Symantec 2006 Annual Report Download - page 89

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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements
Note 1. Consolidated Balance Sheet Information
March 31,
2006 2005
(In thousands)
Trade accounts receivable, net:
Receivables ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 679,731 $ 289,993
Less: allowance for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8,794) (4,668)
$ 670,937 $ 285,325
Property and equipment, net:
Computer hardware and software ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 654,946 $ 419,127
Office furniture and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 149,591 82,310
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 434,548 156,472
Leasehold improvements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 190,385 100,881
1,429,470 758,790
Less: accumulated depreciation and amortizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (612,072) (433,265)
817,398 325,525
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 128,819 57,164
$ 946,217 $ 382,689
Note 2. Sales and Marketing Expense Information
Technical Support Costs
Technical support costs relate to the cost of providing free support and are accrued at the time of product
sale. Technical support costs included in Sales and marketing in the Consolidated Statements of Income for
fiscal 2006, 2005, and 2004 were $24 million, $21 million, and $20 million, respectively.
Advertising Costs
Advertising costs are charged to operations as incurred. Advertising costs included in Sales and marketing
in the Consolidated Statements of Income for fiscal 2006, 2005, and 2004 were $253 million, $172 million,
and $128 million, respectively.
Note 3. Acquisitions
Fiscal 2006 acquisitions
Acquisition of Veritas Software Corporation
On July 2, 2005, we completed our acquisition of Veritas, a leading provider of software and services to
enable storage and backup, whereby Veritas became a wholly owned subsidiary of Symantec in a transaction
accounted for using the purchase method of accounting. The total purchase price of $13.2 billion includes
Symantec common stock valued at $12.5 billion, assumed stock options and restricted stock units, or RSUs,
with a fair value of $699 million, and acquisition-related expenses of $39 million. The combined company
offers customers a broad portfolio of leading software and solutions across all tiers of the infrastructure. In
addition, we believe that bringing together the market leading capabilities of Symantec and Veritas improves
our ability to continuously optimize performance and help companies recover from disruptions when they
occur.
As a result of the acquisition, we issued approximately 483 million shares of Symantec common stock,
net of treasury stock retained, based on an exchange ratio of 1.1242 shares of Symantec common stock for
each outstanding share of Veritas common stock as of July 2, 2005. The common stock issued had a fair value
83