Symantec 2009 Annual Report Download - page 160

taxable temporary differences from our deferred tax liabilities. We have concluded that this positive evidence
outweighs the negative evidence and, thus, that the deferred tax assets as of April 3, 2009 of $702 million, after
application of the valuation allowances, are realizable on a “more likely than not” basis.
As of April 3, 2009, no provision has been made for federal or state income taxes on $1.5 billion of cumulative
unremitted earnings of certain of our foreign subsidiaries, since we plan to indefinitely reinvest these earnings. As of
April 3, 2009, the unrecognized deferred tax liability for these earnings was $447 million.
The Company adopted the provisions of FASB FIN 48, effective March 31, 2007. The cumulative effect of
adopting FIN 48 was a decrease in tax reserves of $16 million, resulting in a decrease to Veritas goodwill of
$10 million, an increase of $5 million to the March 31, 2007 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.
The aggregate changes in the balance of gross unrecognized tax benefits since adoption were as follows
(in thousands):
Beginning balance as of March 31, 2007 (date of adoption) . . ..................... $456,183
Settlements and effective settlements with tax authorities and related remeasurements . . . (6,680)
Lapse of statute of limitations ............................................. (6,030)
Increases in balances related to tax positions taken during prior years ............... 40,390
Decreases in balances related to tax positions taken during prior years ............... (6,570)
Increases in balances related to tax positions taken during current year .............. 111,197
Balance as of March 28, 2008 ............................................ $588,490
Settlements and effective settlements with tax authorities and related remeasurements . . . (1,764)
Lapse of statute of limitations ............................................. (8,901)
Increases in balances related to tax positions taken during prior years ............... 31,138
Decreases in balances related to tax positions taken during prior years ............... (19,369)
Increases in balances related to tax positions taken during current year .............. 44,379
Balance as of April 3, 2009 .............................................. $633,973
Of the $45 million of changes in gross unrecognized tax benefits during the year disclosed above, approx-
imately $22 million was provided through purchase accounting in connection with acquisitions made in fiscal 2009.
This gross liability is reduced by offsetting tax benefits associated with the correlative effects of potential transfer
pricing adjustments, interest deductions, and state income taxes, as well as payments made to date.
Of the total unrecognized tax benefits at April 3, 2009, $632 million, if recognized, would favorably affect the
Company’s effective tax rate, while $2 million would affect the cumulative translation adjustments. However, one
or more of these unrecognized tax benefits could be subject to a valuation allowance if and when recognized in a
future period, which could impact the timing of any related effective tax rate benefit.
Our policy to include interest and penalties related to gross unrecognized tax benefits within our provision for
income taxes did not change upon the adoption of FIN 48. At April 3, 2009, before any tax benefits, we had
$136 million of accrued interest and accrued penalties on unrecognized tax benefits. Interest included in our
provision for income taxes was a benefit of approximately $2 million for the year ended April 3, 2009. If the accrued
interest and penalties do not ultimately become payable, amounts accrued will be reduced in the period that such
determination is made, and reflected as a reduction of the overall income tax provision.
We file income tax returns in the U.S. on a federal basis and in many U.S. state and foreign jurisdictions. Our
two most significant tax jurisdictions are the U.S. and Ireland. Our tax filings remain subject to examination by
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)