Autodesk 2000 Annual Report Download - page 38

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Autodesk, Inc. FY 00
During the fourth quarter of fiscal 2000, the Staff of
the Securities and Exchange Commission issued two
Staff Accounting Bulletins, involving the accounting
for restructuring charges and revenue recognition.
Management believes that Autodesk’s practices and
policies are in compliance with the Staff Accounting
Bulletins and that the impact will not have a material
impact on Autodesk’s financial position or results
of operations.
Note 2. Net Income Per Share
Basic net income per share is calculated using the
weighted average number of common shares out-
standing. Diluted net income per share is computed
using the weighted average number of common
shares outstanding and the dilutive common
stock equivalents outstanding during the period. A
reconciliation of the numerators and denominators
used in the basic and diluted net income per share
amounts follows:
(in thousands)
Year ended January 31, 2000 1999 1998
Numerator:
Numerator for basic and diluted net income per share—net income $ 9,808 $ 97,132 $ 56,215
Denominator:
Denominator for basic net income per share—weighted average shares 60,328 56,394 56,340
Effect of dilutive common stock options 1,078 2,747 3,682
Denominator for diluted net income per share 61,406 59,141 60,022
For fiscal 2000, 1999 and 1998, options to purchase
8.3 million, 3.2 million and 1.9 million shares, respec-
tively, have been excluded from the computation of
diluted net income per share. Such options were
excluded because the options had exercise prices
greater than the average market prices of common
stock during the respective periods, and, therefore
were anti-dilutive.
Note 3. Financial Instruments
Fair Values of Financial Instruments
Estimated fair values of financial instruments are
based on quoted market prices.The carrying amounts
and fair value of Autodesk’s financial instruments are
as follows:
(in thousands)
January 31, 2000 January 31, 1999
Cost Fair value Cost Fair value
Cash and cash equivalents $ 108,641 $ 108,641 $ 258,941 $ 258,941
Marketable securities 434,296 432,282 167,846 169,021
Forward foreign currency contracts 8 8 (80) (80)
Forwards
Autodesk utilizes forwards to reduce its foreign
exchange rate risk. The forwards, which have average
maturities of 60 days or less, are used to hedge mate-
rial foreign currency denominated receivables and
payables.They are not used for trading or speculative
purposes. Forwards are marked-to-market at the end
of each period, with gains and losses recognized as
other income or expense to offset the gains or losses
resulting from the settlement of the underlying for-
eign currency denominated receivables and payables.
The notional amounts of foreign currency contracts
were $37.6 million and $31.2 million at January 31,
2000 and 1999, respectively. While the contract or
notional amount is often used to express the volume
of foreign exchange contracts, the amounts poten-
tially subject to credit risk are generally limited to the
amounts, if any, by which the counterparties’ obliga-
tions under the agreements exceed the obligations
of Autodesk to the counterparties. Gains resulting
from foreign currency transactions were not material
in fiscal 2000, 1999 and 1998.