Autodesk 2014 Annual Report Download - page 91

2013 Annual Report
2014 Form 10-K 17
Further, given the rapid speed of changing customer expectations and advancement of technology inherent in the software
industry, the extensive and complex efforts required to create useful and widely accepted products and the rapid evolution of
cloud computing, mobile devices, new computing platforms and other technologies, such as consumer products, our executive
management team must act quickly, continuously and with vision. Although we have articulated a strategy that we believe will
fulfill these challenges, if we fail to execute properly on that strategy, adapt that strategy as market conditions evolve or fail to
internalize and execute on that strategy, we may fail to meet our customers' expectations, fail to compete with our competitors'
products and technology and lose the confidence of our channel partners and employees. This in turn could adversely affect our
business and financial performance.
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 70% and 71% of our net revenue in fiscal 2014 and 2013, 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. and foreign tax law changes that, if enacted, could significantly impact how multinational
companies are taxed, 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 financial results fluctuate within each quarter and from quarter to quarter making our future revenue and financial results
difficult to predict.
Our quarterly financial results have fluctuated in the past and will continue to do so in the future. These fluctuations could
cause our stock price to change significantly or experience declines. In addition to the other factors described in this Part I, Item
1A, some of the factors that could cause our financial results to fluctuate include:
 general market, economic, business and political conditions in particular geographies, including Europe and emerging
economies,