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Autodesk®
Annual Report
Fiscal Year 
Notice of Annual Meeting
and Proxy Statement

Table of contents

  • Page 1
    Autodesk Annual Report ® Fiscal Year 2011 Notice of Annual Meeting and Proxy Statement

  • Page 2

  • Page 3
    ... by telephone or request, sign and return a proxy card to ensure your representation at the meeting. Your vote is important. On behalf of the Board of Directors, I would like to express our appreciation for your continued support of Autodesk. Very truly yours, Carl Bass Chief Executive Officer and...

  • Page 4
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 5
    ...MEETING OF STOCKHOLDERS Time and Date Place Items of Business Thursday, June 16, 2011 at 3:00 p.m., Pacific Time. Autodesk's San Francisco office, located at: The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. (1) To elect the nine directors listed in the accompanying Proxy...

  • Page 6
    ... OF THE NON-BINDING VOTE ON EXECUTIVE COMPENSATION ...CORPORATE GOVERNANCE ...Corporate Governance Guidelines and Code of Business Conduct ...Stock Ownership Guidelines ...Independence of the Board of Directors ...Board Meetings and Board Committees ...Board Leadership Structure ...Risk Oversight...

  • Page 7
    ...www.autodesk.com under "Investors" or on your proxy card or voting instruction card. Q: Where is the Annual Meeting? A: The Annual Meeting will be held at Autodesk's San Francisco office, located at The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. The telephone number at...

  • Page 8
    ... to check-in. Stock Ownership Q: What is the difference between holding shares as a stockholder of record and as a beneficial owner? A: Stockholders of record-If your shares are registered directly in your name with Autodesk's transfer agent, Computershare Investor Services LLC, you are considered...

  • Page 9
    ...-free telephone number listed on the Notice or by requesting a proxy card from Autodesk by telephone at (415) 507-6705 or by email at [email protected] and completing, signing, dating and returning the proxy card in the postage pre-paid envelope provided. Proxy cards submitted by mail...

  • Page 10
    ...on any of the items of business at the annual meeting. Beneficial owners-If you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of directors (Proposal One), the approval of our executive compensation, on an advisory basis (Proposal Three...

  • Page 11
    ... Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel. Q: Who will bear the costs of soliciting votes for the Annual Meeting? A: Autodesk will bear all expenses of this solicitation, including the cost of preparing and mailing these proxy materials. Autodesk...

  • Page 12
    ... at www.autodesk.com under "Investors-Corporate Governance." All notices of proposals by stockholders, whether or not included in Autodesk's proxy materials, should be sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel. Additional Information About...

  • Page 13
    ... is the mailing address for Autodesk's principal executive offices? A: Autodesk's principal executive offices are located at 111 McInnis Parkway, San Rafael, California 94903. Any written requests for additional information, additional copies of the proxy materials and 2011 Annual Report, notices of...

  • Page 14
    ... Consultant and Non-Executive Chairman of the Board of Directors, Autodesk, Inc. Chairman of the Board, IDI Associates Chief Innovation Officer and Senior Vice President, Intuit, Inc. Executive Vice President, Intel Corporation Executive Vice President, Mobile Phones, Nokia Corporation Independent...

  • Page 15
    ... our Chief Executive Officer and President, Mr. Bass possesses a deep knowledge and understanding of Autodesk's business, operations, employees, the opportunities and risks faced by Autodesk and management's strategy and plans for accomplishing Autodesk's goals. His service on the board of directors...

  • Page 16
    ... June 2005 to July 2006 as President and CEO of Shopping.com, Inc., an online shopping comparison site acquired in 2005 by eBay. Ms. Norrington also served as executive vice president in the office of the CEO of Intuit Inc., a business and financial management software company, from August 2001 to...

  • Page 17
    ... 2004. Mr. West served as Chief Operating Officer of nCUBE Corporation, a provider of on-demand media systems, from December 2001 to July 2003. Prior to joining nCUBE, he was the President and Chief Executive Officer of Entera, Inc. from September 1999 until it was acquired by Blue Coat Systems, Inc...

  • Page 18
    ... independence under applicable SEC rules. The Chairman reports any such action taken to the Audit Committee at subsequent Audit Committee meetings. PROPOSAL THREE NON-BINDING VOTE ON EXECUTIVE COMPENSATION The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the...

  • Page 19
    ... approach to setting our Named Executive Officers' compensation by freezing most Named Executive Officers' base salaries, reducing the amount of funding for the Company's executive short-term cash incentive plan, shifting compensation to further emphasize achievement of our operating goals and...

  • Page 20
    ... compensation program was designed appropriately and is working to ensure management's interests are aligned with our stockholders' interests to support long-term value creation. Accordingly, we ask our stockholders to vote "FOR" the following resolution at the Annual Meeting: THE BOARD OF DIRECTORS...

  • Page 21
    ... Board of Directors for the oversight of Autodesk's risk management. The Guidelines are available on our website at www.autodesk.com under "Investors-Corporate Governance." In addition, we have adopted a Code of Business Conduct for directors and employees and a Code of Ethics for Senior Executive...

  • Page 22
    ...the listing standards of The NASDAQ Stock Market. The Compensation and Human Resources Committee reviews compensation and benefits for our executive officers and has authority to grant stock options and restricted stock to executive officers and non-executive employees under our stock plans. Because...

