Symantec 2001 Annual Report Download - page 44

Because the royalties from Interact are not guaranteed and the quar-
terly amounts to be received were not determinable at December 31,
1999, we have been and will continue to recognize the royalties as
earned. We recognized income, net of expense, from sale of technolo-
gies and product lines of approximately $19.3 million and $5 million
from Interact during fiscal 2001 and 2000, respectively. At the end of
the four-year period, Interact has the exclusive option, for a period of
30 days, to purchase the licensed technology from us for $60 million
less all royalties paid to us to date. As a result of the License, we recog-
nized approximately $20.0 million from the shares received and wrote
off or transferred to Interact $0.4 million of inventory and fixed assets
attributed to the ACT! product line. In addition, we accrued approxi-
mately $1.3 million for transaction related costs. After recognizing
these above amounts, we recorded a pre-tax gain of approximately
$18.3 million in fiscal 2000, which was recorded in income, net of
expenses, from sale of technologies and product lines on the
Consolidated Statements of Income.
During the March 2001 quarter, Interact entered into a plan to merge
with The Sage Group plc and we recorded a loss of approximately
$12.5 million as other expense related to the other than temporary
decline in value of our investment in Interact.
Transition Fees In accordance with individual transition agreements,
WebGain and Interact paid us fees for invoicing, collecting receivables,
shipping and other operational and support activities through fiscal
2001, until they had the ability to take over these activities. We
recorded approximately $0.8 million and $0.9 million for these fees
during fiscal 2001 and 2000, respectively, in income, net of expense,
from sale of technologies and product lines.We do not anticipate any
future transition fees from WebGain or Interact.
Divestiture of Network Administration and Electronic Forms In
March 1997, we sold our network administration technologies and
related tangible assets to the Hewlett-Packard Company (“HP”).
We received royalty payments from HP of approximately $7 million
and $22 million during fiscal 1999 and 1998, respectively. 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.
During September 1996, we sold our electronic forms software
product line and related tangible assets to JetForm Corporation
(“JetForm”), payable in installments through the June 2000 quarter.
We received installment payments from JetForm of approximately
$0.4 million, $15 million and $34 million during fiscal 2001, 2000 and
1999, respectively. Due to the uncertainty regarding the ultimate col-
lectibility of these installments, we recognized the related amounts as
payments were due and collectibility was assured from JetForm.
Royalty payments from HP and installment payments from JetForm
were recorded in 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 were as follows:
Year Ended March 31
(In thousands) 2001 2000 1999
Royalties from Interact $ 19,250 $ 5,000 $ —
Gain on divestiture of:
Visual Café product line —68,523 —
ACT! product line —18,285 —
Transition fees 801 894 —
Payments from
HP and JetForm 397 14,656 41,155
Income, net of expense,
from sale of technologies
and product lines $ 20,448 $ 107,358 $ 41,155
Note 4. Acquired Product Rights
During fiscal 2001, we recorded approximately $86 million of acquired
product rights, related to our acquisition of AXENT. During fiscal
2000, we recorded approximately $11 million of acquired product
rights, primarily related to our acquisitions of URLabs, L-3 and 20/20.
During fiscal 1999, we recorded approximately $35 million of acquired
product rights, primarily related to our acquisitions of Binary Research,
Intel’s anti-virus business and Quarterdeck.
Amortization of acquired product rights totaled approximately $17
million, $10 million and $6 million in fiscal 2001, 2000 and 1999,
respectively, and is recorded in cost of revenues. The amortization
will occur over the next five years.
Note 5. Cash Equivalents and Investments
and Fair Value of Financial Instruments
Available-For-Sale Investments and Trading Investments All cash
equivalents, short-term investments, and restricted investments have
been classified as available-for-sale securities, except for our trading
securities. We maintain a trading asset portfolio for our deferred com-
pensation arrangements that consists of marketable equity securities
and have a fair value of approximately $1.2 million and $0.8 million as
of March 31, 2001 and 2000, respectively. Any activity related to these
trading assets has a corresponding effect on the related liability. These
trading assets have been included in the available-for-sale tabular
disclosure due to their immaterial amounts.
The estimated fair value of the cash equivalents and short-term
investments consisted of the following:
March 31
(In thousands) 2001 2000
Money market funds $ 66,597 $ 8,929
Corporate securities 218,010 324,834
Bank securities and deposits 146,988 4,790
Taxable auction rate securities 5,006 16,027
US government and government-sponsored
securities 15,262 —
Equity securities 7,479 16,867
Total available-for-sale and
trading investments $ 459,342 $ 371,447
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