Autodesk 2004 Annual Report Download - page 19

We retain ownership of software we develop. All software is licensed to users and provided in object
code pursuant to either shrink-wrap, embedded or on-line licenses, or signed license agreements. These
agreements contain restrictions on duplication, disclosure and transfer.
We believe that because of the limitations of laws protecting our intellectual property and the rapid,
ongoing technological changes in both the computer hardware and software industries, we must rely
principally upon software engineering and marketing skills to maintain and enhance our competitive
market position.
While we have recovered some revenues resulting from the unauthorized use of our software products,
we are unable to measure the extent to which piracy of our software products exists. We believe, however,
that software piracy is and can be expected to be a persistent problem.
PRODUCTION AND SUPPLIERS
Production of our Design Solutions Segment and certain Discreet Segment 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 CD-ROMs and diskettes, which are available from multiple
sources. User manuals for our products and packaging materials are produced to our specifications by
outside sources. Production is generally performed in leased facilities operated by us. Some product
assembly is also performed by independent third-party contractors. To date, we have not experienced any
material difficulties or delays in the production of our software and documentation.
In addition, the Discreet segment has historically relied on third-party vendors for the supply of
hardware components used in its systems. Many of Discreet’s software products currently run on
workstations manufactured by Silicon Graphics, Inc. (“SGI”). There are significant risks associated with this
reliance on SGI and Discreet may be impacted by unforeseen difficulties associated with adapting its
products to future SGI products and the timing of the development and release of SGI products.
EMPLOYEES
As of January 31, 2004, we employed 3,493 people. None of our employees in the United States are
represented by a labor union; however, in certain foreign countries, our employees are represented by
worker councils. We have never experienced any work stoppages and believe our employee relations
are good.
Competition in recruiting personnel in the software industry, especially highly skilled engineers, is
intense. We believe our continued growth and future success is highly dependent on our continued ability
to attract, retain and motivate highly skilled employees.
ITEM 2. PROPERTIES
We lease approximately 1,234,000 square feet of office space in 89 locations in the United States and
internationally through our foreign subsidiaries. Our executive offices and the principal offices for domestic
marketing, sales and production are located in leased office space in San Rafael California. Our San Rafael
facilities consist of approximately 270,000 square feet under leases that have expiration dates ranging from
2004 to 2007. We and our foreign subsidiaries lease additional space in various locations throughout the
world for local sales, product development and technical support personnel. During fiscal 2005, as part of
our restructuring plan, we expect to consolidate several domestic and international offices in an effort to
further reduce operating expense levels.
All facilities are in good condition and are operating at capacities averaging 75% occupancy worldwide.
We believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable
future. See Note 7, “Commitments and Contingencies,” in the Notes to the Consolidated Financial
Statements for more information about our lease commitments.
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