Symantec 2006 Annual Report Download - page 97

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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements Ì (Continued)
(a) During the June 2005 quarter, we reclassified our operating segments as described in Note 15, tested our
goodwill for impairment under the new segment structure, and determined that there was no impairment
of goodwill.
(b) During fiscal 2006, we adjusted the goodwill related to several prior acquisitions for individually
insignificant amounts based on final income tax returns and continued post-closing review.
Goodwill is tested for impairment on an annual basis, or earlier if indicators of impairment exist. We
completed our annual goodwill impairment test required by SFAS No. 142 during the March 2006 quarter
and determined that there was no impairment of goodwill.
Acquired product rights, net
Acquired product rights subject to amortization are as follows:
March 31, 2006
Gross Carrying Accumulated Net Carrying
Amount Amortization Amount
(In thousands)
Developed technology ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,597,567 $(420,887) $1,176,680
Patents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78,713 (18,416) 60,297
Backlog and other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 60,661 (59,127) 1,534
$1,736,941 $(498,430) $1,238,511
March 31, 2005
Gross Carrying Accumulated Net Carrying
Amount Amortization Amount
(In thousands)
Developed technology ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $243,958 $(167,061) $ 76,897
Patents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 53,559 (11,030) 42,529
Backlog and other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,761 (6,568) 8,193
$312,278 $(184,659) $127,619
In addition to the business combinations discussed in Note 3, we acquired Acquired product rights in the
following transactions:
On October 7, 2005, in connection with the acquisition of Sygate, we obtained certain acquired product
rights related to patent licenses held by Sygate valued at approximately $18 million. The Acquired product
rights are being amortized to Cost of revenues in the Consolidated Statements of Income over their estimated
life of twelve years.
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 by us in and prior to the June 2005 quarter. The
remaining $8 million was recorded as Acquired product rights 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 were related to benefits received by us in and prior to the June 2003 quarter. The remaining
$49 million was recorded as Acquired product rights 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.
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