Autodesk 2012 Annual Report Download - page 112

The primary source for net cash provided by operating activities of $573.5 million for fiscal 2012 was net income of
$285.3 million increased by the effect of non-cash expenses totaling $224.3 million associated with depreciation and
amortization and stock-based compensation. In addition, net cash flow provided by changes in operating assets and liabilities
was $96.7 million. The primary source of working capital was an increase in deferred revenue due to higher maintenance
billings and an increase in accounts payable for fiscal 2012 compared to fiscal 2011. The primary working capital uses of cash
were increases in accounts receivable due to higher billings and the reduction of accrued expenses primarily related to accrued
commissions in fiscal 2012 compared to fiscal 2011. Our days sales outstanding in trade receivables was 61 at January 31,
2012 compared to 55 at January 31, 2011. The increase in days sales outstanding is due to higher billings in the last month of
fiscal 2012 compared to the last month of fiscal 2011.
At January 31, 2012, our short-term investment portfolio had an estimated fair value of $254.4 million and a cost basis of
$252.6 million. The portfolio fair value consisted of $143.8 million invested in commercial paper and corporate securities,
$38.2 million invested in U.S. government agency securities, $31.5 million invested in mutual funds, $5.2 million invested in
certificates of deposit and time deposits with remaining maturities at the date of purchase greater than 90 days and less than one
year, $30.7 million invested in U.S treasury securities, $4.7 million invested in municipal securities and $0.3 million invested in
other short-term securities.
At January 31, 2012, $31.5 million of trading securities were invested in a defined set of mutual funds as directed by the
participants in our Deferred Compensation Plan (see Note 6, “Deferred Compensation,” in the Notes to Consolidated Financial
Statements for further discussion).
Long-term cash requirements for items other than normal operating expenses are anticipated for the following: the
acquisition of businesses, software products, or technologies complementary to our business; stock repurchases; and capital
expenditures, including the purchase and implementation of internal-use software applications.
Our strategy includes improving our product functionality and expanding our product offerings through internal
development as well as through the acquisition of products, technology and businesses. Acquisitions often increase the speed at
which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in
certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions
regarding acquisitions. We currently anticipate that we will acquire products, technology and businesses as compelling
opportunities become available. In fiscal 2012, we increased the number, pace and dollars spent on acquisitions in comparison
to fiscal 2011, but our decision to acquire businesses or technology is dependent on our business needs, the availability of
suitable sellers and technology, and our own financial condition.
Our cash, cash equivalent and marketable securities balances are primarily denominated and held in U.S. dollar and are
concentrated in a few locations around the world, with substantial amounts held outside of the U.S. We believe that such
dispersion meets our business and liquidity needs. Certain amounts held outside the U.S. could be repatriated to the U.S.
(subject to local law restrictions), but under current U.S. tax law, could be subject to U.S. income taxes less applicable foreign
tax credits. We have provided for the U.S. income tax liability on foreign earnings, except for foreign earnings that are
considered permanently reinvested outside the U.S. Our intent is that amounts related to foreign earnings permanently
reinvested outside the U.S. will remain outside the U.S. and we will meet our U.S. liquidity needs through ongoing cash flows,
external borrowings, or both. We utilize a variety of tax planning and financing strategies in an effort to ensure that our
worldwide cash is available in the locations in which it is needed.
Our existing cash, cash equivalents and investment balances may decline in fiscal 2013 in the event of a weakening of the
global economy or changes in our planned cash outlay. Cash from operations could also be affected by various risks and
uncertainties, including, but not limited to the risks detailed in Part I, Item 1A titled “Risk Factors.” However, based on our
current business plan and revenue prospects, we believe that our existing balances, our anticipated cash flows from operations
and our available credit facility will be sufficient to meet our working capital and operating resource expenditure requirements
for at least the next 12 months. Our existing credit facility at March 15, 2012 is $400.0 million of which we have no amounts
outstanding. This credit facility is available for working capital and general corporate purposes.
Our revenue, earnings, cash flows, receivables and payables are subject to fluctuations due to changes in foreign currency
exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency
volatility that exists as part of our ongoing business operations. We utilize cash flow hedge contracts to reduce the exchange
rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. In addition, we use balance
sheet hedge contracts to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and
payables. As of January 31, 2012 and 2011, we had open cash flow and balance sheet hedge contracts with future settlements
within one to twelve months. Contracts were primarily denominated in euros, Japanese yen, Swiss francs, British pounds,
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