Tech Data 2013 Annual Report Download - page 74

Table of Contents
At January 31, 2013, there are $290.5 million of consolidated cumulative undistributed earnings of foreign subsidiaries. It is not currently practical
to estimate the amount of unrecognized deferred U.S. income tax that might be payable if any earnings were to be distributed by individual foreign
subsidiaries.
A reconciliation of the beginning and ending balances of the total amount of gross unrecognized tax benefits, excluding accrued interest and
penalties, for the years ended January 31, 2013 and 2012 and 2011 is as follows (in thousands, as restated):
At January 31, 2013, 2012 and 2011, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $4.8
million , $2.5 million and $5.1 million , respectively.
Unrecognized tax benefits that have a reasonable possibility of significantly decreasing within the 12 months following January 31, 2013 totaled
$0.8 million and were primarily related to the foreign taxation of certain transactions. Consistent with prior periods, the Company recognizes
interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s accrued interest at January 31, 2013,
would not have a material impact on the effective tax rate if reversed. The provision for income taxes for each of the fiscal years ended January 31,
2013, 2012 and 2011 includes interest expense on unrecognized income tax benefits for current and prior years which is not significant to the
Company’s Consolidated Statement of Income. The change in the balance of accrued interest for fiscal 2013, 2012 and 2011, includes the current
year end accrual, an interest benefit resulting from the expiration of statutes of limitation, and the translation adjustments on foreign currencies.
The Company conducts business primarily in the Americas and Europe and, as a result, one or more of its subsidiaries files income tax returns in
the U.S. federal, various state, local and foreign tax jurisdictions. In the normal course of business, the Company is subject to examination by taxing
authorities. The Company is no longer subject to examinations by the Internal Revenue Service for years prior to fiscal 2010. Income tax returns of
various foreign jurisdictions for fiscal 2006 and forward are currently under taxing authority examination or remain subject to audit.
NOTE 10 — EMPLOYEE BENEFIT PLANS
Overview of Equity Incentive Plans
At January 31, 2013, the Company had awards outstanding from four equity-based compensation plans, only one of which is currently active. The
active plan was approved by the Company’s shareholders in June 2009 and includes 4.0 million shares available for grant, of which approximately
3.0 million shares remain available for future grant at January 31, 2013. Under the active plan, the Company is authorized to award officers,
employees, and non-employee members of the Board of Directors restricted stock, options to purchase common stock, maximum value stock-
settled stock appreciation rights (“MV Stock-settled SARs”), maximum value options (“MVOs”), and performance awards that are dependent upon
achievement of specified
68
Gross unrecognized tax benefits at January 31, 2010
$
3,107
Increases in tax positions for prior years
2,742
Increases in tax positions for current year
86
Expiration of statutes of limitation
(860
)
Gross unrecognized tax benefits at January 31, 2011
5,075
Increases in tax positions for prior years
1,590
Decreases in tax positions for prior years
(208
)
Increases in tax positions for current year
56
Expiration of statutes of limitation
(791
)
Settlements
(1,990
)
Changes due to translation of foreign currencies
(47
)
Gross unrecognized tax benefits at January 31, 2012
3,685
Increases in tax positions for prior years
2,890
Decreases in tax positions for prior years
(127
)
Increases in tax positions for current year
171
Expiration of statutes of limitation
(38
)
Settlements
(1,106
)
Changes due to translation of foreign currencies
124
Gross unrecognized tax benefits at January 31, 2013
$
5,599