Autodesk Reports Third Quarter Results

  Autodesk Reports Third Quarter Results

Business Wire

SAN RAFAEL, Calif. -- November 15, 2012

Autodesk, Inc. (NASDAQ:ADSK) today reported financial results for the third
quarter of fiscal year 2013.

Third Quarter Fiscal 2013

  *Revenue was $548 million, compared to $549 million in the third quarter of
    fiscal 2012.
  *GAAP operating margin was 6 percent, compared to 16 percent in the third
    quarter of fiscal 2012.
  *Non-GAAP operating margin increased 190 basis points to 26 percent,
    compared to 25 percent in the third quarter of fiscal 2012. A
    reconciliation of GAAP to non-GAAP results is provided in the accompanying
    tables.
  *GAAP diluted earnings per share were $0.13, compared to $0.32 in the third
    quarter of fiscal 2012.
  *Non-GAAP diluted earnings per share were $0.47, compared to $0.44 in the
    third quarter of fiscal 2012.
  *Cash flow from operating activities was $157 million, compared to $138
    million in the third quarter of fiscal 2012.

"Our revenue results were disappointing and were primarily caused by a
weakening demand environment," said Carl Bass, Autodesk president and CEO.
"While we experienced pockets of relative strength in the U.S., northern
Europe, and Russia, most other markets around the world slowed during the
quarter, most notably emerging markets. Despite our overall revenue shortfall,
our ongoing focus on cost management delivered meaningful margin expansion and
EPS above our guidance range."

Third Quarter Operational Overview

EMEA revenue decreased 3 percent to $196 million, compared to the third
quarter last year as reported and increased 3 percent on a constant currency
basis. Revenue in the Americas increased 4 percent to $209 million, compared
to the third quarter last year. Revenue in Asia Pacific (APAC) decreased 3
percent to $142 million, compared to the third quarter last year as reported
and decreased 3 percent on a constant currency basis. Revenue from emerging
economies decreased 9 percent to $80 million, compared to the third 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 third
quarter.

Revenue from the Platform Solutions and Emerging Business (PSEB) segment
decreased 2 percent to $205 million, compared to the third quarter last year.
Revenue from the Architecture, Engineering and Construction (AEC) business
segment increased 7 percent to $163 million, compared to the third quarter
last year. Revenue from the Manufacturing business segment decreased 1 percent
to $132 million, compared to the third quarter last year. Revenue from the
Media and Entertainment business segment decreased 9 percent to $48 million,
compared to the third quarter last year.

Revenue from Flagship products decreased 4 percent to $298 million, compared
to the third quarter last year. Revenue from Suites increased 10 percent to
$166 million, compared to the third quarter last year. Revenue from New and
Adjacent products decreased 3 percent to $84 million, compared to the third
quarter last year.

In the third quarter last year, Autodesk recognized a $10 million, one-time
transaction, related to license compliance. This transaction impacted revenue
growth rates for license and other, APAC, PSEB, and Flagship. In addition,
Superstorm Sandy negatively impacted our business during the last few days of
the quarter.

Deferred revenue increased 15 percent to $714 million, compared to the third
quarter last year.

"We achieved strong growth in non-GAAP operating margin, better than expected
EPS, strong cash flow from operations, and growth in deferred revenue," said
Mark Hawkins, Autodesk executive vice president, chief financial officer.
"While our revenue growth target for fiscal 2013 is below our original target,
we believe we can still achieve year-over-year non-GAAP operating margin
expansion of between 80 and 140 basis points. With over $1.7 billion in cash
and marketable securities, our balance sheet remains solid.

"Looking forward, due to the increasing uncertainty in the macroeconomic
environment and our slower than planned revenue growth in fiscal 2013, we are
reassessing our long-term financial model (through fiscal 2015) and are not
providing revenue targets at this time," continued Hawkins. "While revenue
growth will be a key determining factor in the years to come, we remain
committed to growing our non-GAAP operating margin and believe we can achieve
a 30+ percent run rate as we exit our fiscal 2015."

