EX-99.1 2 e19767ex99_1.txt PRESS RELEASE Exhibit 99.1 Autodesk Third Quarter Revenues Increase 28 Percent GAAP EPS Increases 200 Percent SAN RAFAEL, Calif., Nov. 18 /PRNewswire-FirstCall/ -- Autodesk Inc. (Nasdaq: ADSK), a global software and services company today announced financial results for its third fiscal quarter ended October 31, 2004. For the third quarter, Autodesk reported net revenues of $300 million, a 28 percent increase over $234 million reported in the third quarter of the prior year. The company separately announced that it has declared a 2-for-1 stock split on its common stock. Third quarter net income increased 228 percent over the prior year to $74 million on a GAAP basis. GAAP EPS was $0.60 per diluted share, or $0.30 per diluted share after the effect of the 2-for-1 stock split. GAAP basis net income includes tax benefits of $29 million. GAAP net income also includes a $3 million pre-tax restructuring charge. Excluding these items, pro-forma third quarter net income was $48 million. Pro-forma EPS was $0.38 per diluted share, or $0.19 per diluted share on a split adjusted basis. GAAP basis net income in the third quarter of the prior year was $23 million. GAAP EPS in the third quarter of the prior year was $0.20 per diluted share, or $0.10 on a post-split basis. There were no pro-forma adjustments in the prior year. The tax benefit totaling $29 million is comprised of several items. During the quarter the company recognized a tax benefit of $9 million from successful resolution of tax audits of previous years. The company also recognized $20 million in tax benefits primarily as a result of the new Dividends Received Deduction provided in the American Jobs Creation Act, which was signed into law on October 22, 2004. Under this legislation, the company is allowed to bring up to $500 million of foreign-earned cash into the United States by January 31, 2006, at a more favorable tax rate. This will allow the company to more effectively manage its cash and invest in the business. As a result of this legislation, the company now estimates its effective tax rate for fiscal 2005 and 2006 to be 20 percent, down from 24 percent. This reduction in estimated rate for the first half of fiscal 2005 resulted in a $4 million tax benefit. The remaining $16 million is related to the reduction in the estimated tax liability for previous fiscal years. "Autodesk had another outstanding quarter," said Carol Bartz, Autodesk chairman and CEO. "Our customers are interested in quick implementation, ease of use and a fast return on investment, and our products meet those needs. Our results demonstrate that our products are strong and our strategies are working." Autodesk's performance was driven by strong revenues from new seats, increasing penetration of its 3D products, continued success with the subscription program, and continued commitment to improved productivity and efficiency. New seat revenue increased 36 percent over the prior year. Customers continue to respond enthusiastically to the ease of use and quick ROI of the AutoCAD 2005 family of products. Revenue from new commercial seats of AutoCAD increased 35 percent over the prior year. During the quarter, Autodesk 3D products continued to gain traction in the market. In October, the company launched Autodesk(R) Civil 3D(TM) 2005, the only civil engineering software available today that creates intelligent relationships between objects, so design changes are dynamically updated. Aggregate revenue from Autodesk Inventor(R) Series, Autodesk Inventor(R) Professional, Autodesk(R) Revit(R), Autodesk(R) AutoCAD(R) Revit Series, Autodesk(R) Architectural Desktop, Autodesk Map(R) 3D and Autodesk Civil 3D increased 50 percent over the prior year. Customer adoption of Inventor, the world's best selling 3D mechanical design software, reached record levels. Subscription revenues, called maintenance on the financial statements, increased 55 percent over the