Autodesk 2002 Annual Report Download

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Table of contents

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  • Page 3
    ... to execute on our goals in the present. While our ideas are revolutionary, our implementation has been incremental and evolutionary. This allows our customers to improve their business processes at a pace that is comfortable for them and, ultimately, profitable for you. Autodesk, Inc. FY 02 1

  • Page 4
    ... customers. So they trust us-trust our motives. They know that while we continue to seek technology advances that meet the need for productivity and collaboration in the management and use of digital design and visual media, we haven't forgotten the core creation business. 2 FY 02 Autodesk, Inc...

  • Page 5
    ... business processes woven through all our products and services. They realize that we've made it our business to understand their business. And that's why they remain loyal-and Autodesk remains successful- even though the economic climate is tough. Only Autodesk offers its customers the best return...

  • Page 6
    .... Contributions were strong across the product line, from Autodesk Mechanical Desktop and AutoCAD Mechanical to our latest Autodesk Inventor 5. The Platform Technology Group, with AutoCAD and AutoCAD LT, continues to provide a foundation for many products in the core design markets. Net revenues for...

  • Page 7
    ... and revitalized our reseller channel and launched worldwide sales websites. • Helping customers manage their design technology infrastructure: We continued to deliver AutoCAD-family extensions-periodic, modular software enhancements that replace major releases for our subscription customers...

  • Page 8
    ... to model-based design. Geographic Information Systems We understand the needs of mapping, civil engineering, and infrastructure management and are providing focused, easily deployed tools that meet those needs. The streamlined, integrated family of Autodesk GIS desktop software products, including...

  • Page 9
    ... great technology. From the next release of Autodesk Inventor, to the innovative new conceptual design tools of Autodesk Architectural Studio, the acquisition of Revit and its parametric technologies, and our latest collaboration services in Buzzsaw and Autodesk Streamline-we're investing in new...

  • Page 10
    ... 111 McInnis Parkway, San Rafael, California (Address of principal executive offices) 94903 (Zip Code) Registrant's telephone number, including area code: (415) 507-5000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered None...

  • Page 11
    ... Autodesk software products. Launched in April 2000, Autodesk Point A provides users with a global access point to Autodesk services and information, including subscription-based upgrades, tutorials, on-line training and support, product tips, and local industry links. During January 2002, Autodesk...

  • Page 12
    ...managers, designers and engineers who need a powerful, stand-alone drafting tool, but who do not require the advanced feature set in AutoCAD. Autodesk Inventor Autodesk Inventor is a 3D mechanical design creation tool that provides users an assembly-centric solid modeling (3D) and drawing production...

  • Page 13
    Autodesk Land Desktop Autodesk Land Desktop is our land development design tool for the AutoCAD environment built around a centralized product structure that stores critical data-points, terrain models, and alignments-in a central location where they can be shared by team members. Users benefit from...

  • Page 14
    ... and are supported by global marketing and sales organizations. These organizations develop and manage overall marketing and sales programs and work closely with a network of domestic and foreign offices. We sell our software products both directly to customers, which include large corporations, and...

  • Page 15
    ...and distributors through technical product training, sales training classes, the Internet and direct telephone support. Support content is also available on the Product Support portion of our Internet site. There are also a number of user group forums in which customers are able to share information...

  • Page 16
    ... Design Solutions software products involves duplication of the software media and 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 us and by licensed subcontractors. Media for our products include...

  • Page 17
    ... Executive Vice President, Worldwide Consulting and Support Services Carol A. Bartz joined Autodesk in April 1992 and serves as Chairman of the Board, Chief Executive Officer and President. Ms. Bartz is a director of Network Appliance, Inc., BEA Systems, Inc., and Cisco Systems, Inc. Joseph...

  • Page 18
    ... President, Europe/Middle East/Africa. Tom Vadnais joined Autodesk in January 2002 and serves as Executive Vice President, Worldwide Consulting and Support Services. Prior to joining Autodesk, Mr. Vadnais was president and CEO of Mediaplex, Inc. from April 2001 until Mediaplex was acquired by Value...

  • Page 19
    ... common stock is traded on the Nasdaq National Market under the symbol ADSK. The following table lists the high and low sales prices for each quarter in the last two fiscal years. These share prices were adjusted for the two-for-one stock split that was effective for record holders on April 4, 2002...

  • Page 20
    .... Based on whether the sale is product or service related, we recognize revenue as follows. Product sales are recognized at the time of shipment. Subscription, customer support and hosted service revenues are recognized ratably over the contract periods. Customer consulting and training revenues...

  • Page 21
    ...resellers to return product in certain instances, generally when new product releases supercede older versions. Over the past three years, product returns as a percentage of revenues have ranged from 3 to 5 percent annually. The product return reserves are based on estimated channel inventory levels...

