Autodesk 2007 Annual Report Download - page 120

60
General and Administrative
Increase
compared to
prior
fiscal year
Increase
compared to
prior
fiscal year
Fiscal 2007 $ % Fiscal 2006 $ % Fiscal 2005
As Restated (1) As Restated (1)
(in millions)
General and administrative . . . . . . . . . . . . . . $171.1 $42.7 33% $128.4 $23.8 23% $104.6
As a percentage of net revenues . . . . . . . . . 9% 8% 8%
(1) See the “Explanatory Note” immediately preceding Part I, Item 1 and Note 2, “Restatement of
Consolidated Financial Statements,” in the Notes to Consolidated Financial Statements of this
Form 10-K.
General and administrative expenses include salaries, benefits, and bonuses for our finance, human
resources and legal personnel as well as amortization expense of customer relationships and trademarks
acquired from Alias and Constructware, professional fees for legal and accounting services, litigation
costs, and overhead costs. General and administrative expense from the beginning of fiscal 2007 also
includes stock-based compensation expense under SFAS 123R for stock awards granted to general and
administrative employees.
The increase in general and administrative expenses from fiscal 2006 to fiscal 2007 was primarily due
to the recognition of $16.9 million of stock-based compensation expense and an increase of $7.9 million
in employee-related costs, due primarily to an increase in general and administrative headcount. General
and administrative headcount increased as a result of organic growth.
The increase in general and administrative expenses from fiscal 2005 to fiscal 2006 was primarily due
to an increase of $12.6 million in information technology project costs, $8.1 million in employee-related
costs, largely resulting from increased headcount, and $2.9 million increase in litigation expenses.
During fiscal 2007, 2006 and 2005, we incurred significant incremental costs related to our assessment
of internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002 (“SOX”). We
estimate that we incurred approximately $2.1 million during 2007, $2.3 million during fiscal 2006, and $6.4
million during fiscal 2005, which included significant project start-up costs. These cost estimates include
external consulting and auditing fees and internal employee costs.
We expect that general and administrative expenses will modestly decline as a percentage of net
revenues in the future yet increase in absolute dollars due to salary increases and continued information
technology projects.
Restructuring
Increase
(decrease)
compared to
prior
fiscal year
Increase
(decrease)
compared to
prior
fiscal year
Fiscal 2007 $ % Fiscal 2006 $ % Fiscal 2005
(in millions)
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . $— $— — $— $(26.7) (100)% $26.7
During the fourth quarter of fiscal 2004, we implemented a restructuring plan involving the
elimination of employee positions and the closure of a number of offices worldwide at a total cost of
$27.5 million (“Fiscal 2004 Plan”). This plan was designed to improve efficiencies across the organization,
reduce operating expense levels to help achieve our targeted operating margins and redirect resources to