  • Page 23
    ... a number of factors, including current size of our business, composition of the Board of Directors, current candidates for such positions, our succession planning goals and the like. We currently separate the positions of Chief Executive Officer and Non-executive Chairman of the Board of Directors...

  • Page 24
    ... to the Board of Directors must be directed in writing to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel, and must include the candidate's name, home and business contact information, detailed biographical data and qualifications, information regarding...

  • Page 25
    ... of the software industry and the Company's business in particular, (4) have qualifications that will increase overall Board of Directors effectiveness, (5) have varied and divergent experiences, viewpoints and backgrounds and (6) meet other requirements as may be required by applicable rules, such...

  • Page 26
    ... 2010 Annual Meeting of Stockholders. Contacting the Board of Directors Communications from stockholders to the non-employee directors should be addressed to the non-executive Chairman as follows: Autodesk, Inc., c/o General Counsel, 111 McInnis Parkway, San Rafael, California 94903, Attention: Non...

  • Page 27
    ... Portions of our Named Executive Officers' salaries for fiscal 2009 and fiscal 2010 were temporary reduced by 10%, which is excluded from the levels noted in the preceding sentence. Our short-term cash incentive plan (a cash bonus plan known as our Executive Incentive Plan or EIP) was set to fund at...

  • Page 28
    ... short-term cash incentive plan paid out well above the 75% of the target funding level set at the beginning of fiscal 2011. Short-term cash incentive, in aggregate, for our Named Executive Officers increased 35% over the amount paid in fiscal 2010 while the Company's revenue and non-GAAP operating...

  • Page 29
    ...'s investments. Annually reviews and approves compensation for our Chief Executive Officer ("CEO") and President and other executive officers. • This includes base salaries, short-term cash incentives, equity incentive grants, employment agreements and severance arrangements, change-in-control...

  • Page 30
    ... our Named Executive Officers. Certain officers such as our CEO; Senior Vice President of Human Resources and Corporate Real Estate; the vice president responsible for compensation and benefits; and other employees from our Human Resources, Finance, and Legal organizations may assist and support the...

  • Page 31
    ... data and services reviewed by the Compensation Committee provide information on the compensation practices of a group of companies in our industry as well as competitors for executive talent (collectively, our "peer group"). The Compensation Committee uses the compensation information about the pay...

  • Page 32
    ... and services offered, revenue level, geographic location, and competition for executive talent in our labor markets. McAfee will be removed from the peer group in fiscal 2012 as a result of its acquisition by Intel Corporation in February 2011. Elements of Executive Compensation Programs Autodesk...

  • Page 33
    ... the case of stock options) encourage employees and executive officers to remain with the Company and focus on longer-term results. Benefits/Perquisites Health and welfare programs include medical, 401(k) matching, non-qualified deferred compensation plan, life insurance, paid time off and leaves of...

  • Page 34
    ...base salary) Short-Term Cash Incentive Plan Participant Carl Bass, Chief Executive Officer and President ...Mark J. Hawkins, Executive Vice President and Chief Financial Officer ...George M. Bado, former Executive Vice President, Sales and Services ...Jay Bhatt, Senior Vice President, Architecture...

  • Page 35
    ..." Performance Revenue: $1.834 billion Non-GAAP Operating Margin: 20.0% 100% of Target Funding Individual Performance Goals For fiscal year 2011, each named executive officer's individual performance goals were to support the following broad corporate performance goals: Fiscal 2011 Broad Corporate...

  • Page 36
    Accordingly, at its March 2011 meeting, the Compensation Committee approved short-term cash incentive plan payouts for Named Executive Officers approximately as follows: Approved Short-Term Cash Incentive Plan Payout percent of Base Salary Short-Term Cash Incentive Plan Payout as % of Target Award ...

  • Page 37
    ... incentives between options and restricted stock units, competitive pay practices within our peer group and the individual performance of the executive officer. The Compensation Committee uses "new hire," "promotion," and "ongoing" stock grant guidelines in determining the appropriate size of grants...

  • Page 38
    ... equity plans, including our 2008 Employee Stock Plan, as amended and restated, and 2010 Outside Directors' Stock Plan. A similar policy was in place for our prior employee stock plan. In general when issuing options, we issue only nonstatutory stock options to employees and executive officers, with...

  • Page 39
    ... Vice President ...30,000 shares Senior Vice President ...15,000 shares These voluntary stock ownership guidelines are applicable only to those executive officers who are also subject to Section 16 of the Exchange Act. Our executive officers have four years from either December 2008 or the promotion...

  • Page 40
    ... on a number of factors, including stock price changes, overall Company performance and individual performance. Amounts in the chart below are based on what was paid or granted during fiscal 2011. Base salary is the amount of each Named Executive Officer's actual annual base salary. Short-term cash...

  • Page 41
    ... receive tax-deferred investment returns on the contributions similar to the 401(k) plan. This benefit is incremental to the 401(k) plan and is available to a limited group of United States-based officers and high level managers. The assets of our Nonqualified Deferred Compensation Plan are held in...

  • Page 42
    ... discussed above, in fiscal 2011, the tax benefits otherwise available under our short-term cash incentive plan were not available to us, because we did not meet the conditions required under Section 162(m) of the Internal Revenue Code Executive Change in Control Program Short-term Cash Incentive...

  • Page 43
    ... ensure the continued service of our key executive officers in the event of a future change of control of the Company. In December 2008, the Board of Directors approved an amended and restated Executive Change in Control Program which updated the Executive Change in Control Program approved in March...