Business Outlook

The following statements are forward-looking statements that are based on
current expectations and assumptions, and involve risks and uncertainties some
of which are set forth below. Autodesk's business outlook for the fourth
quarter and full year fiscal 2013 assumes a continuation of the current
economic environment and foreign exchange currency rate environment.

Fourth Quarter Fiscal 2013

4Q FY13 Guidance Metrics     4Q FY13 (ending January 31, 2013)
Revenue (in millions)            $570 - $600
EPS GAAP                         $0.18 - $0.26
EPS Non-GAAP                     $0.43 - $0.51
                                 

Non-GAAP earnings per diluted share exclude $0.13 related to stock-based
compensation expense, $0.03 related to restructuring charges, and $0.09 for
the amortization of acquisition related intangibles, net of tax.

Full Year Fiscal 2013

FY13 Guidance Metrics     FY13 (ending January 31, 2013)
Revenue (in millions)         $2,275 - $2,305
EPS GAAP                      $0.92 - $1.00
EPS Non-GAAP                  $1.84 - $1.92
                              

Non-GAAP earnings per diluted share exclude $0.50 related to stock-based
compensation expense, $0.14 related to restructuring charges, $0.26 for the
amortization of acquisition related intangibles and $0.02 for loss on
strategic investments, net of tax.

A reconciliation between the GAAP and non-GAAP estimates for fiscal 2013 is
provided in the tables following this press release.

Both fourth quarter fiscal 2013 and full year fiscal 2013 outlooks assume
annual effective tax rates of approximately 24.5 percent and 25.5 percent for
GAAP and non-GAAP results, respectively. These rates do not include the
federal R&D tax credit benefit, which expired on December 31, 2011, or
one-time discrete items. The assumed effective tax rate will be adjusted if or
when there is a renewal of the tax credit.

Earnings Conference Call and Webcast

Autodesk will host its third 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.

NOTE: The prepared remarks will not be read on the conference call. The
conference call will include only brief remarks followed by questions and
answers.

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 regarding our long-term financial model;
statements in the paragraphs under “Business Outlook” above, and other
statements regarding our expected financial, 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: general market, political, economic and
business conditions; failure to maintain our revenue growth and profitability;
failure to maintain cost reductions and productivity increases or otherwise
control our expenses; the success of our internal reorganization and
restructuring activities; 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; failure
to successfully incorporate sales of licenses of products suites into our
overall sales strategy; weak or negative growth in the industries we serve;
failure to successfully expand adoption of our products; slowing momentum in
maintenance 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; fluctuation in foreign currency exchange rates; the
success of our foreign currency hedging program; 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; failure of key new applications to achieve
anticipated levels of customer acceptance; failure to achieve continued
success in technology advancements, interruptions or terminations in the
business of Autodesk consultants; the expense and impact of legal or
regulatory proceedings; and any unanticipated accounting charges.

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, 2012 and Forms 10-Q for the quarters ended April 30 and
July 31, 2012, 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 17
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.

© 2012 Autodesk, Inc. All rights reserved.


Autodesk, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share data)

