Autodesk
Annual Report 2018

Plain-text annual report

FISCAL YEAR 2018 Annual Report Notice of annual meeting and proxy statement Autodesk, Inc., 111 McInnis Parkway, San Rafael, CA 94903 Autodesk is a registered trademark or trademark of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names, or trademarks belong to their respective holders. Autodesk reserves the right to alter product and services offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. © 2 018 Autodesk, Inc. All rights reserved. Board of Directors Company Executive Officers Corporate Headquarters Andrew Anagnost President and Chief Executive Officer, Autodesk, Inc. Andrew Anagnost President and Chief Executive Officer Crawford W. Beveridge Steven M. Blum non-Executive Chairman of the Board, SVP, Worldwide Field Operations Pascal W. Di Fronzo SVP, Corporate Affairs, Chief Legal Officer & Secretary Carmel Galvin, SVP, Chief Human Resources Officer R. Scott Herren SVP, Chief Financial Officer Autodesk, Inc. Carl Bass* Karen Blasing Reid French Thomas Georgens* Richard S. Hill* Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Worldwide Headquarters Autodesk, Inc. 111 McInnis Parkway San Rafael, CA 94903 USA Asia Pacific Headquarters Autodesk Asia Pte Ltd 3 Fusionopolis Way #10-21 Symbiosis Singapore 138633 Singapore European Headquarters Autodesk Development Sàrl Rue du Puits-Godet 6 Case Postale 35 2002 Neuchâtel Switerland Legal Counsel Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, CA 94304 USA Transfer Agent By Regular Mail P.O. BOX 505000 Louisville, KY 40233 USA Computershare Trust Company N.A. Independent Registered Public Accounting Firm Ernst & Young, LLP 560 Mission Street, Suite 1600 San Fransisco, CA 94105 USA Notice of Annual Meeting June 12, 2018, 3:00 p.m. Pacific time. Investor Relations our website at: www.autodesk.com. distinguished service to Autodesk. Held at Autodesk, Inc.’s San Fransisco office at The Landmark at One Market Street, 2nd Floor, San Fransisco, California, USA. For more information, including copies of this annual report free of charge, write to us at: Investor Relations, Autodesk, Inc., 111 McInnis Parkway, San Rafael, CA 94903, USA; Phone us at +1-415-507-6705; email us at investor.relations@autodesk.com; or visit * Messrs. Bass, Georgens and Hill are not standing for reelection at the Annual Meeting. The Board thanks each of them for their May 1, 2018 Dear Autodesk Stockholder: You are cordially invited to attend Autodesk’s 2018 Annual Meeting of Stockholders to be held on Tuesday, June 12, 2018, at 3:00 p.m., Pacific Time, at our San Francisco office, The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. The 2018 Annual Meeting of Stockholders will be held for the following purposes: 1. 2. 3. 4. To elect the eight directors listed in the accompanying Proxy Statement; To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2019; To hold a non-binding vote to approve compensation for our named executive officers; and To transact such other business as may properly come before the Annual Meeting. s l a i r e t a M y x o r P The accompanying Notice of 2018 Annual Meeting of Stockholders and Proxy Statement describe these proposals in greater detail. We encourage you to read this information carefully. We are once again relying on the Securities and Exchange Commission rule that allows us to furnish our proxy materials to our stockholders over the internet rather than in paper form. We believe this delivery process reduces both our environmental impact and the costs of printing and distributing our proxy materials without hindering our stockholders' timely access to this important information. We hope you will be able to attend this year's Annual Meeting. We will report on fiscal 2018, and there will be an opportunity for stockholders to ask questions. Even if you plan to attend the meeting, please ensure that you are represented by voting in advance. You can vote online or by telephone, or you can request, sign, date and return a proxy card, to ensure your representation at the meeting. Your vote is very important. On behalf of the Board of Directors, I would like to express our appreciation for your continued support of Autodesk. Very truly yours, Andrew Anagnost President and Chief Executive Officer NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS Time and Date Place Items of Business P r o x y M a t e r i a l s Adjournments and Postponements Record Date Voting By Order of the Board of Directors, Tuesday, June 12, 2018, at 3:00 p.m., Pacific Time. Autodesk’s San Francisco office, located at The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. (1) (2) (3) (4) To elect the eight directors listed in the accompanying Proxy Statement to serve for the coming year and until their successors are duly elected and qualified. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2019. To hold a non-binding vote to approve compensation for our named executive officers. To transact such other business as may properly come before the Annual Meeting. These items of business are more fully described in the Proxy Statement accompanying this Notice of 2018 Annual Meeting of Stockholders. Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting is properly adjourned or postponed. You are entitled to vote if you were a stockholder as of the close of business on April 16, 2018. Your vote is very important. Even if you plan to attend the Annual Meeting, we encourage you to read the Proxy Statement and to vote. You can vote online or by telephone, or you can request, sign, date and return your proxy card as soon as possible. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers About the 2018 Annual Meeting and Procedural Matters” in the Proxy Statement and the instructions on the Notice of Internet Availability of Proxy Materials. All stockholders are cordially invited to attend the Annual Meeting. If you attend the Annual Meeting, you may vote in person by ballot even if you previously voted. Pascal W. Di Fronzo SVP, Corporate Affairs, Chief Legal Officer and Secretary This notice of Annual Meeting, Proxy Statement and accompanying form of proxy card are being made available on or about May 1, 2018. TABLE OF CONTENTS EXECUTIVE SUMMARY QUESTIONS AND ANSWERS ABOUT THE 2018 ANNUAL MEETING AND PROCEDURAL MATTERS IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS' MEETING TO BE HELD ON JUNE 12, 2018 PROPOSAL ONE—ELECTION OF DIRECTORS Nominees Summary of Director Nominee Experience, Qualifications, Attributes and Skills Information and Qualifications PROPOSAL TWO—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Principal Accounting Fees and Services Pre-Approval of Audit and Non-Audit Services PROPOSAL THREE—NON-BINDING VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION Fiscal 2018 Business Model Transition and Performance Metrics Stockholder Engagement and Actions Taken Compensation Guiding Principles Leading Compensation and Governance Practices Vote Recommendations CORPORATE GOVERNANCE Corporate Governance Guidelines and Code of Business Conduct and Ethics Stock Ownership Guidelines Independence of the Board Outside Board Memberships Board Meetings and Board Committees Board Leadership Structure Risk Oversight Sustainability Compensation Committee Interlocks and Insider Participation Nominating Process for Recommending Candidates for Election to the Board Attendance at Annual Stockholders Meetings by Directors Contacting the Board EXECUTIVE COMPENSATION Compensation Discussion and Analysis Executive Summary The Compensation-Setting Process Competitive Compensation Positioning The Principal Elements of the Executive Compensation Program Report of the Compensation Committee Summary Compensation Table and Narrative Disclosure s l a i r e t a M y x o r P Page 1 1 9 9 15 16 16 17 18 17 18 19 20 19 25 24 24 25 25 26 27 26 27 26 27 28 28 28 29 30 29 30 30 31 30 31 32 31 3132 32 31 32 32 33 34 33 33 34 34 35 35 36 35 36 36 37 36 37 37 36 36 37 37 38 43 41 44 42 44 46 57 59 59 60 Grants of Plan-Based Awards in Fiscal 2018 Outstanding Equity Awards at Fiscal 2018 Year End Option Exercises and Stock Vested at Fiscal 2018 Year End Nonqualified Deferred Compensation for Fiscal 2018 CEO Pay Ratio Change in Control Arrangements and Employment Agreements Potential Payments Upon Termination or Change in Control Compensation of Directors SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT P r o x y M a t e r i a l s CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Review, Approval or Ratification of Related Person Transactions SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OTHER MATTERS APPENDIX A - RECONCILIATION OF GAAP TO NON-GAAP SPEND 60 62 66 64 66 68 66 68 69 67 70 70 72 70 75 77 80 82 81 84 84 81 84 82 82 85 83 86 84 87 The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: Company Reported Fiscal Year Revenue ($'s in Billions) Market Capitalization as of 1/31/2018 ($'s in billions) Adobe Systems, Inc. Akamai Technologies, Inc. 7.30 2.50 PROXY STATEMENT EXECUTIVE SUMMARY 4.04 2.82 1-Dec-17 31-Dec-17 Citrix Systems, Inc. 31-Mar-17 31-Dec-17 CA, Inc. Electronic Arts, Inc. 31-Mar-17 Intuit Inc. PROPOSALS AND BOARD RECOMMENDATIONS 31-Jul-17 Juniper Networks, Inc. 31-Dec-17 4.85 5.18 5.03 1.28 98.13 11.38 14.78 13.33 38.98 43.00 9.56 N/A Mentor Graphics Corporation Proposal National Instruments Corporation NetApp, Inc. 1. Election of Directors Nuance Communications, Inc. 31-Jan-17 31-Dec-17 28-Apr-17 30-Sep-17 PTC Inc. 2. Ratification of Appointment of Independent 30-Sep-17 28-Feb-17 Red Hat, Inc. Registered Public Accounting Firm salesforce.com, inc. Symantec Corporation 31-Jan-18 3. Advisory Vote on Executive Compensation 31-Mar-17 31-Oct-17 Synopsys, Inc. Autodesk, Inc. Autodesk Percentile Ranking 31-Jan-18 Board Recommendation 1.29 Page Number 6.54 FOR each Nominee 5.52 1.94 16.48 17 5.23 1.16 FOR 2.41 10.48 4.02 FOR 2.72 2.06 25% 8.44 25 23.25 83.14 27 16.92 13.79 25.24 73% s l a i r e t a M y x o r P Your vote is very important. Even if you plan to attend the Annual Meeting, we encourage you to read the Proxy In September 2017, the Committee reviewed the compensation peer group that would be used for fiscal 2019 compensation decision making. The Committee determined that each of the peers was still appropriate, except for Mentor Graphics Statement and to vote. You can vote online or by telephone, or you can request, sign, date and return your proxy Corporation which was removed as a result of its acquisition by Siemens AG in March 2017. The Committee also chose to add Ansys, Inc and Cadence Design Systems Inc, given their size, industry comparability and the fact that they compete with Autodesk for executive talent. card as soon as possible. of Internet Availability of Proxy Materials. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of About the 2018 Annual Meeting of Stockholders and Procedural Matters” below and the instructions on the Notice our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s compensation competitive and within market norms. This also provides flexibility for variances in compensation where appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention considerations. 2018 Proxy Statement 1 2018 Proxy Statement 45 2018 Proxy Statement 1 P r o x y M a t e r i a l s Independent consultant Fiscal 2018 Performance and Company Events Fiscal 2018 Business Model Transition and Performance Metrics The Committee retained Exequity LLP as its compensation adviser for fiscal 2018. Exequity provided advice and recommendations on many issues: total compensation philosophy; program design, including program goals, components, and metrics; peer data; compensation trends in the high technology sector and general market for senior executives; separation plans; the compensation of the CEO and the other executive officers; and disclosure of our executive pay programs. The The software industry is undergoing a transition from the PC to cloud, mobile and social computing. Our strategy is to lead the Committee has considered the independence of Exequity in light of NASDAQ's listing standards for compensation committee industries we serve to cloud-based technologies and business models. As part of the transition, we discontinued selling new independence and the rules of the SEC. The Committee requested and received a written confirmation from Exequity perpetual licenses and now offer term-based subscriptions for our products, cloud service offerings, and flexible enterprise addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these business agreements (collectively referred to as "subscription plan"). considerations and concluded that the work performed by Exequity did not raise any conflict of interest. Over time, Autodesk’s business model transition will result in a more predictable, recurring and profitable business. However, during the transition, traditional financial metrics such as revenue, margins, EPS and cash flow from operations have been adversely impacted. This is primarily a result of revenue for new subscription offerings being recognized over time rather than up front and subscription offerings generally have a lower initial price than perpetual offerings. Despite the lower initial price, our subscription plan offerings are expected to increase the lifetime value of Autodesk’s customers. Management Competitive Compensation Positioning and Peer Group The Committee also consults with management and Autodesk’s Human Resources Group regarding executive and non- Following Andrew Anagnost’s appointment as Chief Executive Officer ("CEO"), and in consultation with the Board of executive employee compensation plans, including administration of Autodesk’s equity incentive plans. Directors (the "Board"), he established three strategic priorities of completing the subscription transition, digitizing the Company, and re-imagining manufacturing, construction, and production. To free up resources to pursue these strategic priorities, we commenced a world-wide restructuring plan in the fourth quarter of fiscal 2018. Through the restructuring, we seek to reduce our investments in areas not aligned with our strategic priorities. At the same time, we plan to further invest primarily in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing To ensure our executive compensation practices are competitive and consistent with the Committee’s guiding principles, resources to better align with our strategic priorities, we are better positioning ourselves to meet our long-term goals, while Exequity and management provide the Committee with compensation data for each executive role. This data is drawn from a maintaining our goal to keep non-GAAP spend flat in fiscal 2019. group of companies in relevant industries that compete with Autodesk for executive talent (the “compensation peer group”). To incent long-term value creation and strong financial performance during the transition, we adopted performance metrics for Where sufficient data for our compensation peer group was not available, market data from similarly sized San Francisco Bay our bonus and equity plans that align with the key drivers of success during the business model transition and reflect the health Area companies was used. The Committee uses this data, as well as information about broader technology industry of the business during the transition. The following performance metrics were used for our CEO during fiscal 2018: compensation practices, when deliberating on the compensation of the executive officers. Performance Metrics The compensation peer group is selected based upon multiple criteria, including industry positioning, competition for talent, company size, financial results and geographic footprint. During Autodesk’s business model transition, Autodesk’s revenue has been negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. The Committee took this into consideration when analyzing the composition of Autodesk’s peer group.  Total Annualized Recurring Revenue ("ARR")  Net Total Subscription Additions  Non-GAAP Total Spend  Total Subscription Renewal rate  Relative Total Shareholder Return (“TSR”) (multi-year)  Free Cash Flow Per Share 2018 Proxy Statement 2 2018 Proxy Statement 44 2018 Proxy Statement 2 s l a i r e t a M y x o r P 38.98 43.00 9.56 Citrix Systems, Inc. Electronic Arts, Inc. Intuit Inc. Juniper Networks, Inc. The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: Our executive officers' continued successful implementation of our business model drove the following fiscal 2018 results: Company  Total ARR was $2.05 billion, an increase of 25% from fiscal 2017; of which subscription plan ARR was $1.18 Market Capitalization as of 1/31/2018 ($'s in billions) billion. Total subscriptions were 3.72 million, an increase of 20% from fiscal 2017; of which subscription plan subscriptions Adobe Systems, Inc. were 2.27 million. Akamai Technologies, Inc. 1-Dec-17 31-Dec-17 Revenue ($'s in Billions) Reported Fiscal Year 98.13 11.38 7.30 2.50  CA, Inc.  Subscription plan ARR and subscriptions base surpassed the base of maintenance plan ARR and subscriptions.  Deferred revenue was $1.96 billion, an increase of 9% from fiscal 2017.  Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.28 billion, an increase of 31-Mar-17 31-Dec-17 14.78 13.33 4.04 2.82 approximately 25% from fiscal 2017. 31-Mar-17 31-Jul-17 31-Dec-17 4.85 5.18 5.03  Total GAAP spend (cost of revenue plus operating expenses) was $2,566 million, an increase of 1% from fiscal  National Instruments Corporation 2017. Mentor Graphics Corporation Total non-GAAP spend was $2,169 million, an increase of 1% from fiscal 2017. A reconciliation of GAAP to non- GAAP results is provided in Appendix A. 28-Apr-17  Total subscription renewal rate was 80.9%. 30-Sep-17  During fiscal 2018 our stock price increased by 42% and over five years our stock price increased by 197%. Nuance Communications, Inc. NetApp, Inc. 31-Dec-17 31-Jan-17 16.48 6.54 5.23 1.28 5.52 1.29 1.94 N/A PTC Inc. Red Hat, Inc. 30-Sep-17 28-Feb-17 salesforce.com, inc. CORPORATE GOVERNANCE HIGHLIGHTS 31-Jan-18 Symantec Corporation Our Board of Directors Synopsys, Inc. 31-Mar-17 31-Oct-17 1.16 2.41 10.48 4.02 2.72 8.44 23.25 83.14 16.92 13.79 Autodesk, Inc. Autodesk Percentile Ranking We believe that our director nominees are highly qualified and well suited to continue providing effective oversight of our rapidly evolving business. Our director nominees provide our Board with a balance of relevant critical skills and an effective mix of experience, knowledge and diverse viewpoints, as listed below. 25% 73% 31-Jan-18 25.24 2.06 ● Technology Industry Experience In September 2017, the Committee reviewed the compensation peer group that would be used for fiscal 2019 compensation decision making. The Committee determined that each of the peers was still appropriate, except for Mentor Graphics Corporation which was removed as a result of its acquisition by Siemens AG in March 2017. The Committee also chose to add Ansys, Inc and Cadence Design Systems Inc, given their size, industry comparability and the fact that they compete with Autodesk for executive talent. Financial Experience Outside Public Company Board Service Senior Leadership Experience ● ● ● ● International Experience Ongoing Board of Director Refreshment and Key Updates When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes Jeff Clarke and Scott Ferguson each resigned from the Board, effective June 19, 2017, in accordance with the settlement that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s agreement, dated February 6, 2017, by and among Autodesk, Sachem Head Capital Management LP, Uncas GP LLC, and Sachem Head GP LLC. On June 18, 2017, the Board appointed Andrew Anagnost as President and CEO of the Company compensation competitive and within market norms. This also provides flexibility for variances in compensation where (“CEO”), effective June 19, 2017. The Board also appointed Dr. Anagnost to the Board to fill the vacancy created by the appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention resignation of Mr. Clarke, effective June 19, 2017. On July 19, 2017, the Board appointed Reid French to the Board to fill the considerations. vacancy created by the resignation of Mr. Ferguson. On March 21, 2018, the Board appointed Karen Blasing to the Board to fill a vacancy. Carl Bass, Thomas Georgens and Richard Hill are not standing for reelection at the Annual Meeting. 2018 Proxy Statement 3 2018 Proxy Statement 45 2018 Proxy Statement 3 Independent consultant As reflected in the charts below, we have an experienced and balanced slate of Board nominees. The Committee retained Exequity LLP as its compensation adviser for fiscal 2018. Exequity provided advice and recommendations on many issues: total compensation philosophy; program design, including program goals, components, and metrics; peer data; compensation trends in the high technology sector and general market for senior executives; separation plans; the compensation of the CEO and the other executive officers; and disclosure of our executive pay programs. The Committee has considered the independence of Exequity in light of NASDAQ's listing standards for compensation committee independence and the rules of the SEC. The Committee requested and received a written confirmation from Exequity addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these considerations and concluded that the work performed by Exequity did not raise any conflict of interest. P r o x y M a t e r i a l s Management The Committee also consults with management and Autodesk’s Human Resources Group regarding executive and non- executive employee compensation plans, including administration of Autodesk’s equity incentive plans. Corporate Governance Guidelines Competitive Compensation Positioning and Peer Group We believe the highest standards of corporate governance and business conduct are essential to running our business efficiently, serving our stockholders well, and maintaining our integrity in the marketplace. Over the years, we have devoted substantial attention to the subject of corporate governance and have developed Corporate Governance Guidelines (the “Guidelines”). To ensure our executive compensation practices are competitive and consistent with the Committee’s guiding principles, Exequity and management provide the Committee with compensation data for each executive role. This data is drawn from a The Guidelines set forth the principles that guide our Board's exercise of its responsibility to oversee corporate governance, group of companies in relevant industries that compete with Autodesk for executive talent (the “compensation peer group”). maintain its independence, evaluate its own performance and the performance of our executive officers, and set corporate Where sufficient data for our compensation peer group was not available, market data from similarly sized San Francisco Bay strategy. On a regular basis, the Board reviews our governance practices, corporate governance developments and stockholder Area companies was used. The Committee uses this data, as well as information about broader technology industry feedback to ensure continued effectiveness. compensation practices, when deliberating on the compensation of the executive officers. Our Board is committed to ensuring that stockholder feedback informs our strong governance practices. As such, we have and intend to continue to engage with stockholders to maintain an open dialogue and ensure that we have an in-depth understanding of our stockholders’ perspectives. EXECUTIVE COMPENSATION HIGHLIGHTS The compensation peer group is selected based upon multiple criteria, including industry positioning, competition for talent, company size, financial results and geographic footprint. During Autodesk’s business model transition, Autodesk’s revenue has been negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. The Committee took this into consideration when analyzing the composition of Autodesk’s peer group. Compensation Guiding Principles The executive compensation program is designed to attract, motivate, and retain talented executives and should provide a rigorous framework that is tied to stockholder returns, Company performance, long-term strategic corporate goals, and individual performance. The general compensation objectives are to: ● Recruit and retain the highest caliber of executives through competitive rewards; ● Motivate executive officers to achieve business and financial goals; ● ● Balance rewards for short- and long-term performance; and Align rewards with stockholder value creation. 