Symantec 2009 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2009 Symantec annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 167

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167

Cost of content, subscriptions, and maintenance consists primarily of fee-based technical support costs, costs
of billable services, and payments to OEMs under revenue-sharing agreements.
Cost of content, subscriptions, and maintenance as a percentage of related revenue for the fiscal 2009
decreased one percentage point as compared to the same period last year. The decrease is primarily driven by higher
revenues, lower OEM royalties and distribution costs, partially offset by a year-over-year increase in technical
support costs.
Cost of content, subscriptions, and maintenance decreased as a percentage of the related revenue in fiscal 2008
as compared to fiscal 2007. The year over year decrease in cost of content, subscriptions, and maintenance as a
percentage of the related revenue is primarily driven by higher revenues and lower OEM royalties as a percentage of
revenue more than offsetting increases in Services expenses.
Cost of licenses
Fiscal
2009 $ %
Fiscal
2008 $ %
Fiscal
2007
2009 vs. 2008 2008 vs. 2007
($ in thousands)
Cost of licenses ........... $34,657 $(10,007) (22)% $44,664 $(5,304) (11)% $49,968
As a percentage of related
revenue ............... 3% 3% 4%
Cost of licenses consists primarily of royalties paid to third parties under technology licensing agreements and
manufacturing and direct material costs.
Cost of licenses remained stable as a percentage of the related revenue for the fiscal 2009 as compared to the
fiscal 2008. Decreases in manufacturing and site license costs were partially offset by higher royalties.
Cost of licenses decreased as a percentage of the related revenue in fiscal 2008 as compared to fiscal 2007. The
year over year decrease in Cost of licenses as a percentage of the related revenue is primarily attributable to higher
revenues and to a lesser extent due to lower obsolescence reserves. Fiscal 2007 had relatively high obsolescence
reserves due to our decision to exit certain aspects of the appliance business.
Amortization of acquired product rights
Fiscal
2009 $ %
Fiscal
2008 $ %
Fiscal
2007
2009 vs. 2008 2008 vs. 2007
($ in thousands)
Amortization of acquired
product rights ............ $352,427 $3,100 1% $349,327 $6,994 2% $342,333
Percentage of total net
revenues . ............... 6% 6% 7%
Acquired product rights are comprised of developed technologies and patents from acquired companies.
The increase in amortization for the fiscal 2009 as compared to the fiscal 2008 is primarily due to amortization
associated with SwapDrive, PC Tools and MessageLabs acquisitions during the fiscal 2009 periods offset in part by
the APM business divestiture in the fiscal 2008 period.
The amortization in fiscal 2008 was higher than fiscal 2007 primarily due to amortization associated with the
Altiris acquisition, offset in part by certain acquired product rights becoming fully amortized. For further discussion
of acquired product rights and related amortization, see Notes 5 and 6 of the Notes to Consolidated Financial
Statements in this annual report.
Operating Expenses
Operating expenses overview
As discussed above under “Our Business,” our operating expenses for fiscal 2009 as compared to fiscal 2008
were adversely impacted by an additional week during fiscal 2009. Our international expenses during the fiscal
41