Autodesk 2012 Annual Report Download - page 81

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ITEM 1A. RISK FACTORS
We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control.
In addition to the other information contained in this Form 10-K, the following discussion highlights some of these risks and the
possible impact of these factors on our business, financial condition and future results of operations. If any of the following risks
actually occur, our business, financial condition or results of operations may be adversely impacted, causing the trading price of
our common stock to decline. In addition, these risks and uncertainties may impact the “forward-looking” statements described
elsewhere in this Form 10-K and in the documents incorporated herein by reference. They could affect our actual results of
operations, causing them to differ materially from those expressed in “forward-looking” statements.
Current global economic uncertainty may impact our business, financial results and financial condition.
As our business has expanded globally, we have increasingly become subject to risks arising from adverse changes in
global economic and political conditions. The past several years have been characterized by weak global economic conditions,
a tightening in the credit markets, high unemployment, a low level of liquidity in many financial markets, increased
government deficit spending and debt levels, uncertainty about certain governments' abilities to repay such debt and extreme
volatility in many financial instrument markets. Although some of these conditions appear to be abating there are a number of
mixed indicators and it is not yet clear whether a sustainable recovery is occurring or a renewed slow-down is taking place.
Over the past several years, many of our customers have experienced tighter credit, negative financial news and
weaker financial performance of their businesses and have reduced their workforces, thereby reducing the number of licenses
and the number of maintenance contracts they purchase from us. In addition, a number of our customers rely, directly and
indirectly, on government spending. Current debt balances of many countries without proportionate increases in revenues has
caused many countries to reduce spending and in some cases has forced those countries to restructure their debt in an effort to
avoid defaulting under those obligations. This has not only impacted those countries but others that are holders of such debt and
those assisting in such restructuring.
These actions may impact, and over the past several years have negatively impacted, our business, financial results
and financial condition. In addition, these factors may cause, and over the past several years have caused, us to restructure our
business and in turn incur restructuring charges as well as take impairment charges on some of our long-term assets. In
addition, the improvement of our financial performance over the past several fiscal quarters may be negatively impacted by:
• lack of credit available to and the insolvency of key channel partners, impairing our distribution channels and cash
flows;
• counterparty failures negatively impacting our treasury functions, including timely access to our cash reserves and third-
party fulfillment of hedging transactions;
• counterparty failures negatively affecting our insured risks;
• inability of banks to honor our existing line of credit, which could increase our borrowing expenses or eliminate our
ability to obtain short-term financing; and
• decreased 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 to entry, and the availability of computing devices with continually
expanding performance at progressively lower prices contributes to the ease of market entry. The markets in which we compete
are characterized by vigorous competition, both by entry of competitors with innovative technologies and by consolidation of
companies with complementary products and technologies. In addition, some of our competitors in certain markets have greater
financial, technical, sales and marketing and other resources. Furthermore, a reduction in the number and availability of
compatible third-party applications, or our inability to rapidly adapt to technological and customer preference changes,
including those related to cloud computing, mobile devices, and new computing platforms, may adversely affect the sale of our
products. Because of these and other factors, competitive conditions in the industry are likely to intensify in the future.
Increased competition could result in price reductions, reduced net revenue and profit margins and loss of market share, any of
which would likely harm our business.
We believe that our future results depend largely upon our ability to offer products that compete favorably with respect to
reliability, performance, ease of use, range of useful features, continuing product enhancements, reputation and price.
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2012 Annual Report