Autodesk 2001 Annual Report Download - page 39

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36 FY 01 Autodesk, Inc.
(in thousands)
January 31, 2001 January 31, 2000
Cost Fair value Cost Fair value
Cash and cash equivalents $ 116,391 $ 116,391 $108,641 $108,641
Marketable securities 302,761 306,109 434,296 432,282
Forward foreign currency contracts 8 8 8 8
Foreign currency option contracts 218 218 — —
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 material foreign cur-
rency denominated assets and liabilities, principally
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 foreign
currency denominated receivables and payables.
The notional amounts of foreign currency contracts were
$36.6 million at January 31, 2001 and $37.6 million at
January 31, 2000. While the contract or notional amount is
often used to express the volume of foreign exchange
contracts,the amounts potentially subject to credit risk are
generally limited to the amounts, if any, by which the
counterparties’ obligations under the agreements exceed
the obligations of Autodesk to the counterparties. Gains
resulting from foreign currency transactions were not
material in fiscal 2001, 2000 and 1999.
Options
In addition to the forward contracts, Autodesk utilizes for-
eign currency option contracts to reduce the exchange
rate impact on anticipated net revenue transactions.These
option contracts have maturities of less than three months
and settle before the end of each fiscal quarter. They are
not used for trading or speculative purposes. Autodesk’s
financial exposure is limited to the amount paid for the
options and any resulting gains from these option con-
tracts are deferred until the underlying hedged
transaction is recorded.
The notional amounts of foreign currency option con-
tracts at January 31, 2001 was $2.3 million. Autodesk did
not use option contracts prior to fiscal 2001. Gains result-
ing from foreign currency transactions were not material
in fiscal 2001.
The computation of diluted net income per share does not
include 6.0 million options for fiscal 2001, 8.3 million
options for fiscal 2000 and 3.2 million options for
fiscal 1999. Such options were excluded because the
options had exercise prices greater than the average mar-
ket 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: