Autodesk 2010 Annual Report Download - page 176

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 8. Commitments and Contingencies
Leases
Autodesk leases office space and computer equipment under noncancellable operating lease agreements.
The leases generally provide that Autodesk pay taxes, insurance and maintenance expenses related to the leased
assets. Future minimum lease payments for fiscal years ended January 31 are as follows:
2011 ....................................................................... $ 60.1
2012 ....................................................................... 42.4
2013 ....................................................................... 33.5
2014 ....................................................................... 21.3
2015 ....................................................................... 15.4
Thereafter ................................................................... 51.1
223.8
Less: Sublease income ......................................................... (5.1)
$218.7
Autodesk leases office space under arrangements expiring through 2023. Certain of these lease
arrangements contain escalation clauses whereby monthly rent increases over time. Autodesk leases computer
equipment under arrangements expiring through 2014. Rent expense is recognized on a straight-line basis over
the lease period. Rent expense was $56.8 million in fiscal 2010, $73.1 million in fiscal 2009 and $49.6 million in
fiscal 2008.
Purchase commitments
Autodesk, in the normal course of business, enters into various purchase commitments for goods or services.
Total non-cancellable purchase commitments as of January 31, 2010 were approximately $58.3 million for
periods through fiscal 2015. These purchase commitments primarily result from contracts for the acquisition of
IT infrastructure, marketing and software development services. Of the total purchase commitments,
$16.9 million related to a termination fee for an outsource application hosting services agreement entered into
during fiscal 2006. This fee is reduced as time lapses during the five-year contract period.
Autodesk has certain royalty commitments associated with the shipment and licensing of certain products.
Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying
revenue. Royalty expense, which was recorded under cost of license and other revenue on Autodesk’s
Consolidated Statements of Operations, was $16.5 million in fiscal 2010, $17.1 million in fiscal 2009 and $14.9
million in fiscal 2008.
Indemnifications
In the normal course of business, Autodesk provides indemnifications of varying scopes, including limited
product warranties and indemnification of customers against claims of intellectual property infringement made
by third parties arising from the use of its products or services. Autodesk accrues for known indemnification
issues if a loss is probable and can be reasonably estimated. Historically, costs related to these indemnifications
have not been significant, but because potential future costs are highly variable, Autodesk is unable to estimate
the maximum potential impact of these indemnifications on its future results of operations.
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