Autodesk Reports 14 Percent Year Over Year Revenue Growth

Further information on potential factors that could affect the financial results of Autodesk are included in Autodesk’s report on Form 10-K for the year ended January 31, 2010 and Form 10-Q for the quarters ended April 30, 2010 and July 31, 2010, which are on file with the U.S. Securities and Exchange Commission. Autodesk does not assume 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, Inc., is a leader in 3D design, engineering and entertainment software. Customers across the manufacturing, architecture, building, construction, and media and entertainment industries – including the last 15 Academy Award winners for Best Visual Effects – use Autodesk software to design, visualize, and simulate their ideas. Since its introduction of AutoCAD software in 1982, Autodesk continues to develop the broadest portfolio of state-of-the-art software for global markets. For additional information about Autodesk, visit www.autodesk.com.

Autodesk and AutoCAD are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. 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. © 2010 Autodesk, Inc. All rights reserved.

 
 
Autodesk, Inc.
Consolidated Statements of Operations
(In millions, except per share data)
                 
Three Months Ended Nine Months Ended
October 31, October 31,
  2010     2009     2010     2009  
(Unaudited) (Unaudited)
Net revenue:
License and other $ 282.0 $ 236.1 $ 842.5 $ 710.7
 
Maintenance   194.7     180.8     581.6     546.9  
 
Total net revenue   476.7     416.9     1,424.1     1,257.6  
 
Cost of revenue:
Cost of license and other revenue 40.3 41.7 122.0 130.6
 
Cost of maintenance revenue   8.2     3.3     26.2     16.8  
 
Total cost of revenue  

48.5

    45.0     148.2     147.4  
 
Gross profit   428.2     371.9     1,275.9     1,110.2  
 
Operating expenses:
 
Marketing and sales 185.1 180.3 549.1 540.6
 
Research and development 122.8 109.3 369.3 340.7
 
General and administrative 51.1 51.1 148.7 150.6
 
Restructuring charges - 4.9 9.0 47.8
 
Impairment of goodwill   -     -     -     21.0  
 
Total operating expenses   359.0     345.6     1,076.1     1,100.7  
 
Income from operations 69.2 26.3 199.8 9.5
 
Interest and other income (expense), net   2.5     5.7     (0.8 )   16.5  
 
Income before income taxes 71.7 32.0 199.0 26.0
 
Provision for income taxes   (18.1 )   (2.5 )   (48.6 )   (18.1 )
 
Net income $ 53.6   $ 29.5   $ 150.4   $ 7.9  
 
Basic net income per share $ 0.24   $ 0.13   $ 0.66   $ 0.03  
 
Diluted net income per share $ 0.23   $ 0.13   $ 0.64   $ 0.03  
 
Shares used in computing basic
net income per share   226.5     229.6     227.9     228.5  
 
Shares used in computing diluted
net income per share   232.4     232.9     233.4     231.1  
 
 
Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)
               
October 31, January 31,
  2010             2010  
(Unaudited)
 
ASSETS:
 
Current assets:
Cash and cash equivalents $ 904.3 $ 838.7
Marketable securities 232.5 161.9
Accounts receivable, net 240.1 277.4
Deferred income taxes 44.7 44.2
Prepaid expenses and other current assets   49.2             57.4  
Total current assets   1,470.8             1,379.6  
 
Marketable securities 199.8 125.6
Computer equipment, software, furniture and leasehold improvements, net 84.8 101.6
Purchased technologies, net 65.3 88.0
Goodwill 549.7 542.9
Deferred income taxes, net 107.7 101.9
Other assets   103.0             107.6  
$ 2,581.1           $ 2,447.2  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
 
Current liabilities:
Accounts payable $ 86.1 $ 67.8
Accrued compensation 131.4 115.6
Accrued income taxes 28.3 8.4
Deferred revenue 430.0 444.6
Other accrued liabilities   58.9             67.6  
Total current liabilities   734.7             704.0  
 
Deferred revenue 77.1 71.9
Long term income taxes payable 139.2 127.2
Other liabilities 74.0 70.6
 
