Autodesk 2010 Annual Report Download - page 163

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
January 31, 2009
Amortized
Cost
Gross
unrealized
gains
Gross
unrealized
losses
Estimated
Fair
Value
Short-term available-for-sale securities:
Money market funds and mutual funds ................... $53.2 $— $— $53.2
Bank time deposits ................................... 10.3 — — 10.3
$63.5 $— $— $63.5
Long-term available-for-sale securities:
Taxable auction-rate securities .......................... $ 7.6 $— $— $ 7.6
$ 7.6 $— $— $ 7.6
The sales of available-for-sale securities in fiscal 2010, 2009 and 2008 resulted in no gross gains or losses.
The cost of securities sold is based on the specific identification method. Proceeds from the sale and maturity of
marketable securities were $355.1 million in fiscal 2010, $83.4 million in fiscal 2009 and $799.1 million in fiscal
2008.
At January 31, 2010, Autodesk was invested in The Reserve International Liquidity Fund (the “International
Fund”) with an estimated fair value of $10.0 million. At January 31, 2009, Autodesk was invested in the
International Fund and The Reserve Primary Fund (the “Primary Fund,” and together with the International Fund,
“Reserve Funds”). In mid-September of 2008, the Reserve Funds ceased redemptions after net asset values of the
fund decreased below $1 per share. This occurred as a result of the Reserve Funds revaluing their holdings of
debt securities issued by Lehman Brothers Holdings, Inc. (“Lehman Brothers”), which filed for Chapter 11
bankruptcy on September 15, 2008, and the resulting unusually high redemption requests on the Reserve Funds.
During fiscal 2010, Autodesk received $23.3 million in redemption proceeds from the Reserve Funds. This
reduced the fair value of Autodesk’s investments in the Primary Fund to zero and the International Fund to
$10.0 million as of January 31, 2010.
A third party court appointed supervisor is overseeing, but not managing, the accounting and payment
administration of the International Fund. At this time, the investment is currently not liquid, and in the event
Autodesk needs to access these funds, the Company will not be able to do so. However, based on currently
available information, Autodesk expects to recover substantially all of its current holdings, net of reserves, from
the International Fund within the next 12 months. Accordingly, the International Fund is classified in current
“Marketable Securities” on the Company’s Consolidated Balance Sheets.
At January 31, 2010, Autodesk owned two auction rate securities with an estimated fair value of $7.6
million. Autodesk’s 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 Autodesk’s 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
Autodesk expects to recover substantially all of its current holdings, net of reserves, in the auction rate securities,
it cannot predict when this will occur or the amount the Company will receive. Due to the lack of liquidity of
these investments in an active market, they are included in non-current “Marketable securities” on the
accompanying Consolidated Balance Sheets. The Company will continue to evaluate its accounting for these
investments quarterly.
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