  • Page 44
    ... revenue. Our Compensation Committee retains discretion to modify, reduce or to eliminate short-term cash incentives that would otherwise be payable based on actual financial performance. Our system of internal control over financial reporting, code of business conduct, and whistle-blower program...

  • Page 45
    ... filed on March 18, 2011. These amounts do not correspond to the actual value that will be realized by the Named Executive Officers upon the vesting of restricted stock units, the exercise of stock options, or the sale of the Common Stock underlying such awards. Equity and Non-Equity Incentive Plan...

  • Page 46
    ...790,318 Mark J. Hawkins, ...2011 531,058 100,000 2010 383,553 100,000 Executive Vice President and Chief Financial Officer (b) George M. Bado, ...2011 491,077 2010 440,000 Former Executive 2009 480,000 Vice President, Sales and Services (c) Jay Bhatt, ...2011 448,718 Senior Vice President, 2010 320...

  • Page 47
    ...Separation Agreement, $75,000 salary compensation for his employment through March 28,2011, and a $55,000 severance payment. In addition, Mr. Bado's fiscal 2011 other compensation includes authorized spouse travel in connection with a business trip, the Company 401(k) plan match, health benefits and...

  • Page 48
    ... table presents information concerning grants of plan-based awards to each of the Named Executive Officers during the fiscal year ended January 31, 2011: All Other Option Awards: Exercise or Number of Base Price Estimated Future Payouts Under Securities of Option Non-Equity Incentive Plan Awards...

  • Page 49
    ... are set forth in Note 1, "Business and Summary of Significant Accounting Policies," in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 18, 2011. These amounts do not correspond to the actual value that will be realized by the Named Executive Officers...

  • Page 50
    ...table presents information concerning unexercised options and unvested restricted stock unit awards for each Named Executive Officer outstanding as of January 31, 2011. This table includes options and restricted stock units granted under the 2008 Employee Stock Plan, the 2006 Employee Stock Plan and...

  • Page 51
    ... on the NASDAQ Global Select Market on the vesting date. Nonqualified Deferred Compensation for Fiscal 2011 Under our Nonqualified Deferred Compensation Plan, certain United States-based officers (including Named Executive Officers) may defer compensation earned as salary, commissions or awards...

  • Page 52
    ... the continued service of our key executive officers in the event of a change in control, each of our current executive officers, among other employees, participate in an amended and restated Executive Change in Control Program (the "Program") that was approved by the Board of Directors in March...

  • Page 53
    ...composition of the Board of Directors changes substantially. For purposes of the tables set forth below in "Potential Payments Upon Termination or Change in Control," the amounts payable to each of our Named Executive Officers, other than to Mr. Bass who does not participate in the Program and to Mr...

  • Page 54
    ... components of compensation, benefits and perquisites payable under the Executive Change in Control Program effective during the 2011 fiscal year. Estimated amounts for share-based compensation are based on the closing price of our common stock on the NASDAQ Global Select Market on Monday, January...

  • Page 55
    ...on 1/31/2011 ($) 1/31/2011 ($) 1/31/2011 ($) 1/31/2011 ($) 1/31/2011 ($) 1/31/2011 ($) Executive Benefits and Payments Compensation: Base Salary (1) ...$ - Short-Term Cash Incentive Plan (EIP) (2) ...500,000 Stock Options (3) ...- Benefits and perquisites: Health Insurance (4) ...Disability Income...

  • Page 56
    George M. Bado (9): Executive Benefits and Payments Voluntary Termination on 1/31/2011 ($) Compensation: Base Salary (1) ...Short-Term Cash Incentive Plan (EIP) (2) ...Sales Commissions and Bonus (10) ...Stock Options (3) ...Benefits and perquisites: Health Insurance (4) ...Disability Income (5) ...

  • Page 57
    ...the Executive Change in Control Program effective during the 2011 fiscal year as Mr. Hawkins did not participate in the short-term cash incentive plan prior to fiscal 2010. These amounts are based on the cash value of the short-term cash incentive plan, regardless of the executive officers' election...

  • Page 58
    ... 31, 2011. Sales Commissions and Bonus: Reflects amounts earned in the fourth quarter of fiscal 2011 by Mr. Bado, which were paid in the first quarter of fiscal 2012. Compensation of Directors During fiscal 2011, our non-employee directors were eligible to receive the annual compensation set forth...

  • Page 59
    .... Ms. Nelson did not seek re-election to the Board of Directors at the 2010 Annual Meeting held on June 10, 2010, and ceased to be a director on that date. The compensation in the following tables relates to Ms. Nelson's services between February 1, 2010 and June 10, 2010. Fees Earned or Paid in...

  • Page 60
    ...earned by the directors during the fiscal year. The assumptions used in the valuation of these awards are set forth in Note 1, "Business and Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements in our fiscal year 2011 Annual Report on Form 10-K filed on March...

  • Page 61
    ... terminated by the Board of Directors in December 2004. The Nonstatutory Stock Option Plan permitted the grant to eligible employees of options to purchase up to 16.9 million shares, all of which have been previously granted. Executive officers and members of the Board of Directors were not eligible...

  • Page 62
    ... address for each listed person is c/o Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903. The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership...

  • Page 63
    ...Includes 90,000 shares subject to options exercisable within 60 days of March 31, 2011. Consists of 17,000 shares subject to options exercisable within 60 days of March 31, 2011. Upon appointment to the Board of Directors on March 24, 2011, Ms. Norrington was granted 50,000 shares subject to options...

