Autodesk 2012 Annual Report Download - page 130

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Level 2 of the fair value hierarchy. Autodesk values it's available for sale securities on pricing from pricing vendors, who may
use quoted prices in active markets for identical assets (Level 1) or inputs other than quoted prices that are observable either
directly or indirectly in determining fair value (Level 2). Autodesk's Level 2 securities are valued primarily using observable
inputs other than quoted prices in active markets for identical assets and liabilities. Autodesk's Level 3 securities consist of
investments held in auction rate securities, convertible debt securities and derivative contracts which are valued using
probability weighted discounted cash flow models and some of the inputs to the models are unobservable in the market.
A reconciliation of the change in Autodesk’s Level 3 items for the fiscal years ended January 31, 2012 and 2011 was as
follows:
Balance at January 31, 2010
Transfers into (out of) Level 3
Redemptions
Total realized/unrealized gains (losses)
included in earnings
Balance at January 31, 2011
Purchases
Transfers into (out of) Level 3
Redemptions
Total realized/unrealized gains (losses)
included in earnings
Balance at January 31, 2012
Fair Value Measurements Using
Significant Unobservable Inputs
(Level 3)
Derivative
Contracts
$—
—
—
—
—
6.2
—
—
—
$ 6.2
Convertible
Debt
Securities
$—
—
—
—
—
18.3
—
—
—
$ 18.3
Money Market
Funds
$ 10.0
—
(11.7)
1.7
—
—
—
—
—
$—
Taxable
Auction-Rate
Securities
$ 7.6
—
(3.4)
—
4.2
—
—
—
—
$ 4.2
Total
$ 17.6
—
(15.1)
1.7
4.2
24.5
—
—
—
$ 28.7
The following table summarizes the estimated fair value of our “available-for-sale securities” classified by the contractual
maturity date of the security:
Due in 1 year
Due in 1 year through 5 years
Due in 5 years through 10 years
Due after 10 years
Total
January 31, 2012
Cost
$ 222.8
205.7
—
4.2
$ 432.7
Fair Value
$ 222.9
206.9
—
4.2
$ 434.0
As of January 31, 2012 and 2011, Autodesk did not have any securities in a continuous unrealized loss position for
greater than twelve months.
The sales or redemptions of “available-for-sale securities” in fiscal 2012 and fiscal 2010 resulted in no gains or losses.
The sales or redemptions of “available-for-sale securities” for fiscal 2011 resulted in a gain of $1.7 million and no losses. The
cost of securities sold is based on the specific identification method. Proceeds from the sale and maturity of marketable
securities were $559.1 million in fiscal 2012, $410.7 million in fiscal 2011 and $355.1 million in fiscal 2010.
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, Canadian
dollars and Australian dollars. These instruments have maturities between one to twelve months in the future. Autodesk does
not enter into derivative instrument transactions for trading or speculative purposes.
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