Symantec 2006 Annual Report Download - page 55

Patent settlement
On May 12, 2005, we resolved patent litigation matters with Altiris, Inc. by entering into a cross-licensing
agreement that resolved all legal claims between the companies. As part of the settlement, we paid Altiris
$10 million for use of the disputed technology. Under the transaction, we expensed $2 million of patent
settlement costs in the June 2005 quarter that was related to benefits received in and prior to the June 2005
quarter. The remaining $8 million was recorded as Acquired product rights in the Consolidated Balance
Sheets and is being amortized to Cost of revenues in the Consolidated Statements of Income over the
remaining life of the primary patent, which expires in May 2017.
On August 6, 2003, we purchased a security technology patent as part of a settlement in Hilgraeve, Inc. v.
Symantec Corporation. As part of the settlement, we also received licenses to the remaining patents in
Hilgraeve's portfolio. The total cost of purchasing the patent and licensing additional patents was $63 million,
which was paid in cash in August 2003. Under the transaction, we recorded $14 million of patent settlement
costs in the June 2003 quarter that was related to benefits received by us in and prior to the June 2003 quarter.
The remaining $49 million was recorded as Acquired product rights in the Consolidated Balance Sheets and is
being amortized to Cost of revenues in the Consolidated Statements of Income over the remaining life of the
primary patent, which expires in June 2011.
Non-operating Income and Expense
Year Ended March 31,
2006 2005 2004
($ in thousands)
Interest and other income, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $106,754 $ 51,185 $ 40,254
Interest expenseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (17,996) (12,323) (21,164)
Income, net of expense, from sale of technologies and
product lines ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 9,547
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 88,758 $ 38,862 $ 28,637
Percentage of total net revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2% 2% 2%
Period over period increase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 49,896 $ 10,225
* 36%
* Percentage not meaningful
The increase in Interest and other income, net in fiscal 2006 as compared to fiscal 2005 was due primarily
to a higher average investment balance, due to the cash acquired through the Veritas acquisition, and higher
average interest rates. The increase in Interest and other income, net in fiscal 2005 as compared to fiscal 2004
was due to a higher average investment balance and higher average interest rates.
Interest expense in fiscal 2006 was due primarily to the interest and accretion related to the 0.25% con-
vertible subordinated notes that were assumed in connection with the acquisition of Veritas. In August 2003,
Veritas issued $520 million of 0.25% convertible subordinated notes due August 1, 2013. For further
discussion of the 0.25% convertible subordinated notes, see Note 6 of the Notes to Consolidated Financial
Statements.
Interest expense in fiscal 2005 and 2004 was primarily related to our $600 million 3% convertible
subordinated notes issued in October 2001. In November 2004, substantially all of the outstanding convertible
subordinated notes were converted into 70.3 million shares of our common stock and the remainder was
redeemed for cash.
Income, net of expense, from sale of technologies and product lines during fiscal 2004 primarily related to
royalty payments received in connection with the licensing of substantially all of the ACT! product line
technology. In December 2003, Interact Commerce Corporation purchased this technology from us.
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