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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3221585
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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12061 Bluemont Way, Reston, Virginia
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20190
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock $0.001 Par Value Per Share
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NASDAQ Global Select Market
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Page
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ITEM 1.
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BUSINESS
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•
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Distributed Servers:
We operate a large number of high-speed servers globally to support localized capacity and availability demands. In conjunction with our proprietary software, processes and procedures, this platform offers rapid failover, global and local load balancing, and threshold monitoring on critical servers.
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•
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Networking:
We deploy and maintain a redundant and diverse global network, maintain high-speed, redundant connections to numerous internet service providers, and maintain peering relationships globally to ensure that our critical services are readily accessible to customers at all times.
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•
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Security:
We incorporate architectural concepts such as protected domains, restricted nodes and distributed access control in our system architecture. In addition, we employ firewalls and intrusion detection software, as well as proprietary security mechanisms at many points across our infrastructure. We perform recurring internal vulnerability testing and controls audits, and also contract with third-party security consultants who perform periodic penetration tests and security risk assessments on our systems. Verisign has engineered resiliency and diversity into how it hosts classes of products throughout its set of interconnected sites to mitigate unknown vendor defects and zero-hour security vulnerabilities. This includes different physical security silos, which themselves are separated into bulkheads, and in which servers are located. Corporate networks are in their own physical silo. Thus, the corporate networks to which personnel directly connect are separated from the silos that house production services; administration of production gear from corporate systems must go through an internal, fortified intermediary; and account credentials used within the corporate networks are not used within the production silos, nor on the fortified systems.
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•
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Data Integrity:
Verisign employs both phased and systemic integrity validation operations via a number of proprietary mechanisms on all internal DNS publication operations.
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As of December 31,
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|||||||
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2016
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2015
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2014
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|||
Employee headcount by function:
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|
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|||
Cost of revenues
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324
|
|
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314
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|
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299
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Sales and marketing
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143
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183
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171
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Research and development
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228
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253
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318
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General and administrative
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295
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269
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273
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Total
|
990
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|
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1,019
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|
1,061
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•
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regional internet infrastructure development, expansion, penetration and adoption;
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•
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market acceptance and adoption of products and services based upon technologies other than those we use, which are substitutes for our products and services;
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•
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public perception of the security of our technologies and of IP and other networks;
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•
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the introduction and consumer acceptance of new generations of mobile devices, and in particular the use of alternative internet navigation mechanisms other than web browsers;
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•
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increasing cyber threats and the associated customer need and demand for our Security Services offerings;
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•
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government regulations affecting internet access and availability, domain name registrations or the provision of registry services, or e-commerce and telecommunications over the internet;
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•
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the maturity and depth of the sales channels within developing and emerging markets and their ability and motivation to establish and support sales for domain names;
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•
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preference by markets for the use of their own country’s ccTLDs as a substitute or alternative to our TLDs; and
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•
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increased acceptance and use of new gTLDs as substitutes for established gTLDs.
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•
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power loss, transmission cable cuts and other telecommunications failures;
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•
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damage or interruption caused by fire, earthquake, and other natural disasters;
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•
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attacks, including hacktivism, by miscreants or other nefarious actors;
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•
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computer viruses or software defects;
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•
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physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks, unintentional mistakes or errors, and other events beyond our control;
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•
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risks inherent in or arising from the terms and conditions of our agreements with service providers to operate our networks and data centers;
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•
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state suppression of internet operations; and
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•
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any failure to implement effective and timely remedial actions in response to any damage or interruption.
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•
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our customers’ continued growth and development of their businesses and our customers’ ability to continue as going concerns or maintain their businesses, which could affect demand for our products and services;
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•
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current and future demand for our services, including decreases as a result of reduced spending on information technology and communications by our customers;
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•
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price competition for our products and services;
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•
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the price of our common stock;
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•
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our liquidity and our associated ability to execute on any share repurchase plans;
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•
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our ability to service our debt, to obtain financing or assume new debt obligations; and
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•
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our ability to obtain payment for outstanding debts owed to us by our customers or other parties with whom we do business.
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•
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competition with foreign companies or other domestic companies entering the foreign markets in which we operate, as well as foreign governments actively promoting ccTLDs, which we do not operate;
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•
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legal uncertainty regarding liability, enforcing our contracts and compliance with foreign laws;
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•
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tariffs and other trade barriers and restrictions;
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•
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difficulties in staffing and managing foreign operations;
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•
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currency fluctuations;
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•
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potential problems associated with adapting our services to technical conditions existing in different countries;
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•
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difficulty of verifying customer information, including complying with the customer verification requirements of certain countries;
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•
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more stringent privacy policies in some foreign countries;
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•
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additional vulnerability from terrorist groups targeting U.S. interests abroad;
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•
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potentially conflicting or adverse tax consequences;
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•
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reliance on third parties in foreign markets in which we only recently started doing business; and
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•
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potential concerns of international customers and prospects regarding doing business with U.S. technology companies due to alleged U.S. government data collection policies.
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•
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adverse changes in the value of the properties, due to interest rate changes, changes in the commercial property markets, or other factors;
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•
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ongoing maintenance expenses and costs of improvements;
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•
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the possible need for structural improvements in order to comply with environmental, health and safety, zoning, seismic, disability law, or other requirements;
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•
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the possibility of environmental contamination or notices of violation from federal or state environmental agencies; and
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•
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possible disputes with neighboring owners, tenants, service providers or others.
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•
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our stockholders may take action only at a duly called meeting and not by written consent;
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•
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special meetings of our stockholders may be called only by the chairman of the board of directors, the president, our Board, or the secretary (acting as a representative of the stockholders) whenever a stockholder or group of stockholders owning at least thirty-five percent (35%) in the aggregate of the capital stock issued, outstanding and entitled to vote, and who held that amount in a net long position continuously for at least one year, so request in writing;
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•
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vacancies on our Board can be filled until the next annual meeting of stockholders by a majority of directors then in office; and
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•
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our Board has the ability to designate the terms of and issue new series of preferred stock without stockholder approval.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Approximate
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Major Locations
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Square Footage
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Use
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United States:
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Reston, Virginia
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221,000
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Corporate Headquarters
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New Castle, Delaware
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105,000
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Data Center
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Dulles, Virginia
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70,000
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Data Center
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Europe:
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Fribourg, Switzerland
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8,000
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Data Center and Corporate Services
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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Name
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Age
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Position
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D. James Bidzos
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61
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Executive Chairman, President and Chief Executive Officer
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Todd B. Strubbe
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53
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Executive Vice President, Chief Operating Officer
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George E. Kilguss, III
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56
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Executive Vice President, Chief Financial Officer
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Thomas C. Indelicarto
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53
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Executive Vice President, General Counsel and Secretary
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Price Range
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||||||
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High
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Low
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||||
Year ended December 31, 2016:
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Fourth Quarter
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$
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86.98
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$
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74.46
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Third Quarter
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$
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87.19
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$
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74.01
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Second Quarter
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$
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91.99
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$
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80.47
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First Quarter
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$
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90.61
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$
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70.26
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Year ended December 31, 2015:
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Fourth Quarter
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$
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93.94
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$
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70.21
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Third Quarter
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$
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71.82
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$
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61.42
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Second Quarter
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$
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68.25
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$
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61.31
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First Quarter
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$
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67.50
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$
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53.48
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Total Number
of Shares
Purchased
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Average
Price Paid
per Share
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Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
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Approximate
Dollar Value of
Shares That May
Yet Be Purchased
Under the Plans or
Programs (1)(2)
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||||||
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(Shares in thousands)
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||||||||||||
October 1 – 31, 2016
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773
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$77.43
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773
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$
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529.0
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million
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November 1 – 30, 2016
|
589
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$80.96
|
|
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589
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$
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481.4
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million
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December 1 – 31, 2016
|
662
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$78.85
|
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662
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$
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429.2
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million
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2,024
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2,024
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(1)
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On February 11, 2016, our Board authorized the repurchase of approximately $611.2 million of our common stock, in addition to the $388.8 million of our common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0 billion of our common stock.