third quarter of the prior year, as customers continue to recognize the value of the subscription program and the quick return on investment of Autodesk products. Autodesk continued to demonstrate progress in improving its productivity and profitability. Operating margins increased 6 percentage points over the prior year to 18 percent on a GAAP basis. Pro-forma operating margins, which exclude the $3 million restructuring charge, increased 7 percentage points to 19 percent in the quarter. These results demonstrate the company's commitment to improving productivity and efficiency. "I am extremely pleased with our results this quarter," said Bartz. "Our product positioning has never been better. Our focus on productivity has enabled us to increase our investment in growth initiatives while improving our profitability. We expect to maintain this momentum next year." In connection with the company's two-for-one stock split, stockholders as of the close of business on December 6, 2004, will be issued one additional share for each share of common stock held on the record date, with a payment date of December 20, 2004. The stock split will increase the number of shares outstanding from approximately 114 million shares to approximately 228 million shares. In addition, the company announced that it will discontinue its $0.03 per share quarterly dividend. Dividend payments will cease after the March 2005 payment. Business Outlook The following statements are forward looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below. Fourth Quarter Fiscal 2005 Net revenues for the fourth quarter of fiscal 2005 are expected to be in the range of $335 million to $345 million. GAAP basis earnings per diluted share are expected to be in the range of $0.50 to $0.55, or $0.25 to $0.28 after the effect of the 2-for-1 stock split. Pro-forma earnings per diluted share are expected to be in the range of $0.52 to $0.57, or $0.26 to $0.29, on a post-split basis. Full Year Fiscal 2005 For fiscal year 2005, net revenues are expected to be in the range of $1.213 billion to $1.223 billion. GAAP basis earnings per diluted share are expected to be in the range of $1.76 to $1.82, or $0.88 to $0.91 on a post-split basis. Pro-forma earnings per diluted share are expected to be in the range of $1.67 to $1.73, or $0.84 to $0.87 on a post-split basis. First Quarter Fiscal 2006 Net revenues for the first quarter of fiscal 2006 are expected to be in the range of $320 million to $330 million. GAAP basis earnings per diluted share are expected to be in the range of $0.47 to $0.52, or $0.24 to $0.26 on a post-split basis. Full Year Fiscal 2006 For fiscal year 2006, net revenues are expected to be in the range of $1.33 billion to $1.38 billion. GAAP basis earnings per diluted share are expected to be in the range of $2.00 to $2.15, or $1.00 to $1.08 on a post-split basis. Guidance for fiscal year 2006 excludes the impact of expected required stock option expensing. All fiscal 2005 and fiscal 2006 EPS guidance ranges are based on the new 20 percent estimated effective tax rate. The company believes its effective tax rate will revert back to the historical effective tax rate of approximately 24 percent in fiscal year 2007. A reconciliation of the above non-GAAP net income and EPS amounts to the corresponding GAAP net income and EPS amounts is provided at the end of this press release. 