2018 Proxy Statement 4 2018 Proxy Statement 44 2018 Proxy Statement 4 The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: Our executive compensation program emphasizes variable compensation with both annual and long-term performance components. In fiscal 2018, 92% of our current CEO's and 84% of all other continuing named executive officers’ total compensation was variable in nature and “at risk” and 86% of our current CEO’s and 73% of all other continuing named Market Capitalization as of 1/31/2018 ($'s in billions) executive officers’ total compensation consisted of long-term equity. Our incentive programs reward strong annual financial and operational performance, as well as relative TSR over one-, two-, and three-year performance periods. The charts below demonstrate the fiscal 2018 pay mix between base salary, actual short-term incentives, and targeted long-term equity compensation for the current CEO and all other continuing named executive officers ("NEOs"). Adobe Systems, Inc. Akamai Technologies, Inc. 1-Dec-17 31-Dec-17 Revenue ($'s in Billions) Reported Fiscal Year 98.13 11.38 7.30 2.50 31-Mar-17 CA, Inc. Company 14.78 4.04 Citrix Systems, Inc. Electronic Arts, Inc. Intuit Inc. Juniper Networks, Inc. Mentor Graphics Corporation National Instruments Corporation NetApp, Inc. Nuance Communications, Inc. PTC Inc. Red Hat, Inc. salesforce.com, inc. Symantec Corporation Synopsys, Inc. 31-Dec-17 31-Mar-17 31-Jul-17 31-Dec-17 31-Jan-17 31-Dec-17 28-Apr-17 30-Sep-17 30-Sep-17 28-Feb-17 31-Jan-18 31-Mar-17 31-Oct-17 2.82 4.85 5.18 5.03 1.28 1.29 5.52 1.94 1.16 2.41 10.48 4.02 2.72 13.33 38.98 43.00 9.56 N/A 6.54 16.48 5.23 8.44 23.25 83.14 16.92 13.79 s l a i r e t a M y x o r P Autodesk, Inc. 31-Jan-18 2.06 25.24 Autodesk Percentile Ranking During fiscal 2018, the Compensation and Human Resources Committee approved annual equity awards in the form of PSUs and RSUs for the NEOs. The Compensation and Human Resources Committee elected to use the following mix of PSUs and RSUs to complement the performance aspects of PSUs with the long-term retention component of RSUs. 25% 73% In September 2017, the Committee reviewed the compensation peer group that would be used for fiscal 2019 compensation decision making. The Committee determined that each of the peers was still appropriate, except for Mentor Graphics Corporation which was removed as a result of its acquisition by Siemens AG in March 2017. The Committee also chose to add Ansys, Inc and Cadence Design Systems Inc, given their size, industry comparability and the fact that they compete with Autodesk for executive talent. When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s compensation competitive and within market norms. This also provides flexibility for variances in compensation where appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention considerations. 2018 Proxy Statement 5 2018 Proxy Statement 45 5 Independent consultant Elements of Executive Compensation The principal elements of Autodesk’s annual executive compensation program are described below. The Committee retained Exequity LLP as its compensation adviser for fiscal 2018. Exequity provided advice and recommendations on many issues: total compensation philosophy; program design, including program goals, components, and metrics; peer data; compensation trends in the high technology sector and general market for senior executives; separation plans; the compensation of the CEO and the other executive officers; and disclosure of our executive pay programs. The Committee has considered the independence of Exequity in light of NASDAQ's listing standards for compensation committee independence and the rules of the SEC. The Committee requested and received a written confirmation from Exequity addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these considerations and concluded that the work performed by Exequity did not raise any conflict of interest. 0% - 150% of target Short-Term Incentive Opportunities Motivate achievement of strategic Forms basis for competitive compensation package Payout Range Base Salary Element Purpose N / A P r o x y M a t e r i a l s Management priorities relating to the business model transition while maintaining our year- over-year non-GAAP spend PSUs Align compensation with key drivers of The Committee also consults with management and Autodesk’s Human Resources Group regarding executive and non- the business and relative shareholder executive employee compensation plans, including administration of Autodesk’s equity incentive plans. return 0% - 180% of target shares Competitive Compensation Positioning and Peer Group Encourage focus on near-term and long- term strategic objectives Change in Autodesk stock price To ensure our executive compensation practices are competitive and consistent with the Committee’s guiding principles, Exequity and management provide the Committee with compensation data for each executive role. This data is drawn from a Align compensation with long-term drivers of the business model transition t (the “compensation peer group”). Where sufficient data for our compensation peer group was not available, market data from similarly sized San Francisco Bay Area companies was used. The Committee uses this data, as well as information about broader technology industry compensation practices, when deliberating on the compensation of the executive officers. CEO Promotion Grant: 0% - 200% of target shares Encourage focus on long-term stockholder value creation Change in Autodesk stock price RSUs Promote retention The compensation peer group is selected based upon multiple criteria, including industry positioning, competition for talent, company size, financial results and geographic footprint. During Autodesk’s business model transition, Autodesk’s revenue has been negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. The Committee took this into consideration when analyzing the composition of Autodesk’s peer group. 2018 Proxy Statement 6 2018 Proxy Statement 44 2018 Proxy Statement 6 The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: Executive Compensation and Corporate Performance The chart below highlights the multi-year relationship between the CEO’s total compensation, the percentage achievement against annual cash incentives as well as the Company’s annual and cumulative Total Shareholder Return. This chart Market Capitalization as of 1/31/2018 ($'s in billions) underscores the Compensation and Human Resources Committee’s commitment to a philosophy of pay-for-performance. 98.13 11.38 Revenue ($'s in Billions) Reported Fiscal Year nologies, Inc. Company - - Company Performance and Total Shareholder Return vs. CEO Total Compensation 31-Mar-17 4.04 2.82 $15,000 r Graphics Corporation ) s 0 0 0 ( n o i t a s n e p m o C l a t o T O E C $10,000 $5,000 $0 31-Dec-17 31-Mar-17 31-Jul-17 31-Dec-17 31-Jan-17 31-Dec-17 28-Apr-17 30-Sep-17 30-Sep-17 28-Feb-17 FY 18 TSR +42%; Over 5 Years +197% 14.78 13.33 300% 38.98 43.00 9.56 250% N/A 6.54 16.48 200% 5.23 4.85 5.18 5.03 1.28 1.29 FY 17 TSR: +74% 5.52 1.94 1.16 2.41 10.48 4.02 s l a i r e t a M y x o r P FY 14 TSR: +32% FY 15 TSR: +5% 31-Jan-18 31-Mar-17 31-Oct-17 Annual Cash Incentive Achievement vs. Target: 109% 31-Jan-18 FY 16 TSR: -13% Annual Cash Incentive Achievement vs. Target: 101% 2.72 Annual Cash Incentive 2.06 Achievement vs. Target: 94% 25% Annual Cash Incentive Achievement vs. Target: 98% Annual Cash Incentive Achievement vs. Target: 31% $8,297 $11,040 $12,177 $10,724 $12,346 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 CEO Total Compensation (000s) (1) TSR - Year Over Year (% in Boxes)(2) Attainment of Annual Incentive Cash Goals (3) e c i r P k c o t S d e x e d n I 8.44 23.25 150% 83.14 16.92 13.79 100% 25.24 73% 50% 0% _____________ and the fiscal 2018 data is for Dr. Anagnost. When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of (1) Total Compensation is based on the amounts in the Summary Compensation Table; the fiscal 2014 - fiscal 2017 data is for Carl Bass our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s (2) TSR shown in boxes is calculated by comparing year-over-year changes in the closing price of Autodesk’s Common Stock at each financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes fiscal year-end. The green line reflects Autodesk’s cumulative total shareholder return indexed off 100% from the beginning of that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s fiscal 2014 through the end of fiscal 2018. Percentage of achievement against annual cash incentives in place during each fiscal year. compensation competitive and within market norms. This also provides flexibility for variances in compensation where appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention considerations. (3) 2018 Proxy Statement 7 2018 Proxy Statement 45 7 P r o x y M a t e r i a l s Independent consultant Leading Compensation Governance Practices The Co mmittee retained Exequity LLP as its compensation adviser for fiscal 2018. Exequity provided advice and Autodesk’s executive compensation objectives are supported by policies and strong governance practices that align executives’ recommendations on many issues: total compensation philosophy; program design, including program goals, components, and interests with the interests of our stockholders. Some of the program’s most notable features are highlighted in the table and metrics; peer data; compensation trends in the high technology sector and general market for senior executives; separation summarized below. plans; the compensation of the CEO and the other executive officers; and disclosure of our executive