  • Page 64
    ... changes in ownership on Form 4 or 5 with the SEC and The NASDAQ Stock Market. Such executive officers, directors and 10 percent Stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms that they file. Based solely on our review of the copies of such reports...

  • Page 65
    ... independent directors as required by the listing standards of The NASDAQ Stock Market and rules of the SEC. The Audit Committee operates under a written charter approved by the Board of Directors, which is available on the Company's website at www.autodesk.com under "Investors-Corporate Governance...

  • Page 66
    ...matters are properly presented at the Annual Meeting, it is the intention of the persons named as proxies to vote the shares they represent as the Board of Directors may recommend. It is important that your shares be represented at the Annual Meeting, regardless of the number of shares that you hold...

  • Page 67
    ... No.) 111 McInnis Parkway, San Rafael, California (Address of principal executive offices) 94903 (Zip Code) Registrant's telephone number, including area code: (415) 507-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered...

  • Page 68
    ... Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 69
    .... Our software products are sold globally, both directly to customers and through a network of resellers and distributors. Segments We are organized into four reportable operating segments Platform Solutions and Emerging Business ("PSEB"), which accounted for 37% of our net revenue in fiscal 2011...

  • Page 70
    ... executive office is located at 111 McInnis Parkway, San Rafael, California 94903 and the telephone number at that address is (415) 507-5000. Our internet address is www.autodesk.com. The information posted on our website is not incorporated into this Annual Report on Form 10-K. Our Annual Report...

  • Page 71
    ...Revit Structure Suite, provide an intuitive sophisticated model-based design and documentation system for architects; mechanical, electrical and plumbing (MEP) engineers; structural engineers; design-build teams; and other design and building industry professionals. Å AutoCAD Civil 3D AutoCAD Civil...

  • Page 72
    ... needed for infrastructure planning, design and management activities. AutoCAD Map 3D software helps professionals working on transportation, land development, water, and power projects to more easily create, manage and analyze design geographic information system ("GIS") and asset data. MFG Our MFG...

  • Page 73
    ... post-production. Autodesk Smoke software is a non-linear and non-compressed online editing, effects and finishing software application and is used in commercials, music videos, corporate video, film as well as broadcast design projects. Autodesk Lustre software is a high-performance color grading...

  • Page 74
    ..., promotions and trade-show presentations. We employ mass-marketing techniques such as Web casts, seminars, telemarketing, direct mailings, advertising in business and trade journals and social media. We have a worldwide user group organization and we have created online user communities dedicated...

  • Page 75
    ... and telephone. We also provide online support directly to our customers through our maintenance program. There are also a number of user group forums in which customers are able to share information. EDUCATIONAL PROGRAMS We offer education programs and specially priced software licensing options...

  • Page 76
    ...Technology, Inc., SONY Corporation and Thomson. The media and entertainment market is highly fragmented with complex interdependencies between many of the larger businesses. As a result, some of our competitors also own subsidiaries that are our customers or our partners in developing or bringing to...

  • Page 77
    ... of our PSEB, AEC, MFG and certain M&E software products involves duplication of the software media and, for certain products, the printing of user manuals. The purchase of media and the transfer of the software programs onto media for distribution to customers are performed by us and by licensed...

  • Page 78
    ...more accurately reflect these products' functionality and general design nature. Vertical design products-Autodesk's vertical design software, including AutoCAD Architecture, AutoCAD Mechanical and AutoCAD Map 3D, are built upon Autodesk's AutoCAD product and are enhanced with industry or discipline...

  • Page 79
    ..., AutoCAD, AutoCAD LT, AutoCAD vertical products, Civil 3D, Inventor products (standalone), Maya, Plant 3D and Revit products (standalone). Suites-Autodesk design Suites are a combination of products that target a specific user objective (product design, building design, etc.) and support a set of...

  • Page 80
    ... several years, many of our customers have experienced tighter credit, negative financial news and weaker financial performance of their businesses and have reduced their workforces, thereby reducing the number of licenses and the number of maintenance contracts they purchase from us. These actions...

  • Page 81
    ... growth or contraction of our upgrade, crossgrade or maintenance programs, fluctuations in foreign currency exchange rates and the success of our hedging activity, failure to expand our AutoCAD and AutoCAD LT products customer base to related vertical design products and model-based design products...

  • Page 82
    ... laws or regulations or accounting rules, such as increased use of fair value measures and the potential requirement that U.S. registrants prepare financial statements in accordance with International Financial Reporting Standards ("IFRS"), changes in sales compensation practices, dependence and the...

  • Page 83
    ... inherent in our international operations include fluctuating currency exchange rates, including risks related to any hedging activities we undertake, unexpected changes in regulatory requirements and practices, delays resulting from difficulty in obtaining export licenses for certain technology...

  • Page 84
    ... will be adversely affected. We derive a substantial portion of our net revenue from sales of licenses of a small number of our products, including AutoCAD software, products based on AutoCAD that serve specific vertical markets, upgrades to those products and products that are interoperable with...

  • Page 85
    ..., fail to internalize and execute on that strategy, we may fail to meet our customers' expectations, fail to compete with our competitors' products and technology and lose the confidence of our channel partners and employees. This in turn could adversely affect our business and financial performance...

