Symantec 2002 Annual Report Download - page 92

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SYMANTEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The future Ñscal year minimum operating lease commitments were as follows as of March 31, 2002:
(In thousands)
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 26,901
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,185
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,502
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,314
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,021
ThereafterÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8,147
Operating lease commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 86,070
Sublease income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (22,818)
Net operating lease commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 63,252
Synthetic Leases
In addition, we have two real estate leasing arrangements that we have classiÑed as operating leases. The
related future minimum commitments for these leases were included in the above table.
One of the lease arrangements is for two existing oÇce buildings in Cupertino, California. Lease
payments for these facilities are based on the three-month LIBOR in eÅect at the beginning of each Ñscal
quarter plus a speciÑed margin. We have the right to acquire the related properties at any time during the
seven-year lease period ending February 1, 2006. If, at the end of the lease term we do not renew the lease,
purchase the properties or arrange for a third party to purchase the properties, we may be obligated to the
lessor for all or some portion of an amount up to the guaranteed residual amount of approximately
$66.0 million, representing approximately 84% of the lessor's purchase price of the property.
On March 30, 2001, we entered into a master lease agreement for land and the construction of two oÇce
buildings, one in Newport News, Virginia, eÅective June 6, 2001, and another in SpringÑeld, Oregon, eÅective
April 6, 2001. Our lease payments will vary based on one-, three- or six-month LIBOR plus a speciÑed
margin. We have the right to acquire the related properties at any time during the six and one-half year lease
period ending September 28, 2007. We moved into the Oregon facility immediately after the end of the
December 2001 quarter and into the Virginia facility in April 2002. If, at the end of the lease term we do not
renew the lease, purchase the properties or arrange for a third party to purchase the properties, we may be
obligated to the lessor for all or some portion of an amount up to the guaranteed residual amount representing
approximately 85% of the lessor's ultimate purchase price of the properties, up to a maximum amount of
approximately $55.1 million as of March 31, 2002.
As security for each of these arrangements, we are required to maintain a cash collateral balance, which
was approximately $124.3 million as of March 31, 2002. We are required to invest the cash collateral in U.S.
Treasury securities or certiÑcates of deposit with speciÑed lenders and maturities not to exceed two to three
years. In accordance with the lease terms, these funds are not available to meet operating cash requirements.
As of March 31, 2002, the investments related to the California lease totaled approximately $77.4 million and
the investments related to the Oregon and Virginia leases totaled $46.9 million. These amounts were classiÑed
as non-current restricted investments within the consolidated Ñnancial statements.
In addition, we are obligated to maintain certain Ñnancial covenants including a minimum cash balance,
tangible net worth and quarterly earnings before income tax, depreciation and amortization, or EBITDA, and
maximum debt and senior debt to EBITDA ratios. Future acquisitions, Ñnancing activities or operating losses
may cause us to be in violation of these Ñnancial covenants. In the event of default, we may be required to
70