Autodesk 2003 Annual Report Download - page 58

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
January 31,
2003 2002
(In thousands)
Purchased technology and capitalized software .................................. $ 33,816 $34,423
Reserves for product returns and bad debts ...................................... 9,207 9,967
Tax loss carryforwards ...................................................... 43,439 13,022
Accrued compensation and benefits ........................................... 8,252 6,932
Fixed assets .............................................................. 8,554 10,073
Research and development credit carryforwards .................................. 7,304 —
Foreign tax credit carryforwards .............................................. 6,679 —
Other accruals not currently deductible for tax ................................... 14,449 15,239
Total deferred tax assets .................................................... 131,700 89,656
Less: valuation allowance ................................................... (11,865) (4,266)
Net deferred tax assets ...................................................... 119,835 85,390
Unremitted earnings of foreign subsidiaries ..................................... (88,445) (21,323)
Other ................................................................... (4,145) (3,131)
Total deferred tax liability ................................................... (92,590) (24,454)
Net deferred tax assets ...................................................... $ 27,245 $60,936
The valuation allowance increased by $7.6 million in fiscal 2003 and decreased by $0.6 million in fiscal
2002 and $3.1 million in fiscal 2001. Approximately $9.0 million of the valuation allowance at January 31, 2003
relates to tax benefits of stock option deductions for fiscal 2003, which will be credited to equity if and when
realized.
As part of the Revit Technology Corporation acquisition, the Company recorded $5.3 million of additional
net 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 $144.0 million at January 31, 2003) because Autodesk plans to reinvest such
earnings for the foreseeable future. At January 31, 2003, the unrecognized deferred tax liability for these earnings
was approximately $49.0 million.
Realization of the Company’s net deferred tax assets of $27.2 million is dependent upon the Company
generating approximately $70.0 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 $19.3 million in fiscal 2003, $20.0 million in fiscal
2002 and $14.0 million in fiscal 2001.
The Company has $121.0 million of cumulative federal tax loss carryforwards and $22.8 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,
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