Symantec 2007 Annual Report Download - page 54

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The increased amortization in fiscal 2006 is primarily associated with the Veritas acquisition, for which
amortization began in July 2005. In connection with the Veritas acquisition, we recorded $1.5 billion in other
intangible assets which will be amortized over their useful lives of eight to ten years. For further discussion of other
intangible assets from acquisitions and related amortization, see Notes 3 and 4 of the Notes to Consolidated
Financial Statements.
Acquired in-process research and development (IPR&D)
2007 2006 2005
Year Ended March 31,
($ in thousands)
Acquired in-process research and development ................ $ — $285,100 $3,480
During fiscal 2006, we wrote off IPR&D totaling $285 million, of which $284 million was in connection with
our acquisition of Veritas. The IPR&D was written off because the acquired technologies had not reached
technological feasibility and had no alternative uses. Technological feasibility is defined as being equivalent to
completion of a beta-phase working prototype in which there is no remaining risk relating to the development. At
the time of the acquisition in July 2005, Veritas was developing new products in multiple product areas that qualify
as IPR&D. These efforts included NetBackup 6.1, Backup Exec 11.0, Server Management 5.0, and various other
projects. At the time of the acquisition, it was estimated that these IPR&D development efforts would be completed
over the following 12 to 18 months at an estimated total cost of $120 million. As of March 31, 2007, the majority of
all IPR&D projects had been completed on schedule and within expected costs, except for one small project which
is expected to be completed within the next six months.
In fiscal 2005, we wrote off $3 million of IPR&D in connection with our acquisition of Brightmail. The
Brightmail IPR&D related to the third generation of Brightmail’s antispam product offering.
Restructuring
2007 2006 2005
Year Ended March 31,
($ in thousands)
Restructuring . . ....................................... $70,236 $ 24,918 $2,776
In fiscal 2007, we recorded approximately $70 million of restructuring and employee termination benefit
expenses which consist of $19 million related to severance, associated benefits, and outplacement services for the
termination of approximately 323 employees located in the Americas, Europe and Asia Pacific and $51 million
dollars related to the 2007 cost savings initiative announced in January 2007. We implemented the 2007 cost savings
initiative to better align our expenses with our new revenue expectations. The costs included in our 2007 cost
savings initiative reflect $51 million related to severance, associated benefits, and outplacement services and an
insignificant amount related to excess facilities. The restructuring and employee termination benefit costs under the
2007 cost savings initiative reflect the termination of approximately 988 employees located in the Americas,
Europe, and Asia Pacific and the consolidation of certain facilities in Europe and Asia Pacific. We paid $24 million
under the restructuring and employee termination benefit reserves established in fiscal 2007. We expect the
remainder of the costs to be paid by the end of fiscal 2008. We expect that the 2007 cost savings initiative will result
in an additional restructuring charge in the first quarter of fiscal 2008 and potentially in other future periods.
In fiscal 2006, we recorded $25 million of restructuring costs, of which $18 million related to severance,
associated benefits, and outplacement services and $7 million related to excess facilities. These restructuring costs
reflect the termination of 446 redundant employees located in the Americas, Europe, and Asia Pacific and the
consolidation of certain facilities in Europe and Asia Pacific. At March 31, 2006, $9 million remained related to this
reserve. In fiscal 2007, we paid $4 million related to this restructuring reserve. At March 31, 2007, $5 million
remained related to this reserve, the majority of which relate to restructured facilities. We expect the remainder of
the costs to be paid by the end of fiscal 2018.
In fiscal 2005, we recorded $3 million of restructuring charges, of which $2 million was for costs of severance,
related benefits, and outplacement services related to the termination of 51 employees located in the U.S. and
48