Symantec 1997 Annual Report Download - page 24

received from Hewlett-Packard in fiscal 1997 under the
aforementioned agreement, which further reduced fiscal 1997
research and development expenses.
The increase in research and development expenses in
fiscal 1996 as compared to fiscal 1995 was primarily the result
of increased product development efforts associated with
Symantec’s and Delrina’s development of new products
designed to operate on the Windows 95 operating system.
Research and development expenditures are charged to
operations as incurred. Prior to fiscal 1997, capitalization of
certain software development costs in accordance with
Statement of Accounting Standards No. 86 did not materially
affect the Company, except for amounts capitalized by
Delrina prior to its acquisition by Symantec in fiscal 1996.
Delrina did not capitalize any software development costs in
fiscal 1996 and capitalized approximately $6 million in
software development costs in fiscal year 1995.
Sales and Marketing Expenses
Sales and marketing expenses decreased 4% to $221 million
or 47% of net revenues in fiscal 1997 from $230 million or
52% of net revenues in fiscal 1996. The decrease in sales and
marketing expenses in fiscal 1997 as compared to fiscal 1996
is due primarily to the elimination of duplicative sales and
marketing expenses as a result of the acquisition of Delrina
by Symantec and the elimination of sales and marketing
expenses related to the electronic forms software products
which were sold to JetForm in September 1996. Reductions
in expenditures for products no longer actively marketed by
Symantec were offset by increased spending for new products
released during the fiscal year.
Sales and marketing expenses increased to $230 million
or 52% of net revenues in fiscal 1996 from $190 million or
44% of net revenues in fiscal 1995, due to an increase in sales
and marketing expenses associated with the release of
Symantec’s Windows 95 products.
General and Administrative Expenses
In fiscal 1997, general and administrative expenses increased
by 4% to $34 million or 7% of net revenues from $33 million
or 7% of net revenues in fiscal 1996 and from $29 million or
7% of net revenues in fiscal 1995. The increase in general and
administrative expenses in absolute dollars in fiscal 1997 as
compared to fiscal 1996 is primarily the result of management
consulting expenditures, offset by benefits from the elimination
of duplicative general and administrative expenses as a result
of the acquisition of Delrina by Symantec in fiscal 1996. The
increase in general and administrative expenses in absolute
dollars in fiscal 1996 as compared to fiscal 1995 was princi-
pally due to significant general and administrative expenses
incurred by Delrina in the three month period ended
September 30, 1995 and certain legal fees incurred by Delrina.
Acquisition, Restructuring and
Other Expenses
Acquisition Expenses In connection with the acquisitions
completed in fiscal 1997, 1996 and 1995 (see Summary of
Significant Accounting Policies and Note 10 of Notes to
Consolidated Financial Statements), significant acquisition
expenses have been incurred. These acquisition expenses
principally included fees for legal, accounting and financial
advisory services, the write-off of duplicative capitalized tech-
nology, the modification of certain development contracts
and expenses related to the combination of the companies,
including the elimination of duplicative and excess facilities and
personnel. These charges approximated $1 million, $20 million
and $10 million in fiscal 1997, 1996 and 1995, respectively.
Symantec recorded total acquisition charges of approx-
imately $1 million in fiscal 1997 in connection with the
acquisition of Fast Track.
In connection with the acquisition of Delrina in fiscal
1996, Symantec recorded total acquisition charges of $22
million, which included $9 million for legal, accounting and
financial advisory services, $6 million for the elimination of
duplicative and excess facilities and equipment, $4 million
for personnel severance and outplacement expenses and $3
million for the consolidation and discontinuance of certain
operational activities and other acquisition-related expenses.
Offsetting these costs was a reduction in accrued acquisition,
restructuring and other expenses of $2 million, as actual costs
incurred related to the acquisitions of Central Point and SLR
were less than costs previously accrued by the Company.
In connection with the acquisitions of Central Point and
SLR, Symantec recorded total acquisition charges of $10
million in fiscal 1995. The charges included $4 million for
legal, accounting and financial advisory services, $1 million
for the write-off of duplicative product-related expenses and
modification of certain development contracts, $1 million for
the elimination of duplicative and excess facilities, $3 million
for personnel severance and outplacement expenses and $1
million for the consolidation and discontinuance of certain
operational activities and other acquisition-related expenses.
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