AUTODESK, INC.
111 McInnis Parkway
San Rafael, California, 94903, U.S.A.
THE AUTODESK, INC. INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 21, 2011) (THE "IESPP")
(SUB-PLAN OF THE AUTODESK, INC. 1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN, AS
AMENDED AND RESTATED) (THE "U.S. ESPP,” TOGETHER WITH THE IESPP, THE “ESPP”)
Prospectus for the employees of certain European Economic Area ("EEA")
subsidiaries of Autodesk, Inc., subject to the laws applicable in each country
Pursuant to articles L. 412-1 and L. 621-8 of the Code Monétaire et Financier and its General
Regulation, in particular articles 211-1 to 216-1 thereof, the Autorité des marchés financiers
("AMF") has attached visa number 15-539 dated October 21, 2015 onto this prospectus. This
prospectus was established by the issuer and incurs the responsibility of its signatories. The visa,
pursuant to the provisions of Article L. 621-8-1-I of the Code Monétaire et Financier, was granted
after the AMF has verified that the document is complete and comprehensible, and that the
information it contains is consistent. The visa represents neither the approval of the worthiness of
the operation nor the authentication of the financial and accounting information presented.
This prospectus will be made available in printed form to employees of the EEA subsidiaries of Autodesk,
Inc. based in countries in which offerings under the ESPP are considered public offerings, subject to the
applicable legislation in each country, at their respective head offices. In addition, this prospectus along
with summary translations (as applicable) will be posted on Autodesk, Inc.'s intranet and free copies will
be available to the employees upon request by contacting the human resources departments of their
employers. This prospectus is also available on the website of the AMF at www.amf-france.org.
NOTE TO THE PROSPECTUS
This prospectus, which contains material information concerning Autodesk, Inc., was established
pursuant to articles 211-1 to 216-1 of the AMF General Regulation. Pursuant to Article 25 of Commission
Regulation (EC) No 809/2004 of 29 April 2004 as amended by Commission Delegated Regulations (EU)
No 486/2012 of 30 March 2012, No 862/2012 of 4 June 2012 and No 759/2013 of 30 April 2013 (the
“Prospectus Regulation”), this prospectus is composed of the following parts in the following order:
(1)
a table of contents,
(2)
the summary provided for in Article 5(2) of Directive 2003/71/EC of the European Parliament and
of the European Council of 4 November 2003, as amended by Directive 2010/73/EU and
Directive 2014/51/EU (the “Prospectus Directive”) (Part I constitutes the prospectus summary),
(3)
the risk factors linked to the issuer and the type of security covered by the issue, and
(4)
excerpts from Annexes I and III of the Prospectus Regulation which, by application of Articles 3,
4, and 6 of the Prospectus Regulation and question 71 of the European Securities and Markets
1
Authority (“ESMA”) Q&A, are required for this offering of equity securities to employees of
Autodesk, Inc. and its affiliates.
This prospectus also contains supplemental information concerning Autodesk, Inc. and the IESPP (Part II
– Section B), as well as the following documents (Exhibits):
-
Autodesk, Inc. International Employee Stock Purchase Plan (as amended and restated effective
September 21, 2011) (Sub-Plan of the Autodesk, Inc. 1998 Employee Qualified Stock Purchase
Plan, as amended and restated); and
-
Excerpts from press release issued by Autodesk, Inc. on August 27, 2015.
When used in this prospectus, the terms "we", "us", "our" mean Autodesk, Inc. and its subsidiaries.
All references to “$” in this prospectus refer to U.S. dollars.
1
Frequently Asked Questions, Prospectuses: Common positions agreed by ESMA Members 22nd updated version – October
2014 (21 October 2014 | ESMA/2014/1279).
2
TABLE OF CONTENTS
Part I constitutes the Prospectus Summary
Page
PART I — PROSPECTUS SUMMARY .......................................................................................................................... 5
SECTION A — INTRODUCTION AND WARNINGS ....................................................................................... 5
SECTION B — ISSUER................................................................................................................................... 5
SECTION C — SECURITIES .......................................................................................................................... 9
SECTION D — RISKS ................................................................................................................................... 10
SECTION E — OFFER .................................................................................................................................. 11
PART II — PROSPECTUS .......................................................................................................................................... 14
SECTION A — RISK FACTORS ................................................................................................................... 14
I.
RISKS RELATED TO AUTODESK’S BUSINESS AND INDUSTRY ....................................... 14
II.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .................... 31
SECTION B — SUPPLEMENTAL INFORMATION CONCERNING AUTODESK AND THE IESPP ............. 32
I.
THE OUTLINE ........................................................................................................................ 32
II.
ELIGIBILITY ............................................................................................................................ 34
III.
DELIVERY AND SALE OF SHARES ...................................................................................... 35
IV.
RIGHT RELATED TO THE SHARES ..................................................................................... 36
V.
STATEMENT OF CAPITALIZATION AND INDEBTEDNESS AS OF JULY 31, 2015............. 40
VI.
MAXIMUM DILUTION AND NET PROCEEDS ....................................................................... 42
VII.
DIRECTORS AND EXECUTIVE OFFICERS .......................................................................... 43
VIII.
EMPLOYEES .......................................................................................................................... 50
IX.
WORKING CAPITAL STATEMENT ........................................................................................ 54
X.
SELECTED FINANCIAL INFORMATION ............................................................................... 55
XI.
DOCUMENTS ON DISPLAY .................................................................................................. 56
XII.
TAX CONSEQUENCES.......................................................................................................... 56
EXHIBITS ..................................................................................................................................................................... 60
EXHIBIT I THE AUTODESK, INC. INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN (AS
AMENDED AND RESTATED EFFECTIVE SEPTEMBER 21, 2011) (SUB-PLAN OF THE
AUTODESK, INC. 1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN, AS
AMENDED AND RESTATED) ............................................................................................................ I
EXHIBIT II EXCERPTS FROM PRESS RELEASE ISSUED BY AUTODESK, INC. ON AUGUST
27, 2015 ............................................................................................................................................ II
CROSS-REFERENCE LISTS ......................................................................................................................................... i
ANNEX I MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE REGISTRATION
DOCUMENT (SCHEDULE) ................................................................................................................ i
ANNEX III MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE SECURITIES NOTE
(SCHEDULE)..................................................................................................................................... v
3
COMPANY REPRESENTATIVE FOR PROSPECTUS
1.1
R. Scott Herren, Senior Vice President and Chief Financial Officer, acting for and on behalf of
Autodesk, Inc.
1.2
To my knowledge, after having taken all reasonable measures for this purpose, the information
contained in this prospectus fairly reflects the current situation and no material omission has been
made.
1.3
Autodesk, Inc. has obtained a letter from its independent registered public accounting firm in
relation to this prospectus. The independent registered public accounting firm has read the
prospectus, including the financial information concerning Autodesk, Inc. for the fiscal years
ended January 31, 2015, 2014 and 2013 and for the three- and six-months ended July 31, 2015
and 2014 contained in Part I - Element B.7 and Part II - Section B.10.1 of this prospectus, in
accordance with the professional standards and interpretations applicable to it in the United
States of America pursuant to PCAOB Interim Auditing Standard AU Section 550, Other
Information in Documents Containing Audited Financial Statements.
/s/ R. Scott Herren
R. Scott Herren
Senior Vice President and Chief Financial Officer
of Autodesk, Inc.
San Rafael, California, U.S.A,
October 20, 2015
4
PART I — PROSPECTUS SUMMARY
PART I — PROSPECTUS SUMMARY
VISA NUMBER 15-539 DATED OCTOBER 21, 2015 OF THE AMF
Summaries are made up of disclosure requirements known as "Elements." These Elements are
numbered in Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of securities
and Issuer. Because some Elements are not required to be addressed, there may be gaps in the
numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities
and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a
short description of the Element is included in the summary with the mention of "not applicable."
SECTION A — INTRODUCTION AND WARNINGS
A.1
Warning to the
reader
This summary should be read as an introduction to the prospectus. Any
decision to invest in the securities should be based on consideration of
the prospectus as a whole by the investor. Where a claim relating to the
information contained in a prospectus is brought before a court, the
plaintiff investor might, under the national legislation of the Member
States of the European Union or States party to the EEA Agreement,
have to bear the costs of translating the prospectus before the legal
proceedings are initiated. Civil liability attaches to those persons who
have presented the summary including any translation thereof, and
applied for its notification, but only if the summary is misleading,
inaccurate or inconsistent when read together with the other parts of the
prospectus or it does not provide, when read together with the other parts
of the prospectus, key information in order to aid investors when
considering whether to invest in such securities.
A.2
Consent to use of
the prospectus
Not applicable. There is no subsequent resale or final placement of
securities by financial intermediaries.
SECTION B — ISSUER
B.1
Legal and
commercial name
of the issuer
Autodesk, Inc. (“Autodesk” or the “Company”).
B.2
Domicile and legal
form of Autodesk,
the legislation
under which it
operates and its
country of
incorporation
Autodesk's principal office is located at 111 McInnis Parkway, San
Rafael, California, 94903, U.S.A. The Company is a corporation
incorporated under the laws of the State of Delaware, U.S.A.
5
PART I — PROSPECTUS SUMMARY
B.3
Description of the
nature of
Autodesk's current
operations and its
principal activities
Autodesk is a world leading design software and services company,
offering customers productive business solutions through powerful
technology products and services. The Company serves customers in
the architecture, engineering, and construction; manufacturing; and
digital media, consumer, and entertainment industries. The Company’s
sophisticated software products enable its customers to experience their
ideas before they are real by allowing them to imagine, design, and
create their ideas and to visualize, simulate, and analyze real-world
performance early in the design process by creating digital prototypes.
These capabilities allow Autodesk’s customers to foster innovation,
optimize and improve their designs, help save time and money, improve
quality, and collaborate with others. Autodesk software products are sold
globally, both directly to customers and through a network of resellers
and distributors.
In fiscal 2015, Autodesk continued to successfully implement a strategic
transition of its business model announced in fiscal 2014. 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.
Autodesk reports based on four reportable operating segments:
• Architecture, Engineering, and Construction (“AEC”),
accounted for 35% of its net revenue in fiscal 2015;
which
• Platform Solutions and Emerging Business (“PSEB”),
accounted for 32% of its net revenue in fiscal 2015;
which
• Manufacturing (“MFG”), which accounted for 27% of its net revenue in
fiscal 2015; and
• Media and Entertainment (“M&E”), which accounted for 6% of its net
revenue in fiscal 2015.
Consolidated net revenue information by reportable segment for the
fiscal years ended January 31, 2015, 2014 and 2013, is as follows (in
millions of US Dollars):
Fiscal year ended January 31,
2015
Net revenue:
AEC (1)
PSEB (1)
MFG (1)
M&E (1)
$
$
872.6
796.7
675.6
167.3
2,512.2
2014
$
$
730.6
789.2
579.4
174.7
2,273.9
2013
$
$
701.1
843.0
573.8
194.3
2,312.2
(1) January 31, 2013 segment revenue amounts have been updated to conform to the
current period's presentation.
Sales through our largest distributor, Tech Data Corporation and its
affiliates ("Tech Data"), accounted for 25%, 24%, and 23% of Autodesk's
net revenue for fiscal years 2015, 2014, and 2013, respectively. No
other distributor, reseller, or direct customer accounted for 10% or more
of Autodesk's revenue.
6
PART I — PROSPECTUS SUMMARY
B.4a
Recent trends
On August 27, 2015, Autodesk reported financial results for the second
quarter of fiscal 2016. The company reported strong billings and
deferred revenue growth.
For the second quarter of fiscal 2016, Autodesk reported revenue of
$610 million, a decrease of 4 percent compared to the second quarter
last year as reported, and flat on a constant currency basis. On a
Generally Accepted Accounting Principles in the United States of
America (“U.S. GAAP”) basis, Autodesk reported diluted net loss per
share was $(1.04) for the second quarter of fiscal 2016.
As a reminder, 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, earnings
per share, 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.
For the third quarter of fiscal 2016, Autodesk expects revenue to be in
the range of $580 - $600 million and U.S. GAAP earnings per share to
be in the range of ($0.23) - ($0.18).
For the full year fiscal 2016, Autodesk expects revenue to be in the
range of $2,465 - $2,505 million.
On September 29, 2015, Autodesk reiterated its business outlook for the
third quarter and fiscal year 2016. Autodesk does not intend and
undertakes no duty to update its business outlook to reflect subsequent
events or circumstances.
On August 31, 2015, Autodesk filed with the U.S. Securities and
Exchange Commission (the “SEC”) its Quarterly Report on Form 10-Q
for the quarterly period ended July 31, 2015 ("Autodesk's Form 10-Q").
B.5
Organizational
structure
Autodesk is the parent company of the Autodesk group. Autodesk holds,
directly or indirectly, as of January 31, 2015, the majority of the capital
and voting rights of the subsidiaries listed in Exhibit 21.1 to the Annual
Report on Form 10-K for the fiscal year ended January 31, 2015, filed
with the SEC on March 18, 2015 ("Autodesk's Form 10-K").
B.6
Interests in
Autodesk's capital
or voting rights
Not applicable. Pursuant to its Q&A, ESMA considers that Item 18 of
Annex I of the Prospectus Regulation is generally not pertinent for offers
of shares to employees and can thus be omitted from the prospectus in
accordance with Article 23.4 of the Prospectus Regulation.
7
PART I — PROSPECTUS SUMMARY
B.7
Financial information concerning Autodesk for the fiscal years ended January 31, 2015,
2014 and 2013, and for the three and six month periods ended July 31, 2015 and 2014
The selected consolidated financial data of Autodesk set out in this prospectus has been derived in part
from Autodesk’s Consolidated Financial Statements prepared in accordance with U.S. GAAP.
SELECTED THREE-YEAR CONSOLIDATED FINANCIAL DATA
(In millions, except per share data)
Fiscal year ended January 31,
2015
2014
2013
For the Fiscal Year:
Net revenue
Income from operations
Net income
Cash flow from operations
Common Stock Data:
Basic net income per share
Diluted net income per share
Dividends paid per share
At Year End:
Total assets(1)
Long-term liabilities(1)
Stockholders’ equity
$
2,512.2
120.7
81.8
708.1
$
2,273.9
284.8
228.8
563.5
$
2,312.2
305.9
247.4
559.1
$
0.36
0.35
—
$
1.02
1.00
—
$
1.09
1.07
—
$
4,913.8
1,294.5
2,219.2
$
4,595.0
1,262.0
2,261.5
$
4,308.4
1,221.5
2,043.2
(1) These numbers do not reflect the early adoption of Accounting Standards Update 2015-03 (“ASU 2015-03”) Autodesk took
during the second quarter of fiscal 2016 that retrospectively adjusted these balances.
SELECTED QUARTERLY CONDENSED CONSOLIDATED FINANCIAL DATA
(In millions, except per share data - Unaudited)
Condensed Consolidated Statements of Operations Data:
Three Months Ended July 31,
2015
2014
Total net revenue
Total operating expenses
Income from operations
Net (loss) income
Basic net (loss) income per share
Diluted net (loss) income per share
$
609.5 $
512.2
4.3
(235.5 )
(1.04 )
(1.04 )
637.1
499.3
49.9
31.3
0.14
0.13
Six Months Ended July 31,
2015
2014
$
1,256.0 $
1,045.4
25.8
(216.4)
(0.95)
(0.95)
1,229.6
970.9
92.1
59.6
0.26
0.26
Condensed Consolidated Balance Sheets Data:
July 31, 2015
Cash, cash equivalents and marketable securities
Total assets
Total current liabilities
Long-term liabilities
Total stockholders' equity
$
$
$
$
$
8
2,952.4
5,341.8
1,313.8
2,125.9
1,902.1
January 31, 2015
$
$
$
$
$
2,299.4
4,913.8
1,400.1
1,294.5
2,219.2
PART I — PROSPECTUS SUMMARY
B.8
Pro forma
financial
information
Not applicable. Pursuant to its Q&A, ESMA considers that Item 20.2 of
Annex I of the Prospectus Regulation is generally not pertinent for offers of
shares to employees and can thus be omitted from the prospectus in
accordance with Article 23.4 of the Prospectus Regulation.
B.9
Profit forecast
Not applicable. This prospectus does not contain any profit forecast.
B.10
Qualifications in
the audit report
on the historical
financial
information
Not applicable. There are no such qualifications in the auditors' report.
B.11
Working capital
statement
Not applicable. Autodesk's working capital is sufficient for its present
requirements.
SECTION C — SECURITIES
C.1
Type and class
of the securities
being offered,
including the
security
identification
code
Autodesk's shares of common stock having a par value of $0.01 ("Shares")
offered pursuant to this prospectus can be either authorized but unissued
Shares or reacquired Shares.
C.2
Currency of the
securities issue
The United States Dollar is the currency of the securities issue.
C.3
Number of
shares issued
As of July 31, 2015, Autodesk was authorized to issue 750.0 million
Shares and 2.0 million shares of preferred stock, par value $0.01. As of
August 26, 2015, there were 226,199,054 Shares outstanding and no
shares of preferred stock outstanding.
C.4
Rights attached
to the securities
No Participant (as defined in Element E.3 below) shall have any voting,
dividend, or other stockholder rights with respect to any offering of Shares
under the ESPP until the Shares have been purchased and delivered to
the Participant. Following such purchase and delivery, the Participant shall
be entitled to the rights attached to the Shares, as further described below:
The Shares are or will be, after their issuance, listed on the NASDAQ
Global Select Market (the “NASDAQ”) under the symbol “ADSK.” The
CUSIP number for the Shares is 052769-10-60.
Dividend Rights. Dividend rights are not provided for in Autodesk's
Amended and Restated Certificate of Incorporation.
Voting Rights. Each holder of Shares is entitled to one vote for each
Share held on all matters submitted to a vote of Autodesk's stockholders.
Right to Receive Liquidation Distributions. Upon a liquidation,
dissolution or winding-up of Autodesk, the assets legally available for
distribution to stockholders are distributable ratably among the holders of
Shares outstanding at that time after payment of any liquidation
preferences on any outstanding preferred stock.
No Preemptive, Redemptive or Conversion Provisions. No holder of
Shares shall have any preemptive or other right, except as such rights are
expressly provided by contract, to purchase or subscribe for or receive any
9
PART I — PROSPECTUS SUMMARY
Shares of any class, or series thereof, of Autodesk's stock, whether now or
hereafter authorized, or any warrants, options, bonds, debentures or other
securities convertible into, exchangeable for or carrying any right to
purchase any share of any class, or series thereof, of stock; but such
additional Shares and such warrants, options, bonds, debentures or other
securities convertible into, exchangeable for or carrying any right to
purchase any Shares of any class, or series thereof, of stock may be
issued or disposed of by Autodesk's Board of Directors (the "Board") to
such persons, and on such terms and for such lawful consideration, as in
its discretion it shall deem advisable or as Autodesk shall have by contract
agreed.
C.5
Transferability
restrictions
Not applicable. The Shares in this offering are registered on Form S-8 with
the SEC and are generally freely transferable.
C.6
Admission to
trading on a
regulated market
Not applicable. The Shares will not be admitted for trading on any
regulated market. As mentioned in Element C.1 above, the Shares are
listed on the NASDAQ.
C.7
Dividend policy
Autodesk did not declare any cash or stock dividends in fiscal 2015, fiscal
2014 or fiscal 2013. Autodesk anticipates that, for the foreseeable future, it
will not pay any cash or stock dividends.
SECTION D — RISKS
D.1
Key risks related
to Autodesk or
its industry
Set forth below are summaries of the key risks, uncertainties and other
factors that may affect Autodesk's future results. The risks and
uncertainties described below are not the only ones facing Autodesk.
•
If Autodesk fails to successfully manage its business model transition
to cloud-based products and more flexible product licenses, its results
of operations could be negatively impacted.
•
Autodesk's strategy to develop and introduce new products and
services exposes it to risks such as limited customer acceptance,
costs related to product defects and large expenditures, each of which
may not result in additional net revenue or could result in decreased
net revenue.
•
Autodesk
exposing
property,
instability
results.
•
Autodesk is exposed to fluctuations in currency exchange rates that
could negatively impact its financial results and cash flows.
•
If Autodesk does not maintain good relationships with the members of
its distribution channel, or achieve anticipated levels of sell-through,
its ability to generate revenue will be adversely affected. If Autodesk's
distribution channel suffers financial losses, becomes financially
unstable or insolvent, or is not provided the right mix of incentives to
sell its products, its ability to generate revenue will be adversely
affected. Tech Data accounted for 23% and 25%, respectively, of
Autodesk's total net revenue for the three and six months ended
is dependent on international revenue and operations,
it to significant regulatory, global economic, intellectual
collections, currency exchange rate, taxation, political
and other risks, which could adversely impact its financial
10
PART I — PROSPECTUS SUMMARY
July 31, 2015, as compared to 26% of Autodesk's total net revenue
for both the three and six months ended July 31, 2014.
D.3
Key risks related
to the shares
•
Autodesk's business could suffer as a result of risks, costs and
charges associated with strategic acquisitions and investments.
•
A significant portion of Autodesk's revenue is generated through
maintenance revenue; decreases in maintenance attach or renewal
rates or a decrease in the number of new licenses the Company sells
would negatively impact its future revenue and financial results.
•
Autodesk is subject to legal proceedings and regulatory inquiries, and
the Company may be named in additional legal proceedings or
become involved in regulatory inquiries in the future, all of which are
costly, distracting to its core business and could result in an
unfavorable outcome, or a material adverse effect on its business,
financial condition, results of operations, cash flows or the trading
prices for its securities.
•
Autodesk issued $1.5 billion aggregate principal amount of unsecured
notes in debt offerings and has an existing $400.0 million revolving
credit facility, and expect to incur other debt in the future, which may
adversely affect its financial condition and future financial results.
•
Net revenue, billings, earnings or subscriptions shortfalls or the
volatility of the market generally may cause the market price of our
stock to decline.
•
Participants assume the risk of any currency fluctuations at the time of
(i) their contribution to the ESPP by payroll deductions and (ii) the
selling of their Shares.
SECTION E — OFFER
2
E.1
Net proceeds
Assuming that the approximately 920 eligible employees in Germany and
the United Kingdom would contribute the maximum amount toward the
purchase of the maximum number of Shares under the ESPP offered
pursuant to this prospectus, that is, a total of $42,430.08 each, then the
gross proceeds of Autodesk in connection with the offer under the ESPP
pursuant to this prospectus would be $39,035,673.60. After deducting
legal and accounting expenses in connection with the offer, the net
proceeds would be approximately $38,958,673.60.
E.2a
Reasons for the
offer and use of
proceeds
The purpose of the IESPP, a sub-plan of the U.S. ESPP, is to provide
eligible employees of the Company’s Participating Affiliates (as defined in
Element E.3 below) the opportunity to acquire a proprietary interest in the
Company through the purchase of Shares at periodic intervals with their
accumulated payroll deductions or other approved contributions.
The net proceeds will be used for general corporate purposes.
E.3
2
Description of
the terms and
conditions of the
Autodesk will offer selected employees of the Company and its
subsidiaries in the EEA the right to purchase or receive its Shares under
the IESPP.
As of August 17, 2015, there were 325 eligible employees in Germany and 595 eligible employees in the United Kingdom.
11
PART I — PROSPECTUS SUMMARY
offer
The offering of the IESPP may be considered as a public offering of
securities pursuant to Prospectus Directive in the following EEA countries,
subject to the applicable legislation in each country: Germany and the
United Kingdom. The offering of the IESPP, on the basis described herein,
may also be made to employees in the following EEA countries: Austria,
Belgium, Belgium, Czech Republic, Denmark, Finland, France, Greece,
Hungary, Iceland, Italy, Netherlands, Norway, Poland, Portugal, Romania,
Spain and Sweden ("Additional Countries"). Under the Prospectus
Directive, such offering in the Additional Countries is not considered a
public offering of securities and/or is an offering to which the obligation to
publish a prospectus does not apply. The total amount of the offering of
the IESPP in the EEA is more than €5 million over a twelve-month period.
This prospectus will be made available in printed form to employees of the
local subsidiaries of Autodesk based in Germany and the United Kingdom
at the respective head offices of their employers. In addition, this
prospectus along with summary translations (as applicable) will be posted
on Autodesk's Intranet, and free copies will be available to employees
upon their request to the human resources department.
Autodesk will offer to each individual who is, on the last day of the
Enrollment Period (such as defined below) for the applicable Offering
Period, an employee ("Eligible Employee") of Autodesk and its
participating affiliates (the "Participating Affiliates"), residing in the EEA,
the right to purchase its Shares under the IESPP.
The ESPP comprises overlapping twenty-four (24) month offering periods
("Offering Period"), each of which contains four (4) successive six-month
purchase periods ("Exercise Period"). The Exercise Period for each
offering is a period within each Offering Period first commencing with the
offering date and ending with the first occurring exercise date of that
Offering Period. The first day of each Offering Period is referred to as the
offering date ("Offering Date"). The last day of each Exercise Period is
referred to as the exercise date ("Exercise Date"). The first fifteen (15)
days of the month immediately preceding the month in which an Offering
Date occurs are referred to as the enrollment period ("Enrollment Period").
The Exercise Period currently commences on April 1 and October 1 of
each year.
Eligible Employees that elect to participate in the IESPP ("Participants")
are offered a right to purchase Shares with their accumulated payroll
deductions with funds deducted from the employees' salary.
Participation is limited to (i) the purchase of up to $25,000 of Shares per
calendar year, based on the fair market value of the Shares on the day the
rights to purchase Shares are granted, (ii) the purchase per Offering
Period of a number of Shares determined by dividing $50,000 by the fair
market value of a Share on the Offering Date and (iii) employees
possessing less than five percent (5%) of the total combined voting power
or value of all classes of stock of the Company or any of its subsidiaries.
A Participant may withdraw from the IESPP at any time prior to the
Exercise Date (as defined above) by notifying the Company in writing.
Rights under the IESPP may not be transferred or otherwise disposed of in
any way (other than by will or the laws of descent and distribution) by
Participants. A Participant may sell Shares purchased under the IESPP.
The purchase price per Share is eighty-five percent (85%) of the lower of:
(i) the fair market value of a Share on the Offering Date, or (ii) the fair
market value of a Share on the Exercise Date (the "Purchase Price").
Participants may elect to contribute to the IESPP by authorizing the
12
PART I — PROSPECTUS SUMMARY
Company to make payroll deductions of up to fifteen percent (15%) of the
aggregate compensation or other methods of contributions approved by
the Board. Such deductions will continue automatically until the Participant
reduces the payroll deduction percentage to zero, withdraws from the
IESPP, ceases to be an Eligible Employee under the IESPP or terminates
employment. A Participant may at any time during the Offering Period
decrease the percentage of authorized deductions by completing or filing
with Autodesk a form notifying the payroll office of such decrease. The
latter shall be effective as of the next pay date following the receipt of the
form or at such other time as Autodesk and the Participant may agree.
All contributions are collected in the local currency of the country where the
employee is employed. However, on the Exercise Date such contributions
are converted into U.S. Dollars for the purchase of Shares under the SubPlan. The changes or fluctuations in the exchange rate are borne by the
Participant. There is no charge to Participants to purchase or hold Shares
under the ESPP, but charges do apply for the sales of Shares purchased
under the ESPP.
As of July 31, 2015, 39.6 million Shares available for issuance under the
ESPP on a worldwide basis.
E.4
Description of
material interest
to the offer
including conflict
of interests
Not applicable. There are no such interests.
E.5
Name of the
entity offering to
sell the security
Autodesk, Inc.
E.6
Maximum
dilution
Assuming that the Shares offered pursuant to this prospectus to the
approximately 920 eligible employees in Germany and the United Kingdom
would all be newly issued, the holdings of a shareholder of Autodesk
currently holding 1% of the total outstanding share capital of Autodesk as
of August 26, 2015, i.e., 2,261,991 Shares, and who is not an eligible
employee participating in the offer, would be diluted as indicated in the
following table:
E.7
Estimated
expenses
charged to the
investor
Percentage of the
total
outstanding Shares
Total number of
outstanding
Shares
Before the offering (as of
August 26, 2015)
1.00%
226,199,054
After issuance of 991,760
Shares under the ESPP
0.996%
227,190,814
Not applicable. There are no such expenses.
13
PART II — PROSPECTUS
THE FOLLOWING INFORMATION IS NOT PART OF THE PROSPECTUS SUMMARY
PART II — PROSPECTUS
SECTION A — RISK FACTORS
I.
RISKS RELATED TO AUTODESK’S BUSINESS AND INDUSTRY
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 Autodesk's Form 10-Q, 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 Shares to decline. In addition, these risks and uncertainties may impact the “forward-looking”
statements described elsewhere in Autodesk's Form 10-Q 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, 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;
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PART II — PROSPECTUS
•
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.
A slower economic recovery in industries important to our business may adversely affect our business,
financial results and financial condition. If a macro-economic recovery does not occur as rapidly as
anticipated, our ability to meet our long-term financial targets may also be adversely affected.
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, social, and mobile computing, we
have accelerated our move to the cloud and are offering more flexible product licenses. As part of this
transition, we discontinued upgrades effective March 6, 2015 and, on February 4, 2015, we announced
that new commercial seats of most standalone software products will be available only by desktop
subscription beginning February 1, 2016. Additionally, we plan to discontinue selling new perpetual
licenses for suites during fiscal 2017. As a result, we expect to derive an increasing portion of our
revenues in the future from subscriptions. This subscription model prices and delivers our products in a
way that differs from the historical perpetual pricing and delivery methods. These changes reflect a
significant shift from perpetual license sales and distribution of our software in favor of providing our
customers the right to access certain of our software in a hosted environment or use downloaded
software for a specified subscription period. During our transition, revenue, gross margin, operating
margin, net income (loss), earnings (loss) per share, 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.
Our ability to achieve our financial objectives is subject to risks and uncertainties. The new offerings
require a considerable investment of technical, financial, legal, and sales resources, and a scalable
organization. Market acceptance of such offerings is affected by a variety of factors, including but not
limited to: security, reliability, performance, current license terms, customer preference, social/community
engagement, customer concerns with entrusting a third party to store and manage their data, public
concerns regarding privacy and the enactment of restrictive laws or regulations. Whether our business
model transition will prove successful and will accomplish our business and financial objectives is subject
to numerous uncertainties, including but not limited to: customer demand, attach and renewal rates,
channel acceptance, our ability to further develop and scale infrastructure, our ability to include
functionality and usability in such offerings that address customer requirements, tax and accounting
implications, pricing, and our costs. In addition, the metrics we use to gauge the status of our business
model transition may evolve over the course of the transition as significant trends emerge. If we are
unable to successfully establish these new offerings and navigate our business model transition in light of
the foregoing risks and uncertainties, our results of operations could be negatively impacted.
Our strategy to develop and introduce new products and services exposes us to risks such as
limited customer acceptance, costs related to product defects and large expenditures, each of
which may not result in additional net revenue or could result in decreased net revenue.
Rapid technological changes, as well as changes in customer requirements and preferences,
characterize the software industry. Just as the transition from mainframes to personal computers
transformed the industry 30 years ago, we believe our industry is undergoing a similar transition from the
15
PART II — PROSPECTUS
personal computer to cloud, mobile, and social computing. Customers are also reconsidering the manner
in which they license software products, which requires us to constantly evaluate our business model and
strategy. In response, we are focused on providing solutions to enable our customers to be more agile
and collaborative on their projects. We are also developing consumer products for digital art, personal
design and creativity, and home design. We devote significant resources to the development of new
technologies. In addition, we frequently introduce new business models or methods that require a
considerable investment of technical and financial resources such as our introduction of flexible license
and service offerings. We are making such investments through further development and enhancement of
our existing products and services, as well as through acquisitions of new product lines. Such
investments may not result in sufficient revenue generation to justify their costs and could result in
decreased net revenue. For example, in fiscal 2015, we announced that we would create Spark, a 3D
printing software platform for developers to facilitate the advancement of 3D printing technology, and
begin manufacturing and selling Ember, an Autodesk-branded 3D printer. If we are not able to meet
customer requirements, either with respect to our software or hardware products or the manner in which
we provide such products, or if we are not able to adapt our business model to meet our customers'
requirements, our business, financial condition or results of operations may be adversely impacted.