  • Page 22
    ... offerings, such as Autodesk Inventor, Autodesk Architectural Desktop, Autodesk Map, Autodesk Land Desktop and AutoCAD 2002, and increased customer demand for greater productivity tools. Although we have been reducing our dependence on AutoCAD, sales of AutoCAD and AutoCAD upgrades continue to be...

  • Page 23
    ... facility costs for our marketing, sales, dealer training and support personnel. These expenses also include programs aimed at increasing revenues, such as advertising, trade shows and expositions, as well as various sales and promotional programs designed for specific sales channels and end users...

  • Page 24
    .... During fiscal 2002 Autodesk recognized $33.6 million of restructuring and other charges. These charges resulted from restructuring activities ($24.5 million), in-process research and development expenses related to the acquisition of Media 100 ($3.2 million), the wind-down costs associated with...

  • Page 25
    ...and marketable securities balances. Gain on disposal of affiliate. During the third quarter of fiscal 2002, we recognized a one-time non-cash gain of $9.5 million related to the dissolution of RedSpark, a development stage company. Because we owned greater than 50 percent of the voting stock, we had...

  • Page 26
    ... and the timing of new product introductions. VISION* Solutions ("VISION") On April 22, 1999, we acquired VISION, a vendor of enterprise automated mapping/facilities management/ geographic information systems (AM/FM/GIS) solutions. Of the $26.0 million purchase price, which was paid in cash...

  • Page 27
    ... Corporation ("Revit") In April 2002, we acquired Revit for $133.0 million in cash. The acquisition will be accounted for as a purchase under SFAS 141. The addition of Revit complements our existing family of building industry applications with a parametric building modeler for customers to design...

  • Page 28
    ... of Revit complements our existing family of building industry applications with a parametric building modeler for customers to design, coordinate, and integrate information about an entire building. We believe our existing cash, cash equivalents, marketable securities, available line of credit and...

  • Page 29
    ... of new products by us or our competitors, changes in marketing or operating expenses, changes in product pricing or product mix, platform changes, delays in product releases, distribution channel management, changes in compensation practices, the timing of large systems sales, and general economic...

  • Page 30
    ... from sales of AutoCAD software, AutoCAD upgrades, and products that are interoperable with AutoCAD. As such, any factor adversely affecting sales of AutoCAD and AutoCAD upgrades, including product life cycle, market acceptance, product performance and reliability, reputation, price competition...

  • Page 31
    ... revenue generation to justify their costs, or competitors may introduce new products and services that will achieve acceptance among our current customers, adversely affecting our competitive position. Disruptions with third party developer and licensing relationships could adversely impact our...

  • Page 32
    ... supercede older versions. We anticipate that product returns in future periods will continue to be impacted by product update cycles, new product releases and software quality. We establish reserves for stock balancing and product rotation. These reserves are based on estimated channel inventory...

  • Page 33
    ... market value if interest rates increase. A sensitivity analysis was performed on our investment portfolio as of January 31, 2002. This sensitivity analysis is based on a modeling technique that measures the hypothetical market value changes that would result from a parallel shift in the yield curve...

  • Page 34
    ...approximately $4.1 million as of January 31, 2002 that includes minority equity investments in several privately-held technology companies, many of which are in the development stage. We account for these minority equity investments using the cost method of accounting because our ownership interests...

  • Page 35
    ...STATEMENTS AND SUPPLEMENTARY DATA AUTODESK, INC. CONSOLIDATED STATEMENTS OF INCOME Fiscal year ended January 31, 2002 2001 2000 (in thousands, except per share data) Net revenues ...Costs and expenses: Cost of revenues ...Marketing and sales ...Research and development ...General and administrative...

  • Page 36
    ... Commitments and contingencies Minority interest ...Stockholders' equity: Common stock and additional paid-in capital, $0.01 par value; 250,000 shares authorized; 111,287 shares outstanding at January 31, 2002 (109,428 shares in 2001) ...Accumulated other comprehensive loss ...Deferred compensation...

  • Page 37
    ...Repurchase of common stock ...Dividends paid ...(Decrease) increase in credit line ...(Repayments) borrowings ...Minority interest ...Net cash (used in) provided by financing activities ...Effect of exchange rate changes on cash and cash equivalents ...Adjustment to conform fiscal year of Discreet...

  • Page 38
    ...Adjustment to conform fiscal year of Discreet Logic ...Dividends paid ...Repurchase of common shares ...(5,790) Balances, January 31, 2000 ...118,481 Common shares issued under stock option and stock purchase plans ...9,236 Tax effect of stock plans ...Shares issued in connection with an acquisition...