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(2)
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Effective February 9, 2017, our Board authorized the repurchase of approximately $640.9 million of our common stock, in addition to the $359.1 million of our common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0 billion of our common stock. The share repurchase program has no expiration date. Purchases made under the program could be effected through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions.
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12/31/11
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12/31/12
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12/31/13
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12/31/14
|
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12/31/15
|
|
12/31/16
|
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||||||
VeriSign, Inc
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$
|
100
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|
$
|
109
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|
$
|
167
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|
$
|
160
|
|
$
|
245
|
|
$
|
213
|
|
S&P 500 Index
|
$
|
100
|
|
$
|
116
|
|
$
|
154
|
|
$
|
175
|
|
$
|
177
|
|
$
|
198
|
|
S&P 500 Information Technology Index
|
$
|
100
|
|
$
|
115
|
|
$
|
147
|
|
$
|
177
|
|
$
|
188
|
|
$
|
214
|
|
ITEM 6.
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SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
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2016
|
|
2015
|
|
2014
|
|
2013 (1)
|
|
2012
|
||||||||||
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|
||||||||||
Revenues
|
$
|
1,142
|
|
|
$
|
1,059
|
|
|
$
|
1,010
|
|
|
$
|
965
|
|
|
$
|
874
|
|
Operating income
|
$
|
687
|
|
|
$
|
606
|
|
|
$
|
564
|
|
|
$
|
528
|
|
|
$
|
457
|
|
Income from continuing operations
|
$
|
441
|
|
|
$
|
375
|
|
|
$
|
355
|
|
|
$
|
544
|
|
|
$
|
312
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
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||||||||||
Basic
|
$
|
4.12
|
|
|
$
|
3.29
|
|
|
$
|
2.80
|
|
|
$
|
3.77
|
|
|
$
|
1.99
|
|
Diluted
|
$
|
3.42
|
|
|
$
|
2.82
|
|
|
$
|
2.52
|
|
|
$
|
3.49
|
|
|
$
|
1.91
|
|
(1)
|
Income from continuing operations for 2013 includes a $375.3 million income tax benefit related to a worthless stock deduction, net of valuation allowances, and accrual for uncertain tax positions, partially offset by $167.1 million of income tax expense related to the repatriation of cash held by foreign subsidiaries.
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As of December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
1,798
|
|
|
$
|
1,915
|
|
|
$
|
1,425
|
|
|
$
|
1,723
|
|
|
$
|
1,556
|
|
Total assets
|
$
|
2,335
|
|
|
$
|
2,358
|
|
|
$
|
1,901
|
|
|
$
|
2,249
|
|
|
$
|
2,009
|
|
Deferred revenues
|
$
|
976
|
|
|
$
|
961
|
|
|
$
|
890
|
|
|
$
|
856
|
|
|
$
|
813
|
|
Subordinated Convertible Debentures, including contingent interest derivative
|
$
|
630
|
|
|
$
|
634
|
|
|
$
|
621
|
|
|
$
|
613
|
|
|
$
|
587
|
|
Long-term debt (1)
|
$
|
1,237
|
|
|
$
|
1,235
|
|
|
$
|
740
|
|
|
$
|
739
|
|
|
$
|
100
|
|
(1)
|
The increase in Long-term debt from 2014 to 2015 was due to the issuance of $500.0 million aggregate principal amount of 5.25% senior unsecured notes due 2025.The increase in Long-term debt from 2012 to 2013 was due to the issuance of $750.0 million aggregate principal amount of 4.625% senior unsecured notes due 2023, offset by the repayment of $100.0 million of outstanding indebtedness under our unsecured credit facility.
|
•
|
We recorded revenues of
$1,142.2 million
in
2016
, which represents an increase of
8%
compared to
2015
.
|
•
|
We recorded operating income of
$686.6 million
during
2016
, which represents an increase of
13%
as compared to
2015
.
|
•
|
On October 20, 2016, we announced that the U.S. Department of Commerce approved the extension amendment to the
.com
Registry Agreement with the Internet Corporation for Assigned Names and Numbers, pursuant to which Verisign will remain the sole registry operator for the
.com
registry through November 30, 2024.
|
•
|
We finished 2016 with 142.2 million
.com
and
.net
registrations in the domain name base, which represents a 2% increase from December 31, 2015.
|
•
|
The final
.com
and
.net
renewal rate for the third quarter of
2016
was 73.0% compared with 71.9% for the same quarter in
2015
. The final
.com
and
.net
renewal rate for the fourth quarter of
2016
was 67.5% compared with 73.3% for the same quarter in
2015
.
|
•
|
We repurchased
7.8 million
shares of our common stock for an aggregate cost of $636.5 million in
2016
. As of
December 31, 2016
, there was $429.2 million remaining for future share repurchases under the share repurchase program.
|
•
|
Through February 9, 2017, we repurchased an additional 0.9 million shares for $70.1 million under our share repurchase program. Effective February 9, 2017, our Board authorized the repurchase of approximately $640.9 million of our common stock, in addition to the $359.1 million of our common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0 billion of our common stock.
|
•
|
We generated cash flows from operating activities of
$667.9 million
in
2016
, which represents an increase of
3%
as compared to
2015
.
|
•
|
On July 28, 2016, we announced an increase in the annual fee for a .
net
domain name registration from $7.46 to $8.20, which became effective February 1, 2017.