In particular, a critical component of our growth strategy is to have customers of our AutoCAD and
AutoCAD LT products expand their portfolios to include our other offerings and cloud-based services. We
want customers using standalone Autodesk products to expand their portfolio with our other offerings and
cloud-based services, and we are taking steps to accelerate this migration. At times, sales of licenses of
our AutoCAD and AutoCAD LT or standalone Autodesk flagship products have decreased without a
corresponding increase in suites product or cloud-based services revenue or without purchases of
customer seats to our suites. Should this continue, our results of operations will be adversely affected.
Also, adoption of our cloud and mobile computing offerings and changes in the delivery of our software
and services to our customers, such as desktop subscription (formally referred to as rental) offerings, will
change the way in which we recognize revenue relating to our software and services, with a potential
negative impact on our financial performance. The accounting impact of these offerings and other
business decisions are expected to result in an increase in the percentage of our ratable revenue, as well
as recurring revenue, making for a more predictable business over time, while potentially reducing our
upfront perpetual revenue stream.
Our executive management team must act quickly, continuously, and with vision, given the rapidly
changing customer expectations and technology advancements inherent in the software industry, the
extensive and complex efforts required to create useful and widely accepted products and the rapid
evolution of cloud computing, mobile devices, new computing platforms, and other technologies, such as
consumer products. Although we have articulated a strategy that we believe will fulfill these challenges, if
we fail to execute properly on that strategy or adapt that strategy as market conditions evolve, we may fail
to meet our customers' expectations, fail to compete with our competitors' products and technology, and
lose the confidence of our channel partners and employees. This in turn could adversely affect our
business and financial performance.
Our entry into 3D printing presents many of the risks described above concerning developing and
introducing new products as well as new risks for us. The manufacturing and 3D printing markets are
highly competitive and some of our competitors have superior experience and resources to us. We have
limited experience designing, developing, and selling hardware products and no experience developing
and selling printers. The market for 3D printing is nascent and may not develop as rapidly as we expect.
Our sale of 3D printers could subject us to product and other liability that we do not currently face. If any
of these risks materialize, it could adversely affect our business and financial performance as well as our
reputation and brand.
Our software is highly complex and may contain undetected errors, defects or vulnerabilities,
each of which could harm our business and financial performance.
The software products that we offer are complex, and despite extensive testing and quality control, may
contain errors, defects or vulnerabilities. Some errors, defects and vulnerabilities in our software products
16
PART II — PROSPECTUS
may only be discovered after the product or service has been released. Any errors, defects or
vulnerabilities could result in the need for corrective releases to our software products, damage to our
reputation, loss of revenue, an increase in product returns or lack of market acceptance of our products,
any of which would likely harm our business and financial performance.
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 69% of our net revenue for the three and six months ended July 31,
2015. 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 as defined
below), 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 patters 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;
17
PART II — PROSPECTUS
•
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;
•
inadequate local infrastructure;
•
greater difficulty in protecting intellectual property;
•
software piracy; and
•
other factors beyond our control, including popular uprisings, terrorism, war, natural disasters,
and diseases.
Some of our business partners also have international operations and are subject to the risks described
above. Even if we are able to successfully manage the risks of international operations, our business may
be adversely affected if our business partners are not able to successfully manage these risks.
Existing and increased competition and rapidly evolving technological changes may reduce our
revenue and profits.
The software industry has limited barriers to entry, and the availability of computing devices with
continually expanding performance at progressively lower prices contributes to the ease of market entry.
The industry is presently undergoing a platform shift from the personal computer to cloud and mobile
computing. This shift further lowers barriers to entry and poses a disruptive challenge to established
software companies. The markets in which we compete are characterized by vigorous competition, both
by entry of competitors with innovative technologies and by consolidation of companies with
complementary products and technologies. In addition, some of our competitors in certain markets have
greater financial, technical, sales and marketing, and other resources. Furthermore, a reduction in the
number and availability of compatible third-party applications, or our inability to rapidly adapt to
technological and customer preference changes, including those related to cloud computing, mobile
devices, and new computing platforms, may adversely affect the sale of our products. Because of these
and other factors, competitive conditions in the industry are likely to intensify in the future. Increased
competition could result in price reductions, reduced net revenue and profit margins and loss of market
share, any of which would likely harm our business.
We are exposed to fluctuations in currency exchange rates that could negatively impact our
financial results and cash flows.
Because we conduct a substantial portion of our business outside the U.S. and we make certain business
and resource decisions based on assumptions about foreign currency, we face exposure to adverse
movements in foreign currency exchange rates. These exposures may change over time as business
practices evolve and economic conditions change, and they could have a material adverse impact on our
financial results and cash flows.
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PART II — PROSPECTUS
We use derivative instruments to manage a portion of our cash flow exposure to fluctuations in foreign
currency exchange rates. As part of our risk management strategy, we use foreign currency contracts to
manage a portion of our exposures of underlying assets, liabilities, and other obligations, which exist as
part of our ongoing business operations. These foreign currency instruments have maturities that extend
for one to twelve months in the future, and provide us with some protection against currency exposures.
However, our attempts to hedge against these risks may not be completely successful, resulting in an
adverse impact on our financial results.
The fluctuations of currencies in which we conduct business can both increase and decrease our overall
revenue and expenses for any given fiscal period. Although our foreign currency cash flow hedge
program extends beyond the current quarter in order to reduce our exposure to foreign currency volatility,
we do not attempt to completely mitigate this risk, and in any case, will incur transaction fees in adopting
such hedging programs. Such volatility, even when it increases our revenues or decreases our expenses,
impacts our ability to accurately predict our future results and earnings.
A breach of security in our products, services or computer systems may compromise the integrity
of our products or services, harm our reputation, create additional liability and adversely impact
our financial results.
We make significant efforts to maintain the security and integrity of our source code and computer
systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion,
including by computer hackers, foreign governments and cyber terrorists, has increased as the number,
intensity and sophistication of attempted attacks and intrusions from around the world have increased.
These threats include but are not limited to identity theft, unauthorized access, DNS attacks, wireless
network attacks, viruses and worms, advanced persistent threat (APT), application centric attacks, peerto-peer attacks, phishing, backdoor trojans and distributed denial of service (DDoS) attacks. Any of the
foregoing could attack our products, services or computer systems. Despite significant efforts to create
security barriers to such programs, it is virtually impossible for us to entirely eliminate this risk. Like all
software, our software is vulnerable to cyber attacks. In the past, hackers have targeted our software, and
they may do so in the future. The impact of cyber attacks could disrupt the proper functioning of our
software products or services, cause errors in the output of our customers' work, allow unauthorized
access to sensitive, proprietary or confidential information of ours or our customers, and other destructive
outcomes. Moreover, as we continue to invest in new lines of consumer products and services we are
exposed to increased security risks and the potential for unauthorized access to, or improper use of, the
information of our consumer users. If any of the foregoing were to occur, our reputation may suffer,
customers may stop buying our products or services, we could face lawsuits and potential liability, and
our financial performance could be negatively impacted.
We rely on third-parties to provide us with a number of operational services, including hosting
and delivery and certain of our customer services and other operations; any interruption or delay
in service from these third parties, breaches of security or privacy, or failures in data collection
could expose us to liability, harm our reputation and adversely impact our financial performance.
We rely on hosted computer services from third parties for services that we provide our customers and
computer operations for our internal use. As we gather customer data and host certain customer data in
third-party facilities, a security breach could compromise the integrity or availability or result in the theft of
customer data. In addition, our operations could be negatively affected in the event of a security breach,
and we could be subject to the loss or theft of confidential or proprietary information, including source
code.
Unauthorized access to this data may be obtained through break-ins, breaches of our secure networks by
unauthorized parties, employee theft or misuse, or other misconduct. We rely on a number of third party
suppliers in the operation of our business for the provision of various services and materials that we use
in the operation of our business and production of our products. We may from time to time rely on a single
or limited number of suppliers, or upon suppliers in a single country, for these services or materials. The
inability of such third parties to satisfy our requirements could disrupt our business operations or make it
19
PART II — PROSPECTUS
more difficult for us to implement our business strategy. If any of these situations were to occur, our
reputation could be harmed, we could be subject to third party liability, including under data protection
and privacy laws in certain jurisdictions, and our financial performance could be negatively impacted.
If we do not maintain good relationships with the members of our distribution channel, or achieve
anticipated levels of sell-through, our ability to generate revenue will be adversely affected. If our
distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not
provided the right mix of incentives to sell our products, our ability to generate revenue will be
adversely affected.
We sell our software products both directly to end-users and through a network of distributors and
resellers. For the three and six months ended July 31, 2015, approximately 80% and 81% of our revenue
was derived from indirect channel sales through distributors and resellers and we expect that the majority
of our revenue will continue to be derived from indirect channel sales in the future. Our ability to
effectively distribute our products depends in part upon the financial and business condition of our
distributor and reseller network. Computer software distributors and resellers typically are not highly
capitalized, have previously experienced difficulties during times of economic contraction and
experienced difficulties during the past several years. We have processes to ensure that we assess the
creditworthiness of distributors and resellers prior to our sales to them. In the past we have taken steps to
support them, and may take additional steps in the future, such as extending credit terms and providing
temporary discounts. These steps, if taken, could harm our financial results. If our distributors and
resellers were to become insolvent, they would not be able to maintain their business and sales, or
provide customer support services, which would negatively impact our business and revenue.
We rely significantly upon major distributors and resellers in both the U.S. and international regions,
including the distributor Tech Data. Tech Data accounted for 23% and 25%, respectively, of our total net
revenue for the three and six months ended July 31, 2015, as compared to 26% of our total net revenue
for both the three and six months ended July 31, 2014. Although we believe that we are not substantially
dependent on Tech Data, if Tech Data were to experience a significant disruption with its business or if
our relationship with Tech Data were to significantly deteriorate, it is possible that our ability to sell to end
users would be, at least temporarily, negatively impacted. This could in turn negatively impact our
financial results.
Over time, we have modified and will continue to modify aspects of our relationship with our distributors
and resellers, such as their incentive programs, pricing to them and our distribution model to motivate and
reward them for aligning their businesses with our strategy and business objectives. Changes in these
relationships and underlying programs could negatively impact their business and harm our business. In
addition, the loss of or a significant reduction in business with those distributors or resellers or the failure
to achieve anticipated levels of sell-through with any one of our major international distributors or large
resellers could harm our business. In particular, if one or more of such distributors or resellers were
unable to meet their obligations with respect to accounts payable to us, we could be forced to write off
such accounts and may be required to delay the recognition of revenue on future sales to these
customers. These events could have a material adverse effect on our financial results.
Our financial results fluctuate within each quarter and from quarter to quarter making our future
revenue and financial results difficult to predict.
Our quarterly financial results have fluctuated in the past and will continue to do so in the future. These
fluctuations could cause our stock price to change significantly or experience declines. We also provide
investors with quarterly and annual financial forward-looking guidance that could prove to be inaccurate
as a result of these fluctuations. In addition to the other factors described in Section A of Part II of this
prospectus, some of the factors that could cause our financial results to fluctuate include:
•
general market, economic, business, and political conditions in particular geographies, including
Europe, APAC, and emerging economies;
20
PART II — PROSPECTUS
•
failure to produce sufficient revenue, billings or subscription growth, and profitability;
•
failure to achieve anticipated levels of customer acceptance to our business model transition,
including the impact of the end of upgrades and perpetual licenses;
•
weak or negative growth in one or more of the industries we serve, including AEC, manufacturing,
and digital media and entertainment markets;
•
restructuring or other accounting charges and unexpected costs or other operating expenses;
•
changes in revenue recognition or other accounting guidelines employed by us and/or
established by the U.S.-based Financial Accounting Standards Board (“FASB”) or other rulemaking bodies;
•
fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity;
•
failure to achieve and maintain cost reductions and productivity increases;
•
dependence on and the timing of large transactions;
•
changes in product mix, pricing pressure or changes in product pricing;
•
changes in billings linearity;
•
the ability of governments around the world to adopt fiscal policies, meet their financial and debt
obligations, and to finance infrastructure projects;
•
lower growth or contraction of our maintenance program;
•
failure to expand our AutoCAD and AutoCAD LT customer base to related design products and
services;
•
our inability to rapidly adapt to technological and customer preference changes, including those
related to cloud computing, mobile devices, new computing platforms, and 3D printing;
•
the timing of the introduction of new products by us or our competitors;
•
the success of new business or sales initiatives and increasing our portfolio of product suites;
•
the financial and business condition of our reseller and distribution channels;
•
failure to accurately predict the impact of acquired businesses or to identify and realize the
anticipated benefits of acquisitions, and successfully integrate such acquired businesses and
technologies;
•
perceived or actual technical or other problems with a product or combination of products;
•
unexpected or negative outcomes of matters and expenses relating to litigation or regulatory
inquiries;
•
increases in cloud services-related expenses;
•
security breaches and potential financial penalties to customers and government entities;
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PART II — PROSPECTUS
•
timing of additional investments in the development of our platform or deployment of our services;
•
timing of product releases and retirements;
•
changes in tax laws or regulations, tax arrangements with foreign governments or accounting
rules, such as increased use of fair value measures;
•
changes in sales compensation practices;
•
failure to effectively implement our copyright legalization programs, especially in developing
countries;
•
failure to achieve sufficient sell-through in our channels for new or existing products;
•
renegotiation or termination of royalty or intellectual property arrangements;
•
interruptions or terminations in the business of our consultants or third-party developers;
•
the timing and degree of expected investments in growth and efficiency opportunities;
•
failure to achieve continued success in technology advancements;
•
catastrophic events or natural disasters;
•
regulatory compliance costs;
•
potential goodwill impairment charges related to prior acquisitions;
•
failure to appropriately estimate the scope of services under consulting arrangements; and
•
adjustments arising from ongoing or future tax examinations.
We have also experienced fluctuations in financial results in interim periods in certain geographic regions
due to seasonality or regional economic or political conditions. In particular, our financial results in Europe
during our third quarter are usually affected by a slower summer period, and our Asia Pacific operations
typically experience seasonal slowing in our third and fourth quarters.
Our operating expenses are based in part on our expectations for future revenue and are relatively fixed
in the short term. Accordingly, any revenue shortfall below expectations has had, and in the future could
have, an immediate and significant adverse effect on our profitability. Greater than anticipated expenses
or a failure to maintain rigorous cost controls would also negatively affect profitability.
Our business could suffer as a result of risks, costs and charges associated with strategic
acquisitions and investments.
We regularly acquire or invest in businesses, software products and technologies that are complementary
to our business through acquisitions, strategic alliances or equity or debt investments. For example, in
fiscal 2015 we acquired Delcam plc, a leading supplier of advanced CADCAM and industrial
measurement solutions for the manufacturing industry. The risks associated with such acquisitions
include, among others, the difficulty of assimilating products, operations and personnel, inheriting
liabilities such as intellectual property infringement claims, the failure to realize anticipated revenue and
cost projections, the requirement to test and assimilate the internal control processes of the acquired
business in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and the
diversion of management's time and attention.
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PART II — PROSPECTUS
In addition, such acquisitions and investments involve other risks such as:
•
the inability to retain customers, key employees, vendors, distributors, business partners, and
other entities associated with the acquired business;
•
the potential that due diligence of the acquired business or product does not identify significant
problems;
•
exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk
as a result of, an acquisition, including but not limited to, claims from terminated employees,
customers, or other third parties;
•
the potential for incompatible business cultures;
•
significant higher than anticipated transaction or integration-related costs;
•
potential additional exposure to fluctuations in currency exchange rates; and
•
the potential impact on relationships with existing customers, vendors, and distributors as
business partners as a result of acquiring another business.
We may not be successful in overcoming such risks, and such acquisitions and investments may
negatively impact our business. In addition, such acquisitions and investments have in the past and may
in the future contribute to potential fluctuations in our quarterly financial results. These fluctuations could
arise from transaction-related costs and charges associated with eliminating redundant expenses or
write-offs of impaired assets recorded in connection with acquisitions and investments. These costs or
charges could negatively impact our financial results for a given period, cause quarter to quarter
variability in our financial results or negatively impact our financial results for several future periods.
Because we derive a substantial portion of our net revenue from a small number of products,
including our AutoCAD-based software products and suites, if these products are not successful,
our revenue will be adversely affected.
We derive a substantial portion of our net revenue from sales of licenses of a limited number of our
products, including AutoCAD software, products based on AutoCAD, which include our suites that serve
specific markets and products that are interoperable with AutoCAD. Any factor adversely affecting sales
of these products, including the product release cycle, market acceptance, product competition,
performance and reliability, reputation, price competition, economic and market conditions and the
availability of third-party applications, would likely harm our financial results. During the three and six
months ended July 31, 2015, combined revenue from our AutoCAD and AutoCAD LT products, not
including suites having AutoCAD or AutoCAD LT as a component, represented 24% and 25% of our total
net revenue, respectively, compared to 29% and 30%, of our total net revenue during the three and six
months ended July 31, 2014.
If we are not able to adequately protect our proprietary rights, our business could be harmed.
We rely on a combination of patent, copyright and trademark laws, trade secret protections, confidentiality
procedures and contractual provisions to protect our proprietary rights. Despite such efforts to protect our
proprietary rights, unauthorized parties from time to time have copied aspects of our software products or
have obtained and used information that we regard as proprietary. Policing unauthorized use of our
software products is time-consuming and costly. We are unable to measure the extent to which piracy of
our software products exists and we expect that software piracy will remain a persistent problem,
particularly in emerging economies. Furthermore, our means of protecting our proprietary rights may not
be adequate.
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PART II — PROSPECTUS
Additionally, we actively protect the secrecy of our confidential information and trade secrets, including
our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future
trade secret protection for that source code. The loss of future trade secret protection could make it easier
for third-parties to compete with our products by copying functionality, which could adversely affect our
financial performance and our reputation. We also seek to protect our confidential information and trade
secrets through the use of non-disclosure agreements with our customers, contractors, vendors and
partners. However, it is possible that our confidential information and trade secrets may be disclosed or
published without our authorization. If this were to occur, it may be difficult and/or costly for us to enforce
our rights, and our financial performance and reputation could be negatively impacted.
We may face intellectual property infringement claims that could be costly to defend and result in
the loss of significant rights.
As more software patents are granted worldwide, the number of products and competitors in our industry
segments grows and the functionality of products in different industry segments overlaps, we expect that
software product developers will be increasingly subject to infringement claims. Infringement or
misappropriation claims have in the past been, and may in the future be, asserted against us, and any
such assertions could harm our business. Additionally, certain patent holders without products have
become more aggressive in threatening and pursuing litigation in attempts to obtain fees for licensing the
right to use patents. Any such claims or threats, whether with or without merit, have been and could in the
future be time-consuming to defend, result in costly litigation and diversion of resources, cause product
shipment delays or require us to enter into royalty or licensing agreements. In addition, such royalty or
license agreements, if required, may not be available on acceptable terms, if at all, which would likely
harm our business.
A significant portion of our revenue is generated through maintenance revenue; decreases in
maintenance attach or renewal rates or a decrease in the number of new licenses we sell would
negatively impact our future revenue and financial results.
Our maintenance customers have no obligation to attach maintenance to their initial license or renew their
maintenance contract after the expiration of their initial maintenance period, which is typically one year.
Our customers' attach and renewal rates may decline or fluctuate as a result of a number of factors,
including the overall global economy, the health of their businesses, and the perceived value of the
maintenance program. If our customers do not attach maintenance to their initial license or renew their
maintenance contract for our products, our maintenance revenue will decline and our financial results will
suffer.
In addition, a portion of the growth of our maintenance revenue has typically been associated with growth
of the number of licenses that we sell. Any reduction in the number of licenses that we sell, even if our
customers' attach rates do not change, will have a negative impact on our future maintenance revenue.
This in turn would impact our business and harm our financial results.
We recognize maintenance revenue ratably over the term of the maintenance contracts, which is
predominantly one year, but may also range up to five years. Decreases in maintenance billings will
negatively impact future maintenance revenue, however future maintenance revenue will also be
impacted by other factors such as the amount, timing and mix of contract terms of future billings.
From time to time we realign or introduce new business and sales initiatives; if we fail to
successfully execute and manage these initiatives, our results of operations could be negatively
impacted.
As part of our effort to accommodate our customers' needs and demands and the rapid evolution of
technology, we from time to time evolve our business and sales initiatives such as realigning our
development and marketing organizations, and expanding our portfolio of suites and our offering of
software as a service, and realigning our internal resources in an effort to improve efficiency. We may
take such actions without clear indications that they will prove successful, and at times, we have been
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PART II — PROSPECTUS
met with short-term challenges in the execution of such initiatives. Market acceptance of any new
business or sales initiative is dependent on our ability to match our customers' needs at the right time and
price. Often we have limited prior experience and operating history in these new areas of emphasis. If any
of our assumptions about expenses, revenue or revenue recognition principles from these initiatives
proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary
materially from those anticipated, and our financial results will be negatively impacted.
Net revenue, billings, earnings or subscriptions shortfalls or the volatility of the market generally
may cause the market price of our stock to decline.
The market price for our Shares has experienced significant fluctuations and may continue to fluctuate
significantly. The market price for our Shares may be affected by a number of factors, including the other
factors described in this Section A of Part II of this prospectus and the following:
•
shortfalls in our expected financial results, including net revenue, billings, earnings, subscriptions,
or other key performance metrics;
•
results and future projections related to our business model transition, including the impact of the
end of upgrades and perpetual licenses;
•
quarterly variations in our or our competitors' results of operations;
•
general socio-economic, political or market conditions;
•
changes in estimates of future results or recommendations or confusion on the part of analysts
and investors about the short-term and long-term impact to our business resulting from our
business model transition;
•
uncertainty about certain governments' abilities to repay debt or effect fiscal policy;
•
the announcement of new products or product enhancements by us or our competitors;
•
unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation;
•
changes in laws, rules, or regulations applicable to our business;
•
outstanding debt service obligations; and
•
other factors, including factors unrelated to our operating performance, such as instability
affecting the economy or the operating performance of our competitors.
Significant changes in the price of our Shares could expose us to additional costly and time-consuming
litigation. Historically, after periods of volatility in the market price of a company's securities, a company
becomes more susceptible to securities class action litigation. This type of litigation is often expensive
and diverts management's attention and resources.
Our business could be adversely affected if we are unable to attract and retain key personnel.
Our success and ability to invest and grow depend largely on our ability to attract and retain highly skilled
technical, professional, managerial, sales, and marketing personnel. Historically, competition for these
key personnel has been intense. The loss of services of any of our key personnel (including key
personnel joining our company through acquisitions), the inability to retain and attract qualified personnel
in the future, or delays in hiring required personnel, particularly engineering and sales personnel, could
make it difficult to meet key objectives, such as timely and effective product introductions and financial
goals.
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PART II — PROSPECTUS
Changes in laws and/or regulations related to the Internet or related to privacy and data security
concerns may impact our business or expose us to increased liability.
The future success of our business depends upon the continued use of the Internet as a primary medium
for commerce, communication, and business applications. Federal, state, or foreign government bodies
or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting data
privacy and the transmission of certain types of content using the Internet. For example, the State of
California has adopted legislation requiring operators of commercial websites and mobile applications that
collect personal information from California residents to conspicuously post and comply with privacy
policies that satisfy certain requirements. Several other U.S. states have adopted legislation requiring
companies to protect the security of personal information that they collect from consumers over the
Internet, and more states may adopt similar legislation in the future. Additionally, the Federal Trade
Commission has used its authority under Section 5 of the Federal Trade Commission Act to bring actions
against companies for failing to maintain adequate security for personal information collected from
consumers over the Internet and for failing to comply with privacy-related representations made to
Internet users. The U.S. Congress has at various times proposed federal legislation intended to protect
the privacy of Internet users and the security of personal information collected from Internet users that
would impose additional compliance burdens upon companies collecting personal information from
Internet users, and the U.S. Congress may adopt such legislation in the future. The European Union also
has adopted various directives regulating data privacy and security and the transmission of content using
the Internet involving residents of the European Union, including those directives known as the Data
Protection Directive, the E-Privacy Directive, and the Privacy and Electronic Communications Directive,
and may adopt similar directives in the future. Several other countries, including Canada and several
Latin American and Asian countries, have constitutional protections for, or have adopted legislation
protecting, individuals' personal information. Additionally, some federal, state, or foreign governmental
bodies have established laws that seek to censor the transmission of certain types of content over the
Internet or require that individuals be provided with the ability to permanently delete all electronic personal
information, such as the German Multimedia Law of 1997.
Given the variety of global privacy and data protection regimes, it is possible we may find ourselves
subject to inconsistent obligations. For instance, the USA Patriot Act is considered by some to be in
conflict with certain directives of the European Union. Situations such as these require that we make
prospective determinations regarding compliance with conflicting regulations. Increased enforcement of
existing laws and regulations, as well as any laws, regulations or changes that may be adopted or
implemented in the future, could limit the growth of the use of public cloud applications or
communications generally, result in a decline in the use of the Internet and the viability of Internet-based
applications, and require implementation of additional technological safeguards.
Our investment portfolio consists of a variety of investment vehicles in a number of countries that
are subject to interest rate trends, market volatility, and other economic factors. If general
economic conditions decline, this could cause the credit ratings of our investments to deteriorate,
illiquidity in the financial marketplace, and we may experience a decline in interest income, and an
inability to sell our investments, leading to impairment in the value of our investments.
It is our policy to invest our cash, cash equivalents and marketable securities in highly liquid instruments
with, and in the custody of, financial institutions with high credit ratings and to limit the amounts invested
with any one institution, type of security and issuer. However, we are subject to general economic
conditions, interest rate trends and volatility in the financial marketplace that can affect the income that
we receive from our investments, the net realizable value of our investments (including our cash, cash
equivalents and marketable securities) and our ability to sell them. In the U.S., for example, the yields on
our portfolio securities are very low due to general economic conditions. Any one of these factors could
reduce our investment income, or result in material charges, which in turn could impact our overall net
income (loss) and earnings (loss) per share.
From time to time we make direct investments in privately held companies. Privately held company
investments are considered inherently risky. The technologies and products these companies have under
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PART II — PROSPECTUS
development are typically in the early stages and may never materialize, which could result in a loss of all
or a substantial part of our initial investment in these companies. The evaluation of privately held
companies is based on information that we request from these companies, which is not subject to the
same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these
evaluations is subject to the timing and accuracy of the data received from these companies.
A loss on any of our investments may cause us to record an other-than-temporary impairment charge.
The effect of this charge could impact our overall net income (loss) and earnings (loss) per share. In any
of these scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making
investments in our business, taking advantage of opportunities and potentially meeting our financial
obligations as they come due.
We are subject to legal proceedings and regulatory inquiries, and we may be named in additional
legal proceedings or become involved in regulatory inquiries in the future, all of which are costly,
distracting to our core business and could result in an unfavorable outcome, or a material adverse
effect on our business, financial condition, results of operations, cash flows or the trading prices
for our securities.
We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global
economy has changed and our business has evolved, we have seen an increase in litigation activity and
regulatory inquiries. Like many other high technology companies, the number and frequency of inquiries
from U.S. and foreign regulatory agencies we have received regarding our business and our business
practices, and the business practices of others in our industry, have increased in recent years. In the
event that we are involved in significant disputes or are the subject of a formal action by a regulatory
agency, we could be exposed to costly and time consuming legal proceedings that could result in any
number of outcomes. Any claims or regulatory actions initiated by or against us, whether successful or
not, could result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of
business, fines or orders to change certain business practices, significant dedication of management
time, diversion of significant operational resources, or otherwise harm our business. In any of these
cases, our financial results, results of operations, cash flows or the trading prices for our securities could
be negatively impacted.
Changes in existing financial accounting standards or practices, or taxation rules or practices
may adversely affect our results of operations.
Changes in existing accounting or taxation rules or practices, new accounting pronouncements or
taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could
have a significant adverse effect on our results of operations or the manner in which we conduct our
business. Further, such changes could potentially affect our reporting of transactions completed before
such changes are effective.
For example, the FASB is currently working together with the International Accounting Standards Board
(“IASB”) on several projects to further align accounting principles and facilitate more comparable financial
reporting between companies who are required to follow U.S. GAAP under SEC regulations and those
who are required to follow International Financial Reporting Standards outside of the U.S. These efforts
by the FASB and IASB may result in different accounting principles under U.S. GAAP that may result in
materially different financial results for us in areas including, but not limited to principles for recognizing
revenue and lease accounting.
It is not clear if or when these potential changes in accounting principles may become effective, whether
we have the proper systems and controls in place to accommodate such changes and the impact that any
such changes may have on our consolidated financial position, results of operations and cash flows. In
addition, as we evolve and change our business and sales models, we are currently unable to determine
how these potential changes may impact our new models, particularly in the area of revenue recognition.
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PART II — PROSPECTUS
We regularly invest resources to update and improve our information technology systems. Should
our investments not succeed, or if delays or other issues with new or existing internal technology
systems disrupt our operations, our business could be harmed.
We rely on our network and data center infrastructure, technology systems and our websites for our
development, marketing, operational, support, sales, accounting and financial reporting activities. We are
continually investing resources to update and improve these systems and environments in order to meet
the growing and evolving requirements of our business and customers. Such improvements are often
complex, costly and time consuming. In addition, such improvements can be challenging to integrate with
our existing technology systems, or uncover problems with our existing technology systems.
Unsuccessful implementation of hardware or software updates and improvements could result in
disruption in our business operations, loss of revenue, errors in our accounting and financial reporting or
damage to our reputation.
Although we believe we currently have adequate internal control over financial reporting, we are
required to evaluate our internal control over financial reporting under Section 404 of the
Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of
investor confidence in our financial reports and have an adverse effect on our stock price.
Pursuant to Section 404, we are required to furnish a report by our management on our internal control
over financial reporting. The report contains, among other matters, an assessment of the effectiveness of
our internal control over financial reporting as of the end of our fiscal year, including a statement as to
whether or not our internal control over financial reporting is effective. This assessment must include
disclosure of any material weaknesses in our internal control over financial reporting identified by
management.
Although we have determined that our internal control over financial reporting was effective as of
January 31, 2015, as indicated in our Management Report on Internal Control over Financial Reporting,
included in Autodesk's Form 10-K, we must continue to monitor and assess our internal control over
financial reporting.
If our management or auditor identifies one or more material weaknesses in our internal control over
financial reporting and such weakness remains uncorrected at fiscal year-end, we will be unable to assert
such internal control is effective at fiscal year-end. If we are unable to assert that our internal control over
financial reporting is effective at fiscal year-end (or if our independent registered public accounting firm is
unable to express an opinion on the effectiveness of our internal controls or concludes that we have a
material weakness in our internal controls), we could lose investor confidence in the accuracy and
completeness of our financial reports, which would likely have an adverse effect on our business and
stock price.
In preparing our financial statements we make certain assumptions, judgments and estimates that
affect amounts reported in our consolidated financial statements, which, if not accurate, may
significantly impact our financial results.
We make assumptions, judgments and estimates for a number of items, including the fair value of
financial instruments, goodwill, long-lived assets and other intangible assets, the realizability of deferred
tax assets and the fair value of stock awards. We also make assumptions, judgments and estimates in
determining the accruals for employee related liabilities including commissions, bonuses, and sabbaticals;
and in determining the accruals for uncertain tax positions, partner incentive programs, product returns
reserves, allowances for doubtful accounts, asset retirement obligations and legal contingencies. These
assumptions, judgments and estimates are drawn from historical experience and various other factors
that we believe are reasonable under the circumstances as of the date of the consolidated financial
statements. Actual results could differ materially from our estimates, and such differences could
significantly impact our financial results.
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PART II — PROSPECTUS
Our financial results could be negatively impacted if our tax positions are overturned by tax
authorities.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
Our effective tax rate is based on our expected geographic mix of earnings, statutory rates, intercompany
transfer pricing, and enacted tax rules. Significant judgment is required in determining our effective tax
rate and in evaluating our tax positions on a worldwide basis. We believe our tax positions, including
intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we
conduct our business. It is possible that these positions may be overturned by jurisdictional tax authorities
and may have a significant impact on our effective tax rate.
We rely on third party technologies and if we are unable to use or integrate these technologies,
our product and service development may be delayed and our financial results negatively
impacted.
