Autodesk 2001 Annual Report Download - page 30

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27
Autodesk, Inc. FY 01
hypothetical 10 percent appreciation of the U.S. dollar
from January 31, 2001 would increase the fair value of our
forward exchange/option contracts by $7.0 million.
Conversely, a hypothetical 10 percent depreciation of the
dollar from January 31, 2001 would decrease the fair value
of our forward exchange/option contracts by $6.1 million.
We do not anticipate any material adverse impact to our
consolidated financial position, results of operations or
cash flows as a result of these foreign currency forward
and option contracts.
Interest rate sensitivity
We had an investment portfolio of fixed income securities,
including those classified as security deposits, of
$306.1 million at January 31, 2001. These securities are
subject to interest rate fluctuations and will decrease in
market value if interest rates increase.
A sensitivity analysis was performed on our investment
portfolio as of January 31, 2001. This sensitivity analysis is
based on a modeling technique that measures the hypo-
thetical market value changes that would result from a
parallel shift in the yield curve of plus 50, plus 100 or plus
150 basis points over 6-month and 12-month time hori-
zons. For the 6-month time horizon the market value
changes for a 50, 100, or 150 basis point increase were
($1.7) million, ($3.4) million and ($5.1) million, respectively.
For the 12-month time horizon the market value changes
for a 50,100 or 150 basis point increase were ($1.4) million,
($2.8) million and ($4.1) million, respectively.
We do not use derivative financial instruments in our
investment portfolio to manage interest rate risk.We place
our investments in instruments that meet high credit qual-
ity standards, as specified in our investment policy
guidelines, which limits the amount of credit exposure to
any one issue, issuer or type of instrument.
Investments in privately held businesses
We have an investment portfolio with a net book value of
approximately $7.0 million as of January 31, 2001 that
includes minority equity investments in several privately
held technology companies, many of which are in the
start-up or development stage. With the exception of our
investments in Buzzsaw and RedSpark, we account for
these minority equity investments using the cost method
of accounting. These investments are inherently risky
because the markets for the technologies or products they
have under development are typically in the early stages
and may never develop into commercially viable busi-
nesses. We may incur losses related to our investments in
these companies.