Symantec 2008 Annual Report Download - page 129

Non-operating Income and Expense
2008 2007 2006
Fiscal
($ in thousands)
Interest income .................................... $ 76,896 $122,043 $108,404
Interest expense .................................... (29,480) (27,233) (17,996)
Settlements of litigation, net ........................... 58,500 — —
Other income (expense), net ........................... 4,327 17,070 (1,650)
Total .......................................... $110,243 $111,880 $ 88,758
Percentage of total net revenues ........................ 2% 2% 2%
Period over period change ............................ $ (1,637) $ 23,122
(1)% 26%
The decrease in Interest income in fiscal 2008 as compared to fiscal 2007 was due to lower average interest
rates and a lower average Cash and cash equivalents and Short-term investment balances. The increase in Interest
income in fiscal 2007 as compared to fiscal 2006 was due primarily to a higher average cash and cash equivalents
and investment balances and higher average interest rates realized on those balances.
Interest expense in fiscal 2008 and fiscal 2007 was due primarily to the interest and amortization of issuance
costs related to our 0.75% and 1.00% Convertible Senior Notes issued in June 2006. Fiscal 2007 also includes
interest and accretion related to the 0.25% Convertible Subordinated Notes that we assumed in connection with our
acquisition of Veritas. The 0.25% Veritas Convertible Subordinated Notes were paid in full during August 2006.
Interest expense in fiscal 2006 was due primarily to the Veritas 0.25% Convertible Subordinated Notes.
In fiscal 2008 we recorded a net gain from Settlements of litigation.
In fiscal 2007, Other income (expense), net includes a gain of $20 million on the sale of our buildings in
Milpitas, California, and Maidenhead, United Kingdom.
Provision for Income Taxes
2008 2007 2006
Fiscal
($ in thousands)
Tax provision on earnings............................. $248,673 $227,242 $227,068
Effective tax rate on earnings .......................... 35% 36% 63%
Tax provision on repatriation .......................... $ — $ — $(21,197)
Total tax provision .................................. $248,673 $227,242 $205,871
Total effective tax rate ............................... 35% 36% 57%
Our effective tax rate on Income before income taxes was approximately 35%, 36%, and 57% in fiscal 2008,
2007, and 2006, respectively. The effective tax rate for fiscal 2008 reflects the impact of non-deductible stock-based
compensation offset by U.S. tax benefits from domestic manufacturing deductions. The effective tax rate for fiscal
2007 reflects the impact of non-deductible stock-based compensation offset by foreign earnings taxed at a lower
rate than the U.S. tax rate. The effective tax rate for fiscal 2006 reflects the impact of the IPR&D charges and other
acquisition-related charges that are nondeductible for tax reporting purposes, partially offset by foreign earnings
taxed at a lower rate than the U.S. tax rate, and the effect of the true-up of taxes on repatriated earnings.
We believe realization of substantially all of our deferred tax assets as of March 28, 2008 of $694 million, after
application of the valuation allowance, is more likely than not based on the future reversal of temporary tax
differences. Realization of approximately $55 million of our deferred tax assets as of March 28, 2008 is dependent
upon future taxable earnings exclusive of reversing temporary differences in certain foreign jurisdictions. Levels of
future taxable income are subject to the various risks and uncertainties discussed in Item 1A, Risk Factors, set forth
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