Autodesk 2014 Annual Report Download - page 144

2013 Annual Report
2014 Form 10-K 70
Stock-based Compensation Expense
The following table summarizes stock-based compensation expense for fiscal 2014, 2013 and 2012, respectively, as
follows:
Fiscal Year Ended January 31,
2014 2013 2012
Cost of license and other revenue $ 3.8 $ 3.7 $ 2.7
Cost of subscription 2.2 1.5 1.2
Marketing and sales 58.6 64.3 48.3
Research and development 43.7 61.8 38.1
General and administrative 23.9 25.0 18.5
Stock-based compensation expense related to stock awards and ESP Plan purchases
132.2 156.3 108.8
Tax benefit (36.4) (35.5) (27.1)
Stock-based compensation expense related to stock awards and ESP Plan
purchases, net $ 95.8 $ 120.8 $ 81.7
Autodesk determines the grant-date fair value of its share-based payment awards using a Black-Scholes Merton Option
pricing model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case
Autodesk uses a binomial-lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model utilizes
multiple input variables to estimate the probability that market conditions will be achieved. Autodesk uses the following
assumptions to estimate the fair value of stock-based awards:
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 2014 January 31, 2013 January 31, 2012
Performance
Stock Unit (1) ESP Plan Stock Option (2) ESP Plan Stock Option (2) ESP Plan
Range of expected volatilities
34% 27 - 36% 41 - 45% 41 - 44% 40 - 49% 34 - 44%
Range of expected lives (in years)
N/A 0.5 - 2.0 3.6 - 4.6 0.5 - 2.0 2.6 - 4.8 0.5 - 2.0
Expected dividends —% —% —% —% —% —%
Range of risk-free interest rates
0.1% 0.1 - 0.4% 0.5 - 0.8% 0.1 - 0.3% 0.5 - 1.9% 0.1 - 0.8%
Expected forfeitures 7.2 - 7.7% 7.2 - 7.7% 7.7 - 7.8% 7.7 - 7.8% 7.8 - 10.5% 7.8 - 10.5%
_______________
(1) Autodesk did not grant PSUs in fiscal 2013 and 2012 that were subject to market conditions.
(2) Autodesk did not grant stock options in fiscal 2014.
Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures. The
first is a measure of historical volatility in the trading market for the Company’s common stock, and the second is the implied
volatility of traded forward call options to purchase shares of the Company’s common stock. The expected volatility for PSUs
subject to market conditions includes the expected volatility of Autodesk's peer companies within the S&P Computer Software
Select Index.
Autodesk estimates the expected life of stock-based awards using both exercise behavior and post-vesting termination
behavior as well as consideration of outstanding options.
Autodesk did not pay cash dividends in fiscal 2014, 2013 or 2012 and does not anticipate paying any cash dividends in
the foreseeable future. Consequently, an expected dividend yield of zero is used in the Black-Scholes-Merton option pricing
model and the Monte Carlo simulation model.