XML 21 R11.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Financial Instruments | 9 Months Ended
--- | ---
Oct. 31, 2018
Investments, All Other Investments [Abstract] |
Financial Instruments | Financial Instruments The following tables summarize the Company's financial instruments' amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category as of October 31, 2018, and January 31, 2018:
|  |  | October 31, 2018
|  |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Cash equivalents (1): |  |  |  |  |  |  |  |  |  |  |  |  |
| Certificates of deposit | $ | 11.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 11.3 |  |  | $ | — |  |  | $ | 11.3 |  |  | $ | — |
| Commercial paper | 249.9 |  |  | — |  |  | — |  |  | 249.9 |  |  | — |  |  | 249.9 |  |  | — |
| Custody cash deposit | 1.0 |  |  | — |  |  | — |  |  | 1.0 |  |  | 1.0 |  |  | — |  |  | — |
| Money market funds | 128.2 |  |  | — |  |  | — |  |  | 128.2 |  |  | 128.2 |  |  | — |  |  | — |
| U.S. government securities | 14.0 |  |  | — |  |  | — |  |  | 14.0 |  |  | — |  |  | 14.0 |  |  | — |
Marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |
| Short-term |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Agency bonds | 6.5 |  |  | — |  |  | — |  |  | 6.5 |  |  | — |  |  | 6.5 |  |  | — |
|  | Asset backed securities | 15.2 |  |  | — |  |  | (0.1 | ) |  | 15.1 |  |  | — |  |  | 15.1 |  |  | — |
|  | Certificates of deposit | 7.5 |  |  | — |  |  | — |  |  | 7.5 |  |  | — |  |  | 7.5 |  |  | — |
|  | Corporate debt securities | 61.1 |  |  | — |  |  | (0.2 | ) |  | 60.9 |  |  | — |  |  | 60.9 |  |  | — |
|  | U.S. government securities | 42.0 |  |  | — |  |  | (0.1 | ) |  | 41.9 |  |  | — |  |  | 41.9 |  |  | — |
|  | Other (2) | 9.9 |  |  | 1.1 |  |  | — |  |  | 11.0 |  |  | 1.6 |  |  | 9.4 |  |  | — |
| Short-term trading securities |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Mutual funds | 54.8 |  |  | 4.8 |  |  | — |  |  | 59.6 |  |  | 59.6 |  |  | — |  |  | — |
| Long-term |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Agency bonds | 8.5 |  |  | — |  |  | — |  |  | 8.5 |  |  | — |  |  | 8.5 |  |  | — |
|  | Asset backed securities | 24.6 |  |  | — |  |  | (0.2 | ) |  | 24.4 |  |  | — |  |  | 24.4 |  |  | — |
|  | Corporate debt securities | 65.6 |  |  | — |  |  | (0.4 | ) |  | 65.2 |  |  | — |  |  | 65.2 |  |  | — |
|  | Municipal bonds | 7.6 |  |  | — |  |  | (0.1 | ) |  | 7.5 |  |  | — |  |  | 7.5 |  |  | — |
|  | U.S. government securities | 5.0 |  |  | — |  |  | — |  |  | 5.0 |  |  | — |  |  | 5.0 |  |  | — |
|  | Other (3) | 4.2 |  |  | — |  |  | — |  |  | 4.2 |  |  | — |  |  | 4.2 |  |  | — |
Convertible debt securities (4) | 4.6 |  |  | 1.9 |  |  | (1.2 | ) |  | 5.3 |  |  | — |  |  | — |  |  | 5.3 |
Derivative contract assets (5) | 1.8 |  |  | 25.6 |  |  | (1.6 | ) |  | 25.8 |  |  | — |  |  | 24.9 |  |  | 0.9 |
Derivative contract liabilities (6) | — |  |  | — |  |  | (7.4 | ) |  | (7.4 | ) |  | — |  |  | (7.4 | ) |  | — |
|  | Total | $ | 723.3 |  |  | $ | 33.4 |  |  | $ | (11.3 | ) |  | $ | 745.4 |  |  | $ | 190.4 |  |  | $ | 548.8 |  |  | $ | 6.2 |
____________________
(1) | Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.
(2) | Consists of municipal bonds, commercial paper, common stock, and sovereign debt.
(3) | Consists of sovereign debt.
