Symantec 2002 Annual Report Download - page 85

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SYMANTEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
development. The transaction was accounted for as a purchase. The acquisition was initially recorded during
Ñscal 2001 for approximately $924.7 million and allocated as follows (in thousands):
Net tangible assets of AXENTÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $130,517
In-process research and development ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22,300
TradenameÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,100
Workforce-in-place ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,670
Developed technologyÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 75,500
Deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (19,080)
Unearned compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 992
GoodwillÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 699,660
Total purchase price ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $924,659
During Ñscal 2001, we also accrued approximately $18.3 million in acquisition related expenses, which
included Ñnancial advisory, legal and accounting, duplicative site and Ñxed assets, and severance costs. These
acquisition related expenses were paid by the end of the December 2001 quarter.
After Ñling the pre-acquisition tax returns of AXENT during the December 2001 quarter, we identiÑed
additional tax losses and other beneÑcial tax attributes available from the pre-acquisition periods of AXENT.
As a result, we recorded additional deferred tax assets of $5 million attributable to these carryforward tax
beneÑts, with a corresponding oÅset to goodwill.
During the September 2001 quarter, we divested the web access management product line that we
acquired with our acquisition of AXENT. As a result, we wrote oÅ approximately $804,000 of net workforce-
in-place related to this product line (see Divestiture of Web Access Management Product Line).
During the June 2001 quarter, we resolved certain pre-acquisition contingencies, and as a result, we
increased the purchase price and goodwill by $4.5 million, of which $1.2 million remains as an accrual as of
March 31, 2002.
The amount allocated to tradename, workforce-in-place, developed technology and goodwill is being
amortized over their useful lives of four years. Commencing in Ñscal 2003, however, the remaining balance of
workforce-in-place and goodwill will no longer be amortized. Instead they will be subject to an annual
impairment test in accordance with SFAS No. 142. The unearned compensation related to the options
assumed as part of the acquisition is being amortized over the remaining vesting period.
Acquisition of 20/20 Software
On March 31, 2000, we purchased 100% of the outstanding common stock of 20/20 Software for up to
$16.5 million. The terms of the agreement required two guaranteed payments totaling approximately
$7.5 million. We originally recorded approximately $6.1 million for goodwill and $2.3 million for acquired
product rights, oÅset by $900,000 in related income tax liabilities, which accounted for the $7.5 million
guaranteed purchase price. In addition, the agreement required contingent payments that were based on
targeted future sales of certain of our products from July 1, 2000 to June 30, 2001, with a cumulative
maximum contingency amount of $9.0 million. We recorded contingent amounts of approximately $523,000,
$4.2 million and $1.6 million during the September 2000, March 2001 and June 2001 quarters, respectively,
resulting in a cumulative increase in the purchase price of $6.3 million, which was allocated to goodwill. The
goodwill and acquired product rights are being amortized over a Ñve-year period. Commencing in Ñscal 2003,
however, the remaining balance of goodwill will no longer be amortized. Instead it will be subject to an annual
impairment test in accordance with SFAS No. 142.
63