Autodesk 2012 Annual Report Download

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Abstract visualization using Autodesk® ds Max® software.
Autodesk®
Annual Report
Fiscal Year 
Notice of Annual Meeting
and Proxy Statement

Table of contents

  • Page 1
    Autodesk Annual Report ® Fiscal Year 2012 Notice of Annual Meeting and Proxy Statement Abstract visualization using Autodesk® 3ds Max® software.

  • Page 2

  • Page 3
    ...by telephone or request, sign and return a proxy card to ensure your representation at the meeting. Your vote is important. On behalf of the Board of Directors, I would like to express our appreciation for your continued support of Autodesk. Very truly yours, Carl Bass President and Chief Executive...

  • Page 4
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 5
    ... previously signed and returned a proxy card or voted on the Internet or by telephone. By Order of the Board of Directors, Record Date Voting Pascal W. Di Fronzo Senior Vice President, General Counsel and Secretary This notice of Annual Meeting, proxy statement and accompanying form of proxy...

  • Page 6
    ... Public accounting firM Principal Accounting Fees and Services Pre-Approval of Audit and Non-Audit Services ProPosal three - non-binding Vote to aPProVe naMed executiVe coMPensation corPorate goVernance Corporate Governance Guidelines and Code of Business Conduct Stock Ownership Guidelines...

  • Page 7
    ...Where is the Annual Meeting? A: The Annual Meeting will be held at Autodesk's San Francisco office, located at The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. The telephone number at that location is (415) 356-0700. Directions and maps to the Annual Meeting are available...

  • Page 8
    ... to check-in. Stock Ownership Q: What is the difference between holding shares as a stockholder of record and as a beneficial owner? A: Stockholders of record -If your shares are registered directly in your name with Autodesk's transfer agent, Computershare Investor Services LLC, you are considered...

  • Page 9
    ... Young LLP as the Company's independent registered public accounting firm for the fiscal year ending January 31, 2013; and (3) To approve, on an advisory basis, the compensation of our named executive officers. Q: What is the voting requirement to approve these proposals? A: Proposal One -A majority...

  • Page 10
    ... of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending January 31, 2013, and "FOR" the approval, on an advisory basis, of the compensation of our named executive officers. Q: If I sign a proxy, how will it be voted? A: All shares entitled to...

  • Page 11
    ... a timely manner. In order to be included in the proxy statement for the 2013 Annual Meeting of Stockholders, stockholder proposals must be received by Autodesk's General Counsel no later than December 25, 2012, and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange...

  • Page 12
    ... at www.autodesk.com under "Investors-Corporate Governance." All notices of proposals by stockholders, whether or not included in Autodesk's proxy materials, should be sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel. Additional Information About...

  • Page 13
    ... address for Autodesk's principal executive offices? A: Autodesk's principal executive offices are located at 111 McInnis Parkway, San Rafael, California 94903. Any written requests for additional information, additional copies of the proxy materials and Fiscal Year 2012 Annual Report, notices...

  • Page 14
    ..., Mr. Bass served as Chief Operating Officer. From February 2002 to June 2004, Mr. Bass served as Senior Executive Vice President, Design Solutions Group. From August 2001 to February 2002, Mr. Bass served as Executive Vice President, Emerging Business and Chief Strategy Officer. From June 1999 to...

  • Page 15
    ... President and Chief Executive Officer, Mr. Bass possesses a deep knowledge and understanding of Autodesk's business, operations, employees, the opportunities and risks faced by the Company and management's strategy and plans for accomplishing Autodesk's goals. His service on the board of directors...

  • Page 16
    ... served as Executive Vice President in charge of Nokia's Mobile Phones unit since July 2010. Previously, Ms. McDowell served as Executive Vice President and Chief Development Officer of Nokia Corporation from January 2008 to July 2010 and as Executive Vice President and General Manager of Enterprise...

  • Page 17
    ...'s industry and business as well as Autodesk's international operational challenges. Mr. Smith's years of service as an executive officer at Intel provide him with the corporate governance knowledge necessary to serve on our Compensation and Human Resources Committee. Steven M. West is a founder and...

  • Page 18
    ...854.0 25.0 $3,200.8 (1) Audit Fees consisted of fees billed for professional services rendered for the integrated audit of the Company's annual financial statements and management's report on internal controls included in the Company's Annual Reports on Form 10-K and for the review of the financial...

  • Page 19
    ... our 2012 executive compensation program. See the "Executive Compensation" section beginning on page 20 below for more information. Financial Performance in Fiscal 2012 and its Effect on Executive Compensation Paid for Fiscal 2012 We experienced an increase in demand for our products and services in...

  • Page 20
    ... balanced combination of stock options and time-based restricted stock units. For fiscal 2012, 89% of our Named Executive Officers' total compensation was performance-based. Compensation Governance Practices A number of fundamental elements of our compensation programs support our overall philosophy...

