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8-K - 8-K - LIFELOCK, INC.lockinvestordeck03162015.htm
1 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com LIFELOCK MARCH 2015


 
Safe Harbor Statement ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 2 This presentation contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, financial goals, business strategies, financing plans, competitive position, product development, membership growth, strategic and enterprise opportunities and partnerships, marketing and advertising plans, industry environment, regulatory matters, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward- looking statements represent our beliefs and assumptions only as of the date of this presentation. You should read the documents that we file with the Securities and Exchange Commission (SEC), including the risks detailed from time to time therein, completely and with the understanding that our actual future results may be different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix.


 
Recent Business Highlights ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 3 • Product Launches – LifeLock Data Breach Service which enables enterprise organizations to rapidly activate LifeLock’s proprietary identity alerts to protect the enterprise’s effected consumers or employees as a quick response to a data breach – LifeLock Privacy Monitor allowing consumers to find, remove or opt out of a number of consumer marketing databases. – Re-launched LifeLock Wallet mobile app in both major app stores. • Next evolution of our service suite – LifeLock Standard, LifeLock Advantage, and LifeLock Ultimate Plus. • Recorded the 39th consecutive quarter of sequential growth in revenue and cumulative ending members. • Added approximately 1.16 million gross new members in 2014 and ended the year with approximately 3.63 million members. • Achieved an annual retention rate of 87.7% for 2014, in excess of 87% for 9 consecutive quarters. • Increased monthly average revenue per member to $11.43 for the fourth quarter of 2014 from $10.72 for the fourth quarter of 2013.


 
The Cost of Identity Theft ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 4 26 MILLION US victims of identity theft** $25 BILLION In losses due to identity theft in US*** 904 MILLION number of records exposed by data breach in 2014**** Every 2 seconds Someone is a victim of identity theft** Identity theft was the #1 COMPLAINT reported in the US for 15 years* * Federal Trade Commission press release, Feb., 27, 2015pr. ** Identity Theft Study, a commissioned survey conducted by Forrester Consulting on behalf of LifeLock, April/May 2014. Results are based on survey participant identity theft and life events of past 12 months. *** The Bureau of Justice Statistics bulletin, Victims of Identity Theft, 2012 (December 2013) **** 2015 Data Protection and Breach. Online Trust Alliance. Pre-Release Draft (January 29, 2015) Based on fist nine months of 2014.


 
The Increasing Risk of Identity Fraud ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 5 *Global Mobile Devices. eMarketer November 21, 2013 **Forrester research custom forecast for LifeLock (2013). ***Global B2C Ecommerce Sales to Hit $1.5 Trillion This Year Driven by Growth in Emerging Markets. eMarketer Feb. 2014. ****Consumer Sentinel Data Book for January-December 2013. Federal Trade Comm. Feb. 2014 ***** Identity Theft Study, a commissioned survey conducted by Forrester Consulting on behalf of LifeLock. Results are based on survey participant identity theft and life events between April 2013 and May 2014. 1.7 BILLION Global Social Network Users* Social Media users are 3 times more likely than non-social media users to be an identity theft victim in the past 12 months.***** 7.0 BILLION Global Mobile Devices** Smartphone users are 3.5 times more likely than non-smartphone users to be an identity theft victim in the past 12 months***** 1.5 TRILLION Global E-Commerce Sales*** Online Shoppers are 4 times more likely to be an identity theft victim in the past 12 months .***** 17 % OF ALL FTC Reported Identity Theft Complaint Claims****


 
Concerned About Security – 78 Million ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 6 30+ Million are doing something 40+ Million are doing nothing Current Market Share 3.6 Million


 
Adults in US ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 7 240 Million Income of $50K Plus


 
Enterprise Market Opportunity ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 8 245 Million Transactions in 2014 3.4 Billion Target Opportunity


 
Proactive Identity Use Alerts The LifeLock Ecosystem ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 9 Real-time ID Scores Technology Platform Predictive Analytics Data Repository Data growth builds momentum Member Data Elements & Authenticating Responses Cross-Industry Data Elements


 
©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 10 Growth Strategy Take advantage of our unique ecosystem Expand data inputs Evolve targeting and messaging Grow partner channel Leverage mobile Long Term Vision – Identity Bureau


 
IDA Market: Leading Enterprises across a wide range of industries ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 11 U.S. Wireless Providers 4 of the Top 5 Carriers Credit Card Issuers 4 of the Top 5 Issuers Retail Card Issuers 4 of the top 5 retail credit card issuers Alternative Lenders Auto Lenders Alternative Payments


