Autodesk 2016 Annual Report Download - page 103

2016 Form 10-K 31
If we were required to record an impairment charge related to the value of our long-lived assets, or an additional
valuation allowance against our deferred tax assets, our results of operations would be adversely affected.
Our long-lived assets are tested for impairment if indicators of impairment exist. If impairment testing shows that
the carrying value of our long-lived assets exceeds their estimated fair values, we would be required to record a non-cash
impairment charge, which would decrease the carrying value of our long-lived assets, as the case may be, and our results
of operations would be adversely affected. Our deferred tax assets include net operating loss and tax credit carryforwards
that can be used to offset taxable income and reduce income taxes payable in future periods. Each quarter, we assess the
need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of
the deferred tax assets are not more likely than not to be realized and determined during our second quarter of fiscal 2016
that our U.S. deferred tax assets were no longer more likely than not to be realized. Changes in the amount of the
valuation allowance could result in a material noncash expense or benefit in the period in which the valuation allowance
is adjusted and our results of operations could be materially affected. We will continue to perform these tests and any
future adjustments may have a material effect on our financial condition and results of operations.
We issued $1.5 billion aggregate principal amount of unsecured notes in debt offerings and have an existing $400.0
million revolving credit facility, and expect to incur other debt in the future, which may adversely affect our financial
condition and future financial results.
In December 2012, we issued 1.95% notes due December 15, 2017 in an aggregate principal amount of $400.0
million and 3.6% notes due December 15, 2022 in an aggregate principal amount of $350.0 million. In June 2015, we
issued 3.125% notes due June 15, 2020 in an aggregate principal amount of $450.0 million and 4.375% notes due June
15, 2025 in an aggregate principal amount of $300.0 million. As the debt matures, we will have to expend significant
resources to either repay or refinance these notes. If we decide to refinance the notes, we may be required to do so on
different or less favorable terms or we may be unable to refinance the notes at all, both of which may adversely affect our
financial condition.
We also have a $400.0 million revolving credit facility. As of January 31, 2016, we had no outstanding borrowings
on the line of credit. Although we have no current plans to borrow under this credit facility, we may use the proceeds of
any future borrowing for general corporate purposes, or for future acquisitions or expansion of our business. Our existing
and future levels of indebtedness may adversely affect our financial condition and future financial results by, among other
things:
• increasing our vulnerability to adverse changes in general economic, industry and competitive conditions;
• requiring the dedication of a greater than expected portion of our expected cash from operations to service our
indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital
expenditures and acquisitions; and
• limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
We are required to comply with the covenants set forth in our unsecured notes and revolving credit facility. Our
ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants
and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, any outstanding
indebtedness may be declared immediately due and payable. In addition, changes by any rating agency to our credit rating
may negatively impact the value and liquidity of our securities. Under certain circumstances, if our credit ratings are
downgraded or other negative action is taken, the interest rate payable by us under our revolving credit facility could
increase. Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and
could affect the terms of any such financing.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
2016 Annual Report