Symantec 2002 Annual Report Download - page 88

SYMANTEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Divestiture of ACT! Product Line
On December 31, 1999, we licensed substantially all of the ACT! product line technology, on an exclusive
basis, to Interact Commerce Corporation, previously SalesLogix, for a period of four years. In addition, we
sold the inventory and Ñxed assets related to the ACT! product line to Interact. In consideration for the license
and assets, Interact transferred to us 623,247 shares of its unregistered common stock. These shares were
valued at approximately $20.0 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 $20.0 million from
the shares received and wrote oÅ or transferred to Interact $400,000 of inventory and Ñxed assets attributed to
the ACT! product line. In addition, we accrued approximately $1.3 million for transaction related costs. After
recognizing these above amounts, we recorded a pre-tax gain of approximately $18.3 million during Ñscal
2000, which was recorded in income, net of expense, from sale of technologies and product lines on the
Consolidated Statements of Operations.
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. As a result of the merger, we received approximately $7.5 million upon the
surrender of the Interact shares in July 2001.
In addition to the shares received from Interact, Interact is required to pay us quarterly royalty payments
for four years. Interact will pay these royalties based on future revenues set forth in the License, up to an
aggregate maximum of $57.0 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. We
recorded approximately $15.5 million, $19.3 million and $5.0 million of royalty payments during Ñscal 2002,
2001 and 2000 in income, net of expense, from sale of technologies and product lines on the Consolidated
Statements of Operations. 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.
Other Royalties and Transition Fees
In accordance with individual transition agreements, PassGo, WebGain and Interact paid us royalties
and/or fees for invoicing, collecting receivables, shipping and other operational and support activities. We
recorded approximately $694,000, $801,000 and $894,000 for these royalties and/or fees during Ñscal 2002,
2001 and 2000, respectively, in income, net of expense, from sale of technologies and product lines on the
Consolidated Statements of Operations.
Divestiture of Electronic Forms
During September 1996, we sold our electronic forms software product line and related tangible assets to
JetForm Corporation, payable in installments through the June 2000 quarter. We received installment
payments from JetForm of approximately $397,000 and $14.7 million during Ñscal 2001 and 2000,
respectively. Due to the uncertainty regarding the ultimate collectibility of these installments, we recognized
the related amounts as payments were due and collectibility was assured from JetForm. Installment payments
from JetForm were recorded in income, net of expense, from sale of technologies and product lines on the
Consolidated Statements of Operations.
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