pay programs. The Committee has considered the independence of Exequity in light of NASDAQ's listing standards for compensation committee independence and the rules of the SEC. The Committee requested and received a written confirmation from Exequity addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these considerations and concluded that the work performed by Exequity did not raise any conflict of interest. Robust stockholder outreach program Large percentage of NEO total pay tied to Prohibition on option re-pricing No hedging Yes No achievement of critical financial and stockholder value creation Representative peer group No executive benefits and limited perquisites The Committee also consults with management and Autodesk’s Human Resources Group regarding executive and non executive employee compensation plans, including administration of Autodesk’s equity incentive plans. Management Significant stock ownership requirements Clawback policy Double-trigger change in control arrangements with no excise tax gross-up Equity award grant policy Effective risk management Competitive Compensation Positioning and Peer Group Independent compensation committee and - consultant To ensure our executive compensation practices are competitive and consistent with the Committee’s guiding principles, Exequity and management provide the Committee with compensation data for each executive role. This data is drawn from a group of companies in relevant industries that compete with Autodesk for executive talent (the “compensation peer group”). Where sufficient data for our compensation peer group was not available, market data from similarly sized San Francisco Bay Area companies was used. The Committee uses this data, as well as information about broader technology industry compensation practices, when deliberating on the compensation of the executive officers. 2017 Executive Transition RECENT EVENTS In February 2017, Carl Bass announced he was stepping down from his CEO and President roles. Mr. Bass’ separation as CEO led to a number of changes to our executive management team:  The Board formed an interim Office of the Chief Executive to oversee the Company's day-to-day operations, The compensation peer group is selected based upon multiple criteria, including industry positioning, competition for talent, company size, financial results and geographic footprint. During Autodesk’s business model transition, Autodesk’s revenue has e been negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally hav a lower initial purchase price. The Committee took this into consideration when analyzing the composition of Autodesk’s peer group. In June 2017, after an extensive review process and search, the Board appointed Dr. Anagnost as President and which was headed by Dr. Anagnost and Amar Hanspal, who served as interim Co-CEOs.  CEO and a member of the Board.  Mr. Hanspal then elected to resign from his role at the Company.  In October 2017, Jan Becker, having helped the Board and management transition through the management changes in fiscal 2018, also chose to resign. 2017 Settlement Agreement Also, in February 2017, Autodesk entered into an agreement with Sachem Head. Pursuant to this agreement, Messrs. Clarke and Ferguson resigned from the Board when Dr. Anagnost was appointed as President and CEO on June 19, 2017. Following the resignation of Mr. Clarke, the Board appointed Dr. Anagnost to fill his vacancy on the Board. Following Mr. Ferguson’s resignation and with the assistance of executive search firm Egon Zehnder, the Board appointed Reid French as a replacement director. 2018 Proxy Statement 8 2018 Proxy Statement 44 2018 Proxy Statement 8 PROXY STATEMENT FOR 2018 ANNUAL MEETING OF STOCKHOLDERS s l a i r e t a M y x o r P QUESTIONS AND ANSWERS ABOUT THE 2018 ANNUAL MEETING OF STOCKHOLDERS AND PROCEDURAL MATTERS Stock Ownership, Quorum and Voting Q: Who is entitled to vote at the Annual Meeting? ______________________________________________________________________________________________________ A: Holders of record of Autodesk’s Common Stock, par value $0.01 per share (“Common Stock”), at the close of business on April 16, 2018 (the “Record Date”) are entitled to receive notice of and to vote their shares at the Annual Meeting (as defined below). Beneficial owners at the close of business on the Record Date have the right to direct their broker, trustee or nominee on how to vote their shares, as described below. Stockholders are entitled to cast one vote for each share of Common Stock they hold as of the Record Date. As of the Record Date, there were 219,108,924 shares of Common Stock outstanding and entitled to vote at the Annual Meeting. No shares of Autodesk’s Preferred Stock were outstanding. Q: What is the difference between holding shares as a stockholder of record and as a beneficial owner? ______________________________________________________________________________________________________ A: Stockholders of record—If your shares are registered directly in your name with Autodesk’s transfer agent, Computershare Investor Services LLC, you are considered the “stockholder of record” with respect to those shares. If you are a stockholder of record, Autodesk sent these proxy materials directly to you. Beneficial owners—Most Autodesk stockholders hold their shares through a broker or other agent rather than directly in their own names. If your shares are held in a brokerage account or by a broker or other agent, you are considered the “beneficial owner” of shares held in “street name.” If you hold your shares in street name, these proxy materials have been forwarded to you by your broker or other agent. That entity is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker or other agent on how to vote your shares. Since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a legal proxy giving you the right to do so from the broker or other agent that holds your shares. Q: How many shares must be present or represented by proxy to conduct business at the Annual Meeting? ______________________________________________________________________________________________________ A: The presence of the holders of a majority of the shares of Common Stock entitled to vote at the Annual Meeting is necessary to constitute a quorum. Stockholders are counted as present if they attend the Annual Meeting in person or have properly submitted a proxy. Under the General Corporation Law of the State of Delaware (the law governing Autodesk’s corporate activities), abstentions and “broker non-votes” are counted as present and entitled to vote and are therefore included for purposes of determining whether a quorum is present at the Annual Meeting. 2018 Proxy Statement 9 P r o x y M a t e r i a l s Q: What are “broker non-votes”? ______________________________________________________________________________________________________ A: Generally, if shares are held in street name, the beneficial owner is entitled to give voting instructions to the broker or other agent holding the shares. If the beneficial owner does not provide voting instructions, the broker or other agent can vote the shares with respect to matters that are considered “routine,” but not with respect to “non-routine” matters. Broker non-votes occur when a beneficial owner of shares held in street name does not give instructions to the broker or other agent holding the shares as to how to vote on a matter deemed “non-routine.” If a broker or other record holder of our Common Stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular proposal, then those shares will be treated as broker non-votes with respect to that proposal. Accordingly, if you own shares through a broker or other agent, please be sure to give voting instructions so your vote will be counted on all proposals that come before the Annual Meeting. Q: Which ballot measures are considered “routine” or “non-routine”? ______________________________________________________________________________________________________ A: The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2019 (Proposal Two) is considered routine under applicable rules. A broker, trustee or nominee holding shares generally may use its discretion to vote on routine matters, so there should not be any broker non-votes in connection with Proposal Two. The election of the eight directors listed in the accompanying Proxy Statement (Proposal One) and the advisory vote on executive compensation (Proposal Three) are considered non-routine matters under applicable rules. A broker or other agent