Symantec 2003 Annual Report Download - page 59

Symantec 2003 57
Goodwill is tested for impairment on an annual basis. We performed
the initial goodwill impairment test required by SFAS No. 142 during
the June 2002 quarter and determined that there was no impairment of
goodwill recorded upon implementation of SFAS No. 142. We also com-
pleted 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. In connection with the
September 2002 quarter acquisitions, we recorded approximately
$308.7 million of goodwill. Subsequently during the December 2002
quarter, we recorded goodwill adjustments of $1.2 million due to revised
estimates related to certain liabilities.
Acquired product rights and other intangible assets subject to amortiza-
tion were as follows:
March 31,
(IN THOUSANDS) 2003 2002
Acquired product rights, net:
Acquired product rights $165,642 $125,589
Less: accumulated amortization (92,517) (60,370)
$73,125 $65,219
Other intangible assets, net:
Other intangible assets 12,300 9,700
Less: accumulated amortization (7,496) (4,709)
$4,804 $4,991
During fiscal 2003, we recorded approximately $42.7 million of product
rights, offset by a write-off of $2.7 million of developed technology
related to the Web access management products that were divested
during fiscal 2002. During fiscal 2002, we recorded approximately $1.1
million of non-acquisition acquired product rights, which was offset by a
write-off of $0.8 million of net workforce-in place related to the divesti-
ture of our Web access management product line.
During fiscal 2003, amortization expense for acquired product rights
was approximately $32.1 million, of which $30.4 million and $1.8 mil-
lion was recorded in cost of revenues and income, net of expense, from
sale of technologies and product lines, respectively. During fiscal 2002,
amortization expense for acquired product rights was approximately
$32.2, of which $31.1 million and $1.1 million was recorded in cost of
revenues and income, net of expense, from sale of technologies and
product lines, respectively. During fiscal 2001, amortization expense
for acquired product rights was approximately $17.3 million and was
recorded in cost of revenues.
Amortization expense for other intangible assets (customer base, trade-
names and marketing-related assets) was $2.8 million, $2.1 million and
$1.4 million during fiscal 2003, 2002 and 2001, respectively.
The estimated annual amortization expense for acquired product rights
is $32.7 million, $23.7 million, $10.0 million, $5.6 million and $1.1 mil-
lion for fiscal year 2004, 2005, 2006, 2007 and 2008, respectively,
based upon existing acquired product rights. The estimated annual
amortization expense for other intangible assets is $2.6 million, $1.5
million, $0.5 million and $0.2 million for fiscal year 2004, 2005, 2006
and 2007, respectively, based upon existing other intangible assets.
Note 5. Investments
Cash Equivalents, Short-term Investments and Trading Investments
All cash equivalents and short-term investments were classified as avail-
able-for-sale securities, except for our trading securities. We maintain a
trading asset portfolio in connection with our executive deferred com-
pensation arrangements that consists of marketable equity securities,
Enterprise Enterprise Consumer
Security Administration Products Services Total
Balance, as of April 1, 2002 $505,960 $8,377 $9,332 $ 2,199 $525,868
Goodwill acquired during fiscal year 2003:
Riptech –––117,770 117,770
Recourse 109,265 – – – 109,265
SecurityFocus 64,318 – – – 64,318
Mountain Wave 17,320 – – – 17,320
Lindler & Pelc –––5959
Goodwill adjustments (217) – – (934) (1,151)
Balance, as of March 31, 2003 $696,646 $8,377 $9,332 $119,094 $833,449
For fiscal year 2003 and 2002, net income per share (diluted), as
adjusted is calculated using the if-converted method. Under this
method, the numerator excludes the interest expense from the 3%
convertible subordinated notes, net of income tax, of $14.4 million
and $6.2 million for fiscal year 2003 and 2002, respectively.
Goodwill by operating segment was as follows (in thousands):