Autodesk 2014 Annual Report Download - page 157

2013 Annual Report
2014 Form 10-K 83
Realization of the Company's net deferred tax assets of $187.9 million is dependent upon the Company's ability to
generate 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.
As of January 31, 2014, Autodesk had $17.0 million of cumulative federal tax loss carryforwards and $322.9 million of
cumulative state tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions.
These federal and state tax loss carryforwards will expire beginning fiscal 2015 through fiscal 2033 and fiscal 2015 through
fiscal 2033, respectively. Autodesk also had $9.8 million of cumulative federal and state capital loss carryforwards as of
January 31, 2014 which are available to offset future capital gains through fiscal 2018.
As of January 31, 2014, Autodesk had $96.1 million of cumulative federal research tax credit carryforwards, $49.8
million of cumulative California state research tax credit carryforwards and $63.4 million of cumulative Canadian federal tax
credit carryforwards, which may be available to reduce future income tax liabilities in the respective jurisdictions. The federal
credit carryforwards will expire beginning fiscal 2020 through fiscal 2034, the state credit carryforwards may reduce future
California income tax liabilities indefinitely, and the Canadian tax credit carryforwards will expire beginning fiscal 2024
through fiscal 2034. Autodesk also has $107.6 million of cumulative foreign tax credit carryforwards, which may be available
to reduce future U. S. tax liabilities. The foreign tax credit will expire beginning fiscal 2019 through fiscal 2025.
Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change
limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the
expiration of net operating losses and credits before utilization.
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 and 2016 and 2019, respectively with
extensions available with incremental business and employment actions. The net income tax benefits attributable to the tax
status of these business arrangements are estimated to be $9.7 million ($0.04 basic net income per share) in fiscal 2014, $6.6
million ($0.03 basic net income per share) in fiscal 2013 and $10.4 million ($0.05 basic net income per share) in fiscal 2012.
The income tax benefits were offset partially by accruals of U.S. income taxes on undistributed earnings, among other factors.
As of January 31, 2014, the Company had $222.1 million of gross unrecognized tax benefits, of which $214.5 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:
Fiscal Year Ended January 31,
2014 2013 2012
Gross unrecognized tax benefits at the beginning of the fiscal year $ 212.7 $ 201.1 $ 188.4
Increases for tax positions of prior years 1.8 0.4 0.4
Decreases for tax positions of prior years (0.3) (0.4) (0.4)
Increases for tax positions related to the current year 15.3 17.8 14.3
Decreases for lapse of statute of limitations/audit settlements (7.4) (6.2) (1.6)
Gross unrecognized tax benefits at the end of the fiscal year $ 222.1 $ 212.7 $ 201.1
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 $2.8 million, $1.9 million and $2.4 million, net of tax benefit, accrued for interest and zero accrued
for penalties related to unrecognized tax benefits as of January 31, 2014, 2013 and 2012, 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 2014 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 2014.