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 our expected effective tax rate and other statements regarding our anticipated performance. Factors that could cause actual results to differ materially include the following: general market and business conditions, failure to achieve sufficient sell-through in our channels for new or existing products, failure of key new applications to achieve anticipated levels of customer acceptance, pricing pressure, failure to achieve anticipated cost reductions, delays in the release of new products and services, failure to achieve continued success in technology advancements, changes in accounting rules, particularly related to stock option expensing, changes in foreign currency rates, failure to successfully integrate new or acquired businesses, financial and business condition of our reseller and distribution channels, renegotiation or termination of royalty or intellectual property arrangements, failure to achieve continued migration from 2d products to 3d products, and failure to grow lifecycle management or collaboration products. Further information on potential factors that could affect the financial results of Autodesk are included in the company's report on Form 10-K for the year ended January 31, 2004, and Form 10-Q for the quarter ended July 31, 2004, which are on file with the Securities and Exchange Commission. Autodesk will host its third quarter earnings announcement today at 5:00 p.m. Eastern Time. The live announcement may be accessed at 800-798-2864 (passcode: 54386757). An audio webcast will also be available beginning at 5:00 p.m. Eastern Time at www.autodesk.com/investor. A replay of this webcast will be maintained on our website for at least twelve months. About Autodesk Autodesk, Inc. is wholly focused on ensuring that great ideas are turned into reality. With six million users, Autodesk is the world's leading software and services company for the building, manufacturing, infrastructure, digital media, and wireless data services fields. Autodesk's solutions help customers create, manage, and share their data and digital assets more effectively. As a result, customers turn ideas into competitive advantage by becoming more productive, streamlining project efficiency, and maximizing profits. Founded in 1982, Autodesk is headquartered in San Rafael, California. For additional information about Autodesk, please visit www.autodesk.com. Reconciliation of diluted net income per share on a GAAP basis to non-GAAP diluted net income per share Unaudited Three months ended Fiscal year ended January 31, 2005 January 31, 2005 Low end High end Low end High end of range of range of range of range Diluted net income per share on a pre-split GAAP basis $ 0.50 $ 0.55 $ 1.76 $ 1.82 Restructuring costs, net of taxes 0.02 0.02 0.11 0.11 Income tax benefits -- -- (0.20) (0.20) Non-GAAP diluted net income per share on a pre-split basis $ 0.52 $ 0.57 $ 1.67 $ 1.73 Three months ended Fiscal year ended January 31, 2005 January 31, 2005 Low end High end Low end High end of range of range of range of range Diluted net income per share on a GAAP basis after the effect of the 2-for-1 stock split $0.25 $0.28 $0.88 $0.91 Restructuring costs, net of taxes 0.01 0.01 0.06 0.06 Income tax benefits -- -- (0.10) (0.10) Non-GAAP diluted net income per share after the effect of the 2-for-1 stock split $0.26 $0.29 $0.84 $0.87 NOTE: Autodesk, AutoCAD, Autodesk Inventor, Autodesk Map, Civil 3D and Revit are either trademarks or registered trademarks of Autodesk, Inc., in the United States and/or other countries. All other brand names, product names, or trademarks belong to their respective holders. Autodesk, Inc. Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Nine Months Ended October 31, October 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) Net revenues: License and other $254,450 $204,303 $753,404 $574,618 Maintenance 45,708 29,559 124,208 81,715 Total net revenues 300,158 233,862 877,612 656,333 Costs and expenses: Cost of license and other revenues 39,184 32,690 112,885 100,193 Cost of maintenance revenues 4,210 3,919 12,597 10,705 Marketing and sales 113,205 95,364 327,497 277,581 Research and development 59,942 53,004 176,165 154,247 General and administrative 26,837 20,945 76,856 65,118 Restructuring and other 2,922 -- 14,889 -- Total costs and expenses 246,300 205,922 720,889 607,844 Income from operations 53,858 27,940 156,723 48,489 Interest and other income, net 2,801 1,805 7,396 8,147 Income before income taxes 56,659 