Autodesk 2008 Annual Report Download - page 144

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
January 31,
2008 2007
Research and development credit carryforwards ..................................... $ 83.2 $ 58.7
Tax loss carryforwards ......................................................... 10.7 82.1
Foreign tax credit carryforwards ................................................. 44.1 46.6
Nonqualified stock options ..................................................... 32.7 24.1
Accrued compensation and benefits .............................................. 31.5 22.3
Other accruals not currently deductible for tax ...................................... 9.3 15.3
Fixed assets ................................................................. 7.4 15.0
Capitalized research and development expenditures .................................. 6.3 7.7
Purchased technology and capitalized software ..................................... 6.8 —
Reserves for product returns and bad debts ......................................... 3.2 6.1
Other ...................................................................... 2.3 0.8
Total deferred tax assets ....................................................... 237.5 278.7
Less: valuation allowance ...................................................... (16.2) (7.4)
Net deferred tax assets ......................................................... 221.3 271.3
Purchased technology and capitalized software ..................................... — (15.9)
Unremitted earnings of foreign subsidiaries ........................................ (71.9) (117.5)
Total deferred tax liability ...................................................... (71.9) (133.4)
Net deferred tax assets ......................................................... $149.4 $ 137.9
Autodesk adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”)
on February 1, 2007. As a result of the adoption of FIN 48, Autodesk recorded approximately $25.0 million of
unrecognized tax benefits, with a corresponding increase in the beginning balance of retained earnings of $26.4
million and a decrease to additional paid in capital of $1.4 million. Of the total retained earnings adjustment,
$19.5 million related to previously disclosed tax benefits for goodwill and other intangible amortization.
The valuation allowance increased by $8.8 million and $5.2 million in fiscal 2008 and 2007, respectively,
and decreased by $0.2 million in fiscal 2006. The fiscal 2008 increase is primarily related to Canadian deferred
taxes, which Autodesk doesn’t expect to realize based on the standard set forth in SFAS 109.
No provision has been made for Federal income taxes on unremitted earnings of certain of Autodesk’s
foreign subsidiaries (cumulatively $539.5 million at January 31, 2008) because Autodesk plans to reinvest such
earnings for the foreseeable future. At January 31, 2008, the unrecognized deferred tax liability for these earnings
was approximately $168.3 million.
Realization of the Company’s net deferred tax assets of $149.4 million is dependent upon the Company
generating approximately $408 million of future taxable income in appropriate tax jurisdictions to obtain benefit
from the reversal of temporary differences, net operating loss carryforwards and tax credits. 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 $47.1 million in fiscal 2008, $14.7 million in fiscal
2007, and $44.2 million in fiscal 2006.
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