Autodesk 2002 Annual Report Download - page 48

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
January 31,
2002 2001
(In thousands)
Purchased technology and capitalized software ................................... $34,423 $17,661
Reserves for product returns and bad debts ...................................... 9,967 10,281
Tax loss carryforwards ...................................................... 13,022 6,512
Accrued compensation and benefits ............................................ 6,932 5,546
Fixed assets ............................................................... 10,073 9,783
Research and development credit carryforwards .................................. — 4,746
Other accruals not currently deductible for tax ................................... 15,239 10,159
Total deferred tax assets ..................................................... 89,656 64,688
Less: valuation allowance .................................................... (4,266) (4,849)
Net deferred tax assets ...................................................... 85,390 59,839
Unremitted earnings of foreign subsidiaries ...................................... (21,323) (13,108)
Other .................................................................... (3,131) (1,793)
Total deferred tax liability ................................................... (24,454) (14,901)
Net deferred tax assets ...................................................... $60,936 $44,938
As part of the Buzzsaw.com, Inc. acquisition, the Company recorded $23.8 million of additional deferred
tax assets. See Note 10 for further discussion.
No provision has been made for federal income taxes on unremitted earnings of certain of Autodesk’s
foreign subsidiaries (cumulatively $335.0 million at January 31, 2002) because Autodesk plans to reinvest such
earnings for the foreseeable future. At January 31, 2002, the unrecognized deferred tax liability for these earnings
was approximately $86.0 million
Realization of the Company’s net deferred tax assets of $60.9 million is dependent upon the Company
generating approximately $150.0 million of future taxable income in appropriate tax jurisdictions to obtain
benefit from the reversal of temporary differences and from net operating loss 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 $20.0 million in fiscal 2002, $14.0 million in fiscal
2001 and $37.6 million in fiscal 2000.
Autodesk has $36.5 million of cumulative federal tax loss carryforwards and $6.3 million of cumulative
state tax loss carryforwards, which may be available to reduce future income tax liabilities in certain
jurisdictions. The federal tax loss carryforwards will expire beginning January 31, 2008 through January 31,
2022. The state tax loss carryforwards will expire beginning January 31, 2008 through January 31, 2012.
Autodesk has recorded a valuation allowance against some deferred tax assets including the tax benefit of certain
tax loss carryforwards of acquired companies due to the uncertainty of their realizability.
Note 5. Gain on Disposal of Affiliate
During October 2001, the shareholders of RedSpark, Inc. (“RedSpark”) approved a plan to dissolve the
company. Autodesk maintained a majority interest in RedSpark’s voting stock since RedSpark was formed in
April 2000. Accordingly, Autodesk consolidated RedSpark’s financial position and results of operations.
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