  • Page 86
    ... their business and sales, or provide customer support services, which would negatively impact our business and revenue. We rely significantly upon major distributors and resellers in both the U.S. and international regions, including the distributor Tech Data Corporation and its global affiliates...

  • Page 87
    ... our business. In particular, if one or more of such distributors or resellers were unable to meet their obligations with respect to accounts payable to us, we could be forced to write off such accounts and may be required to delay the recognition of revenue on future sales to these customers. These...

  • Page 88
    ... changes may have on our consolidated financial position, results of operations and cash flows. In addition, as we evolve and change our business and sales models, we are currently unable to take into account how these potential changes may impact our new models, particularly in the area of revenue...

  • Page 89
    ... our ability to attract and retain highly skilled technical, professional, managerial, sales and marketing personnel. Historically, competition for these key personnel has been intense. The loss of services of any of our key personnel (including key personnel joining our company through acquisitions...

  • Page 90
    ...that is integrated with internally developed software and used in our products to perform key functions. These third-party software licenses may not continue to be available on commercially reasonable terms, and the software may not be appropriately supported, maintained or enhanced by the licensors...

  • Page 91
    ... operations, our business could be harmed. We rely on our network and data center infrastructure, internal technology systems and our websites for our development, marketing, operational, support, sales, accounting and financial reporting activities. We are continually investing resources to update...

  • Page 92
    internationally through our foreign subsidiaries. Our executive offices and corporate headquarters are located in leased office space in San Rafael, California. Our San Rafael facilities consist of 331,000 square feet under leases that have expiration dates ranging from March 2011 to December 2019. ...

  • Page 93
    ... stock under our employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders, and has the effect of returning excess cash generated from our business to stockholders over time. The number of shares acquired and the timing of the purchases are based on...

  • Page 94
    ... following table provides information about the repurchase of our common stock under the stock repurchase programs in open-market transactions during the quarter ended January 31, 2011: Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Maximum Number of Shares that...

  • Page 95
    ... are not included in this Form 10-K. 2011 Fiscal year ended January 31, 2010 2009 2008 (In millions, except per share data) 2007 For the Fiscal Year: Net revenue ...Income from operations ...Provision for income taxes ...Net income(1) ...Common Stock Data: Basic net income per share ...Diluted net...

  • Page 96
    ... developing software for the world's designers, architects, engineers, and digital artists-the people who create the products, buildings, infrastructure, films, and games. Autodesk serves customers in three primary markets: architecture, engineering and construction; manufacturing; and digital media...

  • Page 97
    ... reach into volume markets around the world. Our distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our products quickly and easily. We have a significant number of registered third-party developers who create products...

  • Page 98
    ... is received. Our indirect channel model includes both a two-tiered distribution structure, where distributors sell to resellers, and a one-tiered structure where Autodesk sells directly to resellers. Our product license revenue from distributors and resellers are generally recognized at the time...

  • Page 99
    ...the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. When identical or similar assets are traded in active markets, the level of judgment required to...

  • Page 100
    ... values of our long-lived assets in accordance with applicable accounting rules. As changes in business conditions and our assumptions occur, we may be required to record impairment charges. Income Taxes. We currently have $147.5 million of net deferred tax assets, primarily a result of tax credits...

  • Page 101
    ...2% increase in operating expenses in fiscal 2011, as compared to fiscal 2010 was due to performance based compensation related to higher company performance, the return of employee costs which were temporarily suppressed in the prior year such as, salary reductions, employee incentives and mandatory...

  • Page 102
    ... distributors and resellers in both the U.S. and international regions, including Tech Data Corporation and its global affiliates (collectively, "Tech Data"). Tech Data accounted for 16% and 14% of our consolidated net revenue during fiscal year 2011 and 2010, respectively. We believe our business...

  • Page 103
    ...from the sale of new seat licenses, upgrades and crossgrades. Other revenue consists of revenue from Creative Finishing, consulting and training services, collaborative project management services, and our former Location Services division. We divested the Location Services division in February 2009...

  • Page 104
    ..., downloadable training courses and online support. We recognize maintenance revenue ratably over the maintenance contract periods. Maintenance revenue increased 6% during fiscal 2011, as compared to fiscal 2010, primarily due to a 7% increase in commercial maintenance revenue. Total subscription...

  • Page 105
    ... recovery. Net Revenue by Operating Segment We have four reportable segments: Platform Solutions and Emerging Business ("PSEB"), Architecture, Engineering and Construction ("AEC"), Manufacturing ("MFG") and Media and Entertainment ("M&E"). Location Services, which we disposed of in February 2009, is...

  • Page 106
    ... billings in fiscal 2010 as compared to fiscal 2009. The number of users increased from 1.7 million at January 31, 2009 to 2.2 million at January 31, 2010 primarily due to a one-time adjustment of 0.6 million educational seats for users who were migrated to a standard educational maintenance plan...

  • Page 107
    ... PSEB products and services. Net revenue for AEC decreased 20% during fiscal 2010, as compared to fiscal 2009, primarily due to a 24% decrease in revenue from our Revit products, a 32% decrease in revenue from our AutoCAD Architecture products, a 15% decrease in revenue from our AutoCAD Civil 3D...

  • Page 108
    ... 2010. Our annual incentive plans are based on forecasted revenue and operating margin, with current year targets set at the beginning of fiscal 2011. These increases were partially offset by the decrease in advertising and promotion spending and stock-based compensation expense. Marketing and sales...

