Autodesk 2003 Annual Report Download - page 31

Research and Development Expenses
Fiscal 2003
Increase (decrease)
compared to prior
fiscal year
Fiscal 2002
Increase (decrease)
compared to prior
fiscal year
Fiscal 2001$percent $percent
(in millions)
Research and development ............ $173.0 $4.4 3% $168.6 $(1.9) (1%) $170.5
As a percentage of net revenues ........ 21% 18% 18%
Research and development expenses consist primarily of salaries and benefits for software engineers,
contract development fees and depreciation of computer equipment used in software development. The increase
of $4.4 million between fiscal years 2003 and 2002 was primarily due to incremental costs resulting from our
recent acquisitions of Revit in April 2002 and CAiCE in September 2002 and our continued funding of location
based services and product lifecycle management initiatives. Research and development expenses for fiscal year
2003 were offset by $3.6 million of capitalized development costs mostly associated with AutoCAD 2004, which
was released in March 2003.
Research and development expenses in fiscal year 2002 were the same as a percentage of net revenues and
similar in absolute dollars to research and development expenses in fiscal year 2001.
We expect that research and development spending will continue to be significant in fiscal 2004 as we
continue to invest in product development.
General and Administrative Expenses
Fiscal 2003
Increase (decrease)
compared to prior
fiscal year
Fiscal 2002
Increase (decrease)
compared to prior
fiscal year
Fiscal 2001$percent $percent
(in millions)
General and administrative ............ $128.9 $(2.6) (2%) $131.5 $(1.0) (1%) $132.5
As a percentage of net revenues ........ 16% 14% 14%
General and administrative expenses include our information systems, finance, human resources, legal and
other administrative operations. We generally do not allocate these costs to the business divisions they support,
so such expenses impact general and administrative rather than cost of revenues, research and development or
marketing and sales expenses. The decrease of $2.6 million between fiscal years 2003 and 2002 was due
primarily to lower rent and occupancy charges of $1.7 million, which resulted from cost saving initiatives, and a
$4.9 million decrease in bad debt expense, as a result of improved collection of trade receivables. These
decreases were primarily offset by $3.5 million of additional legal settlement reserves, of which $2.5 million was
specifically set aside for the Spatial legal proceedings matter.
General and administrative expenses in fiscal year 2002 were the same as a percentage and similar in
absolute dollars to general and administrative expenses in fiscal year 2001.
We currently expect that in the coming year general and administrative expenses, as a percentage of net
revenues, will remain generally consistent with the level experienced in fiscal 2003.
Other Intangible Assets. Amortization of purchased intangibles is provided on a straight-line basis over
the respective useful lives of the assets, which range from three to seven years. Amortization expense was $0.3
million in fiscal 2003, $1.0 million in fiscal 2002 and $2.2 million in fiscal 2001.
Goodwill Amortization Expense. On February 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142 “Goodwill and Other Intangible Assets”. Therefore, Autodesk no longer amortizes goodwill
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