Autodesk 2011 Annual Report Download - page 114

Our non-GAAP financial measures as set forth in the table above exclude the following:
Stock-based compensation expenses. We exclude stock-based compensation expenses from non-GAAP
measures primarily because they are non-cash expenses and management finds it useful to exclude certain
non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning
and forecasting future periods.
Amortization of purchased intangibles and in-process research and development expenses. We incur
amortization of acquisition-related purchased intangible assets and charges related to in-process research and
development primarily in connection with acquisitions of certain businesses and technologies. The amortization
of purchased intangibles varies depending on the level of acquisition activity, and management finds it useful to
exclude these variable charges to assess the appropriate level of various operating expenses to assist in
budgeting, planning and forecasting future periods.
Goodwill impairment. This is a non-cash charge to write-down goodwill to fair value when there was an
indication that the asset was impaired. As explained above, management finds it useful to exclude certain
non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning
and forecasting future periods.
Restructuring charges. These expenses are associated with realigning our business strategies based on
current economic conditions. In connection with these restructuring actions, we recognize costs related to
termination benefits for former employees whose positions were eliminated, and the closure of facilities and
cancelation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing
financial results in the current period.
Establishment of a valuation allowance on certain net deferred tax assets. This is a non-cash charge to
record a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to
exclude certain non-cash charges to assess the appropriate level of various expenses to assist in budgeting,
planning and forecasting future periods.
Discrete tax items. We exclude the GAAP tax provision, including discrete items, from the non-GAAP
measure of income, and include a non-GAAP tax provision based upon the projected annual non-GAAP effective
tax rate. Management believes this approach assists investors in understanding the tax provision and the effective
tax rate related to ongoing operations.
Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax
effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP
and non-GAAP costs and expenses, primarily due to differences in the timing of when income tax benefits are
recognized for stock compensation and purchased intangibles for GAAP and non-GAAP measures.
Liquidity and Capital 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 and overhead costs. In addition to operating
expenses, we also use cash to invest in our growth initiatives, which include acquisitions of products, technology
and businesses and to fund our stock repurchase program. See further discussion of these items below.
At January 31, 2011, our principal sources of liquidity were cash, cash equivalents and marketable securities
totaling $1,466.9 million and net accounts receivable of $318.4 million. In addition, we have a U.S. line of credit
facility that permits unsecured short-term borrowings of up to $250.0 million. This line of credit agreement
contains customary covenants that could restrict the imposition of liens on our assets, and restrict our ability to
incur additional indebtedness or make dispositions of assets if we fail to maintain the financial covenants. This
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