Autodesk 2013 Annual Report Download - page 116

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Interest and Other Income, Net
The following table sets forth the components of interest and other income, net:
Fiscal Year Ended
January 31,
2013 2012 2011
(in millions)
Interest and investment income, net (1) $ 4.9 $ 5.4 $ 8.9
Gain (loss) on foreign currency 1.2 (1.1) (14.0)
(Loss) gain on strategic investments (1) (4.0) 0.3 2.0
Other income 2.0 2.7 3.7
Interest and other income, net $ 4.1 $ 7.3 $ 0.6
____________________
(1) For comparability, the presentation of the balances at January 31, 2012 and January 31, 2011 was adjusted to align to current year
presentation.
Interest and other income, net, decreased $3.2 million during fiscal 2013, as compared to fiscal 2012, primarily due to a
reduction in our net interest and investment income and losses incurred due to impairment of certain strategic investments. A
loss on strategic investments occurs when a net reduction in valuation occurs or an impairment is recorded. Impairment results
from the determination that the value of the investment is no longer recoverable.
The decrease in interest and investment income, net, during fiscal 2013 as compared to fiscal 2012 is primarily due to
interest expense resulting from the issuance of $400.0 million aggregate principal amount of 1.95% senior notes due
December 15, 2017 and $350.0 million aggregate principal amount of 3.6% senior notes due December 15, 2022, and a
decrease in the fair value of our trading securities that are marked-to-market each period. Interest and investment income
fluctuates based on average cash, marketable securities and debt balances, average maturities and interest rates.
Interest and other income, net, increased $6.7 million during fiscal 2012, as compared to fiscal 2011, primarily due to a
reduction in foreign currency losses. These losses are due to the impact of re-measuring foreign currency transactions into the
functional currency of the corresponding entity. The amount of gain (loss) on foreign currency is driven by the volume of
foreign currency transactions and the foreign currency exchange rates for the period.
Provision for Income Taxes
We account for income taxes and the related accounts under the liability method. Deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted rates
expected to be in effect during the year in which the basis differences reverse.
Our effective tax rate was 20% and 21% during fiscal 2013 and fiscal 2012, respectively. Our effective tax rate decreased
one percentage point from fiscal 2012 to fiscal 2013 due to lower state tax expense and various other items, offset in part by
increased non-deductible stock-based compensation expense.
Our effective tax rate was 21% and 22% during fiscal 2012 and 2011, respectively. Our effective tax rate decreased one
percentage point from fiscal 2011 to fiscal 2012 primarily due to an increase in tax benefits from foreign earnings taxed at
different rates in fiscal 2012 compared to fiscal 2011, partially offset by tax benefits associated with closure of audits in fiscal
2011.
Our future effective tax rate may be materially impacted by the amount of benefits and charges from tax amounts
associated with our foreign earnings that are taxed at rates different from the federal statutory rate, research credits, state
income taxes, the tax impact of stock-based compensation, accounting for uncertain tax positions, business combinations, U.S.
Manufacturer's deduction, closure of statute of limitations or settlement of tax audits, changes in valuation allowances and
changes in tax laws including possible U.S. tax law changes that, if enacted, could significantly impact how U.S. multinational
companies are taxed on foreign subsidiary earnings. A significant amount of our earnings is generated by our Europe and Asia
Pacific subsidiaries. Our future effective tax rates may be adversely affected to the extent earnings are lower than anticipated in
countries where we have lower statutory tax rates or we repatriate certain foreign earnings on which U.S. taxes have not
previously been provided.
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