(4) | Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(5) | Included in “Prepaid expenses and other current assets” or “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(6) | Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.
|  |  | January 31, 2018
|  |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Cash equivalents (1): |  |  |  |  |  |  |  |  |  |  |  |  |
| Agency bonds | $ | 5.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 5.0 |  |  | $ | 5.0 |  |  | $ | — |  |  | $ | — |
| Certificates of deposit | 17.4 |  |  | — |  |  | — |  |  | 17.4 |  |  | 17.4 |  |  | — |  |  | — |
| Commercial paper | 324.2 |  |  | — |  |  | — |  |  | 324.2 |  |  | — |  |  | 324.2 |  |  | — |
| Corporate debt securities | 5.0 |  |  | — |  |  | — |  |  | 5.0 |  |  | 5.0 |  |  | — |  |  | — |
| Custody cash deposit | 5.2 |  |  | — |  |  | — |  |  | 5.2 |  |  | 5.2 |  |  | — |  |  | — |
| Money market funds | 278.8 |  |  | — |  |  | — |  |  | 278.8 |  |  | — |  |  | 278.8 |  |  | — |
| Municipal bonds | 5.0 |  |  | — |  |  | — |  |  | 5.0 |  |  | 5.0 |  |  | — |  |  | — |
| Sovereign debt | 2.0 |  |  | — |  |  | — |  |  | 2.0 |  |  | — |  |  | 2.0 |  |  | — |
Marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |
| Short-term |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Asset backed securities | 13.1 |  |  | — |  |  | — |  |  | 13.1 |  |  | — |  |  | 13.1 |  |  | — |
|  | Commercial paper | 27.5 |  |  | — |  |  | — |  |  | 27.5 |  |  | — |  |  | 27.5 |  |  | — |
|  | Corporate debt securities | 99.4 |  |  | — |  |  | (0.1 | ) |  | 99.3 |  |  | 99.3 |  |  | — |  |  | — |
|  | Other (2) | 9.2 |  |  | — |  |  | — |  |  | 9.2 |  |  | 7.7 |  |  | 1.5 |  |  | — |
|  | U.S. government securities | 37.1 |  |  | — |  |  | — |  |  | 37.1 |  |  | 37.1 |  |  | — |  |  | — |
| Short-term trading securities |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Mutual funds | 50.1 |  |  | 8.9 |  |  | — |  |  | 59.0 |  |  | 59.0 |  |  | — |  |  | — |
| Long-term |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Agency bonds | 13.7 |  |  | — |  |  | (0.1 | ) |  | 13.6 |  |  | 13.6 |  |  | — |  |  | — |
|  | Asset backed securities | 36.8 |  |  | — |  |  | (0.2 | ) |  | 36.6 |  |  | — |  |  | 36.6 |  |  | — |
|  | Corporate debt securities | 100.2 |  |  | 0.1 |  |  | (0.4 | ) |  | 99.9 |  |  | 99.9 |  |  | — |  |  | — |
|  | Municipal bonds | 12.7 |  |  | — |  |  | (0.1 | ) |  | 12.6 |  |  | 12.6 |  |  | — |  |  | — |
|  | Sovereign debt | 2.8 |  |  | — |  |  | — |  |  | 2.8 |  |  | — |  |  | 2.8 |  |  | — |
|  | U.S. government securities | 25.5 |  |  | — |  |  | (0.2 | ) |  | 25.3 |  |  | 25.3 |  |  | — |  |  | — |
Convertible debt securities (3) | 7.5 |  |  | 0.5 |  |  | (0.2 | ) |  | 7.8 |  |  | — |  |  | — |  |  | 7.8 |
Derivative contract assets (4) | 2.0 |  |  | 7.5 |  |  | (1.3 | ) |  | 8.2 |  |  | — |  |  | 7.2 |  |  | 1.0 |
Derivative contract liabilities (5) | — |  |  | — |  |  | (26.6 | ) |  | (26.6 | ) |  | — |  |  | (26.6 | ) |  | — |
|  | Total | $ | 1,080.2 |  |  | $ | 17.0 |  |  | $ | (29.2 | ) |  | $ | 1,068.0 |  |  | $ | 392.1 |  |  | $ | 667.1 |  |  | $ | 8.8 |
____________________
(1) | Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.
(2) | Consists of agency bonds, certificates of deposit, sovereign debt, and municipal bonds.
(3) | Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(4) | Included in “Prepaid expenses and other current assets,” “Other assets,” or “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.
(5) | Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.