We rely on certain software that we license from third parties, including software that is integrated with
internally developed software and used in our products to perform key functions. These third-party
software licenses may not continue to be available on commercially reasonable terms, and the software
may not be appropriately supported, maintained or enhanced by the licensors. The loss of licenses to, or
inability to support, maintain and enhance any such software could result in increased costs, or in delays
or reductions in product shipments until equivalent software can be developed, identified, licensed and
integrated, which would likely harm our business.
Disruptions with licensing relationships and third party developers could adversely impact our
business.
We license certain key technologies from third parties. Licenses may be restricted in the term or the use
of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or
renew license agreements for key technology on favorable terms, if at all, and any failure to do so could
harm our business.
Our business strategy has historically depended in part on our relationships with third-party developers
who provide products that expand the functionality of our design software. Some developers may elect to
support other products or may experience disruption in product development and delivery cycles or
financial pressure during periods of economic downturn. In particular markets, such disruptions have in
the past, and would likely in the future, negatively impact these third-party developers and end users,
which could harm our business.
Additionally, technology created by outsourced product development, whether outsourced to third parties
or developed externally and transferred to us through business or technology acquisitions, have certain
additional risks such as effective integration into existing products, adequate transfer of technology knowhow and ownership and protection of transferred intellectual property.
As a result of our strategy of partnering with other companies for product development, our
product delivery schedules could be adversely affected if we experience difficulties with our
product development partners.
We partner with certain independent firms and contractors to perform some of our product development
activities. We believe our partnering strategy allows us to, among other things, achieve efficiencies in
developing new products and maintaining and enhancing existing product offerings. Our partnering
strategy creates a dependency on such independent developers. Independent developers, including
those who currently develop products for us in the U.S. and throughout the world, may not be able or
willing to provide development support to us in the future. In addition, use of development resources
through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may
be adversely impacted by, and expose us to risks relating to, evolving employment, export and intellectual
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PART II — PROSPECTUS
property laws. These risks could, among other things, expose our intellectual property to misappropriation
and result in disruptions to product delivery schedules.
Our business may be significantly disrupted upon the occurrence of a catastrophic event.
Our business is highly automated and relies extensively on the availability of our network and data center
infrastructure, our internal technology systems and our websites. We also rely on hosted computer
services from third parties for services that we provide to our customers and computer operations for our
internal use. The failure of our systems or hosted computer services due to a catastrophic event, such as
an earthquake, fire, flood, tsunami, weather event, telecommunications failure, power failure, cyber attack
or war, could adversely impact our business, financial results and financial condition. We have developed
disaster recovery plans and maintain backup systems in order to reduce the potential impact of a
catastrophic event, however there can be no assurance that these plans and systems would enable us to
return to normal business operations. In addition, any such event could negatively impact a country or
region in which we sell our products. This could in turn decrease that country's or region's demand for our
products, thereby negatively impacting our financial results.
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 longlived 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. Changes in the amount of
the valuation allowance could result in a material noncash expense in the period in which the valuation
allowance is adjusted and our results of operations would be adversely affected. We will continue to
perform these tests and any future adjustments may have a material adverse 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 (collectively, the “2012 Notes”). 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 (collectively, the “2015 Notes”). 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 July 31, 2015, 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;
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PART II — PROSPECTUS
•
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.
II.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
2.1
Foreign currency exchange risk
Our revenue, earnings, cash flows, receivables and payables are subject to fluctuations due to changes
in foreign currency exchange rates. Our risk management strategy utilizes foreign currency contracts to
manage our exposure to foreign currency volatility that exists as part of our ongoing business operations.
We utilize cash flow hedge contracts to reduce the exchange rate impact on a portion of the net revenue
or operating expense of certain anticipated transactions. In addition, we use balance sheet hedge
contracts to reduce the exchange rate risk associated primarily with foreign currency denominated
receivables and payables. As of July 31, 2015 and January 31, 2015, we had open cash flow and balance
sheet hedge contracts with future settlements within one to twelve months. Contracts were primarily
denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars and Australian
dollars. We do not enter into any foreign exchange derivative instruments for trading or speculative
purposes. The net notional amount of our option and forward contracts was $375.2 million and $381.2
million at July 31, 2015 and January 31, 2015, respectively.
We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating
expenses of certain anticipated transactions. A sensitivity analysis performed on our hedging portfolio as
of July 31, 2015 indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at July 31,
2015 and January 31, 2015 would increase the fair value of our foreign currency contracts by $31.7
million and $35.1 million, respectively. A hypothetical 10% depreciation of the dollar from its value at
July 31, 2015 and January 31, 2015 would decrease the fair value of our foreign currency contracts by
$20.9 million and $16.5 million, respectively.
2.2
Interest Rate Risk
Interest rate movements affect both the interest income we earn on our short term investments and the
market value of certain longer term securities. At July 31, 2015, we had $2,447.2 million of cash
equivalents and marketable securities, including $916.8 million classified as short-term marketable
securities and $562.5 million classified as long-term marketable securities. If interest rates were to move
up or down by 50 or 100 basis points over a twelve month period, the market value change of our
marketable securities would have an unrealized gain or loss of $5.3 million and $9.2 million, respectively.
2.3
Other Market Risk
From time to time we make direct investments in privately held companies. Privately held company
investments generally are considered inherently risky. The technologies and products these companies
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PART II — PROSPECTUS
have under development are typically in the early stages and may never materialize, which could result in
a loss of all or a substantial part of our initial investment in these companies. The evaluation of privately
held companies is based on information that we request from these companies, which is not subject to
the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these
evaluations is subject to the timing and accuracy of the data received from these companies.
SECTION B — SUPPLEMENTAL INFORMATION CONCERNING AUTODESK AND THE IESPP
I.
THE OUTLINE
1.1
Purpose of the IESPP
The purpose of the IESPP, a sub-plan of the U.S. ESPP, is to provide eligible employees of the
Company’s Participating Affiliates the opportunity to acquire a proprietary interest in the Company
through the purchase of Shares at periodic intervals with their accumulated payroll deductions or other
approved contributions. Unless otherwise specified herein, all terms of the IESPP are governed by and in
accordance with the terms of the U.S. ESPP.
1.2
Shares offered under the ESPP
Under the U.S. ESPP, which was approved by stockholders in 1998, eligible employees may purchase
Shares at their discretion using up to 15% of their eligible compensation subject to certain limitations, at
no less than 85% of fair market value as defined in the ESPP. At July 31, 2015, a total of 39.6 million
Shares were available for future issuance. This amount automatically increases on the first trading day of
each fiscal year by an amount equal to the lesser of 10.0 million Shares or 2% of the total of (1)
outstanding Shares plus (2) any Shares repurchased by Autodesk during the prior fiscal year. Under the
ESPP, the Company issues Shares on the first trading day following March 31 and September 30 of each
fiscal year. The ESPP expires during fiscal 2018.
Autodesk issued 1.1 million Shares under the ESPP during the six months ended July 31, 2015, with an
average price of $36.91 per Share. During the six months ended July 31, 2014, Autodesk issued 1.1
million Shares under the ESPP, at an average price of $33.66 per Share. The weighted average grant
date fair value of awards granted under the ESPP was $15.99 during the six months ended July 31, 2015,
calculated as of the award grant date using the Black-Scholes Merton (“BSM") option pricing model. The
weighted average grant date fair value of awards granted under the ESPP during the six months ended
July 31, 2014, calculated as of the award grant date using the BSM option pricing model, was $14.26 per
Share. The number of Shares a Participant can purchase on any Exercise Date will be determined by
dividing the balance of such Participant's payroll deduction during the Exercise Period by the applicable
Purchase Price (as provided in Section 1.4 below).
No Participant is entitled to purchase Shares under the ESPP in a given Offering Period in excess of a
number determined by dividing $50,000 by the fair market value of a Share on the Offering Date. Fair
market value of a Share is determined as provided in Section 1.4 below. Certain other limitations apply.
1.3
Offering Period
The ESPP is implemented by twenty-four month Offering Periods and currently operates with four sixmonth Exercise Periods during which options granted pursuant to the ESPP may be exercised.
The Exercise Period for each offering is a period within each Offering Period first commencing with the
Offering Date and ending with the first occurring Exercise Date of that Offering Period.
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PART II — PROSPECTUS
The first day of each Offering Period is referred to as the Offering Date. The last day of each Exercise
Period is referred to as the Exercise Date. The Exercise Periods currently commence on April 1 and
October 1 of each year.
The first fifteen (15) days of the months immediately preceding the month in which an Offering Date
occurs is referred to as the Enrollment Period.
1.4
Purchase Price
The Purchase Price per Share at which each Share may be acquired upon the exercise of a purchase
right is eighty-five (85%) of the lesser of (i) the fair market value of the Share on the Offering Date and (ii)
the fair market value of a Share on the Exercise Date.
For purposes of the ESPP, the term "fair market value" on a given date is the closing sales price for the
Shares on such date as quoted on NASDAQ.
1.5
Purchase of Shares
On each Exercise Date, each Participant's accumulated payroll deductions will be automatically applied to
the purchase of whole Shares, up to the maximum number of Shares permitted under the ESPP at the
Purchase Price specified in Section 1.4 above.
Any accumulated payroll deductions remaining in a Participant's account which consists of less than the
amount required to purchase one Share on such Exercise Date shall be refunded to the Participant.
In the event that the fair market value of the Share is lower on the Exercise Date than it was on the first
Offering Date for that Offering Period, all Participants on the Exercise Date shall be deemed to have
withdrawn from the Offering Period immediately after the exercise of their option on such Exercise Date
and to have enrolled as Participants in a new Offering Period which begins on or about the day following
such Exercise Date.
1.6
Term of the ESPP
The ESPP continues in effect for a term of twenty (20) years unless sooner terminated by the Board
which may at any time terminate the ESPP. No such termination can affect options previously granted.
The ESPP will expire in January 2018.
1.7
Amendment or Discontinuance of the ESPP
The Board may, at any time, amend, alter or discontinue the ESPP. However, no amendment can make
any change in any option theretofore granted which adversely affects the rights of any Participant. In
addition, to the extent necessary to comply with any rule or provision or any other applicable law or
regulation, Autodesk shall obtain stockholder approval in such a manner and to such a degree as so
required.
1.8
Transfer of US Employees to an Affiliate
In the event that an employee of the Company who is a Participant in the U.S. ESPP is transferred and
becomes an employee of a Participating Affiliate during an Offering Period in effect under the U.S. ESPP,
such individual shall automatically become a Participant under the IESPP for the duration of the Offering
Period in effect at that time. Unless otherwise required under local law, any payroll deductions shall
continue to be held by the Company for the remainder of the Offering Period. At the next Exercise Date,
all payroll deductions and other approved contributions made by or to the Company or Participating
Affiliate shall be aggregated for the purchase of Shares subject to the terms and limitations of the IESPP.
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PART II — PROSPECTUS
II.
ELIGIBILITY
2.1
Eligible Employees
The ESPP is offered to Eligible Employees of Autodesk and its Participating Affiliates.
2.2
Participation of Eligible Employees
An Eligible Employee may become a Participant in the ESPP by completing a subscription agreement
authorizing payroll deductions on the form provided by Autodesk and filing it with Autodesk's payroll office
during the Enrollment Period for the applicable Offering Date, unless a later or earlier time for filing the
subscription agreement is set by the Board for all Eligible Employees with respect to a given offering.
The subscription agreement is the document by which the Eligible Employee certifies that he or she
desires to participate in the ESPP and authorizes payroll deductions in a certain amount from each
paycheck. Please contact the stock administration department for a copy of the subscription form. A
Participant may decrease the amount of his or her contribution at any time during the Offering Period by
completing and filing with the Company a subscription agreement notifying the payroll office of such
increase or decrease of withholding rate. A Participant may not increase the rate of his or her payroll
deductions during the Offering Period.
2.3
Payroll Deductions
During the enrollment process, an employee may elect to contribute to the ESPP by authorizing the
Company to take payroll deductions of such employee's earnings (as defined in the ESPP) with respect to
each offering. The deductions are made as a percentage of the Participant's earnings in whole
percentages up to fifteen percent (15%) or such lower percentage as set by the Board.
The payroll deductions made for each Participant shall be credited to an account for such Participant
under the ESPP and shall be deposited with the general funds of the Company, unless otherwise
required under local law. A Participant may reduce or begin such payroll deductions after the beginning of
any Offering Period only as provided for in the enrollment documents. A Participant may make additional
payments into his or her account only if specifically provided for in the enrollment documents and only if
the Participant has not had the maximum amount withheld during the Offering Period.
In the event of an administrative error by the Company, the result of which a Participant's payroll
deductions are not credited to his or her account in accordance with such Participant's election, the
Company may permit a Participant to make a payment to his or her account prior to the next scheduled
Exercise Date provided such contributions do not cause such participant's aggregate credits to his or her
account to exceed fifteen percent (15%) of his or her aggregate compensation for the Offering Period with
respect to which such administrative error was made.
In locations where local law prohibits payroll deductions or where the Company has determined that
payroll deductions are problematic, an Eligible Employee may elect to participate through contributions to
his or her account under the ESPP in a form acceptable to the Company.
The amounts so collected shall be credited to the Participant's individual book account under the ESPP,
initially in the currency in which paid by the Participating Affiliate until converted into U.S. Dollars.
Accordingly, all purchases of Shares under the ESPP are to be made with the U.S. Dollars into which the
payroll deductions for the Offering Period or other approved contributions have been converted. The
amounts collected from a participant may be commingled with the general assets of Autodesk or the
Participating Affiliate and may be used for general corporate purposes, except as otherwise required by
local law.
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PART II — PROSPECTUS
For purposes of determining the number of Shares purchasable by a Participant, the payroll deductions or
other approved contributions credited to each Participant's book account during each Exercise Period
shall be converted into U.S. Dollars on the Exercise Date for that Exercise Period on the basis of the
exchange rate in effect on such date. The Board shall have the absolute discretion to determine the
applicable exchange rate to be in effect for each Exercise Date by any reasonable method (including,
without limitation, the exchange rate actually used by Autodesk for its intra-Company financial
transactions for the month of such transfer). Any changes or fluctuations in the exchange rate at which
the payroll deductions or other approved contributions collected on the Participant's behalf are converted
into U.S. Dollars on each Exercise Date shall be borne solely by the Participant.
2.4
Withdrawal / Termination of Employment
At any time during an Offering Period a Participant may terminate his or her payroll deductions under the
ESPP and withdraw through such procedure as provided in the enrollment documents. Such withdrawal
may be elected at any time prior to the Exercise Date by giving written notice to Autodesk. Upon such
withdrawal from the offering by a Participant, the Company shall distribute to such Participant all of his or
her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to
acquire Shares for the Participant) under the offering, without interest (unless required by local law), and
such Participant's interest in that offering shall be automatically terminated.
A Participant's withdrawal from an offering will have no effect upon such individual's eligibility to
participate in any other future offerings under the ESPP but such Participant will be required to re-enroll
electronically (or through such other means as the Company provides) in order to participate in
subsequent offerings under the ESPP.
Rights granted pursuant to any offering under the ESPP shall terminate immediately upon cessation, prior
to the Exercise Date, of any Participant's employment with the Company or the Participating Affiliate, for
any reason, including retirement or death and the Company shall distribute to such terminated employee,
or in the case of Participant's death, to the person or persons entitled thereto under Section 15 of the
ESPP, all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions
have been used to acquire Shares for the terminated employee) under the offering, without interest
unless required by local law, and his or her option will be automatically terminated.
III.
DELIVERY AND SALE OF SHARES
After the Exercise Date, Autodesk will issue Shares for the Participant's benefit representing the Shares
purchased upon exercise of his or her rights granted under the ESPP. A Participant can sell Shares
purchased upon exercise of his or her rights granted under the ESPP, subject to compliance with any
applicable securities laws, as soon as he or she receives his or her Shares electronically through the
broker and provided the sale occurs outside of any closed window period based on applicable insider
trading laws. The Participant assumes the risk of any market fluctuation in the price of the Shares.
Neither payroll deductions credited to a Participant's account nor any rights with regard to the exercise of
an option or to receive Shares under the ESPP may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution) by the Participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw.
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PART II — PROSPECTUS
IV.
RIGHT RELATED TO THE SHARES
4.1
Type and the Class of the Securities Being Offered, Including the Security Identification
Code
As of July 31, 2015, Autodesk was authorized to issue 750.0 million Shares and 2.0 million shares of
preferred stock, par value $0.01. As of August 26, 2015, there were 226,199,054 Shares outstanding and
no shares of preferred stock outstanding.
The Shares are listed on the NASDAQ under the symbol "ADSK." The CUSIP number for the Shares is
052769-10- 60.
4.2
Legislation Under Which the Securities Have Been Created
The Shares were created under the General Corporation Law of the State of Delaware, U.S.A. (the
"DGCL"). Except as otherwise expressly required under the laws of a country, the IESPP and all rights
there under shall be governed by and construed in accordance with the laws of the State of California,
U.S.A.
4.3
Form of Securities, Name and Address of the Entity in Charge of Keeping the Records
Shares to be delivered to a Participant under the ESPP will be registered in the name of the Participant or
in the name of the Participant and his or her spouse. The records are kept by Autodesk's transfer agent:
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021, U.S.A.
+1 800 962-4284
The Company's designated ESPP broker is currently E*TRADE. The address is:
E*TRADE:
14th Floor, 1271 Avenue of the Americas
New York, NY 10022, U.S.A.
Website: http://www.etrade.com
Commissions
The ESPP brokers charge a fixed flat fee commission of $19.95 per trade for sales of Shares purchased
under the ESPP. In addition, the SEC imposes a fee on the transfer of the Shares. This fee is paid to the
SEC at the time of sale and is required for all equity trades. Upon selling the Shares, the Participants will
be charged a fee equal to $0.0000184 multiplied by the total principal amount of the sale proceeds. The
SEC will publish a revised fee rate 30 days after the SEC’s regular appropriation for fiscal year 2016 is
enacted, and this new fee rate will become effective 60 days after the appropriation is enacted.
4.4
Currency of the Securities Issue
The United States Dollar is the currency of the securities issue. Participants assume the risk of any
currency fluctuations at the time of (i) their contribution to the ESPP by payroll deductions and (ii) the
selling of their Shares.
4.5
Rights attached to the Securities
No Participant shall have any voting, dividend, or other stockholder rights with respect to any offering of
Shares under the ESPP until the Shares have been purchased and delivered to the Participant. Following
36
PART II — PROSPECTUS
such purchase and delivery, the Participant shall be entitled to the rights attached to the Shares, as
further described below.
Dividend Rights. Dividend rights are not provided for in Autodesk's Amended and Restated Certificate of
Incorporation. Under the DGCL and subject to preferences that may apply to shares of EA preferred stock
outstanding at the time, the holders of outstanding Shares are entitled to receive dividends either (1) out
of the surplus, or (2) in case there shall be no such surplus, out of the Company’s net profits for the fiscal
year in which the dividend is declared and/or the preceding fiscal year as EA’s Board may determine from
time to time (see Section 170 DGCL).
Autodesk did not declare any cash or stock dividends in fiscal 2015, fiscal 2014 or fiscal 2013. Autodesk
anticipates that, for the foreseeable future, it will not pay any cash or stock dividends.
Voting Rights. Each holder of Shares is entitled to one vote for each Share held on all matters submitted
to a vote of Autodesk's stockholders. An annual meeting of stockholders shall be held for the election of
directors at such date, time and place, either within or outside of the State of Delaware, U.S.A., as the
Board shall each year fix. Any other proper business may be transacted at the annual meeting. The
annual meeting of the stockholders of the Company, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on such date and at such time as may be
designated from time to time by the Board. Nominations of persons for election to the Board and the
proposal of business to be considered by the stockholders may be made at an annual meeting of
stockholders: (i) pursuant to the Company's notice of meeting of stockholders; (ii) by or at the direction of
the Board; or (iii) by any stockholder of the Company who was a stockholder of record at the time of
giving of notice provided for in the Company's bylaws, who is entitled to vote at the meeting and who
complied with the notice procedures set forth in the Company's bylaws.
Pursuant to Section 242 of the DGCL, after a corporation has received payment for any of its capital
stock, it may amend its certificate of incorporation, from time to time, in any and as many respects as may
be desired, so long as its certificate of incorporation as amended would contain only such provisions as it
would be lawful and proper to insert in an original certificate of incorporation filed at the time of the filing of
the amendment; and, if a change in stock or the rights of stockholders, or an exchange, reclassification,
subdivision, combination or cancellation of stock or rights of stockholders is to be made, such provisions
as may be necessary to effect such change, exchange, reclassification, subdivision, combination or
cancellation. In particular, and without limitation upon such general power of amendment, a corporation
may amend its certificate of incorporation, from time to time, so as:
(1)
To change its corporate name; or
(2)
To change, substitute, enlarge or diminish the nature of its business or its corporate powers and
purposes; or
(3)
To increase or decrease its authorized capital stock or to reclassify the same, by changing the
number, par value, designations, preferences, or relative, participating, optional, or other special
rights of the shares, or the qualifications, limitations or restrictions of such rights, or by changing
shares with par value into shares without par value, or shares without par value into shares with
par value either with or without increasing or decreasing the number of shares, or by
subdividing or combining the outstanding shares of any class or series of a class of shares into
a greater or lesser number of outstanding shares; or
(4)
To cancel or otherwise affect the right of the holders of the shares of any class to receive
dividends which have accrued but have not been declared; or
(5)
To create new classes of stock having rights and preferences either prior and superior or
subordinate and inferior to the stock of any class then authorized, whether issued or unissued;
or
37
PART II — PROSPECTUS
(6)
To change the period of its duration.
Any or all such changes or alterations may be effected by one certificate of amendment.
The Board shall adopt a resolution setting forth the amendment proposed, declaring its advisability, and
either calling a special meeting of the stockholders entitled to vote in respect thereof for the consideration
of such amendment or directing that the amendment proposed be considered at the next annual meeting
of the stockholders. Such special or annual meeting shall be called and held upon notice. The notice shall
set forth such amendment in full or a brief summary of the changes to be effected thereby, as the directors
shall deem advisable. At the meeting a vote of the stockholders entitled to vote thereon shall be taken for
and against the proposed amendment. If a majority of the outstanding stock entitled to vote thereon, and a
majority of the outstanding stock of each class entitled to vote thereon as a class has been voted in favor
of the amendment, a certificate setting forth the amendment and certifying that such amendment has been
duly adopted in accordance with Section 242 of the DGCL shall be executed, acknowledged and filed and
shall become effective.
Right to Receive Liquidation Distributions. Upon a liquidation, dissolution or winding-up of Autodesk,
the assets legally available for distribution to stockholders are distributable ratably among the holders of
Shares outstanding at that time after payment of any liquidation preferences on any outstanding preferred
stock.
No Preemptive, Redemptive or Conversion Provisions. No holder of Shares shall have any
preemptive or other right, except as such rights are expressly provided by contract, to purchase or
subscribe for or receive any Shares of any class, or series thereof, of Autodesk's stock, whether now or
hereafter authorized, or any warrants, options, bonds, debentures or other securities convertible into,
exchangeable for or carrying any right to purchase any share of any class, or series thereof, of stock; but
such additional Shares and such warrants, options, bonds, debentures or other securities convertible into,
exchangeable for or carrying any right to purchase any Shares of any class, or series thereof, of stock
may be issued or disposed of by the Board to such persons, and on such terms and for such lawful
consideration, as in its discretion it shall deem advisable or as Autodesk shall have by contract agreed.
4.6
Transferability
The Shares in this offering under the ESPP are registered on a registration statement on Form S-8 with
the SEC and are generally freely transferable after issuance.
The ESPP is intended to provide Shares for investment and not for resale. The Company does not,
however, intend to restrict or influence any Participant in the conduct of his or her own affairs. A
Participant, therefore, may sell Shares purchased under the ESPP at any time he or she chooses, subject
to compliance with any applicable securities laws and provided the sale occurs outside of any closed
window period based on applicable insider trading laws. THE PARTICIPANT ASSUMES THE RISK OF
ANY MARKET FLUCTUATIONS IN THE PRICE OF THE SHARES.
4.7
General Provisions Applying to Business Combinations
Autodesk is subject to Section 203 of the DGCL, which, subject to certain exceptions, prohibits a
Delaware corporation from engaging in any 'business combination" with an "interested stockholder" for a
period of three (3) years following the time that such stockholder became an interested stockholder,
unless:
•
the board of directors of the corporation approves either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder, prior to the time
the interested stockholder attained that status;
38
PART II — PROSPECTUS
•
upon the closing of the transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least eighty-five (85%) of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding for purposes of
determining the number of Shares outstanding, those Shares owned (i) by persons who are
directors and also officers and (ii) by employee stock plans in which Participants do not have the
right to determine confidentially whether Shares held subject to the plan will be tendered in a
tender or exchange offer; or
•
at or subsequent to such time, the business combination is approved by the board of directors
and authorized at an annual or special meeting of stockholders, and not by written consent, by
the affirmative vote of at least sixty-six and two-thirds percent (66.66%) of the outstanding voting
stock that is not owned by the interested stockholder.
With certain exceptions, an "interested stockholder" is a person or group who or which owns fifteen
percent (15%) or more of the corporation's outstanding voting stock (including any rights to acquire stock
pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of
conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an
affiliate or associate of the corporation and was the owner of fifteen percent (15%) or more of such voting
stock at any time within the previous three years.
In general, Section 203 defines a business combination to include:
•
any merger or consolidation involving the corporation or any direct or indirect majority-owned
subsidiary of the corporation with (a) the interested stockholder, or (b) any other corporation,
partnership, unincorporated association or other entity if the merger or consolidation is caused by
the interested stockholder and as a result of such merger or consolidation Section 203(a) is not
applicable to the surviving entity;
•
any sale, lease, exchange, mortgage, transfer, pledge or other disposition of ten percent (10%) or
more of the assets of the corporation or of any direct or indirect majority-owned subsidiary of the
corporation involving the interested stockholder;
•
subject to certain exceptions, any transaction which results in the issuance or transfer by the
corporation or by any direct or indirect majority-owned subsidiary of the corporation of any stock
of the corporation or of such subsidiary to the interested stockholder;
•
subject to certain exceptions, any transaction involving the corporation or any direct or indirect
majority-owned subsidiary of the corporation that has the effect of increasing the proportionate
share of the stock of any class or series, or securities convertible into the stock of any class or
series, of the corporation or of any such subsidiary owned by the interested stockholder; or
•
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation or any direct or indirect
majority-owned subsidiary.
A Delaware corporation, such as Autodesk, may "opt out" of this provision with an express provision in its
original certificate of incorporation or an express provision in its certificate of incorporation or bylaws
resulting from a stockholders' amendment approved by at least a majority of the outstanding voting
Shares. However, Autodesk has not "opted out" of this provision. Section 203 could prohibit or delay
mergers or other takeover or change-in-control attempts and, accordingly, may discourage attempts to
acquire Autodesk.
Section 253 of the DGCL authorizes the board of directors of a Delaware corporation that owns ninety
percent (90%) or more of each of the outstanding classes of stock of a subsidiary that are entitled to vote
39
PART II — PROSPECTUS
on a merger to merge the subsidiary into itself without any requirement for action to be taken by the board
of directors of the subsidiary.
Section 251(h) of the DGCL, subject to certain exceptions, permits parties entering into a merger
agreement to “opt in” to eliminate a target stockholder vote on a back-end merger following a tender or
exchange offer in which the acquirer accumulates sufficient shares to approve the merger agreement (a
majority unless the target has adopted a higher vote requirement) but less than the ninety percent (90%)
necessary to effect a short-form merger.
V.
STATEMENT OF CAPITALIZATION AND INDEBTEDNESS AS OF JULY 31, 2015
5.1
Capitalization and Indebtedness (in millions of US dollars - unaudited)
Total Current debt
- Guaranteed
- Secured
- Unguaranteed / Unsecured
–
–
–
–
Total Non-Current debt (excluding current portion of long-term debt)
- Guaranteed
- Secured
- Unguaranteed / Unsecured
Stockholders’ equity
a. Share Capital and Additional Paid-in Capital
b. Legal Reserve
c. Other Reserves
- Accumulated other comprehensive loss
- Retained earnings
Total stockholders’ equity
5.2
*
$
$
$
$
$
$
$
1,486.2
–
–
1,486.2
1,808.0
–
94.1
(70.3)
164.4
1,902.1
Net Indebtedness (in millions of US dollars - unaudited)
A.+B.
C.
D.
Cash and cash equivalents
Short-term marketable securities*
Liquidity (A) + (B) + (C)
$
$
$
1,473.1
916.8
2,389.9
E.
F.
G.
H.
I.
Current Financial Receivable
Current Bank debt
Current portion of non-current debt
Other current financial debt
Current Financial Debt (F) + (G) + (H)
J.
Net Current Financial Indebtedness (I) – (E) – (D)
$
(2,389.9)
K.
L.
M.
Non-current Bank loans
Bonds Issued
Other non-current loans
$
1,486.2
N.
Non-current Financial Indebtedness (K) + (L) + (M)
$
1,486.2
O.
Net Financial Indebtedness (J) + (N)
$
(903.7)
–
–
–
–
–
In addition to the short-term marketable securities, there are non-current marketable securities of $562.5.
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PART II — PROSPECTUS
5.3
Indirect and Contingent Indebtedness
This information below is excerpted from "Note 8. Commitments and Contingencies" included in
Autodesk's Form 10-K, and "Note 14. Commitments and Contingencies" included in Autodesk's Form 10Q.
Lease commitments
Autodesk leases office space and computer equipment under non-cancellable operating lease
agreements that expire at various dates through 2088. The leases generally provide that Autodesk pay
taxes, insurance, and maintenance expenses related to the leased assets. Certain of these lease
arrangements contain escalation clauses whereby monthly rent increases over time. At January 31, 2015,
the aggregate future minimum lease payments required were as follows:
2016
$
55.4
2017
47.3
2018
40.7
2019
29.1
2020
19.5
Thereafter
32.6
224.6
Less: Sublease income
1.9
$
222.7
Rent expense related to these operating leases recognized on a straight-line basis over the lease period,
was as follows:
Fiscal Year Ended January 31,
2014
2015
Rent expense
$
55.0
$
50.2
2013
$
56.1
Purchase commitments
In the normal course of business, Autodesk enters into various purchase commitments for goods or
services. Total non-cancellable purchase commitments as of January 31, 2015 were approximately $85.4
million for periods through fiscal 2020. These purchase commitments primarily result from contracts for
the acquisition of IT infrastructure, marketing, and software development services.
Autodesk has certain royalty commitments associated with the shipment and licensing of certain
products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the
underlying revenue. Royalty expense, which was recorded under cost of license and other revenue on
Autodesk’s Consolidated Statements of Operations, was $17.9 million in fiscal 2015, $18.0 million in fiscal
2014, and $16.4 million in fiscal 2013.
Guarantees and Indemnifications
In the normal course of business, Autodesk provides indemnifications of varying scopes, including limited
product warranties and indemnification of customers against claims of intellectual property infringement
made by third parties arising from the use of its products or services. Autodesk accrues for known
indemnification issues if a loss is probable and can be reasonably estimated. Historically, costs related to
these indemnifications have not been significant, and because potential future costs are highly variable,
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PART II — PROSPECTUS
Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future
results of operations.
In connection with the purchase, sale or license of assets or businesses with third parties, Autodesk has
entered into or assumed customary indemnification agreements related to the assets or businesses
purchased, sold or licensed. Historically, costs related to these indemnifications have not been significant,
and because potential future costs are highly variable, Autodesk is unable to estimate the maximum
potential impact of these indemnifications on its future results of operations.
As permitted under Delaware law, Autodesk has agreements whereby it indemnifies its officers and
directors for certain events or occurrences while the officer or director is, or was, serving at Autodesk’s
request in such capacity. The maximum potential amount of future payments Autodesk could be required
to make under these indemnification agreements is unlimited; however, Autodesk has directors’ and
officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable
Autodesk to recover a portion of any future amounts paid. Autodesk believes the estimated fair value of
these indemnification agreements in excess of applicable insurance coverage is minimal.
