Autodesk 2016 Annual Report Download - page 150

2016 Form 10-K 78
Taxes Collected from Customers
Autodesk nets taxes collected from customers against those remitted to government authorities in the consolidated
financial statements. Accordingly, taxes collected from customers are not reported as revenue.
Shipping and Handling Costs
Shipping and handling costs are included in cost of revenue for all periods presented.
Stock-based Compensation Expense
The following table summarizes stock-based compensation expense for fiscal 2016, 2015, and 2014, respectively, as
follows:
Fiscal Year Ended January 31,
2016 2015 2014
Cost of license and other revenue $ 6.1 $ 4.6 $ 3.8
Cost of subscription 5.7 4.3 2.2
Marketing and sales 85.2 72.4 58.6
Research and development 70.4 56.0 43.7
General and administrative 29.8 28.3 23.9
Stock-based compensation expense related to stock awards and ESP Plan purchases 197.2 165.6 132.2
Tax benefit (1.6) (45.2) (36.4)
Stock-based compensation expense related to stock awards and ESP Plan
purchases, net $ 195.6 $ 120.4 $ 95.8
Autodesk determines the grant-date fair value of its share-based payment awards using a Black-Scholes Merton ("BSM")
option pricing model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which
case Autodesk uses a binomial-lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model utilizes
multiple input variables to estimate the probability that market conditions will be achieved. Autodesk uses the following
assumptions to estimate the fair value of stock-based awards:
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 31, 2016 January 31, 2015 January 31, 2014
Performance
Stock Unit ESP Plan
Performance
Stock Unit ESP Plan
Performance
Stock Unit ESP Plan
Range of expected volatilities 27% 28 -29% 30% 29 - 33% 34% 27 - 36%
Range of expected lives (in years) N/A 0.5 - 2.0 N/A 0.5 - 2.0 N/A 0.5 - 2.0
Expected dividends —% —% —% —% —% —%
Range of risk-free interest rates 0.2% 0.1 - 0.7% 0.1% 0.0 - 0.6% 0.1% 0.1 - 0.4%
Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures. The
first is a measure of historical volatility in the trading market for the Company’s common stock, and the second is the implied
volatility of traded forward call options to purchase shares of the Company’s common stock. The expected volatility for PSUs
subject to market conditions includes the expected volatility of Autodesk's peer companies within the S&P Computer Software
Select Index.
Autodesk estimates the expected life of stock-based awards using both exercise behavior and post-vesting termination
behavior as well as consideration of outstanding options.
Autodesk did not pay cash dividends in fiscal 2016, 2015, or 2014 and does not anticipate paying any cash dividends in
the foreseeable future. Consequently, an expected dividend yield of zero is used in the BSM option pricing model and the
Monte Carlo simulation model.
The risk-free interest rate used in the BSM option pricing model and the Monte Carlo simulation model for stock-based
awards is the historical yield on U.S. Treasury securities with equivalent remaining lives.
2016 Annual Report