Autodesk 2010 Annual Report Download - page 165

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Balance Sheet Hedges
In addition to the cash flow hedges described above, contracts which are not designated as hedging
instruments are used to reduce the exchange rate risk associated primarily with receivables and payables.
Forward contracts are marked-to-market at the end of each fiscal quarter, with gains and losses recognized as
other income or expense, net. These derivative instruments do not subject the Company to material balance sheet
risk due to exchange rate movements because gains and losses on these derivative instruments are intended to
offset the gains or losses resulting from the settlement of the underlying foreign currency denominated
receivables and payables. The notional amounts of foreign currency contracts were $19.6 million at January 31,
2010 and $28.3 million at January 31, 2009.
The bank counterparties in all contracts expose Autodesk to credit-related losses in the event of their
nonperformance. However, to mitigate that risk, Autodesk only contracts with counterparties who meet the
Company’s minimum requirements under its counterparty risk assessment process. Autodesk monitors ratings,
credit spreads and potential downgrades on at least a quarterly basis. Based on Autodesk’s on-going assessment
of counterparty risk, the Company will adjust its exposure to various counterparties.
The effects of derivative instruments on Autodesk’s consolidated financial statements were as follows as of
January 31, 2010 and for the fiscal year then ended (amounts presented include any income tax effects):
Fair Value of Derivative Instruments in Consolidated Balance Sheet as of January 31, 2010:
Derivative Assets Derivative Liabilities
Balance
Sheet
Location Fair Value
Balance
Sheet
Location Fair Value
Foreign currency contracts designated as
cash flow hedges .......................... Prepaid
expenses and
other current
assets
$ 4.3 Other
accrued
liabilities
$ 0.4
Derivatives not designated as hedging instruments . . . — —
Total derivatives ........................ $4.3 $0.4
Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Derivatives
Designated as Hedging Instruments
For the Fiscal Year Ended
January 31, 2010
Amount of Gain
(Loss) Recognized in
Accumulated OCI on
Derivatives
(Effective Portion)
Amount and Location of Gain
(Loss) Reclassified from
Accumulated OCI into Income
(Effective Portion)
Amount and Location of Gain (Loss)
Recognized in Income on
Derivatives (Ineffective Portion and
Amount Excluded from
Effectiveness Testing)(1)
Foreign exchange contracts ...... $(2.5) $(10.9) Net revenue $1.3 Interest and other
income, net
4.6 Operating expenses
Total ........................ $(2.5) $ (6.3) $1.3
(1) Includes $1.0 million net gain recognized for the fiscal year ended January 31, 2010 due to previously
forecasted transactions that did not occur within the originally specified time period or the additional period
of time allowed.
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