Legal Proceedings
Autodesk is involved in a variety of claims, suits, investigations and proceedings in the normal course of
business activities including claims of alleged infringement of intellectual property rights, commercial,
employment, piracy prosecution, business practices and other matters. In the Company’s opinion,
resolution of pending matters is not expected to have a material adverse impact on its consolidated
results of operations, cash flows or its financial position. Given the unpredictable nature of legal
proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such
proceedings could in the future materially affect the Company’s results of operations, cash flows or
financial position in a particular period, however, based on the information known by the Company as of
the date of this filing and the rules and regulations applicable to the preparation of the Company’s
financial statements, any such amount is either immaterial or it is not possible to provide an estimated
amount of any such potential loss.
VI.
MAXIMUM DILUTION AND NET PROCEEDS
6.1
Maximum Dilution
The Shares under the ESPP are offered pursuant to this prospectus to approximately 920 eligible
employees (as of August 17, 2015) in Germany and the United Kingdom. As indicated in Section 1.2
above, the maximum rate at which employees may purchase Shares may not exceed $25,000 of the fair
market value of Shares (determined as of the Offering Date) per calendar year in which the right is
outstanding. However, as noted above, there are other limitations on Share purchases (such as no more
than 15% of eligible compensation may be contributed for Share purchases under the ESPP) which may
result in employees not being able to purchase $25,000 worth of Shares in a calendar year.
Autodesk’s Exercise Periods consist of two six-month periods commencing on April 1 and October 1 of
each year. The following hypothetical example assumes Participants did not participate in the prior
Exercise Period, other ESPP limitations are not exceeded and Participants enroll in the Offering Period
which begins April 1, 2016. It also assumes that the closing price of a Share on both September 30, 2016
and March 31, 2017 is $46.30 (the actual closing price on September 11, 2015). Under such
assumptions, the Purchase Price would be $39.36 (85% of $46.30). Each Participant would be entitled to
purchase a maximum of 539 whole Shares in September 2015 for a maximum of $21,215 in contributions
per person. Participants would also be able to purchase additional Shares during the next Exercise
Period (i.e., October 1, 2016 – March 31, 2017). Assuming the employees participated in the next
Exercise Period, other ESPP contribution limitations are not exceeded and that the closing price of the
Shares on October 1, 2016 and March 31, 2017 is also $46.30 for a hypothetical Purchase Price of
42
PART II — PROSPECTUS
$39.36, on March 31, 2017, each Participant would again be able to purchase a maximum of 539 whole
Shares for a maximum of $21,215.04. Assuming that each eligible employee would purchase a total of
1,078 Shares in the two Exercise Periods beginning April 1, 2015 and October 1, 2015, the maximum
number of Shares offered pursuant to this prospectus amounts to 991,760 Shares.
Based on the above assumptions, the holdings of a hypothetical shareholder of Autodesk currently
holding one percent (1%) of the total outstanding Share capital of Autodesk as of August 26, 2015, that is
2,261,991 Shares, and who did not participate in the offering, would be diluted as indicated in the
following dilution table:
Percentage of the total
outstanding Shares
Total number of
outstanding Shares
Before the offering (as of August 26,
2015)
1.00%
226,199,054
After issuance of 991,760 Shares under
the ESPP
0.996%
227,190,814
6.2
Net Proceeds
Assuming, using the example above, that the approximately 920 eligible employees in Germany and the
United Kingdom would contribute the maximum amount toward the purchase of the maximum number of
Shares under the ESPP offered pursuant to this prospectus, that is, a total of $42,430.08 each, then the
gross proceeds of Autodesk in connection with the offer under the ESPP pursuant to this prospectus
would be $39,035,673.60. After deducting legal and accounting expenses in connection with the offer,
the net proceeds would be approximately $38,958,673.60.
VII.
DIRECTORS AND EXECUTIVE OFFICERS
7.1
Board of Directors as of June 10, 2015
Name
Age*
Position
Director Since
Carl Bass
57
President, Chief Executive and Director
2006
Crawford W. Beveridge
69
Non-Executive Chairman of the Board
1993
J. Hallam Dawson
78
Director
1988
Thomas Georgens
55
Director
2013
Per-Kristian Halvorsen
63
Director
2000
Mary T. McDowell
50
Director
2010
Lorrie M. Norrington
55
Director
2011
Betsy Rafael
53
Director
2013
Stacy J. Smith
52
Director
2011
Steven M. West
59
Director
2007
*
Ages and bios are as of March 31, 2015.
43
PART II — PROSPECTUS
Mr. Bass joined Autodesk in September 1993 and has served as President and Chief Executive Officer
since May 2006. Mr. Bass served as Interim Chief Financial Officer from August 2014 to November 2014
and August 2008 to April 2009. From June 2004 to April 2006, Mr. Bass served as Chief Operating
Officer. From February 2002 to June 2004, Mr. Bass served as Senior Executive Vice President, Design
Solutions Group. From August 2001 to February 2002, Mr. Bass served as Executive Vice President,
Emerging Business and Chief Strategy Officer. From June 1999 to July 2001, he served as President and
Chief Executive Officer of Buzzsaw.com, Inc., a spin-off from Autodesk. Mr. Bass has also held other
executive positions within Autodesk. Mr. Bass served on the boards of directors of McAfee, Inc., from
January 2008 until it was acquired by Intel Corporation in February 2011, and E2open, Inc. from July
2011 until it was acquired by Insight Venture Partners in April 2014.
Mr. Beveridge is the non-executive Chairman of the Board. From April 2006 until January 2010, Mr.
Beveridge served as Executive Vice President and Chairman EMEA, APAC and the Americas of Sun
Microsystems, Inc. From March 1985 to December 1990 and from March 2000 to April 2006, Mr.
Beveridge held other positions at Sun Microsystems, including Executive Vice President and Chief
Human Resources Officer. From January 1991 to March 2000, Mr. Beveridge served as the Chief
Executive Officer of Scottish Enterprise. Before joining Sun Microsystems in 1985, he held HR
management positions in the United States and Europe with Hewlett-Packard, Digital Equipment
Corporation and Analog Devices Inc. Mr. Beveridge has served as a non-executive board member of
iomart Group plc since September 2011.
Mr. Dawson is the founder of IDI Associates, a private investment bank specializing in Latin America, and
served as Chairman of its board of directors from September 1986 to December 2012. From 1975 to
1984 he held positions at Crocker National Bank, including serving as president and a member of the
board from 1980 to 1984. Prior to joining Crocker, Mr. Dawson was with The First National Bank of
Chicago for 14 years. Mr. Dawson has been chairman of Albina Community Bank since October 2013.
Mr. Georgens has served as the Chief Executive Officer and President of NetApp, Inc., a provider of data
management solutions, since August 2009, and as a member of its board of directors since March 2008.
Mr. Georgens joined NetApp in October 2005 as Executive Vice President and General Manager of
Enterprise Storage Systems. He served as Executive Vice President of Product Operations from January
2007 through February 2008, and as President and Chief Operating Officer from February 2008 to August
2009. From 1996 to 2005, Mr. Georgens served in various roles at LSI Corporation, an electronics design
company, and its subsidiaries, including as Chief Executive Officer of Engenio, President of LSI Logic
Storage Systems, and Executive Vice President of LSI Logic. Prior to LSI, Mr. Georgens spent 11 years
at EMC Corporation, a computer storage and data management company, in a variety of engineering and
marketing positions. Mr. Georgens has been a member of the boards of directors of NetApp since March
2008 and Electronics for Imaging since April 2008.
Dr. Halvorsen has served as Chief Innovation Officer and Senior Vice President of Intuit Inc. since
January 2009. Previously, he served as Intuit's Chief Technology Innovation Officer from 2006 to 2007
and Chief Technology Officer from 2007 to 2008. He was Vice President and Director of the Solutions
and Services Research Center at HPLabs from 2000 to 2005. Prior to holding these positions, Dr.
Halvorsen was a laboratory director at the Xerox Palo Alto Research Center (Xerox PARC), where he
worked for 17 years. Dr. Halvorsen has been a member of the board of directors of Iron Mountain
Incorporated since September 2009.
Ms. McDowell served as Executive Vice President in charge of Nokia's Mobile Phones unit from July
2010 to July 2012. Previously, Ms. McDowell served as Executive Vice President and Chief Development
Officer of Nokia Corporation from January 2008 to July 2010, and as Executive Vice President and
General Manager of Enterprise Solutions of Nokia from January 2004 to December 2007. Prior to joining
Nokia in 2004, Ms. McDowell spent 17 years in various executive, managerial and other positions at
Compaq Computer Corporation and Hewlett-Packard Company, including serving as Senior Vice
President, Industry-Standard Servers of Hewlett-Packard. Ms. McDowell has served as a director of UBM
plc since August 2014 and Bazaarvoice, Inc. since December 2014. Ms. McDowell previously served as a
director of NAVTEQ Corporation from July 2008 until July 2010.
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PART II — PROSPECTUS
Ms. Norrington has over 30 years of operating experience in technology, software, and internet
businesses. Ms. Norrington currently serves as an adviser and in an Operating Partner capacity for Lead
Edge Capital. Lead Edge is a growth equity firm that partners with world-class entrepreneurs and
exceptional technology businesses. Ms. Norrington served as President of eBay Marketplaces from July
2008 to September 2010. Previously, she served in a number of senior management roles at eBay from
July 2006 until June 2008. Prior to joining eBay, Ms. Norrington served from June 2005 to July 2006 as
President and CEO of Shopping.com, Inc., an online shopping comparison site. Prior to joining
Shopping.com, Ms. Norrington served from August 2001 to January 2005, initially as Executive Vice
President of small business, and later in the office of the CEO, at Intuit Inc., a business and financial
management software company. Prior to joining Intuit, Ms. Norrington served in a variety of executive
positions at General Electric Corporation over a twenty-year period, working in a broad range of industries
and businesses. Ms. Norrington has served on the boards of directors of DIRECTV since February 2011
and HubSpot since September 2013. Previously, she served on the boards of directors of Lucasfilm, from
June 2011 until it was acquired by Disney in December 2012; McAfee, Inc. from December 2009 until it
was acquired by Intel in February 2011; and Shopping.com from November 2004 until it was acquired by
eBay in August 2005.
Ms. Rafael has over 30 years of executive financial experience in the technology industry. Ms. Rafael
served as Principal Accounting Officer of Apple Inc. from January 2008 to October 2012, and as its Vice
President and Corporate Controller from August 2007 until October 2012. From April 2002 to September
2006, Ms. Rafael served as Vice President, Corporate Controller and Principal Accounting Officer of
Cisco Systems, Inc., and held the position of Vice President, Corporate Finance for Cisco Systems from
September 2006 to August 2007. From December 2000 to April 2002, Ms. Rafael was the Executive Vice
President, Chief Financial Officer, and Chief Administrative Officer of Aspect Communications, Inc., a
provider of customer relationship portals. From April 2000 to November 2000, Ms. Rafael was Senior
Vice-President and CFO of Escalate, Inc., an enterprise e-commerce application service provider. From
1994 to 2000, Ms. Rafael held a number of senior positions at Silicon Graphics International Corp.
(“SGI”), culminating her career at SGI as Senior Vice President and Chief Financial Officer. Prior to SGI,
Ms. Rafael held senior management positions in finance with Sun Microsystems, Inc. and Apple
Computers. Ms. Rafael began her career with Arthur Young & Company. Ms. Rafael has served on the
board of directors of Echelon Corporation since November 2005 and GoDaddy Inc. since May 2014, and
previously served on the board of directors of PalmSource, Inc.
Mr. Smith has served as the Senior Vice President and Chief Financial Officer of Intel Corporation since
January 2010. Mr. Smith joined Intel in 1988; became Vice President of Sales and Marketing in 2002;
was appointed Vice President, Finance and Enterprise Services, and Chief Information Officer in May
2004; was appointed Vice President, Assistant Chief Financial Officer in March 2006; and in October
2007 was appointed Vice President, Chief Financial Officer. Mr. Smith has served as a director of Virgin
America since February 2014, and previously served as a director of Gevo, Inc. from June 2010 to June
2014.
Mr. West is a founder and partner of Emerging Company Partners, LLC, a technology consulting firm
formed in January 2004. Mr. West served as Chief Operating Officer of nCUBE Corporation, a provider of
on-demand media systems, from December 2001 to July 2003. Prior to joining nCUBE, he was the
President and Chief Executive Officer of Entera, Inc. from September 1999 until it was acquired in
January 2001. From June 1996 to September 1999, he was President and Chief Executive Officer of
Hitachi Data Systems. Prior to that, Mr. West was president of the Infotainment Business Unit at
Electronic Data Systems Corporation from November 1984 to June 1996. Mr. West has served as a
director of Cisco Systems, Inc. since April 1996.
7.2
Executive Officers as of June 10, 2015
Name
Carl Bass
Age*
57
Position
President and Chief Executive Officer
45
PART II — PROSPECTUS
Name
Age*
Position
R. Scott Herren
53
Senior Vice President and Chief Financial Officer
Jan Becker
62
Senior Vice President, Human Resources and Corporate Real
Estate
Steve M. Blum
50
Senior Vice President, Worldwide Sales and Services
Pascal W. Di Fronzo
50
Senior Vice President, General Counsel and Secretary
*
Ages and bios are as of March 18, 2015.
Mr. Bass - For information about Mr. Bass, please refer to Section 7.1 above.
Mr. Herren joined Autodesk in November 2014 and serves as Senior Vice President and Chief Financial
Officer. Prior to joining Autodesk, Mr. Herren was the Senior Vice President of Finance for Citrix Systems,
Inc. from September 2011 to October 2014 where he led the company’s finance, accounting, tax,
treasury, investor relations, real estate, and facilities teams. From March 2000 to September 2011, Mr.
Herren held a variety of leadership positions at Citrix including Vice President and Managing Director for
EMEA and Vice President and General Manager of the Virtualization Systems Group. Prior to Citrix, Mr.
Herren served at FedEx Corporation as Vice President, Financial Planning. Prior to FedEx, he spent 13
years at International Business Machines Corporation in senior financial positions.
Ms. Becker joined Autodesk in September 1992 and has served as Senior Vice President, Human
Resources and Corporate Real Estate since June 2000. Ms. Becker previously served in other capacities
in the Human Resources Department at Autodesk. Prior to joining Autodesk, Ms. Becker held a variety of
senior management positions at Sun Microsystems. Prior to Sun Microsystems, Ms. Becker worked both
domestically and internationally at a number of high-tech organizations, including Activision, Digital
Equipment Corporation, and Hewlett-Packard Company.
Mr. Blum joined Autodesk in January 2003 and has served as Senior Vice President, Worldwide Sales
and Services since February 2011. From January 2003 to February 2011, he served as Senior Vice
President of Americas Sales. Prior to this position, Blum was Executive Vice President of Sales and
Account Management for Parago, Inc. Blum also held positions at Mentor Graphics, most recently serving
as Vice President of America's sales. Before joining Mentor Graphics, he held engineering and sales
positions at NCR Corporation and Advanced Micro Devices.
Mr. Di Fronzo joined Autodesk in June 1998 and has served as Senior Vice President, General Counsel
and Secretary since March 2007. From March 2006 to March 2007, Mr. Di Fronzo served as Vice
President, General Counsel and Secretary, and served as Vice President, Assistant General Counsel and
Assistant Secretary from March 2005 through March 2006. Previously, Mr. Di Fronzo served in other
business and legal capacities in our Legal Department. Prior to joining Autodesk, he advised high
technology and emerging growth companies on business and intellectual property transactions and
litigation while in private practice.
There is no family relationship among any of our directors or executive officers.
7.3
Fraudulent Offences and Bankruptcy, Etc.
For at least the previous five years, none of the directors or executive officers of Autodesk has:
(a)
been convicted in relation to fraudulent offenses;
(b)
been associated with any bankruptcies, receiverships or liquidations when acting in their
capacity of directors or executive officers of Autodesk; or
46
PART II — PROSPECTUS
(c)
7.4
been subject to any official public incrimination and/or sanctions by statutory or regulatory
authorities (including designated professional bodies) or ever been disqualified by a court
from acting as a member of the administrative, management or supervisory bodies of an
issuer or from acting in the management or conduct of the affairs of any issuer.
Conflicts of Interest
Independence of the Board
As required by applicable NASDAQ listing standards, a majority of the members of our Board qualify as
“independent.” The Board has determined that, with the exception of Carl Bass, our President and Chief
Executive Officer, all of its members are “independent directors” as that term is defined by applicable
NASDAQ listing standards. That definition includes a series of objective tests, including that the director is
not an employee of the company and has not engaged in various types of business dealings with the
company. In addition, as further required by applicable NASDAQ listing standards, the Board has made a
subjective determination as to each independent director that no relationships exist that would interfere
with the exercise of independent judgment in carrying out the responsibilities of a director. In making its
independence determinations, the Board considered that Messrs. Smith and Georgens are executive
officers at entities that have arms-length, ordinary course commercial relationships with Autodesk and
that amounts paid or received by those entities for products or services in fiscal 2015 were not material.
The Board determined that the foregoing relationships would not interfere with the exercise of
independent judgment by Messrs. Smith and Georgens in carrying out their responsibilities as directors.
The independent directors meet regularly in executive session, without executive officers present, as part
of the quarterly meeting procedure.
Perquisites and Other Personal Benefits
Autodesk does not, as a general practice, provide material benefits or special considerations to the
executive officers that it does not provide to other employees. However, from time to time, when deemed
appropriate by the Committee, certain executive officers receive perquisites and other personal benefits
that are competitively prudent or otherwise in Autodesk’s best interest. In fiscal 2015, we provided Mr.
Herren with certain living expenses due to the distance (at the time we hired him) between his home and
the Company’s headquarters. The amount of those reimbursements was based on actual costs incurred
by Mr. Herren, and was consistent with market practice when hiring senior executives in this situation.
Please see “Executive Compensation-Summary Compensation Table and Narrative Disclosure,” on page
56 of Autodesk's Definitive Proxy Statement, filed with the SEC on April 29, 2015 ("Autodesk’s Proxy
Statement") for the aggregate amount of such perquisites.
Offer Letter with the CFO
Mr. Herren was appointed Senior Vice President and Chief Financial Officer effective November 1, 2014.
The terms and conditions of his employment are set forth in a written offer letter. Based on a
recommendation from management and in consultation with Exequity, the following offer was reviewed
and approved by the Committee:
•
Annual base salary of $570,000.
•
Eligibility to participate in the Autodesk Executive Incentive Plan, with his target set at 75% of his
base salary.
•
Signing bonus of $150,000. The bonus is subject to repayment if Mr. Herren resigns at any time
within one year following the commencement of his employment.
47
PART II — PROSPECTUS
•
36,000 RSUs and 36,000 PSUs. The PSUs were granted in March 2015, when performance
objectives were established for fiscal 2016.
•
Relocation assistance, including commuting benefits for 18 months, a relocation allowance, and
home sale and purchase assistance.
The Committee believes that Mr. Herren’s compensation package was necessary to recruit him because
it offset compensation he forfeited upon leaving his prior employer.
Change-in-Control Arrangements and Employment Agreements
In an effort to ensure the continued service of our key executive officers in the event of a change-incontrol, each of our current executive officers, among other employees, participate in an amended and
restated Executive Change in Control Program (the “Program”) that was approved by the Board in March
2006 and amended most recently in September 2013. Mr. Bass has a change-in-control provision in his
employment agreement, as noted below.
Executive Change in Control Program
Under the terms of the Program, if, within sixty days prior or twelve months following a “change in
control,” an executive officer who participates in the Program is terminated without “cause,” or voluntarily
terminates his or her employment for “good reason” (as those terms are defined in the Program), the
executive officer will receive (among other benefits), following execution of a release and non-solicit
agreement:
•
An amount equal to one and one-half times the sum of the executive officer’s annual base
compensation and average annual bonus, plus the executive officer’s pro-rata bonus, provided
the Company bonus targets are satisfied, payable in a lump sum;
•
Acceleration of all of the executive officer’s outstanding incentive equity awards, including stock
options and RSUs; and
•
Reimbursement of the total applicable premium cost for medical and dental coverage for the
executive officer and his or her eligible spouse and dependents until the earlier of 18 months from
the date of termination or when the executive officer becomes covered under another employer’s
employee benefit plans.
•
An executive officer who is terminated for any other reason will receive severance or other
benefits only to the extent the executive would be entitled to receive them under our then-existing
benefit plans and policies. If the benefits provided under the Program constitute parachute
payments under Section 280G of the Code and are subject to the excise tax imposed by Section
4999 of the Code, then such benefits will be (1) delivered in full, or (2) delivered to such lesser
extent that would result in no portion of the benefits being subject to the excise tax, whichever
results in the executive officer receiving the greatest amount of benefits.
As defined in the Program, a “change in control” occurs if any person acquires 50% or more of the total
voting power represented by voting securities, if Autodesk sells all or substantially all its assets, if
Autodesk merges or consolidates with another corporation, or if the composition of the Board changes
substantially.
Employment Agreement with Carl Bass
In March 2013, Autodesk entered into an amended and restated employment agreement with Carl Bass
that provides for, among other things, certain payments and benefits to be provided to Mr. Bass in the
event his employment is terminated without “cause” or he resigns for “good reason,” including in
48
PART II — PROSPECTUS
connection with a “change of control” or following the completion of a Board-requested executive
“transition period,” as each such term is defined in Mr. Bass's employment agreement.
In the event Mr. Bass's employment is terminated by Autodesk without cause or if Mr. Bass resigns for
good reason, and such termination is not in connection with a change of control, Mr. Bass will receive (i)
payment of 200% of his then current base salary for 12 months; (ii) payout of his pro-rata bonus for the
fiscal year in which termination occurs, provided Autodesk bonus targets are satisfied, to be paid in one
lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting of all of his
then-outstanding, unvested equity awards (other than any awards that vest in whole or in part based on
performance); (iv) with respect to his then outstanding unvested equity awards that vest in whole or in
part based on performance, those awards will vest, as if he had remained continuously employed by
Autodesk through the end of the 12-month performance period in which his employment is terminated,
based on the extent, if any, that the underlying performance criteria for those awards are satisfied for that
performance period; (v) a period of not less than 12 months to exercise any vested stock options that
were granted to Mr. Bass on or after February 2, 2009 (provided that such options shall expire, if earlier,
on the date when they would have expired if his employment had not terminated); and (vi) reimbursement
for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier
of 12 months following termination or the date Mr. Bass becomes covered under similar health plans. In
addition, Mr. Bass is subject to non-solicitation and non-competition covenants for 12 months following a
termination that gives rise to the severance benefits discussed above.
If, in connection with a change of control, Mr. Bass's employment is terminated by Autodesk without
cause or if Mr. Bass resigns for good reason, Mr. Bass will receive (i) a lump sum payment in an amount
equal to 200% of his then current annual base salary and average annual bonus; (ii) payout of his prorata bonus for the fiscal year of Autodesk in which termination occurs provided Autodesk bonus targets
are satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully
accelerated vesting of all of his then outstanding unvested equity awards, including awards that would
otherwise vest only upon satisfaction of performance criteria; (iv) a period of not less than twelve (12)
months to exercise any vested stock options that were granted to Mr. Bass by Autodesk on or after
February 2, 2009 (provided that such options shall expire, if earlier, on the date when they would have
expired if his employment had not terminated); and (v) reimbursement for premiums paid for continued
health benefits for Mr. Bass and his eligible dependents until the earlier of 18 months following
termination or the date Mr. Bass becomes covered under similar health plans.
Potential Payments Upon Termination or Change in Control
The tables on pages 64 - 67 of Autodesk's Proxy Statement list the estimated amount of compensation
payable to each of the named executive officers in the event of voluntary termination, involuntary not-forcause termination, for cause termination, termination following a change in control, and termination in the
event of disability or death of the executive. The amounts shown for all named executive officers assume
that such termination was effective as of January 31, 2015, and include all components of compensation,
benefits and perquisites payable under the Executive Change in Control Program effective during the
2015 fiscal year or, in the case of Mr. Bass, pursuant to his employment agreement, discussed above.
Estimated amounts for share-based compensation are based on the closing price of our Shares on the
NASDAQ on Friday, January 30, 2015, which was $54.01 per share. The actual amounts for all named
executive officers to be paid out can only be determined at the time of such executive’s separation. Mr.
Hawkins resigned from Autodesk effective July 31, 2014 and was not eligible for compensation in
connection with the termination of his employment.
Review, Approval or Ratification of Related Person Transactions
Autodesk's Related Party Transactions Policy states that all transactions between or among Autodesk
and its wholly-owned subsidiaries and any Related Party, as defined in the Policy, requires the prior
written approval of the Chief Financial Officer. Non-routine transactions with vendors and suppliers to
Autodesk and its wholly-owned subsidiaries require the prior written approval of the Corporate Controller.
In addition, in accordance with our Code of Business Conduct and the charter for the Audit Committee,
49
PART II — PROSPECTUS
our Audit Committee reviews and approves in advance any proposed “related person” transactions. Any
related person transaction will be disclosed in an SEC filing as required by the rules of the SEC. For
purposes of these procedures, “related person” and “transaction” have the meanings contained in Item
404 of Regulation S-K.
VIII.
EMPLOYEES
8.1
Directors' and Executive Officers' Holdings of Shares and Options
The following table sets forth certain information concerning the beneficial ownership of the Shares as of
March 31, 2015, for each of Autodesk’s directors (including the nominees for directors), each of the
named executive officers, and all directors and executive officers as a group.
Common Stock
Beneficially
Owned (2)
Directors and Officers (1)
Non-Employee Directors:
Crawford W. Beveridge (4)
J. Hallam Dawson (5)
Tom Georgens
Per-Kristian Halvorsen (6)
Mary T. McDowell (7)
Lorrie M. Norrington (8)
Betsy Rafael
Stacy J. Smith (9)
Steven M. West
Named Executive Officers:
Carl Bass (10)
R. Scott Herren (11)
Steven M. Blum (12)
Pascal W. Di Fronzo (13)
Jan Becker
Mark J. Hawkins
All directors and executive officers as a group (14 individuals) (14)
*
Percentage
Beneficially
Owned (3)
73,773
83,936
8,308
57,052
67,533
61,378
—
71,864
24,905
*
*
*
*
*
*
*
*
*
584,799
—
103,374
35,390
55,167
—
1,227,479
*
*
*
*
*
*
*
Represents less than one percent (1%) of the outstanding Shares.
(1)
Unless otherwise indicated in their respective footnote, the address for each listed person is c/o Autodesk, Inc., 111 McInnis
Parkway, San Rafael, California 94903, U.S.A.
(2)
The number and percentage of Shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under Rule 13d-3, beneficial ownership includes any Shares the individual or entity has the
right to acquire within 60 days of March 31, 2015, through the exercise of any stock option or other right. Unless otherwise
indicated in the footnotes, each person or entity has sole voting and investment power (or shares such powers with his or her
spouse) with respect to the Shares shown as beneficially owned.
(3)
The total number of Shares outstanding as of March 31, 2015, was 229,123,864.
(4)
Includes 40,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(5)
Includes 40,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(6)
Includes 35,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(7)
Includes 45,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(8)
Includes 50,000 Shares subject to options exercisable within 60 days of March 31, 2015.
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PART II — PROSPECTUS
(9)
Includes 50,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(10) Includes 300,000 Shares subject to options exercisable within 60 days of March 31, 2015. Includes 90,057 Shares held by an
irrevocable trust, as to which Mr. Bass holds sole voting rights, but no dispositive rights, as special voting trustee. Mr. Bass
disclaims beneficial ownership of the Shares held in trust except to the extent of his pecuniary interest.
(11) Upon commencement of his employment on November 3, 2014, Mr. Herren was granted 36,000 RSUs, none of which vest
within 60 days of March 31, 2015.
(12) Includes 50,000 Shares subject to options exercisable within 60 days of March 31, 2015.
(13) Includes 6,875 Shares subject to options exercisable within 60 days of March 31, 2015.
(14) Includes 616,875 Shares subject to options exercisable, and RSUs that vest, within 60 days of March 31, 2015.
8.2
Stock Plans
Stock Plans
As of July 31, 2015, Autodesk maintained two active stock plans for the purpose of granting equity
awards to employees and to non-employee members of the Board: the 2012 Employee Stock Plan (“2012
Employee Plan”), which is available only to employees, and the Autodesk 2012 Outside Directors’ Plan
(“2012 Directors' Plan”), which is available only to non-employee directors. Additionally, there are two
expired or terminated plans with options outstanding. The exercise price of all stock options granted
under these plans was equal to the fair market value of the stock on the grant date.
The 2012 Employee Plan was approved by Autodesk's stockholders and became effective on January 6,
2012. On June 10, 2015, Autodesk's stockholders approved an amendment to the 2012 Employee Plan,
which increased the number of Shares reserved for issuance under the plan by 12.5 million Shares. The
2012 Employee Plan replaced the 2008 Employee Stock Plan, as amended ("2008 Plan"), and no further
equity awards may be granted under the 2008 Plan. The 2012 Employee Plan reserves up to 45.1 million
Shares, which includes 39.1 million Shares reserved under the 2012 Employee Plan, as well as up to 6.0
million Shares forfeited under certain prior employee stock plans during the life of the 2012 Employee
Plan. The 2012 Employee Plan permits the grant of stock options, restricted stock units and restricted
stock awards. Each restricted stock unit or restricted stock award granted will be counted against the
Shares authorized for issuance under the 2012 Employee Plan as 1.79 Shares. If a granted option,
restricted stock unit or restricted stock award expires or becomes unexercisable for any reason, the
unpurchased or forfeited Shares that were granted may be returned to the 2012 Employee Plan and may
become available for future grant under the 2012 Employee Plan. As of July 31, 2015, 23.9 million Shares
subject to options or restricted stock unit awards have been granted under the 2012 Employee Plan.
Options and restricted stock units that were granted under the 2012 Employee Plan vest over periods
ranging from immediately upon grant to over a three-year period and options expire 10 years from the
date of grant. The 2012 Employee Plan will expire on June 30, 2022. At July 31, 2015, 23.3 million
Shares were available for future issuance under the 2012 Employee Plan.
The 2012 Directors' Plan was approved by Autodesk's stockholders and became effective on January 6,
2012. The 2012 Directors' Plan replaced the 2010 Outside Directors' Stock Plan, as amended. The 2012
Directors' Plan permits the grant of stock options, restricted stock units and restricted stock awards to
non-employee members of the Board. Each restricted stock unit or restricted stock award granted will be
counted against the Shares authorized for issuance under the 2012 Directors' Plan as 2.11 Shares. As of
July 31, 2015, 0.7 million Shares subject to restricted stock units have been granted under the 2012
Directors' Plan. Restricted stock units that were granted under the 2012 Directors' Plan vest over one to
three years from the date of grant. On March 12, 2015, the Board reduced the number of Shares
reserved for issuance under the 2012 Directors' Plan by 0.9 million Shares, so that 1.7 million Shares are
now reserved for issuance under the 2012 Directors' Plan. The 2012 Directors' Plan will expire on
June 30, 2022. At July 31, 2015, 1.1 million Shares were available for future issuance under the 2012
Directors' Plan.
51
PART II — PROSPECTUS
The following sections summarize activity under Autodesk’s stock plans.
Stock Options:
A summary of stock option activity for the six months ended July 31, 2015 is as follows:
Number of
Shares
Weighted average
exercise price per share
Weighted
average remaining
contractual term
Aggregate Intrinsic
Value (2)
(in years)
(in millions)
(in millions)
Options outstanding at
January 31, 2015
Granted (1)
Exercised
Canceled/Forfeited
Options outstanding at July 31,
2015
2.7
—
(0.6)
—
$
34.46
—
32.53
—
2.1
$
35.07
3.9 $
32.1
Options vested and exercisable at
July 31, 2015
2.1
$
35.10
3.9 $
32.0
Options available for grant at July
31, 2015
24.4
_______________
(1)
Autodesk did not grant stock options in the six months ended July 31, 2015.
(2)
Represents the total pre-tax intrinsic value, based on Autodesk’s closing stock price of $50.58 per share as of July 31, 2015,
which would have been received by the option holders had all option holders exercised their options as of that date.
As of July 31, 2015, compensation cost related to stock options has been fully recognized.
