Autodesk 2013 Annual Report Download - page 149

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, 2013, Autodesk had $36.6 million of cumulative federal tax loss carryforwards and $249.8 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 2014 through fiscal 2032 and fiscal 2014 through
fiscal 2032, respectively. Autodesk also had $14.7 million of cumulative federal and state capital loss carryforwards as of
January 31, 2013 which are available to offset future capital gains through fiscal 2018.
As of January 31, 2013, Autodesk had $86.1 million of cumulative federal research tax credit carryforwards, $43.5
million of cumulative California state research tax credit carryforwards and $49.7 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 2021 through fiscal 2033, the state credit carryforwards may reduce future
California income tax liabilities indefinitely, and the Canadian tax credit carryforwards will expire beginning fiscal 2025
through fiscal 2033. Autodesk also has $60.8 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 2022 through fiscal 2023.
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 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 $4.4 million ($0.02 basic net income per share) in fiscal 2013, $10.4
million ($0.05 basic net income per share) in fiscal 2012 and zero in fiscal 2011. The income tax benefits were offset partially
by accruals of U.S. income taxes on undistributed earnings, among other factors.
As of January 31, 2013, the Company had $212.7 million of gross unrecognized tax benefits, of which $202.1 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,
2013 2012 2011
Gross unrecognized tax benefits at the beginning of the fiscal year $ 201.1 $ 188.4 $ 178.2
Increases for tax positions of prior years 0.4 0.4 2.0
Decreases for tax positions of prior years (0.4) (0.4) (3.5)
Increases for tax positions related to the current year 17.8 14.3 13.9
Decreases for lapse of statute of limitations/audit settlements (6.2) (1.6) (2.2)
Gross unrecognized tax benefits at the end of the fiscal year $ 212.7 $ 201.1 $ 188.4
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 $1.9 million, $2.4 million and $1.9 million, net of tax benefit, accrued for interest and zero accrued
for penalties related to unrecognized tax benefits as of January 31, 2013, 2012 and 2011, 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 2013 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 2013.
5. Acquisitions
During the fiscal years ended January 31, 2013 and January 31, 2012, Autodesk completed the business combinations and
technology purchases described below. The results of operations for the following acquisitions are included in the
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2013 Annual Report