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|||
Cost of revenues
|
17.4
|
|
|
18.2
|
|
|
18.7
|
|
Sales and marketing
|
7.0
|
|
|
8.5
|
|
|
9.1
|
|
Research and development
|
5.2
|
|
|
6.0
|
|
|
6.7
|
|
General and administrative
|
10.3
|
|
|
10.1
|
|
|
9.6
|
|
Total costs and expenses
|
39.9
|
|
|
42.8
|
|
|
44.1
|
|
Operating income
|
60.1
|
|
|
57.2
|
|
|
55.9
|
|
Interest expense
|
(10.1
|
)
|
|
(10.2
|
)
|
|
(8.5
|
)
|
Non-operating income (loss), net
|
0.9
|
|
|
(1.0
|
)
|
|
0.5
|
|
Income before income taxes
|
50.9
|
|
|
46.0
|
|
|
47.9
|
|
Income tax expense
|
(12.3
|
)
|
|
(10.6
|
)
|
|
(12.7
|
)
|
Net income
|
38.6
|
%
|
|
35.4
|
%
|
|
35.2
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||
|
|
2016
|
|
%
Change
|
|
2015
|
|
%
Change
|
|
2014
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||
Revenues
|
|
$
|
1,142,167
|
|
|
8
|
%
|
|
$
|
1,059,366
|
|
|
5
|
%
|
|
$
|
1,010,117
|
|
|
|
December 31, 2016
|
|
%
Change
|
|
December 31, 2015
|
|
%
Change
|
|
December 31, 2014
|
||
Domain name base for
.com
and
.net
|
|
142.2 million
|
|
2
|
%
|
|
139.8 million
|
|
6
|
%
|
|
131.5 million
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
%
Change |
|
2015
|
|
%
Change |
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
U.S
|
$
|
667,301
|
|
|
4
|
%
|
|
$
|
639,170
|
|
|
4
|
%
|
|
$
|
616,125
|
|
EMEA
|
207,474
|
|
|
7
|
%
|
|
193,623
|
|
|
6
|
%
|
|
182,897
|
|
|||
China
|
127,298
|
|
|
53
|
%
|
|
83,456
|
|
|
27
|
%
|
|
65,525
|
|
|||
Other
|
140,094
|
|
|
(2
|
)%
|
|
143,117
|
|
|
(2
|
)%
|
|
145,570
|
|
|||
Total revenues
|
$
|
1,142,167
|
|
|
8
|
%
|
|
$
|
1,059,366
|
|
|
5
|
%
|
|
$
|
1,010,117
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
%
Change |
|
2015
|
|
%
Change |
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
Cost of revenues
|
$
|
198,242
|
|
|
3
|
%
|
|
$
|
192,788
|
|
|
2
|
%
|
|
$
|
188,425
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
%
Change |
|
2015
|
|
%
Change |
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
Sales and marketing
|
$
|
80,250
|
|
|
(11
|
)%
|
|
$
|
90,184
|
|
|
(2
|
)%
|
|
$
|
92,001
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
%
Change |
|
2015
|
|
%
Change |
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
Research and development
|
$
|
59,100
|
|
|
(7
|
)%
|
|
$
|
63,718
|
|
|
(6
|
)%
|
|
$
|
67,777
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
%
Change |
|
2015
|
|
%
Change |
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||||
General and administrative
|
$
|
118,003
|
|
|
11
|
%
|
|
$
|
106,730
|
|
|
9
|
%
|
|
$
|
97,487
|
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
|
(Dollars in thousands)
|
||||||||||
Income tax expense
|
$
|
140,528
|
|
|
$
|
112,414
|
|
|
$
|
128,051
|
|
Effective tax rate
|
24
|
%
|
|
23
|
%
|
|
26
|
%
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
231,945
|
|
|
$
|
228,659
|
|
Marketable securities
|
1,565,962
|
|
|
1,686,771
|
|
||
Total
|
$
|
1,797,907
|
|
|
$
|
1,915,430
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
667,949
|
|
|
$
|
651,482
|
|
|
$
|
600,949
|
|
Net cash (used in) provided by investing activities
|
(40,399
|
)
|
|
(496,899
|
)
|
|
112,688
|
|
|||
Net cash used in financing activities
|
(623,763
|
)
|
|
(117,778
|
)
|
|
(859,752
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(501
|
)
|
|
246
|
|
|
(1,500
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
3,286
|
|
|
$
|
37,051
|
|
|
$
|
(147,615
|
)
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
2016
|
||||||||||||||||||
|
Quarter Ended
|
Year Ended
|
|||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
December 31,
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Revenues
|
$
|
281,876
|
|
|
$
|
286,466
|
|
|
$
|
287,554
|
|
|
$
|
286,271
|
|
|
$
|
1,142,167
|
|
Gross Profit
|
$
|
231,294
|
|
|
$
|
237,713
|
|
|
$
|
237,747
|
|
|
$
|
237,171
|
|
|
$
|
943,925
|
|
Operating Income
|
$
|
166,767
|
|
|
$
|
176,267
|
|
|
$
|
174,776
|
|
|
$
|
168,762
|
|
|
$
|
686,572
|
|
Net income
|
$
|
107,456
|
|
|
$
|
113,210
|
|
|
$
|
114,427
|
|
|
$
|
105,552
|
|
|
$
|
440,645
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.98
|
|
|
$
|
1.05
|
|
|
$
|
1.08
|
|
|
$
|
1.01
|
|
|
$
|
4.12
|
|
Diluted (1)
|
$
|
0.82
|
|
|
$
|
0.87
|
|
|
$
|
0.90
|
|
|
$
|
0.84
|
|
|
$
|
3.42
|
|
(1)
|
Earnings per share for the year is computed independently and may not equal the sum of the quarterly earnings per share.
|
|
2015
|
||||||||||||||||||
|
Quarter Ended
|
Year Ended
|
|||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
December 31,
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Revenues
|
$
|
258,422
|
|
|
$
|
262,539
|
|
|
$
|
265,780
|
|
|
$
|
272,625
|
|
|
$
|
1,059,366
|
|
Gross Profit
|
$
|
210,069
|
|
|
$
|
214,318
|
|
|
$
|
218,562
|
|
|
$
|
223,629
|
|
|
$
|
866,578
|
|
Operating Income
|
$
|
144,237
|
|
|
$
|
148,965
|
|
|
$
|
154,462
|
|
|
$
|
158,282
|
|
|
$
|
605,946
|
|
Net income
|
$
|
88,238
|
|
|
$
|
93,011
|
|
|
$
|
92,457
|
|
|
$
|
101,530
|
|
|
$
|
375,236
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.75
|
|
|
$
|
0.80
|
|
|
$
|
0.82
|
|
|
$
|
0.92
|
|
|
$
|
3.29
|
|
Diluted
|
$
|
0.66
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
0.76
|
|
|
$
|
2.82
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
•
|
Reports of Independent Registered Public Accounting Firm
|
•
|
Consolidated Balance Sheets as of December 31,
2016
and
2015
|
•
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31,
2016
,
2015
, and
2014
|
•
|
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31,
2016
,
2015
, and
2014
|
•
|
Consolidated Statements of Cash Flows for the Years Ended December 31,
2016
,
2015
, and
2014
|
•
|
Notes to Consolidated Financial Statements
|
|
Financial statement schedules are omitted because the information called for is not material or is shown either in the consolidated financial statements or the notes thereto.
|
|
|
|
|
Incorporated by Reference
|
|
|
|
||||
Exhibit
Number |
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Filed Herewith
|
|
|
|
|
|
|
|
|
|
|
|
||
2.01
|
|
Agreement and Plan of Merger dated as of March 6, 2000, by and among the Registrant, Nickel Acquisition Corporation and Network Solutions, Inc.
|
|
8-K
|
|
3/8/00
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.01
|
|
Sixth Amended and Restated Certificate of Incorporation of the Registrant.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.02
|
|
Amended and Restated Bylaws of VeriSign, Inc.
|
|
10-Q
|
|
7/28/16
|
|
3.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.01
|
|
Indenture dated as of August 20, 2007 between the Registrant and U.S. Bank National Association.
|
|
8-K/A
|
|
9/6/07
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.02
|
|
Indenture, dated as of April 16, 2013, between VeriSign, Inc., each of the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee.
|
|
8-K
|
|
4/17/13
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.03
|
|
Indenture dated as of March 27, 2015 between VeriSign, Inc. and U.S. Bank National Association, as trustee.
|
|
8-K
|
|
3/30/15
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.01
|
|
Registrant's 2007 Employee Stock Purchase Plan, as adopted August 30, 2007. +
|
|
S-1
|
|
11/5/07
|
|
10.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|
||||
Exhibit
Number |
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Filed Herewith
|
|
10.02
|
|
Amendment No. Thirty (30) to Cooperative Agreement - Special Awards Conditions NCR-92-18742, between VeriSign and U.S. Department of Commerce managers.
|
|
10-K
|
|
7/12/07
|
|
10.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.03
|
|
VeriSign, Inc. Annual Incentive Compensation Plan. +
|
|
10-K
|
|
2/24/11
|
|
10.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.04
|
|
Registry Agreement between VeriSign, Inc. and the Internet Corporation for Assigned Names and Numbers, entered into as of June 27, 2011.
