Autodesk 2004 Annual Report Download - page 66

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resulted in a current income tax benefit of approximately $61.7 million which related primarily to various
international tax matters and research and development tax credits. Also in the fourth quarter, the Company
provided an additional $57.9 million in U.S. deferred income taxes on previously permanently reinvested
foreign earnings to reflect a potential repatriation of such foreign earnings to meet expected U.S. cash
needs, including the Company’s current stock repurchase program. The impact of these events was a net
income tax benefit of $3.8 million.
Note 5. Gain on Disposal of Affiliate
During October 2001, the shareholders of RedSpark, Inc. (“RedSpark”) approved a plan to dissolve the
company. Previously, Autodesk had maintained a majority interest in RedSpark’s voting stock since
RedSpark was formed in April 2000. Accordingly, Autodesk consolidated RedSpark’s financial position and
results of operations.
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.
Note 6. Borrowing Arrangements
During fiscal 2004, Autodesk had a U.S. line of credit available that permitted unsecured short-term
borrowings of up to $40.0 million, which could be used from time to time for working capital or other
business needs. This credit facility expired in February 2004. There were no borrowings outstanding under
this agreement at the time it expired. Autodesk does not plan to renew this credit facility.
Note 7. Commitments and Contingencies
Leases
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
(in millions):
2005 ....................................................... $ 38.6
2006 ....................................................... 29.0
2007 ....................................................... 16.4
2008 ....................................................... 9.4
2009 ....................................................... 5.0
Thereafter ................................................. 22.5
120.9
Less: Sublease income .................................... (8.5)
$112.4
Of these amounts, $7.7million has been included in our restructuring accruals at January 31, 2004. Rent
expense was $33.5 million in fiscal 2004, $41.1 million in fiscal 2003 and $40.9 million in fiscal 2002.
Guarantees and Indemnifications
In the normal course of business, Autodesk provides indemnifications of varying scopes to customers
against claims of intellectual property infringement made by third parties arising from the use of its products
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 4. Income Taxes (Continued)
56