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Autodesk, Inc.

Consolidated Statements of Operations

(In millions, except per share data)

 

		Three Months Ended
		April 30,
		2009				2008
		(Unaudited)
Net revenue:
License and other		$	243.6			$	432.2
Maintenance			182.2				166.6
Total net revenue			425.8				598.8
Cost of license and other revenue			49.5				56.0
Cost of maintenance revenue			2.8				2.0
Total cost of revenue			52.3				58.0
Gross margin			373.5				540.8
Operating Expenses:
Marketing and sales			185.8				225.5
Research and development			124.1				145.6
General and administrative			45.5				49.8
Impairment of goodwill			21.0				-
Restructuring charges			16.5				-
Total operating expenses			392.9				420.9
Income (loss) from operations			(19.4	)			119.9
Interest and other income (expense), net			-				6.9
Income (loss) before income taxes			(19.4	)			126.8
Income tax (provision) benefit			(12.7	)			(32.2	)
Net income (loss)		$	(32.1	)		$	94.6
Basic net income (loss) per share		$	(0.14	)		$	0.42
Diluted net income (loss) per share		$	(0.14	)		$	0.41
Shares used in computing basic
net income (loss) per share			227.1				226.2
Shares used in computing diluted
net income (loss) per share			227.1				232.6

 

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Autodesk, Inc.

Condensed Consolidated Balance Sheets

(In millions)

 

		April 30,				January 31,
		2009				2009
		(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents		$	880.5			$	917.6
Marketable securities			78.4				63.5
Accounts receivable, net			228.6				316.5
Deferred income taxes			47.0				31.1
Prepaid expenses and other current assets			67.7				59.3
Total current assets			1,302.2				1,388.0
Marketable securities			7.6				7.6
Computer equipment, software, furniture and leasehold improvements, net			120.7				120.6
Purchased technologies, net			105.0				113.3
Goodwill			520.7				542.5
Deferred income taxes, net			88.3				125.7
Other assets			125.0				123.0
		$	2,269.5			$	2,420.7
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable		$	65.0			$	62.4
Accrued compensation			83.9				124.3
Accrued income taxes			19.1				16.7
Deferred revenue			453.1				438.8
Borrowings under line of credit			2.1				52.1
Other accrued liabilities			58.6				105.8
Total current liabilities			681.8				800.1
Deferred revenue			80.9				113.3
Long term income taxes payable			120.5				116.9
Long term deferred income taxes			-				22.7
Other liabilities			57.8				57.0
Commitments and contingencies
Stockholders' equity:
Preferred stock			-				-
Common stock and additional paid-in capital			1,128.8				1,080.4
Accumulated other comprehensive income (loss)			(9.7	)			(11.2	)
Retained earnings			209.4				241.5
Total stockholders' equity			1,328.5				1,310.7
		$	2,269.5			$	2,420.7

 

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Autodesk, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

 

		Three Months Ended
		April 30,
		2009				2008
		(Unaudited)
Operating Activities
Net income (loss)		$	(32.1	)		$	94.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			27.0				16.9
Stock-based compensation expense			23.0				25.2
Impairment of goodwill			21.0				-
Loss on disposition of assets			1.1				-
Restructuring related charges, net			16.5				-
Changes in operating assets and liabilities, net of business combinations			(29.3	)			48.6
Net cash provided by operating activities			27.2				185.3
Investing Activities
Purchases of marketable securities			(26.6	)			(2.1	)
Sales of marketable securities			11.7				0.8
Acquisition of equity investment			(10.0	)			0.2
Business combinations, net of cash acquired			-				(1.0	)
Capital and other expenditures			(13.6	)			(13.4	)
Net cash used in investing activities			(38.5	)			(15.5	)
Financing activities
Proceeds from borrowings on line of credit			2.2				40.0
Repayments of borrowings on line of credit			(52.2	)			-
Proceeds from issuance of common stock, net of issuance costs			25.4				35.3
Repurchases of common stock			-				(256.6	)
Net cash used in financing activities			(24.6	)			(181.3	)
Effect of exchange rate changes on cash and cash equivalents			(1.2	)			2.7
Net decrease in cash and cash equivalents			(37.1	)			(8.8	)
Cash and cash equivalents at beginning of fiscal year			917.6				917.9
Cash and cash equivalents at end of period		$	880.5			$	909.1

 

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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 net income, non-GAAP net income per share, non-GAAP cost of license and other revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP interest and other income, net and non-GAAP provision for income taxes.  These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, amortization of purchased intangibles, restructuring charges, goodwill impairment, establishment of a valuation allowance on certain deferred tax assets and related income tax expenses.  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, the 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 generally accepted accounting principles 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.

