Autodesk 2012 Annual Report Download - page 114

of returning excess cash generated from our business to stockholders. The number of shares acquired and the timing of the
purchases are based on several factors, including general market conditions, the volume of employee stock option exercises,
stock issuance, the trading price of our common stock, cash on hand and available in the U.S., and company defined trading
windows. There were 2.0 million repurchases of our common stock during the three months ended January 31, 2012; during the
fiscal year ended January 31, 2012 we repurchased 9.7 million shares of our common stock. At January 31, 2012, 14.7 million
shares remained available for repurchase under the existing repurchase authorization. This program does not have a fixed
expiration date. See Note 9, “Stockholders' Equity,” in the Notes to Consolidated Financial Statements for further discussion.
Off-Balance Sheet Arrangements
Other than operating leases, we do not engage in off-balance sheet financing arrangements or have any variable-interest
entities. As of January 31, 2012 we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC
Regulation S-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign currency exchange risk
Our revenue, earnings, cash flows, receivables and payables are subject to fluctuations due to changes in foreign currency
exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency
volatility that exists as part of our ongoing business operations. We utilize cash flow hedge contracts to reduce the exchange
rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. In addition, we use balance
sheet hedge contracts to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and
payables. As of January 31, 2012 and 2011, we had open cash flow and balance sheet hedge contracts with future settlements
within one to twelve months. Contracts were primarily denominated in euros, Japanese yen, Swiss francs, British pounds,
Canadian dollars, and Australian dollars. We do not enter into any foreign exchange derivative instruments for trading or
speculative purposes. The notional amount of our option and forward contracts was $494.7 million and $401.6 million at
January 31, 2012 and 2011, respectively.
We utilize foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of
certain anticipated transactions. A sensitivity analysis performed on our hedging portfolio as of January 31, 2012 indicated that
a hypothetical 10% appreciation of the U.S. dollar from its value at January 31, 2012 and 2011 would increase the fair value of
our foreign currency contracts by $45.3 million and $31.6 million, respectively. A hypothetical 10% depreciation of the dollar
from its value at January 31, 2012 and 2011 would decrease the fair value of our foreign currency contracts by $24.3 million
and $26.6 million, respectively.
Interest rate risk
Interest rate movements affect both the interest income we earn on our short term investments and, to a lesser extent,
the market value of certain longer term securities. At January 31, 2012, we had $1,300.8 million of cash equivalents and
marketable securities. With an average investment balance for the quarter of approximately $1,236.5 million, if interest rates
were to change by 10%, this would result in a $0.2 million change in annual interest income. Further, at January 31, 2012, we
had approximately $211.5 million invested in a longer term portfolio (with remaining maturities that may be less than one year)
which, with 50 and 100 basis point moves, would result in market value changes (gains or losses) of $2.0 million and $4.0
million respectively, over a twelve month period. At January 31, 2011, we had $1,149.9 million of cash equivalents and
marketable securities. With an average investment balance for the quarter of approximately $810.0 million, if interest rates
were to change by 10%, this would result in a $0.2 million change in annual interest income. Further, at January 31, 2011, we
had approximately $285.0 million invested in a longer term portfolio (with remaining maturities that may be less than one year)
which, with 50 and 100 basis point moves, would result in market value changes (gains or losses) of $0.9 million and $1.8
million respectively, over a twelve month period.
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