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Symantec Announces Sale of VeritasAugust 2015
Forward Looking Statements
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This presentation contains statements regarding the pending sale of our information management business to The Carlyle Group, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements regarding the expected benefits to be realized as a result of the sale; statements with respect to our anticipated proceeds from the sale and our expected use of such proceeds; statements regarding the growth prospects of our security business; statements with respect to our continuation of our current dividend; and statements with respect to the proposed timing of the closing of the sale. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: receiving all regulatory approvals, satisfying all closing conditions and consummating the pending transaction; separation of the company into the security business and the information management business; general economic conditions; maintaining customer and partner relationships; fluctuations in tax rates and currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors section of our Form 10-K for the year ended April 3, 2015.
Any information regarding pre-release of Symantec offerings, future updates or other planned modifications is subject to ongoing evaluation by Symantec and therefore subject to change. This information is provided without warranty of any kind, express or implied. Customers who purchase Symantec offerings should make their purchase decision based upon features that are currently available.
We assume no obligation to update any forward looking information contained in this presentation‐ .
Use of GAAP and Non-GAAP Financial Information
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Our results of operations have undergone significant change due to the impact of litigation accruals, stock-based compensation, restructuring, transition and separation matters, charges related to the amortization of intangible assets, and certain other income and expense items that management considers unrelated to the Company’s core operations. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
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. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations page of our website at: www.symantec.com/invest.
Symantec Announces the Sale of Veritas to The Carlyle Group
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Transaction Overview
• $8 billion all cash transaction, with approximately net proceeds of $6.3 billion
• Attractive and certain value generation for Symantec shareholders
• Allows Symantec to grow its security business and increase its lead as the world’s largest cybersecurity company
• Provides Symantec with capital to continue investments in the rapidly growing market for security products and services, and to support its capital return initiatives through the purchase of common stock and its dividend
• Expected closing by end of Q3 FY16 (subject to certain closing conditions and regulatory approvals)
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Announced Plan to Separate the IM Business in October 2014
Focus and strategic flexibility to address market dynamics driven by different trends and customer needs
Reduce operational complexity
Enable each business to unlock its full growth potential and win in its respective market
World’s largest civilian cyberintelligence threat network
Security
#1 in Backup and Recovery
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• FY15 Revenue1: $2.1 billion• FY15 Operating Margin1: 14%
• Unified security analytics platform monetization
• Growth from cloud and mobile offerings
Improving Revenue Outlook with Outstanding Margin
CONSUMER SECURITY
• FY15 Revenue1: $1.9 billion• FY15 Operating Margin1: 53%
• Premium support services
• Customer experience improvements
• Leverage consumer mobile
ENTERPRISE SECURITY
Accelerating Growth and Margin Expansion
1 FY2015 Non-GAAP metrics
Symantec: World’s Largest Security Business
Symantec Security Strategy Leverages Unique Assets
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• Consumer
– Norton Security
• Enterprise
– Symantec Threat Protection
– Symantec Information Protection
We see more, analyze more, and therefore protectfrom more cyber threats than any other company in the world
Best-in-ClassSecurity Products
Our Competitive Advantage: Global Scale & Real-Time Visibility
Cyber Security Services
Unified Security Analytics Platform
• Security Big Data Analytics
• Unparalleled scope of telemetry (Symantec and 3rd Party)
• Unrivalled visibility into real-time global threats
• Powers Symantec and 3rd party security analytics applications
• Full-suite of services
– Monitoring services
– Incident response services
– Threat intelligence services
• Supported by 500+ world-class cyber security experts and9 global threat centers
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Scale & Scope of Enterprise Security Franchises Underpin Growth
#1 share; AAA ratingnine quarters in a row
Endpoint Security
#1 email share; 100% availability with <0.0003% FPs
Email and Web Security
#1 DLP share100% of Fortune 100
Data Protection
#1 share6B certificate lookups/day
SSLCertificates
13B validations every day100% uptime last 5 years
Authentication & Authorization
ManagedSecurity Services5 global SOCs30B logs analyzed/day
Source: IDC, Gartner, Symantec.
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Drivers to Accelerate Growth & Unlock Value for FY16-17
Security
Increase in NEW security offerings in FY16 3 new ATP offerings 2 new Cyber Security services2 new Security Analytics applications
Norton subscription traction
CISO
40% increase for enterprise security quota carrying reps
Shifting & increasing R&D to growth markets
10% CAGR in addressable security market
1,750 dedicated security sales professionals
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FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
$3,600$2,800
$1,500
$700 $553
$870 $893 $826 $918 $913
Returned more than $10 billion to shareholders in the past ten years
Share buyback
Dividend
($ in millions)
Demonstrated Track Record of Capital Return
Historical Cash Deployment
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Continued Commitment to a Balanced Capital Allocation
35%
65%
Domestic
Capital Allocation Strategy
• The Board of Directors is authorizing an increase of the stock buyback program to $2.6 billion, with $2 billion expected to be executed over the 18 months post closing
• While new Symantec operating income is materially reduced, the company is retaining a $0.60 per share dividend per year, significantly increasing Symantec’s dividend payout ratio post separation
• Between dividend and share repurchases, Symantec expects to return approximately 120% of its after-tax domestic cash sale proceeds over the 18 months post closing
• Committed to strong balance sheet and investment grade rating
Offshore
Veritas Sale Proceeds
$1.3
$0.5
Security
Operating Income1: $1.8 Billion
Information Management
1 FY2015 Non-GAAP metrics
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Summary
• Transaction delivers attractive and certain value generation for Symantec shareholders
• Symantec to focus on unlocking significant value as the world’s largest cybersecurity company in a rapidly growing market
• Implementing comprehensive and balanced capital deployment focused on significant capital return to shareholders and investment in the core business
• Transaction expected to close by January 1, 2016, subject to certain closing conditions and regulatory approvals