The following table summarizes information about the pre-tax intrinsic value of options exercised and the
weighted average grant date fair value per share of options granted during the three and six months
ended July 31, 2015 and 2014:
Three Months Ended
July 31,
2015
Pre-tax intrinsic value of options exercised (1)
$
3.6
Six Months Ended
July 31,
2014
$
2015
21.4
$
17.4
2014
$
44.2
_______________
(1)
The intrinsic value of options exercised is calculated as the difference between the exercise price of the option and the market
value of the stock on the date of exercise.
The following table summarizes information about options outstanding and exercisable at July 31, 2015:
Options Vested and Exercisable
Number of
Shares
(in millions)
Range of pershare exercise
prices:
$12.31 $29.49
$29.50 $41.62
0.7
0.9
Weighted
average
contractual
life
(in years)
Weighted
average
exercise
price
$
Options Outstanding
Aggregate
intrinsic
value (1)
(in millions)
Number of
Shares
(in millions)
24.05
0.7
39.68
0.9
52
Weighted
average
contractual
life
(in years)
Weighted
average
exercise
price
$
24.10
39.67
Aggregate
intrinsic
value (1)
(in millions)
PART II — PROSPECTUS
Options Vested and Exercisable
Number of
Shares
(in millions)
$42.39 $43.81
0.5
2.1
Weighted
average
contractual
life
(in years)
Weighted
average
exercise
price
3.9 $
Options Outstanding
Aggregate
intrinsic
value (1)
(in millions)
43.80
35.10 $
32.0
Number of
Shares
(in millions)
0.5
2.1
Weighted
average
contractual
life
(in years)
Weighted
average
exercise
price
3.9 $
Aggregate
intrinsic
value (1)
(in millions)
43.80
35.07 $
32.1
_______________
(1)
Represents the total pre-tax intrinsic value, based on Autodesk’s closing stock price of $50.58 per share as of July 31, 2015,
which would have been received by the option holders had all option holders exercised their options as of that date.
These options will expire if not exercised at specific dates ranging through September 2022.
Restricted Stock Units:
A summary of restricted stock unit activity for the six months ended July 31, 2015 is as follows:
Weighted
average grant
date fair value
per share
Unvested
Restricted
Stock Units
(in thousands)
Unvested restricted stock units at January 31, 2015
Granted
Vested
Canceled/Forfeited
Performance Adjustment (1)
Unvested restricted stock units at July 31, 2015
7,801.3
1,118.5
(1,584.4)
(224.4)
34.6
$
48.46
59.47
41.98
48.47
54.92
7,145.6
$
51.24
_______________
(1)
Based on Autodesk's financial results for fiscal 2015, 2014 and 2013 performance period. The performance stock units were
earned at 113.8%, 65.8%, and 92.3% of the target award, respectively. The vesting of the 2013 performance stock units was
subject to the holders satisfying the remaining service condition of the awards, which ended in March 2015.
For the restricted stock units granted during the six months ended July 31, 2015 and 2014, the weighted
average grant date fair value was $59.47 and $50.85, respectively. The fair value of the Shares vested
during the six months ended July 31, 2015 and 2014 was $93.4 million and $73.4 million, respectively.
During the six months ended July 31, 2015, Autodesk granted 0.7 million restricted stock units. The
restricted stock units vest over periods ranging from immediately upon grant to a pre-determined date that
is typically within three years from the date of grant. Restricted stock units are not considered outstanding
stock at the time of grant, as the holders of these units are not entitled to any of the rights of a
stockholder, including voting rights. The fair value of the restricted stock units is primarily expensed
ratably over the vesting period. Autodesk recorded stock-based compensation expense related to
restricted stock units of $28.0 million and $65.8 million during the three and six months ended July 31,
2015, respectively. Autodesk recorded stock-based compensation expense related to restricted stock
units of $28.0 million and $50.9 million during the three and six months ended July 31, 2014, respectively.
As of July 31, 2015, total compensation cost not yet recognized of $198.1 million related to non-vested
restricted stock units is expected to be recognized over a weighted average period of 1.6 years. At
July 31, 2015, the number of restricted stock units granted but unvested was 6.3 million.
During the six months ended July 31, 2015, Autodesk granted 0.4 million performance restricted stock
units (“PSUs”) for which the ultimate number of Shares earned is determined based on the achievement
of performance criteria at the end of the stated service and performance period. The performance criteria
for these grants are based upon billings and subscriptions goals adopted by the Compensation and
53
PART II — PROSPECTUS
Human Resource Committee, as well as total stockholder return compared against the S&P Computer
Software Select Index (“Relative TSR”). Each PSU covers a three year period:
•
Up to one third of the PSUs may vest following year one, depending upon the achievement of the
billings and subscriptions goals for year one as well as 1-year Relative TSR (covering year one).
•
Up to one third of the PSUs may vest following year two, depending upon the achievement of the
billings and subscriptions goals for year two as well as 2-year Relative TSR (covering years one
and two).
•
Up to one third of the PSUs may vest following year three, depending upon the achievement of
the billings and subscriptions goals for year three as well as 3-year Relative TSR (covering years
one, two and three).
PSUs are not considered outstanding stock at the time of grant, as the holders of these units are not
entitled to any of the rights of a stockholder, including voting rights. Autodesk has determined the grantdate fair value for these awards using a Monte Carlo simulation model since the awards are subject to a
market condition. The fair value of the PSUs is expensed using the accelerated attribution over the
vesting period. Autodesk recorded stock-based compensation expense related to PSUs of $5.9 million
and $11.5 million for the three and six months ended July 31, 2015, respectively. Autodesk recorded
stock-based compensation expense related to PSUs of $4.8 million and $7.8 million during the three and
six months ended July 31, 2014, respectively. As of July 31, 2015, total compensation cost not yet
recognized of $15.8 million related to non-vested performance restricted stock units, is expected to be
recognized over a weighted average period of 1.3 years. At July 31, 2015, the number of PSUs granted
but not vested was 0.8 million.
1998 Employee Qualified Stock Purchase Plan
Under Autodesk’s U.S. ESPP, which was approved by stockholders in 1998, eligible employees may
purchase Shares at their discretion using up to 15% of their eligible compensation subject to certain
limitations, at no less than 85% of fair market value as defined in the U.S. ESPP. At July 31, 2015, a total
of 39.6 million Shares were available for future issuance. This amount automatically increases on the first
trading day of each fiscal year by an amount equal to the lesser of 10.0 million Shares or 2% of the total
of (1) outstanding Shares plus (2) any Shares repurchased by Autodesk during the prior fiscal year.
Under the U.S. ESPP, the Company issues Shares on the first trading day following March 31 and
September 30 of each fiscal year. The U.S .ESPP expires during fiscal 2018.
Autodesk issued 1.1 million Shares under the U.S. ESPP during the six months ended July 31, 2015, with
an average price of $36.91 per share. During the six months ended July 31, 2014, Autodesk issued 1.1
million Shares under the U.S. ESPP, at an average price of $33.66 per share. The weighted average
grant date fair value of awards granted under the U.S. ESPP was $15.99 during the six months ended
July 31, 2015, calculated as of the award grant date using the Black-Scholes Merton (“BSM") option
pricing model. The weighted average grant date fair value of awards granted under the U.S. ESPP during
the six months ended July 31, 2014, calculated as of the award grant date using the BSM option pricing
model, was $14.26 per share.
IX.
WORKING CAPITAL STATEMENT
Based on its current business plan and revenue prospects, Autodesk believes that its existing balances,
its anticipated cash flows from operations and its available credit facility will be sufficient to meet its
working capital and operating resource expenditure requirements for at least the next 12 months.
54
PART II — PROSPECTUS
X.
SELECTED FINANCIAL INFORMATION
10.1
Selected Financial Data
The selected consolidated financial data of Autodesk set out in this prospectus have been prepared in
accordance with U.S. GAAP. The following selected consolidated statements of operations data for the
years ended January 31, 2015, 2014 and 2013 and selected consolidated balance sheets data at January
31, 2015 and 2014 are derived from the Company’s audited consolidated financial statements contained
on pages 58 – 99 of Autodesk’s Form 10-K. The selected consolidated balance sheet data at January
31, 2013 are derived from Autodesk’s audited consolidated financial statements for the fiscal year ended
January 31, 2014, contained on pages 57 – 94 of the Company’s Annual Report on Form 10-K for the
fiscal year ended January 31, 2014, filed with the SEC on March 10, 2014, which is available, free of
charge, on the websites of the Company and the SEC. The following selected condensed consolidated
statements of operations data for the three and six months ended July 31, 2015 and 2014 and condensed
consolidated balance sheet data at July 31, 2015 are derived from Autodesk’s unaudited condensed
consolidated financial statements contained on pages 3 – 26 of Autodesk’s Form 10-Q.
SELECTED THREE-YEAR CONSOLIDATED FINANCIAL DATA
(In millions, except per share data)
2015
For the Fiscal Year:
Net revenue
Income from operations
Net income
Cash flow from operations
Common Stock Data:
Basic net income per share
Diluted net income per share
Dividends paid per share
At Year End:
Total assets(1)
Long-term liabilities(1)
Stockholders’ equity
Fiscal year ended January 31,
2014
2013
$
2,512.2
120.7
81.8
708.1
$
2,273.9
284.8
228.8
563.5
$
2,312.2
305.9
247.4
559.1
$
0.36
0.35
—
$
1.02
1.00
—
$
1.09
1.07
—
$
4,913.8
1,294.5
2,219.2
$
4,595.0
1,262.0
2,261.5
$
4,308.4
1,221.5
2,043.2
(1) These numbers do not reflect the early adoption of ASU 2015-03 Autodesk took during the second quarter of fiscal 2016 that
retrospectively adjusted these balances.
SELECTED QUARTERLY CONDENSED CONSOLIDATED FINANCIAL DATA
(In millions, except per share data - Unaudited)
Condensed Consolidated Statements of Operations Data:
Three Months Ended July 31,
2015
2014
Total net revenue
Total operating expenses
Income from operations
Net (loss) income
Basic net (loss) income per share
$
609.5 $
512.2
4.3
(235.5 )
(1.04 )
55
637.1
499.3
49.9
31.3
0.14
Six Months Ended July 31,
2015
2014
$
1,256.0 $
1,045.4
25.8
(216.4)
(0.95)
1,229.6
970.9
92.1
59.6
0.26
PART II — PROSPECTUS
Three Months Ended July 31,
2015
2014
Diluted net (loss) income per share
(1.04 )
Six Months Ended July 31,
2015
2014
0.13
(0.95)
0.26
Condensed Consolidated Balance Sheets Data:
July 31, 2015
Cash, cash equivalents and marketable securities
Total assets
Total current liabilities
Long-term liabilities
Total stockholders' equity
10.2
$
$
$
$
$
2,952.4
5,341.8
1,313.8
2,125.9
1,902.1
January 31, 2015
$
$
$
$
$
2,299.4
4,913.8
1,400.1
1,294.5
2,219.2
Independent Registered Public Accounting Firm
Autodesk's independent registered public accounting firm is Ernst & Young LLP, San Francisco,
California, U.S.A. Ernst & Young LLP is registered with the Public Company Accounting Oversight Board
(United States) and is a member of the American Institute of Certified Public Accountants.
XI.
DOCUMENTS ON DISPLAY
Autodesk's internet address is www.autodesk.com. Autodesk's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished
pursuant to Sections 13(a) and 15(d) of the Exchange, are available free of charge on the Investor
Relations portion of Autodesk's web site at www.autodesk.com as soon as reasonably practicable after
the Company electronically files such material with, or furnishes it to, the SEC. All such filings are
available free of charge. All SEC filings are also available at the SEC's website at www.sec.gov.
Autodesk expects to issue, in late November 2015, its earnings release for the quarter ending October
31, 2015. The quarterly report on Form 10-Q for such quarter will be filed with the SEC no later than
December 10, 2015. The annual report on Form 10-K for the fiscal year ending January 31, 2016 will be
filed with the SEC no later than March 31, 2016. These documents will be available on the websites of
Autodesk and the SEC indicated above.
XII.
TAX CONSEQUENCES
12.1
German Tax Consequences
This discussion summarizes certain German tax consequences of participating in the ESPP. This
summary assumes the Participant is and will continue to be a resident in Germany for German tax
purposes and the Participant is a private individual and employee in Germany who acquires, holds, and
sells Shares in connection with the ESPP as private investment. This summary is based upon German
tax laws as well as administrative and judicial interpretations in effect as of October 2015. If these tax
laws, or interpretations of these laws, change in the future, possibly with retroactive effect, the information
provided in this summary may no longer be accurate. If Participant is not resident in Germany, the
information contained in this summary may not apply.
The tax consequences of options granted under the ESPP are based on complex tax laws, which may be
subject to varying interpretations, and the application of such laws may depend, in large part, on the
surrounding facts and circumstances. This discussion does not apply to every specific transaction that
may occur in connection with the ESPP. Moreover, it may not apply to Participant's particular tax or
financial situation, and we are not in a position to assure Participant of any particular tax result.
56
PART II — PROSPECTUS
Therefore, we recommend Participant consult with his or her own tax advisor regularly to determine the
consequences of taking or not taking any action concerning Participant's options, and to determine how
the tax or other laws in Germany apply to Participant's specific situation.
Enrollment in the ESPP
Participant is not subject to tax when he or she enrolls in the ESPP or the Offering Period begins.
Purchase of Shares
When Shares are purchased under the ESPP, Participant will be subject to income tax at Participant's
personal income tax rate. According to the official position of the German tax authorities, the taxable
amount will generally be the difference between the fair market value of the Shares on the date the
Shares are transferred to the Participant (generally when the Shares are credited to the Participant’s
account) and the Purchase Price (the discount). Further, Participant will be subject to solidarity surcharge
and church tax (if applicable) on the income tax owed on the discount.
Participant will also be subject to social insurance contributions on the discount to the extent Participant's
income has not exceeded the applicable annual contribution ceilings. A small tax deduction of up to €360
per calendar year may be available pursuant to Section 3 No. 39 of the German Income Tax Act provided
certain conditions are met. Participant should consult with his or her personal tax advisor for further
information regarding this deduction.
Sale of Shares
When Participant subsequently sells any Shares acquired under the ESPP, Participant may also be
subject to capital gains tax with any gain realized.
If Participant sells Shares that were acquired on or after January 1, 2009, the capital gain will be subject
to income tax at a flat rate of 25% (plus a solidarity surcharge thereon and additional church tax, if
applicable), provided that Participant does not own 1% or more of the Company's stated capital (and has
not owned 1% or more at any time in the last five years) and the Shares are not held as business assets.
The taxable amount will be the difference between the sale price and the fair market value of the Shares
at purchase, less any costs Participant incurs directly related to the sale of the Shares.
Participant may deduct € 801 (€1,602 for married couples and for partners in accordance with the
registered partnership law (Gesetz über die Eingetragene Lebenspartnerschaft filing jointly) from
Participant's total capital gains and other income from capital investments realized during the relevant tax
year.
If the flat tax rate exceeds Participant's personal income tax rate, Participant may elect an assessment in
order to have his or her personal income tax rate applied to the capital gain.
Participant will be responsible for declaring any capital gains he or she realizes upon the sale of the
Shares and paying applicable taxes due on such gains (unless Participant's Shares are held by a German
financial institution in a custodial account at the time of sale and the German financial institution withhold
the applicable taxes due on the capital gains).
If Participant realizes a capital loss from the sale of the Shares, Participant may in general deduct the loss
only from capital gains generated from the sale of Shares in the same calendar year or in subsequent
calendar years. The loss may not be deducted from other income from capital investments of the same
calendar year or subsequent calendar years.
57
PART II — PROSPECTUS
Tax Withholding and Reporting
Participant's employer will withhold and report income tax plus solidarity surcharge and church tax, if
applicable, as well as social insurance contributions (to the extent Participant's income has not already
exceeded the applicable annual contribution ceiling) when the Shares are purchased.
Depending on the Participant's personal tax situation, Participant may be required to file a tax return with
the German tax authorities on which Participant must report any income realized in connection with his or
her participation in the ESPP. If applicable, Participant is responsible for paying any difference between
Participant's actual tax liability and the amount withheld by Participant's employer.
12.2
UK Tax Consequences
This following is a summary of certain likely United Kingdom ("U.K.") tax consequences to the Participant
in connection with Shares acquired in the ESPP. This summary assumes that Participant is and will, at all
material times, continue to be resident in, and domiciled within, the U.K. only for all tax purposes and is
based upon U.K. tax laws, judicial interpretations thereof and the published practice of Her Majesty's
Revenue & Customs ("HMRC") in effect as of October 2015. If these tax laws, or interpretations of these
laws, change after that date, possibly with retrospective effect, the information provided in this summary
may no longer be accurate. This summary is limited to a general description and should not be construed
as an opinion or as specific tax advice.
The particular tax consequences for an individual will depend on his or her personal circumstances.
Therefore, we are not in a position to assure Participant of any particular tax result. We recommend
Participant consult with his or her own tax advisor regularly to determine the consequences of taking or
not taking any action concerning the Participant's participation in the ESPP, and to determine how the tax
or other laws in the U.K. apply to Participant's specific situation.
Enrollment in the ESPP
Participant is not subject to tax when he or she enrolls in the ESPP or a new purchase period begins.
Purchase of Shares
When Shares are purchased under the ESPP, Participant will be subject to income tax and employee
national insurance contributions ("NICs") on the difference between the fair market value of the Shares on
the date of purchase and the Purchase Price.
Participant's employer will calculate the income tax and employee NICs due when Shares are purchases
under the ESPP and will account for these amounts to HMRC. Participant is required to reimburse
Participant's employer for the amount accounted by it to HMRC.
Participant must reimburse his or her employer for the income tax due (in excess of the amount withheld
from Participant’s salary or covered by the sale of Shares, if any) within 90 days of end of the U.K. tax
year (April 6 to April 5) in which the Purchase Date occurs (the “Due Date”) to avoid further tax
consequences. If Participant fails to pay this amount to Participant’s employer by the Due Date, pursuant
to the terms of the ESPP for employees in the U.K., the amount of any uncollected income taxes will
constitute a loan owed by Participant to his or her employer, effective on the Due Date. The loan will bear
interest at the then-current Official Rate of HMRC, it will be immediately due and repayable, and the
Company or Participant’s employer may recover it at any time thereafter by withholding from any monies
or compensation due to Participant, including Participant’s salary. Notwithstanding the foregoing, if
Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the
U.S. Securities Exchange Act of 1934, as amended), Participant will not be eligible for such a loan to
cover Participant’s uncollected income tax liability. In the event that Participant is a director or executive
officer and Participant’s income tax liability is not collected from or paid by Participant by the Due Date,
58
PART II — PROSPECTUS
the amount of any uncollected income taxes may constitute a benefit to Participant on which additional
income tax and employee NICs may be payable. Participant will be responsible for reporting and paying
any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for
reimbursing the Company or Participant’s employer (as appropriate) for the value of any employee NICs
due on this additional benefit.
Sale of Shares
When Participant subsequently sells the Shares purchased under the ESPP, any capital gain (i.e., the
difference between the sale price and the fair market value of the Shares on the Purchase Date) will be
subject to capital gains tax. However, capital gains tax is payable only if Participant's total annual capital
gain exceeds the annual exemption amount.
Participant must consider the share identification rules when calculating his/her capital gains. Participant
should consult with his or her personal tax advisor for additional details.
Tax Withholding and Reporting
As mentioned above, Participant’s employer will report the discount as income to Participant and withhold
income tax and employee NICs due on the discount when Shares are purchased under the ESPP. It is
Participant’s responsibility to report any income from the sale of Shares and to pay any applicable taxes
due on such income.
59
EXHIBITS
60
EXHIBIT I
THE AUTODESK, INC. INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 21, 2011)
(SUB-PLAN OF THE AUTODESK, INC. 1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN, AS
AMENDED AND RESTATED)
I
AUTODESK, INC.
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
(as amended and restated effective September 21, 2011)
(Sub-Plan of the Autodesk, Inc. 1998 Employee Qualified Stock Purchase Plan, as amended and
restated)
The following constitute the provisions of the International Employee Stock Purchase Plan, as
amended and restated (herein called the “Sub-Plan”) of Autodesk, Inc. (herein called the “Company”), a
sub-plan of the Autodesk, Inc. 1998 Employee Qualified Stock Purchase Plan, as amended and restated
(herein called the “US Plan”).
1.Purpose. The Sub-Plan is intended to provide eligible Employees of the Company’s Affiliates
the opportunity to acquire a proprietary interest in the Company through the purchase of shares of the
Company’s common stock at periodic intervals with their accumulated payroll deductions or other
approved contributions. The Sub-Plan is not intended to qualify as an employee stock purchase plan under
Section 423 (b) of the U.S. Internal Revenue Code of 1986, as amended.
All provisions of this Sub-Plan shall be governed by the U.S. Plan, except as otherwise provided
herein.
The Sub-Plan became effective on the designated Effective Date.
2.
Definitions.
All definitions in the Sub-Plan shall be interpreted in accordance with the U.S. Plan
except as otherwise provided herein.
(a) “Affiliate” shall mean a corporation, partnership, joint venture or other business
entity, or branch of such business entity, domestic or foreign, of which not less than 50% of the voting
shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or an Affiliate.
(b) “Effective Date” shall mean December 6, 2007; provided, however, that any
Affiliate which extends the benefits of this Sub-Plan to its Employees after December 6, 2007, shall
designate a subsequent Effective Date with respect to its employee-Participants.
(c) “Employee” shall mean any person employed by an Affiliate.
(d) “Participant” means any Employee who meets the eligibility and participation
requirements set forth in Sections 3 and 4, below.
1
3. Eligibility. Each individual who is (a) an Employee as of the last day of the Enrollment
Period for the applicable Offering Period, and (b) employed by an Affiliate (or legal extension of an
Affiliate, such as a branch office) operating in one of the countries listed on the attached Schedule A
(which Schedule A may be amended form time to time by the Board or a committee thereof), shall be
eligible to participate in the Sub-Plan for that Offering Period.
4.
Participation.
(a) An eligible Employee may become a Participant in the Plan by completing a
subscription agreement authorizing payroll deductions or other approved contributions on the form
provided by the Company and filing it with the Company’s payroll office during the Enrollment Period
for the applicable Offering Period, unless a later or earlier time for filing the subscription agreement is set
by the Board for all eligible Employees with respect to a given offering.
(b) Payroll deductions for a Participant shall continue at the rate specified in the
subscription agreement throughout the Offering Period with automatic re-enrollment for the Offering
Period which commences the day after the Exercise Date at the same rate specified in the original
subscription agreement, subject to any change in subscription rate made pursuant to Section 6(c) of the
U.S. Plan, unless sooner terminated by the participant as provided in Section 11 of the U.S. Plan.
5.
Payroll Deductions and Other Approved Contributions.
(a) Except to the extent otherwise determined by the Board, payroll deductions shall be
made in accordance with Section 6 of the U.S. Plan. The Board may, at its discretion, approve other
methods of contributions including, without limitation, check, cash or standing order of the Participant’s
individual bank account.
(b) The amounts so collected shall be credited to the participant’s individual book
account under the Sub-Plan, initially in the currency in which paid by the Affiliate until converted into
U.S. Dollars. Accordingly, all purchases of Common Stock under the Sub-Plan are to be made with the
U.S. Dollars into which the payroll deductions for the Offering Period or other approved contributions
have been converted. The amounts collected from a participant may be commingled with the general
assets of the Company or the Affiliate and may be used for general corporate purposes, except as
otherwise required by local law.
(c) For purposes of determining the number of shares purchasable by a participant, the
payroll deductions or other approved contributions credited to each participant’s book account during
each Exercise Period shall be converted into U.S. Dollars on the Exercise Date for that Exercise Period on
the basis of the exchange rate in effect on such date. The Board shall have the absolute discretion to
determine the applicable exchange rate to be in effect for each Exercise Date by any reasonable method
(including, without limitation, the exchange rate actually used by the Company for its intra-Company
financial transactions for the month of such transfer). Any changes or fluctuations in the exchange rate at
which the payroll deductions or
2
other approved contributions collected on the participant’s behalf are converted into U.S. Dollars on each
Exercise Date shall be borne solely by the participant.
6. Grant of Option. The grant of the option and the purchase price of the option shall be in
accordance with Section 7 of the U.S. Plan.
7. Exercise of Option. The exercise of the option shall be in accordance with Section 8 of the
U.S. Plan.
8.
Withdrawal; Termination of Employment.
(a) A Participant may withdraw all but not less than all the payroll deductions or other
approved contributions credited to his or her account under the Sub-Plan at any time prior to the Exercise
Date of the Offering Period by giving written notice to the Company. All of the Participant’s payroll
deductions or other approved contributions credited to his or her account will be paid to him or her at the
next pay date after receipt of his or her notice of withdrawal and his or her option for the current period
will be automatically terminated, and no further payroll deductions for the purchase of shares will be
made during the Offering Period.
(b) Upon termination of the participant’s Continuous Status as an Employee prior to the
Exercise Date for any reason, including retirement or death, the payroll deductions or other approved
contributions credited to his or her account will be returned to the participant’s or, in the case the of
Participant’s death, to the person or persons entitled thereto under Section 15 of the U.S. Plan, and his or
her option will be automatically terminated.
(c) A Participant’s withdrawal from an offering will not have any effect upon his or her
eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by
the Company.
9. Transfer of Employment.
(a) In the event that a Participant who is an Employee of an Affiliate is transferred and
becomes an employee of the Company during an Offering Period under the Sub-Plan, such individual
may, subject to the terms and eligibility of the U.S. Plan, become a participant under the U.S. Plan for the
duration of the Offering Period in effect at that time. Unless otherwise required under local law, any
payroll deductions or other approved contributions may continue to be held by the Affiliate former
employer of the Participant for the remainder of the Offering Period. At the next Exercise date, all payroll
deductions and other approved contributions made by or to the Company or the Affiliate shall be
aggregated for the purchase of shares subject to the terms and limitations of the U.S. Plan.
(b) In the event that an employee of the Company who is a participant in the U.S. Plan
is transferred and becomes an Employee of an Affiliate during an Offering Period in effect under the U.S.
Plan, such individual may become a participant under the Sub-Plan for the duration of the Offering Period
in effect at that time. Unless otherwise required under local law, any payroll deductions may continue to
be held by the Company for the remainder of the
3
Offering Period. At the next Exercise date, all payroll deductions and other approved contributions made
by or to the Company or Affiliate may be aggregated for the purchase of shares subject to the terms and
limitations of the Sub-Plan.
10. Interest. No interest shall accrue on the payroll deductions or other approved contributions
of a Participant in the Sub-Plan unless required by local law.
11.
Stock.
(a) The shares of the Company’s Common Stock purchasable by Participants under the
Sub-Plan shall be made available from shares reserved under the U.S. Plan and any shares issued under
the Sub-Plan will reduce, on a share-for-share basis, the number of shares of Stock available for
subsequent issuance under the U.S. Plan.
(b) The Participant will have no interest or voting right in shares covered by his or her
option until such option has been exercised.
(c) Shares to be delivered to a Participant under the Sub-Plan will be registered in the
name of the Participant or in the name of the Participant and his or her spouse.
12. Administration. The Sub-Plan shall be administered in accordance with Section 14 of the
U.S. Plan. The Board may adopt rules or procedures relating to the operation and administration of the
Sub-Plan to accommodate the specific requirements of the law and procedures of applicable jurisdictions.
Without limiting the generality of the foregoing, the Board is specifically authorized to adopt rules and
procedures regarding handling of payroll deductions or other approved contributions, payment of interest,
conversion of local currency, payroll tax, withholding procedures and handling of stock certificates that
vary with local requirements. The Board may also adopt rules, procedures or sub-plans applicable to
particular Affiliates or jurisdictions. The rules of such sub-plans may take precedence over other
provisions of this Sub-Plan, with the exception of Section 11 of the Sub-Plan, but unless otherwise
superseded by the terms of such sub-plan, the provisions of the Sub-Plan shall govern the operation of
such sub-plan.
13. Transferability. Neither payroll deductions nor other funds credited to a Participant’s
account nor any rights with regard to the exercise of an option or to receive shares under the Sub-Plan
may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15 of the U.S. Plan) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with Section 11 of the U.S.
Plan. In order to comply with local law (including, without limitation, local securities and applicable
exchange laws), the Company may require a Participant to retain the shares purchased on his or her behalf
in a Company account or an account of a designated broker until the sale of such shares.
14. Use of Funds. All payroll deductions or other approved contributions received or held by
the Company under the Sub-Plan may be used by the Company for any
4
corporate purpose, and the Company shall not be obligated to segregate such payroll deductions or other
approved contributions unless required by local law.
15. Reports. Individual accounts will be maintained for each Participant in the Sub-Plan.
Statements of account will be given to participating Employees annually promptly following the Exercise
Date, which statements will set forth the amounts of payroll deductions or other approved contributions,
the per share purchase price, the number of shares purchased and the remaining cash balance refunded or
to be refunded, if any.
16. Amendment or Termination. The Board of Directors of the Company or its Committee
appointed pursuant to the U.S. Plan may at any time terminate or amend the Sub-Plan. No such
termination can affect options previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the rights of any participant.
Notwithstanding any provision of the U.S. Plan or this Sub-Plan to the contrary, in order
to comply with the laws in other countries in which the Company and its Subsidiaries operate or have
participants, the Company, by action of its duly authorized officers, in their sole discretion, shall have the
power and authority at any time to establish “offering document” and similar addendums to this Sub-Plan
to modify administrative procedures and other terms and procedures, to the extent such actions may be
necessary or advisable and take any action that it deems advisable to obtain approval or comply with any
necessary local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, no
action may be taken hereunder that would violate the Exchange Act, the Code, any securities law or
governing statute or any other applicable law or cause the U.S. Plan not to comply with Section 423 of the
Code.
17. Notices. All notices or other communications by a participant to the Company under or in
connection with the Sub-Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the receipt
thereof.
18. Term of Sub-Plan. The Sub-Plan became effective on December 6, 2007, and shall continue
in effect until the expiration or termination of the U.S. Plan.
19. Governing Laws. Except as otherwise expressly required under the laws of the local
jurisdiction, the Sub-Plan and all rights hereunder shall be governed by and construed in accordance with
the laws of the state of California, United States of America without resort to that state’s conflict-of-laws
rules. Should any provision of this Sub-Plan be determined by a court of competent jurisdiction to be
unlawful or unenforceable for a country, such determination shall in no way affect the application of that
provision in any other country, or any of the remaining provisions of the Sub-Plan.
5
Schedule A
Countries with Eligible Employees of Affiliates Participating in the
International Employee Stock Purchase Plan
(as of June 10, 2014)
Australia
Austria
Belgium
Canada
China*
Czech Republic
Denmark
Finland
France
Germany
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Japan
Malaysia
Netherlands
New Zealand
Norway
Philippines
Poland
Portugal
Qatar
Romania
Singapore
South Korea
Spain
Sweden
Switzerland
Taiwan
Thailand
Turkey
United Arab Emirates
United Kingdom
* Employees of Delcam subsidiaries located in China are not eligible to participate in the International
Employee Stock Purchase Plan.
6
AUTODESK, INC.
1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
(As Amended and Restated Effective June 10, 2010)
The following constitute the provisions of the 1998 Employee Qualified Stock Purchase Plan
(herein called the “Plan”) of Autodesk, Inc. (herein called the “Company”).
1.Purpose. The purpose of the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated
payroll deductions. It is the intention of the Company to have the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Internal Revenue Code of 1986. The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner consistent with the
requirements of that section of the Code.
2.
Definitions.
(a) “Board” shall mean the Board of Directors of the Company.
(b) “Code” shall mean the Internal Revenue Code of 1986.
(c) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the
Company.
(d) “Company” shall mean Autodesk, Inc., a Delaware corporation.
(e) “Compensation” shall mean all regular straight time earnings, payments for
overtime, shift premium and commissions, but exclusive of any incentive compensation, incentive
payments, bonuses, or other compensation.
(f) “Continuous Status as an Employee” shall mean the absence of any interruption or
termination of service as an Employee. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the Company, provided that such
leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) “Designated Subsidiaries” shall mean the Subsidiaries which have been designated
by the Board from time to time in its sole discretion as eligible to participate in the Plan.