  • Page 21
    ... Code of Ethics for Senior Executive and Financial Officers that are required to be disclosed by the rules of the SEC or The NASDAQ Stock Market. Stock Ownership Guidelines Our directors and executive officers are encouraged to be Autodesk stockholders through participation in our stock option plans...

  • Page 22
    ... standards of The NASDAQ Stock Market. The Compensation and Human Resources Committee reviews compensation and benefits for our executive officers and has authority to grant stock options and restricted stock to executive officers and nonexecutive employees under our stock plans. Because RSUs are...

  • Page 23
    ...'s website at www.autodesk.com under "Investors-Corporate Governance." Board Leadership Structure Our Corporate Governance Principles provide that the Board shall fill the Chairman of the Board and Chief Executive Officer positions after consideration of a number of factors, including current size...

  • Page 24
    ...candidates to the Board must be directed in writing to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel, and must include the candidate's name, home and business contact information, detailed biographical data and qualifications, information regarding any...

  • Page 25
    ... reviews before recommending a candidate. On November 7, 2011, upon the recommendation of the Corporate Governance and Nominating Committee, the Board appointed Stacy J. Smith to the Board. The Board used the services of a third party search firm to help it identify, screen, conduct background...

  • Page 26
    ...For fiscal 2012, our Named Executive Officers were Carl Bass, President and Chief Executive Officer Mark J. Hawkins, Executive Vice President and Chief Financial Officer Steven M. Blum, Senior Vice President, Worldwide Sales and Services Pascal W. Di Fronzo, Senior Vice President, General Counsel...

  • Page 27
    ... as of the end of the second quarter of fiscal 2012. Our total stockholder return from January 31, 2010 to January 31, 2012 was approximately 51%. 21 Proxy Materials Relatively strong financial performance combined with a highly volatile global equity market affected our Named Executive Officers...

  • Page 28
    ... our stock price had more than doubled during the period between March 2009 and March 2011. Our short-term cash incentive plan (a cash bonus plan known as our Executive Incentive Plan or EIP) was set to fund at 100% of aggregate employee target payouts if we met our revenue growth and operating...

  • Page 29
    ... 2012) is based on the long term performance of the Company. Significant Stock Ownership: We have implemented mandatory stock holding requirements for our Named Executive Officers as of fiscal 2013 and annually monitor ownership progress. Independent Compensation Practices: Our compensation policy...

  • Page 30
    ... of internal control over financial reporting, code of business conduct, and whistle-blower program, among other things, reduce the likelihood of manipulation of our financial performance to enhance payments under our short-term cash incentive plan. • • • In order to focus our employees...

  • Page 31
    ... investments; and Annually reviews and approves compensation for our President and Chief Executive Officer ("CEO") and other executive officers, which includes base salaries; short-term cash incentives; equity incentive grants; employment agreements and severance arrangements; change-in-control...

  • Page 32
    ... the performance of our other executive officers, including the other Named Executive Officers, with our Compensation Committee. As part of this review, the CEO recommends salary adjustments, short-term cash incentives and equity incentive awards, promotions, and other compensation and benefits. The...

  • Page 33
    ...The changes to our peer group for fiscal 2013 result in a peer group that more closely reflects Autodesk's size, financial performance and stock price performance. Elements of Executive Compensation Programs Autodesk's executive compensation program has three key components base salary; short-term...

  • Page 34
    ... (in the case of stock options), and encourage employees and executive officers to remain with the Company and focus on longer-term results. Benefits/Perquisites Benefit programs include medical, 401(k) matching, non-qualified deferred compensation plan, life insurance, paid time off and leaves of...

  • Page 35
    ... reflects the promotional increase for one of our Named Executive Officers (Steven Blum), as well as increases to mitigate the prior two years of salary freeze. Short-term Cash Incentive Plan The structure of our stockholder approved short-term cash incentive plan provides the Compensation Committee...

  • Page 36
    ...Short-Term Cash Incentive Plan Participant Carl Bass, President and Chief Executive Officer ...Mark J. Hawkins, Executive Vice President and Chief Financial Officer ...Steven M. Blum, Senior Vice President, Worldwide Sales and Services ...Pascal W. Di Fronzo, Senior Vice President, General Counsel...

  • Page 37
    ... Participant Carl Bass, President and Chief Executive Officer ...Mark J. Hawkins, Executive Vice President and Chief Financial Officer ...Steven M. Blum, Senior Vice President, Worldwide Sales and Services (1) ...Pascal W. Di Fronzo, Senior Vice President, General Counsel and Secretary . . Robert...

  • Page 38
    ... motivate our employees, management and non-employee directors under changing economic conditions and competitive practices. To keep in line with our peer group, with the approval of our stockholders, the Board approved a new 2012 Employee Stock Plan and 2012 Outside Directors' Stock Plan in January...

