Autodesk 2009 Annual Report Download - page 123

Liquidity and Capital Resources
Our primary source of cash is from the sale of licenses to 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 invest in our growth initiatives, which include acquisitions of products, technology
and businesses and to fund our stock repurchase program. See further discussion of these items below.
At January 31, 2009, our principal sources of liquidity were cash, cash equivalents and short-term
marketable securities totaling $981.1 million, net accounts receivable of $316.5 million and $52.1 million of
outstanding under our lines of credit. We have a U.S. line of credit facility that permits unsecured short-term
borrowings of up to $250.0 million and a China line of credit that permits unsecured short-term borrowings of up
to $5.0 million. These line of credit agreements contain customary covenants that could restrict the imposition of
liens on our assets, and restrict our ability to incur additional indebtedness or make dispositions of assets if we
fail to maintain their financial covenants. The lines of credit are available for working capital or other business
needs. We drew on the U.S. line of credit during fiscal 2009 due to temporary differences between cash needs
and cash availability in the U.S. During fiscal 2009 we principally used the facility to fund the 8.0 million share
stock repurchase and for the acquisition of Moldflow. At January 31, 2009, we had $50.0 million outstanding on
the U.S. line of credit. At January 31, 2009, we had $2.1 million outstanding on the China line of credit. We drew
on the China line of credit due to temporary differences between cash needs and cash availability in China. The
U.S. facility expires in August 2012 and the current China facility draw matures in May 2009. The China facility
is a short-term revolving facility which may be canceled or called at any time with 30 days’ written notice. As of
March 18, 2009, the balances outstanding on the U.S. and China line of credit facilities were $10.0 million and
$2.1 million, respectively.
Our primary commercial banking relationship is with Citibank and its global affiliates (“Citibank”). Our
cash and cash equivalents are held by diversified financial institutions globally, and the portion of our cash and
cash equivalents held by Citibank has been significantly reduced during the fourth quarter of fiscal 2009.
Citicorp USA, Inc., an affiliate of Citibank, is the lead lender and agent in the syndicate of our $250.0 million
U.S. line of credit. Recently, Citibank, like many financial institutions, has obtained government assistance.
At January 31, 2009, our short-term investment portfolio consisted of term deposits, money market funds
and mutual funds with an estimated fair value of $63.5 million, and a cost basis of $68.0 million. Of this cost
basis amount, $19.9 million was invested in a defined set of mutual funds as directed by the participants in our
Deferred Compensation Plan (see Note 4, “Deferred Compensation” in the Notes to Consolidated Financial
Statements for further discussion), and $10.3 million was invested in bank term deposits with original maturities
greater than 90 days and less than one year. The remaining $37.8 million was invested in two money market
funds: $35.1 million was invested in The Reserve International Liquidity Fund (the “International Fund”) and
$2.7 million was invested in The Reserve Primary Fund (the “Primary Fund,” and together with the International
Fund, the “Reserve Funds”). In mid-September, the Reserve Funds ceased redemptions after net asset values of
the funds decreased below $1 per share. This occurred as a result of the Reserve Funds revaluing their holdings
of debt securities issued by Lehman Brothers, which filed for Chapter 11 bankruptcy on September 15, 2008, and
the resulting unusually high redemption requests on the Reserve Funds. Accordingly, we recorded $4.5 million
other-than-temporary impairment impacting fiscal 2009. The impairment expense was recorded in “Interest and
other income (expense), net” in the Consolidated Statements of Income.
The timing of redemptions from the Reserve Funds currently is undetermined. The SEC is overseeing the
administration, accounting and payout of the U.S.-based Primary Fund, and a third party court appointed supervisor
is overseeing, but not managing, the accounting and payment administration of the non U.S.-based International
Fund. At this time, these investments are not currently liquid, and in the event we need to access these funds, we
will not be able to do so. However, it is our current belief that the distributions for the Reserve Funds will occur
within the next 12 months. Accordingly, the Reserve Funds are classified in current “Marketable Securities” in the
Consolidated Balance Sheets as of January 31, 2009. This re-designation is included in “Purchases of
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