Symantec 1996 Annual Report Download - page 38

Note 7. Income Taxes
The components of the provision (benefit) for income taxe s
were as follows:
The difference between the Company’s effective income tax
rate and the federal statutory income tax rate as a percentage of
income (loss) before income taxes was as follows:
The principal components of deferred tax assets were as follows:
Approximately $19.7 million of the valuation allowance for
d e f e r r ed tax assets is attributable to stock option deductions,
the benefit of which will be credited to equity when re a l i ze d .
Approximately $18.1 million of the valuation allowance relates
to losses and temporary differences associated with Delrina and
the remaining $7.9 million of the valuation allowance re p re-
sents net operating loss and tax credit carry f o rw a rds of other
acquired companies that are limited by separate return limita-
tions and under the “change of ow n e r s h i p” rules of In t e r n a l
Re venue Code Section 382. T he change in the va l u a t i o n
allowance for the years ended March 31, 1996, 1995 and 1994
we re net increases of $14.8 million, $1.6 million and $27.4
million, respectively.
Pretax income (loss) from international operations was approx-
imately $(4.1) million, $25.9 million and $18.8 million for the
years ended Ma rc h 3 1 , 1996, 1995 and 1994, re s p e c t i ve l y.
At Ma rc h 3 1 , 1996, the Company had tax credit carry f o r-
wards of $7.9 million that expire in fiscal 1997 through 2011
and net operating loss carry f o rw a rds of $50.8 million that
expire in fiscal 1999 through 2011.
Note 8. Employee Benefits
401(k) Plan Symantec maintains a salary deferral 401(k) plan
for all of its domestic employees. The plan allows employees to
contribute up to 15% of their pretax salary up to the maximum
dollar limitation prescribed by the Internal Re venue Code.
Symantec matches 50% of employees’ contributions up to 6%
of the employe e s’ eligible compensation. Company contribu-
tions under the plan were $1.5 million, $1.2 million and $1.1
million for the years ended Ma rc h 3 1 , 1996, 1995 and 1994,
re s p e c t i ve l y.
Stock Purchase Plan In October 1989, the Company estab-
lished the 1989 Employee Stock Purchase Plan and has reserved
2.0 million shares of common stock for issuance under the
plan, including an increase of 500,000 shares approved by
Symantec stockholders in fiscal 1996. Subject to certain limita-
tions, Symantec employees may purchase, through payro l l
deductions of 2 to 10% of compensation, shares of common
stock at a price per share that is the lesser of 85% of the fair
market value as of the beginning of the offering period or the
end of the purchase period. As of Ma rc h 3 1 , 1996, approx i-
mately 1.4 million shares had been issued under the plan.
Stock Option Plans As of March 31, 1996, the Company has
reserved 14.8 million shares of its common stock for issuance as
incentive and nonqualified stock options to employees, officers,
d i r ectors, consultants and independent contractors, including
an increase of 1.0 million shares approved in fiscal 1996 by
Symantec’s stockholders for issuance under the 1988 Employees
Stock Option Plan. Options under the Company’s option plans
may be granted at prices not less than 100% of fair mark e t
value on the date of grant, have a maximum term of ten years
and generally vest over a four-year period. In addition, the
Company has re s e rved an additional 1.2 million shares of its
common stock for issuance under acquired company option
plans and acquired company warrants.
During March 1996, the Board of Directors authorized the
(In thousands) Year ended March ,
  
Current:
Federal (,)   (,)
State   
International , , ,
(,), (,)
Deferred:
Federal (,), ,
State —, ()
International —(,) ()
(,), ,
(,) ,  (,)
Year ended March ,
  
Federal statutory rate (.)% .% (.)%
State taxes,
net of federal benefit . . (.)
Non-deductible acquisition
expenses . . .
Non-deductible
acquired in-process R&D —. —
Benefit of pre-acquisition losses
of Central Point —(.) —
Impact of international
operations —(.) (.)
Losses for which no benefit
is currently recognizable . — —
Valuation allowance ——.
Other, net . . .
(.)% .% (.)%
(In thousands) March ,
 
Tax credit carryforwards  ,  ,
Net operating loss carryforwards , ,
Inventory valuation accounts , ,
Other reserves and accruals not
currently tax deductible , ,
Accrued compensation and benefits , ,
Deferred revenue , ,
Sales incentive programs , 
Allowance for doubtful accounts , 
Acquired software , ,
Accrued acquisition, restructuring
and other expenses , ,
Other  ()
, ,
Valuation allowance (,)(,)
 ,  ,