Symantec 2007 Annual Report Download - page 58

As of March 31, 2007, our principal source of liquidity was our existing cash, cash equivalents, and short-term
investments of $3.0 billion, of which 53% was held domestically and the remainder was held outside of the U.S. In
April 2007, we completed our acquisition of Altiris, Inc., a leading provider of IT management software that
enables businesses to easily manage and service network-based endpoints. We used a portion of our domestic cash
balance to fund the aggregate purchase price, excluding acquisition related costs, of approximately $815 million in
cash, which amount is net of Altiris’ cash balance. As a result approximately two-thirds of our cash, cash
equivalents, and short-term investments balance is currently held outside of the U.S. At the beginning of fiscal 2007,
we completed the reorganization of certain international subsidiaries acquired as part of the Veritas acquisition.
In June 2006, we issued $1.1 billion principal amount of 0.75% Convertible Senior Notes due June 15, 2011,
and $1.0 billion principal amount of 1.00% Convertible Senior Notes due June 15, 2013, to initial purchasers in a
private offering for resale to qualified institutional buyers pursuant to SEC Rule 144A. We refer to these Notes
collectively as the Senior Notes. Concurrently with the issuance of the Senior Notes, we entered into note hedge
transactions with affiliates of certain of the initial purchasers whereby we have the option to purchase up to
110 million shares of our common stock at a price of $19.12 per share. In addition, concurrently with the issuance of
the Senior Notes, we also sold warrants to affiliates of certain of the initial purchasers whereby they have the option
to purchase up to 110 million shares of our common stock at a price of $27.3175 per share. The warrants expire on
various dates from July 2011 through August 2013 and must be settled in net shares.
For additional information regarding the Senior Notes and related transactions, see Note 6 of the Notes to
Consolidated Financial Statements, which information is incorporated herein by reference. For information
regarding the deferred tax asset established in connection with the note hedge transactions, see Note 6 of the
Notes to Consolidated Financial Statements, which information is incorporated herein by reference.
The cost incurred in connection with the note hedge transactions, net of the related tax benefit and the proceeds
from the sale of the warrants, is included as a net reduction in Capital in excess of par value in the accompanying
Consolidated Balance Sheets as of March 31, 2007, in accordance with the guidance in Emerging Issues Task Force
Issue, or EITF, No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company’s Own Stock.
On August 1, 2006, at the option of certain of the holders, we repurchased for cash $510 million of the Veritas
0.25% Convertible Subordinated Notes, or the 0.25% Notes, that we had assumed in connection with the acquisition
of Veritas at a price equal to the principal amount, plus accrued and unpaid interest. On August 28, 2006, at our
election, we repurchased the remaining $10 million of the Veritas 0.25% Notes at a price equal to the principal
amount plus accrued and unpaid interest. For additional information regarding the 0.25% Notes, see Note 6 of the
Notes to Consolidated Financial Statements, which information is incorporated herein by reference.
In July 2006, we entered into a five-year $1 billion senior unsecured revolving credit facility that expires in
July 2011. Borrowings under the facility will bear interest, at our option, at either a rate equal to the bank’s base rate
or a rate equal to LIBOR plus a margin based on our leverage ratio, as defined in the credit facility agreement. In
connection with the credit facility, we must maintain certain covenants, including a specified ratio of debt to
EBITDA (earnings before interest, taxes, depreciation, and amortization), as well as various other non-financial
covenants. At March 31, 2007, we were in compliance with all covenants. We have made no borrowings under the
credit facility through the date of filing of this annual report.
During April 2006, we purchased two office buildings totaling approximately 236,000 square feet in
Cupertino, California for $81 million. Approximately 64,000 square feet is leased to a third party. In September
2006, we sold a building in Milpitas, California for net proceeds of $83 million. In January 2007, we sold a building
in Maidenhead, England for net proceeds of $35 million.
On January 24, 2007, we announced that the Board of Directors authorized the repurchase of $1 billion of
Symantec common stock without a scheduled expiration date.
We believe that our cash balances, cash that we generate over time from operations, and our borrowing
capacity will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at
least the next 12 months.
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