Symantec 2003 Annual Report Download - page 55

Symantec 2003 53
Note 2. Statements of Operations Information
Year Ended March 31,
(IN THOUSANDS) 2003 2002 2001
Technical support costs included
in sales and marketing $19,735 $15,871 $18,502
Advertising expense $46,495 $34,657 $46,884
Technical support costs, included in sales and marketing, relate to the
cost of providing free post-contract support and were accrued at the
time of product sale. Advertising expenditures were charged to opera-
tions as incurred.
Note 3. Acquisitions and Divestitures
During the September 2002 quarter, we acquired four privately-held
companies for a total of approximately $375.2 million in cash. We expect
that the acquisition of these emerging technologies will strengthen our
competitive position in the enterprise security solutions and managed
security services markets. The results of operations of the acquired
companies have been included in our operations as of the dates of
acquisition. These acquired companies are included in our Enterprise
Security segment, with the exception of Riptech, which is included in
our Services segment.
Riptech On August 19, 2002, we acquired Riptech, Inc., a provider of
scalable, real-time managed security services that protect clients
through advanced outsourced security monitoring and professional
services, for $145.0 million. Under the transaction, we recorded approx-
imately $2.1 million for acquired in-process research and development,
$12.2 million for developed technology, $0.5 million for acquired prod-
uct rights, including revenue related order backlog and contracts,
$117.8 million for goodwill, $8.0 million for net deferred tax assets
and $7.6 million for tangible assets, net of liabilities. We also accrued
approximately $3.2 million in acquisition related expenses, which
included financial advisory, legal and accounting fees, duplicative sites
and severance costs, of which $0.9 million remains as an accrual as of
March 31, 2003.
The amounts allocated to developed technology and acquired product
rights will be amortized to cost of revenues over their useful lives of five
years and one year, respectively.
During the December 2002 quarter, we revised estimates related to
certain liabilities, and as a result, we decreased the purchase price and
goodwill by $0.9 million.
Recourse On August 19, 2002, we acquired Recourse Technologies,
Inc., a provider of security threat management solutions that detect,
analyze and respond to both known and novel threats, including intru-
sions, internal attacks and denial of service attacks, for approximately
$135.3 million. Under the transaction, we recorded approximately $1.0
million for acquired in-process research and development, $19.0 million
for developed technology, $109.3 million for goodwill, $2.2 million for
other intangibles, $9.1 million for net deferred tax assets and $1.9 mil-
lion for liabilities, net of tangible assets. We also accrued approximately
$3.3 million in acquisition related expenses, which included financial
advisory, legal, tax and accounting fees, duplicative sites and severance
costs, of which $1.0 million remains as an accrual as of March 31, 2003.
The amount allocated to developed technology will be amortized to cost
of revenues over the useful life of four years. The amount allocated to
other intangibles will be amortized to operating expenses over its useful
life of one year.
During the December 2002 quarter, we revised estimates related to
certain liabilities, and as a result, we decreased the purchase price and
goodwill by $0.2 million.
SecurityFocus On August 5, 2002, we acquired SecurityFocus, Inc., a
provider of enterprise security threat management systems, providing
global early warning of cyber attacks, customized and comprehensive
threat alerts, and countermeasures to prevent attacks before they occur,
for approximately $74.9 million. Under the transaction, we recorded
approximately $1.6 million for acquired in-process research and devel-
opment, $3.5 million for developed technology, $3.3 million for acquired
product rights, including database and revenue related order backlog
and contracts, $64.3 million for goodwill, $2.1 million for other market-
ing related intangibles, $0.5 million for net deferred tax assets and $1.2
million for tangible assets, net of liabilities. We also accrued approxi-
mately $1.7 million in acquisition related expenses, which included
legal, tax and accounting fees, duplicative site and fixed asset expenses,
and severance costs, of which $0.9 million remains as an accrual as of
March 31, 2003.
The amounts allocated to developed technology and acquired product
rights will be amortized to cost of revenues over their useful lives of one
to four years. The amount allocated to other intangibles will be amor-
tized to operating expenses over its useful life of four years.
During the December 2002 quarter, we revised estimates related to
certain liabilities, and as a result, we decreased the purchase price and
goodwill by $37,000.
Mountain Wave On July 2, 2002, we acquired Mountain Wave, Inc., a
provider of automated attack sensing and warning software and serv-
ices for real-time enterprise security operations management, for $20.0
million. Under the transaction, we recorded approximately $2.0 million
for developed technology, $17.3 million for goodwill, $1.7 million for net
deferred tax assets and $0.4 million for liabilities, net of tangible assets.
We also accrued approximately $0.7 million in acquisition related
expenses, which included legal and accounting fees, as well as duplica-
tive site and severance costs. As of March 31, 2003, all costs have been
paid with the exception of an immaterial amount for outplacement
services and duplicative site costs.
The amount allocated to developed technology will be amortized to cost
of revenues over its useful life of five years.