Symantec 2001 Annual Report Download - page 50

Pro forma information regarding net income and earnings per share
is required by SFAS No. 123. This information is required to be
determined as if we had accounted for our employee stock options,
including shares issued under the Employee Stock Purchase Plans,
collectively called “options,”granted subsequent to March 31, 1995
under the fair value method of that statement. The fair value of
options granted in fiscal 2001, 2000, and 1999 reported below has been
estimated at the date of grant using the Black-Scholes option-pricing
model assuming no expected dividends and the following weighted
average assumptions:
Employee Stock Options
2001 2000 1999
Expected life (years) 5.01 4.99 5.27
Expected volatility 0.71 0.65 0.66
Risk free interest rate 4.50 % 6.50 % 5.10 %
Employee Stock Purchase Plans
2001 2000 1999
Expected life (years) 0.50 0.50 0.50
Expected volatility 0.84 0.68 0.79
Risk free interest rate 6.00 % 5.20 % 4.80 %
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restric-
tions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions, including the
expected stock price volatility. Because our options have characteristics
significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the
fair value estimate, in our opinion, the existing models do not neces-
sarily provide a reliable single measure of the fair value of our options.
The weighted average estimated fair values of employee stock options
granted during fiscal 2001, 2000 and 1999 were $25.40, $27.24 and
$12.56 per share, respectively. The weighted average estimated fair
value of employee stock purchase rights granted under the Employee
Stock Purchase Plans during fiscal 2001, 2000 and 1999 were $21.05,
$20.05 and $10.47, respectively.
For purposes of pro forma disclosure, the estimated fair value of the
options is amortized to expense over the options’vesting period, for
employee stock options and the six-month purchase period, for stock
purchases under the Employee Stock Purchase Plans. Options assumed
as the result of our acquisition of AXENT were not included in the
estimated fair value. Shares purchased through the AXENT Purchase
Plan subsequent to the closing date of the AXENT acquisition were
included in the estimated fair value and was included in the proforma
information as follows:
Year Ended March 31
(In thousands, except per share data) 2001 2000 1999
Net income – basic – pro forma $ 7,256 $ 137,829 $ 25,100
Net income – diluted – pro forma 7,256 137,829 25,727
Net income per share –
basic – pro forma 0.12 2.49 0.47
Net income per share –
diluted – pro forma 0.11 2.31 0.45
The effects on pro forma disclosures of applying SFAS No. 123 are not
likely to be representative of the effects on pro forma disclosures of
future years.
Note 11. Common Stock Repurchases
On January 16, 2001, the Board of Directors replaced the March 22,
1999 stock repurchase program with a new authorization to repur-
chase up to $700 million, not to exceed 15 million shares, worth of
Symantec common stock with no expiration date. During fiscal 2001,
we repurchased 5.0 million shares at prices ranging from $46.07 to
$51.16, for an aggregate amount of approximately $244 million.
On March 22, 1999, the Board of Directors authorized the repurchase
of up to $75 million of Symantec common stock with no expiration
date. During fiscal 2000, we repurchased 1.0 million shares at prices
ranging from $17.90 to $19.87, for an aggregate amount of approxi-
mately $19 million.
On June 9, 1998, the Board of Directors authorized the repurchase
of up to 5% of our outstanding common stock before December 31,
1998. We completed the repurchase as of October 30, 1998, repurchas-
ing a total of approximately 2.9 million shares at prices ranging from
$13.10 to $27.21, for an aggregate amount of approximately $56 million.
Note 12. Restructuring and Other Expenses
Restructuring and other expenses consisted of the following:
Year Ended March 31
(In thousands) 2001 2000 1999
Employee severance and
outplacement $ 3,524 $ 8,065 $ 3,800
Excess facilities and equipment 140 953 1,305
Total restructuring and
other expenses $ 3,664 $ 9,018 $ 5,105
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