Commitments and contingencies
 
Stockholders' equity:
Preferred stock - -
Common stock and additional paid-in capital 1,242.1 1,204.3
Accumulated other comprehensive income (loss) (4.0 ) (3.5 )
Retained earnings   318.0             272.7  
Total stockholders' equity   1,556.1             1,473.5  
$ 2,581.1           $ 2,447.2  
             
 
Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
  Nine Months Ended
October 31,
  2010     2009  
(Unaudited)
Operating activities:
Net income $ 150.4 $ 7.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 79.6 84.4
Stock-based compensation expense 62.3 74.7
Impairment of goodwill - 21.0
Restructuring charges, net 9.0 47.8

Gain on disposition of assets

- (2.3 )
Changes in operating assets and liabilities,

net of business combinations

  63.6     (112.3 )
Net cash provided by operating activities   364.9     121.2  
Investing activities:
Purchases of marketable securities (425.8 ) (409.9 )
Sales of marketable securities 85.9 8.1
Maturities of marketable securities 201.3 126.5
Capital expenditures (18.1 ) (30.2 )

 

Purchases of equity investments (3.5 ) (10.0 )
Business combinations, net of cash acquired (8.5 ) (3.6 )
Other investing activities   (0.5 )   -  
Net cash used in investing activities   (169.2 )   (319.1 )
 
Financing activities:
Proceeds from issuance of common stock, net of issuance costs 76.4 67.5
Repurchases of common stock (204.1 ) (39.4 )
Draws on line of credit - 2.2
Repayments of line of credit   -     (54.3 )
Net cash used in financing activities   (127.7 )   (24.0 )
 
Effect of exchange rate changes on cash and cash equivalents   (2.4 )   2.8  
 
Net increase (decrease) in cash and cash equivalents 65.6 (219.1 )
Cash and cash equivalents at beginning of fiscal year   838.7     917.6  
Cash and cash equivalents at end of period $ 904.3   $ 698.5  
                       
 
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 profit, non-GAAP operating expenses, non-GAAP income from operations 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.

 
The following table shows Autodesk's non-GAAP results reconciled to GAAP results included in this release.
 
Three Months Ended Nine Months Ended
October 31, October 31,
  2010     2009     2010     2009  
(Unaudited) (Unaudited)
 
GAAP cost of license and other revenue $ 40.3 $ 41.7 $ 122.0 $ 130.6
Stock-based compensation expense (0.6 ) (1.1 ) (2.1 ) (2.4 )
Amortization of developed technology   (8.4 )   (8.7 )   (23.8 )   (25.3 )
Non-GAAP cost of license and other revenue $ 31.3   $ 31.9   $ 96.1   $ 102.9  
 
GAAP gross profit $ 428.2 $ 371.9 $ 1,275.9 $ 1,110.2
Stock-based compensation expense 0.6 1.1 2.1 2.4
Amortization of developed technology   8.4     8.7     23.8     25.3  
Non-GAAP gross profit $ 437.2   $ 381.7   $ 1,301.8   $ 1,137.9  
 
GAAP marketing and sales $ 185.1 $ 180.3 $ 549.1 $ 540.6
Stock-based compensation expense   (7.6 )   (13.5 )   (27.4 )   (32.5 )
Non-GAAP marketing and sales $ 177.5   $ 166.8   $ 521.7   $ 508.1  
 
GAAP research and development $ 122.8 $ 109.3 $ 369.3 $ 340.7
Stock-based compensation expense   (5.7 )   (9.5 )   (21.2 )   (23.7 )
Non-GAAP research and development $ 117.1   $ 99.8   $ 348.1   $ 317.0  
 
GAAP general and administrative $ 51.1 $ 51.1 $ 148.7 $ 150.6
Stock-based compensation expense (3.1 ) (6.2 ) (11.6 ) (16.1 )
Amortization of customer relationships and

trade names

  (5.7 )   (6.4 )   (17.8 )   (19.5 )
Non-GAAP general and administrative $ 42.3   $ 38.5   $ 119.3   $ 115.0  
 
GAAP impairment of goodwill $ - $ - $ - $ 21.0
Impairment of goodwill   -     -     -     (21.0 )
Non-GAAP impairment of goodwill $ -   $ -   $ -   $ -  
 
GAAP restructuring charges $ - $ 4.9 $ 9.0 $ 47.8
Restructuring charges   -     (4.9 )   (9.0 )   (47.8 )
Non-GAAP restructuring charges $ -   $ -   $ -   $ -  
 
