Symantec 2006 Annual Report Download - page 43

acquisition of Veritas, we recorded an accrual related to this matter of $30 million which is included in Other
accrued expenses in our Consolidated Balance Sheets as of March 31, 2006. In addition, we are involved in
other pending legal matters, for which our accrual for legal contingencies represented insignificant amounts
related to external legal fees. However, even if we are successful in our pending legal matters, estimated costs
for external legal fees could be more than anticipated. In addition, if we are unsuccessful, we could be forced
to pay significant damages and licensing fees for which we have not accrued any amounts for loss
contingencies, or to modify our business practices. Any such results could materially harm our business and
could result in a material adverse impact on our financial position, results of operations, or cash flows.
RESULTS OF OPERATIONS
Total Net Revenues
Year Ended March 31,
2006 2005 2004
($ in thousands)
Net revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,143,392 $2,582,849 $1,870,129
Period over period increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,560,543 712,720
60% 38%
Net revenues increased in fiscal 2006 as compared to fiscal 2005 due primarily to sales of products
acquired through the Veritas acquisition, which contributed $1.4 billion of net revenues in fiscal 2006. In
addition, revenues from our enterprise security products increased $122 million and revenues from our
consumer products increased $73 million in fiscal 2006 compared to fiscal 2005. The increased revenues from
these products were due primarily to continuing growth in demand for our enterprise virus protection and anti-
spam solutions as well as our consumer security protection products, as described further in the segment
discussions that follow. Beginning in the December 2005 quarter, as a result of increases in future subscription
pricing for our 2006 consumer products that include content updates, revenue for these products is recognized
on a ratable basis over the term of the subscription.
Net revenues increased in fiscal 2005 as compared to fiscal 2004 due primarily to increases of
$443 million and $195 million in revenue from our consumer and enterprise security products, respectively.
The increased revenue from these products was due primarily to continuing growth in demand for our
consumer security protection products and our enterprise virus protection products. We believe that a
significant portion of the growth in demand was attributable to the continued increase in vulnerabilities,
Internet attacks, and malicious code activity coupled with a growing level of awareness of these threats around
the world.
Content, subscriptions, and maintenance revenues
Year Ended March 31,
2006 2005 2004
($ in thousands)
Content, subscriptions, and maintenance revenuesÏÏÏÏÏÏ $2,873,211 $1,945,310 $1,191,257
Percentage of total net revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 69% 75% 64%
Period over period increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 927,901 $ 754,053
48% 63%
Content, subscriptions, and maintenance revenue includes arrangements for software maintenance and
technical support for our products, content and subscription services primarily related to our security products,
revenue from arrangements where VSOE of the fair value of undelivered elements does not exist, and
managed security services. These arrangements are generally offered to our customers over a specified period
of time and we recognize the related revenue ratably over the maintenance, subscription, or service period.
Beginning with the release of our 2006 consumer products that include content updates in the December 2005
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