Symantec 2014 Annual Report Download - page 173

to examination by the appropriate governmental agencies for Singapore tax purposes. Other significant
jurisdictions include California, Japan, the UK and India. As of March 28, 2014, we are under examination
regarding Symantec U.S. federal income taxes for the fiscal years 2009 through 2012. In addition, we are under
examination by the California Franchise Tax Board for the Symantec California income taxes for the 2009
through 2010 tax years. We are also under audit by the Singapore income tax authorities for fiscal years 2007
through 2011 and by the Indian income tax authorities for fiscal years 2004 through 2014.
On December 2, 2009, we received a Revenue Agent’s Report from the IRS for the Veritas 2002 through
2005 tax years assessing additional taxes due. We contested $80 million of the tax assessed and all penalties. As
a result of negotiations with IRS Appeals in the third quarter of fiscal 2012, we remeasured our liability for
unrecognized tax benefits, resulting in a tax benefit of $52 million. We executed the final closing agreement for
the Veritas 2002 through 2005 tax years on December 26, 2012. Accordingly, we recorded a further tax benefit
of $3 million during the third quarter of fiscal 2013 based on the closing agreement. Further, we amended our
state tax returns for the Veritas 2002 through 2005 tax years in the fourth quarter of fiscal 2013 to reflect the
adjustments in the closing agreement and remeasured our state liability resulting in a benefit of $7 million.
On September 3, 2013, we settled and effectively settled matters with the IRS for the Symantec 2005
through 2008 fiscal years. The result of the settlements, effective settlements, and re-measurements resulted in a
reduction in the balance of our gross unrecognized tax benefits in fiscal year 2014 of $122 million.
The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately
paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts
accrued for each year. Although potential resolution of uncertain tax positions involve multiple tax periods and
jurisdictions, it is reasonably possible that the gross unrecognized tax benefits related to these audits could
decrease (whether by payment, release, or a combination of both) in the next 12 months by between $20 million
and $140 million.
We continue to monitor the progress of ongoing income tax controversies and the impact, if any, of the
expected tolling of the statute of limitations in various taxing jurisdictions.
Note 13. Earnings Per Share
Basic and diluted earnings per share are computed on the basis of the weighted average number of shares of
common stock outstanding during the period. Diluted earnings per share also include the incremental effect of
dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive
potential common shares include the dilutive effect of shares underlying outstanding stock options, restricted
stock, warrants, and convertible senior notes.
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