                              Three Months Ended     Nine Months Ended
                               October 31,             October 31,
                               2012       2011        2012         2011
                                           (Unaudited)
Net revenue:
License and other              $ 317.1     $ 331.4     $ 1,018.6     $ 987.4
Maintenance                    230.9      217.2      686.7        635.8   
Total net revenue              548.0      548.6      1,705.3      1,623.2 
Cost of revenue:
Cost of license and other      49.6        50.5        145.8         138.8
revenue
Cost of maintenance revenue    8.4        9.1        30.8         32.8    
Total cost of revenue          58.0       59.6       176.6        171.6   
Gross profit                   490.0       489.0       1,528.7       1,451.6
Operating expenses:
Marketing and sales            204.6       206.2       640.2         609.1
Research and development       153.6       141.2       451.2         417.0
General and administrative     62.3        51.4        180.9         163.0
Restructuring charges          35.2       —          35.2         (1.3    )
(benefits), net
Total operating expenses       455.7      398.8      1,307.5      1,187.8 
Income from operations         34.3        90.2        221.2         263.8
Interest and other (expense)   (0.1    )   1.1        2.6          6.2     
income, net
Income before income taxes     34.2        91.3        223.8         270.0
Provision for income taxes     (4.9    )   (18.5   )   (51.0     )   (56.7   )
Net income                     $ 29.3     $ 72.8     $ 172.8      $ 213.3 
Basic net income per share     $ 0.13     $ 0.32     $ 0.76       $ 0.93  
Diluted net income per share   $ 0.13     $ 0.32     $ 0.74       $ 0.91  
Weighted average shares used
in computing basic net         225.5      227.1      227.1        228.2   
income per share
Weighted average shares used
in computing diluted net       230.5      230.7      232.0        233.7   
income per share
                                                                             


Autodesk, Inc.
Condensed Consolidated Balance Sheets
(In millions)
                                                                
                                                     October 31,   January 31,
                                                     2012          2012
                                                     (Unaudited)
                                                                   
ASSETS
Current assets:
Cash and cash equivalents                            $ 827.0       $  1,156.9
Marketable securities                                502.1         254.4
Accounts receivable, net                             293.3         395.1
Deferred income taxes                                48.4          30.1
Prepaid expenses and other current assets            53.8         59.4
Total current assets                                 1,724.6      1,895.9
Marketable securities                                408.3         192.8
Computer equipment, software, furniture and          114.6         104.5
leasehold improvements, net
Purchased technologies, net                          75.9          84.6
Goodwill                                             824.6         682.4
Deferred income taxes, net                           128.3         135.8
Other assets                                         152.9        131.8
                                                     $ 3,429.2    $  3,227.8
                                                                   
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                     $ 75.9        $  89.3
Accrued compensation                                 155.6         183.9
Accrued income taxes                                 14.2          14.4
Deferred revenue                                     558.1         582.3
Borrowings under line of credit                      110.0         —
Other accrued liabilities                            71.6         84.2
Total current liabilities                            985.4        954.1
Deferred revenue                                     155.6         136.9
Long term income taxes payable                       184.4         174.8
Other liabilities                                    86.0          79.1
Commitments and contingencies
Stockholders’ equity:
Preferred stock                                      —             —
Common stock and additional paid-in capital          1,438.9       1,365.4
Accumulated other comprehensive (loss) income        (6.4      )   5.9
Retained earnings                                    585.3        511.6
Total stockholders’ equity                           2,017.8      1,882.9
                                                     $ 3,429.2    $  3,227.8
                                                                      


Autodesk, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)

                                                Nine Months Ended October 31,
                                                 2012            2011
                                                 (Unaudited)
Operating activities:
Net income                                       $   172.8        $  213.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                    93.1             85.2
Stock-based compensation expense                 118.8            78.8
Excess tax benefits from stock-based             (27.4      )     (33.0      )
compensation
Restructuring charges (benefits), net            35.2             (1.3       )
Other operating activities                       4.4              —
Changes in operating assets and liabilities,     6.6             55.3       
net of business combinations
Net cash provided by operating activities        403.5           398.3      
Investing activities:
Purchases of marketable securities               (1,103.1   )     (456.0     )
Sales of marketable securities                   207.0            110.8
Maturities of marketable securities              436.6            307.0
Capital expenditures                             (44.7      )     (48.7      )
Acquisitions, net of cash acquired               (204.2     )     (182.7     )
Other investing activities                       (22.1      )     (23.5      )
Net cash used in investing activities            (730.5     )     (293.1     )
Financing activities:
Proceeds from issuance of common stock, net of   199.6            156.3
issuance costs
Repurchases of common stock                      (340.5     )     (263.7     )
Draws on line of credit                          110.0            —
Excess tax benefits from stock-based             27.4            33.0       
compensation
Net cash used in financing activities            (3.5       )     (74.4      )
Effect of exchange rate changes on cash and      0.6             (2.6       )
cash equivalents
Net (decrease) increase in cash and cash         (329.9     )     28.2
equivalents
Cash and cash equivalents at beginning of        1,156.9         1,075.1    
fiscal year
Cash and cash equivalents at end of period       $   827.0       $  1,103.3 
                                                                             