(h) “Employee” shall mean any person, including an officer, who is customarily
employed for at least twenty (20) hours per week and more than five (5) months in a calendar year by the
Company or one of its Designated Subsidiaries.
(i) “Enrollment Period” shall mean the first fifteen (15) days of the month immediately
preceding the month in which an Offering Date occurs.
(j) “Exercise Date” shall mean the date one day prior to the date six (6) months, twelve
(12) months, eighteen (18) months or twenty-four (24) months after the Offering Date of each Offering
Period.
(k) “Exercise Period” shall mean a period commencing on an Offering Date or on the
day after an Exercise Date and terminating one day prior to the date six (6) months later.
(l) “Offering Period” shall mean a period of twenty-four (24) months consisting of four
(4) six-month Exercise Periods during which options granted pursuant to the Plan may be exercised.
(m)
“Offering Date” shall mean the first day of each Offering Period of the Plan.
(n)
“Plan” shall mean this 1998 Employee Qualified Stock Purchase Plan.
(o) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than
50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now
exists or is hereafter organized or acquired by the Company or a Subsidiary.
3.
Eligibility.
(a) Any Employee as defined in paragraph 2 who shall be employed by the Company as
of the last day of Enrollment Period for the applicable Offering Period shall be eligible to participate in
the Plan, subject to limitations imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be
granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any subsidiary of the
Company, or (ii) which permits such Employee’s rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries to accrue at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) of fair market value of such stock (determined at the time such option is
granted) for each calendar year in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by twenty-four (24) month Offering Periods
beginning every six (6) months, until terminated in accordance with Section 20 hereof; provided that, the
first Offering Period shall begin on the first business day after the Company’s Special Meeting on March
31, 1998. The Board of Directors of the Company shall have the power to change the duration of offering
periods with respect to future offerings without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first offering period to be affected.
5.
Participation.
(a) An eligible Employee may become a participant in the Plan by completing a
subscription agreement authorizing payroll deductions on the form provided by the Company and filing it
with the Company’s payroll office during the Enrollment Period for the applicable Offering Period, unless
a later or earlier time for filing the subscription agreement is set by the Board for all eligible Employees
with respect to a given offering.
(b) Payroll deductions for a participant shall continue at the rate specified in the
subscription agreement throughout the Offering Period with automatic re-enrollment for the Offering
Period which commences the day after the Exercise Date at the same rate specified in the original
subscription agreement, subject to any change in subscription rate made pursuant to Section 6(c), unless
sooner terminated by the participant as provided in Section 10.
6.
Payroll Deductions.
(a) At the time a participant files his or her subscription agreement, such participant
shall elect to have payroll deductions made on each payday during the offering period in an amount not
exceeding fifteen percent (15%) of his or her Compensation on each payroll date. The aggregate of such
payroll deductions during any offering period shall not exceed fifteen percent (15%) of his or her
aggregate Compensation during said offering period.
(b) All payroll deductions made by a participant shall be credited to his or her account
under the Plan. A participant may not make any additional payments into such account. Notwithstanding
the foregoing, in the event of an administrative error by the Company the result of which a participant’s
payroll deductions are not credited to his or her account in accordance with such participant’s election
made pursuant to Section 6(a) above, the Company may permit a participant to make a payment to his or
her account prior to the next scheduled Exercise Date provided such contributions do not cause such
participant’s aggregate credits to his or her account to exceed fifteen percent (15%) of his or her
aggregate Compensation for the Offering Period with respect to which such administrative error was
made.
(c) A participant may discontinue his or her participation in the Plan as provided in
Section 11, or may decrease the rate of his or her payroll deductions at any time during the Offering
Period by completing or filing with the Company a form provided by the Company notifying the payroll
office of such withdrawal or reduction of withholding rate. The decrease in rate shall be effective as of the
next pay date following receipt of the form or at such other time as the Company and the participant may
agree. A participant may not increase the rate of his or her payroll deductions during an Offering Period.
7.
Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible Employee participating
in the Plan shall be granted an option to purchase on each Exercise Date during such Offering Period (at
the per share option price) up to a number of shares of the Company’s Common Stock determined by
dividing such Employee’s payroll deductions to be accumulated prior to such Exercise Date by the lower
of (i) eighty-five percent (85%) of the fair market value of a share of the Company’s Common Stock on
the Offering Date or (ii) eighty-five percent (85%) of the fair market value of a share of the Company’s
Common Stock on the Exercise Date; provided that in no event shall an Employee be permitted to
purchase during an Offering Period a number of shares in excess of a number determined by dividing
$50,000 by the fair market value of a share of the Company’s Common Stock on the Offering Date,
subject to the limitations set forth in Sections 3(b) and 13 hereof. Fair market value of a share of the
Company’s Common Stock shall be determined as provided in Section 7(b) herein.
(b) The option price per share of the shares offered in a given Exercise Period shall be
the lower of: (i) 85% of the fair market value of a share of the Common Stock of the Company on the
Offering Date; or (ii) 85% of the fair market value of a share of the Common Stock of the Company on
the Exercise Date. The fair market value of the Company’s Common Stock on a given date shall be the
closing price as quoted on the Nasdaq Stock Market, Inc.’s National Market or, if traded on a securities
exchange, the closing price on such exchange.
8. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 11,
his or her option for the purchase of shares will be exercised automatically on each Exercise Date of the
Offering Period, and the maximum number of full shares subject to option will be purchased for him or
her at the applicable option price with the accumulated payroll deductions in his or her account. During
his or her lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after the Exercise Date of each offering, the Company
shall arrange the delivery to each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option. Any cash remaining which is insufficient to purchase a full
share of Common Stock at the termination of each Exercise Period shall be refunded to the participant.
10. Automatic Transfer to Low Price Offering Period. In the event that the fair market value of
the Company’s Common Stock is lower on an Exercise Date than it was on the first Offering Date for that
Offering Period, all Employees participating in the Plan on the Exercise Date shall be deemed to have
withdrawn from the Offering Period immediately after the exercise of their option on such Exercise Date
and to have enrolled as participants in a new Offering Period which begins on or about the day following
such Exercise Date. A participant may elect to remain in the previous Offering Period by filing a written
statement declaring such election with the Company prior to the time of the automatic change to the new
Offering Period.
11.
Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll deductions credited
to his or her account under the Plan at any time prior to the Exercise Date of the Offering Period by
giving written notice to the Company. All of the participant’s payroll deductions credited to his or her
account will be paid to him or her at the next pay date after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically terminated, and no further payroll deductions
for the purchase of shares will be made during the Offering Period.
(b) Upon termination of the participant’s Continuous Status as an Employee prior to the
Exercise Date for any reason, including retirement or death, the payroll deductions credited to his or her
account will be returned to the participant’s or, in the case the of participant’s death, to the person or
persons entitled thereto under Section 15, and his or her option will be automatically terminated.
(c) A participant’s withdrawal from an offering will not have any effect upon his or her
eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by
the Company.
12.
Interest. No interest shall accrue on the payroll deductions of a participant in the Plan.
13.
Stock.
(a) The maximum number of shares of the Company’s Common Stock which shall be
made available for sale under the Plan shall be 4,000,000 shares, plus an annual increase to be made on
the last day of the immediately preceding fiscal year equal to the lesser of (i) 5,000,000 shares, (ii) 2% of
the Issued Shares (as defined below) on such date or (iii) a lesser amount determined by the Board,
subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof.
“Issued Shares” shall mean the number of shares of Common Stock of the Company outstanding on such
date plus any shares reacquired by the Company during the fiscal year that ends on such date. If the total
number of shares which would otherwise be subject to options granted pursuant to Section 7(a) hereof on
the Exercise Date of an Offering Period exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised or are then outstanding), the Company shall
make a pro rata allocation of the shares remaining available for option grant in as uniform a manner as
shall be practicable and as it shall determine to be equitable. In such event, the Company shall give
written notice of such reduction of the number of shares subject to the option to each Employee affected
thereby and shall similarly reduce the rate of payroll deductions, if necessary.
(b) The participant will have no interest or voting right in shares covered by his or her
option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be registered in the name
of the participant or in the name of the participant and his or her spouse.
14. Administration. The Plan shall be administered by the Board of Directors of the Company
or a committee appointed by the Board (the “Committee”). The administration, interpretation or
application of the Plan by the Board or its Committee shall be final, conclusive and binding upon all
participants. Members of the Board who are eligible Employees are permitted to participate in the Plan,
provided that:
(a) Members of the Board who are eligible to participate in the Plan may not vote on
any matter affecting the administration of the Plan or the grant of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan, no member of the Board who is
eligible to participate in the Plan may be a member of the Committee.
15.
Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who is to receive any
shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to the end of the offering period but prior to delivery to such participant of such shares
and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any
cash from the participant’s account under the Plan in the event of such participant’s death prior to the
Exercise Date of the offering period.
(b) Such designation of beneficiary may be changed by the participant at any time by
written notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the Company shall deliver
such shares and/or cash to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a participant’s account nor any rights
with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as
provided in Section 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or
other disposition shall be without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Section 11.
17. Use of Funds. All payroll deductions received or held by the Company under the Plan may
be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate
such payroll deductions.
18. Reports. Individual accounts will be maintained for each participant in the Plan. Statements
of account will be given to participating Employees annually promptly following the Exercise Date,
which statements will set forth the amounts of payroll deductions, the per share purchase price, the
number of shares purchased and the remaining cash balance refunded or to be refunded, if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option (collectively, the
“Reserves”), as well as the price per share of Common Stock covered by each option under the Plan
which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split or the payment of a stock dividend
(but only on the Common Stock) or any other increase or decrease in the number of shares of Common
Stock effected without receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the offering period will
terminate immediately prior to the consummation of such proposed action, unless otherwise provided by
the Board. In the event of a proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole discretion and in lieu of
such assumption or substitution, that the participant shall have the right to exercise the option as to all of
the optioned stock, including shares as to which the option would not otherwise be exercisable. If the
Board makes an option fully exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the participant that the option shall be fully exercisable for a period
of thirty (30) days from the date of such notice, and the option will terminate upon the expiration of such
period.
The Board may, if it so determines in the exercise of its sole discretion, also make provision for
adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding
option, in the event that the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common Stock.
20. Amendment or Termination. The Board of Directors of the Company may at any time
terminate or amend the Plan. No such termination can affect options previously granted, nor may an
amendment make any change in any option theretofore granted which adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3 under the Act or under Section
423 of the Code (or any successor rule or provision or any other applicable law or regulation), the
Company shall obtain stockholder approval in such a manner and to such a degree as so required.
Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in
other countries in which the Company and its Subsidiaries operate or have participants, the Board or its
Committee, in their sole discretion, shall have the power and authority at any time to (i) modify the terms
and conditions of the Plan as applicable to individuals outside the United States to comply with applicable
foreign laws; (ii) establish sub-plans and modify administrative procedures and other terms and
procedures, to the extent such actions may be necessary or advisable (any such sub-plans and/or
modifications shall be attached to this Plan as appendices) and (iii) take any action that it deems advisable
to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals.
Notwithstanding the foregoing, the Board or its Committee may not take any actions hereunder that
would violate the Exchange Act, the Code, any securities law or governing statute or any other applicable
law or cause the Plan not to comply with Section 423 of the Code.
21. Notices. All notices or other communications by a participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received in the form specified by
the Company at the location, or by the person, designated by the Company for the receipt thereof.
22. Stockholder Approval. Any required approval by the stockholders of the Company shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act, and the rules and regulations
promulgated thereunder.
23. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares
may then be listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such
option to represent and warrant at the time of any such exercise that the shares are being purchased only
for investment and without any present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the aforementioned applicable
provisions of law.
24. Term of Plan. The Plan became effective upon January 27. 1998. It shall continue in effect
for a term of twenty (20) years unless sooner terminated under paragraph 20.
AUTODESK, INC.
1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
Original Application
Date: ____________
Change in Payroll Deduction Rate
Change of Beneficiary(ies)
1.hereby elects to participate in the Autodesk, Inc. 1998 Employee Qualified Stock Purchase Plan, as
amended and restated (the “Stock Purchase Plan”) and subscribes to purchase shares of the Company’s
Common Stock, without par value, in accordance with this Subscription Agreement and the Stock
Purchase Plan.
2.I hereby authorize payroll deductions from each paycheck in the amount of % (maximum 15%) of my
Compensation on each payday during the Offering Period in accordance with the Stock Purchase Plan.
Such deductions are to continue for succeeding Offering Periods until I give written instructions for a
change in or termination of such deductions.
3.I understand that said payroll deductions shall be accumulated for the purchase of shares of Common
Stock, without par value, at the applicable purchase price determined in accordance with the Stock
Purchase Plan. I further understand that, except as otherwise set forth in the Stock Purchase Plan, shares
will be purchased for me automatically on each Exercise Date of the offering period unless I otherwise
withdraw from the Stock Purchase Plan by giving written notice to the Company for such purpose.
4.I have received a copy of the complete Stock Purchase Plan. I understand that my participation in the
Stock Purchase Plan is in all respects subject to the terms of the Stock Purchase Plan. I have been
provided with a prospectus describing the Stock Purchase Plan. I understand that I may withdraw from
the Stock Purchase Plan and have payroll deductions refunded (without interest) on the next payroll date
following notice of withdrawal at any time during the Offering Period.
5.Shares purchased for me under the Stock Purchase Plan should be issued in the name(s) of:
____________________________________________________________
6.I understand that if I dispose of any shares received by me pursuant to the Stock Purchase Plan within 2
years after the Offering Date (the first day of the offering period during which I purchased such shares)
or within one year after the date on which such shares were transferred to me, I will be treated for
federal income tax purposes as having received ordinary income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares at the time such shares were transferred
to me over the price which I paid for the shares, and that I may be required to provide income tax
withholding on that amount. I hereby agree to notify the Company in writing within 30 days after the
date of any such disposition. However, if I dispose of such shares at any time after the expiration of the
two-year and one-year holding periods, I understand that I will be treated for federal income tax
purposes as having received income only at the time of such disposition, and that such income will be
treated as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) the excess of the fair market value of the shares over the option price
measured as if the option had been exercised on the Offering Date. The remainder of the gain or loss, if
any, recognized on such disposition will be treated as capital gain or loss. The federal income tax
treatment of ordinary income and capital gain and loss is described in the Company’s prospectus
relating to the Stock Purchase Plan.,
7.I hereby agree to be bound by the terms of the Stock Purchase Plan. The effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in the Stock Purchase Plan.
8.In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all
payments and shares due me under the Stock Purchase Plan:
NAME: (Please print) ________________________________________________________
(First)
(Middle)
(Last)
_________________________
Relationship
________________________________________
________________________________________
(Address)
NAME: (Please print) _________________________________________________________
(First)
(Middle)
(Last)
_________________________
Relationship
________________________________________
________________________________________
(Address)
Employee’s Social
Security Number: __________________
Employee’s Address:*
_____________________________________
_____________________________________
_____________________________________
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: _____________________
___________________________________
Signature of Employee
__________________________
* It is the participant's responsibility to notify the Company's stock administrator in the event of a change
of address.
EXHIBIT II
EXCERPTS FROM PRESS RELEASE ISSUED BY AUTODESK, INC. ON AUGUST 27, 2015
II
Investors: David Gennarelli, 415-507-6033
david.gennarelli@autodesk.com
Press:
Noah Cole, 415-580-3535
noah.cole@autodesk.com
AUTODESK REPORTS SECOND QUARTER FINANCIAL RESULTS
Strong Billings and Deferred Revenue Growth
SAN RAFAEL, Calif., AUGUST 27, 2015-- Autodesk, Inc. (NASDAQ: ADSK) today reported financial
results for the second quarter of fiscal 2016. The company reported strong billings and deferred revenue growth.
Second Quarter Fiscal 2016
• Total billings increased 7 percent, compared to the second quarter last year as reported, and 15 percent
on a constant currency basis.
•
Deferred revenue increased 26 percent to $1.2 billion, compared to $981 million in the second quarter
last year.
•
Total subscriptions increased by approximately 61,000 from the first quarter of fiscal 2016. Total
subscriptions were 2.39 million at the end of the second quarter.
•
Revenue was $610 million, a decrease of 4 percent compared to the second quarter last year as
reported, and flat on a constant currency basis.
•
GAAP operating margin was 1 percent, compared to 8 percent in the second quarter last year.
•
Non-GAAP operating margin was 11 percent, compared to 18 percent in the second quarter last year. A
reconciliation of GAAP to non-GAAP results is provided in the accompanying tables.
•
GAAP diluted net loss per share was $(1.04). Please refer to the comment below regarding the non-cash
GAAP tax charge recorded in the quarter. GAAP diluted net income per share was $0.13 in the second
quarter last year.
•
Non-GAAP diluted net income per share was $0.19, compared to $0.35 in the second quarter last year.
•
Cash flow from operating activities was $77 million, compared to $96 million in the second quarter last
year.
"We are pleased with the progress of our business model transition," said Carl Bass, Autodesk president and
CEO. "Strong billings and deferred revenue growth led the quarter and we continue to see customers adopt our
new model subscription offerings, which are showing strong year-over-year and sequential growth. For the past
two years we've been preparing for this transition and we're now ready to accelerate the process."
1
Second Quarter Operational Overview
As a reminder, 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.
Revenue in the Americas increased 6 percent compared to the second quarter last year to $236 million. EMEA
revenue was $226 million, a decrease of 7 percent compared to the second quarter last year as reported, and flat
on a constant currency basis. Revenue in APAC was $148 million , a decrease of 13 percent compared to the
second quarter last year as reported, and 9 percent on a constant currency basis. Revenue from emerging
economies was $92 million, a decrease of 7 percent compared to the second quarter last year as reported, and 5
percent on a constant currency basis. Revenue from emerging economies represented 15 percent of total
revenue in the second quarter.
Revenue from the Architecture, Engineering and Construction business segment was $233 million, an increase
of 7 percent compared to the second quarter last year. Revenue from the Platform Solutions and Emerging
Business segment was $164 million, a decrease of 21 percent compared to the second quarter last year. Revenue
from the Manufacturing business segment was $171 million, an increase of 2 percent compared to the second
quarter last year. Revenue from the Media and Entertainment business segment was $41 million, a decrease of 6
percent compared to the second quarter last year.
Revenue from Flagship products was $272 million, a decrease of 11 percent compared to the second quarter last
year. Revenue from Suites was $226 million, a decrease of 3 percent compared to the second quarter last year.
Revenue from New and Adjacent products was $112 million, an increase of 13 percent compared to the second
quarter last year.
In the second quarter, Autodesk recorded a non-cash GAAP tax charge of $214 million to establish a valuation
allowance on certain U.S. deferred tax assets. Due to Autodesk's pre-tax U.S. GAAP cumulative loss over the
last three years, the company evaluated its deferred tax assets and determined that a valuation allowance was
required. This is a GAAP-only charge and has no impact to cash this year or in the future. Autodesk will
continue to monitor the application of this accounting rule and will consider reversing the valuation allowance
when conditions warrant.
"Looking at the second half of this fiscal year we are maintaining our billings and subscriptions outlook but
we're now expecting a greater portion of our sales to shift from perpetual licenses to new subscription types,"
said Scott Herren, Autodesk Chief Financial Officer. "Since the revenue from these new subscription types is
deferred and recognized ratably we have revised our revenue, operating margin and EPS outlook for the year.
Looking beyond this year, we are currently refining our plans around the pace and timeframe for the business
model transition and look forward to providing more detail at our Investor Day event scheduled for September
29th."
Business Outlook
The following are forward-looking statements based on current expectations and assumptions, and involve risks
and uncertainties some of which are set forth below under "Safe Harbor." Autodesk's business outlook for the
third quarter and full year fiscal 2016 assumes, among other things, a continuation of the current economic
2
environment and foreign exchange currency rate environment. A reconciliation between the GAAP and
non-GAAP estimates for fiscal 2016 is provided below or in the tables following this press release.
Third Quarter Fiscal 2016
Q3 FY16 (ending
October 31, 2015)
$580 - $600
($0.23) - ($0.18)
$0.05 - $0.10
Q3 FY16 Guidance Metrics
Revenue (in millions)
EPS GAAP
EPS Non-GAAP (1)
_______________
(1) Non-GAAP earnings per diluted share exclude $0.21 related to stock-based compensation expense and $0.07 for the amortization
of acquisition related intangibles, net of tax.
Full Year Fiscal 2016
FY16 (ending
January 31, 2016)
2% - 4%
$2,465 - $2,505
(2)% - (1)%
9% - 10%
[…]
[…]
FY16 Guidance Metrics
Billings growth (1)
Revenue (in millions) (2)
GAAP operating margin
Non-GAAP operating margin
[…]
[…]
Net subscription additions
375,000 - 425,000
_______________
(1) On a constant currency basis, billings growth would be 9% - 11%.
(2) On a constant currency basis, revenue growth would be 3% - 5%.
[…]
The third quarter and full year fiscal 2016 outlook assume a projected annual effective tax rate of 24 percent
and 26 percent for GAAP and non-GAAP results, respectively.
Earnings Conference Call and Webcast
Autodesk will host its first quarter conference call today at 5:00 p.m. ET. The live broadcast can be accessed at
http://www.autodesk.com/investors . Supplemental financial information and prepared remarks for the
conference call will be posted to the investor relations section of Autodesk's website simultaneously with this
press release.
A replay of the broadcast will be available at 7:00 pm ET at http://www.autodesk.com/investors. This replay
will be maintained on Autodesk's website for at least 12 months.
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements
in the paragraphs under “Business Outlook” above, statements regarding the impacts of our business model
3
transition, expectations regarding the transition of product offerings to subscription, and other statements
regarding our strategies, market and products positions, performance, and results. There are a significant
number of factors that could cause actual results to differ materially from statements made in this press release,
including: failure to maintain our revenue growth and profitability; failure to successfully manage transitions to
new business models and markets, including the introduction of additional ratable revenue streams and our
continuing efforts to attract customers to our cloud-based offerings and expenses related to the transition of our
business model; difficulty in predicting revenue from new businesses and the potential impact on our financial
results from changes in our business models; general market, political, economic and business conditions; the
impact of non-cash charges on our financial results; fluctuation in foreign currency exchange rates; the success
of our foreign currency hedging program; failure to control our expenses; our performance in particular
geographies, including emerging economies; the ability of governments around the world to meet their financial
and debt obligations, and finance infrastructure projects; weak or negative growth in the industries we serve;
slowing momentum in subscription billings or revenues; difficulties encountered in integrating new or acquired
businesses and technologies; the inability to identify and realize the anticipated benefits of acquisitions; the
financial and business condition of our reseller and distribution channels; dependence on and the timing of large
transactions; failure to achieve sufficient sell-through in our channels for new or existing products; pricing
pressure; unexpected fluctuations in our tax rate; the timing and degree of expected investments in growth and
efficiency opportunities; changes in the timing of product releases and retirements; and any unanticipated
accounting charges.
Further information on potential factors that could affect the financial results of Autodesk are included in
Autodesk's Annual Report on Form 10-K for the year ended January 31, 2015 and Form 10-Q for the quarter
ended April 30, 2015, which are on file with the U.S. Securities and Exchange Commission. Autodesk
disclaims any obligation to update the forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made.
About Autodesk
Autodesk helps people imagine, design and create a better world. Everyone--from design professionals,
engineers and architects to digital artists, students and hobbyists--uses Autodesk software to unlock their
creativity and solve important challenges. For more information visit autodesk.com or follow @autodesk.
Autodesk is a registered trademark of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or
other countries. All other brand names, product names or trademarks belong to their respective holders.
Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time
without notice, and is not responsible for typographical or graphical errors that may appear in this document.
© 2015 Autodesk, Inc. All rights reserved.
4
Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)
Three Months Ended July 31,
2015
Six Months Ended July 31,
2014
2015
2014
(Unaudited)
Net revenue:
License and other
$
Subscription
290.5
$
350.4
$
617.2
$
666.6
319.0
286.7
638.8
563.0
609.5
637.1
1,256.0
1,229.6
Cost of license and other revenue
53.0
53.4
106.1
102.7
Cost of subscription revenue
40.0
34.5
78.7
63.9
93.0
87.9
184.8
166.6
516.5
549.2
1,071.2
1,063.0
Marketing and sales
240.8
237.6
494.7
463.0
Research and development
193.1
179.3
387.6
349.8
70.1
71.5
146.0
134.0
8.2
10.1
17.1
21.0
Total net revenue
Cost of revenue:
Total cost of revenue
Gross profit
Operating expenses:
General and administrative (1)
Amortization of purchased intangibles (1)
Restructuring charges, net
Total operating expenses
Income from operations
Interest and other expense, net
—
0.8
—
3.1
512.2
499.3
1,045.4
970.9
4.3
49.9
25.8
92.1
(3.4 )
Income before income taxes
0.9
Provision for income taxes
(236.4 )
(7.0 )
(3.1 )
42.9
22.7
(13.6 )
78.5
(11.6 )
(239.1 )
(18.9 )
Net (loss) income
$
(235.5 )
$
31.3
$
(216.4 )
$
59.6
Basic net (loss) income per share
$
(1.04 )
$
0.14
$
(0.95 )
$
0.26
Diluted net (loss) income per share
$
(1.04 )
$
0.13
$
(0.95 )
$
0.26
Weighted average shares used in computing basic net (loss) income
per share
227.0
227.3
227.1
227.1
Weighted average shares used in computing diluted net (loss)
income per share
227.0
232.4
227.1
232.4
_____________________
(1) Effective in second quarter of fiscal 2015, Autodesk elected to present amortization of purchased customer relationships, trade
names, patents, and user lists as a separate line item within operating expenses. As a result, amortization previously reflected in
“General and Administrative” expense was reclassified to “Amortization of Purchased Intangibles" within Operating Expenses. Prior
period amounts have been revised to conform to the current period presentation.
5
Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)
July 31, 2015
January 31, 2015
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
1,473.1
$
1,410.6
Marketable securities
916.8
615.8
Accounts receivable, net
394.1
458.9
10.0
85.1
105.8
100.9
Deferred income taxes, net
Prepaid expenses and other current assets
Total current assets
2,899.8
2,671.3
Marketable securities
562.5
273.0
Computer equipment, software, furniture and leasehold improvements, net
158.2
159.2
73.2
86.5
1,473.8
1,456.2
4.2
100.0
Developed technologies, net
Goodwill
Deferred income taxes, net
Other assets (1)
170.1
Total assets
$
163.5
5,341.8
$
4,909.7
90.8
$
100.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
Accrued compensation
172.2
Accrued income taxes
Deferred revenue
Other accrued liabilities
253.3
52.3
28.2
881.6
900.8
116.9
117.3
1,313.8
1,400.1
Deferred revenue
354.7
256.3
Long term income taxes payable
124.0
158.8
Long term deferred income taxes
28.9
—
Long term notes payable, net (1)
1,486.2
743.1
132.1
132.2
—
—
1,808.0
1,773.1
Total current liabilities
Other liabilities
Stockholders’ equity:
Preferred stock
Common stock and additional paid-in capital
Accumulated other comprehensive loss
(70.3 )
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders' equity
$
(53.3 )
164.4
499.4
1,902.1
2,219.2
5,341.8
$
4,909.7
_______________
(1)
Effective in the second quarter of 2016, Autodesk elected to retrospectively adopt ASU 2015-03, regarding Subtopic 835-30 “Interest Imputation of Interest". The adoption resulted in a $4.1 million reclassification of debt issuance costs from other assets to a reduction of long
term notes payable, net, as of January 31, 2015.
6
Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
Six Months Ended July 31,
2014
2015
(Unaudited)
Operating activities:
Net (loss) income
$
(216.4 )
$
59.6
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion
74.0
73.3
Stock-based compensation expense
90.9
73.4
197.9
1.1
—
3.1
Deferred income taxes
Restructuring charges, net
Other operating activities
(15.3 )
5.5
64.4
76.3
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable
Prepaid expenses and other current assets
(19.4 )
(7.8 )
Accounts payable and accrued liabilities
(81.5 )
(21.5 )
79.2
68.9
Deferred revenue
Accrued income taxes
Net cash provided by operating activities
Investing activities:
Purchases of marketable securities
(10.1 )
(17.0 )
163.7
314.9
(1,314.2 )
(684.2 )
Sales of marketable securities
187.0
127.3
Maturities of marketable securities
541.0
407.1
Capital expenditures
Acquisitions, net of cash acquired
(29.8 )
(37.5 )
(31.6 )
(548.3 )
Other investing activities
(13.1 )
(0.7 )
Net cash used in investing activities
Financing activities:
(666.6 )
(730.4 )
33.2
91.3
(207.7 )
(204.3 )
Proceeds from issuance of common stock, net of issuance costs
Repurchase and retirement of common stock
Proceeds from debt, net of discount
748.3
Other financing activities
—
(6.3 )
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
(1.7 )
567.5
(114.7 )
(2.1 )
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of fiscal year
0.3
62.5
(529.9 )
1,410.6
Cash and cash equivalents at end of the period
$
7
1,473.1
1,853.0
$
1,323.1
Autodesk, Inc.
Reconciliation of GAAP financial measures to non-GAAP financial measures
(In millions, except per share data)
To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain
non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP
net income, non-GAAP net income per share, non-GAAP diluted shares used in per share calculation and billings. Excluding billings,
these non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based
compensation expense, restructuring charges, amortization of purchased intangibles, gain and loss on strategic investments, and
related income tax expenses. In the case of billings, we reconcile to revenue by adjusting for the change in deferred revenue from the
beginning to the end of the period less any deferred revenue balances acquired from business combination(s) during the period and
other discounts. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein. We believe these
exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the
future, as well as to facilitate comparisons with our historical operating results. These adjustments to our GAAP results are made
with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational
results and trends and our marketplace performance. For example, non-GAAP results are an indication of our baseline performance
before gains, losses or other charges that are considered by management to be outside our core operating results. In addition, these
non-GAAP financial measures are among the primary indicators management uses as a basis for our planning and forecasting of
future periods.
There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in
accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other
companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material
impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation
or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors
should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as
provided in the tables accompanying this press release.
The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.