GAAP operating expenses $ 359.0 $ 345.6 $ 1,076.1 $ 1,100.7
Stock-based compensation expense (16.4 ) (29.2 ) (60.2 ) (72.3 )
Amortization of customer relationships and

trade names

(5.7 ) (6.4 ) (17.8 ) (19.5 )
Impairment of goodwill - - - (21.0 )
Restructuring charges   -     (4.9 )   (9.0 )   (47.8 )
Non-GAAP operating expenses $ 336.9   $ 305.1   $ 989.1   $ 940.1  
 
GAAP income from operations $ 69.2 $ 26.3 $ 199.8 $ 9.5
Stock-based compensation expense 17.0 30.3 62.3 74.7
Amortization of developed technology 8.4 8.7 23.8 25.3
Amortization of customer relationships and

trade names

5.7 6.4 17.8 19.5
Impairment of goodwill - - - 21.0
Restructuring charges   -     4.9     9.0     47.8  
Non-GAAP income from operations $ 100.3   $ 76.6   $ 312.7   $ 197.8  
 
GAAP provision for income taxes $ (18.1 ) $ (2.5 ) $ (48.6 ) $ (18.1 )
Establishment of valuation allowance on

deferred tax assets

- - - 21.0
Discrete GAAP tax provision items (1) 0.3 (7.8 ) (1.3 ) (9.4 )
Income tax effect of non-GAAP adjustments   (10.0 )   (10.7 )   (34.3 )   (48.0 )
Non-GAAP provision for income tax $ (27.8 ) $ (21.0 ) $ (84.2 ) $ (54.5 )
 
GAAP net income $ 53.6 $ 29.5 $ 150.4 $ 7.9
Stock-based compensation expense 17.0 30.3 62.3 74.7
Amortization of developed technology 8.4 8.7 23.8 25.3
Amortization of customer relationships and

trade names

5.7 6.4 17.8 19.5
Impairment of goodwill - - - 21.0
Restructuring charges - 4.9 9.0 47.8
Establishment of valuation allowance on

deferred tax assets

- - - 21.0
Discrete GAAP tax provision items (1) 0.3 (7.8 ) (1.3 ) (9.4 )
Income tax effect of non-GAAP adjustments   (10.0 )   (10.7 )   (34.3 )   (48.0 )
Non-GAAP net income $ 75.0   $ 61.3   $ 227.7   $ 159.8  
 
GAAP diluted net income per share $ 0.23 $ 0.13 $ 0.64 $ 0.03
Stock-based compensation expense 0.07 0.13 0.26 0.33
Amortization of developed technology 0.04 0.04 0.10 0.11
Amortization of customer relationships and

trade names

0.02 0.02 0.08 0.08
Impairment of goodwill - - - 0.09
Restructuring charges - 0.02 0.04 0.21
Establishment of valuation allowance on

deferred tax assets

- - - 0.09
Discrete GAAP tax provision items (1) - (0.03 ) (0.01 ) (0.03 )
Income tax effect of non-GAAP adjustments   (0.04 )   (0.05 )   (0.14 )   (0.22 )
Non-GAAP diluted net income per share $ 0.32   $ 0.26   $ 0.97   $ 0.69  
 
 
(1) Effective in the second quarter of fiscal 2011, Autodesk began excluding certain discrete GAAP tax provision items for purposes of its non-GAAP financial measures. Prior period non-GAAP income tax expense amounts have been revised to conform to the current period presentation.
                             
                                         
Other Supplemental Financial Information (a)
Fiscal Year 2011       QTR 1       QTR 2       QTR 3       QTR 4       YTD 2011
Financial Statistics ($ in millions, except per share data):
Total Net Revenue $ 475 $ 473 $ 477 $ 1,424
License and Other Revenue $ 280 $ 281 $ 282 $ 842
Maintenance Revenue $ 195 $ 192 $ 195 $ 582
 
GAAP Gross Margin 89 % 90 % 90 % 90 %
Non-GAAP Gross Margin (1)(2) 91 % 92 % 92 % 91 %
 