|
|
8-K
|
|
6/28/11
|
|
10.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.05
|
|
Form of Amended and Restated Change-in-Control and Retention Agreement. +
|
|
10-Q
|
|
7/29/11
|
|
10.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.06
|
|
Amended and Restated Change-in-Control and Retention Agreement [CEO Form of Agreement]. +
|
|
10-Q
|
|
7/29/11
|
|
10.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.07
|
|
Purchase and Sale Agreement for 12061 Bluemont Way Reston, Virginia between 12061 Bluemont Owner, LLC, a Delaware limited liability company, as Seller and VeriSign, Inc., a Delaware corporation, as Purchaser Dated August 18, 2011.
|
|
8-K
|
|
9/7/11
|
|
10.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.08
|
|
Guarantee Agreement, dated as of November 22, 2011, among VeriSign, Inc., the other guarantors identified therein and JPMorgan Chase Bank, N.A., as Administrative Agent.
|
|
8-K
|
|
11/29/11
|
|
10.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.09
|
|
VeriSign, Inc. 2006 Equity Incentive Plan Form of Non-Employee Director Restricted Stock Unit Agreement. +
|
|
10-Q
|
|
7/27/12
|
|
10.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Registry Agreement between VeriSign, Inc. and the Internet Corporation for Assigned Names and Numbers, entered into on November 29, 2012.
|
|
8-K
|
|
11/30/12
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Amendment Number Thirty-Two (32) to the Cooperative Agreement between VeriSign, Inc. and Department of Commerce, entered into on November 29, 2012.
|
|
8-K
|
|
11/30/12
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
VeriSign, Inc. 2006 Equity Incentive Plan Employee Restricted Stock Unit Agreement. +
|
|
10-Q
|
|
4/25/13
|
|
10.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
VeriSign, Inc. 2006 Equity Incentive Plan Performance-Based Restricted Stock Unit Agreement +
|
|
10-Q
|
|
4/28/16
|
|
10.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
Credit Agreement dated as of March 31, 2015 among VeriSign, Inc., the Lenders as defined therein, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London Agent.
|
|
8-K
|
|
4/1/15
|
|
99.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
VeriSign, Inc. 2006 Equity Incentive Plan Form of Employee Restricted Stock Unit Agreement +
|
|
10-K
|
|
2/19/16
|
|
10.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Amendment to the
.com
Registry Agreement between VeriSign, Inc. and the Internet Corporation for Assigned Names and Numbers, entered into on October 20, 2016
|
|
8-K
|
|
10/20/16
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Amendment Number Thirty-Three (33) to the Cooperative Agreement between VeriSign, Inc. and Department of Commerce, entered into on October 20, 2016
|
|
8-K
|
|
10/20/16
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Amendment Number Thirty-Four (34) to the Cooperative Agreement between VeriSign, Inc. and Department of Commerce, entered into on October 20, 2016
|
|
8-K
|
|
10/20/16
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
Amended and Restated VeriSign, Inc. 2006 Equity Incentive Plan, as amended and restated
|
|
DEF 14A
|
|
4/29/16
|
|
Appendix A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|
||||
Exhibit
Number |
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Filed Herewith
|
|
21.01
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.01
|
|
Powers of Attorney (Included as part of the signature pages hereto).
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.01
|
|
Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a).
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.02
|
|
Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a).
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.01
|
|
Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code (18 U.S.C. 1350). *
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.02
|
|
Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code (18 U.S.C. 1350). *
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
|
|
X
|
*
|
As contemplated by SEC Release No. 33-8212, these exhibits are furnished with this Annual Report on Form 10-K and are not deemed filed with the Securities and Exchange Commission and are not incorporated by reference in any filing of VeriSign, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in such filings.
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
|
By:
|
/S/ D. J
AMES
B
IDZOS
|
|
|
D. James Bidzos
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
|
|
/S/ D. J
AMES
B
IDZOS
|
|
President, Chief Executive Officer,
Executive Chairman and Director
(Principal Executive Officer)
|
D. J
AMES
B
IDZOS
|
|
|
|
|
|
|
|
|
/S/ G
EORGE
E. K
ILGUSS
, III
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
G
EORGE
E. K
ILGUSS
, III
|
|
|
|
|
|
/S/ K
ATHLEEN
A. C
OTE
|
|
Director
|
K
ATHLEEN
A. C
OTE
|
|
|
|
|
|
/S/ T
HOMAS
F. F
RIST
, III
|
|
Director
|
T
HOMAS
F. F
RIST
, III
|
|
|
|
|
|
/S/ J
AMIE
S. G
ORELICK
|
|
Director
|
J
AMIE
S. G
ORELICK
|
|
|
|
|
|
/S/ R
OGER
H. M
OORE
|
|
Director
|
R
OGER
H. M
OORE
|
|
|
|
|
|
/S/ L
OUIS
A. S
IMPSON
|
|
Director
|
L
OUIS
A. S
IMPSON
|
|
|
|
|
|
/S/ T
IMOTHY
T
OMLINSON
|
|
Director
|
T
IMOTHY
T
OMLINSON
|
|
|
Financial Statement Description
|
Page
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
231,945
|
|
|
$
|
228,659
|
|
Marketable securities
|
1,565,962
|
|
|
1,686,771
|
|
||
Accounts receivable, net
|
13,051
|
|
|
12,638
|
|
||
Other current assets
|
31,384
|
|
|
39,856
|
|
||
Total current assets
|
1,842,342
|
|
|
1,967,924
|
|
||
Property and equipment, net
|
266,125
|
|
|
295,570
|
|
||
Goodwill
|
52,527
|
|
|
52,527
|
|
||
Deferred tax assets
|
9,385
|
|
|
17,361
|
|
||
Deposits to acquire intangible assets
|
145,000
|
|
|
2,000
|
|
||
Other long-term assets
|
19,193
|
|
|
22,355
|
|
||
Total long-term assets
|
492,230
|
|
|
389,813
|
|
||
Total assets
|
$
|
2,334,572
|
|
|
$
|
2,357,737
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
203,920
|
|
|
$
|
188,171
|
|
Deferred revenues
|
688,265
|
|
|
680,483
|
|
||
Subordinated convertible debentures, including contingent interest derivative
|
629,764
|
|
|
634,326
|
|
||
Total current liabilities
|
1,521,949
|
|
|
1,502,980
|
|
||
Long-term deferred revenues
|
287,424
|
|
|
280,859
|
|
||
Senior notes
|
1,237,189
|
|
|
1,235,354
|
|
||
Deferred tax liabilities
|
371,433
|
|
|
294,194
|
|
||
Other long-term tax liabilities
|
117,172
|
|
|
114,797
|
|
||
Total long-term liabilities
|
2,013,218
|
|
|
1,925,204
|
|
||
Total liabilities
|
3,535,167
|
|
|
3,428,184
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
||||
Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and outstanding shares: none
|
—
|
|
|
—
|
|
||
Common stock—par value $.001 per share; Authorized shares: 1,000,000; Issued shares: 324,118 at December 31, 2016 and 322,990 at December 31, 2015; Outstanding shares: 103,091 at December 31, 2016 and 110,072 at December 31, 2015
|
324
|
|
|
323
|
|
||
Additional paid-in capital
|
16,987,488
|
|
|
17,558,822
|
|
||
Accumulated deficit
|
(18,184,954
|
)
|
|
(18,625,599
|
)
|
||
Accumulated other comprehensive loss
|
(3,453
|
)
|
|
(3,993
|
)
|
||
Total stockholders’ deficit
|
(1,200,595
|
)
|
|
(1,070,447
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
2,334,572
|
|
|
$
|
2,357,737
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
$
|
1,142,167
|
|
|
$
|
1,059,366
|
|
|
$
