Autodesk 2001 Annual Report Download - page 21

18 FY 01 Autodesk, Inc.
Item 7. Management’s Discussion and
Analysis of Financial Condition and
Results of Operations
The discussion in “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” contains
trend analyses and other forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of
1934. All statements, trend analyses and other information
contained herein relative to markets for our products and
trends in revenues, as well as other statements including
such words as “anticipate,” “believe,” “plan,” “estimate,”
“expect,”“goal,” and “intend” and other similar expressions
involving future trends or uncertainties, constitute for-
ward-looking statements. These forward-looking
statements are subject to business and economic risks,
and our actual results could differ materially from those
set forth in the forward-looking statements as a result of
the factors set forth elsewhere herein, including “Risk
Factors Which May Impact Future Operating Results.”
Basis of Presentation
As a result of two new accounting pronouncements that
were effective during the fourth quarter of fiscal 2001, we
reclassified dealer commissions to marketing and sales
expenses and customer-paid shipping and handling fees
to net revenues (see Notes 1 and 16 of our consolidated
financial statements for further discussion). Previously,
dealer commission costs were reflected as a direct reduc-
tion of net revenues and customer-paid shipping and
handling amounts were reflected as a reduction of cost of
revenues. Historical amounts have been reclassified to
conform to the current year presentation. The adoption of
these accounting pronouncements did not impact our
current or previously reported net income.
Results of Operations
Net Revenues
Our net revenues for fiscal 2001 were $936.3 million, as
compared to $848.1 million in fiscal 2000. The 10 percent
growth reflected increased net revenues in the Americas
of 14 percent and in Asia/Pacific of 22 percent as com-
pared to the prior fiscal year. Despite unfavorable
exchange rate movements, net revenues in Europe
remained flat compared to the prior fiscal year. Net rev-
enues for the Discreet Segment increased 11 percent
compared to the prior fiscal year. The net revenues for the
Design Solutions Segment increased 10 percent compared
to the prior fiscal year. Sales of AutoCAD and AutoCAD
upgrades, which are reflected in the net revenues for the
Design Solutions Segment, accounted for approximately
33 percent of our consolidated net revenues in fiscal 2001
and 37 percent of our consolidated net revenues in
fiscal 2000.
The stronger value of the U.S. dollar, relative to interna-
tional currencies, had a negative impact on net revenues
in fiscal 2001. Had exchange rates from the prior year
been in effect in fiscal 2001, translated international rev-
enue billed in local currencies would have been
$32.5 million higher. Unfavorable exchange rates may
have a negative impact on net revenues in fiscal 2002.
International sales, including exports from the U.S.,
accounted for approximately 64 percent of our net rev-
enues in fiscal 2001 as compared to 65 percent in the prior
fiscal year.
Our net revenues for fiscal 2000 were $848.1 million, as
compared to $893.8 million in fiscal 1999. Increases in
Asia/Pacific’s net revenues of 32 percent were more than
offset by decreases of 13 percent in the Americas and
10 percent in Europe. The overall decrease in net revenues
was primarily due to a decline in sales of AutoCAD and
AutoCAD LT. On a stand-alone basis,sales of AutoCAD and
AutoCAD upgrades, which are reflected in net revenues for
the Design Solutions Segment, accounted for approxi-
mately 37 percent of our consolidated net revenues in
fiscal 2000 and 45 percent of our consolidated net rev-
enues in fiscal 1999.
The value of the U.S. dollar, relative to international cur-
rencies, did not have a significant impact on net revenues
in fiscal 2000 compared to fiscal 1999. International sales,
including exports from the U.S., accounted for approxi-
mately 65 percent of our net revenues in fiscal 2000 as
compared to 59 percent in fiscal 1999.
Product returns, consisting principally of stock rotation,
are recorded as a reduction of revenues. Over the past
three years, product returns as a percentage of revenues
have ranged from 3 to 5 percent annually. We anticipate
that the level of product returns in future periods will con-
tinue to be impacted by the timing of new product
releases, as well as the quality and market acceptance of
new products.
Cost of Revenues
Cost of revenues includes the cost of diskettes and com-
pact discs, cost of hardware sold (mainly workstations
manufactured by Silicon Graphics), costs associated with-
transferring Autodesk’s software to electronic media,
printing of user manuals and packaging materials, ship-
ping and handling costs, royalties, amortization of
purchased technology and capitalized software, software