Autodesk classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable securities with remaining maturities of up to 12 months are classified as short-term and marketable securities with remaining maturities greater than 12 months are classified as long-term. Autodesk may sell certain of its marketable securities prior to their stated maturities for strategic purposes or in anticipation of credit deterioration. Autodesk applies fair value accounting for certain financial assets and liabilities, which consist of cash equivalents, marketable securities and other financial instruments, that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and (Level 3) unobservable inputs for which there is little or no market data, which require Autodesk to develop its own assumptions. When determining fair value, Autodesk uses observable market data and relies on unobservable inputs only when observable market data is not available. It is Autodesk's assessment that the leveling best reflects current market activity when observing the pricing information for these assets. Autodesk's cash equivalents, marketable securities and financial instruments are primarily classified within Level 1 or Level 2 of the fair value hierarchy. Autodesk values its 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 convertible debt securities and related derivative contracts. A reconciliation of the change in Autodesk’s Level 3 items for the nine months ended October 31, 2018, follows:
| Fair Value Measurements Using Significant Unobservable Inputs
| (Level 3)
|  | Derivative Contracts |  | Convertible Debt Securities |  | Total
Balances, January 31, 2018 |  | $ | 1.0 |  |  | $ | 7.8 |  |  | $ | 8.8 |
Settlements |  | — |  |  | (3.5 | ) |  | (3.5 | )
(Loss) gain included in earnings |  | (0.1 | ) |  | 0.5 |  |  | 0.4 |
Gain included in OCI |  | — |  |  | 0.5 |  |  | 0.5 |
Balances, October 31, 2018 |  | $ | 0.9 |  |  | $ | 5.3 |  |  | $ | 6.2 |
The following table summarizes the estimated fair value of Autodesk's securities classified by the contractual maturity date of the security:
| October 31, 2018
| Cost |  | Fair Value
Due within 1 year | $ | 146.8 |  |  | $ | 148.2 |
Due in 1 year through 5 years | 111.0 |  |  | 110.3 |
Due in 5 years through 10 years | 3.6 |  |  | 3.6 |
Due after 10 years | 0.9 |  |  | 0.9 |
Total | $ | 262.3 |  |  | $ | 263.0 |
As of October 31, 2018, and January 31, 2018, Autodesk had no material unrealized losses, individually and in the aggregate, for securities that are in a continuous unrealized loss position for greater than twelve months. There was no loss or gain for the sales or redemptions of securities during the nine months ended October 31, 2018. Gains and losses resulting from the sale or redemption of securities are recorded in “Interest and other expense, net” on the Company's Condensed Consolidated Statements of Operations. Proceeds from the sale and maturity of marketable securities for the nine months ended October 31, 2018 and 2017, were $256.2 million and $729.3 million, respectively. Non-marketable equity securities Autodesk had $112.3 million in direct investments in privately held companies for both periods ending October 31, 2018, and January 31, 2018. These non-marketable equity security investments do not have readily determined fair values and with the adoption of ASU 2016-01 during the first quarter of fiscal 2019, Autodesk elected to use the measurement alternative to account for the adjustment to these investments in a given quarter. See "Note 2. Recently Issued Accounting Standards" for more details on the adoption. Under the measurement alternative method, these investments are measured at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer in the current period. To determine if a transaction is deemed a similar investment, Autodesk considers the rights and obligations between the investments and the extent to which those differences would affect the fair values of those investments with additional consideration for the stage of development of the investee company. The fair value would then be adjusted positively or negatively based on available information such as pricing in recent rounds of financing. During the nine months ended October 31, 2018, and cumulative since the adoption of ASU 2016-01 in the first quarter of fiscal 2019, Autodesk recorded $6.2 million as a positive adjustment on certain of its privately held investments, reflected as a gain in "Interest and other expense, net" on the Company's Condensed Consolidated Statement of Operations. Non-marketable equity securities investments are periodically assessed for impairment based on available information such as current cash positions, earnings and cash flow positions, earnings and cash flow forecasts, recent operational performance and any other readily available market data. Autodesk does not intend to sell these investments and it is not more likely than not that Autodesk will be required to sell the investment before recovery of the amortized cost basis. If Autodesk determines that an impairment has occurred, Autodesk writes down the investment to its fair value. During the three months ended October 31, 2018, Autodesk recorded no impairments on its privately held investments. During the nine months ended October 31, 2018, Autodesk recorded $4.8 million in impairments on its privately held investments. Therefore, Autodesk does not consider the remaining investments to be impaired at October 31, 2018. During the three and nine months ended October 31, 2017, Autodesk recorded $3.9 million and $8.0 million, respectively, in impairments on its privately held investments. 