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
restructuring charges, 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, gain
and loss on strategic investments, discrete tax provision items 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,
                             2012       2011        2012         2011
                             (Unaudited)             (Unaudited)
                                                                   
GAAP cost of license and     $ 49.6      $ 50.5      $ 145.8       $ 138.8
other revenue
Stock-based compensation     (1.3    )   (0.9    )   (3.8      )   (2.8      )
expense
Amortization of developed    (9.9    )   (11.1   )   (29.3     )   (27.7     )
technology
Non-GAAP cost of license     $ 38.4     $ 38.5     $ 112.7      $ 108.3   
and other revenue
                                                                   
GAAP gross profit            $ 490.0     $ 489.0     $ 1,528.7     $ 1,451.6
Stock-based compensation     1.3         0.9         3.8           2.8
expense
Amortization of developed    9.9        11.1       29.3         27.7      
technology
Non-GAAP gross profit        $ 501.2    $ 501.0    $ 1,561.8    $ 1,482.1 
                                                                   
GAAP marketing and sales     $ 204.6     $ 206.2     $ 640.2       $ 609.1
Stock-based compensation     (16.6   )   (11.7   )   (47.3     )   (34.8     )
expense
Non-GAAP marketing and       $ 188.0    $ 194.5    $ 592.9      $ 574.3   
sales
                                                                   
GAAP research and            $ 153.6     $ 141.2     $ 451.2       $ 417.0
development
Stock-based compensation     (28.1   )   (8.9    )   (49.6     )   (27.6     )
expense
Non-GAAP research and        $ 125.5    $ 132.3    $ 401.6      $ 389.4   
development
                                                                   
GAAP general and             $ 62.3      $ 51.4      $ 180.9       $ 163.0
administrative
Stock-based compensation     (5.8    )   (4.1    )   (18.0     )   (13.6     )
expense
Amortization of customer
relationships and trade      (13.8   )   (8.2    )   (29.5     )   (24.0     )
names
Non-GAAP general and         $ 42.7     $ 39.1     $ 133.4      $ 125.4   
administrative
                                                                   
GAAP restructuring charges   $ 35.2      $ —         $ 35.2        $ (1.3    )
(benefits), net
Restructuring charges        (35.2   )   —          (35.2     )   1.3       
(benefits)
Non-GAAP restructuring       $ —        $ —        $ —          $ —       
charges (benefits), net
                                                                   
GAAP operating expenses      $ 455.7     $ 398.8     $ 1,307.5     $ 1,187.8
Stock-based compensation     (50.5   )   (24.7   )   (114.9    )   (76.0     )
expense
Amortization of customer
relationships and trade      (13.8   )   (8.2    )   (29.5     )   (24.0     )
names
Restructuring (charges)      (35.2   )   —          (35.2     )   1.3       
benefits
Non-GAAP operating           $ 356.2    $ 365.9    $ 1,127.9    $ 1,089.1 
expenses
                                                                   
GAAP income from             $ 34.3      $ 90.2      $ 221.2       $ 263.8
operations
Stock-based compensation     51.8        25.6        118.7         78.8
expense
Amortization of developed    9.9         11.1        29.3          27.7
technology
Amortization of customer
relationships and trade      13.8        8.2         29.5          24.0
names
Restructuring charges        35.2       —          35.2         (1.3      )
(benefits)
Non-GAAP income from         $ 145.0    $ 135.1    $ 433.9      $ 393.0   
operations
                                                                   