cannot vote without instructions on non-routine matters, so there may be broker non-votes on Proposals One and Three. Q: How can I vote my shares in person at the Annual Meeting? ______________________________________________________________________________________________________ A: If you hold shares in your name as the stockholder of record, you may vote those shares in person at the Annual Meeting. If you hold shares beneficially in street name, you may vote those shares in person at the Annual Meeting only if you obtain a legal proxy from the broker or other agent that holds your shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy card or follow the voting instructions described below so that your vote will be counted if you later decide not to attend. Q: How can I vote my shares without attending the Annual Meeting? ______________________________________________________________________________________________________ A: If you are a stockholder of record, you may instruct the proxy holders how to vote your shares in one of three ways:    by using the internet voting site listed on the proxy card and Notice, by calling the toll-free telephone number listed on the proxy card and Notice, or requesting a proxy card by (415) 507-6705 or by email at investor.relations@autodesk.com, and completing, signing, dating and returning the proxy card in the postage pre-paid envelope provided. from Autodesk by telephone at Proxy cards submitted by mail must be received by the time the Annual Meeting begins in order for the related shares to be voted. If you return a signed proxy card without giving specific voting instructions, your shares will be voted as recommended by the Board. Specific instructions for using the telephone and internet voting systems are on the proxy card and Notice. The telephone and internet voting systems for stockholders of record will be available until 11:59 p.m. (Eastern Time) on June 11, 2018. 2018 Proxy Statement 10 If you are a beneficial owner, you will receive instructions from your broker or other agent that you must follow in order to have your shares voted. These instructions will indicate if internet and telephone voting are available, and if so, how to access and use those methods. Q: What is the voting requirement to approve these proposals? ______________________________________________________________________________________________________ A: Proposal One—A majority of the votes duly cast is required for the election of each director. If the number of shares voted “for” a director nominee exceeds the number of votes cast “against,” the nominee will be elected as a director of Autodesk to serve until the next annual meeting or until his or her successor has been duly elected and qualified. For additional information on how our majority voting policy works, see the section captioned “Corporate Governance” below. You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of the eight nominees for election as director. Abstentions and broker non-votes will not affect the outcome of the election. Proposal Two—The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote are required to ratify the appointment of Ernst & Young LLP as Autodesk’s independent registered public accounting firm. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and are not included in the tabulation of the voting results on this proposal. s l a i r e t a M y x o r P Proposal Three—The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote are required to approve, on an advisory basis, the compensation of our named executive officers. You may vote “FOR,” “AGAINST” or “ABSTAIN” on this proposal. Abstentions are deemed to be votes cast and have the same effect as a vote against this proposal. However, broker non-votes are not deemed to be votes cast and are not included in the tabulation of the voting results on this proposal. Q: What happens if I do not cast a vote? ______________________________________________________________________________________________________ A: Stockholders of record—If you are a stockholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting. Beneficial owners—If you hold your shares in street name and you do not cast your vote, your broker, trustee or nominee can use its discretion to vote on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm (Proposal Two). However, you must cast your vote if you want it to count in the election of directors (Proposal One) or the non-binding approval of compensation for our named executive officers (Proposal Three). Your broker may not vote your uninstructed shares with respect to Proposals One and Three. Q: How does the Board recommend that I vote? ______________________________________________________________________________________________________ A: The Board unanimously recommends that you vote your shares “FOR” the election of each of the eight nominees listed in Proposal One, “FOR” the ratification of the appointment of Ernst & Young LLP as Autodesk's independent registered public accounting firm for the fiscal year ending January 31, 2019, and “FOR” the approval, on an advisory basis, of the compensation of our named executive officers. 2018 Proxy Statement 11 Q: If I sign a proxy, how will it be voted? ______________________________________________________________________________________________________ A: All shares entitled to vote and represented by properly executed proxy cards received prior to the Annual Meeting and not revoked before the polls are closed will be voted in accordance with the instructions on those proxy cards. If there are no instructions on an otherwise properly executed proxy card, the shares represented by that proxy card will be voted as recommended by the Board. Q: What happens if additional matters are presented at the Annual Meeting? ______________________________________________________________________________________________________ A: If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place (for the purpose of soliciting additional proxies or otherwise), the persons named as proxies will have discretion to vote on those matters in accordance with their best judgment. We do not currently anticipate that any other matters will be raised at the Annual Meeting. Q: Can I change or revoke my vote? ______________________________________________________________________________________________________ P r o x y M a t e r i a l s A: If you are a stockholder of record, there are three ways you can change your vote. (1) Before your shares are voted at the Annual Meeting, you can file with Autodesk’s Chief Legal Officer a written notice of revocation or a duly executed proxy card, in either case dated later than the proxy card you wish to change. (2) You can attend the Annual Meeting and vote in person. Simply attending the Annual Meeting without actually voting will not revoke a proxy. (3) If you voted online or by telephone, you may change that vote by voting again, either by making a timely and valid internet or telephone vote or by voting in person at the Annual Meeting. Any written notice of revocation or subsequent proxy card should be hand-delivered to Autodesk’s Chief Legal Officer or sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: Chief Legal Officer, and must be received by the Chief Legal Officer before the vote at the Annual Meeting. If you are a beneficial owner of shares held in street name, there are two ways you can change your vote. You can submit new voting instructions to your broker or other agent. Alternatively, if you have obtained a legal proxy from the broker or other agent that holds your shares giving you the right to vote those shares, you can attend the Annual Meeting and vote in person. Q: Who will bear the costs of soliciting votes for the Annual Meeting? ______________________________________________________________________________________________________ A: Autodesk will bear all expenses of this solicitation, including the cost of preparing and mailing these proxy materials. Autodesk may reimburse brokerage firms, custodians, nominees, fiduciaries and other persons representing beneficial owners of Common Stock for their reasonable expenses in forwarding solicitation material to such beneficial owners. Directors, officers and other employees of Autodesk also may solicit proxies in person or by other means of communication. These individuals may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation, but will not receive any additional compensation. Autodesk has engaged the services of D.F. King & Co., Inc., a professional proxy solicitation firm, to help us solicit proxies from stockholders, including certain brokers, trustees, nominees and other institutional owners, for a fee of approximately $9,000 plus costs and expenses. 