Autodesk 2015 Annual Report Download - page 177

2015 Form 10-K 85
California income tax liabilities indefinitely, and the Canadian tax credit carryforwards will expire beginning fiscal 2024
through fiscal 2034. Autodesk also has $163.6 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 2019 through fiscal 2026.
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 2020, 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 $1.2 million ($0.01 basic net income per share) in fiscal 2015, $9.7
million ($0.04 basic net income per share) in fiscal 2014, and $6.6 million ($0.03 basic net income per share) in fiscal 2013.
The income tax benefits were offset partially by accruals of U.S. income taxes on undistributed earnings, among other factors.
As of January 31, 2015, the company had $245.8 million of gross unrecognized tax benefits, of which $227.3 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,
2015 2014 2013
Gross unrecognized tax benefits at the beginning of the fiscal year $ 222.1 $ 212.7 $ 201.1
Increases for tax positions of prior years 3.2 1.8 0.4
Decreases for tax positions of prior years (2.5) (0.3) (0.4)
Increases for tax positions related to the current year 33.2 15.3 17.8
Decreases relating to settlements with taxing authorities (5.4) (4.6) (3.0)
Reductions as a result of lapse of the statute of limitations (4.8) (2.8) (3.2)
Gross unrecognized tax benefits at the end of the fiscal year $ 245.8 $ 222.1 $ 212.7
It is the company's continuing practice to recognize interest and/or penalties related to income tax matters in income tax
expense. Autodesk had $2.0 million, $2.8 million, and $1.9 million, net of tax benefit, accrued for interest and an immaterial
amount accrued for penalties related to unrecognized tax benefits as of January 31, 2015, 2014, and 2013, respectively.
Autodesk and its subsidiaries are subject to income tax in the United States as well as numerous state and foreign
jurisdictions. Autodesk's U.S. and state income tax returns for fiscal year 2003 through fiscal year 2015 remain open to
examination. In addition, Autodesk files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from
fiscal year 2003 to 2015.
5. Acquisitions
During the fiscal years ended January 31, 2015 and January 31, 2014, Autodesk completed the business combinations and
technology purchases described below. The results of operations for the following acquisitions are included in the
accompanying Consolidated Statement of Operations since their respective acquisition dates. Pro forma results of operations
have not been presented because the effects of the following acquisitions, individually and in the aggregate, were not material
to Autodesk's Consolidated Financial Statements.
For acquisitions accounted for as business combinations, Autodesk recorded the tangible and intangible assets acquired
and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values assigned to the identifiable
intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recorded the excess
of consideration transferred over the aggregate fair values as goodwill.
2015 Annual Report