Three Months Ended July 31,
2015
Six Months Ended July 31,
2014
2015
(Unaudited)
2014
(Unaudited)
GAAP cost of license and other revenue
Stock-based compensation expense
Amortization of developed technology
$
53.0
(1.2 )
(11.2 )
$
53.4
(1.1 )
(13.4 )
$
106.1
(2.7 )
(23.6 )
$
102.7
(2.0 )
(25.2 )
Non-GAAP cost of license and other revenue
$
40.6
$
38.9
$
79.8
$
75.5
GAAP cost of subscription revenue
Stock-based compensation expense
Amortization of developed technology
$
40.0
(1.2 )
(0.8 )
$
34.5
(1.0 )
(1.1 )
$
78.7
(2.6 )
(1.9 )
$
63.9
(1.8 )
(2.3 )
Non-GAAP cost of subscription revenue
$
38.0
$
32.4
$
74.2
$
59.8
GAAP gross profit
Stock-based compensation expense
Amortization of developed technology
$
516.5
2.4
12.0
$
549.2
2.1
14.5
$
1,071.2
5.3
25.5
$
1,063.0
3.8
27.5
Non-GAAP gross profit
$
530.9
$
565.8
$
1,102.0
$
1,094.3
GAAP marketing and sales
Stock-based compensation expense
$
240.8
(17.3 )
$
237.6
(17.6 )
$
494.7
(39.0 )
$
463.0
(31.6 )
Non-GAAP marketing and sales
$
223.5
$
220.0
$
455.7
$
431.4
8
GAAP research and development
Stock-based compensation expense
$
193.1
(14.8 )
$
179.3
(13.7 )
$
387.6
(32.4 )
$
349.8
(24.6 )
Non-GAAP research and development
$
178.3
$
165.6
$
355.2
$
325.2
GAAP general and administrative
Stock-based compensation expense
$
70.1
(6.2 )
$
71.5
(6.4 )
$
146.0
(14.2 )
$
134.0
(13.4 )
Non-GAAP general and administrative
$
63.9
$
65.1
$
131.8
$
120.6
GAAP amortization of purchased intangibles
Amortization of purchased intangibles
$
8.2
(8.2 )
$
10.1
(10.1 )
$
17.1
(17.1 )
$
21.0
(21.0 )
Non-GAAP Amortization of purchased intangibles
$
—
$
—
$
—
$
—
GAAP restructuring charges, net
Restructuring charges, net
$
—
—
$
0.8
(0.8 )
$
—
—
$
3.1
(3.1 )
Non-GAAP restructuring charges, net
$
—
$
—
$
—
$
—
GAAP operating expenses
Stock-based compensation expense
Amortization of purchased intangibles
Restructuring charges, net
$
512.2
(38.3 )
(8.2 )
—
$
499.3
(37.7 )
(10.1 )
(0.8 )
$
1,045.4
(85.6 )
(17.1 )
—
$
970.9
(69.6 )
(21.0 )
(3.1 )
Non-GAAP operating expenses
$
465.7
$
450.7
$
942.7
$
877.2
GAAP income from operations
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
$
4.3
40.7
12.0
8.2
—
$
49.9
39.8
14.5
10.1
0.8
$
25.8
90.9
25.5
17.1
—
$
92.1
73.4
27.5
21.0
3.1
Non-GAAP income from operations
$
65.2
$
115.1
$
159.3
$
217.1
GAAP interest and other expense, net
(Gain) loss on strategic investments
$
(3.4 )
(2.4 )
$
(7.0 )
3.3
$
(3.1 )
(3.4 )
$
(13.6 )
6.9
Non-GAAP interest and other expense, net
$
(5.8 )
$
(3.7 )
$
(6.5 )
$
(6.7 )
GAAP provision for income taxes
$
Discrete GAAP tax benefit (provision) items
Establishment of valuation allowance on deferred tax assets
Income tax effect of non-GAAP adjustments
(236.4 )
4.3
213.6
3.1
$
(11.6 )
(2.6 )
—
(15.2 )
$
(239.1 )
1.2
213.6
(15.4 )
$
(18.9 )
(4.7 )
—
(31.0 )
$
(15.4 )
$
(29.4 )
$
(39.7 )
$
(54.6 )
GAAP net (loss) income
$
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax benefit (provision) items
Establishment of valuation allowance on deferred tax assets
Income tax effect of non-GAAP adjustments
(235.5 )
40.7
12.0
8.2
—
(2.4 )
4.3
213.6
3.1
$
31.3
39.8
14.5
10.1
0.8
3.3
(2.6 )
—
(15.2 )
$
(216.4 )
90.9
25.5
17.1
—
(3.4 )
1.2
213.6
(15.4 )
$
59.6
73.4
27.5
21.0
3.1
6.9
(4.7 )
—
(31.0 )
44.0
$
82.0
$
113.1
$
155.8
Non-GAAP provision for income tax
Non-GAAP net income
$
9
GAAP diluted net (loss) income per share
$
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax benefit (provision) items
Establishment of valuation allowance on deferred tax assets
Income tax effect of non-GAAP adjustments
Non-GAAP diluted net income per share
$
(1.04 )
0.18
0.05
0.04
—
(0.01 )
0.02
0.94
0.01
0.19
GAAP diluted shares used in per share calculation
227.0
232.4
227.1
232.4
4.1
—
4.5
—
231.1
232.4
231.6
232.4
Shares included in non-GAAP net income per share, but
excluded from GAAP net loss per share as they would have
been anti-dilutive
Non-GAAP diluted weighted average shares used in per
share calculation
10
$
$
0.13
0.18
0.06
0.04
—
0.01
(0.01 )
—
(0.06 )
0.35
$
$
(0.95 )
0.39
0.11
0.07
—
(0.01 )
0.01
0.94
(0.07 )
0.49
$
$
0.26
0.32
0.12
0.09
0.01
0.03
(0.03 )
—
(0.13 )
0.67
Autodesk, Inc.
Other Supplemental Financial Information (a)
Fiscal Year 2016
Financial Statistics ($ in millions, except per share
data):
Total Net Revenue:
License and Other Revenue
Subscription Revenue
QTR 1
$
$
$
647
327
320
GAAP Gross Margin
Non-GAAP Gross Margin (1)(2)
GAAP Operating Expenses
GAAP Operating Margin
GAAP Net Income (Loss)
GAAP Diluted Net Income (Loss) Per Share (b)
QTR 2
$
$
$
86 %
88 %
$
$
$
$
Non-GAAP Operating Expenses (1)(3)
$
Non-GAAP Operating Margin (1)(4)
Non-GAAP Net Income (1)(5)(c)
$
Non-GAAP Diluted Net Income Per Share (1)(6)(b)(c) $
477
15 %
69
0.30
$
$
$
$
$
$
$
$
$
$
2,271
44
13
87
38
Deferred Subscription Revenue Balance (c)
$
Revenue by Geography:
Americas
Europe, Middle East and Africa
Asia Pacific
% of Total Rev from Emerging Economies
Revenue by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
QTR 4
YTD 2016
$
$
$
85 %
87 %
533
3%
19
0.08
Total Cash and Marketable Securities
Days Sales Outstanding
Capital Expenditures
Cash Flow from Operating Activities
GAAP Depreciation, Amortization and Accretion
610
291
319
QTR 3
1,256
617
639
85 %
88 %
512
1%
(236 )
(1.04 )
$
466
11 %
44
0.19
$
$
$
$
$
1,045
2%
(216 )
(0.95 )
943
13 %
113
0.49
$
2,952
$
$
$
2,952
59
17
77
36
$
$
$
30
164
74
930
$
1,004
$
1,004
$
$
$
244
245
157
14 %
$
$
$
236
226
148
15 %
$
$
$
480
471
305
15 %
$
$
$
$
237
185
185
40
$
$
$
$
233
164
171
41
$
$
$
$
470
349
356
81
11
Other Revenue Statistics:
% of Total Rev from Flagship
% of Total Rev from Suites
% of Total Rev from New and Adjacent
% of Total Rev from AutoCAD and AutoCAD LT
46
37
17
25
%
%
%
%
45
37
18
24
%
%
%
%
45 %
37 %
17 %
25 %
Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to
Foreign Currencies Compared to Comparable Prior
Year Period:
FX Impact on Total Billings
FX Impact on Total Net Revenue
$
$
FX Impact on Cost of Revenue and Total Operating Expenses $
FX Impact on Operating Income
$
Gross Profit by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
Unallocated amounts
$
$
$
$
$
Common Stock Statistics:
GAAP Common Shares Outstanding
GAAP Fully Diluted Weighted Average Shares Outstanding
Shares Repurchased
Subscriptions (in millions):
Total Subscriptions (c)
(31 )
(22 )
$
$
(50 )
(25 )
$
$
(81 )
(47 )
22
—
$
$
25
—
$
$
47
—
217
163
158
33
(16 )
$
$
$
$
$
210
139
151
32
(14 )
$
$
$
$
$
427
302
309
64
(31 )
227.6
231.7
1.6
226.2
227.0
2.1
226.2
227.1
3.7
2.33
2.39
2.39
(a) Totals may not agree with the sum of the components due to rounding.
(b) Net Income (Loss) Per Share were computed independently for each of the periods presented; therefore the sum of the net income
(loss) per share amounts for the quarters may not equal the total for the year.
(c) Total Subscriptions consists of subscriptions from our maintenance, desktop, cloud service and enterprise license offerings that
are active and paid as of the quarter end date. For certain cloud based and enterprise license offerings, subscriptions represent the
monthly average activity within the last three months of the quarter end date. Total subscriptions do not include data from education
offerings, consumer product offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware and
third party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription
count methodology and when added, may cause variability in the quarterly comparisons of this calculation.
12
(1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain
non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP
net income, non-GAAP net income per share and billings. Excluding net billings, these non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of
purchased intangibles, gain and loss on strategic investments, and related income tax expenses. In the case of billings, we reconcile to
revenue by adjusting for the change in deferred revenue from the beginning to the end of the period less any deferred revenue
balances acquired from business combination(s) during the period and other discounts. See our reconciliation of GAAP financial
measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding
of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a
more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For
example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by
management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary
indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP
financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting
principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are
limited in value because they exclude certain items that may have a material impact upon our reported financial results. The
presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable
financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the
non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying
Autodesk's press release.
QTR 1
(2) GAAP Gross Margin
Stock-based compensation expense
Amortization of developed technology
Non-GAAP Gross Margin
(3) GAAP Operating Expenses
Stock-based compensation expense
Amortization of purchased intangibles
Restructuring charges, net
Non-GAAP Operating Expenses
86
—
2
88
$
QTR 2
%
%
%
%
533
(47 )
(9 )
—
477
$
(4) GAAP Operating Margin
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
3
8
2
2
—
Non-GAAP Operating Margin
15 %
(5) GAAP Net Income (Loss)
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax (provision) benefit items
Establishment of valuation allowance on deferred tax
assets
Income tax effect of non-GAAP adjustments
$
Non-GAAP Net Income
$
85
—
2
87
$
$
%
%
%
%
%
19
50
14
9
—
(1 )
(3 )
—
(19 )
69
13
512
(38 )
(8 )
—
466
1
7
2
1
—
$
QTR 3
QTR 4
YTD 2016
%
%
%
%
85 %
1%
2%
88 %
$
$
%
%
%
%
%
2%
7%
2%
2%
—%
11 %
13 %
(236 )
41
12
8
—
(2 )
4
$
214
3
$
1,045
(86 )
(17 )
—
943
44
(216 )
91
26
17
—
(3 )
1
214
(15 )
$
113
(6) GAAP Diluted Net Income (Loss) Per Share
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax (provision) benefit items
Establishment of valuation allowance on deferred tax assets
Income tax effect of non-GAAP adjustments
Non-GAAP Diluted Net Income Per Share
$
0.08
0.21
0.06
0.04
—
—
(0.01 )
—
(0.08 )
0.30
$
$
$
(1.04 )
0.18
0.05
0.04
—
(0.01 )
0.02
0.94
0.01
0.19
Reconciliation for Billings:
Q116
Year over year change in GAAP net revenue
Change in deferred revenue in the current period
Change in hedge gain (loss) applicable to billings
Change in acquisition related deferred revenue and other
Q216
9%
(11 )%
4%
1%
(4 )%
10 %
2%
(1 )%
3%
7%
Year over year change in billings
Reconciliation for Subscription Billings
Q116
Year-over-year change in GAAP subscription revenue
Change in deferred subscription in the current period
Q216
16 %
(20 )%
11 %
31 %
5%
4%
2%
6%
3%
52 %
Change in hedge gain (loss) applicable to subscription
billings
Change in acquisition related deferred subscription revenue
and other
Year-over-year change in subscription billings
Reconciliation for Guidance:
The following is a reconciliation of anticipated full year fiscal 2016 GAAP and non-GAAP operating margins:
Fiscal 2016
GAAP operating margin
Stock-based compensation expense
Amortization of purchased intangibles
(2 )%
3%
8%
(1 )%
3%
8%
9%
10 %
Non-GAAP operating margin
(a) Totals may not agree with the sum of the components due to rounding.
14
$
$
(0.95 )
0.39
0.11
0.07
—
(0.01 )
0.01
0.94
(0.07 )
0.49
AUTODESK, INC. (ADSK)
SECOND QUARTER FISCAL 2016 EARNINGS ANNOUNCEMENT
August 27, 2015
PREPARED REMARKS
Autodesk is posting a copy of these prepared remarks and its press release to its Investor Relations website.
These prepared remarks are offered to provide shareholders and analysts with additional time and detail for
analyzing our results in advance of our quarterly conference call. As previously scheduled, the conference call
will begin today, August 27, 2015 at 2:00 pm PT (5:00 pm ET) and will include only brief comments followed
by questions and answers. These prepared remarks will not be read on the call.
To access the live broadcast of the question and answer session, please visit the Investor Relations section of
Autodesk’s website at www.autodesk.com/investor . A complete reconciliation between GAAP and
non-GAAP results is provided in the tables following these prepared remarks.
Business Model Transition
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.
Second Quarter Fiscal 2016 Overview
• Total billings increased 7 percent compared to the second quarter last year as reported, and 15 percent
on a constant currency basis.
•
Deferred revenue increased 26 percent to $1.2 billion, compared to $981 million in the second quarter
last year.
•
Total subscriptions increased by approximately 61,000 from the first quarter of fiscal 2016.
•
Revenue was $610 million, a decrease of 4 percent compared to the second quarter last year as
reported, and flat on a constant currency basis.
•
GAAP operating margin was 1 percent, compared to 8 percent in the second quarter last year.
•
Non-GAAP operating margin was 11 percent, compared to 18 percent in the second quarter last year. A
reconciliation of GAAP to non-GAAP results is provided in the accompanying tables.
•
GAAP diluted net loss per share was $(1.04). Please refer to the comment below regarding the non-cash
GAAP tax charge recorded in the quarter. GAAP diluted net income per share was $0.13 in the second
quarter last year.
•
Non-GAAP diluted net income per share was $0.19, compared to $0.35 in the second quarter last year.
1
•
Cash flow from operating activities was $77 million, compared to $96 million in the second quarter last
year.
Billings and Subscriptions Review*
Total billings for the second quarter increased 7 percent compared to the second quarter last year as reported,
and 15 percent on a constant currency basis. The increase is related primarily to growth in subscription
billings.
Subscription billings (includes maintenance subscription, cloud services, and a portion of desktop
subscription) increased 52 percent, compared to the second quarter last year as reported, and 64 percent on a
constant currency basis. The increase is related primarily to an increase in maintenance subscription billings.
Total subscriptions were 2.39 million, an increase of approximately 61,000 from the first quarter of fiscal
2016. The majority of the subscription additions were from new subscription types (desktop, enterprise
flexible license, and cloud subscription).
* For definitions, please view the Glossary of Terms later in this document.
Revenue Analysis
2Q 2015
(in millions)
Total net revenue (1)
License and other revenue
Subscription revenue
Recurring revenue (2)
3Q 2015
4Q 2015
1Q 2016
2Q 2016
$
637
$
618
$
665
$
647
$
610
$
350
$
321
$
354
$
327
$
291
$
287
$
44 %
298
$
48 %
310
$
48 %
320
$
51 %
319
55 %
___________
(1) Totals may not agree with the sum of the components due to rounding.
(2) For a definition, please view the Glossary of Terms later in this document.
Total net revenue for the second quarter decreased 4 percent to $610 million compared to the second quarter last
year as reported and was flat on a constant currency basis.
License and other revenue decreased 17 percent compared to the second quarter last year, to $291 million. The
decline in license and other revenue was related primarily to the business model transition noted on page 1 of
this document.
Subscription revenue increased 11 percent compared to the second quarter last year, to $319 million. Growth in
subscription revenue was related primarily to an increase in maintenance subscription revenue.
Recurring revenue was 55 percent compared to 44 percent in the second quarter last year.
Backlog was $1 million, a decrease of $26 million compared to the second quarter last year and a decrease of $8
million sequentially. At the end of the second quarter, channel inventory was less than one week.
2
Revenue by Geography
(in millions)
Americas
EMEA
Asia Pacific
$
$
$
Emerging Economies
Emerging as a percentage of Total Revenue
$
2Q 2015
223
244
170
$
$
$
3Q 2015
231
238
149
98
$
15 %
$
$
$
4Q 2015
238
273
154
95
$
15 %
$
$
$
107
$
16 %
1Q 2016
244
245
157
$
$
$
2Q 2016
236
226
148
93
$
14 %
92
15 %
Revenue in the Americas was $236 million, an increase of 6 percent compared to the second quarter last year.
Growth in the Americas was led by the U.S.
Revenue in EMEA was $226 million, a decrease of 7 percent compared to the second quarter last year as
reported and flat on a constant currency basis, primarily related to a decline in central Europe.
Revenue in APAC was $148 million, a decrease of 13 percent compared to the second quarter last year as
reported and 9 percent on a constant currency basis, primarily related to a decline in Japan.
Revenue from emerging economies was $92 million, a decrease of 7 percent compared to the second quarter last
year as reported and 5 percent on a constant currency basis. Growth in China was more than offset by declines
in the other BRIC countries. As a matter of reference, none of the individual BRIC countries currently represent
more than 4 percent of total revenue.
Revenue by Product Type
2Q 2015
(in millions)
3Q 2015
4Q 2015
1Q 2016
2Q 2016
Flagship
$
307
$
288
$
298
$
299
$
272
Suites
$
232
$
225
$
249
$
240
$
226
New and Adjacent
$
99
$
105
$
117
$
108
$
112
Revenue from Flagship products was $272 million, a decrease of 11 percent compared to the second quarter last
year. Growth in enterprise flexible license agreements, maintenance subscriptions, and desktop subscriptions
was more than offset by weakness in AutoCAD LT.
Revenue from Suites was $226 million, a decrease of 3 percent compared to the second quarter last year.
Growth in AEC suites was more than offset by a decline in Manufacturing suites. Revenue from Suites was 37
percent of total revenue.
Revenue from New and Adjacent products was $112 million, an increase of 13 percent compared to the second
quarter last year. Growth in New and Adjacent was primarily from Delcam.
3
Revenue by Business Segment
2Q 2015
(in millions)
3Q 2015
4Q 2015
1Q 2016
2Q 2016
Architecture, Engineering and Construction
$
218
$
217
$
242
$
237
$
233
Platform Solutions and Emerging Business
$
208
$
188
$
189
$
185
$
164
Manufacturing
$
168
$
170
$
190
$
185
$
171
Media and Entertainment
$
44
$
43
$
43
$
40
$
41
Revenue from our AEC business segment was $233 million, an increase of 7 percent compared to the second
quarter last year driven by growth from our AEC flexible enterprise offerings. Revenue from our AEC suites
increased 4 percent compared to the second quarter last year, led by growth in Building Design Suite and
Infrastructure Design Suite.
Revenue from our Platform Solutions and Emerging Business (PSEB) segment was $164 million, a decrease of
21 percent compared to the second quarter last year. Combined revenue from AutoCAD and AutoCAD LT was
$146 million, a decrease of 22 percent compared to the second quarter last year, related primarily to a decrease
in AutoCAD LT.
Revenue from our Manufacturing business segment was $171 million, an increase of 2 percent compared to the
second quarter last year. Growth in our Manufacturing segment was primarily from Delcam. Revenue from our
Manufacturing suites decreased 9 percent compared to the second quarter last year.
Revenue from our Media and Entertainment (M&E) business segment was $41 million, a decrease of 6 percent
compared to the second quarter last year driven by a decline in Creative Finishing.
Foreign Currency Impact
2Q 2015
(in millions)
3Q 2015
4Q 2015
1Q 2016
2Q 2016
FX Impact on Total Billings
$
1
$
(5 )
$
(32 )
$
(31 )
$
(50 )
FX Impact on Total Revenue
$
—
$
(4 )
$
(11 )
$
(22 )
$
(25 )
FX Impact on Cost of Revenue and Operating Expenses
$
(2 )
$
3
$
14
$
22
$
25
FX Impact on Operating Income
$
(2 )
$
(1 )
$
3
$
—
$
—
The year-on-year foreign currency impact represents the U.S. Dollar impact of changes in foreign currency rates
on our financial results as well as the impact of gains and losses from our hedging program.
Compared to the second quarter of last year, the impact of foreign currency exchange rates and hedging was
$50 million unfavorable on billings. Compared to the first quarter of this year, the impact of foreign currency
exchange rates and hedging was $12 million unfavorable on billings.
Compared to the second quarter of last year, the impact of foreign currency exchange rates, including the
benefits of our hedging program, was $25 million unfavorable on revenue and $25 million favorable on cost of
revenue and operating expenses.
4
Balance Sheet Items and Cash Review
(in millions)
Cash Flows from Operating Activities
Capital Expenditures
Depreciation, Amortization and Accretion
Total Cash and Marketable Securities, net of long-term debt
Days Sales Outstanding
Deferred Revenue
2Q 2015
96
17
37
1,419
52
$
981
$
$
$
$
3Q 2015
136
28
37
1,407
55
$ 1,006
$
$
$
$
4Q 2015
257
16
36
1,549
63
$ 1,157
$
$
$
$
1Q 2016
87
13
38
1,521
44
$ 1,154
$
$
$
$
2Q 2016
77
17
36
1,466
59
$ 1,236
$
$
$
$
In June 2015, Autodesk engaged in a debt issuance of $750 million. Total long-term debt at the end of the
second quarter was $1.5 billion.
Net of long-term debt, cash and investments at the end of the second quarter was approximately $1.5 billion.
Including the proceeds from our debt offerings, approximately 68 percent of the total cash and investments is
located offshore.
During the second quarter, Autodesk used $112 million to repurchase approximately 2.1 million shares of
common stock at an average repurchase price of $52.87 per share. Through this stock repurchase program,
Autodesk remains committed to managing dilution and reducing shares outstanding over time.
Cash flow from operating activities during the second quarter was $77 million, a decrease of 20 percent
compared to the second quarter last year, primarily related to a decline in net income and a shift in billings
linearity.
Days sales outstanding (DSO) was 59 days, which was an increase of 7 days compared to the second quarter
last year. The increase is primarily related to a shift in billings linearity.
Deferred revenue was $1.2 billion, an increase of 26 percent compared to the second quarter last year. The
increase is primarily related to the increase in subscription billings over the past four quarters driven by the
business model transition.
Margins and EPS Review
2Q 2015
Gross Margin
Gross Margin - GAAP
Gross Margin - Non-GAAP
Operating Expenses (in millions)
Operating Expenses - GAAP
Operating Expenses - Non-GAAP
Operating Margin
Operating Margin - GAAP
Operating Margin - Non-GAAP
Earnings Per Share
Diluted Net Income (Loss) Per Share - GAAP
Diluted Net Income Per Share - Non-GAAP
3Q 2015
86 %
89 %
$
$
499
451
86 %
89 %
$
$
8%
18 %
$
$
0.13
0.35
517
467
0.05
0.25
1Q 2016
87 %
89 %
$
$
2%
13 %
$
$
5
4Q 2015
561
506
86 %
88 %
$
$
2%
13 %
$
$
0.05
0.25
2Q 2016
533
477
85 %
87 %
$
$
3%
15 %
$
$
0.08
0.30
512
466
1%
11 %
$
$
(1.04 )
0.19
GAAP gross margin in the second quarter was 85 percent. Non-GAAP gross margin in the second quarter was
87 percent. The year-over-year decrease in both GAAP and non-GAAP gross margin is primarily related to the
decline in license revenue attributed to the business model transition and associated higher cloud-related costs.
GAAP and non-GAAP operating expenses increased 3 percent year-over-year. Both GAAP and non-GAAP
year-over-year operating expenses increased primarily related to higher employee-related costs.
GAAP operating margin was 1 percent compared to 8 percent in the second quarter last year. Non-GAAP
operating margin was 11 percent compared to 18 percent in the second quarter last year. The changes in both
GAAP and non-GAAP operating margin are primarily related to the decline in revenue as well as the changes in
respective cost of revenue and operating expenses noted above.
The second quarter GAAP effective tax rate was 25 percent before discrete items. In the second quarter,
Autodesk recorded a non-cash GAAP tax charge of $214 million to establish a valuation allowance on certain
U.S. deferred tax assets. Due to Autodesk's pre-tax U. S. GAAP cumulative loss over the last three years, the
company evaluated its deferred tax assets and determined that a valuation allowance was required. This is a
GAAP-only charge and has no impact to cash this year or in the future. Autodesk will continue to monitor the
application of this accounting rule and will consider reversing the valuation allowance when conditions warrant.
The second quarter non-GAAP effective tax rate was 26 percent.
GAAP diluted net loss per share for the second quarter was $(1.04), which includes the non-cash GAAP tax
charge mentioned above. Non-GAAP diluted net income per share for the second quarter was $0.19.
For the second quarter, the GAAP and non-GAAP share count used to compute basic net (loss) income per
share was 227.0 million. The GAAP share count used to compute diluted net loss per share was 227.0 million.
The non-GAAP share count used to compute diluted net income per share was 231.1 million.
A complete reconciliation between GAAP and non-GAAP results is provided in the tables following these
prepared remarks.
Business Outlook
The following are forward-looking statements based on current expectations and assumptions, and involve risks
and uncertainties some of which are set forth below under "Safe Harbor." Autodesk's business outlook for the
third quarter and full year fiscal 2016 assumes, among other things, a continuation of the current economic
environment and foreign exchange currency rate environment. A reconciliation between the GAAP and
non-GAAP estimates for fiscal 2016 is provided below or in the tables following these prepared remarks.
Third Quarter Fiscal 2016
Q3 FY16 (ending
October 31, 2015)
$580 - $600
($0.23) - ($0.18)
$0.05 - $0.10
Q3 FY16 Guidance Metrics
Revenue (in millions)
EPS GAAP
EPS Non-GAAP (1)
_______________
(1) Non-GAAP earnings per diluted share exclude $0.21 related to stock-based compensation expense and $0.07 for the amortization
of acquisition related intangibles, net of tax.
6
Full Year Fiscal 2016
FY16 Guidance Metrics
Billings growth (1)
Revenue (in millions) (2)
GAAP operating margin
Non-GAAP operating margin
[…]
[…]
Net subscription additions
FY16 (ending
January 31, 2016)
2% - 4%
$2,465 - $2,505
(2)% - (1)%
9% - 10%
[…]
[…]
375,000 - 425,000
_______________
(1) On a constant currency basis, billings growth would be 9% - 11%.
(2) On a constant currency basis, revenue growth would be 3% - 5%.
[…]
The third quarter and full year fiscal 2016 outlook assume a projected annual effective tax rate of 24 percent
and 26 percent for GAAP and non-GAAP results, respectively.
The majority of the euro, yen and Australian dollar denominated billings for our third quarter fiscal 2016 have
been hedged. This, along with deferred revenue locked-in through prior period billings hedges, will materially
reduce the impact of currency fluctuations on our third quarter results. However, over an extended period of
time, currency fluctuations may increasingly impact our results. We also hedge certain expenses as noted
below. We hedge our net cash flow exposures using a four quarter rolling layered hedge program. As such, a
portion of the projected euro, yen, and Australian dollar denominated billings for the remainder of fiscal 2016
and the beginning of fiscal 2017 has been hedged. The closer to the current time period, the more we are
hedged. See below for more details on our foreign currency hedging program.
Autodesk’s Foreign Currency Hedging Program and Calculation of Constant Currency Growth
Given continued foreign exchange volatility, we provide a brief summary of how we handle foreign currency
exchange hedging as well as a description of how we calculate constant currency growth rates. A few points on
our hedging program include:
• We do not conduct foreign currency exchange hedging for speculative purposes. The purpose of our
hedging program is to reduce risk to foreign denominated cash flows and to partially reduce variability
that would otherwise impact our financial results from currency fluctuations.
• We utilize cash flow hedges on projected billings and certain projected operating expenses in major
currencies. We hedge our net exposures using a four quarter rolling layered hedge. The closer to the
current time period, the more we are hedged.
•
•
•
•
We designate cash flow hedges for deferred and non-deferred billings separately, and reflect associated
gains and losses on hedging contracts in our earnings when respective revenue is recognized in earnings.
On a monthly basis, to mitigate foreign exchange gains/losses, we hedge net monetary assets and
liabilities recorded in non-functional currencies on the books of certain USD functional entities where
these exposures are purposefully concentrated.
From time to time, we hedge strategic exposures which may be related to acquisitions. Such hedges
may not qualify for hedge accounting and are marked-to-market and reflected in earnings immediately.
The major currencies we hedge include the euro, yen, Swiss franc, British pound, Canadian dollar, and
Australian dollar. The euro is the primary exposure for the company.
When we report period-over-period growth rate percentages on a constant currency basis, we attempt to
represent the changes in the underlying business operations by eliminating fluctuations caused by changes in
foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and
comparative period. However, when we calculate the foreign currency impact of exchange rates in the current
and comparative period on our financial results (See table above in “Foreign Currency Impact” section) we
include the U.S. Dollar impact of fluctuations in foreign currency exchange rates as well as the impact of gains
and losses recorded as a result of our hedging program.
Autodesk’s Product Type Classification
The following represents Autodesk’s current view for product categorization. Autodesk will periodically make
changes to this list. This is not a complete list.
“Flagship” includes the following products:
®
•3ds Max
®
•AutoCAD
®
•AutoCAD LT
®
•AutoCAD vertical products such
®
•Civil 3D
®
•Inventor products (standalone)
®
•Map 3D
®
•Maya
as AutoCAD® Mechanical and AutoCAD® Architecture
7
•Revit
®
products (standalone)
“Suites” include the following product classes:
®
•AutoCAD Design Suites
•Building Design Suites
•Educational/academic suites
•Entertainment Creation Suites
•Factory Design Suites
•Infrastructure Design Suites
®
•Inventor family suites
•Plant Design Suites
•Product Design Suites
®
•Revit family suites
“New and Adjacent” includes the following products and services:
®
•Alias Design products
®
•Autodesk 360 products
®
•Autodesk Consulting
®
•Autodesk Simulation Mechanical
®
•Autodesk Simulation Multiphysics
®
•Buzzsaw
•CF Design
®
•Constructware
•Consumer products
•Creative Finishing products
®
•Delcam products
•Moldflow® products
®
•Navisworks
®
•Scaleform
®
•Vault products
•All other products
Glossary of Terms
Annualized Recurring Revenue:Represents the annualized value of our average monthly revenue for the
preceding three months from our maintenance, desktop, cloud services and enterprise license offerings. It
excludes revenue from Autodesk Consulting Services, education offerings, consumer product offerings, certain
Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third party products.
Recurring revenue acquired with the acquisition of a business is captured and may cause variability in the
comparison of this calculation.
Billings: Amounts billed to customers during the current fiscal period net of any partner incentives, hedge
gains/losses, or other discounts.
License and Other revenue: License and other revenue consists of two components: (1) all forms of product
license revenue and (2) other revenue. Product license revenue includes software license revenue from the sale
of perpetual licenses, term-based licenses from our desktop subscription and enterprise offerings, and product
8
revenue for Creative Finishing. Other revenue includes revenue from consulting, training, Autodesk Developers
Network and Creative Finishing customer support, and is recognized over time, as the services are performed.
Maintenance: Our maintenance program provides our customers with a cost effective and predictable
budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released
during the term of their contracts. Under our maintenance program, customers are eligible to receive
unspecified upgrades when and if available, downloadable training courses and online support. We recognize
maintenance revenue over the term of the agreements, generally between one and three years.
Recurring Revenue: Represents the revenue for the period from our maintenance, desktop, cloud services and
enterprise license offerings. It excludes revenue from Autodesk Consulting Services, education offerings,
consumer product offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk
Constructware, and third party products. Recurring revenue acquired with the acquisition of a business is
captured and may cause variability in the comparison of this calculation.
Subscription revenue: Autodesk subscription revenue consists of three components: (1) maintenance revenue
from our software products; (2) maintenance revenue from our term-based desktop subscription and enterprise
offerings; and (3) revenue from our cloud service offerings.
Total Subscriptions: Consists of subscriptions from our maintenance, desktop, cloud service and enterprise
license offerings that are active and paid as of the quarter end date. For certain cloud based and enterprise
license offerings, subscriptions represent the monthly average activity reported within the last three months of
the quarter end date. Total subscriptions do not include data from education offerings, consumer product
offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third
party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to
our subscription count methodology and when added, may cause variability in the quarterly comparisons of this
calculation.
9
Safe Harbor Statement
These prepared remarks contain forward-looking statements that involve risks and uncertainties, including
statements in the paragraphs under “Business Outlook” above, the impacts of our business model transition, our
expectations regarding our ability to significantly increase our subscription base and customer value, trends
(including by geography, product, product type, and end user), the impact of foreign exchange hedges, and
statements regarding our strategies, market and products positions, performance and results. There are a
significant number of factors that could cause actual results to differ materially from statements made in these
remarks, including: failure to successfully manage transitions to new business models and markets, including
the introduction of additional ratable revenue streams and our continuing efforts to attract customers to our
cloud-based offerings and expenses related to the transition of our business model; fluctuation in foreign
currency exchange rates; the success of our foreign currency hedging program; failure to control our expenses;
our performance in particular geographies, including emerging economies; the ability of governments around
the world to meet their financial and debt obligations, and finance infrastructure projects; weak or negative
growth in the industries we serve; slowing momentum in subscription billings or revenues; difficulty in
predicting revenue from new businesses and the potential impact on our financial results from changes in our
business models; general market, political, economic and business conditions; the impact of non-cash charges
on our financial results; failure to maintain our revenue growth and profitability; difficulties encountered in
integrating new or acquired businesses and technologies; the inability to identify and realize the anticipated
benefits of acquisitions; the financial and business condition of our reseller and distribution channels;
dependence on and the timing of large transactions; failure to achieve sufficient sell-through in our channels for
new or existing products; pricing pressure; unexpected fluctuations in our tax rate; the timing and degree of
expected investments in growth and efficiency opportunities; changes in the timing of product releases and
retirements; and any unanticipated accounting charges.
