Autodesk 2008 Annual Report Download - page 110

distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement will
be effective for Autodesk’s fiscal year beginning February 1, 2009. Autodesk does not believe the adoption of
SFAS 160 will have a material effect on its consolidated financial position, results of operations or cash flows.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115”
(“SFAS 159”), which expands the use of fair value measurement by permitting entities to choose to measure
many financial instruments and certain other items at fair value at specified election dates. This statement is
required to be adopted by Autodesk as of February 1, 2008. Autodesk does not believe the adoption of SFAS 159
will have a material effect on its consolidated financial position, results of operations or cash flows.
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value
Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements
but instead is intended to eliminate inconsistencies with respect to this topic found in various other accounting
pronouncements. This statement is effective as of February 1, 2008 for Autodesk’s 2009 fiscal year, including
interim periods within our 2009 fiscal year, with the exception of a one year deferral for the implementation of
the statement for other nonfinancial assets and liabilities. Autodesk does not believe the adoption of SFAS 157
will have a material effect on its consolidated financial position, results of operations or cash flows.
Overview of Fiscal 2008 Results of Operations
Fiscal Year
Ended
January 31, 2008
As a % of Net
Revenue
Fiscal Year
Ended
January 31, 2007
As a % of Net
Revenue
(in millions)
Net Revenue ...................... $2,171.9 100% $1,839.8 100%
Cost of revenue ................ 206.9 9% 216.6 12%
Operating expenses ............. 1,519.4 70% 1,273.5 69%
Income from Operations ............. $ 445.6 21% $ 349.7 19%
The primary goals for fiscal 2008 were to continue our delivery of market-leading products and solutions to
our customers and to drive revenue growth and increases in operating margins and operating cash flow. During
fiscal 2008, we released our 2008 family of products, offering our customers continued advancements in design
and authoring productivity as well as digital prototyping and product lifecycle management capabilities. During
fiscal 2008, as compared to fiscal 2007, net revenue increased 18%, income from operations increased 27% and
operating cash flow increased 23%.
Net revenue for fiscal 2008 increased due to an increase in license and other revenue of 14% and an increase
in maintenance revenue from our Subscription Program of 31%. Net revenue for our 2D products and 3D model-
based design products increased 13%, and 26%, respectively, during fiscal 2008, as compared to the prior fiscal
year. A critical component of our growth strategy is to continue to add new 2D horizontal users, while migrating
our customers to our higher value 2D vertical and 3D model-based design products.
Our total operating margin increased from 19% of net revenue in fiscal 2007 to 21% in fiscal 2008. This
improvement is primarily due to an increase in our Media and Entertainment Segment’s operating income by
$34.2 million in fiscal 2008 compared to the prior fiscal year. The increase in operating income from our Media
and Entertainment Segment was due to higher gross margins from Advanced Systems resulting from a shift to
sales of our Linux-based systems, a shift to system sales comprised of more software and less hardware and a
22% increase in net revenue from our Animation products. These increases were partially offset by an increase in
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