Autodesk 2007 Annual Report Download - page 149

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2007 Annual Report
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Business and Summary of Significant Accounting Policies (Continued)
Reclassifications
Certain reclassifications have been made to fiscal 2006 amounts to conform to the fiscal 2007
presentation. Autodesk reclassified $8.1 million in marketable securities on its Consolidated Balance
Sheet at January 31, 2006. This amount was originally classified as a non-current asset, included in “Other
assets,” but was subsequently reclassified as a current asset and included in “Marketable securities.” The
reclassification resulted from Autodesk’s determination that amounts originally classified as non-current
marketable securities were current, available-for-sale marketable securities.
Note 2. Restatement of Consolidated Financial Statements
In this Form 10-K, Autodesk is restating its consolidated balance sheet as of January 31, 2006, the
related consolidated statements of income, stockholders’ equity, and cash flows for each of the fiscal
years ended January 31, 2006 and January 31, 2005 and each of the quarters in fiscal 2006 as a result of a
voluntary review of Autodesk’s historical stock option granting practices and related accounting issues.
Previously filed annual reports on Form 10-K and quarterly reports on Form 10-Q prior to fiscal 2007
have been affected by the restatements, have not been amended and should not be relied on.
Introduction
On August 17, 2006, Autodesk announced that the Audit Committee of the Board of Directors
was conducting a voluntary review of Autodesk’s historical stock option granting practices and related
accounting issues. On February 27, 2007, Autodesk announced the key results of the voluntary review,
which were set forth in the Form 8-K filed on that date.
The Audit Committee engaged independent outside legal counsel, Hogan & Hartson LLP, who,
with the assistance of forensic accounting experts, PricewaterhouseCoopers, reviewed the facts and
circumstances surrounding approximately 230 separate stock option grant approvals made between
January 1988 and August 2006, or the “relevant period.” During the course of the voluntary review, more
than 700,000 documents were reviewed and interviews with over 40 current and former employees,
directors and advisors were conducted. In February 2007, the Audit Committee completed its review and
presented its final report to Autodesk’s Board of Directors.
The following is a summary of the key findings of the Audit Committee:
• Throughout the relevant period, numerous administrative errors were made in the processing of
option grants resulting in options being accounted for incorrectly;
• Between July 2000 and February 2005, the Company made monthly broad-based employee grants
pursuant to authority delegated by the Board to the CEO, where the grant dates for most of these
broad based grants were selected by an administrative process to coincide with low trading prices
during the month of the applicable grant;
• During the calendar year 1992:
• a broad-based employee grant that included a grant to the Company’s then-CFO and then-
General Counsel were measured on an incorrect date; and
• the new hire grant to the then-incoming CEO was measured on an incorrect date;