Autodesk 2013 Annual Report Download - page 95

(including our cash, cash equivalents and marketable securities) and our ability to sell them. In the U.S., for example, the yields
on our portfolio securities are very low due to general economic conditions. Any one of these factors could reduce our
investment income, or result in material charges, which in turn could impact our overall net income and earnings per share.
From time to time we make direct investments in privately held companies. The privately held companies in which we
invest are considered inherently risky. The technologies and products these companies have under development are typically in
the early stages and may never materialize, which could result in a loss of all or a substantial part of our initial investment in
these companies. The evaluation of privately held companies is based on information that we request from these companies,
which is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these
evaluations is subject to the timing and accuracy of the data received from these companies.
If we were to experience a loss on any of our investments that loss may cause us to record an other-than-temporary
impairment charge. The effect of this charge could impact our overall net income and earnings per share. In any of these
scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making investments in our business,
taking advantage of opportunities and potentially meeting our financial obligations as they come due.
We are subject to legal proceedings and regulatory inquiries, and we may be named in additional legal proceedings or become
involved in regulatory inquiries in the future, all of which are costly, distracting to our core business and could result in an
unfavorable outcome, or a material adverse effect on our business, financial condition, results of operations, cash flows or the
trading price for our securities.
We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy has changed
and our business has evolved, we have seen an increase in litigation activity and regulatory inquiries. Like many other high
technology companies, the number and frequency of inquiries from U.S. and foreign regulatory agencies we have received
regarding our business and our business practices, and the business practices of others in our industry, have increased in recent
years. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we
could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes. Although
outcomes of such actions vary, any claims or regulatory actions initiated by or against us, whether successful or not, could
result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to
change certain business practices, significant dedication of management time, diversion of significant operational resources, or
otherwise harm our business. In any of these cases, our financial results could be negatively impacted.
Although we believe we currently have adequate internal control over financial reporting, we are required to evaluate our
internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from
such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock
price.
Pursuant to Section 404, we are required to furnish a report by our management on our internal control over financial
reporting. The report contains, among other matters, an assessment of the effectiveness of our internal control over financial
reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting
is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting
identified by management.
Although we have determined that our internal control over financial reporting was effective as of January 31, 2013, as
indicated in our Management Report on Internal Control over Financial Reporting, included in this Annual Report on Form 10-
K, we must continue to monitor and assess our internal control over financial reporting. If our management identifies one or
more material weaknesses in our internal control over financial reporting and such weakness remains uncorrected at fiscal year-
end, we will be unable to assert such internal control is effective at fiscal year-end. If we are unable to assert that our internal
control over financial reporting is effective at fiscal year-end (or if our independent registered public accounting firm is unable
to express an opinion on the effectiveness of our internal controls or concludes that we have a material weakness in our internal
controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would likely have
an adverse effect on our business and stock price.
In preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in
our consolidated financial statements, which, if not accurate, may significantly impact our financial results.
We make assumptions, judgments and estimates for a number of items, including the fair value of financial instruments,
goodwill, long-lived assets and other intangible assets, the realizability of deferred tax assets and the fair value of stock awards.
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2013 Annual Report