|
1,010,117
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of revenues
|
198,242
|
|
|
192,788
|
|
|
188,425
|
|
|||
Sales and marketing
|
80,250
|
|
|
90,184
|
|
|
92,001
|
|
|||
Research and development
|
59,100
|
|
|
63,718
|
|
|
67,777
|
|
|||
General and administrative
|
118,003
|
|
|
106,730
|
|
|
97,487
|
|
|||
Total costs and expenses
|
455,595
|
|
|
453,420
|
|
|
445,690
|
|
|||
Operating income
|
686,572
|
|
|
605,946
|
|
|
564,427
|
|
|||
Interest expense
|
(115,564
|
)
|
|
(107,631
|
)
|
|
(85,994
|
)
|
|||
Non-operating income (loss), net
|
10,165
|
|
|
(10,665
|
)
|
|
4,878
|
|
|||
Income before income taxes
|
581,173
|
|
|
487,650
|
|
|
483,311
|
|
|||
Income tax expense
|
(140,528
|
)
|
|
(112,414
|
)
|
|
(128,051
|
)
|
|||
Net income
|
440,645
|
|
|
375,236
|
|
|
355,260
|
|
|||
Realized foreign currency translation adjustments, included in net income
|
85
|
|
|
(291
|
)
|
|
—
|
|
|||
Unrealized gain (loss) on investments
|
533
|
|
|
(519
|
)
|
|
84
|
|
|||
Realized (gain) loss on investments, included in net income
|
(78
|
)
|
|
(185
|
)
|
|
3
|
|
|||
Other comprehensive income (loss)
|
540
|
|
|
(995
|
)
|
|
87
|
|
|||
Comprehensive income
|
$
|
441,185
|
|
|
$
|
374,241
|
|
|
$
|
355,347
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.12
|
|
|
$
|
3.29
|
|
|
$
|
2.80
|
|
Diluted
|
$
|
3.42
|
|
|
$
|
2.82
|
|
|
$
|
2.52
|
|
Shares used to compute earnings per share
|
|
|
|
|
|
||||||
Basic
|
107,001
|
|
|
114,155
|
|
|
126,710
|
|
|||
Diluted
|
128,833
|
|
|
133,031
|
|
|
140,895
|
|
|
|
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Deficit
|
|||||||||||||
|
|
Common Stock
|
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2013
|
|
133,724
|
|
|
$
|
320
|
|
|
$
|
18,935,302
|
|
|
$
|
(19,356,095
|
)
|
|
$
|
(3,085
|
)
|
|
$
|
(423,558
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
355,260
|
|
|
—
|
|
|
355,260
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
87
|
|
|||||
Issuance of common stock under stock plans
|
|
1,341
|
|
|
2
|
|
|
17,595
|
|
|
—
|
|
|
—
|
|
|
17,597
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
46,728
|
|
|
—
|
|
|
—
|
|
|
46,728
|
|
|||||
Net excess income tax benefits associated with stock-based compensation
|
|
—
|
|
|
—
|
|
|
3,823
|
|
|
—
|
|
|
—
|
|
|
3,823
|
|
|||||
Repurchase of common stock
|
|
(16,613
|
)
|
|
—
|
|
|
(883,403
|
)
|
|
—
|
|
|
—
|
|
|
(883,403
|
)
|
|||||
Balance at December 31, 2014
|
|
118,452
|
|
|
322
|
|
|
18,120,045
|
|
|
(19,000,835
|
)
|
|
(2,998
|
)
|
|
(883,466
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
375,236
|
|
|
—
|
|
|
375,236
|
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(995
|
)
|
|
(995
|
)
|
|||||
Issuance of common stock under stock plans
|
|
1,291
|
|
|
1
|
|
|
14,689
|
|
|
—
|
|
|
—
|
|
|
14,690
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
48,793
|
|
|
—
|
|
|
—
|
|
|
48,793
|
|
|||||
Net excess income tax benefits associated with stock-based compensation
|
|
—
|
|
|
—
|
|
|
18,464
|
|
|
—
|
|
|
—
|
|
|
18,464
|
|
|||||
Repurchase of common stock
|
|
(9,671
|
)
|
|
—
|
|
|
(643,169
|
)
|
|
—
|
|
|
—
|
|
|
(643,169
|
)
|
|||||
Balance at December 31, 2015
|
|
110,072
|
|
|
323
|
|
|
17,558,822
|
|
|
(18,625,599
|
)
|
|
(3,993
|
)
|
|
(1,070,447
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
440,645
|
|
|
—
|
|
|
440,645
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
540
|
|
|
540
|
|
|||||
Issuance of common stock under stock plans
|
|
1,128
|
|
|
1
|
|
|
13,669
|
|
|
—
|
|
|
—
|
|
|
13,670
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
52,430
|
|
|
—
|
|
|
—
|
|
|
52,430
|
|
|||||
Net excess income tax benefits associated with stock-based compensation
|
|
—
|
|
|
—
|
|
|
25,058
|
|
|
—
|
|
|
—
|
|
|
25,058
|
|
|||||
Repurchase of common stock
|
|
(8,109
|
)
|
|
—
|
|
|
(662,491
|
)
|
|
—
|
|
|
—
|
|
|
(662,491
|
)
|
|||||
Balance at December 31, 2016
|
|
103,091
|
|
|
$
|
324
|
|
|
$
|
16,987,488
|
|
|
$
|
(18,184,954
|
)
|
|
$
|
(3,453
|
)
|
|
$
|
(1,200,595
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
440,645
|
|
|
$
|
375,236
|
|
|
$
|
355,260
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation of property and equipment
|
58,167
|
|
|
61,491
|
|
|
63,690
|
|
|||
Stock-based compensation
|
50,044
|
|
|
46,075
|
|
|
43,977
|
|
|||
Excess tax benefit associated with stock-based compensation
|
(25,058
|
)
|
|
(18,464
|
)
|
|
(6,054
|
)
|
|||
Unrealized (gain) loss on contingent interest derivative on Subordinated Convertible Debentures
|
(2,402
|
)
|
|
14,130
|
|
|
(2,249
|
)
|
|||
Payment of contingent interest
|
(13,385
|
)
|
|
(10,759
|
)
|
|
—
|
|
|||
Amortization of debt discount and issuance costs
|
13,411
|
|
|
12,292
|
|
|
10,878
|
|
|||
Other, net
|
(3,787
|
)
|
|
(1,781
|
)
|
|
480
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable
|
(871
|
)
|
|
661
|
|
|
(73
|
)
|
|||
Prepaid expenses and other assets
|
8,980
|
|
|
(1,728
|
)
|
|
11,571
|
|
|||
Accounts payable and accrued liabilities
|
40,244
|
|
|
21,013
|
|
|
45,419
|
|
|||
Deferred revenues
|
14,347
|
|
|
70,988
|
|
|
34,518
|
|
|||
Net deferred income taxes and other long-term tax liabilities
|
87,614
|
|
|
82,328
|
|
|
43,532
|
|
|||
Net cash provided by operating activities
|
667,949
|
|
|
651,482
|
|
|
600,949
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from maturities and sales of marketable securities and investments
|
3,817,899
|
|
|
2,767,027
|
|
|
3,428,659
|
|
|||
Purchases of marketable securities
|
(3,691,057
|
)
|
|
(3,219,329
|
)
|
|
(3,277,096
|
)
|
|||
Purchases of property and equipment
|
(26,574
|
)
|
|
(40,656
|
)
|
|
(39,327
|
)
|
|||
Deposits to acquire intangible assets
|
(143,000
|
)
|
|
—
|
|
|
—
|
|
|||
Other investing activities
|
2,333
|
|
|
(3,941
|
)
|
|
452
|
|
|||
Net cash (used in) provided by investing activities
|
(40,399
|
)
|
|
(496,899
|
)
|
|
112,688
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock from option exercises and employee stock purchase plans
|
13,670
|
|
|
14,690
|
|
|
17,597
|
|
|||
Repurchases of common stock
|
(662,491
|
)
|
|
(643,169
|
)
|
|
(883,403
|
)
|
|||
Proceeds from senior notes, net of issuance costs
|
—
|
|
|
492,237
|
|
|
—
|
|
|||
Excess tax benefit associated with stock-based compensation
|
25,058
|
|
|
18,464
|
|
|
6,054
|
|
|||
Net cash used in financing activities
|
(623,763
|
)
|
|
(117,778
|
)
|
|
(859,752
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(501
|
)
|
|
246
|
|
|
(1,500
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
3,286
|
|
|
37,051
|
|
|
(147,615
|
)
|
|||
Cash and cash equivalents at beginning of period
|
228,659
|
|
|
191,608
|
|
|
339,223
|
|
|||
Cash and cash equivalents at end of period
|
$
|
231,945
|
|
|
$
|
228,659
|
|
|
$
|
191,608
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
115,544
|
|
|
$
|
99,473
|
|
|
$
|
75,088
|
|
Cash paid for income taxes, net of refunds received
|
$
|
14,303
|
|
|
$
|
39,723
|
|
|
$
|
35,201
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Third-party implementation and consulting services
|
$
|
493
|
|
|
$
|
426
|
|
Internally developed software
|
$
|
17,523
|
|
|
$
|
20,061
|
|
•
|
Persuasive evidence of an arrangement exists: It is the Company’s customary practice to have a written contract, signed by both the customer and Verisign or a service order form from those customers who have previously negotiated a standard master services agreement with Verisign.