29,745 164,119 56,636 Income tax benefit (provision) 17,411 (7,139) (8,379) 6,081 Net income $74,070 $22,606 $155,740 $62,717 Basic net income per share $0.65 $0.20 $1.37 $0.56 Diluted net income per share $0.60 $0.20 $1.27 $0.55 Shares used in computing basic net income per share 113,912 111,220 113,672 111,497 Shares used in computing diluted net income per share 124,022 114,166 122,746 113,660 Earnings per share adjusted for impact of two-for-one stock split (A): Basic earnings per share $0.33 $0.10 $0.69 $0.28 Diluted earnings per share $0.30 $0.10 $0.63 $0.28 Shares used in computing basic net income per share 227,823 222,440 227,344 222,994 Shares used in computing diluted net income per share 248,045 228,333 245,492 227,319 (A) Earnings per share for the three and nine months ended October 31, 2004 and 2003 have been presented to reflect a two-for-one stock split approved November 16, 2004, payable to shareholders of record on December 6, 2004. Autodesk, Inc. Pro Forma Consolidated Statements of Income (See pro forma adjustments listed in the tables below) (In thousands, except per share data) Three Months Ended Nine Months Ended October 31, October 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) Net revenues: License and other $ 254,450 $ 204,303 $ 753,404 $ 574,618 Maintenance 45,708 29,559 124,208 81,715 Total net revenues 300,158 233,862 877,612 656,333 Costs and expenses: Cost of license and other revenues 39,184 32,690 112,885 100,193 Cost of maintenance revenues 4,210 3,919 12,597 10,705 Marketing and sales 113,205 95,364 327,497 277,581 Research and development 59,942 53,004 176,165 154,247 General and administrative 26,837 20,945 76,856 65,118 Total costs and expenses 243,378 205,922 706,000 607,844 Income from operations 56,780 27,940 171,612 48,489 Interest and other income, net 2,801 1,805 7,396 8,147 Income before income taxes 59,581 29,745 179,008 56,636 Provision for income taxes (11,916) (7,139) (35,802) (13,593) Pro forma net income $ 47,665 $ 22,606 $ 143,206 $ 43,043 Basic pro forma net income per share $ 0.42 $ 0.20 $ 1.26 $ 0.39 Diluted pro forma net income per share $ 0.38 $ 0.20 $ 1.17 $ 0.38 Shares used in computing basic pro forma net income per share 113,912 111,220 113,672 111,497 Shares used in computing diluted pro forma net income per share 124,022 114,166 122,746 113,660 Pro forma earnings per share adjusted for impact of two-for-one stock split (A): Basic pro forma earnings per share $ 0.21 $ 0.10 $ 0.63 $ 0.19 Diluted pro forma earnings per share $ 0.19 $ 0.10 $ 0.58 $ 0.19 Shares used in computing basic pro forma net income per share 227,823 222,440 227,344 222,994 Shares used in computing diluted pro forma net income per share 248,045 228,333 245,492 227,319 (A) Pro forma earnings per share for the three and nine months ended October 31, 2004 and 2003 have been presented to reflect a two-for-one stock split approved November 16, 2004, payable to shareholders of record on December 6, 2004. Three Months Ended Nine Months Ended October 31, October 31, 2004 2003 2004 2003 (Unaudited) (Unaudited) A reconciliation between operating expenses on a GAAP basis and pro forma operating expenses is as follows: GAAP costs and expenses $ 246,300 $ 205,922 $ 720,889 $ 607,844 Restructuring and other (2,922) -- (14,889) -- Pro forma costs and expenses $ 243,378 $ 205,922 $ 706,000 $ 607,844 A reconciliation between income from operations on a GAAP basis and pro forma income from operations is as follows: GAAP income from operations $ 53,858 $ 27,940 $ 156,723 $ 48,489 Restructuring and other 2,922 -- 14,889 -- Pro forma income from operations $ 56,780 $ 27,940 $ 171,612 $ 48,489 A reconciliation between income tax benefit (provision) on a GAAP basis and pro forma provision for income taxes is as follows: GAAP income tax benefit (provision) $ 17,411 $ (7,139) $ (8,379) $ 6,081 Income tax effect on restructuring and other (584) -- (2,978) -- Dividends received deduction