Autodesk 2008 Annual Report Download - page 119

development headcount, and an $11.6 million increase in consulting services and in-process technology
purchases from Hanna Strategies. Also contributing to the increase in research and development expenses was
$5.5 million of in-process research and development from acquisitions during fiscal 2008. Additionally, in the
fourth quarter of fiscal 2008 we accelerated certain internal product development initiatives that increased
research and development costs.
During fiscal 2008, we incurred a total of approximately $38.3 for consulting services and in-process
technology purchases from Hanna Strategies compared to $26.7 million in the prior year. The cost of the
in-process technology acquired from Hanna Strategies was immediately recognized as an expense because the
technology had not yet reached technological feasibility and had no alternative future use. During the fourth
quarter of fiscal 2008 we acquired the remaining 72% ownership interest in Hanna Strategies for net
consideration of $13.5 million. See Note 14, “Related Parties,” in Notes to Consolidated Financial Statements for
further discussion of this acquisition.
The increase in research and development expenses during fiscal 2007, as compared to fiscal 2006, resulted
primarily from an increase in wages and salaries driven by an increase in headcount of $55.4 million and the
recognition of $30.1 million of stock-based compensation expense due to the adoption of SFAS 123R during
fiscal 2007. During fiscal 2007, we incurred a total of approximately $26.7 for consulting services and in-process
technology purchases from Hanna Strategies compared to $27.0 million in the prior year. During the first quarter
of fiscal 2007, we also acquired a 28% ownership interest in Hanna Strategies for cash consideration of $12.5
million.
Overall, we have increased our investment in research and development during fiscal 2008 as compared to
the prior fiscal year to create new products and new versions of existing products, broader interoperability,
accelerated localization efforts and improvements in visualization, simulation and analysis. We expect research
and development expense to increase in absolute dollars, but remain relatively consistent as a percentage of net
revenue during fiscal 2009, as compared to fiscal 2008, as we continue to invest in product development and
acquire new technology in fiscal 2009.
General and Administrative
Fiscal year
Ended
January 31,
2008
Increase
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2007
Increase
compared to
prior fiscal year
Fiscal year
Ended
January 31,
2006
$ % $ %
(in millions)
General and administrative ............ $191.4 $20.3 12% $171.1 $42.7 33% $128.4
As a percentage of net revenue ......... 9% 9% 8%
General and administrative expenses include salaries, benefits, and bonuses for our finance, human
resources and legal personnel as well as professional fees for legal and accounting services, overhead costs,
stock-based compensation expense under SFAS 123R for stock awards granted to general and administrative
employees, litigation costs and amortization expense of customer relationships and trademarks acquired.
General and administrative expenses increased 12% from fiscal 2007 to fiscal 2008 primarily due to a $19.6
million increase in employee related costs, due to an increase in general and administrative headcount. The 33%
increase in general and administrative expenses from fiscal 2006 to fiscal 2007 was primarily due to the
recognition of $16.9 million of stock-based compensation expense as a result of the adoption of FAS 123R, and a
$7.9 million increase in employee-related costs, due to an increase in general and administrative headcount.
General and administrative headcount increased as a result of organic growth. We expect general and
administrative expense to increase in absolute dollars, but remain relatively consistent as a percentage of net
revenue during fiscal 2009, as compared to fiscal 2008.
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2008 Annua
l Report