Tech Data 2014 Annual Report Download - page 60

Table of Contents
At January 31, 2014, there are $390.2 million of consolidated cumulative undistributed earnings of foreign subsidiaries. It is not currently
practical to estimate the amount of unrecognized deferred U.S. income tax that might be payable if any earnings were to be distributed by
individual foreign subsidiaries.
A reconciliation of the beginning and ending balances of the total amount of gross unrecognized tax benefits, excluding accrued interest and
penalties, for the years ended January 31, 2014, 2013 and 2012 is as follows (in thousands):
At January 31, 2014, 2013 and 2012, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $5.4
million , $4.8 million and $2.5 million , respectively.
Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following January 31, 2014 totaled
$1.4 million and were primarily related to the foreign taxation of certain transactions. Consistent with prior periods, the Company recognizes
interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s accrued interest at January 31,
2014, would not have a material impact on the effective tax rate if reversed. The provision for income taxes for each of the fiscal years ended
January 31, 2014, 2013 and 2012 includes interest expense on unrecognized income tax benefits for current and prior years which is not
significant to the Company’s Consolidated Statement of Income. The change in the balance of accrued interest for fiscal 2014, 2013 and 2012,
includes the current year end accrual, an interest benefit resulting from the expiration of statutes of limitation, and the translation adjustments on
foreign currencies.
The Company conducts business primarily in the Americas and Europe and, as a result, one or more of its subsidiaries files income tax returns in
the U.S. federal, various state, local and foreign tax jurisdictions. In the normal course of business, the Company is subject to examination by
taxing authorities. The Company is no longer subject to examinations by the Internal Revenue Service for years before fiscal 2011. Income tax
returns of various foreign jurisdictions for fiscal 2006 and forward are currently under taxing authority examination or remain subject to audit.
NOTE 9 — EMPLOYEE BENEFIT PLANS
Overview of Equity Incentive Plans
At January 31, 2014, the Company had awards outstanding from three equity-based compensation plans, only one of which is currently active.
The active plan was approved by the Company’s shareholders in June 2009 and includes 4.0 million shares available
55
Gross unrecognized tax benefits at January 31, 2011
$
5,075
Increases in tax positions for prior years
1,590
Decreases in tax positions for prior years
(208
)
Increases in tax positions for current year
56
Expiration of statutes of limitation
(791
)
Settlements
(1,990
)
Changes due to translation of foreign currencies
(47
)
Gross unrecognized tax benefits at January 31, 2012
3,685
Increases in tax positions for prior years
2,890
Decreases in tax positions for prior years
(127
)
Increases in tax positions for current year
171
Expiration of statutes of limitation
(38
)
Settlements
(1,106
)
Changes due to translation of foreign currencies
124
Gross unrecognized tax benefits at January 31, 2013
5,599
Increases in tax positions for prior years
1,956
Decreases in tax positions for prior years
(420
)
Increases in tax positions for current year
93
Expiration of statutes of limitation
(77
)
Settlements
(1,295
)
Changes due to translation of foreign currencies
3
Gross unrecognized tax benefits at January 31, 2014
$
5,859