Symantec 2014 Annual Report Download - page 171

The principal components of deferred tax assets are as follows:
March 28,
2014
March 29,
2013
(Dollars in millions)
Deferred tax assets:
Tax credit carryforwards $ 38 $ 54
Net operating loss carryforwards of acquired companies 79 102
Other accruals and reserves not currently tax deductible 128 144
Deferred revenue 92 97
Loss on investments not currently tax deductible 16 10
State income taxes 19 29
Stock-based compensation 31 36
403 472
Valuation allowance (56) (66)
Total deferred tax assets $ 347 $ 406
Deferred tax liabilities:
Tax over book depreciation (76) (73)
Goodwill (29) (19)
Intangible assets (48) (102)
Unremitted earnings of foreign subsidiaries (399) (377)
Prepaids and deferred expenses (30) (42)
Other (7) (2)
Total deferred tax liabilities $ (589) $ (615)
Net deferred tax assets $ (242) $ (209)
The $56 million total valuation allowance provided against our deferred tax assets as of March 28, 2014 is
mainly attributable to net operating loss and tax credit carryforwards of acquired companies, state tax credits, and
net operating losses in foreign jurisdictions. The valuation allowance decreased by a net of $10 million in fiscal
2014, related mostly to the liquidation of a foreign entity.
As of March 28, 2014, we have U.S. federal net operating losses attributable to various acquired companies
of approximately $74 million, which, if not used, will expire between fiscal 2015 and 2032. 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 $203 million and $70 million, respectively. If not used, our U.S. state net
operating losses will expire between fiscal 2015 and 2032 and the majority of our U.S. state credit carryforwards
can be carried forward indefinitely. In addition, we have foreign net operating loss carryforwards attributable to
various acquired foreign companies of approximately $280 million net of valuation allowances, the majority of
which, under current applicable foreign tax law, can be carried forward indefinitely.
In assessing the ability to realize our deferred tax assets, we considered whether it was more likely than not
that some portion or all the deferred tax assets will not be realized. We considered the following: we have
historical cumulative book income, as measured by the current and prior two years, we have 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
March 28, 2014 of $347 million, after application of the valuation allowances described above, are realizable on
a “more likely than not” basis.
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