Autodesk 2009 Annual Report Download - page 94

low level of liquidity in many financial markets, and extreme volatility in many financial instrument markets.
Our business has been impacted by these events and may be further impacted from this global credit and banking
crisis by: the insolvency of key channel partners impairing our distribution channels; counterparty failures
negatively impacting our treasury functions, including timely access to our cash reserves; and increased expense
or inability to obtain short-term financing if banks providing our line of credit are unable to lend us money when
it is needed for our operations.
Net revenue or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline.
The market price for our common stock has experienced significant fluctuations and may continue to
fluctuate significantly. The market price for our common stock may be affected by a number of factors, including
shortfalls in our expected net revenue, earnings or key performance metrics; changes in estimates or
recommendations by securities analysts; the announcement of new products or product enhancements by us or
our competitors; 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 affecting the economy or the operating performance of our competitors. For example,
current deteriorating global economic conditions have negatively impacted our financial performance and in turn
the market price of our common stock.
Significant changes in the price of our common stock could expose us 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.
A significant portion of our revenue is generated through maintenance revenue; any decrease in maintenance
attach and renewal rates or a decrease in the number of new seats we sell would negatively impact our future
revenue and operating results.
Our maintenance customers have no obligation to attach maintenance to their initial license or renew their
maintenance contract after the expiration of their initial maintenance period, which is typically one year. Our
customers’ attach and renewal rates may decline or fluctuate as a result of a number of factors. If our customers
do not attach maintenance to their initial license or renew their maintenance contract for our products, then our
maintenance revenue will decline, and our business will suffer. In addition, a portion of the growth of our
maintenance revenue has typically been associated with growth of the number of licenses that we sell. Any
reduction in the number of licenses that we sell, even if our customers’ attach rates do not change, will have a
negative impact on our future maintenance revenue. This in turn would impact our business and harm our
financial results.
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 U.S. and we make certain business and
resource decisions based on assumptions about foreign currency, 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
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