 
Superior Performance From Differentiated Data ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com • Over 1 trillion data elements • Over 2 billion high-value consumer events • Unique data others don’t see • Over 3.3 million known identity frauds • Can score 100% of US adult population ID Network: A real-time, cross-industry network of consumer behavioral data 12


 
One column A broad network of identity behavioral connections and linkages provides deep insight into identity risk 13 20 9 41 17 Visibility into unusual identity behavior such as high velocity Uncovering Risk - Name - Phone - Date of Birth - Email Address - Address - SSN - Fraud Application - Application Legend ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com Confirmed fraud connected to identity elements 3


 
Enable the Enterprise, Empower the Consumer ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 14 ID Score: 721


 
Growth Strategy: 3.4 Billion Alertable Transactions ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 15 Expand the Core 580 Million Penetrate Adjacent Markets 360 Million Establish eCommerce Market 2.5 Billion Market Opportunity


 
Product Evolution ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 16 LifeLock Mobile LifeLock Junior $5.99 LifeLock Ultimate Plus $29.99 LifeLock Advantage $19.99 LifeLock Ultimate $25 month LifeLock Command Center $15 month LifeLock Basic $10 month I I I I I I I 2009 2010 2011 2012 2013 2014 2015 LifeLock Standard $9.99


 
New Product Lineup LifeLock Standard $9.99 LifeLock Advantage $19.99 LifeLock Ultimate Plus $29.99 All features in our basic LifeLock service, plus: • Enhanced insurance policy that underwrites our service guarantee All features in LifeLock Standard, plus: • Credit card, checking and savings account alerts • Online annual credit report and score • Data breach notifications • Court records scanning • Fictitious identity scanning All features in our LifeLock Advantage service plus: • Sex Offender Reports • Investment account activity alerts • Online annual Tri-bureau credit report and score • Tri-bureau credit inquiry activity monitoring • Monthly credit score tracking • Bank Account Takeover Alerts ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 17


 
LifeLock Consumer -3 Layers of Protection 18 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com Monitor over a trillion data points every day Proactive alerts that empower consumers 24x7 Certified resolution specialists to handle your case RESTOREALERTDETECT


 
©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com Live freely in an always connected world 19 email SMS / TEXT Integrated Voice Response


 
Priorities 20 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 1 REACH 2 CONVERSION Members $ $ $ 4 VIRALITY 3 MONETIZATION Continuum Process


 
Myth #1: “My credit card protects me” 21 • Narrow Visibility • Card Fraud Not Identity Protection Credit Card ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
Myth #2: “I can do this by myself” 22 DIY • Limited DIY Steps • Not Realistic • Not Real Time • Not Effective ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
Myth #3: “Credit monitoring is good enough” 23 Credit Monitoring • Not Comprehensive • Speed Matters • Reactive Not Proactive ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
The LifeLock Difference… 24 Unique Data Superior Technology Trusted Brand Growth, Retention, Customer Satisfaction ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
Multi-Channel GTM Strategy 25 Direct To Consumer Marketing Partner Distribution Channels ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
26 Television: A More Diverse Mix Insert additional logos on right ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
Shifting Media Spend Towards Digital $ 27 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 2012 2013 2014 Online Offline


 
Educate, Educate, Educate 28 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com


 
A commissioned survey conducted in June 2014 by MSI International on behalf of LifeLock. Base: Total Respondents (aware) Q10b. Imagine you were signing up for Security Identity Protection service. Which number best describes how likely you would be to consider the following companies? (10-point scale: 10=extremely likely to consider; 1=not at all likely to consider) Save room for second graph – will include unaided awareness Brand Leadership •MSI International. January 2014 • Q5a. What companies are you aware of that provide Financial/Security/Identity Theft Protection services to consumers? 29 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 42% 11% 11% 9% 8% 8% 7% 7% 6% 5% 5% 4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% % who said that, if they were signing up, they’d consider this brand


 
Partner Overview ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 30 Co-Marketing Embedded Affiliates Employee Benefits Breach Direct Response


 
2014 Partner Channel Growth ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 31 Strategic partner investments


 
©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 32 Profile: Mid-Size Community Bank Bank had $2.5 billion in assets Overview: A commercial bank displaced a credit monitoring offer with LifeLock. Financial Services Case Study Credit Monitoring # of Members LifeLock 1055 3738 LTV Revenue per Member Credit Monitoring LifeLock $415 $810


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Revenue and Adjusted EBITDA ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 33 - 100.0 200.0 300.0 400.0 500.0 2010 2011 2012 2013 2014 Revenue ($M) Consumer Enterprise (10.0) - 10.0 20.0 30.0 40.0 50.0 60.0 2010 2011 2012 2013 2014 Adjusted EBITDA ($M)


