Autodesk 2001 Annual Report Download - page 42

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Autodesk, Inc. FY 01
No provision has been made for federal income taxes on
unremitted earnings of certain of Autodesk’s foreign sub-
sidiaries (cumulative $318.0 million at January 31, 2001)
because Autodesk plans to reinvest such earnings for the
foreseeable future. At January 31, 2001, the unrecognized
deferred tax liability for these earnings was approximately
$87.0 million
Realization of the Company‘s net deferred tax assets is
dependent upon the Company generating sufficient tax-
able income in future years in appropriate tax jurisdictions
to obtain benefit from the reversal of temporary differ-
ences and from tax credit carryforwards. The amount of
deferred tax assets considered realizable is subject to
adjustment in future periods if estimates of future taxable
income are reduced.
Cash payments for income taxes were approximately
$14.0 million in fiscal 2001, $37.6 million in fiscal 2000 and
$20.9 million in fiscal 1999.
Autodesk has $18.6 million of cumulative tax loss carryfor-
wards,which may be available to reduce future income tax
liabilities in certain jurisdictions.The tax loss carryforwards
will expire beginning January 31, 2007. Autodesk has
recorded a valuation allowance against some deferred tax
assets including the tax benefit of these tax loss carryfor-
wards due to the uncertainty of their realizability.
Autodesk has $4.7 million of cumulative research tax
credit carryforwards, which may be available to reduce
future income tax liabilities in California indefinitely.
Note 5. Investment in Affiliate—
Buzzsaw.com, Inc. (“Buzzsaw”)
In October 1999, Autodesk formed Buzzsaw. Between
October and December 1999, Autodesk owned a majority
interest in Buzzsaw, and as such, Autodesk consolidated
Buzzsaw’s results of operations, which were included
within Autodesk’s fiscal 2000 cost and expense categories.
After December 1999, Autodesk owned a less than major-
ity interest in Buzzsaw.
In April 2000, Autodesk invested an additional
$17.5 million in Buzzsaw. Autodesk currently maintains
approximately a 40 percent interest in Buzzsaw and is
accounting for this investment under the equity method
of accounting.
During fiscal 2001, Autodesk recognized $16.3 million
of losses, which represents Autodesk’s proportionate
share of Buzzsaw’s losses from April 2000 through
January 2001.
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
(in thousands)
January 31, 2001 2000
Purchased technology and capitalized software $ 17,661 $ 10,880
Reserves for product returns and bad debts 10,281 9,359
Tax loss carryforwards 6,512 3,671
Accrued compensation and benefits 5,546 4,966
Fixed assets 8,522 9,371
Accrued state income taxes 563 331
Research and development credit carryforwards 4,746 11,325
Inventory reserves 1,473 1,319
Other accruals not currently deductible for tax 8,686 8,947
Other — 4,945
Total deferred tax assets 63,990 65,114
Less: valuation allowance (4,849) (7,988)
Net deferred tax assets 59,141 57,126
Unremitted earnings of foreign subsidiaries (13,108) (6,018)
Other (1,095) —
Total deferred tax liability (14,203) (6,018)
Net deferred tax assets $ 44,938 $ 51,108