Symantec 2012 Annual Report Download - page 158

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)
Assets and liabilities measured and recorded at fair value on a nonrecurring basis
Goodwill. In fiscal 2012, we recorded an impairment of $19 million as a cumulative-effect adjustment in
Accumulated deficit, related to an implied fair value measurement made for our Services reporting unit upon the
adoption of a new accounting standard. The valuation technique used to estimate the implied fair value of
goodwill was an income approach which relied upon Level 3 inputs, which included estimated future cash flows
or profit streams.
Indefinite-lived intangible assets. In fiscal years 2012 and 2011, we recorded impairment charges of $4
million and $27 million, respectively, which reduced the gross carrying value of indefinite-lived tradenames. The
fair value amounts were derived using an income approach which required Level 3 inputs such as estimated
future cash flows on profit streams. These impairment charges were due to reductions in expected future cash
flows for certain indefinite-lived tradenames related to the Security and Compliance segment and the Consumer
segment, respectively. These impairment charges were recorded within Impairment of intangible assets on the
Consolidated Statements of Income.
Debt. In fiscal 2011, we repurchased $500 million of aggregate principal amount of our 0.75% convertible
senior notes, which had a net book value of $481 million. Concurrently with the repurchase, we sold a
proportionate share of the initial note hedges back to the note hedge counterparties for approximately $13
million. These transactions resulted in a loss from extinguishment of debt of approximately $16 million, which
represented the difference between book value of the notes net of the remaining unamortized discount prior to
repurchase and the fair value of the liability component of the notes upon repurchase. The fair value of the
liability component was calculated to be $497 million upon repurchase using Level 2 inputs based on market
prices for similar convertible debt instruments and resulting yields.
Note 3. Acquisitions
Fiscal 2012 acquisitions
Clearwell Systems Inc.
On June 24, 2011, we completed the acquisition of Clearwell Systems Inc. (“Clearwell”), a privately-held
provider of eDiscovery solutions. In exchange for all of the voting equity interests of Clearwell, we transferred a
total consideration of $392 million, which consists of $364 million in cash, net of $20 million cash acquired, and
$8 million of assumed stock options. The objective of the acquisition was to enhance our eDiscovery, archiving
and backup offerings to our customers. The results of operations of Clearwell are included since the date of
acquisition as part of the Storage and Server Management segment. Supplemental pro forma information for
Clearwell was not material to our financial results and therefore not included.
The following table presents the purchase price allocation included in our Consolidated Balance Sheets
(in millions):
Net tangible assets(1) ........................................................... $ 33
Intangible assets(2) ............................................................. 154
Goodwill(3) ................................................................... 268
Net tax liabilities .............................................................. (63)
Total purchase price ........................................................... $392
(1) Net tangible assets included deferred revenue which was adjusted down from $13 million to $3 million,
representing our estimate of the fair value of the contractual obligation assumed for support services.
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