Autodesk 2014 Annual Report Download - page 161

2013 Annual Report
2014 Form 10-K 87
Purchase commitments
In the normal course of business, Autodesk enters into various purchase commitments for goods or services. Total non-
cancellable purchase commitments as of January 31, 2014 were approximately $65.3 million for periods through fiscal 2017
These purchase commitments primarily result from contracts for the acquisition of IT infrastructure, marketing and software
development services.
Autodesk has certain royalty commitments associated with the shipment and licensing of certain products. Royalty
expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue. Royalty expense,
which was recorded under cost of license and other revenue on Autodesk’s Consolidated Statements of Operations, was $18.0
million in fiscal 2014, $16.4 million in fiscal 2013 and $16.5 million in fiscal 2012.
Guarantees and Indemnifications
In the normal course of business, Autodesk provides indemnifications of varying scopes, including limited product
warranties and indemnification of customers against claims of intellectual property infringement made by third parties arising
from the use of its products or services. Autodesk accrues for known indemnification issues if a loss is probable and can be
reasonably estimated. Historically, costs related to these indemnifications have not been significant, and because potential
future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these indemnifications on its
future results of operations.
In connection with the purchase, sale or license of assets or businesses with third parties, Autodesk has entered into or
assumed customary indemnification agreements related to the assets or businesses purchased, sold or licensed. Historically,
costs related to these indemnifications have not been significant, and because potential future costs are highly variable,
Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations.
As permitted under Delaware law, Autodesk has agreements whereby it indemnifies its officers and directors for certain
events or occurrences while the officer or director is, or was, serving at Autodesk’s request in such capacity. The maximum
potential amount of future payments Autodesk could be required to make under these indemnification agreements is unlimited;
however, Autodesk has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and
may enable Autodesk to recover a portion of any future amounts paid. Autodesk believes the estimated fair value of these
indemnification agreements in excess of applicable insurance coverage is minimal.
Legal Proceedings
Autodesk is involved in a variety of claims, suits, investigations and proceedings in the normal course of business
activities including claims of alleged infringement of intellectual property rights, commercial, employment, piracy prosecution,
business practices and other matters. In the Company's opinion, resolution of pending matters is not expected to have a material
adverse impact on its consolidated results of operations, cash flows or its financial position. Given the unpredictable nature of
legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the
future materially affect the Company's results of operations, cash flows or financial position in a particular period, however,
based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the
preparation of the Company's financial statements, any such amount is either immaterial or it is not possible to provide an
estimated amount of any such potential loss.
9. Stockholders' Equity
Preferred Stock
Under Autodesk’s Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At January 31, 2014,
there were no preferred shares issued or outstanding. The Board of Directors has the authority to issue the preferred stock in one
or more series and to fix rights, preferences, privileges and restrictions, including dividends and the number of shares
constituting any series or the designation of such series, without any further vote or action by the stockholders.
Common Stock Repurchase Programs
Autodesk has a stock repurchase program that is used to offset dilution from the issuance of stock under the Company’s
employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders, which has the