Symantec 2010 Annual Report Download - page 160

Total amortization expense for intangible assets which have definite lives, based upon our existing intangible
assets and their current estimated useful lives as of April 2, 2010, is estimated to be as follows (in millions):
2011 ................................................................. $ 340
2012 ................................................................. 296
2013 ................................................................. 264
2014 ................................................................. 119
2015 ................................................................. 66
Thereafter ............................................................. 41
Total................................................................. $1,126
Note 6. Investment in Joint Venture
On February 5, 2008, Symantec formed Huawei-Symantec, Inc. (“joint venture”) with a subsidiary of Huawei
Technologies Co., Limited (“Huawei”). The joint venture is domiciled in Hong Kong with principal operations in
Chengdu, China. We contributed cash of $150 million, licenses related to certain intellectual property and
intangible assets in exchange for 49% of the outstanding common shares of the joint venture. The joint venture
develops, manufactures, markets and supports security and storage appliances to global telecommunications
carriers and enterprise customers. Huawei contributed its telecommunications storage and security business assets,
engineering, sales and marketing resources, personnel, and licenses related to intellectual property in exchange for a
51% ownership interest in the joint venture.
The contribution of assets to the joint venture was accounted for at its carrying value. The historical carrying
value of the assets contributed by Symantec comprised a significant portion of the net assets of the joint venture. As
a result, our carrying value of the investment in the joint venture exceeded our proportionate share in the book value
of the joint venture by approximately $75 million upon formation of the joint venture. As the contributions for both
Symantec and Huawei were recorded at historical carrying value by the joint venture, this basis difference is
attributable to the contributed identified intangible assets. The basis difference is being amortized over a weighted-
average period of 9 years, the estimated useful lives of the underlying identified intangible assets to which the basis
difference is attributed.
On February 5, 2011, we have a one-time option to purchase an additional two percent ownership interest from
Huawei for $28 million. We determined the value of the option using the Black-Scholes option-pricing model. The
value of the option is not considered material to the financial statements. We have concluded that the option does not
meet the definition of a derivative under the authoritative guidance. Symantec and Huawei each have the right to
purchase all of the other partner’s ownership interest through a bid process upon certain triggering events set to
occur as early as February 5, 2011.
We account for our investment in the joint venture under the equity method of accounting. Under this method,
we record our proportionate share of the joint venture’s net income or loss based on the quarterly financial
statements of the joint venture. We record our proportionate share of net income or loss one quarter in arrears. In
determining our share of the joint venture’s net income or loss, we adjust the joint venture’s reported results to
recognize the amortization expense associated with the basis difference described above.
As described in Note 1, the joint venture adopted new authoritative guidance on revenue arrangements with
multiple deliverables during its period ended December 31, 2009, which was applied to the beginning of its fiscal
year. The impact of the adoption decreased our proportionate share of net loss by $12 million during our fiscal 2010.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)