Autodesk 2009 Annual Report Download - page 96

security and issuer. However, we are subject to general economic conditions, interest rate trends and volatility in
the financial marketplace that can affect the income that we receive from our investments, the net realizable
value of our investments (including our cash, cash equivalents and marketable securities) and our ability to sell
them. In the U.S., for example, if the Federal Reserve continues to lower interest rates, the yields on our portfolio
securities may further decline. Any one of these factors could reduce our interest income, or result in material
charges, which in turn could impact our overall net income and earnings per share.
For example, during fiscal year 2009 we recorded several other-than-temporary impairment charges to
recognize the estimated loss in these investments. These charges impacted our overall net income and earnings
per share.
A further description of our capital resources can be found in the Liquidity and Capital Resources section of
Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our efforts to develop and introduce new product and service offerings, including new product features,
expose us to risks such as limited customer acceptance, costs related to product defects and large expenditures
that may not result in additional net revenue.
Rapid technological changes, as well as changes in customer requirements and preferences, characterize the
software industry. We are devoting significant resources to the development of technologies, like our vertical
design products and our digital prototyping and collaboration products. In addition, we are continually
introducing new business models that require a considerable investment of technical and financial resources. We
are making such investments through further development and enhancement of our existing products, as well as
through acquisitions of new product lines. Such investments may not result in sufficient revenue generation to
justify their costs, or competitors may introduce new products and services that achieve acceptance among our
current customers, adversely affecting our competitive position. In particular, a critical component of our growth
strategy is to have customers of our AutoCAD and AutoCAD LT products expand their portfolios to include our
related 2D vertical industry products and our 3D model-based design products such as our Autodesk Inventor
products, our Autodesk Revit products, our AutoCAD Civil 3D products and our Autodesk Navisworks products.
Should sales of our AutoCAD and AutoCAD LT products decrease without a corresponding increase in 2D
vertical and 3D model-based design product revenue or without purchases of customer seats to our 2D vertical
products and 3D model-based design products, our results of operations will be adversely affected.
Additionally, the software products we offer are complex, and despite extensive testing and quality control,
may contain errors or defects. These defects or errors could result in the need for corrective releases to our
software products, damage to our reputation, loss of revenue, an increase in product returns or lack of market
acceptance of our products, any of which would likely harm our business.
Our business could suffer as a result of risks and costs associated with strategic acquisitions and investments.
We regularly acquire or invest in businesses, software products and technologies that are complementary to
our business through strategic alliances, equity investments or acquisitions. The risks associated with such
acquisitions include, among others, the difficulty of assimilating the products, operations and personnel of the
companies, the failure to realize anticipated revenue and cost projections, the requirement to test and assimilate
the internal control processes of the acquired business in accordance with the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 (“Section 404”), and the diversion of management’s time and attention. In addition,
such acquisitions and investments may involve significant transaction or integration-related costs. We may not be
successful in overcoming such risks, and such acquisitions and investments may negatively impact our business.
In addition, such acquisitions and investments have in the past and may in the future contribute to potential
fluctuations in quarterly results of operations. The fluctuations could arise from transaction-related costs and
charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection
with acquisitions and investments. For example, during our fourth quarter of fiscal 2009, we took an impairment
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