Autodesk 2011 Annual Report Download - page 136

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The sales or redemptions of “available-for-sale securities” in fiscal 2011 resulted in a gain of $1.7 million.
The sales or redemptions of “available-for-sale securities” for fiscal 2010 and 2009 resulted in no 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 $410.7 million in fiscal 2011, $355.1 million in fiscal 2010 and $83.4 million in fiscal
2009.
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. In mid-September of 2008, the International Fund ceased
redemptions after net asset values of the funds decreased below $1 per share. This occurred as a result of the
International Fund 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 International Fund. A third party court supervisor was appointed to oversee the
accounting and payment administration of the International Fund. On November 30, 2010 a judge entered an
order accepting a Settlement Agreement directing the distribution of the remaining funds. On January 20, 2011,
Autodesk received substantially all of its holdings from the International Fund.
At January 31, 2011 and January 31, 2010, Autodesk owned auction rate securities with an estimated fair
value of $4.2 million and $7.6 million respectively. During the fiscal year ended January 31, 2011, Autodesk
redeemed one of its two auction rate securities with a fair value of $3.4 million. Autodesk’s remaining auction
rate security is a variable rate debt instrument that has underlying securities with contractual maturities greater
than ten years and interest rates that were structured to reset at auction every twenty-eight days. The security,
which met Autodesk’s investment guidelines at the time the investment was made, has failed to settle in auction
since August 2007 and has 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 security, it cannot predict when this
will occur or the amount the Company will receive. Due to the lack of liquidity of this investment in an active
market, it is included in non-current “Marketable securities” on the accompanying Consolidated Balance Sheets.
The Company will continue to evaluate its accounting for this investment quarterly.
The following table summarizes the estimated fair value of our “available-for-sale securities” classified by
the contractual maturity date of the security:
January 31, 2011
Cost Fair Value
Due in 1 year ............................................... $167.8 $167.9
Due in 1 year through 5 years .................................. 186.6 188.4
Due in 5 years through 10 years ................................ — —
Due after 10 years ........................................... 4.2 4.2
Total ...................................................... $358.6 $360.5
As of January 31, 2011 and 2010, Autodesk did not have any securities in a continuous unrealized loss
position for greater than twelve months.
Derivative Financial Instruments
Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term
exposures to fluctuations in foreign currency exchange rates which exist as part of ongoing business operations.
Autodesk’s general practice is to hedge a majority of transaction exposures denominated in euros, Japanese yen,
Swiss francs, British pounds and Canadian dollars. These instruments have maturities between one to twelve
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