Autodesk 2012 Annual Report Download - page 138

As a result of certain business and employment actions and capital investments undertaken by Autodesk, income earned
in certain Europe and Asia Pacific countries is subject to reduced tax rates through fiscal 2016 and 2019, respectively. with
extensions available with incremental business and employment actions. The income tax benefits attributable to the tax status
of these business arrangements are estimated to be $10.4 million in fiscal 2012 ($0.046 basic net income per share) and zero in
both fiscal 2011 and 2010. The income tax benefits were offset partially by accruals of U.S. income taxes on undistributed
earnings, among other factors.
During fiscal 2012, Autodesk recognized income tax expense of $4.4 million related to California taxes, including an
increase in the valuation allowance against California deferred taxes. Autodesk also recognized tax benefits of $4.0 million
related to changes in estimates as a result of U.S. and foreign tax return filings.
During fiscal 2011, Autodesk recognized income tax expense of approximately $2.1 million primarily related to a change
in the expected future tax rates and the increase of a valuation allowance against California deferred taxes of $4.9 million
partially offset by the closure of audits and other decreases in uncertain tax positions of $2.8 million.
During fiscal 2010, Autodesk recognized income tax expense of approximately $17.7 million primarily related to a
change in the expected future tax rates and the establishment of a valuation allowance against California deferred taxes of
$20.2 million partially offset by the closure of audits and other decreases in uncertain tax positions with respect to fiscal 2003
of $2.5 million.
As of January 31, 2012, the Company had $201.1 million of gross unrecognized tax benefits, of which $187.8 million
would impact the effective tax rate, if recognized. It is possible that the amount of unrecognized tax benefits will change in the
next twelve months; however an estimate of the range of the possible change cannot be made at this time.
A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
Gross unrecognized tax benefits at the beginning of the fiscal year
Increases for tax positions of prior years
Decreases for tax positions of prior years
Increases for tax positions related to the current year
Decreases for lapse of statute of limitations/audit settlements
Gross unrecognized tax benefits at the end of the fiscal year
2012
$ 188.4
0.4
(0.4)
14.3
(1.6)
$ 201.1
2011
$ 178.2
2.0
(3.5)
13.9
(2.2)
$ 188.4
2010
$ 169.4
3.1
(1.9)
11.1
(3.5)
$ 178.2
It is the Company's continuing practice to recognize interest and/or penalties related to income tax matters in income tax
expense. The Company had $2.4 million, $1.9 million and $2.2 million, net of tax benefit, accrued for interest and zero accrued
for penalties related to unrecognized tax benefits as of January 31, 2012, 2011 and 2010, respectively.
Autodesk and its subsidiaries are subject to income tax in the United States as well as numerous state and foreign jurisdictions.
The Company's U.S. and state income tax returns for fiscal year 2003 through fiscal year 2012 remain open to examination. In
addition, the Company files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from fiscal year
2003 to 2012.
5. Acquisitions
During the fiscal year ended January 31, 2012, Autodesk completed the business combinations and technology purchases
described below. The results of operations for the following acquisitions are included in the accompanying Consolidated
Statement of Operations since their respective acquisition date. Pro forma results of operations have not been presented because
the effects of the following acquisitions, individually and in the aggregate, were not material to Autodesk's Consolidated
Financial Statements.
For acquisitions accounted for as business combinations, Autodesk recorded the tangible and intangible assets acquired
and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values assigned to the identifiable
intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recorded the excess
of consideration transferred over the aggregate fair values as goodwill.
On March 1, 2011, Autodesk acquired Scaleform Corporation (“Scaleform”) for total cash consideration of $36.2 million.
70