Symantec 2016 Annual Report Download - page 156

Fair value of debt
As of April 1, 2016 and April 3, 2015, the total fair value of our current and long-term debt was $2.3 billion
and $2.2 billion, respectively, based on Level 2 inputs. As of April 1, 2016, the fair value of the equity
component of our 2.5% Convertible Notes was $29 million, based on Level 3 inputs.
Note 3. Discontinued Operations
In August 2015, we entered into a definitive agreement to sell the assets of Veritas to Carlyle and amended
the terms on January 19, 2016. Based on the amended terms of the definitive agreement, we received net
consideration of $6.6 billion in cash excluding transaction costs and 40 million B common shares of Veritas and
Veritas assumed certain liabilities in connection with the acquisition. The transaction closed on January 29, 2016.
The disposition resulted in a net gain of $3.0 billion, which is presented as part of income from discontinued
operations, net of income taxes in the Consolidated Statements of Operations for fiscal 2016. See Note 6 for
more information on severance, facilities and separation costs related to our fiscal 2015 plans to separate our
security and information management businesses.
The results of Veritas are presented as discontinued operations in our Consolidated Statements of
Operations and thus have been excluded from continuing operations and segment results for all reported periods.
Furthermore, Veritas’ assets and liabilities were removed from our Consolidated Balance Sheet upon
consummation of the sale on January 29, 2016, and have been classified as discontinued operations on our
Consolidated Balance Sheet as of April 3, 2015. The Company has two remaining reporting segments, Consumer
Security and Enterprise Security. See Note 8 for more information on our operating segments.
In connection with the divestiture of Veritas, the Company and Veritas entered into Transition Service
Agreements (“TSA”) pursuant to which the Company provides Veritas certain limited services including
financial support services, information technology services, and access to facilities, and Veritas provides the
Company certain limited financial support services. The TSAs commenced with the close of the transaction and
expire at various dates through fiscal 2019. During fiscal 2016, the Company recorded income of approximately
$8 million for all services provided to Veritas, which is presented as part of other income, net in the Consolidated
Statements of Operations.
The Company also has retained various customer relationships and contracts that were reported historically
as a part of the Veritas business. Approximately $330 million related to these relationships and contracts have
been reported as part of the Company’s deferred revenues in the Consolidated Balance Sheets as of April 1,
2016, along with a $131 million asset representing the fair value of the service and maintenance rights the
Company has under an agreement with Veritas. These balances will be amortized to discontinued operations
through the remaining term of the underlying contracts.
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