  • Page 109
    ... compensation expense for our finance, human resources and legal employees, and the expense of travel, entertainment and training for such personnel as well as professional fees for legal and accounting services, amortization of acquisition related customer relationships and trade names, expense...

  • Page 110
    ... around the world in order to reduce our operating expenses. In the fourth quarter of fiscal 2009, we initiated a restructuring program in order to reduce our operating costs. This program reduced the number of employees by a total of approximately 700 positions globally and resulted in the...

  • Page 111
    ... points from fiscal 2010 to fiscal 2011 primarily due to a change in expected future tax rates, the establishment of the California valuation allowance in fiscal 2010 and a decrease in non-deductible stock-based compensation expense, offset by a decrease in tax benefits from foreign earnings...

  • Page 112
    ... Information In addition to our results determined under U.S. generally accepted accounting principles ("GAAP") discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the fiscal years ended January 31, 2011, 2010 and 2009...

  • Page 113
    ... for gross margin, operating margin and per share data): Fiscal Year Ended January 31, 2011 2010 2009 (Unaudited) Gross profit ...$1,755.2 $1,521.9 $2,096.1 Stock-based compensation expense ...2.9 3.1 3.6 Amortization of purchased intangibles(1) ...31.9 32.9 23.2 Non-GAAP gross profit ...$1,790...

  • Page 114
    ... Resources Our primary source of cash is from the sale of licenses to our products. Our primary use of cash is payment of our operating costs which consist primarily of employee-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities...

  • Page 115
    ... and stock-based compensation. In addition, net cash flow provided by changes in operating assets and liabilities was $131.9 million. The primary source of working capital was an increase in deferred revenue due to higher maintenance billings for fiscal 2011 compared to fiscal 2010. The primary...

  • Page 116
    ... for working capital and other business needs. Our revenue, earnings, cash flows, receivables and payables are subject to fluctuations due to changes in foreign currency exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency...

  • Page 117
    ... has the effect of returning excess cash generated from our business to stockholders. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions, the volume of employee stock option exercises, the trading price of our common stock...

  • Page 118
    ... QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign currency exchange risk Our revenue, earnings, cash flows, receivables and payables are subject to fluctuations due to changes in foreign currency exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure...

  • Page 119
    ...January 31, 2011 2010 2009 (in millions, except per share data) Net revenue: License and other ...Maintenance ...Total net revenue ...Cost of revenue: Cost of license and other revenue ...Cost of maintenance revenue ...Total cost of revenue ...Gross profit ...Operating expenses: Marketing and sales...

  • Page 120
    ... assets ...Marketable securities ...Computer equipment, software, furniture and leasehold improvements, net ...Purchased technologies, net ...Goodwill ...Deferred income taxes, net ...Other assets ...LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ...Accrued compensation...

  • Page 121
    ... current assets ...(12.9) 4.4 (7.8) Accounts payable and accrued liabilities ...83.7 (80.3) (93.6) Deferred revenue ...71.5 (34.0) 40.8 Accrued income taxes ...32.4 0.6 26.9 Net cash provided by operating activities ...Investing Activities Purchases of marketable securities ...Sales of marketable...

  • Page 122
    ... stock purchase plans ...5.2 Compensation expense related to stock options ...Tax benefits from employee stock plans ...Comprehensive income: Net income ...Other comprehensive income, net of tax: Net gain on derivative instruments, net of tax ...Change in net unrealized gain on marketable securities...

  • Page 123
    ... as follows: 2010 2009 Increase (Decrease) to Expense Cost of license and other revenue ...Cost of maintenance revenue ...Use of Estimates $(7.9) $(6.5) 7.9 6.5 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make...

  • Page 124
    .... Derivative Financial Instruments Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term exposures to fluctuations in foreign currency exchange rates which exist as part of ongoing business operations. Autodesk's general practice is to hedge a majority of...

  • Page 125
    ... are classified as current assets. Auction rate securities with an estimated fair value of $4.2 million at January 31, 2011 are classified as non-current marketable securities; for additional information see Note 2, "Financial Instruments and Hedging Activities." Autodesk determines the appropriate...

  • Page 126
    ..., 2011 and 2010, respectively. Autodesk believes its business is not substantially dependent on Tech Data. Autodesk's actual customers through Tech Data are the resellers and end users who purchase Autodesk's software licenses and services. Should any of the agreements between Autodesk and Tech Data...

  • Page 127
    ... a one year period, if material. Autodesk had no capitalized software development costs at January 31, 2011 and January 31, 2010. Other Intangible Assets, Net Other intangible assets include purchased technologies, customer relationships, trade names and the related accumulated amortization. These...

  • Page 128
    ... to expense over an applicable useful life. Prior to February 1, 2009, Autodesk expensed in-process research and development to research and development expense in the period it was acquired. (2) Customer relationships and trade names are included in "Other assets" in the Consolidated Balance...

  • Page 129
    ... Construction Manufacturing Media and Entertainment Total Balance as of January 31, 2009 Goodwill ...Accumulated impairment losses ...Impairment ...Goodwill acquired during the year ...Transfer of assets between segments . . Effect of foreign currency translation, purchase accounting adjustments...

  • Page 130
    ... the sale of new seat licenses, upgrades and crossgrades, product revenue for Creative Finishing sales wherein software is bundled with hardware components, and revenue from on-demand collaboration software and services. Autodesk's existing customers who are using a currently supported version of...

