Symantec 2007 Annual Report Download - page 116

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out of $35 million originally assessed by the IRS in connection with one of the issues covered in the assessment. The
IRS has also agreed to waive the assessment of penalties. We do not agree with IRS on the $832 million remaining at
issue. We strongly believe the IRS’ position with regard to this matter is inconsistent with applicable tax laws and
existing Treasury regulations, and that our previously reported income tax provision for the years in question is
appropriate. See Note 13 for additional information on this matter.
On July 7, 2004, a purported class action complaint entitled Paul Kuck, et al. v. Veritas Software Corporation,
et al. was filed in the United States District Court for the District of Delaware. The lawsuit alleges violations of
federal securities laws in connection with Veritas’ announcement on July 6, 2004 that it expected results of
operations for the fiscal quarter ended June 30, 2004 to fall below earlier estimates. The complaint generally seeks
an unspecified amount of damages. Subsequently, additional purported class action complaints have been filed in
Delaware federal court, and, on March 3, 2005, the Court entered an order consolidating these actions and
appointing lead plaintiffs and counsel. A consolidated amended complaint, or CAC, was filed on May 27, 2005,
expanding the class period from April 23, 2004 through July 6, 2004. The CAC also named another officer as a
defendant and added allegations that Veritas and the named officers made false or misleading statements in the
company’s press releases and SEC filings regarding the company’s financial results, which allegedly contained
revenue recognized from contracts that were unsigned or lacked essential terms. The defendants to this matter filed
a motion to dismiss the CAC in July 2005; the motion was denied in May 2006. The defendants to this matter intend
to defend this case vigorously. Because our liability, if any, cannot be reasonably estimated, no amounts have been
accrued for this matter. An adverse outcome in this matter could have a material adverse affect on our financial
position and results of operations.
We are also involved in a number of other judicial and administrative proceedings that are incidental to our
business. Although adverse decisions (or settlements) may occur in one or more of the cases, it is not possible to
estimate the possible loss or losses from each of these cases. The final resolution of these lawsuits, individually or in
the aggregate, is not expected to have a material adverse affect on our financial condition or results of operations.
Note 15. Segment Information
In the June 2006 quarter, we consolidated our Enterprise Security, Data Protection, and Storage and Server
Management segments into two segments: the Security and Data Management segment and the Data Center
Management segment. Amounts for fiscal 2006 and 2005 have been reclassified to conform to our current
presentation.
Our operating segments are significant strategic business units that offer different products and services,
distinguished by customer needs. As of March 31, 2007, we operated in five operating segments:
•Consumer Products. Our Consumer Products segment focuses on delivering our Internet security, PC
tuneup, and backup products to individual users and home offices.
•Security and Data Management. Our Security and Data Management segment focuses on providing large
to small and medium-sized businesses with solutions for compliance and security management, endpoint
security, messaging management, and data protection management software solutions that allow our
customers to secure, provision, backup, and remotely access their laptops, PCs, mobile devices, and servers.
•Data Center Management. Our Data Center Management segment focuses on providing enterprise and
large enterprise customers with storage and server management, data protection, and application perfor-
mance management solutions across heterogeneous storage and server platforms.
•Services. Our Services segment consists of consultants with extensive technical knowledge, business
expertise, and global insight across multi-vendor environments who assist organizations in managing IT risk
on an ongoing basis. We provide customers with maintenance and technical support, consulting, education,
and business critical services.
110
SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)