GAAP interest and other      $ (0.1  )   $ 1.1       $ 2.6         $ 6.2
income (expense), net
(Gain) loss on strategic     (0.1    )   —          3.8          —         
investments (1)
Non-GAAP interest and
other income (expense),      $ (0.2  )   $ 1.1      $ 6.4        $ 6.2     
net
                                                                   
GAAP provision for income    $ (4.9  )   $ (18.5 )   $ (51.0   )   $ (56.7   )
taxes
Discrete GAAP tax            (15.4   )   (4.2    )   (19.0     )   (7.4      )
provision items
Income tax effect of         (16.7   )   (11.4   )   (42.3     )   (35.8     )
non-GAAP adjustments
Non-GAAP provision for       $ (37.0 )   $ (34.1 )   $ (112.3  )   $ (99.9   )
income tax
                                                                   
GAAP net income              $ 29.3      $ 72.8      $ 172.8       $ 213.3
Stock-based compensation     51.8        25.6        118.7         78.8
expense
Amortization of developed    9.9         11.1        29.3          27.7
technology
Amortization of customer
relationships and trade      13.8        8.2         29.5          24.0
names
Restructuring charges        35.2        —           35.2          (1.3      )
(benefits)
(Gain) loss on strategic     (0.1    )   —           3.8           —
investments (1)
Discrete GAAP tax            (15.4   )   (4.2    )   (19.0     )   (7.4      )
provision items
Income tax effect of         (16.7   )   (11.4   )   (42.3     )   (35.8     )
non-GAAP adjustments
Non-GAAP net income          $ 107.8    $ 102.1    $ 328.0      $ 299.3   
                                                                   
GAAP diluted net income      $ 0.13      0.32        0.74          0.91
per share
Stock-based compensation     0.23        0.11        0.51          0.34
expense
Amortization of developed    0.04        0.05        0.13          0.12
technology
Amortization of customer
relationships and trade      0.06        0.03        0.13          0.10
names
Restructuring charges        0.15        —           0.15          (0.01     )
(benefits)
(Gain) loss on strategic     —           —           0.01          —
investments (1)
Discrete GAAP tax            (0.07   )   (0.02   )   (0.08     )   (0.03     )
provision items
Income tax effect of         (0.07   )   (0.05   )   (0.18     )   (0.15     )
non-GAAP adjustments
Non-GAAP diluted net         $ 0.47     0.44       1.41         1.28      
income per share


(1) Effective in the second quarter of fiscal 2013, Autodesk began excluding
gains and losses on strategic investments for purposes of its non-GAAP
financial measures. Prior period non-GAAP interest and other income (expense),
net, net income and earnings per share amounts have been revised to conform to
the current period presentation.


Autodesk
Other Supplemental Financial Information (a)

Fiscal Year 2013                QTR 1      QTR 2      QTR 3      YTD 2013
Financial Statistics ($ in
millions, except per share                                      
data):
Total Net Revenue                $ 589       $ 569       $ 548       $ 1,705
License and Other Revenue        $ 361       $ 341       $ 317       $ 1,019
Maintenance Revenue              $ 228       $ 228       $ 231       $ 687
                                                                     
GAAP Gross Margin                90      %   89      %   89      %   90      %
Non-GAAP Gross Margin (1)(2)     92      %   91      %   91      %   92      %
                                                                     
GAAP Operating Expenses          $ 436       $ 416       $ 456       $ 1,308
GAAP Operating Margin            16      %   16      %   6       %   13      %
GAAP Net Income                  $ 79        $ 65        $ 29        $ 173
GAAP Diluted Net Income Per      $ 0.34      $ 0.28      $ 0.13      $ 0.74
Share (b)
                                                                     
