Autodesk 2012 Annual Report Download - page 99

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the fair value of stock-based payment awards (including grants of stock options and employee stock purchases related to the
employee stock purchase plan) using the Black-Scholes-Merton option-pricing model. The determination of the fair value of a
stock-based award on the date of grant using the Black-Scholes-Merton option-pricing model is affected by our stock price on
the date of grant as well as assumptions regarding a number of complex and subjective variables. These variables include our
expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise
behaviors, the risk-free interest rate for the expected term of the award and expected dividends. The variables used in the model
are reviewed on a quarterly basis and adjusted, as needed. Share-based compensation cost for restricted stock is measured on
the closing fair market value of our commons stock on the date of grant. The value of the portion of the award that is ultimately
expected to vest is recognized as expense in our Consolidated Statements of Operations.
Legal Contingencies. As described in Part I, Item 3, “Legal Proceedings” and Part II, Item 8, Note 8, “Commitments
and Contingencies,” in the Notes to Consolidated Financial Statements, we are periodically involved in various legal claims
and proceedings. We routinely review the status of each significant matter and assess our potential financial exposure. If the
potential loss from any matter is considered probable and the amount can be reasonably estimated, we record a liability for the
estimated loss. Because of inherent uncertainties related to these legal matters, we base our loss accruals on the best
information available at the time. As additional information becomes available, we reassess our potential liability and may
revise our estimates. Such revisions could have a material impact on future quarterly or annual results of operations.
Recently Issued Accounting Standards
See Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated
Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and
estimated effects on results of operations and financial condition, which is incorporated herein by reference.
Overview of Fiscal 2012
Net Revenue
Cost of revenue
Gross Profit
Operating expenses
Income from Operations
Fiscal Year
Ended
January 31, 2012
(in millions)
$ 2,215.6
229.1
1,986.5
1,630.9
$ 355.6
As a % of Net
Revenue
100%
10%
90%
74%
16%
Fiscal Year
Ended
January 31, 2011
$ 1,951.8
196.6
1,755.2
1,483.8
$ 271.4
As a % of Net
Revenue
100%
10%
90%
76%
14%
Our business grew year over year as evidenced by our increases in revenue, gross profit and income from operations.
During fiscal 2012, as compared to fiscal 2011, net revenue increased 14%, gross profit increased 13% and income from
operations increased 31%. Contributing to the year over year increases in revenue were increases in revenue from new seat
licenses, maintenance revenue, revenue for most of our major products, all of our reportable segments, and all of our
geographies during fiscal 2012 as compared to the prior fiscal year. The reasons for these increases are discussed below under
the heading "Results from Operations." In addition, we continued to make progress in controlling our operating costs, which
led to year over year improvements in profitability. The 31% increase in income from operations in fiscal 2012, as compared to
fiscal 2011, was due to the increase in our net revenue, while controlling the growth of operating expenses.
Our total operating margin increased as a percentage from 14% for fiscal 2011 to 16% for fiscal 2012. The increase in our
operating margin was primarily due to net revenue increasing at a faster rate than the increase in our costs due to our cost
containment efforts during fiscal 2012. Net revenue increased $263.8 million or 14% for fiscal 2012, as compared to fiscal
2011, while our operating expenses increased $147.1 million, or 10% for fiscal 2012. The 10% increase in operating expenses
in fiscal 2012, as compared to fiscal 2011, was due to an increase in salaries and benefits related to increased headcount and the
return of employee costs which were temporarily suppressed in the prior year through salary reductions, employee incentives
reductions and mandatory vacation, and other costs associated with higher revenue. These increases were partially offset by the
decrease in restructuring charges of $12.1 million.
We believe net revenue for fiscal 2013 will increase by approximately 10% compared to fiscal 2012. We anticipate fiscal
2013 operating margin will increase by approximately 130 basis points compared to fiscal 2012.
We generate a significant amount of our revenue in the U.S., Japan, Germany, the United Kingdom and France. Included
in the overall increase in revenue were impacts associated with foreign currency. Our revenue benefited from foreign exchange
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2012 Annual Report