Fair Value Measurements

9 Months Ended

Oct. 31, 2011

Fair Value Measurements

5. Fair Value Measurements

On a recurring basis, Autodesk measures the fair value of certain financial assets and liabilities, which consist of cash equivalents, marketable securities and financial instruments. Autodesk uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly in active markets; 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. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. There have been no transfers between fair value measurement levels during the nine months ended October 31, 2011.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes Autodesk’s investments and financial instruments measured at fair value on a recurring basis as of October 31, 2011:

	Fair Value Measurements at October 31, 2011 Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash equivalents (1):
Certificates of deposit and time deposits	$	9.3	$	454.3	$	—	$	463.6
Commercial paper		—		305.2		—		305.2
Money market funds		—		32.0		—		32.0
Marketable securities:
Commercial paper and corporate debt securities		258.5		—		—		258.5
U.S. government agency securities		77.2		—		—		77.2
U.S. treasury securities		40.1		—		—		40.1
Certificates of deposit and time deposits		—		4.8		—		4.8
Mutual funds		32.7		—		—		32.7
Municipal securities		13.1		—		—		13.1
Taxable auction-rate securities		—		—		4.2		4.2
Other		0.3		—		—		0.3
Convertible debt securities (2)		—		—		12.4		12.4
Derivative contracts (3)		—		7.4		5.1		12.5
Total	$	431.2	$	803.7	$	21.7	$	1,256.6
Liabilities
Derivative contracts (4)	$	—	$	3.1	$	—	$	3.1
Total	$	—	$	3.1	$	—	$	3.1

⁽¹⁾  Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾  Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽³⁾  Included in “Prepaid expenses and other current assets” or “Other assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽⁴⁾  Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.

The following table summarizes Autodesk’s investments and financial instruments measured at fair value on a recurring basis as of January 31, 2011:

	Fair Value Measurements at January 31, 2011 Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Cash equivalents (1):
Certificates of deposit and time deposits	$	97.9	$	285.4	$	—	$	383.3
Commercial paper		—		331.0		—		331.0
Money market funds		—		43.8		—		43.8
Marketable securities:
Commercial paper and corporate debt securities		191.6		10.0		—		201.6
U.S. government agency securities		60.1		—		—		60.1
U.S. treasury securities		38.8		—		—		38.8
Certificates of deposit and time deposits		25.0		4.0		—		29.0
Mutual funds		31.3		—		—		31.3
Sovereign debt		—		13.1		—		13.1
Municipal securities		13.4		—		—		13.4
Taxable auction-rate securities		—		—		4.2		4.2
Other		0.3		—		—		0.3
Foreign currency derivative contracts (2)		—		5.1		—		5.1
Total	$	458.4	$	692.4	$	4.2	$	1,155.0
Liabilities
Foreign currency derivative contracts (3)	$	—	$	1.2	$	—	$	1.2
Total	$	—	$	1.2	$	—	$	1.2

⁽¹⁾  Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets.

⁽²⁾  Included in “Prepaid expenses and other current assets” in the accompanying Condensed Consolidated Balance Sheets.

⁽³⁾  Included in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.

Autodesk’s cash equivalents and marketable securities are primarily classified within Level 1 or Level 2 of the fair value hierarchy. Autodesk’s Level 1 securities are valued primarily using quoted market prices. Level 2 securities are valued primarily using alternative pricing sources and models utilizing market observable inputs with reasonable levels of price transparency. The Company’s investments held in auction rate and convertible debt securities at October 31, 2011 and January 31, 2011 are designated as Level 3 because they 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 nine months ended October 31, 2011 was as follows:

	Fair Value Measurements Using Significant Unobservable Inputs
	(Level 3)
	Taxable Auction-Rate Securities		Convertible Debt Securities		Derivative Contracts		Total
Balance at January 31, 2011	$	4.2	$	—	$	—	$	4.2
Purchases		—		12.4		5.1		17.5
Balance at October 31, 2011	$	4.2	$	12.4	$	5.1	$	21.7

During the nine months ended October 31, 2011, there were no transfers in or out, issuances, settlements, sales or realized/unrealized gains (losses) within Level 3 assets.