Symantec 2003 Annual Report Download - page 67

Symantec 2003 65
outplacement services. In addition, we provided approximately $1.2 mil-
lion for costs of severance and related benefits for six members of our
senior management due to a realignment of certain responsibilities.
These severance, related benefits, and outplacement costs were paid
by the end of the September 2001 quarter.
During the December 2000 quarter, we reduced a portion of our opera-
tions in Toronto, thereby terminating 10 employees, and recorded
approximately $400,000 for the costs of severance, related benefits
and abandonment of certain equipment. In addition, approximately
$900,000 was provided for costs of severance and related benefits for
four members of our senior management due to a realignment of certain
responsibilities. These severance and related benefits were paid by the
end of the March 2001 quarter.
The exit plans associated with each of the reductions in workforce and
facility closures above specifically identified all the significant actions,
including:
•the names of individuals who would not continue employ-
ment with us;
•the termination dates and severance packages for each
terminating employee;
•the date we would vacate the facilities which were under
existing operating leases; and
•the specific excess equipment, furniture, fixtures and
leasehold improvements to be disposed.
Employee severance and outplacement was primarily comprised of sev-
erance packages for employees who were terminated as a result of the
restructurings. As part of each restructuring, we specifically identified
those individuals who would not continue employment with us. The
severance periods ranged from one to six months. The total cost of the
severance packages was accrued and included in a restructuring charge
after the identified employees had their severance packages communi-
cated to them. Additionally, we accrued estimated costs associated with
outplacement services to be provided to terminating employees, as
these costs have no future economic benefit to us. The remaining accrual
as of March 31, 2003 was primarily for outstanding severance, benefits
and outplacement costs and will be paid by the first quarter of fiscal 2004.
Excess facilities and equipment included 1) remaining lease payments
associated with building leases subsequent to their abandonment dates,
2) net of estimated sublease income, and/or 3) estimated lease termina-
tion costs. The cash outlays for these leases are to be made over the
remaining term of each lease, unless a lease termination payment is
required. In addition, we wrote off the carrying value of site-specific
equipment, furniture, fixtures and leasehold improvements, which
would no longer be utilized. The accrual as of March 31, 2003 relates
primarily to the remaining lease payments, net of estimated sublease
income, which will be paid over the remaining lease term subsequent to
the abandonment of each facility through fiscal year 2007.
Note 14. Income Taxes
The components of the provision for income taxes were as follows:
Year Ended March 31,
(IN THOUSANDS) 2003 2002 2001
Current:
Federal $58,732 $24,508 $ 55,019
State 15,045 9,543 14,741
International 45,809 26,045 30,411
119,586 60,096 100,171
Deferred:
Federal (620) 13,802 (16,677)
State (2,465) 1,512 (5,386)
International (1,308) (1,761) (1,264)
(4,393) 13,553 (23,327)
$115,193 $73,649 $ 76,844
The difference between our effective income tax rate and the federal
statutory income tax rate as a percentage of income before income
taxes was as follows:
Year Ended March 31,
2003 2002 2001
Federal statutory rate 35.0% 35.0% 35.0%
State taxes, net of federal benefit 2.1 15.8 4.3
Acquired in-process research and
development charges with no
tax benefit ––5.5
Non-deductible goodwill amortization –148.5 16.8
Foreign earnings taxed at less than
the federal rate (5.7) (30.8) (11.5)
Valuation allowance for potential
non-deductible loss on investment ––3.1
Research tax credits –(2.2) (0.7)
Benefit of exempt foreign sales
income –(2.0) (0.2)
Other, net 0.3 (2.4) 2.3
31.7% 161.9% 54.6%