Autodesk 2016 Annual Report Download - page 88

2016 Form 10-K 16
ITEM 1A. RISK FACTORS
We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control.
In addition to the other information contained in this Form 10-K, the following discussion highlights some of these risks and
the possible impact of these factors on our business, financial condition, and future results of operations. If any of the following
risks actually occur, our business, financial condition, or results of operations may be adversely impacted, causing the trading
price of our common stock to decline. In addition, these risks and uncertainties may impact the “forward-looking” statements
described elsewhere in this Form 10-K and in the documents incorporated herein by reference. They could affect our actual
results of operations, causing them to differ materially from those expressed in “forward-looking” statements.
Global economic and political conditions may further impact our business, financial results and financial condition.
As our business has expanded globally, we have increasingly become subject to risks arising from adverse changes
in global economic and political conditions. The past several years were characterized by weak global economic
conditions, volatile credit markets, volatile exchange rates, relatively high unemployment, increased government deficit
spending and debt levels, uncertainty about certain governments' abilities to repay such debt or to address certain fiscal
issues, and volatility in many financial instrument markets. If economic growth in countries where we do business slows,
such as in Japan or in emerging economies, or if such countries experience further economic recessions, customers may
delay or reduce technology purchases. This could result in reductions in sales of our products and services, longer sales
cycles and slower adoption of our technologies.
Over the past several years, many of our customers have experienced tighter credit, negative financial news and
weaker financial performance of their businesses and have reduced their workforces, thereby reducing the number of
licenses and the number of maintenance contracts they purchase from us. In addition, a number of our customers rely,
directly and indirectly, on government spending. Current debt balances of many countries without proportionate increases
in revenues have caused many countries to reduce spending and in some cases have forced those countries to restructure
their debt in an effort to avoid defaulting under those obligations. This has not only impacted those countries but others
that are holders of such debt and those assisting in such restructuring.
These actions may impact, and over the past several years have negatively impacted, our business, financial results
and financial condition. Moreover, our financial performance may be negatively impacted by:
• lack of credit available to and the insolvency of key channel partners, which may impair our distribution channels
and cash flows;
• counterparty failures negatively impacting our treasury functions, including timely access to our cash reserves and
third-party fulfillment of hedging transactions;
• counterparty failures negatively affecting our insured risks;
• inability of banks to honor our existing line of credit, which could increase our borrowing expenses or eliminate
our ability to obtain short-term financing; and
• decreased borrowing and spending by our end users on small and large projects in the industries we serve, thereby
reducing demand for our products.
Uncertainty about current and future economic and political conditions on us, our customers and partners, makes it
difficult for us to forecast operating results and to make decisions about future investments.
Further macro-economic degradation, a slower economic recovery in industries important to our business or adverse
exchange rate movements, may adversely affect our business, financial results and financial condition.
If we fail to successfully manage our business model transition to cloud-based products and more flexible product
licenses, our results of operations could be negatively impacted.
To address the industry transition from personal computer to cloud, mobile, and social computing, we have
accelerated our move to the cloud and are offering more flexible product licenses. To support our transition, we
discontinued licensing upgrades effective March 6, 2015, discontinued selling new perpetual licenses of most individual
software products effective February 1, 2016, and plan to discontinue selling new perpetual licenses of suites effective
2016 Annual Report