Autodesk 2008 Annual Report Download - page 123

Purchase orders or contracts for the purchase of supplies, services and other goods and services are not
included in the table above. We are not able to determine the aggregate amount of such purchase orders that
represent contractual obligations, as purchase orders may represent authorizations to purchase rather than binding
agreements. Our purchase orders are based on our current procurement or development needs and are fulfilled by
our vendors within short time horizons. We do not have significant agreements for the purchase of supplies,
services or other goods specifying minimum quantities or set prices that exceed our expected requirements for
three months. We also enter into contracts for outsourced services; however, in most instances, the obligations
under these contracts are not significant and the contracts contain clauses allowing for cancellation without
significant penalty. In addition, we have certain software royalty commitments associated with the shipment and
licensing of certain products. Royalty expense is generally based on the number of units shipped or a percentage
of the underlying revenue. Royalty expense, included in cost of license and other revenue, was $14.9 million in
fiscal 2008, $16.8 million in fiscal 2007, $12.1 million in fiscal 2006.
Principal commitments at January 31, 2008 shown above consist of obligations under operating leases for
facilities and computer equipment, IT infrastructure costs, marketing costs and contractual development costs.
Purchase commitments also include $24.5 million related to a termination fee for an outsource application
hosting services agreement entered into during fiscal 2006. This fee is reduced as time elapses during the five-
year contract period.
The expected timing of payment of the obligations discussed above is estimated based on current
information. Timing of payments and actual amounts paid may be different depending on the time of receipt of
goods or services or changes to agreed-upon amounts for some obligations.
We provide indemnifications of varying scopes and certain guarantees, including limited product warranties.
Historically, costs related to these warranties and indemnifications have not been significant, but because
potential future costs are highly variable, we are unable to estimate the maximum potential impact of these
guarantees on our future results of operations.
Off-Balance Sheet Arrangements
Other than operating leases, we do not engage in off-balance sheet financing arrangements or have any
variable-interest entities. As of January 31, 2008 we did not have any off-balance sheet arrangements as defined
in Item 303(a)(4)(ii) of SEC Regulation S-K.
Stock Compensation
As of January 31, 2008, we maintained two active stock option plans for the purpose of granting stock
options to employees and non-employee members of Autodesk’s Board of Directors (“Board”): the 2006
Employee Stock Plan (“2006 Plan”), which is available only to employees, and the 2000 Directors’ Option Plan,
as amended (“2000 Plan”), which is available only to non-employee directors. Additionally, there are seven
expired or terminated plans with options outstanding, including the 1996 Stock Plan which was replaced by the
2006 Employee Stock Plan in March 2006.
The 2006 Plan, which was approved by Autodesk’s stockholders on November 10, 2005, reserved
9.65 million shares of Autodesk common stock plus 0.22 million shares that remained available for issuance
under the 1996 Stock Plan upon its expiration, for issuance under the plan. At January 31, 2008, 2.5 million
shares were available for future issuance under this plan. The 2006 Plan expires in March 2008. The 2000 Plan,
which was originally approved by the stockholders in June 2000, allows for an automatic annual grant of options
to non-employee members of Autodesk’s Board of Directors. At January 31, 2008, 0.31 million shares were
available for future issuance. The 2000 Plan will expire in March 2010.
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2008 Annua
l Report