Autodesk 2010 Annual Report Download - page 141

A third party court appointed supervisor is overseeing, but not managing, the accounting and payment
administration of the non U.S.-based International Fund. Our investment in the International Fund is not
currently liquid, and in the event we need to access these funds, we will not be able to do so. However, based on
currently available information, we expect to recover substantially all of our current holdings, net of reserves,
from the International Fund within the next 12 months. Accordingly, the investment in the International Fund is
classified in current “Marketable Securities” in the Consolidated Balance Sheets.
In addition, At January 31, 2010, we owned two auction rate securities with an estimated fair value of $7.6
million. Our auction rate securities are variable rate debt instruments that have underlying securities with
contractual maturities greater than ten years and interest rates that were structured to reset at auction every 28
days. The securities, which met our investment guidelines at the time the investments were made, have failed to
settle in auctions since August 2007 and have earned a premium interest rate since that time. While we expect to
recover substantially all of our current holdings, net of reserves, in the auction rate securities, we cannot predict
when this will occur or the amount we will receive. Due to the lack of liquidity of these investments, they are
included in non-current “Marketable securities” in the Consolidated Balance Sheets. See Note 2, “Financial
Instruments and Hedging Activities,” in the Notes to Consolidated Financial Statements for further discussion of
our financial instruments.
At January 31, 2010, $26.3 million of trading securities were invested in a defined set of mutual funds as
directed by the participants in our Deferred Compensation Plan (see Note 6, “Deferred Compensation,” in the
Notes to Consolidated Financial Statements for further discussion).
The primary source for net cash provided by operating activities of $246.8 million for fiscal 2010 was net
income increased by the effect of non-cash expenses associated with depreciation and amortization, stock-based
compensation, and impairment of goodwill. The primary working capital source of cash was a decrease in
accounts receivable. The decrease in accounts receivable relates primarily to the increase in collections during
the fourth quarter of fiscal 2010 as compared to the fourth quarter of fiscal 2009. Our days sales outstanding in
trade receivables was 55 days at January 31, 2010. The primary working capital uses of cash were for payment of
restructuring-related costs, the reduction of deferred revenue due to lower maintenance billings for fiscal 2010
compared to fiscal 2009 and reductions of accrued expenses primarily related to our fiscal 2010 employee bonus
accrual and fourth quarter fiscal 2010 commissions. We expect net cash flows provided by operating activities to
be higher in fiscal 2011 than in fiscal 2010 due to improved operating margins.
Long-term cash requirements for items other than normal operating expenses are anticipated for the
following: stock repurchases; the acquisition of businesses, software products, or technologies complementary to
our business; capital expenditures, including the purchase and implementation of internal-use software
applications; and funding restructuring costs.
Our existing cash, cash equivalents and investment balances may decline in fiscal 2011 in the event of a
further weakening of the economy or changes in our planned cash outlay. Cash from operations could also be
affected by various risks and uncertainties, including, but not limited to the risks detailed in Part I, Item 1A titled
“Risk Factors.” However, based on our current business plan and revenue prospects, we believe that our existing
balances, our anticipated cash flows from operations and our available credit facility will be sufficient to meet
our working capital and operating resource expenditure requirements for the next 12 months. Our existing U.S.
credit facility is currently $250.0 million of which we have no amounts outstanding. This credit facility is
available for working capital and other business needs.
Our revenue, earnings and cash flows are subject to fluctuations due to changes in foreign currency
exchange rates. Our risk management strategy utilizes derivative instruments to hedge a majority of our foreign
currency transaction exposures that exist as part of our ongoing business operations. As of January 31, 2010, we
have open contracts to hedge expected cash flows for one to twelve months in the future. Contracts are primarily
denominated in euros, Japanese yen, Swiss francs, British pounds and Canadian dollars. We do not enter into any
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