Computer Associates 2013 Annual Report Download - page 103

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A roll-forward of the Company’s uncertain tax positions for all U.S. federal, state and foreign tax jurisdictions is as follows:
AT MARCH 31,
(in millions) 2013 2012
Balance at beginning of year $ 523 $ 522
Additions for tax positions related to the current year 30 26
Additions for tax positions from prior years 60 21
Reductions for tax positions from prior years (158) (17)
Settlement payments (55) (19)
Statute of limitations expiration (15) (6)
Translation and other (3) (4)
Balance at end of year $ 382 $ 523
The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $311 million and
$410 million at March 31, 2013 and 2012, respectively. The gross amount of interest and penalties accrued, reported in
‘‘Total liabilities,’’ was approximately $104 million, $118 million and $98 million for fiscal years 2013, 2012 and 2011,
respectively. The amount of interest and penalties decreased approximately $14 million for fiscal year 2013 and increased
approximately $20 million and $16 million for fiscal years 2012 and 2011, respectively.
In the fiscal year ended March 31, 2013, the Company reclassified approximately $150 million of deferred tax assets from
non-current to current due to a change in tax accounting method reflected in the Company’s federal income tax return for
the fiscal year ended March 31, 2012. This accounting change did not affect income tax expense.
A number of years may elapse before a particular uncertain tax position for which the Company has not recorded a
financial statement benefit is audited and finally resolved. The number of years with open tax audits varies depending on
the tax jurisdiction. The Company is subject to tax audits in the following major taxing jurisdictions:
•United States — federal tax years are open for years 2005 through 2007 and years 2011 and forward;
•Germany — tax years are open for years 2010 and forward;
•Italy — tax years are open for years 2008 and forward;
•Japan — tax years are open for years 2007 and forward; and
•United Kingdom — tax years are open for years 2010 and forward.
The U.S. Internal Revenue Service (IRS) examination of the Company’s federal income tax returns for the tax years ended
March 31, 2005, 2006 and 2007 has been forwarded to the Joint Committee of Taxation for final approval. As final approval
had not been obtained as of the end of the fiscal year, matters relating to this audit were not deemed effectively settled.
While it is difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company
believes that its financial statements reflect the probable outcome of uncertain tax positions. The Company may adjust these
uncertain tax positions, as well as any related interest or penalties, in light of changing facts and circumstances, including
the settlement of income tax audits and the expirations of statutes of limitation. To the extent a settlement differs from the
amounts previously reserved, that difference generally would be recognized as a component of income tax expense in the
period of resolution. Although the timing of the resolution of income tax examinations is highly uncertain, it is reasonably
possible that settlements, payments and new information in the next 12 months related to certain federal, foreign and state
tax issues may result in changes to the Company’s uncertain tax positions, including issues involving taxation of international
operations, certain state tax issues and other matters. The Company believes that such reasonably possible changes within
the next 12 months may reduce the balance of unrecognized tax benefits by an amount up to $250 million.
Note 16 — Supplemental Statement of Cash Flows Information
Interest payments, net for fiscal years 2013, 2012 and 2011 were approximately $61 million, $61 million and $72 million,
respectively. Income taxes paid, net for these fiscal years were approximately $333 million, $420 million and $222 million,
respectively. For fiscal years 2013, 2012 and 2011, the excess tax benefits from options exercised included in financing
activities from continuing operations were approximately $6 million, $3 million and less than $1 million, respectively.
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