  • Page 39
    ... including building design, geographic information systems, manufacturing, digital media and wireless data services. In August 2001, Autodesk acquired the remaining outstanding stock of Buzzsaw.com, Inc. ("Buzzsaw"). Additionally, in October 2001, Autodesk acquired the software division of Media 100...

  • Page 40
    ... one institution, type of security and issuer. Autodesk's accounts receivable are derived from sales to a large number of direct customers, resellers and distributors in the Americas, Europe and the Asia Pacific region. Autodesk performs ongoing evaluations of its customers' financial condition and...

  • Page 41
    ... activities. Purchased Technologies and Capitalized Software Costs incurred in the initial design phase of software development are expensed as incurred. Once the point of technological feasibility is reached, production costs (programming and testing) are capitalized. Certain acquired software...

  • Page 42
    ... as follows. Product sales, which include software licenses and the related hardware and peripherals, are recognized at the time of shipment. In addition to product sales, Autodesk recognizes subscription and hosted service revenues ratably over the contract periods. Customer consulting and 41

  • Page 43
    ... resellers to return product in certain instances, generally during periods of product transition and during update cycles. Autodesk establishes allowances for product returns, including allowances for stock balancing and product rotation. These reserves are based upon channel inventory levels and...

  • Page 44
    ..., the Board of Directors authorized a two-for-one stock split in the form of a stock dividend to stockholders of record as of April 4, 2002. All references in the consolidated financial statements and notes thereto with respect to the number of shares, per share amounts and market prices of Autodesk...

  • Page 45
    ... subject to credit risk are generally limited to the amounts, if any, by which the counterparties' obligations under the agreements exceed the obligations of Autodesk to the counterparties. Gains resulting from foreign currency transactions were not material in fiscal 2002, 2001 and 2000. Options In...

  • Page 46
    ... prepayment penalties. Realized gains on the sale of available-for-sale securities were $2.8 million in fiscal 2002. Realized gains and losses on available-for-sale securities were immaterial in fiscal 2001 and 2000. The cost of securities sold is based on the specific identification method. 45

  • Page 47
    ...165) Acquired in-process research and development ...- - 645 Goodwill amortization ...4,308 4,711 5,945 Utilization of net operating losses not previously benefited ...- (3,473) - Research and development tax credit benefit ...(1,433) (1,162) (2,438) Non-deductible acquisition costs ...- - 6,473 Non...

  • Page 48
    ... Autodesk's deferred tax assets and liabilities are as follows: January 31, 2002 2001 (In thousands) Purchased technology and capitalized software ...Reserves for product returns and bad debts ...Tax loss carryforwards ...Accrued compensation and benefits ...Fixed assets ...Research and development...

  • Page 49
    ...8. Stockholders' Equity Preferred Stock Under Autodesk's Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At January 31, 2002, there were no preferred shares issued or outstanding. The Board of Directors has the authority to issue the preferred stock in one or more...

  • Page 50
    ... 2002. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions and the trading price of Autodesk common stock. In fiscal 2002, Autodesk repurchased its common stock through open market purchases. In fiscal 2001 and 2000 Autodesk...

  • Page 51
    ... of the stock on the grant date. A summary of stock option activity is as follows: Weighted average Number of price per shares share (Shares in thousands) Options outstanding at January 31, 1999 ...Granted ...Exercised ...Canceled ...Options outstanding at January 31, 2000 ...Granted ...Exercised...

  • Page 52
    ... shares plus any shares repurchased by Autodesk during the prior fiscal year. Autodesk issued 2.1 million shares at an average price of $9.43 per share in fiscal 2002, 1.9 million shares at an average price of $9.14 in fiscal 2001, and 1.6 million shares at an average price of $10.12 in fiscal 2000...

  • Page 53
    ... under the employee qualified stock purchase plan was $4.14 per share during fiscal 2002, $4.29 during fiscal 2001, and $3.82 during fiscal 2000. These were estimated using the Black-Scholes option-pricing model, based on the following assumptions: 2002 2001 2000 Volatility ...0.6 Weighted-average...

  • Page 54
    ... net losses that Autodesk recognized. (in thousands, except per share data) Fiscal year ended January 31, 2002 2001 2000 (unaudited) Net...Autodesk closed Buzzsaw's headquarters office in San Francisco, California, and moved the Buzzsaw employees to a new Autodesk office location, which is also in San...

  • Page 55
    ...141. Management's allocation of the purchase price, which is based on valuations of acquired assets performed by a third party, is as follows (in thousands): Inventory and computer hardware ...$ 558 Intangible assets and amounts: Developed technologies ...7,380 Brand names ...620 In-process research...

  • Page 56
    ..., Autodesk acquired Discreet by issuing approximately 20.0 million shares of Autodesk common stock in exchange for Discreet's outstanding common stock. Discreet develops, assembles, markets, sells and supports nonlinear digital systems and software for creating, editing, compositing and animating...