  • Page 131
    ... Ended January 31, 2011 2010 2009 Cost of license and other revenue ...Marketing and sales ...Research and development ...General and administrative ...Stock-based compensation expense related to stock awards and ESP Plan purchases ...Tax benefit ...Stock-based compensation expense related to stock...

  • Page 132
    ... million for Marketing and sales, $2.9 million for Research and development, $2.1 million for General and Administrative and $3.0 million for additional tax benefit are included in the stock-based compensation expenses in the table above for the fiscal year ended January 31, 2010. Autodesk uses the...

  • Page 133
    ... 1 and 2 fair value measurements and the reasons for the transfers. In addition, this ASU requires the Company to present separately information about purchases, sales, issuances, and settlements (on a gross basis rather than as one net number) in the reconciliation for fair value measurements using...

  • Page 134
    ... options contracts are included in "Prepaid expenses and other current assets" in the Consolidated Balance Sheets. Autodesk has marketable securities that are classified as either "available-for-sale" or "trading securities." At January 31, 2011 and January 31, 2010, Autodesk's short-term investment...

  • Page 135
    ... 31, 2010 Amortized Cost Gross unrealized gains Gross unrealized losses Estimated Fair Value Short-term available-for-sale securities: Commercial paper and corporate securities ...Certificates of deposit and time deposits ...Money market funds ...U.S. government agency securities ...Municipal...

  • Page 136
    .... Derivative Financial Instruments Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term exposures to fluctuations in foreign currency exchange rates which exist as part of ongoing business operations. Autodesk's general practice is to hedge a majority of...

  • Page 137
    ... to the cash flow hedges described above, Autodesk uses contracts which are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and payables. Forward contracts are marked-to-market at the end of each fiscal quarter...

  • Page 138
    ...other current assets $ 5.1 - 5.1 $ 4.3 - 4.3 Other accrued liabilities $ 1.2 - $ 1.2 $ 0.4 - $ 0.4 The effects of derivatives designated as hedging instruments on Autodesk's Consolidated Statements of Operations were as follows for the fiscal years ended January 31, 2011 and 2010, respectively...

  • Page 139
    ... not designated as hedging instruments on Autodesk's Consolidated Statements of Operations were as follows for the fiscal years ended January 31, 2011 and 2010, respectively (amounts presented include any income tax effects): Foreign Exchange Contracts Fiscal Year Ended January 31, 2011 2010 Amount...

  • Page 140
    ...(Level 1) (Level 2) (Level 3) Total Assets Cash equivalents(1): Certificates of deposit and time deposits ...Commercial paper ...Money market funds ...Marketable securities: Commercial paper and corporate securities ...U.S. government agency securities ...U.S. treasury securities ...Certificates of...

  • Page 141
    ... auction rate securities at January 31, 2011 and 2010 are designated as Level 3. The Company conducted its fair value assessment of the International Fund using Level 1 and Level 3 inputs. At January 31, 2010, management reviewed the International Fund's underlying portfolio, which was substantially...

  • Page 142
    ... 31, 2011, Autodesk maintained two active stock option plans for the purpose of granting equity awards to employees and to non-employee members of Autodesk's Board of Directors: the 2008 Employee Stock Plan, as amended and restated ("2008 Plan"), which is available only to employees, and the 2010...

  • Page 143
    ...following sections summarize activity under Autodesk's stock plans. Stock Options: A summary of stock option activity for the fiscal year ended January 31, 2011 is as follows: Number of Shares (in millions) Weighted average exercise price per share Options outstanding at January 31, 2010 ...Granted...

  • Page 144
    ... $0.2 million related to non-vested awards, is expected to be recognized over a weighted average period of 0.4 years. At January 31, 2011, the number of awards granted but unreleased was 23,000. 1998 Employee Qualified Stock Purchase Plan ("ESP Plan") Under Autodesk's ESP Plan, which was approved by...

  • Page 145
    ... expense associated with the ESP Plan in fiscal 2011, 2010 and 2009, respectively. Equity Compensation Plan Information The following table summarizes the number of outstanding options granted to employees and directors, as well as the number of securities remaining available for future issuance...

  • Page 146
    ... components of Autodesk's deferred tax assets and liabilities are as follows: January 31, 2011 2010 Nonqualified stock options ...Research and development tax credit carryforwards ...Foreign tax credit carryforwards ...Accrued compensation and benefits ...Other accruals not currently deductible for...

  • Page 147
    ... losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. As a result of certain...

  • Page 148
    ... year 2002 to 2011. Note 6. Deferred Compensation At January 31, 2011, Autodesk had marketable securities totaling $391.8 million, of which $31.3 million related to investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans. The total...

  • Page 149
    ... Lease commitments Autodesk leases office space and computer equipment under non-cancellable operating lease agreements that expire at various dates through 2023. The leases generally provide that Autodesk pay taxes, insurance and maintenance expenses related to the leased assets. Certain of...

  • Page 150
    ... on its future results of operations. In connection with the purchase, sale or license of assets or businesses with third parties, Autodesk has entered into or assumed customary indemnification agreements related to the assets or businesses purchased, sold or licensed. Historically, costs related to...

  • Page 151
    ... plans approved by the Board of Directors. In fiscal 2011, 2010 and 2009, Autodesk repurchased its common stock through open market purchases. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions, the number of employee...

