SYMANTEC CORPORATION (Exact Name of the Registrant As Speciñed in Its Charter) Delaware 77-0181864 (State Or Other Jurisdiction of (I.R.S
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ¥ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended April 1, 2005 OR n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to . Commission File Number 0-17781 SYMANTEC CORPORATION (Exact name of the registrant as speciÑed in its charter) Delaware 77-0181864 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) IdentiÑcation No.) 20330 Stevens Creek Blvd., 95014-2132 Cupertino, California (zip code) (Address of principal executive oÇces) Registrant's telephone number, including area code: (408) 517-8000 Securities registered pursuant to Section 12(b) of the Act: None None (Title of each class) (Name of each exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.01 per share, and Related Stock Purchase Rights (Title of class) Indicate by check mark whether the registrant (1) has Ñled all reports required to be Ñled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to Ñle such reports), and (2) has been subject to such Ñling requirements for the past 90 days. Yes ¥ No n Indicate by check mark if disclosure of delinquent Ñlers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in deÑnitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. n Indicate by check mark whether the registrant is an accelerated Ñler (as deÑned in Rule 12b-2 of the Exchange Act). Yes ¥ No n Aggregate market value of the voting stock held by non-aÇliates of the registrant, based upon the closing sale price of Symantec common stock on October 1, 2004 as reported on the Nasdaq National Market: $18,094,697,000 Number of shares outstanding of the registrant's common stock as of May 27, 2005: 711,727,753 DOCUMENTS INCORPORATED BY REFERENCE Portions of the deÑnitive Proxy Statement, to be delivered to stockholders in connection with our Annual Meeting of Stockholders for 2005, are incorporated by reference into Part III. SYMANTEC CORPORATION FORM 10-K For the Fiscal Year Ended April 1, 2005 Table of Contents Page PART I Item 1. BusinessÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 Item 2. Properties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11 Item 3. Legal Proceedings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12 Item 4. Submission of Matters to a Vote of Security HoldersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12 Item 6. Selected Financial Data ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A. Quantitative and Qualitative Disclosures about Market Risk ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 46 Item 8. Financial Statements and Supplementary Data ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 Item 9A. Controls and Procedures ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 48 Item 9B. Other Information ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49 PART III Item 10. Directors and Executive OÇcers of the Registrant ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49 Item 11. Executive Compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49 Item 12. Security Ownership of Certain BeneÑcial Owners and ManagementÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49 Item 13. Certain Relationships and Related Transactions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 49 Item 14. Principal Accountant Fees and Services ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 PART IV Item 15. Exhibits, Financial Statement Schedules ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 SignaturesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 96 ""Symantec,'' ""we,'' ""us,'' and ""our'' refer to Symantec Corporation and all of its subsidiaries. This document contains references to trademarks and trade names of other companies. FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS The discussion following below and throughout this report contains forward-looking statements, which are subject to safe harbors under the Securities Act of 1933 and the Securities Exchange Act of 1934. The words ""expects,'' ""plans,'' ""anticipates,'' ""believes,'' ""estimates,'' ""predicts,'' ""projects,'' and similar expres- sions identify forward-looking statements. In addition, statements that refer to projections of our future Ñnancial performance, anticipated growth and trends in our businesses, the anticipated impacts of acquisitions, and other characterizations of future events or circumstances are forward-looking statements. These state- ments are only predictions, based on our current expectations about future events. We cannot guarantee future results, performance or achievements or that predictions or current expectations will be accurate. We do not undertake any obligation to update these forward-looking statements to reÖect events occurring or circum- stances arising after the date of this report. These forward-looking statements involve risks and uncertainties, and our actual results, performance or achievements could diÅer materially from those expressed or implied by the forward-looking statements on the basis of several factors, including those that we discuss under Business Risk Factors beginning on page 34. We encourage you to read that section carefully. PART I Item 1: Business Introduction Symantec is the global leader in information security providing a broad range of software, appliances, and services designed to help individuals, small and mid-sized businesses, and large enterprises secure and manage their information technology, or IT, infrastructure. Symantec's Norton brand of products is the worldwide leader in consumer security and problem-solving solutions. Founded in 1982, we are incorporated in Delaware and we have oÇces in 38 countries worldwide. We Ñle registration statements, periodic and current reports, proxy statements, and other materials with the Securities and Exchange Commission, or SEC. You may read and copy any materials we Ñle with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that Ñle electronically with the SEC, including our Ñlings. Our Internet address is www.symantec.com. We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports Ñled pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, through our Investor Relations web site, located at www.symantec.com/invest/index.html, as soon as reasonably practicable after they are electronically Ñled with or furnished to the SEC. The contents of our website are not incorporated into, or otherwise to be regarded as a part of this Annual Report on Form 10-K. Business Overview We currently view our business in Ñve operating segments: Consumer Products, Enterprise Security, Enterprise Administration, Services, and Other. For Ñnancial information related to our operating segments, see Note 15 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. Consumer Products Our Consumer Products segment focuses on delivering our Internet security and problem-solving products to individual users, home oÇces, and small businesses. Symantec's Norton brand of consumer security products is a market leader in desktop protection, with integrated products that work seamlessly to protect customers' computers from virus outbreaks or malicious hacker attacks. Most of the products that we are currently marketing or developing feature LiveUpdateTM. This feature enables users to easily download security updates including virus deÑnitions, Ñrewall rules, Uniform Resource Locator , or URL, databases, and uninstall scripts. Retail customers typically get a 12-month subscription to these security updates with the purchase of any consumer product. Our consumer products run primarily on Windows» and Macintosh» operating systems. Our Consumer Products segment represented 51%, 47%, and 41% of net revenues during Ñscal 2005, 2004, and 2003, respectively. Product oÅerings in the Consumer Products segment include Norton AntiVirusTM, Norton Internet SecurityTM, and Norton SystemWorksTM. Enterprise Security Our Enterprise Security segment provides security solutions for all tiers of a network: at the server tier behind the gateway and at the client tier, including desktop personal computers, or PCs, laptops, and handhelds. Our comprehensive software and appliance solutions include virus protection and content Ñltering, Ñrewall and virtual private networking, or VPN, intrusion