Autodesk 2007 Annual Report Download - page 172

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 7. Borrowing Arrangements
Autodesk entered into a U.S. credit facility in August 2005. This facility permits unsecured short-term
borrowings of up to $100.0 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.
Note 8. Commitments and Contingencies
Leases
Autodesk leases office space and computer equipment under noncancellable 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:
2008 ............................................... $ 41.7
2009 ............................................... 33.1
2010 ............................................... 25.7
2011 ................................................ 20.4
2012 ............................................... 11.5
Thereafter .......................................... 25.4
157.8
Less: Sublease income ............................... (5.8)
$152.0
Of these amounts, approximately $6.0 million has been included in Autodesk’s restructuring accruals
at January 31, 2007. Rent expense was $40.6 million in fiscal 2007, $38.0 million in fiscal 2006 and $34.2
million in fiscal 2005.
Purchase commitments
Autodesk, in the normal course of business, enters into various purchase commitments for goods
or services. Total noncancellable purchase commitments as of January 31, 2007 were approximately $37.0
million for periods through fiscal 2008. These purchase commitments primarily result from contracts for
the acquisition of IT infrastructure, marketing and software development services. Of the total purchase
commitments, $28.8 million related to a termination fee for an outsource application hosting services
agreement entered into during fiscal 2006. This fee is reduced as time lapses during the five-year contract
period.
Autodesk has certain royalty commitments associated with the shipment and licensing of certain
products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the