Symantec 2000 Annual Report Download - page 28

Interest Income, Interest Expense and Other Income (Expense)
Interest income was relatively flat at approximately $13 million in
fiscal 2000, 1999 and 1998.
Interest expense was approximately $2million in fiscal 1999 and
$1million in fiscal 1998. The interest expense in fiscal 1999 and
1998 was principally related to our convertible subordinated
debentures, which were converted into our common stock in Feb-
ruary 1999 and for interest on Quarterdeck’s subordinated notes
that were paid off in March 1999.
Other income (expense) is primarily comprised of foreign currency
exchange gains and losses from fluctuations in currency
exchange rates. In fiscal 2000 there was approximately $1million
in income due to gains on unhedged foreign currency exposures.
Foreign currency exchange gains and losses accounted for
approximately $2million in income in fiscal 1999, which primarily
resulted from the write-off of the cumulative translation adjust-
ment related to the payoff of an intercompany loan.
Income, Net of Expense, from Sale of Technologies and Product
Lines The components of income, net of expense, from sale of
technologies and product lines are as follows:
Year Ended March 31,
(In thousands) 2000 1999 1998
Gain on divestiture of:
Visual Café product line $ 68,523 $ — $ —
ACT! product line 18,285 — —
Royalties from Interact 5,000 — —
Transition fees 894 — —
Payments from HP and JetForm 14,656 41,155 45,421
Income, net of expense, from sale of
technologies and product lines $ 107,358 $ 41,155 $ 45,421
Gain on Divestiture of Visual Café On December 31, 1999, we sold
the principal assets and liabilities of the Visual Café product line
to WebGain, Inc. (“WebGain”). The assets primarily consisted of
fixed assets and intangible assets. The liabilities related to certain
revenue deferrals. In exchange for the assets and liabilities sold
to WebGain, we received $75.0million in a lump-sum cash pay-
ment on December 31, 1999. We wrote-off or transferred
approximately $4.7million of capitalized software, fixed assets
and inventory related to the Visual Café product line. In addition,
we accrued approximately $1.4million in transaction costs and
$0.4million in retention packages for the affected employees. As a
result, we recorded a pre-tax gain of approximately $68.5million
on the divestiture.
Gain on Divestiture of ACT! and Royalties from Interact On Decem-
ber 31, 1999, we licensed, on an exclusive basis, to Interact
Commerce Corporation, previously SalesLogix Corporation
(“Interact”), substantially all of the ACT! product line technology for
a period of four years. In addition, we sold the inventory and fixed
assets related to the ACT! product line to Interact. In considera-
tion for the license and assets, Interact transferred to us 623,247
shares of its unregistered common stock. These shares were val-
ued at approximately $20 million as of December 6, 1999, the date
the license was signed and the date the number of shares was
determined. As a result of the license, we recognized approximately
$20 million of income from the shares received and wrote-off or
transferred to Interact approximately $0.4million of inventory and
fixed assets attributed to the ACT! product line. In addition, we
accrued approximately $1.3million for transaction related costs in-
curred at December 31,1999. After recognizing the above amounts,
we recorded a pre-tax gain of approximately $18.3million.
In addition to the shares received from Interact, we will receive
quarterly royalty payments for four years. Interact will pay these
royalties based on future revenues, up to an aggregate maximum
of $57 million. Because the royalties are not guaranteed and the
quarterly amounts to be received are not determinable until
earned, we are recognizing these royalties as payments are due.
The first payment of $5million, which was due and payable on
March 31, 2000, was recorded as income, net of expense, from sale
of technologies and product lines in the March 2000 quarter. The
payment was subsequently received in the June 2000 quarter.
Transition Fees In accordance with individual transition agree-
ments, WebGain and Interact will pay us a fee for invoicing,
collecting receivables, shipping and other operational and support
activities, until such time as they have the ability to take over these
activities. As of March 31, 2000, we billed them for a total amount
of $4million. Approximately $3.1million of these fees were reim-
bursement of incremental costs incurred during the transition
period to provide these services, which we would otherwise not
have incurred, and as such, we have offset our operating
expenses by this amount and have recorded the remaining
amount of $0.9million in income, net of expenses, from sale of
technologies and product lines.
Payments from HP and JetForm Payments from HP and JetForm
are associated with our sale of certain software products, tech-
nologies and tangible assets to JetForm Corporation (“JetForm”)
and the Hewlett-Packard Company (“HP”) during fiscal 1997. The
payments decreased from approximately $41 million in fiscal 1999
to $15 million in fiscal 2000. These payments also decreased $4
million from approximately $45 million in fiscal 1998 to $41 million
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