  • Page 39
    ...like. Use of Performance-Based Stock Units in Fiscal 2013. For fiscal 2013, our Compensation Committee updated our equity grant strategy for executive officers and all other officers. During fiscal 2013, the Compensation Committee plans to issue equity grants that are evenly split between time-based...

  • Page 40
    ... Stock Plan, 2010 Outside Directors' Stock Plan and 2012 Outside Directors' Stock Plan. In general when issuing options, we issue only non-statutory stock options to employees and executive officers, with the exception of grants to those executive officers subject to the stock ownership guidelines...

  • Page 41
    ... of salary. This is intended to create clear guidelines that tie a portion of our executive's net worth to the performance of our stock price. The current stock ownership guidelines are as follows: Position Ownership Guidelines Chief Executive Officer ...Executive Vice President ...Senior Vice...

  • Page 42
    ... value creation. Actual Pay Mix for Fiscal 2012 For fiscal 2012, the pay mix of our three main components of compensation (base salary, short-term cash incentive and long-term equity compensation) for the Named Executive Officers is shown below. The pay mix generally reflects our objective of...

  • Page 43
    ... receive tax-deferred investment returns on the contributions similar to the 401(k) plan. This benefit is incremental to the 401(k) plan and is available to a limited group of United States-based officers and high level managers. The assets of our Nonqualified Deferred Compensation Plan are held in...

  • Page 44
    ...principles in determining changes to policies and practices for our stock-based compensation programs. We have structured our Executive Change in Control program so that in the event payment of benefits constitutes a "parachute" payment under Section 280G of the Internal Revenue Code, we will revise...

  • Page 45
    ... Change in Control Program and potential payments in connection with terminations occurring after a change in control. 39 Proxy Materials We have entered into an employment agreement with Carl Bass, our President and Chief Executive Officer. Throughout fiscal 2012, this agreement provided general...

  • Page 46
    ...ended January 31, 2012, 2011 and 2010. The Named Executive Officers are Carl Bass (President and Chief Executive Officer), Mark J. Hawkins (Executive Vice President and Chief Financial Officer), and the next three most highly compensated individuals who were serving as executive officers of Autodesk...

  • Page 47
    ...Mark J. Hawkins, ...Executive Vice President and Chief Financial Officer (a) Steven M. Blum, ...Senior Vice President, Worldwide Sales and Services (b) Pascal W. Di Fronzo, ...Senior Vice President, General Counsel and Secretary (c) Robert L. Kross, ...Senior Vice President, Manufacturing (d) Bonus...

  • Page 48
    ... reflect grants made to our Named Executive Officers under our non-equity incentive plans and equity compensation plans during fiscal 2012. The following table includes amounts payable under our short-term cash incentive plan (EIP) for performance during fiscal 2012. The actual amounts awarded under...

  • Page 49
    ... target and maximum dollar amounts payable under the short-term cash incentive plan (EIP) for performance during fiscal 2012, as described in "Compensation Discussion and Analysis-Elements of Executive Compensation Programs." "Threshold" refers to the minimum amount payable for a certain level of...

  • Page 50
    ... Financial Statements in our Annual Report on Form 10-K filed on March 15, 2012. These amounts do not correspond to the actual value that will be realized by the Named Executive Officers upon the vesting of RSUs, the exercise of stock options, or the sale of the Common Stock underlying such awards...

  • Page 51
    Option Awards Stock Awards Equity Incentive Plan Awards: Market Equity Market or Value of Incentive Shares of Plan Awards: Payout Value of Unearned Stock Number of Shares That That Unearned Have Not Have Not Shares That Vested Vested ($) Have Not Vested (#) ($) (f) Name Steven M. Blum ... Grant ...

  • Page 52
    ...the Named Executive Officers during the fiscal year ended January 31, 2012. Option Awards Number of Shares Acquired Value Realized on Exercise on Exercise (#) ($) (a) Stock Awards Number of Shares Acquired Value Realized on Vesting on Vesting (#) ($) (a) Name Carl Bass ...Mark J. Hawkins ...Steven...

  • Page 53
    ... and Employment Agreements In an effort to ensure the continued service of our key executive officers in the event of a change in control, each of our current executive officers, among other employees, participate in an amended and restated Executive Change in Control Program (the "Program") that...

  • Page 54
    ... payment in an amount equal to 200 percent of his then current annual base salary, (ii) accelerated vesting for 24 months of his then outstanding, unvested equity awards (other than awards that vest based on performance), (iii) a period of not less than 6 months to exercise any vested stock options...

  • Page 55
    ... for all Named Executive Officers assume that such termination was effective as of January 31, 2012, and include amounts earned through such time for all components of compensation, benefits and perquisites payable under the Executive Change in Control Program effective during the 2012 fiscal year...

  • Page 56
    ...31/2012 ($) Executive Benefits and Payments Compensation: Base Salary (1) ...Short-Term Cash Incentive Plan (EIP) (2) ...Stock Options (3) ...Benefits and perquisites: Health Insurance (4)...Disability Income (5) ...Accidental Death or Dismemberment (6) ...Life Insurance (7)...Accrued Vacation Pay...

