Symantec 2016 Annual Report Download - page 173

We file income tax returns in the U.S. on a federal basis and in many U.S. state and foreign jurisdictions.
Our most significant tax jurisdictions are the U.S., Ireland, and Singapore. Our tax filings remain subject to
examination by applicable tax authorities for a certain length of time following the tax year to which those filings
relate. Our fiscal years 2014 through 2016 remain subject to examination by the Internal Revenue Service
(“IRS”) for U.S. federal tax purposes. Our fiscal years prior to 2014 have been settled and closed with the IRS.
Our 2012 through 2016 fiscal years remain subject to examination by the appropriate governmental agencies for
Irish tax purposes, and our 2011 through 2016 fiscal years remain subject to examination by the appropriate
governmental agencies for Singapore tax purposes. Other significant jurisdictions include California, Japan, the
UK, India and Australia. We are under examination by the California Franchise Tax Board for the Symantec
California income taxes for the 2009 through 2013 tax years, the Indian income tax authorities for fiscal years
2004 through 2014, and the Australian income tax authorities for fiscal years 2011 through 2014.
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.
On March 18, 2015, we settled and effectively settled matters with the IRS for the Symantec 2009 through
2013 fiscal years. The settlement and effective settlement resulted in a benefit to tax expense in fiscal year 2015
of $59 million. Additionally, the Company settled transfer price related matters of $158 million, a portion of
which was accounted for against deferred tax liabilities on unremitted foreign earnings. The Company has paid in
$155 million to cover the final tax and interest liability on the settlement.
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 $7 million.
Depending on the nature of the settlement or expiration of statutes of limitations, we estimate $6 million could
affect our income tax provision and therefore benefit the resulting effective tax rate.
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 12. 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, ESPP and Convertible Senior Notes.
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