Autodesk 2013 Annual Report Download - page 90

In addition, a portion of the growth of our maintenance revenue has typically been associated with growth of the number
of licenses that we sell. Any reduction in the number of licenses that we sell, even if our customers' attach rates do not change,
will have a negative impact on our future maintenance revenue. This in turn would impact our business and harm our financial
results.
We recognize maintenance revenue ratably over the term of the maintenance contracts, which is predominantly one year,
but may also range up to five years. Decreases in net maintenance billings will negatively impact future maintenance revenue,
however future maintenance revenue will also be impacted by other factors such as the amount, timing and mix of contract
terms of future billings.
We are dependent on international revenue and operations, exposing us to significant regulatory, global economic, intellectual
property, collections, currency exchange rate, taxation, political instability and other risks, which could adversely impact our
financial results.
We are dependent on our international operations for a significant portion of our revenue. International net revenue
represented 71% and 72% of our net revenue in fiscal 2013 and fiscal 2012, respectively. 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. Our dependency on international
revenue makes us much more exposed to global economic and political trends, which can negatively impact our financial
results, even if our results in the U.S. are strong for a particular period. Further, a significant portion of our earnings from our
international operations may not be freely transferable to the U.S. due to remittance restrictions, adverse tax consequences or
other factors. Our intent is that amounts related to foreign earnings permanently reinvested outside the U.S. will remain outside
the U.S., and we will meet our U.S. liquidity needs through ongoing cash flows, external borrowings (such as our Senior
Notes), or both. However, if, in the future, amounts held by foreign subsidiaries are needed to fund our operations in the U.S.,
or to service our external borrowings, the repatriation of such amounts to the U.S. could result in a significant incremental tax
liability in the period in which the decision to repatriate occurs and payment of any such tax liability would reduce the cash
available to fund our operations.
We anticipate that our international operations will continue to account for a significant portion of our net revenue, and,
as we expand our international development, sales and marketing expertise, will provide significant support to our overall
efforts in countries outside of the U.S. Risks 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, tariffs, quotas and other trade
barriers and restrictions, transportation delays, operating in locations with a higher incidence of corruption and fraudulent
business practices, particularly in emerging economies, increasing enforcement by the U.S. under the Foreign Corrupt Practices
Act, adoption of stricter anti-corruption laws in certain countries, including the United Kingdom, difficulties in staffing and
managing foreign sales and development operations, longer collection cycles for accounts receivable, potential changes in tax
laws, including possible U.S. tax law changes that, if enacted, could significantly impact how U.S. multinational companies are
taxed on foreign subsidiary earnings, tax arrangements with foreign governments, including our ability to meet and review the
terms of those tax arrangements, and laws regarding the management of and access to data and public networks, possible future
limitations upon foreign owned businesses, increased financial accounting and reporting burdens and complexities, inadequate
local infrastructure, greater difficulty in protecting intellectual property, and other factors beyond our control, including popular
uprisings, terrorism, war, natural disasters and diseases.
Some of our business partners also have international operations and are subject to the risks described above. Even if we
are able to successfully manage the risks of international operations, our business may be adversely affected if our business
partners are not able to successfully manage these risks.
Our business could suffer as a result of risks, costs and charges associated with strategic acquisitions and investments.
We regularly acquire or invest in businesses, software products and technologies that are complementary to our business
through acquisitions, strategic alliances or equity or debt investments. The risks associated with such acquisitions include,
among others, the difficulty of assimilating products, operations and personnel, inheriting liabilities such as intellectual
property infringement claims, the failure to realize anticipated revenue and cost projections, the requirement to test and
assimilate the internal control processes of the acquired business in accordance with the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 and the diversion of management's time and attention. Our recent increase in the number of
18