Autodesk 2007 Annual Report Download - page 95

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2007 Annual Report
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,
we restated our 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, we determined that we 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.
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.
In connection with the restatement of our consolidated financial statements, we applied judgment in
determining whether to revise measurement dates for prior option grants. In addition, if we determined
that a measurement date needed to be revised, judgment was applied in determining the appropriate
measurement date.
In addition, we have restated the pro forma expense under Statement of Financial Accounting
Standards No. 123 (“SFAS 123”) in Part II, Item 8, Note 1, “Business and Summary of Significant Accounting
Policies,” in the Notes to Consolidated Financial Statements to include these adjustments for the years
ended January 31, 2006 and 2005.
All references to the number of option shares, option exercise prices, and share prices in this section
have been adjusted for any subsequent stock splits.
Stock Option Grant Process
Pursuant to our non-director stock plans, our Board of Directors has the authority to grant options or
delegate this authority to a committee. For portions of the relevant period, the right to grant options under
our stock plans to all employees other than non-employee directors was delegated to the Compensation
Committee of the Board of Directors or to the chief executive officer, or CEO, as a committee of one.
Executive officer option grants were generally approved by the Compensation Committee during regularly
scheduled Compensation Committee meetings, although a small number were approved by unanimous
written consent. Option grants by the CEO to all other employees were generally done on a monthly basis
by written consent during the period between December 1995 and August 2006.