Symantec 2009 Annual Report Download - page 89

markets. If the challenging economic conditions affecting global markets continue or deteriorate further, we may
experience slower or negative revenue growth and our business and operating results might suffer. For example, our
revenue declined slightly in the fourth quarter of fiscal 2009 relative to the fourth quarter of fiscal 2008, although
this was due in part to year over year changes in foreign exchange rates. In light of these economic conditions, we
will continue to align our cost structure with our revenue expectations.
Employee-related costs have been the primary driver of our operating expenses, and we expect this trend to
continue. Employee-related costs include items such as wages, commissions, bonuses, vacation, benefits, and
stock-based compensation. We had 17,426, 17,648, and 17,131 employees as of the end of fiscal 2009, 2008 and
2007, respectively. The decrease during fiscal 2009 was primarily attributable to the impact of our cost and expense
discipline, partially offset by employees added through acquisitions.
During fiscal 2009, based on a combination of factors, including the current economic environment and a
sustained decline in our market capitalization, we concluded that there were sufficient indicators to require us to
perform an interim goodwill impairment analysis. As a result of this interim analysis, we recorded a $7.4 billion
non-cash goodwill impairment during fiscal 2009. Primarily as a result of this charge, our net loss was $6.7 billion
for fiscal 2009 as compared to our net income of $464 million and $404 million for fiscal 2008 and 2007,
respectively.
On November 14, 2008, we acquired MessageLabs Group Limited (“MessageLabs”), a nonpublic United
Kingdom-based provider of managed services to protect, control, encrypt, and archive electronic communications
for $630 million, net of cash acquired. We believe this acquisition complements our SaaS business.
On October 6, 2008, we acquired PC Tools Pty Ltd. (“PC Tools”), a nonpublic Australia-based provider of
security and systems software, for approximately $262 million in cash, net of cash acquired. We believe this
acquisition complements our consumer security software business.
We completed four other acquisitions during fiscal 2009 for a combined cash consideration of $215 million.
See Note 5 of the Notes to Consolidated Financial Statements in this annual report for further details.
In the face of a challenging economic environment, cash flows remained strong in fiscal 2009 as we achieved
$1.7 billion in operating cash flow. We ended fiscal 2009 with nearly $2.0 billion in cash, cash equivalents, and
short-term investments. In addition, during fiscal 2009 we repurchased 42 million shares of our common stock at an
average price of $16.53, for total consideration of $700 million.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Consolidated Financial Statements and related notes included in this annual report in
accordance with generally accepted accounting principles in the United States, requires us to make estimates, which
include judgments and assumptions, that affect the reported amounts of assets, liabilities, revenue, and expenses,
and related disclosure of contingent assets and liabilities. We have based our estimates on historical experience and
on various assumptions that we believe to be reasonable under the circumstances. We evaluate our estimates on a
regular basis and make changes accordingly. Historically, our critical accounting estimates have not differed
materially from actual results; however, actual results may differ from these estimates under different conditions. If
actual results differ from these estimates and other considerations used in estimating amounts reflected in the
Consolidated Financial Statements included in this annual report, the resulting changes could have a material
adverse effect on our Consolidated Statements of Operations, and in certain situations, could have a material
adverse effect on liquidity and our financial condition.
A critical accounting estimate is based on judgments and assumptions about matters that are uncertain at the
time the estimate is made. Different estimates that reasonably could have been used or changes in accounting
estimates could materially impact the operating results or financial condition. We believe that the estimates
described below represent our critical accounting estimates, as they have the greatest potential impact on our
consolidated financial statements. See also Note 1 of the Notes to the Consolidated Financial Statements included in
this annual report.
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