Autodesk 2009 Annual Report Download - page 127

For further information concerning Autodesk’s policies and procedures regarding the use of stock options,
see ”Compensation Discussion and Analysis” incorporated herein by reference to the section entitled “Executive
Compensation,” in our Proxy Statement for our fiscal year 2009 Annual Meeting of Stockholders to be filed with
the Securities and Exchange Commission not later than 120 days after the fiscal year ended January 31, 2009.
In addition to our stock option plans, our employees are also eligible to participate in Autodesk’s 1998
Employee Qualified Stock Purchase Plan (“ESP Plan”). Eligible employees may purchase shares of Autodesk’s
common stock at their discretion using up to 15% of their compensation subject to certain limitations, at not less
than 85% of fair market value as defined in the plan agreement. At January 31, 2009, 24.8 million shares were
available for future issuance. This amount will automatically be increased on the first trading day of each fiscal
year by an amount equal to the lesser of 10.0 million shares or 2.0% of the total outstanding shares plus any
shares repurchased by Autodesk during the prior fiscal year. We typically issue shares on March 31 and
September 30 of each fiscal year. The provisions of this plan expire during fiscal 2018.
On August 17, 2006, we disclosed that the Audit Committee of the Board of Directors was conducting a
voluntary review of our historical stock option granting practices and related accounting issues. Due to this
review, Autodesk was not current with its reporting obligations under the Securities Exchange Act of 1934 until
June 2007, and suspended contributions and purchases under the ESP Plan during the third quarter of fiscal 2007
and the first quarter of fiscal 2008. On September 18, 2006, our Board of Directors approved an amendment to
our ESP Plan which provided for active participant employees at the time of the suspension to become
automatically enrolled in the next offering period, unless they elected not to participate. The Board of Directors
also approved a one-time cash bonus of $8.8 million to non-executive employees enrolled in the ESP Plan at that
date. This bonus approximated the profits employee participants would have made on the scheduled
September 30, 2006 exercise date, had the purchases been made and the shares been sold on the next trading day
at close of market, and was expensed as additional compensation expense at the time it was paid. On March 22,
2007, our Board of Directors approved an amendment, which superseded the September 18, 2006 amendment,
which provided for active participant employees at the time of the suspension to become automatically enrolled
in the next offering period ending in September 2007, unless they elected not to participate. In June 2007, we
became current with our financial filings and resumed employee contributions to the ESP Plan.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign currency exchange risk
Our revenue, earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange
rates. Our risk management strategy utilizes foreign currency forward and option contracts to manage our foreign
currency exposures that exist as part of our ongoing business operations. Prior to the quarter ended October 31,
2008 such contracts did not extend beyond the current quarter; however, beginning in the third quarter of fiscal
2009 we entered into longer-term hedging contracts. We have expanded our foreign currency cash flow hedge
program beyond one quarter, and as of January 31, 2009 have open contracts to hedge expected cash flows for one
to 12 months in the future in order to reduce foreign currency volatility. Contracts are primarily denominated in
euros, Japanese yen, Swiss francs, British pounds and Canadian dollars. We do not enter into any foreign
exchange derivative instruments for trading or speculative purposes. The notional amount of our option and
forward contracts was $276.7 million and $131.8 million at January 31, 2009 and 2008, respectively.
We utilize foreign currency option collar and forward contracts to reduce the exchange rate impact on the
net revenue and operating expenses of certain anticipated transactions. A sensitivity analysis performed on our
hedging portfolio as of January 31, 2009 indicated that a hypothetical 10% appreciation of the U.S. dollar from
its value at January 31, 2009 would increase the fair value of our forward exchange and option contracts by $25.7
million. A hypothetical 10% depreciation of the dollar from its value at January 31, 2009 would decrease the fair
value of our forward exchange and option contracts by $19.7 million. The results of the sensitivity analysis
performed on our hedging portfolio as of January 31, 2008 indicated that a hypothetical 10% appreciation of the
U.S. dollar from its value at January 31, 2008 would have increased the fair value of our forward exchange and
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