Autodesk 2000 Annual Report Download - page 42

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Autodesk, Inc. FY 00
Note 5. Borrowing Arrangements
Autodesk has a U.S. line of credit permitting short-
term, unsecured borrowings of up to $40.0 million,
which may be used from time to time to facilitate
short-term cash flow. At January 31, 2000, there were
no borrowings outstanding under this agreement,
which expires in January 2001.
Additionally, Autodesk has a revolving demand line of
credit with a bank, under which it may borrow up to
Cdn$5.0 million (U.S.$3.5 million at January 31, 2000).
The amount available under the revolving line of
credit was reduced by letters of guarantee totaling
Cdn$0.3 million (U.S.$0.2 million at January 31, 2000).
Note 6. Commitments and Contingencies
Autodesk leases office space and equipment under
noncancelable operating lease agreements.The leases
generally provide that Autodesk pay taxes, insurance
and maintenance expenses related to the leased
assets. Future minimum lease payments for fiscal
years ended January 31 are as follows: $24.1 million
in 2001; $17.1 million in 2002; $13.4 million in 2003;
$10.0 million in 2004; $8.8 million in 2005; and
$21.1 million thereafter.
Rent expense was $30.2 million, $25.7 million
and $19.7 million in fiscal 2000, 1999 and 1998,
respectively.
Autodesk is a party to various legal proceedings aris-
ing from the normal course of business activities. In
management’s opinion, resolution of these matters
is not expected to have a material adverse impact on
Autodesk’s consolidated results of operations or its
financial position.However,depending on the amount
and timing, an unfavorable resolution of a matter
could materially affect Autodesk’s future results of
operations or cash flows in a particular period.
Note 7. Stockholders’ Equity
Preferred Stock
Under Autodesk’s Certificate of Incorporation, 2.0 mil-
lion shares of preferred stock are authorized. At
January 31, 2000, there were no preferred shares
issued or outstanding.The Board of Directors has the
authority to issue the preferred stock in one or more
series and to fix rights, preferences, privileges and
restrictions, including dividends, and the number of
shares constituting any series or the designation
of such series, without any further vote or action by
the stockholders.
Common Stock Repurchase Programs
During fiscal years 2000, 1999 and 1998, Autodesk
repurchased and retired a total of 2.9 million, 1.2 mil-
lion and 5.3 million shares of its common stock at aver-
age repurchase prices of $31.11, $39.34 and $32.80,
respectively. The primary purpose of the stock repur-
chase programs was to help offset the dilution to earn-
ings per share caused by the issuance of stock under
Autodesk’s employee stock plans.
In November, 1999, Autodesk announced a plan to
repurchase up to 8.0 million shares of Autodesk’s com-
mon stock. The number of shares acquired and the
timing of the purchases are based on several factors,
including general market conditions and the trading
price of Autodesk common stock.By January 31, 2000,
Autodesk repurchased and retired 2.9 million shares,
which were acquired in the open market. In addition,
during the fourth quarter of fiscal 2000, Autodesk
entered into a series of equity collar contracts with a
financial institution with respect to 1.8 million shares
of its common stock by selling put options (which
entitle the holder of the option to sell shares to
Autodesk at a specified price) and purchasing call
options (which entitle Autodesk to purchase shares
of common stock from the seller of the option at a
specified price). There was no exchange of cash in
placement of the contracts. The put and call options,
which expire between June and December, 2000, give
Autodesk a choice of physical, cash and net share
settlement methods.