GAAP Operating Expenses $ 373 $ 345 $ 359 $ 1,076
GAAP Operating Margin 11 % 17 % 15 % 14 %
GAAP Net Income $ 37 $ 60 $ 54 $ 150
GAAP Diluted Net Income Per Share $ 0.16 $ 0.25 $ 0.23 $ 0.64
 
Non-GAAP Operating Expenses (1)(3) $ 336 $ 317 $ 337 $ 989
Non-GAAP Operating Margin (1)(4) 20 % 25 % 21 % 22 %
Non-GAAP Net Income (1)(5) $ 68 $ 85 $ 75 $ 228
Non-GAAP Diluted Net Income Per Share (1)(6) $ 0.29 $ 0.36 $ 0.32 $ 0.97
 
Total Cash and Marketable Securities $ 1,239 $ 1,271 $ 1,337 $ 1,337
Days Sales Outstanding 42 44 46 46
Capital Expenditures $ 6 $ 5 $ 7 $ 18

Cash Flow from Operating Activities

$ 139 $ 112 $ 114 $ 365
GAAP Depreciation and Amortization $ 27 $ 26 $ 27 $ 80
 
Deferred Maintenance Revenue Balance $ 492 $ 473 $ 450 $ 450
 
Revenue by Geography (in millions):
Americas $ 161 $ 168 $ 179 $ 509
Europe, Middle East and Africa $ 199 $ 189 $ 183 $ 570
Asia Pacific $ 115 $ 116 $ 115 $ 345
 
Revenue by Segment (in millions):
Platform Solutions and Emerging Business $ 184 $ 177 $ 174 $ 535
Architecture, Engineering and Construction $ 137 $ 133 $ 136 $ 406
Manufacturing $ 108 $ 113 $ 117 $ 337
Media and Entertainment $ 46 $ 50 $ 50 $ 146
 
Other Revenue Statistics:
% of Total Rev from AutoCAD and AutoCAD LT 36 % 34 % 33 % 34 %
% of Total Rev from Model-based Design Products (c) 29 % 30 % 30 % 30 %
% of Total Rev from Emerging Economies 14 % 15 % 16 % 15 %

Upgrade and Crossgrade Revenue (d) (in millions)

$ 51 $ 18 $ 32 $ 101
 
Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to Foreign Currencies Compared to Comparable Prior Year Period (b) (in millions):
 
FX Impact on Total Net Revenue $ 21 $ 5 $ (4 ) $ 22
FX Impact on Total Operating Expenses $ (11 ) $ - $ (1 ) $ (12 )
FX Impact on Operating Income $ 10 $ 5 $ (5 ) $ 10
 
Gross Margin by Segment (in millions):
Platform Solutions and Emerging Business $ 173 $ 168 $ 164 $ 505
Architecture, Engineering and Construction $ 123 $ 122 $ 124 $ 369
Manufacturing $ 100 $ 105 $ 110 $ 315
Media and Entertainment $ 36 $ 38 $ 39 $ 113
Unallocated amounts $ (9 ) $ (9 ) $ (9 ) $ (26 )
 
Common Stock Statistics:
Common Shares Outstanding 229,400,000 227,200,000 227,100,000 227,100,000
Fully Diluted Weighted Average Shares Outstanding 234,600,000 233,800,000 232,400,000 233,400,000
Shares Repurchased 2,000,000 2,500,000 2,500,000 7,000,000
 
Installed Base Statistics:
Maintenance Installed Base 2,383,000 2,631,000 2,813,000 2,813,000
 
(a) Totals may not agree with the sum of the components due to rounding.

(b) Includes favorable (unfavorable) revenue impact from Autodesk's hedging program during the fiscal quarter.

(c) Effective in the third quarter of fiscal 2011, Autodesk has added Inventor LT to the Model-based Design Products Category. Prior periods have been revised to conform to adjust for the change.

(d) Upgrade and Crossgrade Revenue was previously reported as "Upgrade Revenue." There has been no change in the calculation of this metric.

 
(1) 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 total spend, non-GAAP income from operations 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, restructuring charges, amortization of purchased intangibles 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 Autodesk's press release.
 
