Symantec 2007 Annual Report Download - page 109

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Prior to the adoption of SFAS No. 123R, we provided the pro forma information regarding net income and net
income per share required by SFAS No. 123. This information was required to be determined as if we had accounted
for our employee stock options, including shares issued under our ESPP, granted subsequent to March 31, 1995
under the fair value method of SFAS No. 123. We generally did not recognize stock-based compensation expense in
our Consolidated Statements of Income for option grants to our employees for the periods prior to our adoption of
SFAS No. 123R because the exercise price of options granted was equal to the fair market value of the underlying
common stock on the date of grant. Prior to April 1, 2006, stock-based compensation expense resulted primarily
from stock options and RSUs assumed in acquisitions and restricted stock granted to executives. The following
table illustrates the effect on net income and net income per share as if we had applied the fair value recognition
provisions of SFAS No. 123 to stock-based employee compensation using the Black-Scholes option-pricing model
for the fiscal years ended March 31, 2006, and March 31, 2005:
2006 2005
Year Ended March 31,
(In thousands, except
per share amounts)
Net income, as reported..................................... $156,852 $ 536,159
Add: Amortization of deferred stock-based compensation included in
reported net income, net of tax.............................. 26,996 3,087
Less: Stock-based employee compensation expense excluded from
reported net income, net of tax.............................. (239,071)
(1)
(116,957)
Pro forma net income (loss).................................. $ (55,223) $ 422,289
Net income (loss) per share — basic
As reported .............................................. $ 0.16 $ 0.81
Pro forma ............................................... $ (0.06) $ 0.64
Net income (loss) per share — diluted
As reported .............................................. $ 0.15 $ 0.74
Pro forma ............................................... $ (0.06) $ 0.59
(1)
Includes a charge of $18 million resulting from the inclusion of unamortized expense for ESPP offering periods
that were cancelled as a result of a plan amendment to eliminate the two-year offering period effective July 1,
2005.
Prior to the adoption of SFAS No. 123R, we presented Deferred stock-based compensation as a separate
component of Stockholders’ Equity. In accordance with the provisions of SFAS No. 123R, on April 1, 2006, we
reversed the balance in Deferred stock-based compensation to Capital in excess of par value in the Consolidated
Balance Sheet.
103
SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)