benefit for the current fiscal year (4,298) -- -- -- Dividends received deduction benefit for prior fiscal years (15,540) -- (15,540) -- Non-recurring tax benefit (8,905) -- (8,905) (19,674) Pro forma provision for income taxes $ (11,916) $ (7,139) $ (35,802) $(13,593) A reconciliation between net income on a GAAP basis and pro forma net income is as follows: GAAP net income $ 74,070 $ 22,606 $ 155,740 $ 62,717 Restructuring and other 2,922 -- 14,889 -- Income tax effect on restructuring and other (584) -- (2,978) -- Dividends received deduction benefit for the current fiscal year (4,298) -- -- -- Dividends received deduction benefit for prior fiscal years (15,540) -- (15,540) -- Non-recurring tax benefit (8,905) -- (8,905) (19,674) Pro forma net income $ 47,665 $ 22,606 $ 143,206 $ 43,043 A reconciliation between diluted net income per share on a pre-split GAAP basis and diluted pro forma net income per share on a pre-split basis is as follows: Pre-split GAAP diluted net income per share $ 0.597 $ 0.198 $ 1.269 $ 0.552 Restructuring and other 0.024 -- 0.121 -- Income tax effect on restructuring and other (0.005) -- (0.024) -- Dividends received deduction benefit for the current fiscal year (0.035) -- -- -- Dividends received deduction benefit for prior fiscal years (0.125) -- (0.127) -- Non-recurring tax benefit (0.072) -- (0.073) (0.173) Pre-split pro forma diluted net income per share $ 0.384 $ 0.198 $ 1.166 $ 0.379 A reconciliation between diluted net income per share on a post-split GAAP basis and diluted pro forma net income per share on a post-split basis is as follows: Post-split GAAP diluted net income per share $ 0.299 $ 0.099 $ 0.634 $ 0.276 Restructuring and other 0.012 -- 0.061 -- Income tax effect on restructuring and other (0.002) -- (0.012) -- Dividends received deduction benefit for the current fiscal year (0.017) -- -- -- Dividends received deduction benefit for prior fiscal years (0.064) -- (0.064) -- Non-recurring tax benefit (0.036) -- (0.036) (0.087) Post-split pro forma diluted net income per share $ 0.192 $ 0.099 $ 0.583 $ 0.189 To supplement our consolidated financial statements presented on a GAAP basis, Autodesk uses pro forma measures of operating results, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. 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 pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States. Autodesk, Inc. Consolidated Balance Sheets (In thousands) October 31, January 31, 2004 2004 (Unaudited) (Audited) ASSETS: Current assets: Cash and cash equivalents $ 377,148 $ 282,249 Marketable securities 56,917 81,275 Accounts receivable, net 168,044 166,816 Inventories 12,530 17,365 Deferred income taxes 56,985 25,410 Prepaid expenses and other current assets 25,896 24,137 Total current assets 697,520 597,252 Marketable securities 83,899 165,976 Computer equipment, software, furniture and leasehold improvements, at cost: Computer equipment, software and furniture 193,845 206,319 Leasehold improvements 32,625 34,526 Less accumulated depreciation (158,571) (174,371) Net 67,899 66,474 Purchased technologies and capitalized software, net 13,108 19,378 Goodwill, net 166,669 160,094 Deferred income taxes, net 44,048 -- Other assets 8,984 7,986 $1,082,127 $1,017,160 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 50,909 $ 52,307 Accrued compensation 107,917 92,830 Accrued income taxes 37,734 50,695 Deferred revenues 157,105 127,276 Other accrued liabilities 53,891 61,814 Total current liabilities 407,556 384,922 Deferred income taxes, net -- 7,849 Other liabilities 1,293 2,746 Stockholders' equity: Preferred stock -- -- Common stock and additional paid-in capital 600,936 473,673 Accumulated other comprehensive loss (4,432) (4,754) Deferred compensation (412) (451) Retained earnings 77,186 153,175 Total stockholders' equity 673,278 621,643 $1,082,127 $1,017,160 Autodesk, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) Nine Months Ended October 