  • Page 57
    ...Compensation: Base Salary (1) ...Short-Term Cash Incentive Plan (EIP) (2) ...Stock Options (3) ...Benefits and perquisites: Health Insurance (4)...Disability Income (5) ...Accidental Death or Dismemberment (6) ...Life Insurance (7)...Accrued Vacation Pay (8) ...Total Executive Benefits and Payments...

  • Page 58
    ... with his employment agreement that was in effect as of January 31, 2012. For Mr. Hawkins, Mr. Blum, Mr. Di Fronzo and Mr. Kross, the amounts shown would be paid in accordance with the Executive Change in Control Program effective during the 2012 fiscal year. (2) Short-Term Cash Incentive Plan (EIP...

  • Page 59
    ...compensation with respect to service during Autodesk's fiscal year 2012. No later than December 31 of the year prior to a director's re-election to the Board, each director may elect to receive up to 50 percent of their annual fee in cash, with the balance paid in the form of restricted stock issued...

  • Page 60
    ... directors for the fiscal year ended January 31, 2012. Mr. Bass, who was our employee during the fiscal year ended January 31, 2012, did not receive additional compensation for his service as a director. Fees Earned or Paid in Cash ($) (b) Stock Awards ($) (c) Option Awards ($) (c) Total ($) Name...

  • Page 61
    ...and Mr. Smith were both granted an initial option grant of 50,000 upon appointment to the Board. The aggregate number of each director's stock options outstanding at January 31, 2012 is disclosed in the table below: Name Option Awards Outstanding (#) Crawford W. Beveridge ...J. Hallam Dawson ...Per...

  • Page 62
    ...purchase up to 16.9 million shares, all of which have been previously granted. Executive officers and members of the Board were not eligible to participate in this plan. The Nonstatutory Stock Option Plan was intended to help the Company attract and retain outstanding individuals in order to promote...

  • Page 63
    ... their respective footnote, the address for each listed person is c/o Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903. (2) The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily...

  • Page 64
    ...address of BlackRock, Inc., 40 East 52nd Street, New York, NY 10022. (7) As of December 31, 2011, the reporting date of Massachusetts Financial Services Company's most recent filing with the SEC pursuant to Section 13(g) of the Exchange Act filed on January 31, 2012, Massachusetts Financial Services...

  • Page 65
    ...the Exchange Act requires our directors and executive officers, and persons who own more than 10 percent of a registered class of our equity securities ("10 percent Stockholders"), to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC and The NASDAQ Stock Market...

  • Page 66
    ... independent directors as required by the listing standards of The NASDAQ Stock Market and rules of the SEC. The Audit Committee operates under a written charter approved by the Board of Directors, which is available on the Company's website at www.autodesk.com under "Investors-Corporate Governance...

  • Page 67
    ... as the Board may recommend. It is important that your shares be represented at the Annual Meeting, regardless of the number of shares that you hold. Therefore, you are urged to vote at your earliest convenience. THE BOARD OF DIRECTORS April 24, 2012 San Rafael, California 61 Proxy Materials

  • Page 68
    ...management finds it useful to exclude certain noncash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods. Amortization of purchased intangibles. We incur amortization of acquisition-related purchased intangible assets...

  • Page 69
    ... Code) (Address of principal executive offices) _____ Registrant's telephone number, including area code: (415) 507-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $0.01 Par Value Name of each exchange on which registered The NASDAQ Stock Market...

  • Page 70
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  • Page 71
    ..., Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services 83 84 84 84 84 Market...

  • Page 72
    ... products are sold globally, both directly to customers and through a network of resellers and distributors. Segments We are organized into four reportable operating segments Platform Solutions and Emerging Business ("PSEB"), which accounted for 38% of our net revenue in fiscal 2012, Architecture...

  • Page 73
    ... Civil 3D, AutoCAD Mechanical, AutoCAD Architecture, Autodesk 3ds Max and Autodesk Maya. Suites, which accounted for approximately 27% of our net revenue in fiscal 2012, are a combination of products that target a specific user objective (product design, building design, etc.) and support a set...

  • Page 74
    ... built. Digital prototyping with Autodesk Inventor enables manufacturers to design, visualize, and simulate products digitally, helping them to build better products, reduce development costs, and get to market faster. • AutoCAD Mechanical AutoCAD Mechanical software is purpose-built to accelerate...

  • Page 75
    ... product groups included the following during fiscal 2012: Animation • Autodesk 3ds Max Autodesk 3ds Max software provides 3D modeling, animation and rendering solutions that enable game developers, design visualization professionals and visual effects artists to digitally create realistic...

  • Page 76
    ... media. We have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products. In addition to sales of new software licenses, we generate revenue through our maintenance program and upgrade pricing options...