|
•
|
Delivery has occurred or services have been rendered: The Company’s services are usually delivered continuously from service activation date through the term of the arrangement.
|
•
|
The fee is fixed or determinable: Substantially all of the Company’s revenue arrangements have fixed or determinable fees.
|
•
|
Collectability is reasonably assured: Collectability is assessed on a customer-by-customer basis. Verisign typically sells to customers for whom there is a history of successful collection. The majority of customers either maintain a deposit with Verisign or provide an irrevocable letter of credit in excess of the amounts owed. New customers are subjected to a credit review process that evaluates the customer’s financial condition and, ultimately, their ability to pay. If Verisign determines from the outset of an arrangement that collectability is not probable based upon its credit review process, revenues are recognized as cash is collected.
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Cash
|
$
|
39,183
|
|
|
$
|
99,027
|
|
Money market funds
|
134,790
|
|
|
137,593
|
|
||
Time deposits
|
4,632
|
|
|
4,007
|
|
||
Debt securities issued by the U.S. Treasury
|
1,626,764
|
|
|
1,685,882
|
|
||
Equity securities of public companies
|
2,174
|
|
|
890
|
|
||
Total
|
$
|
1,807,543
|
|
|
$
|
1,927,399
|
|
|
|
|
|
||||
Included in Cash and cash equivalents
|
$
|
231,945
|
|
|
$
|
228,659
|
|
Included in Marketable securities
|
$
|
1,565,962
|
|
|
$
|
1,686,771
|
|
Included in Other long-term assets (Restricted cash)
|
$
|
9,636
|
|
|
$
|
11,969
|
|
|
|
|
Fair Value Measurement Using
|
||||||||||||
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In thousands)
|
||||||||||||||
As of December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments in money market funds
|
$
|
134,790
|
|
|
$
|
134,790
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities issued by the U.S. Treasury
|
1,626,764
|
|
|
1,626,764
|
|
|
—
|
|
|
—
|
|
||||
Equity securities of public companies
|
2,174
|
|
|
2,174
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts (1)
|
242
|
|
|
—
|
|
|
242
|
|
|
—
|
|
||||
Total
|
$
|
1,763,970
|
|
|
$
|
1,763,728
|
|
|
$
|
242
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent interest derivative on Subordinated Convertible Debentures
|
$
|
14,339
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,339
|
|
Foreign currency forward contracts (2)
|
87
|
|
|
—
|
|
|
87
|
|
|
—
|
|
||||
Total
|
$
|
14,426
|
|
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
14,339
|
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments in money market funds
|
$
|
137,593
|
|
|
$
|
137,593
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Debt securities issued by the U.S. Treasury
|
1,685,882
|
|
|
1,685,882
|
|
|
—
|
|
|
—
|
|
||||
Equity securities of public companies
|
890
|
|
|
890
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts (1)
|
230
|
|
|
—
|
|
|
230
|
|
|
—
|
|
||||
Total
|
$
|
1,824,595
|
|
|
$
|
1,824,365
|
|
|
$
|
230
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent interest derivative on Subordinated Convertible Debentures
|
$
|
30,126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,126
|
|
Foreign currency forward contracts (2)
|
164
|
|
|
—
|
|
|
164
|
|
|
—
|
|
||||
Total
|
$
|
30,290
|
|
|
$
|
—
|
|
|
$
|
164
|
|
|
$
|
30,126
|
|
(1)
|
Included in Other current assets
|
(2)
|
Included in Accounts payable and accrued liabilities
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Beginning balance
|
$
|
30,126
|
|
|
$
|
26,755
|
|
Unrealized (gain) loss on contingent interest derivative on Convertible Debentures
|
(2,402
|
)
|
|
14,130
|
|
||
Payment of contingent interest
|
(13,385
|
)
|
|
(10,759
|
)
|
||
Ending balance
|
$
|
14,339
|
|
|
$
|
30,126
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Prepaid expenses
|
$
|
14,385
|
|
|
$
|
14,823
|
|
Income taxes receivable
|
15,328
|
|
|
23,098
|
|
||
Other
|
1,671
|
|
|
1,935
|
|
||
Total other current assets
|
$
|
31,384
|
|
|
$
|
39,856
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Land
|
$
|
31,141
|
|
|
$
|
31,141
|
|
Buildings and building improvements
|
246,237
|
|
|
244,760
|
|
||
Computer equipment and software
|
441,732
|
|
|
432,463
|
|
||
Capital work in progress
|
4,246
|
|
|
5,406
|
|
||
Office equipment and furniture
|
6,203
|
|
|
6,203
|
|
||
Leasehold improvements
|
1,350
|
|
|
1,350
|
|
||
Total cost
|
730,909
|
|
|
721,323
|
|
||
Less: accumulated depreciation
|
(464,784
|
)
|
|
(425,753
|
)
|
||
Total property and equipment, net
|
$
|
266,125
|
|
|
$
|
295,570
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Goodwill, gross
|
$
|
1,537,843
|
|
|
$
|
1,537,843
|
|
Accumulated goodwill impairment
|
(1,485,316
|
)
|
|
(1,485,316
|
)
|
||
Total goodwill
|
$
|
52,527
|
|
|
$
