Autodesk 2015 Annual Report Download - page 109

2015 Form 10-K 17
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. Although we have articulated a strategy that we believe will
fulfill these challenges, if we fail to execute properly on that strategy or adapt that strategy as market conditions evolve, 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.
Our entry into 3D printing presents many of the risks described above concerning developing and introducing new
products as well as new risks for us. The manufacturing and 3D printing markets are highly competitive and some of our
competitors have superior experience and resources to us. We have limited experience designing, developing, and selling
hardware products and no experience developing and selling printers. The market for 3D printing is nascent and may not
develop as rapidly as we expect. Our sale of 3D printers could subject us to product and other liability that we do not currently
face. If any of these risks materialize, it could adversely affect our business and financial performance as well as our reputation
and brand.
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 70% of our net revenue in fiscal 2015 and 2014, 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. At times, these factors 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;
2015 Annual Report