  • Page 77
    ... support for some of our customers. We support our resellers and distributors through technical product training, sales training classes, the Internet and telephone. We also provide online support directly to our customers through our maintenance program. There are also a number of user group forums...

  • Page 78
    ... SUPPLIERS Production of our PSEB, AEC, MFG and certain M&E software products involves duplication of the software media and, for certain products, the printing of user manuals. The purchase of media and the transfer of the software programs onto media for distribution to customers are performed by...

  • Page 79
    ... team with knowledge of web-based design applications. PlanPlatform has been integrated into, and the related goodwill was assigned to the PSEB segment. BACKLOG We have historically reported backlog as consisting of software license product orders that have not yet shipped, and deferred revenue...

  • Page 80
    ... Autodesk Product Design Suite. Our previously established suites include: Autodesk Inventor family suites, Autodesk Revit family suites, and education solutions suites. Upgrade-Upgrades allow customers to pay an incremental fee at currently available prices toward the purchase of the latest version...

  • Page 81
    ... borrowing and spending by our end users on small and large projects in the industries we serve, thereby reducing demand for our products. Existing and increased competition and rapidly evolving technological changes may reduce our net revenue and profits. The software industry has limited barriers...

  • Page 82
    ... AutoCAD LT products customer base to related design products, the timing of the introduction of new products by us or our competitors, the success of new business or sales initiatives and increasing our portfolio of product suites ("suites"), failure to maintain our revenue growth and profitability...

  • Page 83
    ...be adversely affected. We sell our software products both directly to end-users and through a network of distributors and resellers. For the fiscal year ended January 31, 2012, approximately 84%, of our revenue was derived from indirect channel sales through distributors and resellers, and we expect...

  • Page 84
    ...for a particular period. We anticipate that our international operations will continue to account for a significant portion of our net revenue, and, as we expand our international development, sales and marketing expertise, will provide significant support to our overall efforts in countries outside...

  • Page 85
    ... in the market price of a company's securities, a company becomes more susceptible to securities class action litigation. This type of litigation is often expensive and diverts management's attention and resources. Our strategy to develop and introduce new product and service offerings, including...

  • Page 86
    ...customers using standalone Autodesk products to expand their portfolio with our suites offerings. Should sales of licenses of our AutoCAD and AutoCAD LT or standalone Autodesk flagship products decrease without a corresponding increase in suites product revenue or without purchases of customer seats...

  • Page 87
    ... in attempts to obtain fees for licensing the right to use patents. Any such claims or threats, whether with or without merit, have been and could in the future be time-consuming to defend, result in costly litigation and diversion of resources, cause product shipment delays or require us to enter...

  • Page 88
    ... code and computer systems. There appears to be an increasing number of computer "hackers" developing and deploying a variety of destructive software programs (such as viruses, worms, and the like) that could attack our products and computer systems. Despite significant efforts to create security...

  • Page 89
    ...that is integrated with internally developed software and used in our products to perform key functions. These third-party software licenses may not continue to be available on commercially reasonable terms, and the software may not be appropriately supported, maintained or enhanced by the licensors...

  • Page 90
    ... be harmed. We rely on our network and data center infrastructure, internal technology systems and our websites for our development, marketing, operational, support, sales, accounting and financial reporting activities. We are continually investing resources to update and improve these systems and...

  • Page 91
    .... Our San Rafael facilities consist of 284,000 square feet under leases that have expiration dates ranging from February 2012 to December 2019. We and our foreign subsidiaries lease additional space in various locations throughout the world for local sales, product development and technical support...

  • Page 92
    ... the effect of returning excess cash generated from our business to stockholders. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions, the volume of employee stock option exercises, stock issuances, the trading price of our...

  • Page 93
    ... provides information about the repurchase of our common stock under the stock repurchase programs in open-market transactions during the quarter ended January 31, 2012: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans...

  • Page 94
    ... are not included in this Form 10-K. Fiscal year ended January 31, 2012 2011 2010 2009 2008 (In millions, except per share data) For the Fiscal Year: Net revenue Income from operations Provision for income taxes Net income(1) Cash flow from operations Common Stock Data: Basic net income per share...

  • Page 95
    ... into volume markets around the world. Our distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our products quickly and easily. We have a significant number of registered third-party developers who create products that...

  • Page 96
    of training and providing fresh talent for our customers. Our global network of distributors, resellers, third party developers, customers, educational institutions and students has been developed over our twenty-nine year history. We believe it is an enduring competitive advantage that is difficult...

  • Page 97
    ...the sale of our product licenses by our distributors and resellers to their customers. If we were to change any of these assumptions or judgments, it could cause a material increase or decrease in the amount of revenue that we report in a particular period. Marketable Securities. At January 31, 2012...

  • Page 98
    ...from sales, maintenance agreements and acquired developed technologies; the acquired company's trade name and customer relationships as well as assumptions about the period of time the acquired trade name and customer relationships will continue to be used in the combined company's product portfolio...

