Symantec 2013 Annual Report Download - page 123

We have outsourced a substantial portion of our worldwide consumer support functions to third party
service providers. If these companies experience financial difficulties, do not maintain sufficiently skilled
workers and resources to satisfy our contracts, or otherwise fail to perform at a sufficient level under these
contracts, the level of support services to our customers may be significantly disrupted, which could materially
harm our relationships with these customers.
Accounting charges may cause fluctuations in our quarterly financial results.
Our financial results have been in the past, and may continue to be in the future, materially affected by non-
cash and other accounting charges, including:
• Amortization of intangible assets
• Impairment of goodwill and other long-lived assets
• Stock-based compensation expense
• Restructuring charges
• Loss on sale of a business and similar write-downs of assets held for sale
For example, during fiscal 2009, we recorded a non-cash goodwill impairment charge of $7.4 billion,
resulting in a significant net loss for the year. Goodwill is evaluated annually for impairment in the fourth quarter
of each fiscal year or more frequently if events and circumstances warrant as we determined they did in the third
quarter of fiscal 2009, and our evaluation depends to a large degree on estimates and assumptions made by our
management. Our assessment of any impairment of goodwill is based on a comparison of the fair value of each
of our reporting units to the carrying value of that reporting unit. Our determination of fair value relies on
management’s assumptions of our future revenues, operating costs, and other relevant factors. If management’s
estimates of future operating results change, or if there are changes to other key assumptions such as the discount
rate applied to future operating results, the estimate of the fair value of our reporting units could change
significantly, which could result in a goodwill impairment charge. In addition, we evaluate our other long-lived
assets, including intangible assets whenever events or circumstances occur which indicate that the value of these
assets might be impaired. If we determine that impairment has occurred, we could incur an impairment charge
against the value of these assets.
The foregoing types of accounting charges may also be incurred in connection with or as a result of other
business acquisitions. The price of our common stock could decline to the extent that our financial results are
materially affected by the foregoing accounting charges.
We sell products to the U.S. government under contracts that include special compliance obligations and
subject us to audits and reviews by various agencies of the U.S. government. Any failure to meet these
obligations, or an adverse outcome in an audit or investigation, could result in civil damages and/or
penalties being assessed against us by the government.
We have sold products through our U.S. General Services Administration Multiple Award Schedule
Contract No. GS-35F-0240T effective January 24, 2007 (the “GSA Schedule contract”). Our GSA Schedule
contract contains provisions that require us to provide customers purchasing through that contract with negotiated
favorable pricing as compared to certain non-federal customers, and requires us to monitor aspects of our
commercial sales practices to ensure compliance with that pricing obligation. In the ordinary course of business,
sales under our GSA Schedule contract may be subject to audit and/or investigation by the U.S. government.
Noncompliance with the provisions of the contract identified as a result of such reviews (as well as
noncompliance identified on our own) could subject us to damages and other penalties, which would adversely
affect our operating results and financial condition.
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