Symantec 2000 Annual Report Download - page 43

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The estimated fair value of the cash equivalents, short-term invest-
ments and long-term investments consisted of the following:
March 31,
Cash equivalents, short
and long-term investments (in thousands) 2000 1999
Money market funds $ 8,929 $ 19, 891
Corporate securities 324,834 53,839
Bank securities and deposits 4,790 60,322
Taxable auction rate securities 16,027 10,010
US government and
government-sponsored securities — 11 ,932
Equity securities 16,867 —
Total available-for-sale
and trading investments $371,447 $155 ,994
The estimated fair value of available-for-sale and trading invest-
ments by contractual maturity as of March 31, 2000 is as follows:
Cash equivalents, short
and long-term investments (in thousands)
Due in one year or less $354,580
No maturity (equity securities) 16,867
$371,447
Except for equity securities, fair values of cash equivalents, short-
term investments, long-term investments and trading assets
approximate cost primarily due to the short-term maturities of the
investments and the absence of changes in security credit ratings.
Equity securities consist of 623,247 unregistered shares of Interact
Commerce Corporation, a publicly traded company, with an unre-
alized loss of approximately $3million as of March 31, 2000. Since
April 2000, many high-technology stocks experienced a significant
decrease in value, including these shares. As of June 16, 2000, the
value of these shares was approximately $7.6million, reflecting an
additional unrealized loss of $9.3million subsequent to March 31,
2000. These shares are not registered, and therefore, are subject
to restrictions upon sale. However, we do have the ability, at our
option, to register and sell these shares within twelve months fol-
lowing March 31, 2000.
As of March 31, 2000 and 1999, the estimated fair value of our
restricted investments were $82 million and $71 million, respec-
tively, and consisted of US government and government–
sponsored securities. The restricted marketable securities have a
contractual maturity of less than one year.
Our available-for-sale restricted investments relate to certain col-
lateral requirements for lease agreements associated with our
corporate facilities in Cupertino, California. Fair values of the
restricted investments approximate cost due to the short-term
maturities of the investments and the absence of changes in
security credit ratings.
Unrealized losses on all available-for-sale securities are reported
as a component of stockholders’ equity, net of tax effect, of
approximately $2.4million and $0.3million as of March 31, 2000
and 1999, respectively.
During the period covered by the consolidated financial state-
ments, we did not use any derivative instrument for trading
purposes. We utilize some natural hedging to mitigate our for-
eign currency exposures and we hedge certain residual exposures
through the use of one-month foreign exchange forward con-
tracts. We enter into foreign exchange forward contracts with
financial institutions primarily to protect against currency
exchange risks associated with certain balance sheet positions.
The fair value of foreign exchange forward contracts is based on
quoted market prices. At March 31, 2000, outstanding forward
exchange contracts had a notional amount of approximately $163
million, all of which mature in 35 days or less. The net liability of
forward contracts was a notional amount of approximately $43
million at March 31, 2000. The fair value of foreign currency
exchange forward contracts approximates cost due to the short
maturity periods. We do not hedge our translation risk.
NOTE 6. CONVERTIBLE SUBORDINATED DEBENTURES
On April 2, 1993, we issued convertible subordinated debentures
totaling $25 million. The debentures bore interest at 7.75%payable
semiannually and were convertible into Symantec common stock
at $12 per share at the option of the investor. The debentures were
due in three equal annual installments beginning in 1999 and were
redeemable at the option of the investors in the event of a change
in control of Symantec or the sale of all or substantially all of its
assets. At our option, we could redeem the notes at any time with
30 to 60 days notice; however, we would have incurred a prepay-
ment penalty for early redemption. The holders were entitled to
certain registration rights relating to the shares of common stock
resulting from the conversion of the debentures. In fiscal 1996 and
1998, convertible subordinated debentures totaling approximately
$11 million were converted into Symantec common stock. During
February 1999, the entire remaining $14 million principal amount
of our convertible subordinated debentures was converted into
approximately 1.2million shares of Symantec common stock. The
conversion to shares of common stock was exempt from registra-
tion under the Securities Act of 1933.