Symantec 2009 Annual Report Download - page 107

prescribing a minimum recognition threshold that a tax position is required to satisfy before being recognized in the
financial statements. FIN 48 also provides guidance on derecognition, measurement, classification, interest and
penalties, accounting in interim periods, disclosure and transition.
The cumulative effect of adopting FIN 48 was a decrease in tax reserves of $16 million, resulting in a decrease
in Veritas goodwill of $10 million, an increase of $5 million to Accumulated earnings balance, and a $1 million
increase in Additional paid-in capital. Upon adoption, the gross liability for unrecognized tax benefits as of
March 31, 2007 was $456 million, exclusive of interest and penalties.
Loss from joint venture
Fiscal
2009 $ %
Fiscal
2008 $ %
Fiscal
2007
2009 vs. 2008 2008 vs. 2007
($ in thousands)
Loss from joint venture ............ $53,062 $53,062 100% $— $— 0% $—
Percentage of total net revenues ...... 1% 0% 0%
On February 5, 2008, Symantec formed Huawei-Symantec, Inc. (“joint venture”) with a subsidiary of Huawei
Technologies Co., Ltd. (“Huawei”). The joint venture is domiciled in Hong Kong with principal operations in
Chengdu, China. The joint venture develops, manufactures, markets and supports security and storage appliances to
global telecommunications carriers and enterprise customers.
As described further in Note 7 of the Notes to Consolidated Financial Statements in this annual report, we
account for our investment in the joint venture under the equity method of accounting. Under this method, we record
our proportionate share of the joint venture’s net income or loss based on the quarterly financial statements of the
joint venture. We record our proportionate share of net income or loss one quarter in arrears. For the fiscal 2009, we
recorded a loss of approximately $53 million related to our share of the joint venture’s net loss incurred for the
period from February 5, 2008 (its date of inception) to December 31, 2008.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Cash
We have historically relied primarily on cash flows from operations, borrowings under a credit facility,
issuances of convertible notes and equity securities for our liquidity needs. Key sources of cash include earnings
from operations and existing cash, cash equivalents, short-term investments, and our revolving credit facility.
In fiscal 2007, we entered into a five-year $1 billion senior unsecured revolving credit facility that expires in
July 2011. During fiscal 2008, we borrowed $200 million under the credit facility. In order to be able to draw on the
credit facility, we must maintain certain covenants, including a specified ratio of debt to earnings (before interest,
taxes, depreciation, and amortization and impairments) as well as various other non-financial covenants. As of
April 3, 2009, we were in compliance with all required covenants, and there was no outstanding balance on the
credit facility.
As of April 3, 2009, we had cash and cash equivalents of $1.8 billion and short-term investments of
$199 million resulting in a net liquidity position, defined as unused availability of the credit facility, cash and cash
equivalents and short-term investments, of approximately $3.0 billion.
We believe that our existing cash balances, cash that we generate over time from operations, and our borrowing
capacity will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at
least the next 12 months.
Uses of Cash
Our principal cash requirements include working capital, capital expenditures, payments of principal and
interest on our debt and payments of taxes. In addition, we regularly evaluate our ability to repurchase stock, pay
debts and acquire other businesses.
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