Non-GAAP Operating Expenses      $ 396       $ 376       $ 356       $ 1,128
(1)(3)
Non-GAAP Operating Margin        25      %   25      %   26      %   25      %
(1)(4)
Non-GAAP Net Income (1)(5)(c)    $ 109       $ 111       $ 108       $ 328
Non-GAAP Diluted Net Income      $ 0.47      $ 0.48      $ 0.47      $ 1.41
Per Share (1)(6)(b)(c)
                                                                     
Total Cash and Marketable        $ 1,796     $ 1,717     $ 1,737     $ 1,737
Securities
Days Sales Outstanding           46          58          49          49
Capital Expenditures             $ 12        $ 17        $ 17        $ 45
Cash Flow from Operating         $ 139       $ 107       $ 157       $ 404
Activities
GAAP Depreciation and            $ 29        $ 29        $ 35        $ 93
Amortization
                                                                     
Deferred Maintenance Revenue     648         672         634         634
Balance
                                                                     
Revenue by Geography:
Americas                         $ 208       $ 199       $ 209       $ 616
Europe, Middle East and Africa   $ 224       $ 210       $ 196       $ 630
Asia Pacific                     $ 157       $ 161       $ 142       $ 460
% of Total Rev from Emerging     14      %   15      %   15      %   15      %
Economies
                                                                     
Revenue by Segment (c):
Platform Solutions and           $ 229       $ 217       $ 205       $ 650
Emerging Business
Architecture, Engineering and    $ 163       $ 162       $ 163       $ 489
Construction
Manufacturing                    $ 146       $ 141       $ 132       $ 419
Media and Entertainment          $ 51        $ 49        $ 48        $ 148
                                                                     
Other Revenue Statistics (c):
% of Total Rev from Flagship     58      %   56      %   55      %   56      %
% of Total Rev from Suites       28      %   29      %   30      %   29      %
% of Total Rev from New and      14      %   14      %   15      %   15      %
Adjacent
% of Total Rev from AutoCAD      35      %   34      %   33      %   34      %
and AutoCAD LT
Upgrade and Crossgrade Revenue   $ 50        $ 34        $ 32        $ 116
                                                                     
Favorable (Unfavorable) Impact
of U.S. Dollar Translation
Relative to Foreign
Currencies Compared to
Comparable Prior Year Period:
FX Impact on Total Net Revenue   $ 14        $ (1    )   $ (10   )   $ 2
FX Impact on Cost of Revenue     $ (2    )   $ 6         $ 7         $ 12
and Total Operating Expenses
FX Impact on Operating Income    $ 12        $ 5         $ (3    )   $ 14
                                                                     
Gross Margin by Segment (c):
Platform Solutions and           $ 216       $ 203       $ 191       $ 610
Emerging Business
Architecture, Engineering and    $ 149       $ 147       $ 150       $ 446
Construction
Manufacturing                    $ 134       $ 130       $ 122       $ 387
Media and Entertainment          $ 42        $ 39        $ 38        $ 119
Unallocated amounts              $ (11   )   $ (11   )   $ (11   )   $ (33   )
                                                                     
Common Stock Statistics:
Common Shares Outstanding        229.7       226.7       224.5       224.5
Fully Diluted Weighted Average   234.1       232.1       230.5       232.0
Shares Outstanding
Shares Repurchased               2.5         3.4         4.0         9.9
                                                                             

(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.

(c) Prior amounts have been conformed to align with the current period
presentation.