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Member Metrics ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 34 517 704 762 944 1,164 200 400 600 800 1,000 1,200 2010 2011 2012 2013 2014 Gross New Members 1.5 1.8 2.0 2.3 2.5 2.8 3.0 3.3 3.5 3.8 2010 2011 2012 2013 2014 Cumulative Ending Members


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Revenue per Member ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 35 0% 2% 4% 6% 8% 10% 12% 7.50 8.50 9.50 10.50 11.50 2010 2011 2012 2013 2014 ARPU YOY Growth


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 GNM LifeLock Premium Products LifeLock Command Center LifeLock Basic and Standard LifeLock for Minors/LifeLock Junior Product Mix ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 36 * Gross new members for the year ended December 31, 2014 ** LifeLock Premium Products include LifeLock Ultimate, LifeLock Ultimate Plus & LifeLock Advantage. **


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Annual Retention Rate ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 37 79.1% 82.7% 87.1% 87.8% 87.7% 70.0% 75.0% 80.0% 85.0% 90.0% 2010 2011 2012 2013 2014 80.1% 87.0% 89.7% 91.1% 92.1% 93.1% 93.9% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 1 2 3 4 5 6 7 # of Years a Member 2014 Cohort Aging


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 38 Growing Lifetime Value 2010 2011 2012 2013 2014 COA Fulfillment Net LTV 2010 2011 2012 2013 2014 COA Fulfillment Net LTV Member Base New Members NOTE: Take out #’s & stretch taller at same ratio


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Free Cash Flow ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 39 $(30.0) $(10.0) $10.0 $30.0 $50.0 $70.0 $90.0 $110.0 2009 2010 2011 2012 2013 2014


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Strong Balance Sheet ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 40 Dec 31, 2013 $Millions Dec 31, 2014 $Millions Cash and Marketable Securities 172.6 273.9 Goodwill & Intangible Assets 206.6 197.7 Deferred Tax Assets 46.3 36.1 Total Other Assets 36.2 48.3 Deferred Revenue 119.1 145.2 Debt - - Total Other Liabilities 42.0 65.2 Stockholder’s Equity 300.6 345.6


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 41 Long Term Goals 2010 2011 2012 2013 2014 LT Goals1 Adj GM% 68% 68% 71% 73% 75% 75% - 77% Adj S&M 48% 47% 44% 44% 44% 36% - 39% Adj T&D 13% 9% 10% 10% 10% 9% - 10% Adj G&A 13% 8% 7% 9% 11% 7% - 8% Adj EBITDA (3.2)% 6.4% 11.2% 11.4% 11.7% 20% - 25% FCF (10)% 12% 15% 18% 19% 18 – 23% 1 These goals are forward‐looking, are subject to significant business, economic, regulatory, competitive, and other uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. For discussion of some of the important factors that could cause these variations, please consult the “Risk Factors” section in our filings with the Securities and Exchange Commission from time to time, including our Form 10-K/A for the year ended December 31, 2013 and Form 10-Q/A for the period ended June 30, 2014. Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals.


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 SaaS + Internet + Security (137 companies) ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 42


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 43 SaaS + Internet + Security


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Key Investment Highlights ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 44 Large and growing addressable market Leader in consumer identity theft and consumer risk management Industry leading service offering Strong barriers to entry: data, analytics, technology platform, and brand Experienced management team with track record of execution Predictable subscription model Compelling combination of growth, profitability, and cash flow


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 45 Appendix


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 GAAP to Non-GAAP Reconciliations ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 46 2009 2010 2011 2012 2013 2014 Cash flows provided by (used in) operations (23.4) (14.5) 24.3 48.4 77.4 109.2 Acquisitions of property and equipment (5.1) (1.5) (2.0) (7.5) (10.4) (14.6) Legal Settlement - 11.0 - (3.6) - (5.0) Free Cash Flow (28.5) (5.0) 22.3 37.3 67.0 89.6 2010 2011 2012 2013 2014 Net income (loss) (15.4) (4.3) 23.5 54.5 2.5 Depreciation and amortization 4.2 3.7 10.4 12.8 16.3 Share-based compensation 3.3 3.3 6.8 11.1 18.1 Interest expense 1.4 0.2 3.7 0.4 0.4 Interest income - - - (0.1) (0.3) Change in fair value of warrant liabilities 1.3 8.7 (3.1) - - Change in embedded derivatives - - 2.8 - - Other expense - - - - 0.1 Acquisition expenses - 0.6 0.7 1.1 - Legal Settlement - - (3.6) - 15.0 Income tax (benefit) expense - 0.2 (13.7) (37.5) 3.4 Adjusted EBITDA (5.2) 12.5 27.5 42.2 55.5 Reconciliation of Net Cash Provided By (Used In) Operating Activities to Free Cash Flow Reconciliation of Net Income (Loss) to Adjusted EBITDA