|
52,527
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Long-term restricted cash
|
9,636
|
|
|
11,969
|
|
||
Other taxes receivable
|
5,673
|
|
|
5,673
|
|
||
Long-term prepaid expenses and other assets
|
3,884
|
|
|
4,713
|
|
||
Total other long-term assets
|
$
|
19,193
|
|
|
$
|
22,355
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Accounts payable
|
$
|
19,455
|
|
|
$
|
23,298
|
|
Accrued employee compensation
|
61,426
|
|
|
51,851
|
|
||
Customer deposits, net
|
52,173
|
|
|
48,307
|
|
||
Interest Payable
|
27,701
|
|
|
27,701
|
|
||
Taxes payable and other tax liabilities
|
23,144
|
|
|
16,943
|
|
||
Other accrued liabilities
|
20,021
|
|
|
20,071
|
|
||
Total accounts payable and accrued liabilities
|
$
|
203,920
|
|
|
$
|
188,171
|
|
Principal value of Subordinated Convertible Debentures
|
|
$
|
1,250,000
|
|
Less: Issuance costs
|
|
(25,777
|
)
|
|
Net proceeds, Subordinated Convertible Debentures
|
|
$
|
1,224,223
|
|
Amounts recognized at issuance:
|
|
|
||
Subordinated Convertible Debentures, including contingent interest derivative (net of issuance costs of $11,328)
|
|
$
|
546,915
|
|
Additional paid-in capital
|
|
418,996
|
|
|
Long-term deferred tax liabilities
|
|
267,225
|
|
|
Non-operating loss
|
|
(8,913
|
)
|
|
Net proceeds, Subordinated Convertible Debentures
|
|
$
|
1,224,223
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Debt discount upon issuance (net of issuance costs of $14,449)
|
$
|
686,221
|
|
|
$
|
686,221
|
|
Deferred taxes associated with the debt discount upon issuance
|
(267,225
|
)
|
|
(267,225
|
)
|
||
Carrying amount of equity component
|
$
|
418,996
|
|
|
$
|
418,996
|
|
|
|
|
|
||||
Principal amount of Subordinated Convertible Debentures
|
$
|
1,250,000
|
|
|
$
|
1,250,000
|
|
Unamortized discount of liability component
|
(624,315
|
)
|
|
(635,378
|
)
|
||
Unamortized debt issuance costs associated with the liability component
|
(10,260
|
)
|
|
(10,422
|
)
|
||
Carrying amount of liability component
|
615,425
|
|
|
604,200
|
|
||
Contingent interest derivative
|
14,339
|
|
|
30,126
|
|
||
Subordinated Convertible Debentures, including contingent interest derivative
|
$
|
629,764
|
|
|
$
|
634,326
|
|
|
Year Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
|
(In thousands)
|
||||||||||
Contractual interest on Subordinated Convertible Debentures
|
$
|
40,625
|
|
|
$
|
40,625
|
|
|
$
|
40,625
|
|
Contractual interest on Senior Notes
|
60,938
|
|
|
54,667
|
|
|
34,688
|
|
|||
Amortization of debt discount on the Subordinated Convertible Debentures
|
11,094
|
|
|
10,218
|
|
|
9,412
|
|
|||
Credit facility and other interest expense
|
2,907
|
|
|
2,121
|
|
|
1,269
|
|
|||
Total interest expense
|
$
|
115,564
|
|
|
$
|
107,631
|
|
|
$
|
85,994
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
Shares
|
|
Average Price
|
|
Shares
|
|
Average Price
|
|
Shares
|
|
Average Price
|
|||||||||||||
|
(In thousands, except average price amounts)
|
||||||||||||||||||||||
Total repurchases under the repurchase plans
|
7,789
|
|
|
$
|
81.73
|
|
|
9,338
|
|
|
$
|
66.59
|
|
|
16,316
|
|
|
$
|
53.15
|
|
|||
Total repurchases for tax withholdings
|
320
|
|
|
$
|
80.74
|
|
|
333
|
|
|
$
|
64.03
|
|
|
297
|
|
|
$
|
54.73
|
|
|||
Total repurchases
|
8,109
|
|
|
$
|
81.70
|
|
|
9,671
|
|
|
$
|
66.50
|
|
|
16,613
|
|
|
$
|
53.18
|
|
|||
Total costs
|
$
|
662,491
|
|
|
|
|
$
|
643,169
|
|
|
|
|
$
|
883,403
|
|
|
|
|
Foreign Currency Translation Adjustments Loss
|
|
Unrealized Gain (Loss) On Investments
|
|
Total Accumulated Other Comprehensive Loss
|
||||||
|
(In thousands)
|
||||||||||
Balance, December 31, 2014
|
$
|
(3,160
|
)
|
|
$
|
162
|
|
|
$
|
(2,998
|
)
|
Changes
|
(291
|
)
|
|
(704
|
)
|
|
(995
|
)
|
|||
Balance, December 31, 2015
|
(3,451
|
)
|
|
(542
|
)
|
|
(3,993
|
)
|
|||
Changes
|
85
|
|
|
455
|
|
|
540
|
|
|||
Balance, December 31, 2016
|
$
|
(3,366
|
)
|
|
$
|
(87
|
)
|
|
$
|
(3,453
|
)
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
(In thousands)
|
|||||||
Weighted-average shares of common stock outstanding
|
107,001
|
|
|
114,155
|
|
|
126,710
|
|
Weighted-average potential shares of common stock outstanding:
|
|
|
|
|
|
|||
Conversion spread related to Subordinated Convertible Debentures
|
21,074
|
|
|
18,047
|
|
|
13,384
|
|
Unvested RSUs, stock options, and ESPP
|
758
|
|
|
829
|
|
|
801
|
|
Shares used to compute diluted earnings per share
|
128,833
|
|
|
133,031
|
|
|
140,895
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
U.S
|
$
|
667,301
|
|
|
$
|
639,170
|
|
|
$
|
616,125
|
|
EMEA
|
207,474
|
|
|
193,623
|
|
|
182,897
|
|
|||
China
|
127,298
|
|
|
83,456
|
|
|
65,525
|
|
|||
Other
|
140,094
|
|
|
143,117
|
|
|
145,570
|
|
|||
Total revenues
|
$
|
1,142,167
|
|
|
$
|
1,059,366
|
|
|
$
|
1,010,117
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
U.S.
