Autodesk 2004 Annual Report Download - page 58

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The following table illustrates the effect on net income and earnings per share if Autodesk had
applied the fair value recognition provisions of SFAS 123 as amended by SFAS 148 to stock-based
employee compensation:
Fiscal year ended January 31,
2004 2003 2002
(In thousands, except per share amounts)
Net income — as reported ......................... $120,316 $ 31,904 $ 90,313
Add: Stock-based employee compensation
cost, net of related tax effects, included in the
determination of net income as reported ..... 1,243 1,917 571
Deduct: Total stock-based employee
compensation cost determined under the
fair value based method for all awards, net of
related tax effects .............................. (45,383) (48,923) (44,510)
Pro forma net income (loss) ......................... $ 76,176 $(15,102) $ 46,374
Net income (loss) per share:
Basic — as reported .............................. $ 1.08 $ 0.28 $ 0.83
Basic — pro forma ................................ $ 0.68 $ (0.13) $ 0.43
Diluted — as reported ............................ $ 1.04 $ 0.28 $ 0.80
Diluted — pro forma ............................. $ 0.67 $ (0.13) $ 0.41
Revenue Recognition
Autodesk recognizes revenue when persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, the price is fixed or determinable, and collectibility is probable.
Autodesk’s revenue recognition policies are in compliance with the provisions of the American Institute of
Certified Public Accountants’ Statement of Position 97-2, “Software Revenue Recognition” (“SOP 97-2”), as
amended, and SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.”
Autodesk recognizes revenue as follows: Product sales, which include software licenses and any related
hardware and peripherals, are recognized at the time of shipment to our distributors, resellers and direct
customers, providing all other criteria for recognition of revenue have been met. In addition to product sales,
Autodesk recognizes maintenance revenues from our subscription program and hosted service revenues
ratably over the contract periods. Customer consulting and training revenues are recognized as the services
are performed. In arrangements that include multiple software products and/or services, the Company
allocates the total arrangement fee among each of the deliverables using the residual method, under which
revenue is allocated to undelivered elements based on vendor-specific objective evidence (“VSOE”) for fair
value of such undelivered elements and the residual amounts of revenue are allocated to delivered
elements. VSOE is the price charged when that element is sold separately or the price as set by management
with the relevant authority.
For reporting purposes, Autodesk reports revenue generated from the subscription program
separately as maintenance revenue on the Consolidated Statements of Income. Revenue from all other
sales types including product, consulting, training, hardware support, and hosting services, are reported as
License and Other Revenue on the Consolidated Statements of Income. Revenue from the sales of our
services, training and support are immaterial for all periods presented.
With the exception of contracts with certain distributors, sales contracts do not contain specific
product-return privileges. However, Autodesk permits its distributors and resellers to return product in
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Business and Summary of Significant Accounting Policies (Continued)
48