Symantec 2015 Annual Report Download - page 124

For further information on the impact of foreign earnings on our effective tax rate, see Note 11 of the Notes
to Consolidated Financial Statements in this annual report.
See Critical Accounting Policies and Estimates above for additional information about our provision for
income taxes.
In assessing the ability to realize our deferred tax assets, we considered whether it is 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. Levels of
future taxable income are subject to the various risks and uncertainties discussed in Part I, Item 1A, Risk Factors,
set forth in this annual report. We have concluded that this positive evidence outweighs the negative evidence
and, thus, that the deferred tax assets as of April 3, 2015 of $350 million, which are net of a valuation allowance
of $60 million, are realizable on a “more likely than not” basis.
In fiscal 2013, we resolved an IRS audit for the Veritas 2002 through 2005 tax years and executed the final
closing agreement. Accordingly, we recorded a further tax benefit of $3 million in fiscal 2013 based on the
closing agreement. We also amended our state tax returns for the Veritas 2002 through 2005 tax years in 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.
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 $44 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.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Cash
We have historically relied on cash flow from operations, borrowings under a credit facility, and issuances
of debt and equity securities for our liquidity needs. As of April 3, 2015, we had cash, cash equivalents and short-
term investments of $3.9 billion and an unused credit facility of $1.0 billion resulting in a liquidity position of
approximately $4.9 billion. As of April 3, 2015, $2.2 billion in cash, cash equivalents, and short-term
investments were held by our foreign subsidiaries. We have provided U.S. deferred taxes on a portion of our
undistributed foreign earnings sufficient to address the incremental U.S. tax that would be due if we needed such
portion of these funds to support our operations in the U.S.
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