QTR 1       QTR 2       QTR 3       QTR 4       YTD 2011
(2) GAAP Gross Margin 89 % 90 % 90 % 90 %
Stock-based compensation expense 0 % 0 % 0 % 0 %
Amortization of developed technology   2 %         2 %         2 %                 1 %
Non-GAAP Gross Margin 91 % 92 % 92 % 91 %
 
(3) GAAP Operating Expenses $ 373 $ 345 $ 359 $ 1,076
Stock-based compensation expense (24 ) (20 ) (16 ) (60 )
Amortization of customer relationships and trade names (6 ) (6 ) (6 ) (18 )
Restructuring charges   (7 )         (2 )         -                   (9 )
Non-GAAP Operating Expenses $ 336 $ 317 $ 337 $ 989
 
(4) GAAP Operating Margin 11 % 17 % 15 % 14 %
Stock-based compensation expense 5 % 5 % 3 % 4 %
Amortization of developed technology 2 % 2 % 2 % 2 %
Amortization of customer relationships and trade names 1 % 1 % 1 % 1 %
Restructuring charges   1 %         0 %         0 %                 1 %
Non-GAAP Operating Margin 20 % 25 % 21 % 22 %
 
(5) GAAP Net Income $ 37 $ 60 $ 54 $ 150
Stock-based compensation expense 24 21 17 62
Amortization of developed technology 8 8 8 24
Amortization of customer relationships and trade names 6 6 6 18
Restructuring charges 7 2 - 9
Discrete GAAP tax provision items (7) (2 ) - - (1 )
Income tax effect of non-GAAP adjustments   (12 )         (12 )         (10 )                 (34 )
Non-GAAP Net Income $ 68 $ 85 $ 75 $ 228
 
(6) GAAP Diluted Net Income Per Share $ 0.16 $ 0.25 $ 0.23 $ 0.64
Stock-based compensation expense 0.10 0.09 0.07 0.26
Amortization of developed technology 0.03 0.03 0.04 0.10
Amortization of customer relationships and trade names 0.03 0.03 0.02 0.08
Restructuring charges 0.03 0.01 - 0.04
Discrete GAAP tax provision items (7) (0.01 ) - - (0.01 )
Income tax effect of non-GAAP adjustments   (0.05 )         (0.05 )         (0.04 )                 (0.14 )
Non-GAAP Diluted Net Income Per Share $ 0.29 $ 0.36 $ 0.32 $ 0.97
 
(7) Effective in the second quarter of fiscal 2011, Autodesk began excluding certain discrete GAAP tax provision items for purposes of its non-GAAP financial measures. Prior period non-GAAP income tax expense, net income and earnings per share amounts have been revised to conform to the current period presentation.
 
GAAP total spend (Cost of revenue plus Total operating expenses) $ 424 $ 393 $ 407 $ 1,224
Stock-based compensation expense (24 ) (21 ) (17 ) (62 )
Amortization of developed technology (8 ) (8 ) (8 ) (24 )
Amortization of customer relationships and trademarks (6 ) (6 ) (6 ) (18 )
Restructuring charges   (7 )         (2 )         -                   (9 )
Non-GAAP total spend (Cost of revenue plus Total operating expenses) $ 379 $ 356 $ 376 $ 1,111
                             
                                         
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 $ 415 $ 417 $ 456 $ 1,714
License and other revenue $ 244 $ 231 $ 236 $ 270 $ 981
Maintenance revenue $ 182 $ 184 $ 181 $ 186 $ 733
 
GAAP Gross Margin 88 % 88 % 89 % 90 % 89 %
Non-GAAP Gross Margin (1)(2) 90 % 90 % 92 % 92 % 91 %
 
GAAP Operating Expenses $ 393 $ 362 $ 346 $ 356 $ 1,456
GAAP Operating Margin -5 % 1 % 6 % 12 % 4 %
GAAP Net Income (Loss) $ (32 ) $ 10 $ 30 $ 50 $ 58
GAAP Diluted Net Income (Loss) Per Share $ (0.14 ) $ 0.05 $ 0.13 $ 0.21 $ 0.25
 
Non-GAAP Operating Expenses (1)(3) $ 327 $ 308 $ 305 $ 331 $ 1,271
Non-GAAP Operating Margin (1)(4) 13 % 16 % 18 % 20 % 17 %
Non-GAAP Net Income (1)(5) $ 42 $ 56 $ 61 $ 69 $ 229
Non-GAAP Diluted Net Income Per Share (1)(6) $ 0.18 $ 0.24 $ 0.26 $