 

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The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.

 

		Three Months Ended
		April 30,
		2009				2008
		(Unaudited)
GAAP cost of license and other revenue		$	49.5			$	56.1
SFAS 123R stock-based compensation expense			(0.6	)			(1.0	)
Amortization of developed technology			(8.3	)			(3.6	)
Non-GAAP cost of license and other revenue		$	40.6			$	51.5
GAAP gross margin		$	373.5			$	540.7
SFAS 123R stock-based compensation expense			0.6				1.0
Amortization of developed technology			8.3				3.6
Non-GAAP gross margin		$	382.4			$	545.3
GAAP marketing and sales		$	185.8			$	225.4
SFAS 123R stock-based compensation expense			(9.5	)			(10.5	)
Non-GAAP marketing and sales		$	176.3			$	214.9
GAAP research and development		$	124.1			$	145.6
SFAS 123R stock-based compensation expense			(7.0	)			(8.4	)
Non-GAAP research and development		$	117.1			$	137.2
GAAP general and administrative		$	45.5			$	49.8
SFAS 123R stock-based compensation expense			(5.9	)			(5.3	)
Amortization of customer relationships and trademarks			(6.4	)			(2.9	)
Non-GAAP general and administrative		$	33.2			$	41.6
GAAP Impairment of goodwill		$	21.0			$	-
Impairment of goodwill			(21.0	)			-
Non-GAAP Impairment of goodwill		$	-			$	-
GAAP Restructuring charges		$	16.5			$	-
Restructuring charges			(16.5	)			-
Non-GAAP Restructuring charges		$	-			$	-
GAAP operating expenses		$	392.9			$	420.8
SFAS 123R stock-based compensation expense			(22.4	)			(24.2	)
Amortization of customer relationships and  trademarks			(6.4	)			(2.9	)
Impairment of goodwill			(21.0	)			-
Restructuring charges			(16.5	)			-
Non-GAAP operating expenses		$	326.6			$	393.7
GAAP income (loss) from operations		$	(19.4	)		$	119.9
SFAS 123R stock-based compensation expense			23.0				25.2
Amortization of developed technology			8.3				3.6
Amortization of customer relationships and trademarks			6.4				2.9
Impairment of goodwill			21.0				-
Restructuring charges			16.5				-
Non-GAAP income from operations		$	55.8			$	151.6
GAAP income tax (provision) benefit		$	(12.7	)		$	(32.2	)
Establishment of valuation allowance on deferred tax assets			21.0				-
Income tax effect on difference between GAAP and non-GAAP total costs and expenses at a normalized rate			(22.2	)			(9.1	)
Non-GAAP income tax provision		$	(13.9	)		$	(41.3	)
GAAP net income (loss)		$	(32.1	)		$	94.6
SFAS 123R stock-based compensation expense			23.0				25.2
Amortization of developed technology			8.3				3.6
Amortization of customer relationships and trademarks			6.4				2.9
Impairment of goodwill			21.0				-
Restructuring charges			16.5				-
Establishment of valuation allowance on deferred tax assets			21.0				-
Income tax effect on difference between GAAP and non-GAAP total costs and expenses at a normalized rate			(22.2	)			(9.1	)
Non-GAAP net income		$	41.9			$	117.2
GAAP diluted net income (loss) per share		$	(0.14	)		$	0.41
SFAS 123R stock-based compensation expense			0.10				0.11
Amortization of developed technology			0.04				0.01
Amortization of customer relationships and trademarks			0.03				0.01
Impairment of goodwill			0.09				-
Restructuring charges			0.07				-
Establishment of valuation allowance on deferred tax assets			0.09				-
Income tax effect on difference between GAAP and non-GAAP total costs and expenses at a normalized rate			(0.10	)			(0.04	)
Non-GAAP diluted net income per share		$	0.18			$	0.50
GAAP diluted shares used in per share calculation			227.1				232.6
Impact of SFAS 123R on diluted shares			(0.1	)			0.3
Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive			2.2				-
Non-GAAP diluted shares used in per share calculation			229.2				232.9

 

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Other Supplemental Financial Information (1)

