Symantec 2010 Annual Report Download - page 97

For example, during fiscal 2009, we recorded a non-cash goodwill impairment charge of $7.4 billion, resulting
in a significant net loss for the year. Goodwill is evaluated annually for impairment in the fourth quarter of each
fiscal year or more frequently if events and circumstances warrant as we determined they did in the third quarter of
fiscal 2009, and our evaluation depends to a large degree on estimates and assumptions made by our management.
Our assessment of any impairment of goodwill is based on a comparison of the fair value of each of our reporting
units to the carrying value of that reporting unit. Our determination of fair value relies on management’s
assumptions of our future revenues, operating costs, and other relevant factors. If management’s estimates of
future operating results change, or if there are changes to other key assumptions such as the discount rate applied to
future operating results, the estimate of the fair value of our reporting units could change significantly, which could
result in a goodwill impairment charge. In addition, we evaluate our other long-lived assets, including intangible
assets whenever events or circumstances occur which indicate that the value of these assets might be impaired. If we
determine that impairment has occurred, we could incur an impairment charge against the value of these assets.
The foregoing types of accounting charges may also be incurred in connection with or as a result of other
business acquisitions. The price of our common stock could decline to the extent that our financial results are
materially affected by the foregoing accounting charges.
Our effective tax rate may increase, which could increase our income tax expense and reduce (increase)
our net income (loss).
Our effective tax rate could be adversely affected by several factors, many of which are outside of our control,
including:
• Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which
we operate that have differing statutory tax rates
• Changing tax laws, regulations, and interpretations in multiple jurisdictions in which we operate as well as
the requirements of certain tax rulings
• The tax effects of purchase accounting for acquisitions and restructuring charges that may cause fluctuations
between reporting periods
• Tax assessments, or any related tax interest or penalties, could significantly affect our income tax expense for
the period in which the settlements take place.
The price of our common stock could decline if our financial results are materially affected by an adverse
change in our effective tax rate.
We report our results of operations based on our determinations of the amount of taxes owed in the various tax
jurisdictions in which we operate. From time to time, we receive notices that a tax authority in a particular
jurisdiction in which we are subject to taxes has determined that we owe a greater amount of tax than we have
reported to such authority. We are regularly engaged in discussions and sometimes disputes with these tax
authorities. We are engaged in disputes of this nature at this time. If the ultimate determination of our taxes owed in
any of these jurisdictions is for an amount in excess of the tax provision we have recorded or reserved for, our
operating results, cash flows, and financial condition could be adversely affected.
Fluctuations in our quarterly financial results have affected the price of our common stock in the past
and could affect our stock price in the future.
Our quarterly financial results have fluctuated in the past and are likely to vary significantly in the future due to
a number of factors, many of which are outside of our control and which could adversely affect our operations and
operating results. If our quarterly financial results or our predictions of future financial results fail to meet the
expectations of securities analysts and investors, our stock price could be negatively affected. Any volatility in our
quarterly financial results may make it more difficult for us to raise capital in the future or pursue acquisitions that
involve issuances of our stock. Our operating results for prior periods may not be effective predictors of our future
performance.
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