Autodesk 2009 Annual Report Download - page 97

charge of $128.9 million, primarily related to goodwill associated with acquisitions in our M&E segment. We
also may need to make further investments to support these acquired companies and may have difficulty
identifying and acquiring appropriate resources. These costs or charges could negatively impact results of
operations for a given period, cause quarter to quarter variability in our operating results or negatively impact our
operating results for several future periods.
Our operating results fluctuate within each quarter and from quarter to quarter making our future revenue
and operating results difficult to predict.
Our quarterly operating results have fluctuated in the past and may do so in the future. These fluctuations
could cause our stock price to change significantly or experience declines. Some of the factors that could cause
our operating results to fluctuate include general global economic conditions, the timing of the introduction of
new products by us or our competitors, lower growth or contraction of our upgrade or maintenance programs,
stock-based compensation expense, fluctuations in foreign currency exchange rates, the financial and business
condition of our reseller and distribution channels, failure to achieve anticipated levels of customer acceptance of
key new applications, failure to follow sales policies, unexpected costs or other operating expenses, changes in
product pricing or product mix, platform changes, failure to expand our AutoCAD and AutoCAD LT products
customer base to related 2D vertical industry and 3D model-based design products, timing of product releases
and retirements, failure to continue momentum of frequent release cycles or to move a significant number of
customers from prior product versions in connection with our programs to retire major products, failure to
accurately predict the impact of acquired businesses, failure to successfully or fully integrate acquired businesses
and technologies, unexpected outcomes of matters relating to litigation, failure to achieve continued cost
reductions and productivity increases, unanticipated changes in tax rates and tax laws, distribution channel
management, changes in sales compensation practices, the timing of large sales, failure to effectively implement
our copyright legalization programs, especially in developing countries, failure to achieve sufficient sell-through
in our channels for new or existing products, renegotiation or termination of royalty or intellectual property
arrangements, interruptions or terminations in the business of our consultants or third party developers, failure to
grow lifecycle management or collaboration products, and unanticipated impact of accounting for technology
acquisitions.
We have also experienced fluctuations in operating results in interim periods in certain geographic regions
due to seasonality or regional economic conditions. In particular, our operating results in Europe during our third
quarter are usually affected by a slow summer period, and our Asia Pacific operations typically experience
seasonal slowing in our third and fourth quarters.
Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in
the short term. Accordingly, any revenue shortfall below expectations could have an immediate and significant
adverse effect on our profitability. Greater than anticipated expenses or a failure to maintain rigorous cost
controls would also negatively affect profitability. Further, gross margins may be adversely affected if our sales
of AutoCAD LT, upgrades and Advanced Systems products, which historically have had lower margins, grow at
a faster rate than sales of our higher-margin products.
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.
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