  • Page 152
    ...the above reportable segments, and is reflected as Other. Autodesk has no material intersegment revenue. The PSEB, AEC and MFG segments derive revenue from the sale of licenses for software products and services to customers who design, build, manage or own building, manufacturing and infrastructure...

  • Page 153
    ...oriented markets. PSEB's revenue primarily includes revenue from sales of licenses of Autodesk's horizontal design products, AutoCAD and AutoCAD LT, as well as many of Autodesk's vertical design products. AEC software products help to improve the way building, civil infrastructure, process plant and...

  • Page 154
    ... of revenue from Autodesk's Location Services division, which Autodesk disposed of in February 2009. (2) Unallocated amounts primarily relate to corporate expenses and other costs and expenses that are managed outside the reportable segments, including stock-based compensation expense. Information...

  • Page 155
    ... technologies and remote application delivery and provided a design team with knowledge of web-based design applications. Autodesk incorporated PlanPlatform into its PSEB segment. Management's allocation of the purchase price consideration, based on a valuation of the acquired assets and liabilities...

  • Page 156
    ... to these plans were $13.6 million in fiscal 2011, $13.4 million in fiscal 2010 and $12.0 million in fiscal 2009. In addition, Autodesk offers a non-qualified deferred compensation plan to certain key employees whereby they may defer a portion (or all) of their annual compensation until retirement...

  • Page 157
    ... as part of this restructuring ("Fiscal 2011 Plan"). During the second quarter of fiscal 2010, Autodesk initiated a restructuring program in order to reduce its operating costs. This plan resulted in a staff reduction of approximately 430 positions globally and resulted in the consolidation of...

  • Page 158
    ...Plan Employee termination costs ...Fiscal 2010 Plan Employee termination costs ...Lease termination and asset costs ...Fiscal 2009 Plan Employee termination costs ...Lease termination and asset costs ...Other Employee termination costs ...Lease termination costs ...Total ...Current portion(2) ...Non...

  • Page 159
    ...) Note 17. Selected Quarterly Financial Information (Unaudited) Summarized quarterly financial information for fiscal 2011 and 2010 is as follows: 2011 1st quarter 2nd quarter 3rd quarter 4th quarter Fiscal year Net revenue ...Gross profit ...Income from operations ...Provision for income taxes...

  • Page 160
    .... Blue Ridge was a privately held company that designs and sells software that enables mechanical engineers to study fluid flow and thermal performance in virtual prototyping. The acquisition was structured as a merger, the result of which Autodesk acquired all the outstanding shares of Blue Ridge...

  • Page 161
    ... in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Autodesk, Inc.'s internal control over financial reporting as of January 31, 2011, based on criteria established in...

  • Page 162
    ... express an opinion on the company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable...

  • Page 163
    ... Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Changes in Internal...

  • Page 164
    ... Senior Vice President, Chief Marketing Officer Senior Vice President, Strategic Planning and Operations Senior Vice President, General Counsel and Secretary Senior Vice President, Platform Solutions and Emerging Business Senior Vice President, Manufacturing Senior Vice President, Media and...

  • Page 165
    ...Autodesk Building Collaboration Services. He served as senior vice president of sales and marketing for Buzzsaw.com, Inc., a spin-off of Autodesk, from September 1999 to August 2001 and as sales development director for Autodesk's AEC (Architecture, Engineering and Construction) products in the Asia...

  • Page 166
    ...the section entitled "Security Ownership of Certain Beneficial Owners and Management," and "Executive Compensation-Equity Compensation Plan Information" in our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is...

  • Page 167
    ... 31, 2011, 2010 and 2009, is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements of Autodesk, Inc. Schedule II Valuation and Qualifying Accounts Schedules not listed above have been omitted because they are not applicable or are not required or...

  • Page 168
    ... requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. AUTODESK, INC. By: /S/ CARL BASS Carl Bass Chief Executive Officer and President Dated: March 18, 2011...

  • Page 169
    ... Bass Chief Executive Officer and President (Principal Executive Officer) Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Director (Non-executive Chairman of the Board) Director /s/ MARK J. HAWKINS Mark J. Hawkins /s/ CRAWFORD...

  • Page 170
    ... filed with the Registrant's Current Report on Form 8-K filed on June 18, 2008) Registrant's 2008 Employee Stock Plan Forms of Agreement (non-U.S. Employees) (incorporated by reference to Exhibit 10.14 filed with the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 2009...

  • Page 171
    ... 28, 2011 (filed herewith) Executive Change in Control Program, as amended and restated (incorporated by reference to Exhibit 10.1 filed with the Registrant's Current report on Form 8-K filed on December 15, 2010) Description of annual cash compensation paid to non-employee directors (incorporated...

  • Page 172
    ... between Registrant and the J.H.S. Holdings L.P. for 111 McInnis Parkway, San Rafael, CA (incorporated by reference to Exhibit 10.3 filed with the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 2010) Credit Agreement between Registrant and CITIBANK, N.A. dated as of...

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  • Page 175
    ... Business Mark J. Hawkins Executive Vice President, Chief Financial Officer Robert "Buzz" Kross Senior Vice President, Manufacturing Marc Petit Senior Vice President, Media & Entertainment Corporate Headquarters Worldwide Headquarters Autodesk, Inc. 111 McInnis Parkway San Rafael, CA 94903 USA Asia...

  • Page 176
    Autodesk, Inc., 111 McInnis Parkway, San Rafael, CA 94903