  • Page 99
    ... 2011, net revenue increased 14%, gross profit increased 13% and income from operations increased 31%. Contributing to the year over year increases in revenue were increases in revenue from new seat licenses, maintenance revenue, revenue for most of our major products, all of our reportable segments...

  • Page 100
    ... revenue for fiscal 2012, and increased 31% as compared to fiscal 2011. During fiscal 2012, we released our new design and creation suites that include English language versions of our Autodesk Design Suite, Autodesk Factory Design Suite, Autodesk Product Design Suite, Autodesk Building Design Suite...

  • Page 101
    ... stand-alone products to suites and a promotion that was run related to the education solutions suites. Backlog related to current software license product orders that had not shipped at the end of the quarter decreased by $0.4 million during fiscal 2012 from $27.5 million at January 31, 2011 to $27...

  • Page 102
    ... program, customers are eligible to receive unspecified upgrades when and if available, downloadable training courses and online support. We recognize maintenance revenue ratably over the maintenance contract periods. Maintenance revenue increased 10% during fiscal 2012, as compared to fiscal 2011...

  • Page 103
    ... increase in upgrade pricing, an additional promotion run in the Americas geography in the fourth quarter and an increase in the number of larger revenue transactions in fiscal 2011 as compared to fiscal 2010. Backlog related to current software license product orders that had not shipped at the end...

  • Page 104
    ...), costs associated with transferring our software to electronic media, printing of user manuals and packaging materials and shipping and handling costs. Cost of license and other revenue increased 15% during fiscal 2012, as compared to fiscal 2011 primarily due to increased support costs and lower...

  • Page 105
    ...37 2012 Annual Report Marketing and sales expenses include salaries, bonuses, benefits, and stock-based compensation expense for our marketing and sales employees, and the expense of travel, entertainment and training for such personnel, and the costs of programs aimed at increasing revenue, such...

  • Page 106
    ... include salaries, bonuses, benefits and stock-based compensation expense for our finance, human resources and legal employees, as well as professional fees for legal and accounting services, amortization of acquisition related customer relationships and trade names, expense of travel, entertainment...

  • Page 107
    ...interest rates. The decrease in Interest and investment income, net, during fiscal 2012 as compared to fiscal 2011 is primarily due to the decrease in the fair value of our trading securities that are marked to market each period. Interest and other income, net, decreased $18.5 million during fiscal...

  • Page 108
    ... Financial Information In addition to our results determined under U.S. generally accepted accounting principles ("GAAP") discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the fiscal years ended January 31, 2012, 2011 and...

  • Page 109
    ..., and be viewed in conjunction with, GAAP financial measures. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business. 41 2012 Annual Report

  • Page 110
    ... margin, operating margin and per share data): Fiscal Year Ended January 31, 2012 2011 (Unaudited) 2010 Gross profit Stock-based compensation expense Amortization of purchased intangibles(1) Non-GAAP gross profit Gross margin Stock-based compensation expense Amortization of purchased intangibles...

  • Page 111
    ... of cash generated from operations and to a lesser extent, the proceeds from the issuance of common stock following stock option exercises and employee stock plan purchases. These increases to cash, cash equivalents and marketable securities were partially offset by cash used for repurchases of our...

  • Page 112
    ... in operating assets and liabilities was $96.7 million. The primary source of working capital was an increase in deferred revenue due to higher maintenance billings and an increase in accounts payable for fiscal 2012 compared to fiscal 2011. The primary working capital uses of cash were increases in...

  • Page 113
    ... purchase orders are based on our current procurement or development needs and are fulfilled by our vendors within short time horizons. We do not have significant agreements for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements...

  • Page 114
    of returning excess cash generated from our business to stockholders. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions, the volume of employee stock option exercises, stock issuance, the trading price of our common stock,...

  • Page 115
    ...2012 2011 2010 (in millions, except per share data) Net revenue: License and other Maintenance Total net revenue Cost of revenue: Cost of license and other revenue Cost of maintenance revenue Total cost of revenue Gross profit Operating expenses: Marketing and sales Research and development General...

  • Page 116
    ... 31, 2012 January 31, 2011 (in millions, except per share data) ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Deferred income taxes Prepaid expenses and other current assets Total current assets Marketable securities Computer equipment, software...

  • Page 117
    ... expenses and other current assets Accounts payable and accrued liabilities Deferred revenue Accrued income taxes Net cash provided by operating activities Investing Activities Purchases of marketable securities Sales of marketable securities Maturities of marketable securities Acquisitions, net of...

  • Page 118
    ...shares issued under stock plans Stock-based compensation expense Tax benefits from employee stock plans Comprehensive income: Net income Other comprehensive income, net of tax: Net gain on derivative instruments, net of tax Change in net unrealized gain on marketable securities, net of tax Change in...

