Autodesk 2010 Annual Report Download - page 112

The recent global credit and banking crisis that has occurred over the past several quarters has negatively
affected and may continue to negatively affect our business, financial conditions and results of operations.
The recent global financial crisis affecting the banking system and financial markets and other financial
institutions has resulted in a tightening in the credit markets, a 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 third-party fulfillment of hedging transactions;
• counterparty failures negatively affecting insured risks;
• 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, and
• decreased borrowing and spending by our end users on small and large projects in the industries we
serve, thereby reducing demand for our 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. For example, during the fiscal year ended January 31, 2010, combined revenue from our
AutoCAD and AutoCAD LT products decreased 34% as compared to the same period of the prior fiscal year,
harming our operating results.
From time to time we are subject to litigation and regulatory inquiries, and we may be named in additional
litigation or become involved in regulatory inquiries in the future, all of which could result in an unfavorable
outcome and have a material adverse effect on our business, financial condition, results of operations, cash
flows and the trading price for our securities.
From time to time, we are involved in litigation or regulatory inquiries. The number and significance of
these disputes and inquiries have increased as our business has evolved. Any claims or regulatory actions
initiated by or against us, whether successful or not, could be time consuming, result in costly litigation, damage
awards, injunctive relief, increased costs of business, require us to change our business practices, require
significant amounts of management time, result in the diversion of significant operational resources, or otherwise
harm our business.
We are dependent on international revenue and operations, exposing us to significant regulatory, global
economic, intellectual property, collections, currency exchange rate, taxation and other risks, which could
adversely impact our financial results.
We are dependent on our international operations for a significant portion of our revenue. Our international
revenue, including that from emerging economies, is subject to general economic and political conditions in
foreign markets, including conditions in foreign markets resulting from economic and political conditions in the
U.S. Our revenue is also impacted by the relative geographical and country mix of our revenue over time. These
factors have recently adversely impacted and may in the future adversely impact our international revenue, and
consequently our business as a whole. Further, our dependency on international revenue makes us much more
exposed to global economic trends, which can negatively impact our financial results, even if our results in the
U.S. are strong for a particular period.
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