Autodesk 2006 Annual Report Download - page 87

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During fiscal 2006, we used $338.0 million in net cash for investing activities compared to $175.7 million
generated from investing activities during fiscal 2005. The increase in cash used in investing activities during
fiscal 2006 was primarily due to $242.1 million used in business acquisitions (Alias, Compass, Colorfront, c-plan,
Solid Dynamics, Engineering Intent and AST). In addition, we also utilized $271.3 million for purchases of available-
for-sale marketable securities during the current fiscal year, partially offset by $204.0 million of sales and
maturities of such securities. These uses of cash for investing activities were primarily due to funds repatriated
from Europe and Asia to the United States under the American Jobs Creation Act of 2004 (“DRD Legislation”).
During fiscal 2006, under the DRD Legislation, we repatriated approximately $512 million to the United States
where we can more effectively manage our cash and invest in our business. During fiscal 2005, sales and
maturities of available-for-sale marketable securities were higher primarily due to the liquidation of certain
marketable securities to fund the repurchase of our common stock, as discussed below.
We used $305.6 million in net cash for financing activities during fiscal 2006, compared to $317.7 million
during fiscal 2005. The major financing uses of cash in both periods were for the repurchase of our common stock.
We repurchased 11.7 million shares of our common stock for $446.8 million during fiscal 2006 and repurchased
25.9 million shares for $546.4 million during fiscal 2005. As of January 31, 2006, 20.5 million shares remained
available for repurchase under our stock repurchase program. We currently expect to continue making
repurchases under this program. Our dividend payments declined to $3.4 million during fiscal 2006 compared
to $13.5 million during fiscal 2005. This decline was due to the discontinuance of the payment of cash dividends
after the fourth quarter of fiscal 2005. The dividend payment made during fiscal 2006 related to the dividend
declaration made during the fourth quarter of fiscal 2005. These financing uses of cash were partially offset by
proceeds received from the issuance of common stock under our stock option and stock purchase plans, which
amounted to $144.6 million during fiscal 2006 and $242.2 million during fiscal 2005.
Long-term cash requirements, other than normal operating expenses, are anticipated for the development
of new software products and incremental product offerings resulting from the enhancement of existing
products; financing anticipated growth; the share repurchase program; the acquisition of businesses, software
products, or technologies complementary to our business; and capital expenditures, including the purchase and
implementation of internal-use software applications.
As noted above, during fiscal 2006, we repatriated approximately $512 million of foreign earnings held by
financial institutions outside of the United States under the DRD Legislation. As a result, at January 31, 2006,
40% of our consolidated cash, cash equivalents and marketable securities are held with financial institutions
in the United States, compared to 10% at January 31, 2005. For further discussion of the DRD Legislation, see
Note 5 “Income Taxes” in the Notes to Consolidated Financial Statements. In addition, $22.4 million of our
marketable securities at January 31, 2006 is reserved for deferred compensation. See Note 4, “Restricted Financial
Instruments,” in the Notes to Consolidated Financial Statements for further discussion.
Our international operations are subject to currency fluctuations. To minimize the impact of these
fluctuations, we use foreign currency option contracts to hedge our exposure on anticipated transactions and
forward contracts to hedge our exposure on firm commitments, primarily certain receivables and payables
denominated in foreign currencies. Our foreign currency instruments, by policy, have maturities of less than three
months and settle before the end of each quarterly period. The principal currencies hedged during fiscal 2006
were the euro, Swiss franc, Canadian dollar, British pound and Japanese yen. We monitor our foreign exchange
exposures to ensure the overall effectiveness of our foreign currency hedge positions.
2006 Annual Report
41