Symantec 2008 Annual Report Download - page 111

On April 6, 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 approximately $841 million
of our cash and cash equivalents to fund the acquisition, which amount was net of Altiris’ cash and cash equivalents
balance. We believe this acquisition enables us to help customers better manage and enforce security policies at the
endpoint, identify and protect against threats, and repair and service assets.
On November 30, 2007, we completed our acquisition of Vontu, Inc. (“Vontu”), a provider of Data Loss
Prevention (DLP) solutions that assists organizations in preventing the loss of confidential or proprietary infor-
mation, for approximately $298 million in cash, which amount was net of Vontu’s cash and cash equivalents
balance. On November 29, 2007, we borrowed $200 million under our five-year $1 billion senior unsecured
revolving credit facility to partially finance this acquisition.
In February 2008, we contributed $150 million in cash to our joint venture with Huawei Technologies Co., Ltd.
in exchange for a 49% interest in the joint venture. The joint venture will develop, manufacture, market and support
security and storage appliances to global telecommunications carriers and enterprise customers.
Our Operating Segments
Our operating segments are significant strategic business units that offer different products and services,
distinguished by customer needs. During the March 2008 quarter, we modified the segment reporting structure in
line with business operational changes associated with Enrique Salem’s promotion to Chief Operating Officer in
January 2008. The following changes have been made to our segment reporting structure: (1) the Security and Data
Management segment was renamed the Security and Compliance segment; (2) the Altiris segment, in its entirety,
has been moved into the Security and Compliance segment; (3) the Data Center Management segment was renamed
the Storage and Server Management segment; and (4) the Backup Exec products were moved from the Security and
Data Management segment to the Storage and Server Management segment. As a result of these changes, we now
operate in five operating segments: Security and Compliance, Storage and Server Management, Consumer
Products, Services, and Other. The new business structure more directly aligns the operating segments with
markets and customers, and we believe will establish more direct lines of reporting responsibilities, speed decision
making, and enhance the ability to pursue strategic growth opportunities. All financial information from periods
prior to these changes in reportable segments contained in this annual report has been recast, where appropriate, in
this annual report to reflect the revised segment reporting structure noted above.
For further descriptions of our operating segments, see Note 19 of the Notes to Consolidated Financial
Statements in this annual report. Our reportable segments are the same as our operating segments.
Financial Results and Trends
Our net income was $464 million for fiscal 2008 as compared to $404 million and $157 million for fiscal 2007
and 2006, respectively. The higher net income for fiscal 2008 as compared to fiscal 2007 was primarily due to
higher revenue in fiscal 2008 compared to fiscal 2007 as well as a net gain from settlements of litigation of
$59 million in fiscal 2008 for which there was no corresponding gain in fiscal 2007. Our net income for fiscal 2008
was partially offset by higher operating expenses, including a loss on sale of a business of $95 million related to the
disposition of our APM business, for which there is no corresponding charge in fiscal 2007.
The higher net income for fiscal 2007 as compared to fiscal 2006 was primarily due to the write-off in fiscal
2006 of $285 million of acquired in-process research and development, or IPR&D, as a result of the Veritas
acquisition for which there is no comparable charge in fiscal 2007. This increase was partially offset by $154 million
of stock-based compensation expense related to our adoption of Statement of Financial Accounting Standards, or
SFAS, No. 123R, Share-Based Payment, effective April 1, 2006, higher employee compensation costs resulting
from increased employee headcount, and $70 million of restructuring charges compared to $25 million in fiscal
2006.
Revenue for fiscal 2008 was $5.9 billion, or 13%, higher than revenue for fiscal 2007. For fiscal 2008 we
realized revenue growth across all of our geographic regions as compared to fiscal 2007 and fiscal 2006 and
experienced revenue growth in all of our segments. Foreign currency fluctuations positively impacted our
29