31, 2004 2003 (Unaudited) Operating Activities Net income $ 155,740 $ 62,717 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 38,581 35,966 Stock compensation expense 2,915 1,497 Net loss on fixed asset disposals 321 -- Write-downs of cost method investments -- 61 Tax benefits from employee stock plans 91,414 -- Restructuring related charges, net 4,773 -- Changes in operating assets and liabilities (64,318) 709 Net cash provided by operating activities 229,426 100,950 Investing Activities Net sales and maturities of available-for-sale marketable securities 105,238 4,927 Capital and other expenditures (29,291) (18,716) Business combinations, net of cash acquired (11,750) (5,150) Other investing activities (1,487) (51) Net cash provided by (used in) investing activities 62,710 (18,990) Financing activities Proceeds from issuance of common stock, net of issuance costs 211,456 50,454 Repurchases of common stock (400,066) (81,062) Dividends paid (10,146) (10,076) Net cash used in financing activities (198,756) (40,684) Effect of exchange rate changes on cash and cash equivalents 1,519 7,057 Net increase in cash and cash equivalents 94,899 48,333 Cash and cash equivalents at beginning of year 282,249 186,377 Cash and cash equivalents at end of period $ 377,148 $ 234,710 Supplemental cash flow information: Net cash paid during the period for income taxes $ 12,123 $ 2,058 Fiscal Year 2005 QTR 1 QTR 2 QTR 3 QTR 4 YTD2005 Financial Statistics (in millions): Total net revenues $ 297.9 $ 279.6 $ 300.2 $ 877.6 License and other revenues $ 260.5 $ 238.5 $ 254.5 $ 753.4 Maintenance revenues $ 37.4 $ 41.1 $ 45.7 $ 124.2 Gross Margin 86% 86% 86% 86% GAAP Operating Expenses $ 202.5 $ 190.0 $ 202.9 $ 595.4 GAAP Operating Margin 18% 18% 18% 18% GAAP Net Income $ 42.5 $ 39.2 $ 74.1 $ 155.7 Pre-split GAAP Earnings Per Share (diluted) $ 0.36 $ 0.31 $ 0.60 $ 1.27 Split-adjusted GAAP Earnings Per Share (diluted) (F) $ 0.18 $ 0.16 $ 0.30 $ 0.63 Pro Forma Operating Expenses (A)(B) $ 194.2 $ 186.3 $ 200.0 $ 580.5 Pro Forma Operating Margin (A)(C) 21% 19% 19% 20% Pro Forma Net Income (A)(D) $ 51.3 $ 44.2 $ 47.7 $ 143.2 Pre-split Pro Forma Earnings Per Share (diluted) (A)(E) $ 0.43 $ 0.35 $ 0.38 $ 1.17 Split-adjusted Pro Forma Earnings Per Share (diluted) (A)(F) $ 0.22 $ 0.18 $ 0.19 $ 0.58 Total Cash and Marketable Securities $ 519.4 $ 571.7 $ 518.0 $ 518.0 Days Sales Outstanding 43 51 50 50 Capital Expenditures $ 5.9 $ 9.9 $ 13.5 $ 29.3 Cash from Operations $ 55.2 $ 83.5 $ 90.8 $ 229.4 GAAP Depreciation and Amortization $ 12.5 $ 12.9 $ 13.2 $ 38.6 Revenue by Geography (in millions): Americas $ 121.5 $ 115.1 $ 137.0 $ 373.6 Europe $ 108.8 $ 98.9 $ 95.8 $ 303.5 Asia/Pacific $ 67.6 $ 65.6 $ 67.4 $ 200.5 Revenue by Division (in millions) (G): Design Solutions Segment $ 261.6 $ 243.8 $ 257.9 $ 763.3 Manufacturing Solutions Division $ 44.8 $ 44.2 $ 50.4 $ 139.4 Infrastructure Solutions Division $ 33.5 $ 31.4 $ 33.0 $ 98.0 Building Solutions Group $ 27.2 $ 28.8 $ 29.1 $ 85.0 Platform Technology Group and other $ 156.1 $ 139.4 $ 145.4 $ 440.9 Discreet Segment $ 36.1 $ 35.3 $ 41.6 $ 113.0 Upgrade Revenue (in millions): Upgrade Revenue $ 66.2 $ 46.4 $ 55.8 $ 168.4 Deferred Maintenance Revenue (in millions): Deferred Maintenance Revenue Balance $ 96.7 $ 107.2 $ 113.2 $ 113.2 Operating Income (Loss) by Segment (in millions) (G): Design Solutions $124.2 $ 106.5 $ 115.8 $ 346.5 Discreet $ 1.8 $ 5.2 $ 5.4 $ 12.4 Unallocated amounts $(72.5) $ (62.3) $ (67.4) $(202.2) Headcount: Headcount 3,409 3,443 3,437 3,437 Common Stock Statistics: Stock Outstanding Pre-split Pro Forma EPS Calculation - diluted 119,283,000 125,304,000 124,022,000 122,746,000 Post-split Pro Forma EPS Calculation - diluted 238,565,000 250,607,000 248,045,000 245,492,000 Stock Repurchased - Pre-split basis 5,182,600 1,659,800 4,016,100 10,858,500 Installed Base Statistics: Total AutoCAD-based Installed Base* 3,469,400 3,514,600 3,571,800 3,571,800 *Includes prior period adjustment of approximately 28,000 seats (A) To supplement our consolidated financial statements presented on a GAAP basis, Autodesk uses pro forma measures of operating results, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. 