Autodesk 2009 Annual Report Download - page 111

uncertainties related to these legal matters, we base our loss accruals on the best information available at the
time. As additional information becomes available, we reassess our potential liability and may revise our
estimates. Such revisions could have a material impact on future quarterly or annual results of operations.
Recently Issued Accounting Standards
See Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated
Financial Statements for a full description of recent accounting pronouncements, including the expected dates of
adoption and estimated effects on results of operations and financial condition, which is incorporation herein by
reference.
Overview of Fiscal 2009 Results of Operations
Fiscal Year
Ended
January 31, 2009
As a % of Net
Revenue
Fiscal Year
Ended
January 31, 2008
As a % of Net
Revenue
(in millions)
Net Revenue ...................... $2,315.2 100% $2,171.9 100%
Cost of revenue ................ 219.1 9% 207.7 10%
Gross Profit ....................... 2,096.1 91% 1,964.2 90%
Operating expenses ............. 1,851.6 80% 1,518.6 70%
Income from Operations ............. $ 244.5 11% $ 445.6 20%
During fiscal 2009, as compared to fiscal 2008, net revenue increased 7%, gross profit increased 7% and
income from operations decreased 45%. We expect net revenue to decrease in absolute dollars in fiscal 2010 as a
result of adverse economic pressures on our customers.
During the third and fourth quarters of fiscal 2009 we experienced a dramatic change in the economic
conditions of our markets globally. The first two quarters of fiscal 2009 were characterized by net revenue
growth of 18% over the same period in the prior fiscal year and we reported an increase in income from
operations of 20% for that six-month period, which was only slightly lower compared to the same period of the
prior year as a result of our acquisition activity during the first six months of fiscal 2009. Due to the deteriorating
global economic conditions during our third and fourth fiscal quarters, our results for the second half of fiscal
2009 were a stark contrast to the first half of the fiscal year. Revenue for the second half of fiscal 2009 declined
by 4% compared to the same period in the prior fiscal year; revenue decreased sequentially 2% and 19% during
our third and fourth quarters of fiscal 2009, respectively. Income from operations for the second half of fiscal
2009 was approximately break-even compared to a positive 20% operating margin for the second half of fiscal
2008; the third quarter fiscal 2009 positive operating margin of approximately 23% was offset by a 27% negative
operating margin in the fourth quarter fiscal 2009 due primarily to a goodwill and intangibles impairment charge
of $128.9 million, and a restructuring charge of $40.2 million.
Our primary goals for fiscal 2009 were to continue delivering our market-leading products and solutions to
our customers, to drive revenue growth, and to invest in product functionality and new product lines while
minimizing the impact of these investments on gross profit, operating margins and operating cash flow. Due
primarily to the deterioration of the economy during the second half of the year, we were unable to achieve our
revenue, operating margin and net income goals. In January 2009 we announced a restructuring plan to reduce
headcount by approximately 10% and to consolidate certain facilities around the world in order to reduce our
operating expenses. See further discussion of our restructuring plan in Note 14, “Restructuring Reserves” of the
Notes to Consolidated Financial Statements. We are taking other actions in an attempt to stimulate demand and
align our cost structure with the reality of our recent and anticipated financial results, including a hiring freeze,
travel restrictions and other expense initiatives. In taking these actions, we may incur additional costs which
could negatively impact our net income and cash flows from operating activities.
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