2018 Proxy Statement 12 Q: Where can I find the voting results of the Annual Meeting? ______________________________________________________________________________________________________ A: We intend to announce preliminary voting results at the Annual Meeting and expect to provide final results in a Current Report on Form 8-K within four business days of the Annual Meeting. 2018 Annual Meeting Q: Why am I receiving these proxy materials? ______________________________________________________________________________________________________ A: The Board of Directors (“Board”) of Autodesk, Inc. (“Autodesk,” “we” or “our”) is providing these proxy materials to you in connection with the solicitation of proxies for use at our 2018 Annual Meeting of Stockholders, to be held on Tuesday, June 12, 2018, at 3:00 p.m., Pacific Time, and at any adjournment, postponement or other delay thereof (the “Annual Meeting”) for the purpose of considering and acting upon the matters set forth in this Proxy Statement. We are providing these materials to all of our stockholders through a Notice of Internet Availability of Proxy Materials (the “Notice”) unless a stockholder has specifically requested a full set paper copy of this Proxy Statement and our fiscal 2018 Annual Report. s l a i r e t a M y x o r P Q: Where is the Annual Meeting? ______________________________________________________________________________________________________ A: The Annual Meeting will be held at Autodesk’s San Francisco office, located at The Landmark, One Market Street, 2nd Floor, San Francisco, California 94105. The telephone number at that location is (415) 356-0700. Maps and directions to the Annual Meeting are available at www.autodesk.com under “Contact Us.” Q: What proposals will be voted on at the Annual Meeting? ______________________________________________________________________________________________________ A: At the Annual Meeting, stockholders will be asked to vote: (1) To elect the eight directors named in this Proxy Statement to serve for the coming year and until their successors are duly elected and qualified; (2) To ratify the appointment of Ernst & Young LLP as Autodesk's independent registered public accounting firm for the fiscal year ending January 31, 2019; and (3) To approve, on an advisory basis, the compensation of our named executive officers. Q: Can I attend the Annual Meeting? ______________________________________________________________________________________________________ A: Yes, you can attend the Annual Meeting in person if you are a stockholder of record or a beneficial owner as of the Record Date. Please notify David Gennarelli, Autodesk's Senior Director of Investor Relations, by telephone at (415) 507-6705 or by email at investor.relations@autodesk.com if you plan to attend the Annual Meeting. You will need proof of identity to enter the Annual Meeting. If your shares are held in a brokerage account or by a bank or another nominee, you also will need to bring a copy of a brokerage statement reflecting stock ownership as of the Record Date. The Annual Meeting will begin promptly at 3:00 p.m., Pacific Time. Please leave ample time for parking and to check in. 2018 Proxy Statement 13 Q: Why did I receive a Notice in the mail regarding the Internet Availability of Proxy Materials instead of a full set paper copy of this Proxy Statement and fiscal 2018 Annual Report? ______________________________________________________________________________________________________ A: We are once again relying on a Securities and Exchange Commission (“SEC”) rule that allows companies to furnish their proxy materials over the internet rather than in paper form. This rule allows us to send all of our stockholders a Notice that explains how to access the proxy materials over the internet or how to request a paper copy of proxy materials. If you would prefer to receive proxy materials in printed form by mail or electronically by email on an ongoing basis, please follow the instructions contained in the Notice. Proxy materials for our 2019 and future annual meetings of stockholders will be delivered to you by a Notice rather than in paper form unless you specifically request to receive printed proxy materials. P r o x y M a t e r i a l s Q: Why did I receive a full set paper copy of this Proxy Statement in the mail and not a Notice Regarding the Internet Availability of Proxy Materials? ____________________________________________________________________________________________________ A: Stockholders who previously requested full paper copies of the proxy materials are receiving paper copies again this year. If you would like to reduce the costs we incur in printing and mailing proxy materials, you can consent to receive all future proxy statements, proxy cards and annual reports electronically via email or the internet. To sign up for electronic delivery, please follow the instructions provided at www.autodesk.com under “Investor Relations” or on your proxy card or voting instruction form. Stockholder Proposals and Director Nominations at Future Meetings Q: What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors? ______________________________________________________________________________________________________ A: Stockholders may present proper proposals for inclusion in Autodesk's proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to Autodesk's Chief Legal Officer in a timely manner. In order to be included in the proxy statement for the 2019 Annual Meeting of Stockholders, proposals must be received by Autodesk's Chief Legal Officer no later than January 1, 2019, and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 (the “Exchange Act”). In addition, Autodesk's Bylaws establish an advance notice procedure for stockholders who wish to present certain matters before an annual meeting of stockholders. In general, nominations for the election of directors may be made by or at the direction of the Board, or by any stockholder entitled to vote who has delivered written notice to Autodesk's Chief Legal Officer during the Notice Period (as defined below). Any such notice must contain specified information concerning the nominee(s) and the stockholder proposing such nomination(s). A stockholder who wishes to recommend a candidate for consideration by the Corporate Governance and Nominating Committee as a potential nominee for director should read the procedures discussed in the section titled “Corporate Governance-Nominating Process for Recommending Candidates for Election to the Board” below. 2018 Proxy Statement 14 Autodesk's Bylaws also provide that the only business that may be conducted at an annual meeting is business that is brought (1) pursuant to the notice of meeting (or any supplement thereto), (2) by or at the direction of the Board, or (3) by a stockholder who has delivered written notice setting forth all information required by Autodesk's Bylaws to Autodesk's Chief Legal Officer during the Notice Period (as defined below). For the purposes described above, the “Notice Period” begins 75 days before the one-year anniversary of the date on which Autodesk first mailed its proxy materials for the previous year's annual meeting of stockholders, and lasts for 30 days. As a result, the Notice Period for the 2019 Annual Meeting of Stockholders will be from February 15, 2019 to March 17, 2019. If a stockholder who has notified Autodesk of an intention to present a proposal at an annual meeting does not appear to present that proposal, Autodesk need not present the proposal for vote at such meeting. Q: How may I obtain a copy of the bylaw provisions regarding stockholder proposals and director nominations? ______________________________________________________________________________________________________ A: You can obtain a copy of the full text of the bylaw provisions discussed above by writing to the Chief Legal Officer of Autodesk or from www.autodesk.com under “Investor Relations-Corporate Governance.” All notices of proposals by stockholders should be sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: Chief Legal Officer. s l a i r e t a M y x o r P Additional Information About the Proxy Materials Q: What should I do if I receive more than one set of proxy materials? ______________________________________________________________________________________________________ A: You may receive more than one Proxy Statement, proxy card, voting instruction card or Notice. