Autodesk 2016 Annual Report Download - page 91

2016 Form 10-K 19
We are dependent on international revenue and operations, exposing us to significant regulatory, global economic,
intellectual property, collections, currency exchange rate, taxation, political instability and other risks, which could
adversely impact our financial results.
We are dependent on our international operations for a significant portion of our revenue. International net revenue
represented 68% and 71% of our net revenue in fiscal 2016 and 2015, respectively. Our international revenue, including
that from emerging economies, is subject to general economic and political conditions in foreign markets, including
conditions in foreign markets resulting from economic and political conditions in the U.S. Our revenue is also impacted
by the relative geographical and country mix of our revenue over time. At times, these factors adversely impact our
international revenue, and consequently our business as a whole. Our dependency on international revenue makes us
much more exposed to global economic and political trends, which can negatively impact our financial results, even if our
results in the U.S. are strong for a particular period. Further, a significant portion of our earnings from our international
operations may not be freely transferable to the U.S. due to remittance restrictions, adverse tax consequences or other
factors. Our intent is that amounts related to foreign earnings permanently reinvested outside the U.S. will remain outside
the U.S., and we will meet our U.S. liquidity needs through ongoing cash flows, external borrowings (such as our 2012
and 2015 Notes), or both. However, if, in the future, amounts held by foreign subsidiaries are needed to fund our
operations in the U.S., or to service our external borrowings, the repatriation of such amounts to the U.S. could result in a
significant incremental tax liability in the period in which the decision to repatriate occurs and payment of any such tax
liability would reduce the cash available to fund our operations.
We anticipate that our international operations will continue to account for a significant portion of our net revenue,
and, as we expand our international development, sales and marketing expertise, will provide significant support to our
overall efforts in countries outside of the U.S. Risks inherent in our international operations include:
• economic volatility;
• fluctuating currency exchange rates, including risks related to any hedging activities we undertake;
• unexpected changes in regulatory requirements and practices;
• delays resulting from difficulty in obtaining export licenses for certain technology;
• different purchase patterns as compared to the developed world;
• tariffs, quotas, and other trade barriers and restrictions;
• operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in
emerging economies;
• increasing enforcement by the U.S. under the Foreign Corrupt Practices Act, adoption of stricter anti-corruption
laws in certain countries, including the United Kingdom;
• difficulties in staffing and managing foreign sales and development operations;
• local competition;
• longer collection cycles for accounts receivable;
• 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;
2016 Annual Report