Symantec 2014 Annual Report Download - page 103

On June 4, 2012, we were advised by the Commercial Litigation Branch of the Department of Justice’s Civil
Division and the Civil Division of the U.S. Attorney’s Office for the District of Columbia that the government is
investigating our compliance with certain provisions of our GSA Schedule contract, including provisions relating
to pricing, country of origin, accessibility, and the disclosure of commercial sales practices. The Department of
Justice has requested that we preserve, among other things, all records relating to GSA Schedule contracting
activity. As reported on the GSA’s publicly-available database, our total sales under the GSA Schedule contract
were approximately $222 million from the period beginning January 2007 and ending September 2012.
We are cooperating with the investigation and we are unable, at this time, to predict the likely outcome. It is
possible that the investigation could lead to claims or findings of violations of the False Claims Act in connection
with our GSA contracting activity. Violations of the False Claims Act could result in the imposition of damages,
including up to treble damages, plus civil penalties in some cases. To the extent the investigation leads to any
such claims or findings, the cost to resolve this matter would adversely affect our operating results and financial
condition. Any negative publicity related to our government customer contracts or any proceedings surrounding
them, regardless of the outcome of this matter, may also damage our business by affecting our ability to compete
for new contracts.
Accounting charges may cause fluctuations in our quarterly financial results.
Our financial results have been in the past, and may continue to be in the future, materially affected by non-cash
and other accounting charges, including:
• Amortization of intangible assets
• Impairment of goodwill and other long-lived assets
• Stock-based compensation expense
• Restructuring charges
• Loss on sale of a business and similar write-downs of assets held for sale
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,
including possible corporate tax reform in the United States, and proposed actions by international
bodies such as the OECD, 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 that 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 determination of the aggregate amount of taxes owed in the tax
jurisdictions in which we operate. From time to time, we receive notices that a tax authority in a particular
jurisdiction believes 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
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