  • Page 119
    ... designs, help save time and money, improve quality and foster innovation. Autodesk software products are sold globally, both directly to customers and through a network of resellers and distributors. Principles of Consolidation The accompanying consolidated financial statements include the accounts...

  • Page 120
    ... associated with problem accounts. The product returns reserves are based on historical experience of actual product returns, estimated channel inventory levels, the timing of new product introductions, channel sell-in for applicable markets and other factors. Partner program and other obligations...

  • Page 121
    ... 16% of trade accounts receivable at January 31, 2012 and 2011, respectively. In October 2011, Tech Data purchased certain assets of Mensch and Maschine Software ("MuM"), which has been a distributor of our products in Europe. The acquisition concentrates additional sales through Tech Data, which on...

  • Page 122
    ... of Autodesk's other intangible assets are amortized to expense over the estimated economic life of the product, which ranges from two to seven years. Amortization expense for purchased technologies, customer relationships, trade names, patents, and user lists was $71.8 million in fiscal 2012, $57...

  • Page 123
    ...may be recorded to goodwill. The change in the carrying amount of goodwill during the year ended January 31, 2012 is as follows: Platform Solutions and Emerging Business Architecture, Engineering and Construction Manufacturing Media and Entertainment Total Balance as of January 31, 2011 Goodwill...

  • Page 124
    ... License Revenue Product license revenue includes: software license revenue from the sale of new seat licenses, upgrades, product revenue for Creative Finishing and revenue from on-demand collaboration software and services. Autodesk's existing customers who are using a currently supported version...

  • Page 125
    ... 2012 Annual Report Cost of license and other revenue Marketing and sales Research and development General and administrative Stock-based compensation expense related to stock awards and ESP Plan purchases Tax benefit Stock-based compensation expense related to stock awards and ESP Plan purchases...

  • Page 126
    ... the treasury stock method. Accounting Standards in Fiscal 2012 With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") or adopted by the Company during the fiscal year ended January 31...

  • Page 127
    ... on employers' disclosures about postretirement benefit plan asset (Subtopic 715-20). The changes under ASU 2010-06 were effective for Autodesk's fiscal year beginning February 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in...

  • Page 128
    ... time deposits $ Commercial paper Money market funds Marketable securities: Short-term available for sale Commercial paper and corporate debt securities Certificates of deposit and time deposits U.S. treasury securities U.S. government agency securities Municipal securities Other Short-term trading...

  • Page 129
    ... Money market funds Marketable securities: Short-term available for sale Commercial paper and corporate debt securities Certificates of deposit and time deposits U.S. treasury securities U.S. government agency securities Sovereign debt Municipal securities Other Short-term trading securities Mutual...

  • Page 130
    ... method. Proceeds from the sale and maturity of marketable securities were $559.1 million in fiscal 2012, $410.7 million in fiscal 2011 and $355.1 million in fiscal 2010. Derivative Financial Instruments Under its risk management strategy, Autodesk uses derivative instruments to manage its short...

  • Page 131
    ... not designated as hedging instruments Autodesk uses foreign currency contracts which 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-tomarket at the end of...

  • Page 132
    ... Exchange Contracts Fiscal Year Ended January 31, 2012 2011 Amount and Location of Gain (Loss) Recognized in Income on Derivative Interest and other income, net 3. Employee and Director Stock Plans Stock Plans $ (1.3) $ 2.3 As of January 31, 2012, Autodesk maintained two active stock option...

  • Page 133
    ...future issuance under the 2012 Director's Plan. The following sections summarize activity under Autodesk's stock plans. Stock Options: A summary of stock option activity for the fiscal year ended January 31, 2012 is as follows: Weighted average exercise price per share Number of Shares (in millions...

  • Page 134
    ... date fair value per share of stock options granted is calculated, as of the stock option grant date, using the BSM option pricing model. The following table summarizes information about options outstanding and exercisable at January 31, 2012: Options Exercisable Weighted average contractual life...

  • Page 135
    ... Autodesk recorded $23.8 million, $18.2 million and $26.6 million of compensation expense associated with the ESP Plan in fiscal 2012, 2011 and 2010, respectively. Equity Compensation Plan Information The following table summarizes the number of outstanding options granted to employees and directors...

  • Page 136
    ... fiscal year 2012, the Company reduced its current federal and state taxes payable by $31.3 million primarily related to excess tax benefits from non-qualified stock options, offsetting additional paid-in capital. Pursuant to accounting standards related to stock-based compensation, the Company...

  • Page 137
    ... losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. 69 2012 Annual Report

  • Page 138
    ... twelve months; however an estimate of the range of the possible change cannot be made at this time. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows: 2012 2011 2010 Gross unrecognized tax benefits at the beginning of the fiscal year Increases...

  • Page 139
    ...Autodesk purchased the option to acquire Turbo Squid within a prescribed date range. On October 14, 2011, Autodesk acquired Micro Application Packages Limited ("MAP") for total cash consideration of $23.0 million. MAP was a privately held company specializing in software and services in the building...

