Symantec 1999 Annual Report Download - page 73

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements, Continued
59
The following table outlines the value of the above referenced acquisition’s intangible assets (in thousands):
Symantec did not complete any acquisitions during fiscal 1998. During fiscal 1997, we acquired Fast Track, Inc. in a
transaction accounted for as a pooling of interests. In conjunction with Fast Track, we issued 600,000 shares of
Symantec stock on May 28, 1996, the date of acquisition. As the results of operations of Fast Track were not material
to our consolidated financial statements, amounts prior to the date of acquisition were not restated to reflect the
combined operations of the companies.
Pro Forma. The following unaudited pro forma results of operations for fiscal 1999 and 1998 are as if the
acquisition of Binary and Quarterdeck had occurred at the beginning of each period presented. The pro forma
information excludes approximately $15 million of in-process research and development. The pro forma information
has been prepared for comparative purposes only and is not indicative of what operating results would have been if
the acquisition had taken place at the beginning of each period presented or of future operating results. Financial
information for IBM’s and Intel’s anti-virus businesses were not available and as such have not been included in this
pro forma information.
Year Ended March 31,
(In thousands, except per share data; unaudited) 1999 1998
Net revenues $ 615,189 $ 613,844
Net income $ 28,384 $ 64,149
Basic net income per share $ 0.63 $ 0.89
Diluted net income per share $ 0.61 $ 0.84
NOTE 4. PURCHASE PRODUCT RIGHTS AND CAPITALIZED SOFTWARE
During fiscal 1999 we recorded approximately $46 million of purchased product rights and technology and
capitalized software, primarily related to our acquisitions of Binary, Intel’s anti-virus business and Quarterdeck. See
Note 3 of Notes to Consolidated Financial Statements.
Amortization of purchased product rights and capitalized software expense totaled approximately $11 million in fiscal
1999 and $1 million in fiscal 1998. The increase for fiscal 1999 over fiscal 1998 is primarily due to additional
amortization related to the purchase of Intel’s anti-virus business and the acquisitions of Binary and Quarterdeck. The
amortization will occur over the next 3 to 5 years. See Note 3 of Notes to Consolidated Financial Statements in this
Form 10-K.
In fiscal 1998, capitalization of certain software development costs in accordance with SFAS No. 86 did not
materially affect us.
In fiscal 1997, Symantec capitalized approximately $8 million of software development costs, primarily related to
network administration technology, which was sold to Hewlett-Packard in March 1997, resulting in the write off of
approximately $7 million of unamortized costs during the fourth quarter of fiscal 1997. See Note 13 of Notes to
Allocated Purchase Price Components (in thousands)
Purchase In-Process Developed Customer Prepaid-
Price R&D Software Goodwill Base Workforce Tradename R&D
IBM 20,250$ 7,100$ -$ 11,850$ 100$ -$ -$ 1,200$
Binary 27,871 7,100 16,900 3,751 - 120 - -
Intel 16,525 5,017 10,697 - 811 - - -
63% of Quarterdeck 59,347 7,560 4,410 45,588 882 25 882 -
37% of Quarterdeck 25,960 740 4,070 20,210 407 15 518 -
Total 149,953$ 27,517$ 36,077$ 81,399$ 2,200$ 160$ 1,400$ 1,200$