Fiscal Year 2010		QTR 1				QTR 2				QTR 3				QTR 4				YTD 2010
Financial Statistics ($ in millions, except per share data):
Total net revenue		$	426															$	426
License and other revenue		$	244															$	244
Maintenance revenue		$	182															$	182
Gross Margin - GAAP			88	%															88	%
Gross Margin - Non-GAAP			90	%															90	%
GAAP Operating Expenses		$	393															$	393
GAAP Operating Margin			-5	%															-5	%
GAAP Net Income (Loss)		$	(32	)														$	(32	)
GAAP Diluted Net Income (Loss) Per Share		$	(0.14	)														$	(0.14	)
Non-GAAP Operating Expenses  (2)(3)		$	327															$	327
Non-GAAP Operating Margin  (2)(4)			13	%															13	%
Non-GAAP Net Income  (2)(5)		$	42															$	42
Non-GAAP Diluted Net Income Per Share  (2)(6)		$	0.18															$	0.18
Total Cash and Marketable Securities		$	966															$	966
Days Sales Outstanding			49																49
Capital Expenditures		$	14															$	14
Cash from Operations		$	27															$	27
GAAP Depreciation and Amortization		$	27															$	27
Deferred Maintenance Revenue Balance		$	458															$	458
Revenue by Geography (in millions):
Americas		$	163															$	163
Europe		$	167															$	167
Asia/Pacific		$	96															$	96
Revenue by Segment (in millions):
Platform Solutions and Emerging Business		$	156															$	156
Architecture, Engineering and Construction		$	128															$	128
Manufacturing		$	94															$	94
Media and Entertainment		$	48															$	48
Other		$	-															$	-
Other Revenue Statistics:
% of Total Rev from AutoCAD and AutoCAD LT			34	%															34	%
% of Total Rev from 3D design products			29	%															29	%
% of Total Rev from Emerging Economies			14	%															14	%
Upgrade Revenue (in millions)		$	43															$	43
Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to Foreign
Currencies Compared to Comparable Prior Year Period (in millions):
FX Impact on Total Net Revenue		$	(31	)														$	(31	)
FX Impact on Total Operating Expenses		$	22															$	22
FX Impact on Total Net Income (Loss)		$	(9	)														$	(9	)
Gross Margin by Segment (in millions):
Platform Solutions and Emerging Business		$	142															$	142
Architecture, Engineering and Construction		$	119															$	119
Manufacturing		$	86															$	86
Media and Entertainment		$	35															$	35
Unallocated amounts		$	(9	)														$	(9	)
Common Stock Statistics:
GAAP Shares Outstanding			228,219,000																228,219,000
GAAP Diluted Weighted Average Shares Outstanding			227,080,000																227,080,000
Shares Repurchased			-																-
Maintenance Installed Base			1,719,000																1,719,000

 

(1) Totals may not agree with the sum of the components due to rounding.

 

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(2) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP net income, non-GAAP net income per share, non-GAAP cost of license and other revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP interest and other income, net and non-GAAP provision for income taxes. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, amortization of purchased intangibles, goodwill impairment, restructuring charges, establishment of a valuation allowance on certain deferred tax assets and related income tax expenses. 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, the 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 generally accepted accounting principles 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.

 

Fiscal Year 2010		QTR 1				QTR 2				QTR 3				QTR 4				YTD 2010
(3) GAAP Operating Expenses		$	393															$	393
Stock-based compensation expense			(22	)															(22	)
Amortization of customer relationships and trademarks			(6	)															(6	)
Restructuring charges			(17	)															(17	)
Impairment of goodwill			(21	)															(21	)
Non-GAAP Operating Expenses		$	327															$	327
(4) GAAP Operating Margin			-5	%															-5	%
Stock-based compensation expense			5	%															5	%
Amortization of developed technology			2	%															2	%
Amortization of customer relationships and trademarks			2	%															2	%
Restructuring charges			4	%															4	%
Impairment of goodwill			5	%															5	%
Non-GAAP Operating Margin			13	%															13	%
(5) GAAP Net Income (Loss)		$	(32	)														$	(32	)
Stock-based compensation expense			23																23
Amortization of developed technology			8																8
Amortization of customer relationships and trademarks			6																6
Impairment of goodwill			21																21
Restructuring charges			17																17
Establishment of valuation allowance on deferred tax assets			21																21
Income tax effect on difference between GAAP and non-GAAP           total costs and expenses at a normalized rate			(22	)															(22	)
Non-GAAP Net Income		$	42															$	42
(6) GAAP Diluted Net Income (Loss) Per Share		$	(0.14	)														$	(0.14	)
Stock-based compensation expense			0.10																0.10
Amortization of developed technology			0.04																0.04
Amortization of customer relationships and trademarks			0.03																0.03
Impairment of goodwill			0.09																0.09
Restructuring charges			0.07																0.07
Establishment of valuation allowance on deferred tax assets			0.09																0.09
Income tax effect on difference between GAAP and non-GAAP         total costs and expenses at a normalized rate			(0.10	)															(0.10	)
Non-GAAP Diluted Net Income Per Share		$	0.18															$	0.18

 

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