LifeLock 2013 Annual Report Download - page 87

Financial information about our segments for the year ended December 31, 2013 and as of December 31, 2013 was as follows:
          
Revenue                
External customers $ 340,121 $ 29,537 $ - $ 369,658
Intersegment revenue - 5,316 (5,316) -
Income (loss) from operations 23,997 (10,405) - 13,592
Goodwill 96,583 59,537 - 156,120
Total assets 349,394 114,337 (481) 463,250
Financial information about our segments for the year ended December 31, 2012 and as of December 31, 2012 was as follows:
          
Revenue                
External customers $ 254,678 $ 21,750 $ - $ 276,428
Intersegment revenue - 3,506 (3,506) -
Income (loss) from operations 18,840 (5,747) - 13,093
Goodwill 69,891 59,537 - 129,428
Total assets 213,564 129,245 (3,221) 339,588
We allocated goodwill between our segments by estimating the expected synergies to each segment.
We derive all of our revenue from sales in the United States, and substantially all of our long-lived assets are located in the United States.

As part of our consumer services, we offer 24x7x365 member service support. If a member’s identity has been compromised, our member service team
and remediation specialists will assist the member until the issue has been resolved. This includes our $1 million service guarantee, which is backed by an
identity theft insurance policy, under which we will spend up to $1 million to cover certain third-party costs and expenses incurred in connection with the
remediation, such as legal and investigatory fees. This insurance also covers certain out-of-pocket expenses, such as loss of income, replacement of fraudulent
withdrawals, and costs associated with child and elderly care, travel, and replacement of documents. While we have reimbursed members for claims under
this guarantee, the amounts in aggregate for the years ended December 31, 2013, 2012, and 2011 were not material.
In January 2010, Neal Duncan, a former stockholder, filed a breach of contract claim against us in the Superior Court of Maricopa County, Arizona.
In his complaint, Mr. Duncan alleged that we breached a purported contract with him and sought an ownership interest in our company equal to 7.5%. In
April 2012, the judge granted our motion for summary judgment and dismissed Mr. Duncan's lawsui t. Mr. Duncan has exhausted his avenues of appeal with
the Arizona Court of Appeals and the Arizona Supreme Court. As part of our efforts to recover the attorneys’ fees and costs that we were awarded, we acquired
835 shares of our common stock held by Mr. Duncan pursuant to a garnishment proceeding.
In September 2012, Denise Richardson filed a complaint against our company and Todd Davis. Ms. Richardson claims that she was improperly
classified as an independent contractor instead of an employee and that we breached the terms of an alleged employment agreement. Ms. Richardson claims she
is entitled to equitable relief, compensatory damages, liquidated damages, statutory penalties, punitive damages, interest, costs, and attorneys’ fees. The
parties are awaiting the court’s decision with respect to our motion to dismiss.
We are subject to other legal proceedings and claims that have arisen in the ordinary course of business. Although there can be no assurance as to the
ultimate disposition of these matters and the proceedings disclosed above, we believe, based upon the information available at this time, that a material adverse
outcome related to the matters is neither probable nor estimable.
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