Autodesk 2015 Annual Report Download - page 110

2015 Form 10-K 18
• 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 renew the terms of those tax
arrangements;
• 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.
Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits.
The software industry has limited barriers to entry, and the availability of computing devices with continually expanding
performance at progressively lower prices contributes to the ease of market entry. The industry is presently undergoing a
platform shift from the personal computer to cloud and mobile computing. This shift further lowers barriers to entry and poses a
disruptive challenge to established software companies. The markets in which we compete are characterized by vigorous
competition, both by entry of competitors with innovative technologies and by consolidation of companies with complementary
products and technologies. In addition, some of our competitors in certain markets have greater financial, technical, sales and
marketing, and other resources. Furthermore, a reduction in the number and availability of compatible third-party applications,
or our inability to rapidly adapt to technological and customer preference changes, including those related to cloud computing,
mobile devices, and new computing platforms, may adversely affect the sale of our products. Because of these and other
factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could result in price
reductions, reduced net revenue and profit margins and loss of market share, any of which would likely harm our business.
We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.
Because we conduct a substantial portion of our business outside the U.S. and we make certain business and resource
decisions based on assumptions about foreign currency, we face exposure to adverse movements in foreign currency exchange
rates. These exposures may change over time as business practices evolve and economic conditions change, and they could
have a material adverse impact on our financial results and cash flows.
We use derivative instruments to manage a portion of our cash flow exposure to fluctuations in foreign currency exchange
rates. As part of our risk management strategy, we use foreign currency contracts to manage a portion of our exposures of
underlying assets, liabilities, and other obligations, which exist as part of our ongoing business operations. These foreign
currency instruments have maturities that extend for one to twelve months in the future, and provide us with some protection
against currency exposures. However, our attempts to hedge against these risks may not be completely successful, resulting in
an adverse impact on our financial results.
The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and
expenses for any given fiscal period. Although our foreign currency cash flow hedge program extends beyond the current
quarter in order to reduce our exposure to foreign currency volatility, we do not attempt to completely mitigate this risk, and in
any case, will incur transaction fees in adopting such hedging programs. Such volatility, even when it increases our revenues or
decreases our expenses, impacts our ability to accurately predict our future results and earnings.
2015 Annual Report