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 GAAP to Non-GAAP Reconciliations ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 47 Reconciliation of Cost of Services to Adjusted Cost of Services 2010 2011 2012 2013 2014 Cost of services 51.4 62.6 79.9 100.1 120.4 Share-based compensation (0.3) (0.3) (0.6) (0.8) (1.3) Adjusted Cost of Services 51.1 62.3 79.3 99.3 119.1 Reconciliation of Gross Profit to Adjusted Gross Profit 2010 2011 2012 2013 2014 Gross Profit 110.8 131.3 196.5 269.6 355.6 Share-based compensation 0.2 0.3 0.6 0.8 1.3 Adjusted Gross Profit 111.0 131.6 197.2 270.4 356.9


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 GAAP to Non-GAAP Reconciliations ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 48 Reconciliation of Sales and Marketing Expenses to Adjusted Sales and Marketing Expenses 2010 2011 2012 2013 2014 Sales and marketing expenses 78.8 91.2 123.0 162.4 214.0 Share-based compensation (0.7) (0.7) (1.1) (1.3) (3.2) Adjusted sales and marketing expenses 78.1 90.5 121.9 161.0 210.8 Reconciliation of Technology and Development Expenses to Adjusted Technology and Development Expenses 2010 2011 2012 2013 2014 Technology and development expenses 21.3 17.7 29.5 40.0 51.0 Share-based compensation (0.8) (0.8) (1.7) (2.8) (5.1) Acquisition related expenses - - - - - Adjusted technology and development expenses 20.5 16.9 27.8 37.1 45.9


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 GAAP to Non-GAAP Reconciliations ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 49 Reconciliation of General and Administrative Expenses to Adjusted General and Administrative Expenses 2010 2011 2012 2013 2014 General and administrative expenses 23.3 17.5 24.6 42.1 75.7 Share-based compensation (1.5) (1.5) (3.3) (6.2) (8.7) Acquisition related expenses - (0.6) (0.7) (1.0) - Legal Reserve - - 3.6 - (15.0) Adjusted general and administrative expenses 21.8 15.4 24.2 34.9 52.0


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Components of Profit and Loss ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 50 Cost of Service Consumer revenue Enterprise revenue Total revenue COS GM S&M T&D G&A Adj EBITDA Depreciation $M % of Rev 340.1 92.0% 29.5 8.0% 369.7 100.0% 96.8 26.2% 272.9 73.8% 160.4 43.4% 35.8 9.7% 34.5 9.3% 42.2 11.4% 4.9 2013 2014 $M % of Rev Consumer revenue 494.2 94.4% Enterprise revenue 26.8 5.6% Total revenue 476.0 100.0% Adj COS 119.1 25.0% Adj GM 356.9 75.0% Adj S&M 210.8 44.3% Adj T&D 45.9 9.6% Adj G&A 52.0 11.1% Adj EBITDA 55.5 11.7% Fulfillment Partners (incl Insurance) Member Services Credit Card Fees Other Enterprise


 
Secondary Colors R55 G53 G52 PMS BLK7C R204 G9 B47 PMS 186 R119 G184 B0 PMS 376 R153 G153 B153 Cool Gray R255 G161 B45 PMS 1375 Primary LifeLock Colors R0 G41 B66 R172 G26 B47 Additional Graphic + Gradient Colors R0 G62 B116 R153 G153 B153 R55 G53 G52 R235 G113 B37 R90 G142 B34 R204 G9 B47 R119 G184 B0 R255 G161 B45 Components of Profit and Loss ©2015 LifeLock Inc. 1-800-LifeLock LifeLock.com 51 Sales and Marketing Consumer revenue Enterprise revenue Total revenue COS GM S&M T&D G&A Adj EBITDA Depreciation $M % of Rev 340.1 92.0% 29.5 8.0% 369.7 100.0% 96.8 26.2% 272.9 73.8% 160.4 43.4% 35.8 9.7% 34.5 9.3% 42.2 11.4% 4.9 2013 2014 $M % of Rev Consumer revenue 494.2 94.4% Enterprise revenue 26.8 5.6% Total revenue 476.0 100.0% Adj COS 119.1 25.0% Adj GM 356.9 75.0% Adj S&M 210.8 44.3% Adj T&D 45.9 9.6% Adj G&A 52.0 11.1% Adj EBITDA 55.5 11.7% Media Commissions Enterprise Production Personnel Other