|
$
|
261,837
|
|
|
$
|
287,986
|
|
Other
|
4,288
|
|
|
7,584
|
|
||
Total property and equipment, net
|
$
|
266,125
|
|
|
$
|
295,570
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Stock-based compensation:
|
|
|
|
|
|
||||||
Cost of revenues
|
$
|
7,253
|
|
|
$
|
7,009
|
|
|
$
|
6,400
|
|
Sales and marketing
|
5,738
|
|
|
6,763
|
|
|
8,023
|
|
|||
Research and development
|
6,739
|
|
|
6,488
|
|
|
7,018
|
|
|||
General and administrative
|
30,314
|
|
|
25,815
|
|
|
22,536
|
|
|||
Total stock-based compensation
|
$
|
50,044
|
|
|
$
|
46,075
|
|
|
$
|
43,977
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
RSUs
|
$
|
37,325
|
|
|
$
|
36,664
|
|
|
$
|
32,304
|
|
Performance-based RSUs
|
11,512
|
|
|
8,078
|
|
|
10,232
|
|
|||
ESPP
|
3,593
|
|
|
4,051
|
|
|
4,192
|
|
|||
Capitalization (Included in Property and equipment, net)
|
(2,386
|
)
|
|
(2,718
|
)
|
|
(2,751
|
)
|
|||
Total stock-based compensation expense
|
$
|
50,044
|
|
|
$
|
46,075
|
|
|
$
|
43,977
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value
|
||||||||||
|
(Shares in thousands)
|
|||||||||||||||||||
Unvested at beginning of period
|
2,110
|
|
|
$
|
54.77
|
|
|
2,179
|
|
|
$
|
46.36
|
|
|
2,442
|
|
|
$
|
38.00
|
|
Granted
|
760
|
|
|
78.58
|
|
|
1,075
|
|
|
61.74
|
|
|
909
|
|
|
55.05
|
|
|||
Vested and settled
|
(873
|
)
|
|
49.95
|
|
|
(932
|
)
|
|
43.92
|
|
|
(878
|
)
|
|
35.99
|
|
|||
Forfeited
|
(151
|
)
|
|
61.57
|
|
|
(212
|
)
|
|
51.47
|
|
|
(294
|
)
|
|
44.00
|
|
|||
|
1,846
|
|
|
$
|
66.30
|
|
|
2,110
|
|
|
$
|
54.77
|
|
|
2,179
|
|
|
$
|
46.36
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Unrealized gain (loss) on contingent interest derivative on Subordinated Convertible Debentures
|
2,402
|
|
|
(14,130
|
)
|
|
2,249
|
|
|||
Interest income
|
6,191
|
|
|
2,128
|
|
|
922
|
|
|||
Other, net
|
1,572
|
|
|
1,337
|
|
|
1,707
|
|
|||
Total non-operating income (loss), net
|
$
|
10,165
|
|
|
$
|
(10,665
|
)
|
|
$
|
4,878
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
United States
|
$
|
299,304
|
|
|
$
|
248,932
|
|
|
$
|
270,373
|
|
Foreign
|
281,869
|
|
|
238,718
|
|
|
212,938
|
|
|||
Total income before income taxes
|
$
|
581,173
|
|
|
$
|
487,650
|
|
|
$
|
483,311
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Current expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
34,842
|
|
|
$
|
13,601
|
|
|
$
|
4,643
|
|
State
|
240
|
|
|
156
|
|
|
(14
|
)
|
|||
Foreign, including withholding tax
|
19,268
|
|
|
17,241
|
|
|
69,614
|
|
|||
|
54,350
|
|
|
30,998
|
|
|
74,243
|
|
|||
Deferred expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
64,301
|
|
|
65,168
|
|
|
76,614
|
|
|||
State
|
21,492
|
|
|
15,767
|
|
|
15,402
|
|
|||
Foreign
|
385
|
|
|
481
|
|
|
(38,208
|
)
|
|||
|
86,178
|
|
|
81,416
|
|
|
53,808
|
|
|||
Total income tax expense
|
$
|
140,528
|
|
|
$
|
112,414
|
|
|
$
|
128,051
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Income tax expense at federal statutory rate
|
$
|
203,410
|
|
|
$
|
170,677
|
|
|
$
|
169,159
|
|
State taxes, net of federal benefit
|
14,517
|
|
|
9,616
|
|
|
11,308
|
|
|||
Differences between statutory rate and foreign effective tax rate
|
(79,087
|
)
|
|
(66,238
|
)
|
|
(57,876
|
)
|
|||
Reorganization of certain non-U.S. operations
|
—
|
|
|
—
|
|
|
14,474
|
|
|||
Changes in estimates related to worthless stock deduction
|
—
|
|
|
—
|
|
|
14,497
|
|
|||
Change in valuation allowance
|
(511
|
)
|
|
434
|
|
|
(41,700
|
)
|
|||
Accrual for uncertain tax positions
|
963
|
|
|
706
|
|
|
22,719
|
|
|||
Other
|
1,236
|
|
|
(2,781
|
)
|
|
(4,530
|
)
|
|||
Total income tax expense
|
$
|
140,528
|
|
|
$
|
112,414
|
|
|
$
|
128,051
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
46,879
|
|
|
$
|
56,108
|
|
Deductible goodwill and intangible assets
|
10,473
|
|
|
21,044
|
|
||
Tax credit carryforwards
|
59,337
|
|
|
86,951
|
|
||
Deferred revenue, accruals and reserves
|
114,548
|
|
|
106,572
|
|
||
Capital loss carryforwards and book impairment of investments
|
1,161,772
|
|
|
1,162,320
|
|
||
Other
|
4,791
|
|
|
5,039
|
|
||
Total deferred tax assets
|
1,397,800
|
|
|
1,438,034
|
|
||
Valuation allowance
|
(1,162,101
|
)
|
|
(1,162,604
|
)
|
||
Net deferred tax assets
|
235,699
|
|
|
275,430
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(4,212
|
)
|
|
(10,787
|
)
|
||
Subordinated Convertible debentures
|
(590,921
|
)
|
|
(538,098
|
)
|
||
Other
|
(2,614
|
)
|
|
(3,378
|
)
|
||
Total deferred tax liabilities
|
(597,747
|
)
|
|
(552,263
|
)
|
||
Total net deferred tax liabilities
|
$
|
(362,048
|
)
|
|
$
|
(276,833
|
)
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Gross unrecognized tax benefits at January 1
|
$
|
220,280
|
|
|
$
|
219,908
|
|
Increases in tax positions for prior years
|
119
|
|
|
—
|
|
||
Decreases in tax positions for prior years
|
(71
|
)
|
|
—
|
|
||
Increases in tax positions for current year
|
354
|
|
|
372
|
|
||
Gross unrecognized tax benefits at December 31
|
$
|
220,682
|
|
|
$
|
220,280
|
|
|
Purchase Obligations
|
|
.tv
Agreement
|
|
Senior Notes
|
|
Subordinated Convertible Debentures
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
2017
|
$
|
30,946
|
|
|
$
|
5,000
|
|
|
$
|
60,938
|
|
|
$
|
48,344
|
|
|
$
|
145,228
|
|
2018
|
5,265
|
|
|
5,000
|
|
|
60,938
|
|
|
40,625
|
|
|
111,828
|
|
|||||
2019
|
619
|
|
|
5,000
|
|
|
60,938
|
|
|
40,625
|
|
|
107,182
|
|
|||||
2020
|
—
|
|
|
5,000
|
|
|
60,938
|
|
|
40,625
|
|
|
106,563
|
|
|||||
2021
|
—
|
|
|
5,000
|
|
|
60,938
|
|
|
40,625
|
|
|
106,563
|
|
|||||
Thereafter
|
—
|
|
|
—
|
|
|
1,411,250
|
|
|
1,884,766
|
|
|
3,296,016
|
|
|||||
Total
|
$
|
36,830
|
|
|
$
|
25,000
|
|
|
$
|
1,715,940
|
|
|
$
|
2,095,610
|
|
|
$
|
3,873,380
|
|
ITEM 16.
|
10-K SUMMARY
|
Name of Subsidiary
|
Jurisdiction
|
eNIC Cocos (Keeling) Island Pty. Ltd.
|
Australia
|
eNIC Corporation
|
U.S. - Washington
|
Global Registration Services Limited
|
United Kingdom
|
The .tv Corporation International
|
U.S. - Delaware
|
The .TV Corporation (Tuvalu) Pty Ltd.
|
Tuvalu
|
VeriSign do Brasil Servicos para Internet Ltda
|
Brazil
|
VeriSign Holdings Limited
|
Cayman Islands
|
VeriSign India Private Limited
|
India
|
VeriSign International Holdings, Inc.
|
U.S. - Delaware
|
VeriSign Internet Services Sárl
|
Switzerland
|
VeriSign Internet Technology Services (Beijing) Co., Ltd.
|
China
|
VeriSign Israel Ltd.
|
Israel
|
VeriSign Naming and Directory Services, LLC
|
U.S. - Delaware
|
VeriSign Netherlands B.V.
|
Netherlands
|
VeriSign Sárl
|
Switzerland
|
VeriSign Services India Private Limited
|
India
|
VeriSign Spain S.L.
|
Spain
|
VeriSign Switzerland SA
|
Switzerland
|
Whiteley Investments, Ltd.
|
United Kingdom
|
Date: February 17, 2017
|
By:
|
/S/ D. J
AMES
B
IDZOS
|
|
|
D. James Bidzos
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: February 17, 2017
|
By:
|
/S/ G
EORGE
E. K
ILGUSS
, III
|
|
|
George E. Kilguss, III
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: February 17, 2017
|
/S/ D. J
AMES
B
IDZOS
|
|
D. James Bidzos
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: February 17, 2017
|
/S/ G
EORGE
E. K
ILGUSS
, III
|
|
George E. Kilguss, III
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|