0.30

$

0.99

 
Total Cash and Marketable Securities $ 966 $ 1,029 $ 1,054 $ 1,126 $ 1,126
Days Sales Outstanding 49 49 47 55 55
Capital Expenditures $ 14 $ 11 $ 6 $ 9 $ 39

Cash Flow from Operating Activities

$ 27 $ 47 $ 47 $ 126 $ 247
GAAP Depreciation and Amortization $ 27 $ 28 $ 29 $ 27 $ 111
 
Deferred Maintenance Revenue Balance $ 469 $ 444 $ 420 $ 464 $ 464
 
Revenue by Geography (in millions):
Americas $ 163 $ 159 $ 164 $ 168 $ 655
Europe, Middle East and Africa $ 167 $ 157 $ 159 $ 188 $ 671
Asia Pacific $ 96 $ 99 $ 94 $ 100 $ 388
 
Revenue by Segment (in millions):
Platform Solutions and Emerging Business $ 156 $ 150 $ 154 $ 165 $ 624
Architecture, Engineering and Construction $ 128 $ 123 $ 125 $ 137 $ 514
Manufacturing $ 94 $ 95 $ 90 $ 108 $ 387
Media and Entertainment $ 48 $ 47 $ 48 $ 46 $ 189
Other $ - $ - $ - $ - $ -
 
Other Revenue Statistics:
% of Total Rev from AutoCAD and AutoCAD LT 33 % 31 % 32 % 31 % 32 %
% of Total Rev from Model-based Design Products (c) 29 % 29 % 29 % 30 % 29 %
% of Total Rev from Emerging Economies 14 % 15 % 15 % 16 % 15 %

Upgrade and Crossgrade Revenue (d) (in millions)

$ 43 $ 26 $ 26 $ 37 $ 133
 

Favorable (Unfavorable) Impact of U.S. Dollar Translation Relative to Foreign Currencies Compared to Comparable Prior Year Period (b) (in millions):

FX Impact on Total Net Revenue $ (30 ) $ (30 ) $ (16 ) $ 9 $ (66 )
FX Impact on Total Operating Expenses $ 22 $ 14 $ 2 $ (10 ) $ 28
FX Impact on Operating Income (Loss) $ (8 ) $ (16 ) $ (14 ) $ (1 ) $ (38 )
 
Gross Margin by Segment (in millions):
Platform Solutions and Emerging Business $ 146 $ 140 $ 147 $ 157 $ 590
Architecture, Engineering and Construction $ 116 $ 110 $ 113 $ 125 $ 465
Manufacturing $ 86 $ 88 $ 84 $ 101 $ 359
Media and Entertainment $ 34 $ 36 $ 38 $ 37 $ 144
Unallocated amounts $ (9 ) $ (9 ) $ (10 ) $ (8 ) $ (36 )
 
Common Stock Statistics:
Common Shares Outstanding 228,200,000 229,600,000 229,700,000 228,900,000 228,900,000
GAAP Fully Diluted Weighted Average Shares Outstanding 227,100,000 232,300,000 232,900,000 233,200,000 232,100,000
Shares Repurchased - - 1,700,000 1,000,000 2,700,000
 
Installed Base Statistics:

Maintenance Installed Base (e)

1,719,000 2,299,000 2,236,000 2,250,000 2,250,000
 
(a) Totals may not agree with the sum of the components due to rounding.
(b) Includes favorable (unfavorable) revenue impact from Autodesk's hedging program during the fiscal quarter.

(c) Effective in the third quarter of fiscal 2011, Autodesk has added Inventor LT to the Model-based Design Products Category. Prior periods have been revised to conform to adjust for this change.

(d) Upgrade and Crossgrade Revenue was previously reported as "Upgrade Revenue." There has been no change in the calculation of this metric.

(e) The second quarter of fiscal 2010 maintenance installed base includes a one-time adjustment of 581,000 educational seats for users migrated to a standard educational maintenance plan. These users were not previously captured in Autodesk's maintenance installed base.