(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 gross margin,
non-GAAP operating expenses, and non-GAAP operating margin. 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 investment,
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      YTD 2013
                                                               
(2) GAAP Gross Margin             90     %   89     %   89     %     90      %
Stock-based compensation          —          —          —            —
expense
Amortization of developed         2      %  2      %  2      %   2       %
technology
Non-GAAP Gross Margin             92     %   91     %   91     %     92      %
                                                                     
(3) GAAP Operating Expenses       $ 436      $ 416      $ 456        $ 1,308
Stock-based compensation          (32    )   (32    )   (51    )     (115    )
expense
Amortization of customer          (8     )   (8     )   (14    )     (30     )
relationships and trade names
Restructuring benefits            —        —        (35    )   (35     )
(charges), net
Non-GAAP Operating Expenses       $ 396      $ 376      $ 356        $ 1,128
                                                                     
(4) GAAP Operating Margin         16     %   16     %   6      %     13      %
Stock-based compensation          6      %   6      %   9      %     7       %
expense
Amortization of developed         2      %   2      %   2      %     1       %
technology
Amortization of customer          1      %   1      %   3      %     2       %
relationships and trade names
Restructuring charges, net        —        —        6      %   2       %
Non-GAAP Operating Margin         25     %   25     %   26     %     25      %
                                                                     
(5) GAAP Net Income               $ 79       $ 65       $ 29         $ 173
Stock-based compensation          33         34         52           119
expense
Amortization of developed         10         10         10           29
technology
Amortization of customer          8          8          14           30
relationships and trade names
Restructuring charges, net        —          —          35           35
(Gain) loss on strategic          (1     )   5          —            4
investments (7)
Discrete GAAP tax provision       (6     )   3          (15    )     (19     )
items
Income tax effect of non-GAAP     (14    )  (12    )  (17    )   (42     )
adjustments
Non-GAAP Net Income               $ 109      $ 111      $ 108        $ 328
                                                                     
(6) GAAP Diluted Net Income Per   $ 0.34     $ 0.28     $ 0.13       $ 0.74
Share
Stock-based compensation          0.14       0.15       0.23         0.51
expense
Amortization of developed         0.04       0.04       0.04         0.13
technology
Amortization of customer          0.03       0.03       0.06         0.13
relationships and trade names
Restructuring charges, net        —          —          0.15         0.15
(Gain) loss on strategic          —          0.02       —            0.01
investments (7)
Discrete GAAP tax provision       (0.03  )   0.01       (0.07  )     (0.08   )
items
Income tax effect of non-GAAP     (0.05  )  (0.05  )  (0.07  )   (0.18   )
adjustments
Non-GAAP Diluted Net Income Per   $ 0.47     $ 0.48     $ 0.47       $ 1.41
Share
                                                                             

(7) Effective in the second quarter of fiscal 2013, Autodesk began excluding
gains and losses on strategic investments for purposes of its non-GAAP
financial measures. Prior period non-GAAP interest and other income (expense),
net, net income and earnings per share amounts have been revised to conform to
the current period presentation.



Reconciliation for Fiscal 2013:                                   
                                                                     
The following is a reconciliation of anticipated fiscal
2013 GAAP and non-GAAP operating margins:
                                                            FISCAL 2013
Non-GAAP Revenue Guidance Range (in millions)               $2,275   $ 2,305 
GAAP operating margin basis point improvement over prior    (375 )   (295    )
year
Stock-based compensation expense                            205      195
Amortization of purchased intangibles                       50       45
Restructuring charges                                       200     195     
Non-GAAP operating margin basis point improvement over      80      140     
prior year
                                                                             

Reconciliation for Long Term Operating Margins:

Autodesk is not able to provide targets for our long term (ending with fiscal
year 2015) GAAP operating margins at this time because of the difficulty of
estimating certain items that are excluded from non-GAAP that affect operating
margin, such as charges related to stock-based compensation expense and
amortization of acquisition related intangibles, the effect of which may be
significant.

Contact:

Autodesk, Inc.
Investors:
David Gennarelli, 415-507-6033
david.gennarelli@autodesk.com
or
Press:
Greg Eden, 415-547-2135
greg.eden@autodesk.com
 
Press spacebar to pause and continue. Press esc to stop.