Symantec 2004 Annual Report Download - page 38

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«36»SYMANTEC CORPORATION
The increase in interest income in fiscal 2004 as compared to fiscal
2003 was due to higher average invested cash balances, partially
offset by lower average interest rates. The increase in interest
income in fiscal 2003 as compared to fiscal 2002 was due to higher
average invested cash balances.
Interest expense during fiscal 2004, 2003 and 2002 was primarily
related to the issuance of our $600 million 3% convertible subor-
dinated notes in October 2001.
Other income (expense), net during fiscal 2004, 2003 and 2002
was comprised primarily of immaterial amounts of rental income,
offset by banking fees.
2004 Annual Report
INTEREST AND OTHER INCOME (EXPENSE), NET
Year Ended March 31, % Change % Change
Fiscal 2003 Fiscal 2002
($ in thousands) 2004 2003 2002 to 2004 to 2003
Interest income $ 38,257 $ 37,704 $ 31,717 1% 19%
Percentage of total net revenues 2% 3% 3%
Interest expense $(21,164) $ (21,166) $ (9,169) * 131%
Percentage of total net revenues 1% 2% 1%
Other income (expense), net $ 1,997 $ (1,297) $ (627) * 107%
Percentage of total net revenues ***
* Percentage not meaningful
PROVISION FOR INCOME TAXES
Year Ended March 31, % Change % Change
Fiscal 2003 Fiscal 2002
($ in thousands) 2004 2003 2002 to 2004 to 2003
Provision $171,603 $115,193 $73,649 49% 56%
Percentage of total net revenues 9% 8% 7%
Effective tax rate 32% 32% 162%
INCOME, NET OF EXPENSE, FROM SALE OF TECHNOLOGIES AND PRODUCT LINES
Year Ended March 31, % Change % Change
Fiscal 2003 Fiscal 2002
($ in thousands) 2004 2003 2002 to 2004 to 2003
Income $9,547 $6,878 $15,536 39% (56)%
Percentage of total net revenues 1% *1%
* Percentage not meaningful
Income, net of expense, from sale of technologies and product
lines primarily related to royalty payments received in connection
with the licensing of substantially all of the ACT! product line
technology to Interact Commerce Corporation for a period of
four years through December 2003. During fiscal 2003, this royalty
income was offset by the write-off of $3 million of developed
technology related to the Web Access Management products due
to impairment. The December 2003 quarter payments represent
the final royalty and buy-out payments related to the divestiture
of our ACT! product line as Interact exercised its option to purchase
the licensed technology from us for $60 million less all royalties
paid to us to date.
Our effective tax rate on income before taxes was approximately
32%, 32% and 162% during fiscal 2004, 2003 and 2002 respectively.
The higher effective tax rate in fiscal 2002 reflects the non-deductibility
of acquired in-process research and development and substantially
all of the goodwill amortization.
Realization of our net-deferred tax asset at March 31, 2004 is
dependent primarily upon future United States taxable income
and our implementation of tax planning strategies. We believe
it is more likely than not that the net deferred tax assets will be