Symantec 2003 Annual Report Download - page 60

58 Symantec 2003
which had a fair value of approximately $1.9 million and $1.1 million as
of March 31, 2003 and 2002, respectively. Any activity related to these
trading assets has a corresponding effect on the carrying value of the
related deferred compensation liability. These trading assets have not
been separately disclosed on the balance sheet due to their immaterial
amounts and were instead included in the following tabular disclosures.
The estimated fair value of the cash equivalents and short-term invest-
ments consisted of the following:
March 31,
(IN THOUSANDS) 2003 2002
Corporate securities $688,805 $478,632
Taxable auction rate securities 258,250 226,906
Money market funds 151,307 201,107
Asset backed securities 176,860 168,427
Corporate bonds 63,448 104,015
U.S. government and government-
sponsored securities 218,082 65,089
Bank securities and deposits 37,219 7,845
Total available-for-sale and trading
investments 1,593,971 1,252,021
Less: amounts classified as cash
equivalents (182,919) (256,207)
$1,411,052 $995,814
The estimated fair value of cash equivalents and short-term investments
by contractual maturity as of March 31, 2003 was as follows:
(IN THOUSANDS)
Due in one year or less $1,451,785
Due after one year and through three years 142,186
$1,593,971
Fair values of cash equivalents, short-term investments and trading
assets approximate cost primarily due to the short-term maturities of
the investments and the absence of changes in security credit ratings.
As of March 31, 2003 and 2002, we held no publicly traded equity secu-
rities. As of March 31, 2001, equity securities of approximately $7.5 mil-
lion consisted of 623,247 shares of Interact. 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 mil-
lion upon the surrender of the Interact shares in July 2001.
Unrealized gains and losses on available-for-sale securities were
reported as a component of stockholders’ equity and were approxi-
mately $1.7 million and $0.7 million as of March 31, 2003 and 2002,
respectively.
Unregistered Equity Investments As of March 31, 2003 and 2002, we
held equity investments with a carrying value of approximately $10.5
million in six privately held companies and $8.4 million in three pri-
vately held companies, respectively. These investments were recorded at
cost as we do not have significant influence over the investee and are
classified as other long-term assets on the Consolidated Balance Sheets.
During the September 2002 and March 2001 quarters, we recognized a
decline in value of approximately $0.8 million and $12.6 million, respec-
tively, determined to be other than temporary on certain privately held
investments. Also during the March 2001 quarter, we recorded a gain of
approximately $0.9 million on another investment, as a result of this
privately held company being acquired by another entity. This invest-
ment was acquired as a result of our acquisition of AXENT. The other
than temporary decline in value and gain on investments were recorded
as other expense, net on the Consolidated Statements of Operations.
Derivative Financial Instruments During the periods covered by the
consolidated financial statements, we did not use any derivative instru-
ment for trading purposes. We utilize some natural hedging to mitigate
our exposures and we manage certain residual balance sheet exposures
through the use of one-month forward foreign exchange contracts. We
enter into forward foreign exchange contracts with financial institutions
primarily to minimize currency exchange risks associated with certain
balance sheet positions. The fair value of forward foreign exchange con-
tracts approximates cost due to the short maturity periods. As of March
31, 2003, the notional amount of our forward foreign exchange con-
tracts was approximately $67.3 million, all of which mature in 35 days
or less. We do not hedge our foreign currency translation risk.
Note 6. Convertible Subordinated Notes
On October 24, 2001, we completed a private offering of $600.0 million
of 3% convertible subordinated notes due November 1, 2006, the net
proceeds of which were approximately $584.6 million. The notes are
convertible into shares of our common stock by the holders at any time
before maturity at a conversion price of $34.14 per share, subject to
certain adjustments. During fiscal 2003, an immaterial principal amount
of our notes were converted into shares of our common stock. We may
redeem the remaining notes on or after November 5, 2004, at a redemp-
tion price of 100.75% of stated principal during the period November 5,
2004 through October 31, 2005 and 100% thereafter. Interest is paid
semi-annually and we commenced making these payments on May 1,
2002. Debt issuance costs of approximately $15.8 million, related to the
notes, is amortized on a straight-line basis through November 1, 2006.
We have reserved approximately 17.6 million shares of common stock
for issuance upon conversion of the notes.
Note 7. Commitments
We lease certain of our facilities and equipment under operating leases
that expire at various dates through 2018. We currently sublease some
space under various operating leases that will expire at various dates
through 2013.