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 that exist as part of ongoing business operations. Autodesk's general practice is to hedge a portion of transaction exposures primarily denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars, and Australian dollars. These instruments have maturities between one and twelve months in the future. Autodesk does not enter into derivative instrument transactions for trading or speculative purposes. The bank counterparties to the derivative contracts potentially expose Autodesk to credit-related losses in the event of their nonperformance. However, to mitigate that risk, Autodesk only contracts with counterparties who meet the Company's minimum requirements under its counterparty risk assessment process. Autodesk monitors ratings, credit spreads and potential downgrades on at least a quarterly basis. Based on Autodesk's ongoing assessment of counterparty risk, the Company will adjust its exposure to various counterparties. Autodesk generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. However, Autodesk does not have any master netting arrangements in place with collateral features. Foreign currency contracts designated as cash flow hedges Autodesk uses foreign currency contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. These contracts are designated and documented as cash flow hedges. The effectiveness of the cash flow hedge contracts is assessed quarterly using regression analysis as well as other timing and probability criteria. To receive cash flow hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and the hedges are expected to be highly effective in offsetting changes to future cash flows on hedged transactions. The gross gains and losses on these hedges are included in “Accumulated other comprehensive loss” and are reclassified into earnings at the time the forecasted revenue or expense is recognized. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, Autodesk reclassifies the gain or loss on the related cash flow hedge from “Accumulated other comprehensive loss” to “Interest and other expense, net” in the Company's Condensed Consolidated Financial Statements at that time. The net notional amounts of these contracts are presented net settled and were $812.6 million at October 31, 2018, and $619.9 million at January 31, 2018. Outstanding contracts are recognized as either assets or liabilities on the balance sheet at fair value. The majority of the net gain of $12.5 million remaining in “Accumulated other comprehensive loss” as of October 31, 2018, is expected to be recognized into earnings within the next twelve months. Derivatives not designated as hedging instruments Autodesk uses foreign currency contracts that are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and payables. These forward contracts are marked-to-market at the end of each fiscal quarter with gains and losses recognized in “Interest and other expense, net.” These derivative instruments do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivative instruments are intended to offset the gains or losses resulting from the settlement of the underlying foreign currency denominated receivables and payables. The net notional amounts of these foreign currency contracts are presented net settled and were $317.0 million at October 31, 2018, and $329.6 million at January 31, 2018. In addition to these foreign currency contracts, Autodesk holds derivative instruments issued by privately held companies, which are not designated as hedging instruments. These derivatives consist of certain conversion options on the convertible debt securities held by Autodesk and an option to acquire a privately held company. These derivatives are recorded at fair value as of each balance sheet date and are recorded in “Other assets.” Changes in the fair values of these instruments are recognized in “Interest and other expense, net.” Fair Value of Derivative Instruments The fair values of derivative instruments in Autodesk’s Condensed Consolidated Balance Sheets were as follows as of October 31, 2018 and January 31, 2018:
| Balance Sheet Location |  | Fair Value at
| October 31, 2018 |  | January 31, 2018
Derivative Assets |  |  |  |  |
Foreign currency contracts designated as cash flow hedges | Prepaid expenses and other current assets |  | $ | 19.5 |  |  | $ | 6.2 |
Derivatives not designated as hedging instruments | Prepaid expenses and other current assets and Other assets |  | 6.3 |  |  | 2.0 |
Total derivative assets |  |  | $ | 25.8 |  |  | $ | 8.2 |
Derivative Liabilities |  |  |  |  |
Foreign currency contracts designated as cash flow hedges | Other accrued liabilities |  | $ | 6.4 |  |  | $ | 18.7 |
Derivatives not designated as hedging instruments | Other accrued liabilities |  | 1.0 |  |  | 7.9 |
Total derivative liabilities |  |  | $ | 7.4 |  |  | $ | 26.6 |
The effects of derivatives designated as hedging instruments on Autodesk’s Condensed Consolidated Statements of Operations were as follows for the three and nine months ended October 31, 2018 and 2017 (amounts presented include any income tax effects):
| Foreign Currency Contracts
| Three Months Ended October 31, |  | Nine Months Ended October 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
Am ount of gain (loss) recognized in accumulated other comprehensive loss on derivatives (effective portion) | $ | 6.8 |  |  | $ | 2.9 |  |  | $ | 20.1 |  |  | $ | (8.5 | )
Amount and location of (loss) gain reclassified from accumulated other comprehensive loss into (loss) income (effective portion) |  |  |  |  |  |  |
Net revenue | $ | (2.5 | ) |  | $ | 2.4 |  |  | $ | (8.5 | ) |  | $ | 7.2 |
Operating expenses | (2.2 | ) |  | 2.9 |  |  | (0.5 | ) |  | (0.3 | )
Total | $ | (4.7 | ) |  | $ | 5.3 |  |  | $ | (9.0 | ) |  | $ | 6.9 |
Amount and location of gain (loss) recognized in (loss) income on derivatives (ineffective portion and amount excluded from effectiveness testing) |  |  |  |  |  |  |
Interest and other expense, net | $ | 0.9 |  |  | $ | — |  |  | $ | 1.4 |  |  | $ | (0.1 | )
The effects of derivatives not designated as hedging instruments on Autodesk’s Condensed Consolidated Statements of Operations were as follows for the three and nine months ended October 31, 2018 and 2017 (amounts presented include any income tax effects):
| Three Months Ended October 31, |  | Nine Months Ended October 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
Amount and location of gain (loss) recognized on derivatives in net (loss) |  |  |  |  |  |  |
Interest and other expense, net | $ | 4.7 |  |  | $ | 0.9 |  |  | $ | 10.7 |  |  | $ | (7.4 | )

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAllOtherInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration