Autodesk 2007 Annual Report Download - page 127

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2007 Annual Report
Liquidity and Capital Resources
Our primary source of cash is from the sale of our products. Our primary use of cash is payment of
our operating costs which consist primarily of employee-related expenses, such as compensation and
benefits, as well as general operating expenses for marketing, facilities and overhead costs. In addition to
operating expenses, we also use cash to fund our stock repurchase program and to invest in our growth
initiatives through business acquisitions. See further discussion of these items below.
At January 31, 2007, our principal sources of liquidity were cash, cash equivalents and marketable
securities totaling $777.9 million and net accounts receivable of $301.3 million. In addition, we also have a
U.S. line of credit facility which was established during fiscal 2006. This line of credit permits unsecured
short-term borrowings of up to $100 million, which is available for working capital or other business needs.
The credit agreement contains customary covenants which could restrict liens, certain types of additional
debt and dispositions of assets if Autodesk fails to maintain its financial covenants. Because the Company
was not current with its reporting obligations under the Securities and Exchange Act of 1934 during the
second half of fiscal 2007, the company was in violation of its financial reporting covenant. Autodesk
received a waiver from the borrowing institution for the period that it was not in compliance with the
covenant. Autodesk pays a quarterly commitment fee, ranging between $25,000 and $62,500, to maintain
this facility. This facility, which matures in August 2007, had no borrowings outstanding at January 31,
2007.
Long-term cash requirements for items other than normal operating expenses are anticipated for
the following: 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. In
addition, $27.2 million of our marketable securities are held in a rabbi trust under non-qualified deferred
compensation plans as of January 31, 2007. See Note 5, “Deferred Compensation,” 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 reduce 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 2007 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.
Contractual Obligations
The following table summarizes our significant financial contractual obligations at January 31, 2007
and the effect such obligations are expected to have on our liquidity and cash flows in future periods. This
table excludes amounts already recorded on our balance sheet as current liabilities at January 31, 2007.
Total FY 2008 FY 2009-2010 FY 2011-2012 Thereafter
(in millions)
Operating lease obligations. . . . . . . . . . . . . $157.8 $41.7 $58.8 $31.9 $25.4
Purchase obligations . . . . . . . . . . . . . . . . . . . 37.0 37.0 — — —
Total (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $194.8 $78.7 $58.8 $31.9 $25.4
(1) Total does not include contractual obligations recorded on the balance sheet or certain purchase
obligations as discussed below.