Summary
Synopsys, Inc. (SNPS) has announced the finalization of a tax settlement with the Internal Revenue Service (IRS) concerning fiscal years 2002-2004. This settlement, which received final approval from the Joint Committee on Taxation of the U.S. Congress on January 4, 2010, resolves a long-standing dispute. The company had previously made a $19 million prepayment related to this settlement and anticipates no further material cash payments. A significant impact for investors is the expected decrease in tax expense for the first quarter of fiscal year 2010, estimated at approximately $85.0 million. This reduction is largely attributed to the release of previously established tax liabilities stemming from the 2002 acquisition of Avant! Corporation.
Key Highlights
- 1Final IRS tax settlement for fiscal years 2002-2004 approved by the Joint Committee on Taxation.
- 2Settlement resolves a dispute that began in fiscal year 2009.
- 3A $19 million prepayment was made in Q4 fiscal 2009 towards the settlement.
- 4No additional material cash payments are expected by the company.
- 5Expected decrease in tax expense for Q1 fiscal 2010 is approximately $85.0 million.
- 6The tax benefit is primarily due to the release of liabilities from the 2002 Avant! Corporation acquisition.
- 7The event date for this report is January 4, 2010.