Symantec 1999 Annual Report Download - page 29

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Item 7: Management’s Discussion and Analysis of Finan cial Condition and
Results of Operations.
FORWARD -LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
The following discussion contains forward-looking statements that involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially
different from any future results, levels of activity, performance, or achievements expressed or implied by such
forward-looking statements. Such factors include, among others things, those risk factors set forth in this section and
elsewhere in this report. We identify forward-looking statements by words such as “may,” “will,” “should,” “could,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or similar terms that
refer to the future. We cannot guarantee future results, levels of activity, performance or achievements.
OVERVIEW
Symantec is a world leader in utility software for business and personal computing. Symantec products and solutions
make users productive and keep their computers safe and reliable anywhere and anytime. Founded in 1982, we have
offices in 26 countries worldwide. During the last three fiscal years, we completed the following acquisitions:
In November 1998 we completed a tender offer for the common stock of Quarterdeck, obtaining 63% of the
outstanding shares. In March 1999, Quarterdeck shareholders approved the acquisition by Symantec of 100% of the
outstanding shares of Quarterdeck. The acquisition of Quarterdeck was accounted for as a purchase and was paid for
with cash. We recorded intangible assets of developed software, tradename, customer base, goodwill, workforce in
place and in-process research and development for the respective purchases. We wrote off the in-process research and
development acquired. We are amortizing the value of the workforce in place over 2 years. We are amortizing the
value of the remaining intangibles, developed software, tradename, customer base and goodwill over 5 years. See Note
3 of the Notes to Consolidated Financial Statements in this Form 10-K.
In September 1998 we entered into an agreement with Intel to acquire its anti-virus business and to license its systems
management technology. The acquisition was accounted for as a purchase and was paid for with cash. We recorded
intangible assets of developed software, customer base and in-process research and development as of the date of the
acquisition. We wrote off the in-process research and development acquired. We are amortizing the value of the
customer base and developed software over 5 years. See Note 3 of the Notes to Consolidated Financial Statements in
this Form 10-K.
In June 1998 we acquired the operations of Binary. The acquisition was accounted for as a purchase and was paid for
with cash. We recorded intangible assets of developed software, workforce in place and in-process research and
development as of the date of the acquisition. We wrote off the in-process research and development acquired. We
are amortizing the value of the workforce in place and developed software over 4 years. See Note 3 of the Notes to
Consolidated Financial Statements in this Form 10-K.
In May 1998 we entered into an agreement with IBM to acquire its immune system technology and related anti-virus
patents. The acquisition was accounted for as a purchase and was paid for with cash. We recorded intangible assets of
prepaid research and development, customer base, goodwill and in-process research and development. We wrote-off
the in-process research and development as of the date of the purchase. We are amortizing the value of prepaid
research and development over 1 year. We are amortizing the value of both the goodwill and customer base over 5
years. See Note 3 of the Notes to Consolidated Financial Statements in this Form 10-K.
We did not complete any acquisitions during fiscal 1998. During fiscal 1997, we acquired Fast Track in a transaction
accounted for as a pooling of interests. In conjunction with our acquisition of Fast Track, we issued 600,000 shares of
our common stock. The results of operations of Fast Track were not material to our consolidated financial statements
and we did not restate amounts prior to the date of acquisition to reflect the combined operations of the companies.
On January 6, 1999, we received a comment letter from the Securities and Exchange Commission with respect to our
Form 10-K for the fiscal year ended March 31, 1998 and Form 10-Q for the quarter ended September 30, 1998. The
comment letter contained questions related to accounting for certain acquisitions, including questions related to the
write-off of associated in-process research and development costs. We re-evaluated the Binary and IBM transactions
and the related in-process research and development costs as well as the other questions raised in the comment letter.