Further information on potential factors that could affect the financial results of Autodesk are included in
Autodesk's Annual Report on Form 10-K for the year ended January 31, 2015 and Form 10-Q for the quarter
ended April 30, 2015, which are on file with the U.S. Securities and Exchange Commission. Autodesk
disclaims any obligation to update the forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made.
Autodesk is a registered trademark of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or
other countries. All other brand names, product names or trademarks belong to their respective holders.
Autodesk reserves the right to alter product and services offerings, and specifications and pricing at any time
without notice, and is not responsible for typographical or graphical errors that may appear in this document.
© 2015 Autodesk, Inc. All rights reserved.
10
Autodesk, Inc.
Other Supplemental Financial Information (a)
Fiscal Year 2016
Financial Statistics ($ in millions, except per
share data):
Total Net Revenue:
License and Other Revenue
Subscription Revenue
QTR 1
$
$
$
647
327
320
GAAP Gross Margin
Non-GAAP Gross Margin (1)(2)
GAAP Operating Expenses
GAAP Operating Margin
GAAP Net Income (Loss)
GAAP Diluted Net Income (Loss) Per Share (b)
Non-GAAP Operating Expenses (1)(3)
Non-GAAP Operating Margin (1)(4)
Non-GAAP Net Income (1)(5)(c)
QTR 2
$
$
$
610
291
319
86 %
88 %
$
$
$
QTR 4
YTD 2016
$
$
$
1,256
617
639
85 %
87 %
$
$
$
$
$
477
15 %
69
$
Total Cash and Marketable Securities
Days Sales Outstanding
Capital Expenditures
Cash Flow from Operating Activities
GAAP Depreciation, Amortization and Accretion
$
512
1%
(236 )
(1.04 )
85 %
88 %
$
1,045
2%
$
(216 )
$
(0.95 )
$
$
466
11 %
44
$
943
13 %
113
0.30
$
0.19
$
0.49
$
2,952
$
$
$
2,952
59
17
77
36
$
$
$
$
2,271
44
13
87
38
$
$
$
30
164
74
Deferred Subscription Revenue Balance (c)
$
930
$
1,004
$
1,004
Revenue by Geography:
Americas
Europe, Middle East and Africa
Asia Pacific
% of Total Rev from Emerging Economies
$
$
$
244
245
157
14 %
$
$
$
Non-GAAP Diluted Net Income Per Share
(1)(6)(b)(c)
Revenue by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
Other Revenue Statistics:
% of Total Rev from Flagship
% of Total Rev from Suites
$
533
3%
19
0.08
QTR 3
$
$
$
$
237
185
185
40
46 %
37 %
11
$
$
$
$
236
226
148
15 %
233
164
171
41
45 %
37 %
$
$
$
$
$
$
$
480
471
305
15 %
470
349
356
81
45 %
37 %
% of Total Rev from New and Adjacent
% of Total Rev from AutoCAD and AutoCAD LT
17 %
25 %
18 %
24 %
17 %
25 %
Favorable (Unfavorable) Impact of U.S. Dollar
Translation Relative to
Foreign Currencies Compared to Comparable Prior
Year Period:
FX Impact on Total Billings
FX Impact on Total Net Revenue
$
$
FX Impact on Cost of Revenue and Total Operating Expenses $
FX Impact on Operating Income
$
Gross Profit by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
Unallocated amounts
Common Stock Statistics:
GAAP Common Shares Outstanding
GAAP Fully Diluted Weighted Average Shares Outstanding
Shares Repurchased
Subscriptions (in millions):
Total Subscriptions (c)
$
$
$
$
$
(31 )
(22 )
$
$
(50 )
(25 )
$
$
(81 )
(47 )
22
—
$
$
25
—
$
$
47
—
217
163
158
33
(16 )
$
$
$
$
$
210
139
151
32
(14 )
$
$
$
$
$
427
302
309
64
(31 )
227.6
231.7
1.6
226.2
227.0
2.1
226.2
227.1
3.7
2.33
2.39
2.39
(a) Totals may not agree with the sum of the components due to rounding.
(b) Net Income (Loss) Per Share were computed independently for each of the periods presented; therefore the sum of the net income
(loss) per share amounts for the quarters may not equal the total for the year.
(c) Total Subscriptions consists of subscriptions from our maintenance, desktop, cloud service and enterprise license offerings that
are active and paid as of the quarter end date. For certain cloud based and enterprise license offerings, subscriptions represent the
monthly average activity within the last three months of the quarter end date. Total subscriptions do not include data from education
offerings, consumer product offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware and
third party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription
count methodology and when added, may cause variability in the quarterly comparisons of this calculation.
(1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain
non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP
net income, non-GAAP net income per share and billings. Excluding net billings, these non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of
purchased intangibles, gain and loss on strategic investments, and related income tax expenses. In the case of billings, we reconcile to
revenue by adjusting for the change in deferred revenue from the beginning to the end of the period less any deferred revenue
balances acquired from business combination(s) during the period and other discounts. See our reconciliation of GAAP financial
measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding
of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a
more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For
example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by
management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary
indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP
financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting
principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are
limited in value because they exclude certain items that may have a material impact upon our reported financial results. The
presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable
financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the
non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying
Autodesk's press release.
12
QTR 1
(2) GAAP Gross Margin
Stock-based compensation expense
Amortization of developed technology
Non-GAAP Gross Margin
(3) GAAP Operating Expenses
Stock-based compensation expense
Amortization of purchased intangibles
Restructuring charges, net
Non-GAAP Operating Expenses
86
—
2
88
$
$
QTR 2
%
%
%
%
533
(47 )
(9 )
—
477
(4) GAAP Operating Margin
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
3
8
2
2
—
Non-GAAP Operating Margin
15 %
(5) GAAP Net Income (Loss)
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax (provision) benefit items
$
Establishment of valuation allowance on deferred tax
assets
Income tax effect of non-GAAP adjustments
$
$
%
%
%
%
%
19
50
14
9
—
(1 )
(3 )
$
(6) GAAP Diluted Net Income (Loss) Per Share
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
(Gain) loss on strategic investments
Discrete GAAP tax (provision) benefit items
$
69
0.08
0.21
0.06
0.04
—
—
(0.01 )
$
$
$
(236 )
41
12
8
—
(2 )
4
$
$
44
(1.04 )
0.18
0.05
0.04
—
(0.01 )
0.02
0.94
0.01
0.19
Q216
(4 )%
10 %
2%
%
%
%
%
1,045
(86 )
(17 )
—
943
2
7
2
2
—
%
%
%
%
%
13 %
$
214
3
$
9%
(11 )%
4%
85
1
2
88
%
%
%
%
%
Reconciliation for Billings:
Year over year change in GAAP net revenue
Change in deferred revenue in the current period
Change in hedge gain (loss) applicable to billings
YTD 2016
11 %
—
(0.08 )
Q116
QTR 4
%
%
%
%
512
(38 )
(8 )
—
466
1
7
2
1
—
—
(19 )
Non-GAAP Net Income
Establishment of valuation allowance on deferred tax
assets
Income tax effect of non-GAAP adjustments
Non-GAAP Diluted Net Income Per Share
85
—
2
87
QTR 3
(216 )
91
26
17
—
(3 )
1
214
(15 )
$
113
$
(0.95 )
0.39
0.11
0.07
—
(0.01 )
0.01
$
0.94
(0.07 )
0.49
Change in acquisition related deferred revenue and
other
Year over year change in billings
1%
(1 )%
3%
7%
13
Reconciliation for Subscription Billings
Q116
Year-over-year change in GAAP subscription
revenue
Change in deferred subscription in the current
period
Change in hedge gain (loss) applicable to
subscription billings
Change in acquisition related deferred subscription
revenue and other
Year-over-year change in subscription billings
Q216
16 %
11 %
(20 )%
31 %
5%
4%
2%
6%
3%
52 %
Reconciliation for Guidance:
The following is a reconciliation of anticipated full year fiscal 2016 GAAP and non-GAAP operating margins:
Fiscal 2016
GAAP operating margin
(2 )%
(1 )%
Stock-based compensation expense
3%
3%
Amortization of purchased intangibles
8%
8%
Non-GAAP operating margin
9%
10 %
(a) Totals may not agree with the sum of the
components due to rounding.
Fiscal Year 2015
QTR 1
Financial Statistics ($ in millions, except per share
data):
$
Total Net Revenue:
License and Other Revenue
$
Subscription Revenue
$
GAAP Gross Margin
Non-GAAP Gross Margin (1)(2)
$
$
$
87 %
89 %
GAAP Operating Expenses
GAAP Operating Margin
GAAP Net Income
GAAP Diluted Net Income Per Share (b)
$
Non-GAAP Operating Expenses (1)(3)
Non-GAAP Operating Margin (1)(4)
Non-GAAP Net Income (1)(5)(c)
Non-GAAP Diluted Net Income Per Share
(1)(6)(b)(c)
$
Total Cash and Marketable Securities
Days Sales Outstanding
Capital Expenditures
Cash Flow from Operating Activities
593
316
276
QTR 2
$
$
$
427
17 %
74
$
$
$
$
$
$
$
86 %
89 %
472
7%
28
0.12
$
$
637
350
287
QTR 3
$
$
$
451
18 %
82
0.32
$
2,388
50
15
219
14
$
$
$
$
$
$
86 %
89 %
499
8%
31
0.13
$
$
618
321
298
QTR 4
665
354
310
YTD 2015
$
$
$
87 %
89 %
2,512
1,341
1,171
86 %
89 %
517
$
2%
11
$
0.05
$
561
$
2%
12
$
0.05
$
2,049
5%
82
0.35
$
467
$
13 %
58
$
506
$
13 %
59
$
1,850
15 %
272
0.35
$
0.25
$
0.25
$
1.17
2,169
52
17
96
$
2,157
55
28
136
$
2,299
63
16
257
$
2,299
$
$
76
708
$
$
$
$
$
$
GAAP Depreciation, Amortization and Accretion
$
36
$
37
$
37
$
36
$
146
Deferred Subscription Revenue Balance (c)
$
848
$
839
$
839
$
937
$
937
Revenue by Geography:
Americas
Europe, Middle East and Africa
Asia Pacific
% of Total Rev from Emerging Economies
$
$
$
206
$
226
$
161
$
13 %
223
$
244
$
170
$
15 %
231
$
238
$
149
$
15 %
238
$
273
$
154
$
16 %
898
980
634
15 %
$
$
$
$
196
212
147
38
218
208
168
44
217
188
170
43
242
189
190
43
873
797
676
167
Revenue by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
Other Revenue Statistics:
% of Total Rev from Flagship
% of Total Rev from Suites
% of Total Rev from New and Adjacent
% of Total Rev from AutoCAD and AutoCAD LT
50
35
14
32
$
$
$
$
%
%
%
%
48
36
16
29
$
$
$
$
%
%
%
%
47
36
17
27
$
$
$
$
%
%
%
%
45
37
18
25
$
$
$
$
%
%
%
%
48
36
16
28
%
%
%
%
Favorable (Unfavorable) Impact of U.S. Dollar
Translation Relative to
Foreign Currencies Compared to Comparable
Prior Year Period:
FX Impact on Total Net Revenue
$
(9 )
$
—
$
(4 )
$
(11 )
$
(24 )
FX Impact on Cost of Revenue and Total Operating
Expenses
FX Impact on Operating Income
$
$
2
(7 )
$
$
(2 )
(2 )
$
$
3
(1 )
$
$
14
3
$
$
17
(7 )
Gross Profit by Segment:
Architecture, Engineering and Construction
Platform Solutions and Emerging Business
Manufacturing
Media and Entertainment
Unallocated amounts
$
$
$
$
$
176
191
133
29
(15 )
$
$
$
$
$
196
185
152
32
(16 )
$
$
$
$
$
194
167
153
32
(15 )
$
$
$
$
$
220
169
167
34
(15 )
$
$
$
$
$
786
712
604
127
(59 )
Common Stock Statistics:
Common Shares Outstanding
Fully Diluted Weighted Average Shares Outstanding
Shares Repurchased
Subscriptions (in millions):
Total Subscriptions (c)
227.5
231.6
2.0
227.2
232.4
1.9
227.2
231.5
1.9
227.0
232.2
1.1
227.0
232.4
6.9
1.94
2.01
2.13
2.23
2.23
(a) Totals may not agree with the sum of the components due to rounding.
(b) Earnings per share were computed independently for each of the periods presented; therefore the sum of the earnings per share
amounts for the quarters may not equal the total for the year.
15
(c) Total Subscriptions consists of subscriptions from our maintenance, desktop, cloud service and enterprise license offerings that
are active and paid as of the quarter end date. For certain cloud based and enterprise license offerings, subscriptions represent the
monthly average activity within the last three months of the quarter end date. Total subscriptions do not include data from education
offerings, consumer product offerings, certain Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware and
third party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription
count methodology and when added, may cause variability in the quarterly comparisons of this calculation.
(1) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain
non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP
net income, non-GAAP net income per share and billings. Excluding net billings, these non-GAAP financial measures are adjusted to
exclude certain costs, expenses, gains and losses, including stock-based compensation expense, restructuring charges, amortization of
purchased intangibles, gain and loss on strategic investments, and related income tax expenses. In the case of billings, we reconcile to
revenue by adjusting for the change in deferred revenue from the beginning to the end of the period less any deferred revenue
balances acquired from business combination(s) during the period and other discounts. See our reconciliation of GAAP financial
measures to non-GAAP financial measures herein. We believe these exclusions are appropriate to enhance an overall understanding
of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical
operating results. These adjustments to our GAAP results are made with the intent of providing both management and investors a
more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance. For
example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by
management to be outside our core operating results. In addition, these non-GAAP financial measures are among the primary
indicators management uses as a basis for our planning and forecasting of future periods. There are limitations in using non-GAAP
financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting
principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are
limited in value because they exclude certain items that may have a material impact upon our reported financial results. The
presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable
financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the
non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying
Autodesk's press release.
Fiscal Year 2015
QTR 1
(2) GAAP Gross Margin
Stock-based compensation expense
Amortization of developed technology
Non-GAAP Gross Margin
(3) GAAP Operating Expenses
Stock-based compensation expense
Amortization of purchased intangibles
Restructuring charges, net
Non-GAAP Operating Expenses
87 %
—%
2%
89 %
$
$
(4) GAAP Operating Margin
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
472
(32 )
(11 )
(2 )
427
7
6
2
2
—%
Non-GAAP Operating Margin
(5) GAAP Net Income
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
Loss on strategic investments
Discrete GAAP tax provision items
QTR 2
86 %
—%
3%
89 %
$
$
%
%
%
%
28
34
13
11
2
4
(2 )
499
(38 )
(10 )
(1 )
451
8
6
2
2
—%
17 %
$
QTR 3
86 %
—%
3%
89 %
$
$
%
%
%
%
16
31
40
15
10
1
3
(3 )
517
(41 )
(10 )
—
467
2
7
2
2
—%
18 %
$
QTR 4
87
—
2
89
$
$
%
%
%
%
$
11
43
13
10
—
1
(5 )
%
%
%
%
561
(46 )
(9 )
—
506
2
8
2
1
—
13 %
YTD 2015
86
1
2
89
$
$
%
%
%
%
%
$
12
49
13
9
—
16
(10 )
2,049
(157 )
(40 )
(3 )
1,850
5
7
2
1
—
13 %
%
%
%
%
%
%
%
%
%
15 %
$
82
166
53
40
3
23
(19 )
Income tax effect of non-GAAP adjustments
(16 )
Non-GAAP Net Income
$
(6) GAAP Diluted Net Income Per Share
Stock-based compensation expense
Amortization of developed technology
Amortization of purchased intangibles
Restructuring charges, net
Loss on strategic investments
Discrete GAAP tax provision items
Income tax effect of non-GAAP adjustments
Non-GAAP Diluted Net Income Per Share
$
$
74
0.12
0.14
0.06
0.05
0.01
0.02
(0.01 )
(0.07 )
0.32
(15 )
$
$
$
82
0.13
0.18
0.06
0.04
—
0.01
(0.01 )
(0.06 )
0.35
(15 )
$
$
$
58
0.05
0.19
0.06
0.04
—
—
(0.02 )
(0.07 )
0.25
(30 )
$
$
$
59
0.05
0.21
0.05
0.04
—
0.07
(0.04 )
(0.13 )
0.25
(76 )
$
272
$
0.35
0.71
0.23
0.17
0.01
0.10
(0.08 )
(0.32 )
1.17
$
Reconciliation for Billings:
Q115
Year over year change in GAAP net revenue
Q215
Q315
Q415
FY15
4%
13 %
11 %
13 %
10 %
Change in deferred revenue in the current
period
Change in hedge gain (loss) applicable to
billings (d)
8%
12 %
13 %
2%
8%
(1 )%
(1 )%
—%
2%
—%
Change in acquisition related deferred revenue
and other
(2 )%
2%
1%
(2 )%
—%
9%
26 %
25 %
15 %
18 %
Year over year change in Billings
Reconciliation for Subscription Billings
Q115
Q215
Q315
Q415
FY15
Year-over-year change in GAAP subscription
revenue
12 %
15 %
15 %
17 %
15 %
Change in deferred subscription revenue in the
current period
14 %
14 %
17 %
2%
10 %
(2 )%
(1 )%
1%
2%
(6 )%
1%
(1 )%
(5 )%
(3 )%
18 %
29 %
32 %
16 %
22 %
Change in hedge gain (loss) applicable to
subscription billings (d)
Change in acquisition related deferred
subscription revenue and other
Year-over-year change in subscription billings
—%
(d) Prior period was adjusted to conform with current period's presentation to include the effects from hedging on total net billings.
17
CROSS-REFERENCE LISTS
CROSS-REFERENCE LISTS
ANNEX I
MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE REGISTRATION DOCUMENT
(SCHEDULE)
(Page numbering refers to the page contained in the relevant document.)
Item #
Item contents
Chapter/Exhibit
Page
1.
Persons Responsible
1.1.
All persons responsible for the information given in
the prospectus.
Prospectus
4 (Company
Representative for
Prospectus)
1.2.
A declaration by those responsible for the prospectus.
Prospectus
4 (Company
Representative for
Prospectus)
2.
Statutory Auditors
Part II - Section B
56 (10.2
Independent
Registered Public
Accounting Firm)
Not applicable
Not applicable
2.1.
Names and addresses of the issuer’s auditors.
2.2.
If auditors have resigned, been removed or not been
re-appointed during the period covered by the
historical financial information, indicate details if
material.
3.
Selected Financial Information
3.1.
Selected historical financial information.
Part II - Section B
55 - 56 (10.1
Selected Financial
Data)
3.2.
Interim periods.
Part II - Section B
55 - 56 (10.1
Selected Financial
Data)
4.
Risk Factors
Part II - Section A
14 - 32 (Risk
Factors)
5.
Information about the Issuer
5.1.
History and Development of the Issuer
5.1.1.
Legal and commercial name of the issuer.
Part I - Section B
5 (B.1 Legal and
Commercial Name
i
CROSS-REFERENCE LISTS
Item #
Item contents
Chapter/Exhibit
Page
of the Issuer)
12.
Trend Information
12.1.
Significant trends that affected production, sales and
inventory, and costs and selling prices since the end
of the last financial year to the date of the prospectus.
Exhibit II
All pages
12.2.
Trends, uncertainties or events that are likely to affect
the issuer for at least the current financial year.
Part II - Section A
14 - 32 (Risk
Factors)
13.
Profit Forecasts or Estimates
Not applicable
Not applicable
14.
Administrative, Management, Supervisory Bodies
and Senior Management
Names, business addresses and functions in the
issuer of the following persons and an indication of
the principal activities performed by them outside the
issuer where these are significant with respect to that
issuer:
43 - 45 (7.1 Board
of Directors and
age as of June 10,
2015) and
Part II - Section B
50 - 51 (8.1
Directors’ and
Executive Officers’
Holdings of Shares
and Options)
b) partners with unlimited liability, in the case of a
limited partnership with a share capital;
Not applicable
Not applicable
c) founders, if the issuer has been established for
fewer than five years; and
Not applicable
Not applicable
a) members of the administrative, management or
supervisory bodies;
14.1.
d) any senior manager who is relevant to establishing
that the issuer has the appropriate expertise and
experience for the management of the issuer’s
business.
The nature of any family relationship between any of
those persons.
ii
45 - 46 (7.2
Executive Officers
and age as of June
10, 2015) and
Part II - Section B
Part II - Section B
50 - 51 (8.1
Directors’ and
Executive Officers’
Holdings of Shares
and Options)
46 - 47 (7.3
Fraudulent
Offences and
Bankruptcy, Etc.)
CROSS-REFERENCE LISTS
Item #
Item contents
Chapter/Exhibit
In the case of each member of the administrative,
management or supervisory bodies of the issuer and
each person mentioned in points (b) and (d) of the
first subparagraph, details of that person’s relevant
management expertise and experience and the
following information:
(a) the nature of all companies and partnerships of
which such person has been a member of the
administrative, management and supervisory bodies
or partner at any time in the previous five years,
indicating whether or not the individual is still a
member of the administrative, management or
supervisory bodies or partner. It is not necessary to
list all the subsidiaries of an issuer of which the
person is also a member of the administrative,
management or supervisory bodies or partner. It is
not necessary to list all the subsidiaries of an issuer of
which the person is also a member of the
administrative, management or supervisory bodies.
Part II - Section B
Page
43 - 45 (7.1 Board
of Directors and
age as of June 10,
2015) and
45 - 46 (7.2
Executive Officers
and age as of June
10, 2015)
(b) any convictions in relation to fraudulent offences
for at least the previous five years;
(c) details of any bankruptcies, receiverships or
liquidations with which a person described in (a) and
(d) of the first subparagraph who was acting in the
capacity of any of the positions set out in (a) and (d)
of the first subparagraph was associated for at least
the previous five years;
(d) details of any official public incrimination and/or
sanctions of such person by statutory or regulatory
authorities (including designated professional bodies)
and whether such person has ever been disqualified
by a court from acting as a member of the
administrative, management or supervisory bodies of
an issuer or from acting in the management or
conduct of the affairs of any issuer for at least the
previous five years.
Part II - Section B
46 - 47 (7.3
Fraudulent
Offences and
Bankruptcy, Etc.)
Part II - Section B
47 - 50 (7.4
Conflicts of Interest)
Part II - Section B
50 - 51 (8.1
Directors’ and
Executive Officers’
Holdings of Shares
and Options)
If there is no such information to be disclosed, a
statement to that effect is to be made.
14.2.
Administrative, management, and supervisory bodies
and senior management conflicts of interests.
17.
Employees
17.2.
Shareholdings and stock options with respect to each
person referred to in points (a) and (d) of the first
subparagraph of item 14.1.
iii
CROSS-REFERENCE LISTS
Item #
Item contents
17.3
Description of any arrangements for involving the
employees in the capital of the issuer.
Chapter/Exhibit
Page
Exhibit I
All sections
Part II - Section B
51 - 54 (8.2 Stock
Plans)
20.7.
Dividend policy
20.7.1
The amount of the dividend per share for each
financial year for the period covered by the historical
financial information.
Part II - Section B
37 (Dividend
Rights)
20.8.
Legal and arbitration proceedings.
Part II - Section B
41 - 42 (5.3 Indirect
and Contingent
Indebtedness)
20.9.
Significant change in the issuer’s financial or trading
position since the end of the last financial period.
Part I - Section B
7 (B.4a Recent
Trends)
23.
Third Party Information and Statement by Experts
and Declarations of any Interest
23.1.
Where a statement or report attributed to a person as
an expert is included in the Registration Document,
provide such person’s name, business address,
qualifications and material interest if any in the issuer.
Not applicable
Not applicable
23.2.
Where information has been sourced from a third
party, provide a confirmation that this information has
been accurately reproduced.
Not applicable
Not applicable
24.
Documents on Display
Part II - Section B
56 (XI. Documents
on Display)
iv
CROSS-REFERENCE LISTS
ANNEX III
MINIMUM DISCLOSURE REQUIREMENTS FOR THE SHARE SECURITIES NOTE
(SCHEDULE)
(Page numbering refers to the page contained in the relevant document)
Item
Item contents
Chapter/Exhibit
Page
1.
Persons Responsible
1.1.
All persons responsible for the information given in
the prospectus.
Prospectus
4 (Company
Representative for
Prospectus)
1.2.
A declaration by those responsible for the prospectus.
Prospectus
4 (Company
Representative for
Prospectus)
2.
Risk Factors
Part II - Section A
14 - 32 (Risk
Factors)
3.
Essential Information
3.1
Working capital Statement.
Part II - Section B
54 (IX. Working
Capital Statement)
Part II - Section B
40 - 42 (V.
Statement of
Capitalization and
Indebtedness as of
July 31, 2015)
Part II - Section B
32 (1.1 Purpose of
the IESPP)
Exhibit I
Section 1 (Purpose)
3.2
3.4
4.
Capitalization and indebtedness.
Reasons for the offer and use of proceeds.
Information Concerning the Securities to be
Offered/ Admitted to Trading
4.1
Type and the class of the securities being offered,
including the security identification code.
Part II - Section B
36 (4.1 Type and
Class of the
Securities being
Offered, Including
the Security
Identification Code)
4.2
Legislation under which the securities have been
created.
Part II - Section B
36 (4.2 Legislation
Under which the
Securities Have
v
CROSS-REFERENCE LISTS
Item
Item contents
Chapter/Exhibit
Page
Been Created)
4.3
Form of securities, name and address of the entity in
charge of keeping the records.
Part II - Section B
36 (4.3 Form of
Securities, Name
and address of the
Entity in Charge of
Keeping the
Records)
4.4
Currency of the securities issue.
Part II - Section B
36 (4.4 Currency of
the Securities
Issue)
4.5
Rights attached to the securities.
Part II - Section B
36 - 38 (4.5 Rights
Attached to the
Securities)
4.6
Statement of the resolutions, authorizations and
approvals by virtue of which the securities have been
or will be created and/or issued.
Part II - Section B
32 (1.1 Purpose of
the IESPP)
Exhibit I
Section I (Purpose)
Part II - Section B
32 - 33 (1.3
Offering Period)
Part II - Section B
38 (4.6
Transferability)
Exhibit I
Section 13
(Transferability)
4.7
Expected issue date of the securities.
4.8
Description of any restrictions
transferability of the securities.
on
the
free
4.9
Mandatory takeover bids and/or squeeze-out and sellout rules in relation to the securities.
Part II - Section B
38 - 40 (4.7
General Provisions
Applying to
Business
Combinations)
4.11
Information on taxes on the income from the
securities withheld at source.
Part II - Section B
56 - 59 (XII. Tax
Consequences)
5.
Terms and Conditions of the Offer
5.1
Conditions, offer statistics, expected timetable
and action required to apply for the offer
Part II - Section B
32 - 35 (I. The
Outline, II. Eligibility
and III. Delivery and
Sale of the Shares)
Exhibit I
All sections
5.1.1
Conditions to which the offer is subject.
vi
CROSS-REFERENCE LISTS
Item
5.1.2
Item contents
Chapter/Exhibit
Page
Part II - Section B
43 (6.2 Net
Proceeds)
Total amount of the issue/offer.
Exhibit I
Part II - Section B
5.1.3
Section 11 (Stock)
and
U.S. ESPP Section
13 (Stock)
32 - 35 (I. The
Outline, II. Eligibility
and III. Delivery and
Sale of the Shares)
Section 3
(Eligibility),
Time period during which the offer will be open and
description of the application process.
Exhibit I
Section 4
(Participation),
Section 6 (Grant of
Option) and
U.S. ESPP Section
4 (Offering Periods)
Part II - Section B
5.1.4
Circumstances under which the offer may be revoked
or suspended and whether revocation can occur after
dealing has begun.
Exhibit I
33 (1.7 Amendment
or Discontinuance
of the ESPP)
Section 8
(Withdrawal;
Termination of
Employment) and
Section 16
(Amendment or
Termination)
5.1.5
Possibility to reduce subscriptions and the manner for
refunding excess amount paid by applicants.
Part II - Section B
34 - 35 (2.3 Payroll
Deductions)
5.1.6
Minimum and/or maximum amount of application.
Part II - Section B
34 - 35 (2.3 Payroll
Deductions)
Part II - Section B
35 (2.4 Withdrawal /
Termination of
Employment)
Exhibit I
Section 8
(Withdrawal;
Termination of
Employment)
5.1.7
Period during which an application may be withdrawn.
vii
CROSS-REFERENCE LISTS
Item
5.1.8
5.3
5.3.1.
Item contents
Chapter/Exhibit
Method and time limits for paying up the securities
and for delivery of the securities.
Part II - Section B
Page
35 (III. Delivery and
Sale of Shares) and
34 - 35 (2.3 Payroll
Deductions)
Exhibit I
U.S. ESPP Section
9 (Delivery)
Part II - Section B
33 (1.4 Purchase
Price)
Exhibit I
U.S. ESPP Section
7 (Grant of Option)
Pricing
An indication of the price at which the securities will
be offered.
33 (1.4 Purchase
Price) and
Part II - Section B
5.3.2.
Process for the disclosure of the offer price.
36 (4.3 Form of
Securities, Name
and Address of the
Entity in Charge of
Keeping the
Records)
Exhibit I
U.S. ESPP Section
7 (Grant of Option)
5.3.3.
If the issuer’s equity holders have pre-emptive
purchase rights and this right is restricted or
withdrawn.
Part II - Section B
38 (No Preemptive,
Redemptive or
Conversions
Provisions)
5.3.4
Where there is or could be a material disparity
between the public offer price and the effective cash
cost to members of the administrative, management
or supervisory bodies or senior management, or
affiliated persons, of securities acquired by them in
transactions during the past year.
Not applicable
Not applicable
5.4.
Placing and Underwriting
Part II - Section B
36 (4.3 Form of
Securities, Name
and Address of the
Entity in Charge of
Keeping the
Records)
5.4.2
Name and address of any paying agents and
depository agents in each country.
6.
Admission to Trading and Dealing Arrangements
viii
CROSS-REFERENCE LISTS
Item
Item contents
Chapter/Exhibit
Page
Part II - Section B
36 (4.1 Type and
Class of the
Securities being
Offered, Including
the Security
Identification Code)
Part II - Section B
36 (4.1 Type and
Class of the
Securities being
Offered, Including
the Security
Identification Code)
Part II - Section B
43 (6.2 Net
Proceeds)
6.1
Whether the securities offered are or will be the object
of an application for admission to trading.
6.2
Regulated markets or equivalent markets on which
securities of the same class of the securities to be
offered or admitted to trading are already admitted to
trading.
8.
Expense of the Issue/Offer
8.1.
The total net proceeds and an estimate of the total
expenses of the issue/offer.
9.
Dilution
9.1.
The amount and percentage of immediate dilution
resulting from the offer.
Part II - Section B
42 - 43 (6.1
Maximum Dilution)
9.2.
In the case of a subscription offer to existing equity
holders, the amount and percentage of immediate
dilution if they do not subscribe to the new offer.
Not applicable
Not applicable
10.
Additional Information
10.1.
If advisors connected with an issue are mentioned in
the Securities Note, a statement of the capacity in
which the advisors have acted.
Not applicable
Not applicable
10.3.
Where a statement or report attributed to a person as
an expert is included in the Securities Note, provide
such persons’ name, business address, qualifications
and material interest if any in the issuer.
Not applicable
Not applicable
10.4.
Where information has been sourced from a third
party.
Not applicable
Not applicable
ix