  • Page 57
    ... fiscal 2002 Autodesk recognized $33.6 million of restructuring and other charges. These charges resulted from restructuring activities ($24.5 million), in-process research and development expenses related to the acquisition of Media 100 ($3.2 million-see Note 10), the wind-down costs associated...

  • Page 58
    ...programs, commercials, music and corporate videos, interactive game production, Web design and interactive Web streaming. The Design Solutions Segment derives revenues from the sale of design software products for professionals or consumers who design, draft and diagram, and from the sale of mapping...

  • Page 59
    ... costs and expenses managed outside the reportable segments. Unallocated amounts in fiscal 2002 also include $33.6 million of charges, primarily resulting from restructuring activity. Unallocated amounts in fiscal 2001 also include $1.2 million of credits, resulting from fiscal 2000 corporate...

  • Page 60
    ... FINANCIAL STATEMENTS-(Continued) Information regarding Autodesk's operations by geographic area is as follows: Fiscal year ended January 31, 2002 2001 2000 (In millions) Net revenues: United States customers ...Other Americas ...Total Americas ...Europe ...Asia Pacific ...Total net revenues...

  • Page 61
    ...effects allocated to each component of other comprehensive income (loss) are as follows: Amount before taxes Income tax (expense) benefit (In thousands) Amount net of taxes Fiscal 2002: Unrealized losses on available-for-sale securities... 2000: Unrealized losses on available-for-sale securities ...

  • Page 62
    ...In April 2002, Autodesk acquired Revit Technology Corporation ("Revit") for $133.0 million in cash. The acquisition will be accounted for under SFAS 141. The addition of Revit complements our existing family of building industry applications with a parametric building modeler for customers to design...

  • Page 63
    REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS The Board of Directors and Stockholders of Autodesk, Inc. We have audited the accompanying consolidated balance sheets of Autodesk, Inc., as of January 31, 2002 and 2001 and the related consolidated statements of income, cash flows and stockholders' ...

  • Page 64
    ... address the items set forth herein are incorporated by reference. Such incorporation does not include the Compensation Committee Report or the Performance Graph included in the Proxy Statement. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information concerning Autodesk...

  • Page 65
    .... 1 to Preferred Shares Rights Agreement Voting and Exchange Trust Agreement dated March 16, 1999 among Autodesk, Inc., Discreet Logic Inc., Autodesk Development B.V., and Montreal Trust Company of Canada Registrant's 1998 Employee Qualified Stock Purchase Plan and form of Subscription Agreement, as...

  • Page 66
    ...by reference to the exhibit filed with the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 1995. * Denotes a management contract or compensatory plan or arrangement. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended January 31, 2002. 65

  • Page 67
    ... 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/ CAROL A. BARTZ Carol A. Bartz Chairman of the Board Dated: April 30, 2002 POWER OF ATTORNEY KNOW ALL PERSONS BY...

  • Page 68
    Signature Title Date /s/ MARY ALICE TAYLOR Mary Alice Taylor Director April 30, 2002 /s/ LARRY W. WANGBERG Larry W. Wangberg Director April 30, 2002 67

  • Page 69
    ...,370,000 2,200,000 Additions Charged to Costs and Expenses $ 4,519,000 45,876,000 28,097,000 $ 3,565,000 30,721,000 0 Description Fiscal year ended January 31, 2002 Allowance for doubtful accounts ...Allowance for stock balancing and product rotation ...Restructuring ...Fiscal year ended January 31...

  • Page 70
    ... Development S.a.r.l...Autodesk (EMEA) S.A...Autodesk Far East Ltd...Autodesk GesmbH ...Autodesk GmbH ...Autodesk India Pte. Ltd...Autodesk International Holding Co...Autodesk International Ltd...Autodesk Ireland Ltd...Autodesk Korea Ltd...Autodesk Ltd...Autodesk Ltd. Japan ...Autodesk de Mexico...

  • Page 71
    ... Operations Tom Vadnais Executive Vice President, Worldwide Consulting and Support Services Annual Meeting Autodesk's Annual Meeting of Stockholders will be held at 2:00 p.m. on June 20, 2002, at Autodesk's principal executive office, located at 111 McInnis Parkway, San Rafael, California 70

  • Page 72
    Corporate Headquarters Autodesk, Inc. 111 McInnis Parkway San Rafael, CA 94903 USA The Americas Autodesk, Inc. 20400 Stevens Creek Boulevard Cupertino, CA 95014-2217 USA Asia Pacific Autodesk Asia Pte Ltd. 391B Orchard Road #12-06 Ngee Ann City, Tower B 238874 Singapore Europe Autodesk (Europe) SA ...

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