 

(1) 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 total spend, non-GAAP income from operations 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, restructuring charges, amortization of purchased intangibles, 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 Autodesk's press release.
 
QTR 1       QTR 2       QTR 3       QTR 4       YTD 2010
(2) GAAP Gross Margin 88 % 88 % 89 % 90 % 89 %
Stock-based compensation expense 0 % 0 % 0 % 0 % 0 %
Amortization of developed technology   2 %         2 %         3 %         2 %         2 %
Non-GAAP Gross Margin 90 % 90 % 92 % 92 % 91 %
 
(3) GAAP Operating Expenses $ 393 $ 362 $ 346 $ 356 $ 1,456
Stock-based compensation expense (22 ) (21 ) (30 ) (19 ) (91 )
Amortization of customer relationships and trade names (6 ) (7 ) (6 ) (6 ) (25 )
Restructuring charges (17 ) (26 ) (5 ) - (48 )
Impairment of goodwill   (21 )         -           -           -           (21 )
Non-GAAP Operating Expenses $ 327 $ 308 $ 305 $ 331 $ 1,271
 
(4) GAAP Operating Margin -5 % 1 % 6 % 12 % 4 %
Stock-based compensation expense 5 % 5 % 7 % 4 % 5 %
Amortization of developed technology 2 % 2 % 2 % 2 % 2 %
Amortization of customer relationships and trade names 2 % 2 % 2 % 2 % 2 %
Restructuring charges 4 % 6 % 1 % 0 % 3 %
Impairment of goodwill   5 %         0 %         0 %         0 %         1 %
Non-GAAP Operating Margin 13 % 16 % 18 % 20 % 17 %
 
(5) GAAP Net Income (Loss) $ (32 ) $ 10 $ 30 $ 50 $ 58
Stock-based compensation expense 23 21 30 19 93
Amortization of developed technology 8 8 9 8 33
Amortization of customer relationships and trade names 6 7 6 6 26
Establishment of valuation allowance on deferred tax assets 21 - - - 21
Impairment of goodwill 21 - - - 21
Restructuring charges 17 26 5 - 48
Discrete GAAP tax provision items (7) (1 ) - (8 ) (4 ) (13 )
Income tax effect of non-GAAP adjustments   (21 )         (16 )         (11 )         (10 )         (58 )
Non-GAAP Net Income $ 42 $ 56 $ 61 $ 69 $ 229
 
(6) GAAP Diluted Net Income (Loss) Per Share $ (0.14 ) $ 0.05 $ 0.13 $ 0.21 $ 0.25
Stock-based compensation expense 0.10 0.09 0.13 0.08 0.40
Amortization of developed technology 0.04 0.03 0.04 0.03 0.14
Amortization of customer relationships and trade names 0.03 0.03 0.02 0.03 0.11
Establishment of valuation allowance on deferred tax assets 0.09 - - - 0.09
Impairment of goodwill 0.09 - - - 0.09
Restructuring charges 0.07 0.11 0.02 - 0.21
Discrete GAAP tax provision items (7) - - (0.03 )

(0.01

)

(0.04

)
Income tax effect of non-GAAP adjustments   (0.10 )         (0.07 )         (0.05 )         (0.04 )         (0.26 )
Non-GAAP Diluted Net Income Per Share $ 0.18 $ 0.24 $ 0.26 $

0.30

$

0.99

 

(7) Effective in the second quarter of fiscal 2011, Autodesk began excluding certain discrete GAAP tax provision items for purposes of its non-GAAP financial measures. Prior period non-GAAP income tax expense, net income and earnings per share amounts have been revised to conform to the current period presentation.

 
GAAP total spend (Cost of revenue plus Total operating expenses) $ 445 $ 412 $ 391 $ 400 $ 1,648
Stock-based compensation expense (23 ) (21 ) (30 ) (19 ) (93 )
Amortization of developed technology (8 ) (8 ) (9 ) (8 ) (33 )
Amortization of customer relationships and trademarks (6 ) (7 ) (6 ) (6 ) (25 )
Impairment of goodwill (21 ) - - - (21 )
Restructuring charges   (17 )         (26 )         (5 )         -           (48 )
Non-GAAP total spend (Cost of revenue plus Total operating expenses) $ 370 $ 350 $ 340 $ 367 $ 1,427

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