Autodesk 2002 Annual Report Download - page 49

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As a result of the plan to dissolve RedSpark, Autodesk recognized a one-time non-cash gain of $9.5 million
during the third quarter of fiscal 2002. This gain, which resulted from the reversal of the minority interest
liability balance, represents the reversal of cumulative losses recognized in excess of the amount that Autodesk
originally invested.
The minority interest at January 31, 2001 represents equity funding received by RedSpark from third party
investors, net of allocated losses for the period since the funding was received in October 2000 through January
2001.
Note 6. Borrowing Arrangements
Autodesk has a U.S. line of credit available that permits short-term, unsecured borrowings of up to
$75.0 million, which may be used from time to time for working capital or other business needs. This credit
facility, which expires in January 2003, contains restrictive covenants that, among other provisions, require
Autodesk to maintain certain financial ratios. During fiscal 2002 and at January 31, 2002, Autodesk was in
compliance with these restrictive covenants. In addition, at January 31, 2002, there were no borrowings
outstanding under this agreement.
Note 7. Commitments and Contingencies
Autodesk leases office space and computer 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: $35.1 million in 2003;
$31.1 million in 2004; $25.0 million in 2005; $19.0 million in 2006; $8.6 million in 2007; and $14.1 million
thereafter. Of these amounts, $17.5 million has been included in our restructuring accruals at January 31, 2002.
Rent expense was $40.9 million in fiscal 2002, $31.8 million in fiscal 2001 and $30.2 million in fiscal 2000.
Autodesk is a party to various legal proceedings arising 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, cash flows 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, cash flows or financial position in a particular period.
Note 8. Stockholders’ Equity
Preferred Stock
Under Autodesk’s Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At
January 31, 2002, 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.
In December 1995, the Board of Directors approved a Preferred Shares Rights Agreement (the “Rights
Agreement”). The Rights Agreement is intended to protect stockholders’ rights in the event of an unsolicited
takeover attempt. It is not intended to prevent a takeover of the Company on terms that are favorable and fair to
all stockholders and will not interfere with a merger approved by the Board of Directors. Each right entitles
stockholders to buy
1
⁄ 1000 of a share of preferred stock at an exercise price of $100, subject to further adjustment.
The rights will become exercisable for half-priced common stock if a person or group acquires or
48