Symantec 2008 Annual Report Download - page 190

the CAC in July 2005; the motion was denied in May 2006. In April 2008, the parties filed a stipulation of
settlement, which if approved by the Court will resolve the matter. If the settlement is not completed, an adverse
outcome in this matter could have a material adverse effect on our financial position, results of operations and cash
flows. As of March 28, 2008, we have recorded an accrual in the amount of $21.5 million for this matter and,
pursuant to the terms of the settlement, we established a settlement fund of $21.5 million on May 1, 2008. The loss is
reflected in Settlements of litigation in the Consolidated Statements of Income.
After Veritas announced in January 2003 that it would restate its financial results as a result of transactions
entered into with AOL Time Warner in September 2000, numerous separate complaints purporting to be class actions
were filed in the United States District Court for the Northern District of California alleging that Veritas and some of its
officers and directors violated provisions of the Securities Exchange Act of 1934. The complaints contain varying
allegations, including that Veritas made materially false and misleading statements with respect to its 2000, 2001 and
2002 financial results included in its filings with the SEC, press releases and other public disclosures. A consolidated
complaint entitled In Re VERITAS Software Corporation Securities Litigation was filed by the lead plaintiff on
July 18, 2003. On February 18, 2005, the parties filed a Stipulation of Settlement in the class action. On March 18,
2005, the Court entered an order preliminarily approving the class action settlement. Pursuant to the terms of the
settlement, a $35 million settlement fund was established on March 25, 2005. Veritas’ insurance carriers provided for
the entire amount of the settlement fund. In July 2007, the Court of Appeals vacated the settlement, finding that the
notice of settlement was inadequate. The matter has been returned to the District Court for further proceedings,
including reissuance of the notice. If the settlement is not approved, an adverse outcome in this matter could have a
material adverse effect on our financial position, results of operations and cash flows.
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. During the fourth quarter of fiscal 2008, we agreed to
settle two such lawsuits, the net result of which was a gain of $58.5 million reflected in Settlements of litigation in
the Consolidated statements of Income. The final resolution of these lawsuits, individually or in the aggregate, is not
expected to have a material adverse effect on our financial condition or results of operations.
Note 19. Segment Information
During the March 2008 quarter, we changed our reporting segments to align with the new operating structure.
The new reporting segment structure is as follows: (i) the Security and Data Management Group is now known as
the Security and Compliance segment; (ii) the Altiris segment, in its entirety, has been moved into the Security and
Compliance segment; (iii) the Data Center Management Group is now known as the Storage and the Server
Management segment; and (iv) we have moved the Backup Exec products to the Storage and Server Management
segment from the Security and Data Management Group. All reporting segments are managed by the chief
operating decision maker, which is our chief operating officer. Our chief operating decision maker, manages
business operations, evaluates performance and allocates resources based on the operating segments’ net revenues
and operating income. 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. We revised the business segment information for prior
years to conform to the new presentation. As of March 28, 2008, 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 Compliance. Our Security and Compliance segment focuses on providing large, medium, and
small-sized business 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.
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Notes to Consolidated Financial Statements — (Continued)