Autodesk 2005 Annual Report Download - page 36

with current ship dates and orders with ship dates beyond the current fiscal period. During the first quarter of
the next fiscal year, the component of product backlog attributable to product orders that have not yet shipped
will decline significantly. Aggregate backlog at January 31, 2005 and January 31, 2004 was approximately $226.2
million and $159.2 million, respectively, of which $32.0 million and $31.9 million related to current software license
product orders which have not yet shipped at the end of each respective fiscal year.
We generate a significant amount of our revenue in the United States, Japan, Germany, United Kingdom,
Italy, France, China, Korea, Australia and Canada. The weaker value of the U.S. dollar, relative to foreign currencies,
had a positive impact of $34.8 million on operating results in fiscal 2005 compared to fiscal 2004. Had exchange
rates from fiscal 2004 been in effect during fiscal 2005, translated international revenue billed in local currencies
would have been $51.1 million lower and operating expenses would have been $16.3 million lower. Changes in
the value of the U.S. dollar may have a significant impact on net revenues in future periods. To reduce this impact
for the current quarter, we utilize foreign currency option collar contracts to reduce the current quarter exchange
rate impact on the net revenue of certain anticipated transactions.
Our operating expenses, excluding restructuring, increased $108.7 million for fiscal 2005 as compared to fiscal
2004, but declined as a percentage of revenue. The increase is due primarily to higher commission and bonus costs,
including related benefits and payroll taxes, resulting from our improved financial performance as well as higher
marketing costs, offset in part by our efficiency initiatives and a reduction in salary expense due to our restructuring
efforts. Our operating margins are very sensitive to changes in revenues, given the relatively fixed nature of most of
our operating expenses, which consist primarily of employee-related expenditures, facilities costs and depreciation
and amortization expense. During fiscal 2006 we expect operating expenses, ignoring the impact of employee stock
compensation expenses, to increase in absolute dollars but decline as a percentage of revenue as we balance
investment in our growth opportunities with our focus on increasing profitability.
The required adoption of SFAS 123R in the third quarter of fiscal 2006 will result in increased employee-
related expenditures related to the expensing of employee stock option grants and our employee stock purchase
plan offering. See Note 1, “Business and Summary ofSignificant Accounting Policies” in the Notes toConsolidated
Financial Statements for further discussion.
Throughout fiscal 2005, we maintained a strong balance sheet and generated $373.1 million of cash from
our operating activities as compared to $220.1 million in the previous year. We finished the year with $532.7 million
in cash and marketable securities, a higher deferred revenue balance and a relatively constant days sales
outstanding position as compared to the previous year. Approximately 73% of the deferred revenues balance
at January 31, 2005consisted ofcustomer subscription contractswhichwill be recognized as maintenancerevenue
ratably over the life of the contracts, which is predominantly one year.
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