Autodesk 2016 Annual Report Download - page 168

2016 Form 10-K 96
Autodesk’s assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if Autodesk
fails to maintain the financial covenants. The financial covenants consist of a debt to capitalization ratio, and an interest
coverage ratio. The line of credit is syndicated with various financial institutions, including Citibank, N.A., an affiliate of
Citigroup, which is one of the lead lenders and an agent. In May 2015, Autodesk amended and restated the credit agreement to
extend the facility's maturity date from May 2018 to May 2020 and to update the calculation for our financial covenants. As of
January 31, 2016, we were in compliance with the credit facility’s covenants. At January 31, 2016 and January 31, 2015,
Autodesk had no outstanding borrowings on this line of credit.
8. Commitments and Contingencies
Lease commitments
Autodesk leases office space and computer equipment under non-cancellable operating lease agreements that expire at
various dates through 2090. The leases generally provide that Autodesk pay taxes, insurance, and maintenance expenses related
to the leased assets. Certain of these lease arrangements contain escalation clauses whereby monthly rent increases over time.
At January 31, 2016, the aggregate future minimum lease payments required were as follows:
2017 $ 61.0
2018 54.8
2019 43.1
2020 26.2
2021 18.0
Thereafter 51.2
254.3
Less: Sublease income 1.6
$ 252.7
Rent expense related to these operating leases recognized on a straight-line basis over the lease period, was as follows:
Fiscal Year Ended January 31,
2016 2015 2014
Rent expense $ 58.7 $ 55.0 $ 50.2
Purchase commitments
In the normal course of business, Autodesk enters into various purchase commitments for goods or services. Total non-
cancellable purchase commitments as of January 31, 2016 were approximately $100.2 million for periods through fiscal 2020.
These purchase commitments primarily result from contracts for the acquisition of IT infrastructure, marketing, and software
development services.
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 and cost of subscription revenue on Autodesk’s Consolidated
Statements of Operations, was $17.4 million in fiscal 2016, $17.9 million in fiscal 2015, and $18.0 million in fiscal 2014.
Guarantees and 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, and 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.
2016 Annual Report