Symantec 2004 Annual Report Download - page 39

SYMANTEC CORPORATION «37»
Our principal source of liquidity as of March 31, 2004 is our existing
cash, cash equivalents and short-term investments of $2.4 billion,
as well as cash that we generate over time from our operations.
During fiscal 2004, cash and cash equivalents increased by $545
million and short-term investments increased by $160 million. This
increase is primarily due to cash provided by operations and
proceeds from the sale of common stock through our employee
benefit plans, offset by payments for business acquisitions,
purchases of intangible assets and capital expenditures.
OPERATING ACTIVITIES
The increase in operating cash flow in fiscal 2004, as compared
with fiscal 2003, was primarily the result of an increase in net income
of $122 million, an increase in deferred revenue of $123 million
and an increase in income taxes payable of $35 million. The increase
in deferred revenue was due to a greater volume and term of
software maintenance agreements and the increase in income
taxes payable was due to improved profitability. The increase in
operating cash flow was partially offset by an increase in accounts
receivable of $35 million due to higher sales in the month of
March 2004 compared to the month of March 2003. The higher
March 2004 sales resulted from greater sales of our consumer
and enterprise products due to the security threat outbreaks that
occurred during February 2004, including the MyDoom and
Netsky viruses.
The increase in operating cash flow in fiscal 2003, as compared
with fiscal 2002, was primarily the result of improved profitability.
Net income increased $277 million, however fiscal 2002 net income
included a non-cash charge of $197 million for the amortization of
goodwill. We ceased amortizing goodwill in fiscal 2003 in accordance
with SFAS 142. Excluding the amortization of goodwill, net income
increased $80 million in fiscal 2003, compared to fiscal 2002. The
increase in operating cash flow in fiscal 2003 was also the result
of increased deferred revenue of $70 million and an increase in
income taxes payable of $39 million. The increase in deferred
revenue was due to a greater volume of software maintenance
agreements and the increase in income taxes payable was due
to improved profitability. The increase in operating cash flow was
partially offset by an increase in accounts receivable of $74 million
due to higher sales in the month of March 2003 compared to the
month of March 2002 due to an unusually low net trade accounts
receivable balance at March 31, 2002 as compared to the prior six
quarter-end balances. In prior quarters, we had generated a larger
percentage of net revenues during the last month of each quarter.
INVESTING ACTIVITIES
During the past three fiscal years our investing activities have
included purchases of property and equipment, purchases
of businesses and intangible assets, and purchases and sales
of short-term available-for-sale securities.
Net cash used in investing activities decreased in fiscal 2004,
as compared to fiscal 2003, due primarily to a decrease in net
purchases of marketable securities of $269 million and a decrease
in capital expenditures of $81 million. The higher capital expenditures
in fiscal 2003 resulted from our purchase of four of our facilities
that were classified as operating leases under synthetic lease
transactions by purchasing the land and buildings. The decrease
in cash used in investing activities was also affected by a $30 million
increase in cash payments for acquisitions of businesses and
intangible assets during fiscal 2004.
2004 Annual Report
realized based on historical earnings and expected levels
of future taxable income as well as the implementation of tax
planning strategies.
Levels of future taxable income are subject to the various risks and
uncertainties discussed in the Business Risk Factors. An additional
valuation allowance against net-deferred tax assets may be
necessary if it is more likely than not that all or a portion of the
net deferred tax assets will not be realized. We will assess the
need for an additional valuation allowance on a quarterly basis.
LIQUIDITY AND CAPITAL RESOURCES
(In thousands) Year Ended March 31,
2004 2003 2002
Net cash provided by (used in):
Operating activities $ 902,605 $599,238 $511,197
Investing activities (517,298) (771,973) (869,263)
Financing activities 129,154 73,379 514,062
Effect of exchange rate changes on cash and cash equivalents 30,095 14,725 (4,682)
Net change in cash and cash equivalents 544,556 (84,631) 151,314