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Hi Jeff,

Looking at Autodesk for last fiscal year reported the tax deferred assets (net of changes in tax deferred liabilities) increased by 74.2 million. There was also a decrease in accrued income taxes of 30.8 million. By this method the cash taxes paid would increase by 105.0 million. I believe this is the concern you are bringing up.

Consider that Autodesk only paid 44.2 million in actual taxes (disclosed in the footnotes) which was 9.9 million less than the provision for income taxes of 54.1 million.

Looking at the operating cash flow reconciliation we see that adjustments to the provision of taxes was 124 million in tax benefit from stock options, an outflow of 87.8 million in Deferred Income Taxes, and a drop of 27.3 million in accrued income taxes. Adjusting:

Provision: 54.1 million
add: 124 million Tax Benefit from Stock Options
less: 87.8 Deferred Income Taxes
less: 27.3 Accrued Income Taxes
Taxes Paid: 45.2 million

(vs reported 44.2 million ?don't know where the 1 million went)

So do we reduce cash taxes by 9.9 million or add 105 million. My answer is stick with the cash flow statement and cash taxes paid of 44.2 million. I don't think the balance sheet includes enough information to get us in the ball park of the actual cash taxes paid. I personally have gone after the balance sheet method but this is a perfect example of the cash flow statements and footnotes being of help and giving a more clear picture. Don't know if this was of any help but maybe it will stimulate some more discussion - I am curious as to other's thoughts on this issue and finding out where I am confusing things.

Snippit from 10-K

Cash payments (refunds) for income taxes were approximately $44.2 million in fiscal 2006, $16.5 million in fiscal 2005, and ($19.3) million in fiscal 2004.


The tax benefit recognized associated with dispositions from employee stock plans was $124.0 million in fiscal 2006, $116.9 million in fiscal 2005, and zero in fiscal 2004. Foreign pretax income was $276.2 million in fiscal 2006, $183.5 million in fiscal 2005, and $126.7 million in fiscal 2004.

Matthew
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