Symantec 2010 Annual Report Download - page 175

Of the $67 million total valuation allowance provided against our deferred tax assets, approximately
$55 million is attributable to acquisition-related assets. The valuation allowance decreased by $35 million in
fiscal 2010, of which $34 million was attributable to the release of Irish deferred tax assets related to our Veritas
2000-2001 court case decision, current year utilization, and a favorable change in our ability to use deferred tax
assets on our tax returns; and $2 million was attributable to acquisition-related assets, offset by a $1 million increase
attributable to capital losses.
As of April 2, 2010, we have U.S. federal net operating losses attributable to various acquired companies of
approximately $137 million, which, if not used, will expire between fiscal 2011 and 2029. These net operating loss
carryforwards are subject to an annual limitation under Internal Revenue Code § 382, but are expected to be fully
realized. Furthermore, we have U.S. state net operating loss and credit carryforwards attributable to various
acquired companies of approximately $233 million and $14 million, respectively, which will expire in various fiscal
years. In addition, we have foreign net operating loss carryforwards attributable to various acquired foreign
companies of approximately $374 million net of valuation allowances, which, under current applicable foreign tax
law, can be carried forward indefinitely.
As a result of the impairment of goodwill in fiscal year 2009, we have cumulative pre-tax book losses, as
measured by the current and prior two years. We considered the negative evidence of this cumulative pre-tax book
loss position on our ability to continue to recognize deferred tax assets that are dependent upon future taxable
income for realization. We considered the following as positive evidence: the vast majority of the goodwill
impairment is not deductible for tax purposes and thus will not result in tax losses; we have a strong, consistent
taxpaying history; we have substantial U.S. federal income tax carryback potential; and we have substantial
amounts of scheduled future reversals of 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 2, 2010 of $519 million, after application of the valuation allowances, are realizable on a “more likely than
not” basis.
As of April 2, 2010, no provision has been made for federal or state income taxes on $1.8 billion of cumulative
unremitted earnings of certain of our foreign subsidiaries since we plan to indefinitely reinvest these earnings. As of
April 2, 2010, the unrecognized deferred tax liability for these earnings was $524 million.
The Company adopted the provisions of new authoritative guidance on income taxes, effective March 31,
2007. The cumulative effect of adopting this new guidance 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.
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SYMANTEC CORPORATION
Notes to Consolidated Financial Statements — (Continued)