Autodesk 2005 Annual Report Download - page 67

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The notional amounts of foreign currency contracts were $36.2 million at January 31, 2005 and $26.0 million
at January 31, 2004. 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.
Options
In addition to the forward contracts, Autodesk utilizes foreign currency option collar contracts to reduce
the exchange rate impact on the net revenue of certain anticipated transactions. These option contracts, which
are designated and documented as cash flow hedges and qualify for hedge accounting treatment under SFAS
133, have maturities of less than three months. For cash flow hedges, derivative gains and losses included in
comprehensive income are reclassified into earnings at the time the forecasted revenue is recognized or the
option expires. The cost of these foreign currency option collars are recorded as other current assets and other
accrued liabilities on our consolidated balance sheets.
The notional amounts of foreign currency option contracts were $52.4 million at January 31, 2005 and $42.0
million at January 31, 2004 and the critical terms were generally the same as those of the underlying exposure.
Gains, if any, from the effective portion of the option contracts, as determinable under SFAS 133, are recognized
as net revenues, while the ineffective portion of the option contract is recorded in interest and other income,
net. There were $0.5 million net settlement losses recorded as net revenues during fiscal 2005 and no net
settlement gains or losses during fiscal 2004 recorded as net revenues. Amounts associated with the cost of the
options totaling $0.8 million during fiscal 2005 and $0.8 million during fiscal 2004 were recorded in interest and
other income, net.
Marketable Securities
Marketable securities include the following available-for-sale securities at January 31, 2005 and 2004:
January 31, 2005
Cost
Gross
unrealized
gains
Gross
unrealized
losses
Estimated
fair value
(In thousands)
Short-term Mutual Funds .......... $15,038 $— $— $15,038
January 31, 2004
Cost
Gross
unrealized
gains
Gross
unrealized
losses
Estimated
fair value
(In thousands)
Short-term:
Municipal Bonds ................ $ 69,894 $ 132 $— $ 70,026
Mutual Funds ................... 11,249 — — 11,249
81,143 132 — 81,275
Long-term:
Municipal Bonds ................ 163,586 2,390 — 165,976
$244,729 $2,522 $— $247,251
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 3. Financial Instruments (Continued)
55