Autodesk 2016 Annual Report Download - page 118

2016 Form 10-K 46
Balance Sheet and Cash Flow Items
At January 31, 2016, we had $2.8 billion in cash and marketable securities. This amount includes the aggregate net
proceeds of $742.0 million, after deducting the underwriting discounts and related offering expenses, from our June 2015
registered underwritten public offering of $450.0 million aggregate principal amount of 3.125% notes due June 15, 2020 and
$300.0 million aggregate principal amount of 4.375% notes due June 15, 2025. We completed fiscal 2016 with higher deferred
revenue and accounts receivable balances as compared to the prior fiscal year. Our deferred revenue balance at January 31,
2016 included $1.1 billion of deferred subscription revenue primarily related to customer maintenance contracts, which will be
recognized as revenue ratably over the life of the contracts. The term of our maintenance contracts is typically between one and
three years. Our cash flow from operations decreased 42% to $414.0 million as of January 31, 2016 from $708.1 million at
January 31, 2015. We repurchased 8.5 million shares of our common stock for $458.0 million during fiscal 2016.
Comparatively, we repurchased 6.9 million shares of our common stock for $372.4 million during fiscal 2015. Further
discussion regarding the balance sheet and cash flow activities are discussed below under the heading “Liquidity and Capital
Resources.”
Business Outlook
Autodesk is undergoing a business model transition in which the company will discontinue selling new perpetual licenses
in favor of subscriptions and flexible license arrangements. During the transition, billings, revenue, gross margin, operating
margin, EPS, deferred revenue, and cash flow from operations will be impacted as more revenue is recognized ratably rather
than up front and as new offerings bring a wider variety of price points. Over time, we expect our business model transition to
expand our customer base by eliminating higher up-front licensing costs and provide more flexibility in how customers gain
access to and pay for our products. In the future, we expect this business model transition will increase our long-term revenue
growth rate by increasing total subscriptions, ARR, and customer value over time.
In February 2016 we commenced a restructuring plan to reduce headcount by approximately 10% and to consolidate
certain facilities around the world in order to accelerate the Company’s move to the cloud and its transition to a subscription-
based business model. Through the restructuring, we seek to reduce expenses, streamline the organization, and reallocate
resources to align more closely with the Company’s needs going forward. See further discussion of our restructuring plan in
Note 17, “Subsequent Events” of the Notes to Consolidated Financial Statements. As a result of these actions, we have incurred
and will incur additional costs in the short term that negatively impact our net income and cash flows from operating activities
and have the effect of reducing our operating margins.
Q1 FY17 Guidance Metrics Q1 FY17 (ending April 30, 2016)
Revenue (in millions) $500 - $520
EPS GAAP ($0.98) - ($0.89)
EPS Non-GAAP (1) ($0.17) - ($0.12)
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(1) Non-GAAP earnings per diluted share exclude $0.28 related to restructuring expense, $0.27 related to stock-based compensation expense,
between $0.18 and $0.14 of GAAP-only tax charges, and $0.10 for the amortization of acquisition related intangibles, offset by $0.02 for
gains on strategic investments.
2016 Annual Report