Autodesk 2008 Annual Report Download - page 94

quarterly variations in our or our competitors’ results of operations; developments in our industry; unusual events
such as significant acquisitions, divestitures and litigation; and general socio-economic, political or market
conditions and other factors, including factors unrelated to our operating performance, like the current credit
issues effecting the economy or the operating performance of our competitors.
In addition, significant changes in the price of our common stock could expose the Company to additional
costly and time-consuming litigation. Historically, after periods of volatility in the market price of a company’s
securities, a company becomes more susceptible to securities class action litigation. This type of litigation is
often expensive and diverts management’s attention and resources.
Because we derive a substantial portion of our net revenue from AutoCAD-based software products, if these
products are not successful, our net revenue will be adversely affected.
We derive a substantial portion of our net revenue from sales of licenses of AutoCAD software, including
products based on AutoCAD that serve specific vertical markets, upgrades to those products and products that are
interoperable with AutoCAD. As such, any factor adversely affecting sales of these products, including the
product release cycle, market acceptance, product competition, performance and reliability, reputation, price
competition, economic and market conditions and the availability of third-party applications, would likely harm
our operating results.
Our international operations expose us to significant regulatory, intellectual property, collections, currency
exchange rate, taxation and other risks, which could adversely impact our future net revenue and increase our
net expenses.
We anticipate that international operations will continue to account for a significant portion of our net
revenue and as we expand our international development expertise, will provide significant support to our overall
development efforts. Risks inherent in our international operations include fluctuating currency exchange rates,
unexpected changes in regulatory practices and tariffs, difficulties in staffing and managing foreign sales and
development operations, longer collection cycles for accounts receivable, potential changes in tax laws, tax
arrangements with foreign governments and laws regarding the management of data, possible future limitations
upon foreign owned businesses, and greater difficulty in protecting intellectual property.
Our international results will also continue to be impacted by general economic and political conditions in
foreign markets generally, including conditions in foreign markets resulting from economic and political
conditions in the United States. These factors may adversely impact our future international operations and
consequently our business as a whole.
We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results
and cash flows.
Because we conduct a substantial portion of our business outside the United States, we face exposure to
adverse movements in foreign currency exchange rates. These exposures may change over time as business
practices evolve and economic conditions change, and they could have a material adverse impact on our financial
results and cash flows.
We use derivative instruments to manage a portion of our earnings exposure and cash flow exposure to
fluctuations in foreign currency exchange rates. As part of our risk management strategy, we use foreign
currency forward and option contracts to manage a portion of our exposures of underlying assets, liabilities and
other obligations, which exist as part of our ongoing business operations. These foreign currency instruments
have maturities of less than three months. These instruments provide us with some protection against currency
exposures for only the current quarter. Significant appreciation of the U.S. dollar against foreign currencies may
adversely impact our future net revenue.
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