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 pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States. (B) GAAP Operating Expenses $202.5 $ 190.0 $ 202.9 $ -- $595.4 Restructuring and other $ (8.3) $( 3.7) $ (2.9) $ -- $(14.9) Pro Forma Operating Expenses $194.2 $ 186.3 $ 200.0 $ -- $580.5 (C) GAAP Operating Margin 18% 18% 18% 0% 18% Restructuring and other 3% 1% 1% 0% 2% Pro Forma Operating Margin 21% 19% 19% 0% 20% (D) GAAP Net Income $42.505 $39.165 $74.070 $ -- $155.740 Restructuring and other $ 8.250 $ 3.717 $ 2.922 $ -- $ 14.889 Income tax effect on restructuring and other (H) $(1.650) $(0.744) $(0.584) $ -- $( 2.978) Dividends Received Deduction benefit for current fiscal year (H) $ 2.244 $ 2.054 $(4.298) $ -- $ -- Dividends Received Deduction benefit for prior fiscal years (H) $ -- $ -- $(15.540) $ -- $(15.540) Non-recurring tax benefit $ -- $ -- $ (8.905) $ -- $ (8.905) Pro Forma Net Income $51.349 $44.192 $ 47.665 $ -- $143.206 (E) Pre-split GAAP Earnings Per Share (diluted) $ 0.356 $ 0.313 $ 0.597 $ -- $ 1.269 Restructuring and other $ 0.069 $ 0.030 $ 0.024 $ -- $ 0.121 Income tax effect on restructuring and other (H) $(0.014) $(0.006) $ (0.005) $ -- $ (0.024) Dividends Received Deduction benefit for current fiscal year (H) $ 0.019 $ 0.016 $ (0.035) $ -- $ -- Dividends Received Deduction benefit for prior fiscal years (H) $ -- $ -- $ (0.125) $ -- $ (0.127) Non-recurring tax benefit $ -- $ -- $ (0.072) $ -- $ (0.073) Pre-split Pro Forma Earnings Per Share (diluted) $ 0.430 $ 0.353 $ 0.384 $ -- $ 1.166 (F) On November 18, 2004 Autodesk announced the Board of Directors declared a 2-for-1 stock split on its common stock to be paid on December 20, 2004 to stockholders of record as of the close of business on December 6, 2004. As a result, we have presented the impact of this stock split on our GAAP and pro forma earnings per share for all prior fiscal periods. Post-split GAAP Earnings Per Share (diluted) $ 0.178 $ 0.156 $ 0.299 $ -- $ 0.634 Restructuring and other $ 0.035 $ 0.015 $ 0.012 $ -- $ 0.061 Income tax effect on restructuring and other (H) $(0.007) $(0.003) $ (0.002) $ -- $ (0.012) Dividends Received Deduction benefit for current fiscal year (H) $ 0.009 $ 0.008 $ (0.017) $ -- $ -- Dividends Received Deduction benefit for prior fiscal years (H) $ -- $ -- $ (0.064) $ -- $ (0.064) Non-recurring tax benefit $ -- $ -- $ (0.036) $-- $ (0.036) Post-split Pro Forma Earnings Per Share (diluted) $0.215 $0.176 $ 0.192 $-- $ 0.583 (G) In the third quarter of fiscal 2005, Autodesk modified its segment disclosure. For purposes of comparison with previous periods, the segment data has been restated to reflect the current segment reporting. (H) In the third quarter of fiscal 2005, Autodesk determined that its consolidated fiscal year effective income tax rate declined from 24% to 20%. For purposes of comparison, we have assumed the new estimated effective income tax rate of 20% in calculating our pro forma net income and pro forma earnings per share for each individual quarter of fiscal 2005. CONTACT: Investors: Sue Pirri, sue.pirri@autodesk.com, 415-507-6467 John Clancy, john.clancy@autodesk.com 415-507-6373 Press: Kathleen O'Boyle, Kathleen.oboyle@autodesk.com, 415-507-6465 Nicole Pack, nicole.pack@autodesk.com, 415-507-6282 SOURCE Autodesk, Inc. -0- 11/18/2004 /CONTACT: investors, Sue Pirri, +1-415-507-6467, or sue.pirri@autodesk.com, or John Clancy, +1-415-507-6373, or john.clancy@autodesk.com, or media, Kathleen O'Boyle, +1-415-507-6465, or Kathleen.oboyle@autodesk.com, or Nicole Pack, +1-415-507-6282, or nicole.pack@autodesk.com, all of Autodesk, Inc./ /Web site: http://www.autodesk.com/ (ADSK) CO: Autodesk, Inc. ST: California IN: CPR STW SU: ERN ERP CCA