment, net:
(In millions)October 1, 2021April 2, 2021
Land$2 $3 
Computer hardware and software465 479 
Office furniture and equipment28 63 
Buildings28 29 
Leasehold improvements58 58 
Construction in progress1 1 
Total property and equipment, gross582 633 
Accumulated depreciation and amortization(515)(555)
Total property and equipment, net$67 $78 
Other long-term assets:
(In millions)October 1, 2021April 2, 2021
Non-marketable equity investments$185 $185 
Long-term income tax receivable and prepaid income taxes30 30 
Deferred income tax assets341 355 
Long-term prepaid royalty61 70 
Other46 46 
Total other long-term assets$663 $686 
Short-term contract liabilities:
(In millions)October 1, 2021April 2, 2021
Deferred revenue$740 $795 
Customer deposit liabilities419 415 
Total short-term contract liabilities$1,159 $1,210 
Other current liabilities:
(In millions)October 1, 2021April 2, 2021
Income taxes payable$99 $111 
Other taxes payable69 82 
Accrued legal fees76 66 
Accrued royalties36 46 
Other129 123 
Total other current liabilities$409 $428 
Long-term income taxes payable:
(In millions)October 1, 2021April 2, 2021
Deemed repatriation tax payable$438 $525 
Other long-term income taxes25 29 
Uncertain tax positions (including interest and penalties)571 565 
Total long-term income taxes payable$1,034 $1,119 
14

Other income (expense), net:
Three Months EndedSix Months Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Interest income$ $1 $ $3 
Foreign exchange gain (loss)1  2 1 
Gain (loss) on early extinguishment of debt  (5)20 
Gain on sale of property175 35 175 35 
Transition service expense, net (1) (9)
Other1 3 2 7 
Other income (expense), net$177 $38 $174 $57 
Supplemental cash flow information:
Six Months Ended
(In millions)October 1, 2021October 2, 2020
Income taxes paid, net of refunds$273 $235 
Interest expense paid$60 $76 
Cash paid for amounts included in the measurement of operating lease liabilities$14 $17 
Non-cash operating activities:
Operating lease assets obtained in exchange for operating lease liabilities$35 $28 
Reduction of operating lease assets as a result of lease terminations and modifications$8