Autodesk 2013 Annual Report Download - page 86

Over the past 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. In addition, a number of our customers rely, directly and indirectly, on
government spending. Current debt balances of many countries without proportionate increases in revenues have caused many
countries to reduce spending and in some cases have forced those countries to restructure their debt in an effort to avoid
defaulting under those obligations. This has not only impacted those countries but others that are holders of such debt and those
assisting in such restructuring.
These actions may impact, and over the past several years have negatively impacted, our business, financial results and
financial condition. In addition, these factors are causing, and over the past several years have caused, us to restructure our
business and in turn we have and will incur restructuring charges. Moreover, our financial performance may be negatively
impacted by:
• lack of credit available to and the insolvency of key channel partners, which may impair our distribution channels and
cash flows;
• 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 our insured risks;
• inability of banks to honor our existing line of credit, which could increase our borrowing expenses or eliminate our
ability to obtain short-term financing; 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.
Even if economic conditions in the U.S. and foreign markets improve generally, a slower economic recovery in industries
important to our business, such as the architecture, engineering and construction, manufacturing and digital media and
entertainment industries, may adversely affect our business, financial results and financial condition. If a macro-economic
recovery does not occur as rapidly as anticipated, our ability to meet our long-term financial targets may also be adversely
affected.
The actions that we are taking to reorganize our business in alignment with our current operating strategy and in response to
our related business slowdown may be costly and may not be as effective as anticipated.
During the first quarter of fiscal year 2013, we undertook a number of important organizational changes to drive the
success of our business. The reorganization included changes to the structure and alignment of our product development and
marketing teams and re-organization of our sales teams. While these changes were intended to better serve our customers and
drive future growth, we encountered challenges in the execution of these efforts which impacted our financial results in the
short term. In order to achieve these organizational changes and to further our strategy, including our continuing shift to cloud
and mobile computing, in the third quarter of fiscal year 2013, we commenced a company-wide restructuring plan. If we are
unable to realize the outcomes from the restructuring efforts as planned, we may need to undertake additional restructuring
efforts, and our business and operating results may be harmed. In taking any future restructuring actions, we may incur
additional costs that negatively impact our operating margins. Additionally, a prolonged and slow economic recovery or a
renewed recession in U.S. or foreign markets could also lead to additional restructuring actions and associated costs.
We have taken actions to reduce our cost structure to more closely align our costs with our revenue levels. In taking these
actions, we have attempted to balance the cost of such initiatives against their longer term benefits. As a result of these actions,
we have incurred and will incur additional costs in the short term that have the effect of reducing our operating margins. If we
do not achieve the proper balance of these cost reduction initiatives, we may eliminate critical elements of our operations, the
loss of which could negatively impact our ability to benefit from an economic recovery. We cannot assure that our cost cutting
efforts will achieve appropriate levels of expenses, and we may take additional actions in the future.
In addition, we are taking actions to stimulate demand for our products through a number of programs. Although we are
attempting to balance the cost of these programs against their longer term benefits, it is possible that we will make such
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