Symantec 2000 Annual Report Download - page 42

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activities. As of March 31, 2000, we billed them for a total amount
of approximately $4.0million. Approximately $3.1million of these
fees were reimbursement 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.
Divestiture of Network Administration In March 1997, we sold
our network administration technologies and related tangible
assets to the Hewlett-Packard Company (“HP”), resulting in the
receipt of approximately $1million of income, net of expenses,
from sale of technologies and product lines and a $2million
research and development reimbursement in fiscal 1997. Addi-
tionally, a two-year quarterly royalty payment stream, not to
exceed a present value of $27 million as of March 1997, com-
menced in fiscal 1998, which was solely contingent on future sales
of certain HP products. Royalty payments from HP ended during
the December 1998 quarter. Due to the uncertainty regarding the
amounts upon which these royalties would have been determined,
we recognized these amounts as they were received from HP. We
recognized income, net of expenses, from sale of technologies
and product lines of approximately $7million and $22 million from
HP during fiscal 1999 and 1998, respectively.
In connection with the sale to HP during fiscal 1997, we wrote-off
approximately $7million of unamortized software development
costs and less than $1million of unamortized purchased product
rights, as well as incurred approximately $2million of legal,
accounting and other costs associated with the transaction.
Divestiture of Electronic Forms During September 1996, we
sold our electronic forms software product line and related tan-
gible assets to JetForm Corporation (“JetForm”) for approximately
$100 million, payable over four years in quarterly installments
through the June 2000 quarter. During February 1998, the pur-
chase agreement was amended to accelerate certain quarterly
payments during the remaining payment term in exchange for a
reduction in the total sale price to approximately $93 million. Dur-
ing June 1998, the purchase agreement was amended once again
to modify certain payments, however, the total sales price
remained at $93 million. JetForm has the option to tender pay-
ment in either cash or in registered JetForm common stock,
within a contractually defined quantity threshold. Due to the
uncertainty regarding the ultimate collectibility of these install-
ments, we are recognizing the related amounts as payments are
due and collectibility is assured from JetForm. We recognized
income, net of expenses, from sale of technologies and product
lines of approximately $15 million, $34 million and $24 million from
JetForm during fiscal 2000, 1999 and 1998, respectively.
The components of income, net of expenses, from sale of tech-
nologies 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
NOTE 4. PURCHASED PRODUCT RIGHTS
AND CAPITALIZED SOFTWARE
During fiscal 2000, we recorded approximately $11 million of
acquired product rights, primarily related to our acquisitions of
URLabs, L-3and 20/20. During fiscal 1999, we recorded approxi-
mately $35 million of acquired product rights, primarily related
to our acquisitions of Binary, Intel’s anti-virus business and
Quarterdeck.
Amortization of purchased product rights and capitalized software
expense totaled approximately $10 million, $6million and $1mil-
lion in fiscal 2000, 1999 and 1998, respectively, and is recorded in
cost of revenues. The amortization will occur over the next three
to five years.
NOTE 5. CASH EQUIVALENTS, INVESTMENTS
AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Available-For-Sale Investments and Trading Investments All
cash equivalents, short-term investments, long-term investments
and restricted investments have been classified as available-for-
sale securities, except for our trading securities. During fiscal
2000, we maintained a trading asset portfolio to generate returns
that offset changes in certain liabilities related to deferred com-
pensation arrangements. The trading assets consist of marketable
equity securities and, have a fair value of approximately $0.8mil-
lion and $0.5million as of March 31, 2000 and 1999, respectively.
These trading assets have been included in the available-for-sale
tabular disclosure, due to their immaterial amounts.