Autodesk 2007 Annual Report Download - page 150

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 2. Restatement of Consolidated Financial Statements (Continued)
• There was no evidence that any officer or director backdated any stock option granted to himself
or herself;
• Based on the evidence developed during the review, the Audit Committee concluded that it was
unlikely that those involved in the decisions and actions that resulted in measurement date errors
understood the accounting impact of their actions or that they intended to misstate our financial
statements; and
• There was no evidence of any measurement date error involving any stock option grant made to a
person serving as a director.
The Company had progressively, substantially and voluntarily improved its employee stock-based
compensation grant process prior to 2006, before the intense regulatory and media focus on stock
option grant practices began, and no Company employees or officers who may have made discretionary
determinations that resulted in measurement date errors in the past has any continuing role relating to
the distribution, administration or accounting for stock-based compensation.
As a result of the findings of the voluntary review, the Board of Directors has concluded, upon
the recommendation of management and the Audit Committee, that the consolidated balance sheets
as of January 31, 2002, 2003, 2004, 2005 and 2006, and the related consolidated statements of income,
stockholders’ equity, and cash flows for each of the fiscal years ended January 31, 2003, 2004, 2005
and 2006, should no longer be relied upon. As a result, we are restating our previously-issued financial
statements for fiscal years 2003 through 2006, inclusive, to correct errors related to accounting for total
stock-based compensation expense.
The pre-tax, non-cash charges to be restated are an aggregate $34.8 million for stock-based
compensation expense over the 18-year period of the review through fiscal 2006. Approximately $21.7
million of the restated amounts apply to the income statements for fiscal years 2003 through 2006,
inclusive, and the remainder, which is applicable to prior fiscal years, has been recorded as a charge to
retained earnings as of January 31, 2002. Such charges have the effect of decreasing net income and,
correspondingly, retained earnings as reported in our historical financial statements. The net of tax
impact of the stock-based compensation adjustments in the first quarter of fiscal 2007 were insignificant.
However, Autodesk restated its Consolidated Balance Sheet as of January 31, 2006 to properly reflect
Retained Earnings, Common Stock and Deferred Compensation balances as a result of previous period
adjustments.
During the period of the voluntary stock option review, Autodesk also identified that it had incorrectly
recorded certain credits to resellers. As a result, adjustments were made to increase net revenues and
decrease deferred revenue by $14.0 million in fiscal 2006 and $5.1 million in fiscal 2005. These adjustments,
which have the effect of increasing net income and, correspondingly, retained earnings, are described in
more detail below.
This Form 10-K reflects the restatement of our 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 2005, and each of the quarters in fiscal 2006.
This Form 10-K also reflects the restatement of “Selected Consolidated Financial Data” in Item 6
for the fiscal years ended January 31, 2006, 2005, 2004 and 2003, and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Item 7 for the fiscal years ended
January 31, 2006 and 2005.