  • Page 140
    ... 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, 2012, the aggregate future minimum lease payments required were as follows: 2013 2014...

  • Page 141
    ... 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 on Autodesk's Consolidated Statements of Operations, was $16.5 million in fiscal 2012, $12.8 million in fiscal 2011 and...

  • Page 142
    Board of Directors. In fiscal 2012, 2011 and 2010, Autodesk repurchased its common stock through open market purchases. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions, the number of employee stock option exercises, ...

  • Page 143
    ... includes revenue from the sales of licenses of Autodesk Inventor family suites, AutoCAD Mechanical and Autodesk Moldflow products. M&E is comprised of two product groups: Animation, including design visualization, and Creative Finishing. Animation products, such as Autodesk 3ds Max, Autodesk Maya...

  • Page 144
    ... managed outside the reportable segments, including stock-based compensation expense. Information regarding Autodesk's operations by geographic area is as follows: Fiscal year ended January 31, 2012 2011 2010 Net revenue: Americas U.S. Other Americas Total Americas Europe, Middle East and Africa...

  • Page 145
    ... tax assets and marketable securities. 14. Retirement Benefit Plans Pretax Savings Plan Autodesk has a 401(k) plan that covers nearly all U.S. employees. Eligible employees may contribute up to 50% of their pretax salary, subject to limitations mandated by the Internal Revenue Service. Autodesk...

  • Page 146
    ... sets forth the restructuring activities for the fiscal years ended January 31, 2012 and 2011. Balances, January 31, 2011 Additions Payments Adjustments(1) Balances, January 31, 2012 Fiscal 2011 Plan Employee termination costs Fiscal 2010 Plan Employee termination costs Lease termination and asset...

  • Page 147
    ...information for fiscal 2012 and 2011 is as follows: 2012 Net revenue Gross profit Income from operations Provision for income taxes Net income Basic net income per share Diluted net income per share Income from operations includes the following items: Stock-based compensation...79 2012 Annual Report

  • Page 148
    REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Autodesk, Inc. We have audited the accompanying consolidated balance sheets of Autodesk, Inc. as of January 31, 2012 and 2011, and the related consolidated statements of operations, ...

  • Page 149
    ... express an opinion on the company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable...

  • Page 150
    ... and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to Autodesk's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required...

  • Page 151
    ... Name Age Position Carl Bass Mark J. Hawkins Jan Becker Steven Blum Pascal W. Di Fronzo 54 52 59 47 47 President and Chief Executive Officer Executive Vice President and Chief Financial Officer Senior Vice President, Human Resources and Corporate Real Estate Senior Vice President, Worldwide Sales...

  • Page 152
    ... the section entitled "Security Ownership of Certain Beneficial Owners and Management," and "Executive Compensation-Equity Compensation Plan Information" in our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item...

  • Page 153
    ... years ended January 31, 2012, 2011 and 2010, is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements of Autodesk, Inc. Schedule II Valuation and Qualifying Accounts Schedules not listed above have been omitted because they are not applicable or...

  • Page 154
    ...requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. AUTODESK, INC. By: /S/ CARL BASS Carl Bass President and Chief Executive Officer Dated: March 15, 2012...

  • Page 155
    ...the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities as of March 15, 2012. Signature Title /s/ CARL BASS Carl Bass President and Chief Executive Officer (Principal Executive Officer) /s/ MARK J. HAWKINS...

  • Page 156
    ...31, 2005) Registrant's 1998 Employee Qualified Stock Purchase Plan Form of Agreement (non-U.S. Employees) (incorporated by reference to Exhibit 10.5 filed with the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 2009) Registrant's 2000 Directors' Option Plan, as amended...

  • Page 157
    ...fiscal year ended January 31, 2009) Registrant's 2010 Outside Directors' Stock Plan (incorporated by reference to Exhibit 10.1 filed with the Registrant's Current Report on Form 8-K filed on June 16, 2009) Autodesk, Inc. 2010 Outside Directors' Stock Plan Form of Stock Option Agreement (incorporated...

  • Page 158
    ... Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008) Amendment to Registrant's Equity Incentive Deferral Plan effective as of February 17, 2012 (filed herewith) Office Lease between Registrant and the J.H.S. Trust for 111 McInnis Parkway, San Rafael, CA, as amended...

  • Page 159
    ...Senior Vice President, Worldwide Sales and Services Pascal W. Di Fronzo Senior Vice President, General Counsel and Secretary Mark J. Hawkins Executive Vice President and Chief Financial Officer Corporate Headquarters Worldwide Headquarters Autodesk, Inc. 111 McInnis Parkway San Rafael, CA 94903 USA...

  • Page 160
    ..., Inc., 111 McInnis Parkway, San Rafael, CA 94903 Autodesk and 3ds Max are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names, or trademarks belong to their respective holders...