Symantec 2003 Annual Report Download - page 38

36 Symantec 2003
The following table displays our contractual obligations as of March 31, 2003:
Payments Due In
Total Fiscal 2005 Fiscal 2007 Fiscal 2009
(IN THOUSANDS) Payments Due Fiscal 2004 and 2006 and 2008 and Thereafter
Convertible subordinated notes $600,000 $ – $ – $600,000 $ –
Operating leases 105,674 31,306 43,105 23,972 7,291
Total contractual obligations $705,674 $31,306 $43,105 $623,972 $7,291
The above table assumes that the convertible subordinated notes will
be paid in cash upon maturity and excludes the balance of our current
liabilities.
We believe that existing cash and short-term investments, cash gener-
ated from operating results and cash from the subordinated convertible
debenture offering will be sufficient to fund operations for at least the
next year.
Newly Adopted and Recently Issued Accounting
Pronouncements
On April 1, 2002, we adopted the provisions of SFAS No. 142, Goodwill
and Other Intangible Assets. Under SFAS No. 142, goodwill and intangi-
ble assets deemed to have indefinite lives will no longer be amortized
but will be subject to an annual impairment test. Other intangibles will
continue to be amortized over their useful lives. In addition, SFAS No.
142 required acquired workforce-in-place to be reclassified as goodwill.
In accordance with SFAS No. 142, we ceased the amortization of good-
will and recharacterized acquired workforce-in-place (and the related
deferred tax liability) as goodwill on April 1, 2002. We also performed
the initial goodwill impairment test required by SFAS No. 142 during the
June 2002 quarter. We identified four reporting units, which represent
our primary operating segments, and determined that there was no
impairment of goodwill recorded upon implementation of SFAS No. 142.
We completed our annual goodwill impairment test during the March
2003 quarter and determined that there was no impairment of goodwill.
We will continue to test for impairment during the fourth quarter of
each year, or earlier if indicators of impairment exist.
As a result of the discontinuance of the amortization of goodwill existing
as of March 31, 2002, the application of SFAS No. 142 resulted in an
increase in our results of operations of approximately $198.4 million
during fiscal 2003. At March 31, 2003, we had goodwill of approxi-
mately $833.4 million.
On April 1, 2002, we adopted SFAS No. 144, Accounting for Impairment
or Disposal of Long-Lived Assets. SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of and elements of APB No. 30, Reporting
the Results of Operations – Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary, Unusual, and Infrequently
Occurring Events and Transactions. SFAS No. 144 addresses financial
accounting and reporting for the impairment and disposal of long-lived
assets. The adoption of this statement did not have a material impact
on our financial position or results of operations.
In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 requires that
the liability for a cost associated with an exit or disposal activity be rec-
ognized when the liability is incurred rather than when a commitment is
made to an exit or disposal plan. SFAS No. 146 also establishes that the
liability should initially be measured and recorded at fair value. SFAS
No. 146 became effective for exit or disposal activities that were initi-
ated after December 31, 2002. The adoption of this statement may
result in recognizing the cost of future restructuring activities, if any,
over a period of time rather than in the reporting period that the plan
of restructuring is adopted.
In November 2002, the FASB issued Interpretation No. 45, Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. Under this Interpretation,
a liability shall be recognized for the fair value of the obligation under-
taken in issuing or modifying guarantees and indemnification agree-
ments after December 31, 2002. Certain of the software licenses that
we have granted contain provisions that indemnify licensees of the soft-
ware from damages and costs resulting from claims alleging that our
software infringes the intellectual property rights of a third party. We
have historically received only a limited number of requests for indemni-
fication under these provisions and have not been required to make
material payments pursuant to these provisions. Accordingly, we have
not recorded a liability related to these indemnification provisions.
As of March 31, 2003, we had no liability associated with any of our
indemnification agreements on our balance sheet.
In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51, that provides
guidance for determining when a primary beneficiary should consolidate
a variable interest entity that functions to support the activities of the
primary beneficiary. The effective date of Interpretation No. 46 is the
first interim period beginning after June 15, 2003 for variable interest
entities acquired before February 1, 2003 and immediately to variable
interest entities created after January 31, 2003. In the March 2003
quarter, we purchased four of our facilities that were classified as