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each account. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one proxy card. Please complete, sign, date and return each proxy card or voting instruction card that you receive to ensure that all your shares are voted. Q: How may I obtain a separate Notice or a separate set of proxy materials and Fiscal 2018 Annual Report? ______________________________________________________________________________________________________ A: If you share an address with another stockholder, it is possible you will not each receive a separate Notice or a separate copy of the proxy materials and fiscal 2018 Annual Report. If you wish, you may request individual documents by calling (415) 507- 6705 or by sending an email to investor.relations@autodesk.com. Stockholders who share an address and receive multiple Notices or multiple copies of our proxy materials and fiscal 2018 Annual Report can request to receive a single copy in the same manner. 2018 Proxy Statement 15 Q: What is the mailing address for Autodesk’s principal executive offices? ______________________________________________________________________________________________________ A: Autodesk’s principal executive offices are located at 111 McInnis Parkway, San Rafael, California 94903. Any written requests for additional information, additional copies of the proxy materials and fiscal 2018 Annual Report, notices of stockholder proposals, recommendations for candidates to the Board, communications to the Board, or any other communications should be sent to this address. Our internet address is www.autodesk.com. The information posted on our website is not incorporated into this Proxy Statement. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 12, 2018. The Proxy Statement and Annual Report to Stockholders are available at: https://materials.proxyvote.com/052769 P r o x y M a t e r i a l s 2018 Proxy Statement 16 PROPOSAL ONE - ELECTION OF DIRECTORS Nominees Autodesk's Bylaws currently set the number of directors at eleven. Carl Bass, Thomas Georgens and Richard Hill are not standing for reelection at the Annual Meeting. The Board thanks each of them for their distinguished service to Autodesk. Upon the recommendation of the Corporate Governance and Nominating Committee, the Board has nominated eight individuals to be elected at the Annual Meeting. All of the nominees are presently directors of Autodesk and have consented to being named in this Proxy Statement and to serving as directors if elected. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the eight nominees named below. Your proxy cannot be voted for more than eight director candidates. February 2017 Settlement Agreement Jeff Clarke and Scott Ferguson each resigned from the Board, effective June 19, 2017, in accordance with the settlement agreement, dated February 6, 2017, by and among Autodesk, Sachem Head Capital Management LP, Uncas GP LLC, and Sachem Head GP LLC. On June 18, 2017, the Board appointed Andrew Anagnost as President and Chief Executive Officer of the Company (“CEO”), effective June 19, 2017. The Board also appointed Dr. Anagnost to the Board to fill the vacancy created by the resignation of Mr. Clarke, effective June 19, 2017. On July 19, 2017, the Board appointed Reid French to the Board to fill the vacancy created by the resignation of Mr. Ferguson. Pursuant to the terms of the 2017 Sachem Settlement Agreement, Mr. Ferguson consented to the appointment of Mr. French to the Board. Among others, the following material terms are included in and effective pursuant to the 2017 Sachem Settlement Agreement: • The size of the Board shall not exceed 11 directors prior to the conclusion of the 2018 Annual Meeting. s l a i r e t a M y x o r P • Under the 2017 Sachem Settlement Agreement, Sachem Head has agreed to observe voting and standstill provisions during the period beginning on the date of the 2017 Sachem Settlement Agreement to the date that is the earlier to occur of (i) the date of the 2018 Annual Meeting and (ii) June 30, 2018 (the “Standstill Period”). The standstill provisions provide, among other things, that Sachem Head and its affiliates will not directly or indirectly: • engage in any “solicitation” or become a “participant” as such terms are used in the proxy rules of the SEC other than at the Board’s director or consistent with the Board’s recommendation in connection with such matter, or publicly disclose how it intends to vote or act, except in certain limited circumstances; • form or join in any “group” as defined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, with respect to any of Autodesk’s voting securities; • individually beneficially own more than 7% of Autodesk’s voting securities; • • effect or seek to effect certain extraordinary transactions or material changes with Autodesk; enter into a voting trust or subject any of Autodesk’s voting securities to any voting trust; 2018 Proxy Statement 17 P r o x y M a t e r i a l s • • institute any litigation against Autodesk, its directors or its officers, make any “books and records” demands against Autodesk or make application or demand to a court or other person for an inspection, investigation or examination of Autodesk or its subsidiaries or affiliates, except in certain limited circumstances; (i) enter into or maintain any economic or compensatory arrangements with Mr. Hill that depend, directly or indirectly, on the performance of Autodesk or its stock price, or (ii) enter into or maintain any economic or compensatory arrangements with any other director or nominees for director of Autodesk; • other than sale transactions in which the identity of the purchaser is not known, sell or agree to sell directly or indirectly, in excess of 1% of the outstanding shares of Autodesk’s Common Stock or any derivatives relating to its Common Stock to any third party that has filed a Schedule 13D with respect to Autodesk or run (or publicly announced an intention to run) a proxy contest or consent solicitation with respect to another company in the past three years (to the extent known after reasonably inquiry that such third party has or will have, beneficial ownership of more than 5% of Autodesk’s Common Stock); or • alone or in concert with others, make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board, Autodesk, its management, policies or affairs, any of its securities or assets or the 2017 Sachem Settlement Agreement that is inconsistent with the provisions of the 2017 Sachem Settlement Agreement. • During the Standstill Period, Autodesk and Sachem Head shall each refrain from making, or causing to be made, any public statement or announcement that relates to and constitutes an ad hominem attack on, or relates to and otherwise disparages, Autodesk and Sachem Head, as applicable, or any of their respective officers or directors or any affiliates or subsidiaries, advisors, employees, as applicable. • During the Standstill Period, Sachem Head has agreed, at any meeting of Autodesk's stockholders (or in connection with any action by written consent) in which (or through which) action will be taken with respect to the election or removal of directors, to cause the shares of Common Stock over which they have the right to vote or direct the voting to be present for quorum purposes and voted (or consent to be given (if applicable)) (A) in favor of all nominees recommended by the Board, (B) against any nominees for director not recommended by the Board and (C) against any proposals to remove any director. The foregoing is not a complete description of the terms of the agreements. For a further description of those terms, see our Current Report on Form 8-K that we filed with the SEC on February 7, 2017. 2018 Proxy Statement 18 Summary of Director Nominee Experience, Qualifications, Attributes and Skills We believe that our director nominees are highly qualified and well suited to continue providing effective oversight of our rapidly evolving business. Our director nominees provide our Board with a balance of critical relevant skills and an effective mix of experience, knowledge and diverse viewpoints, as summarized below. 8/8 directors Technology Industry Experience Nominees with experience in the software and technology industries help us to analyze our research and development efforts, competing technologies, the various products and processes that we develop and the industries in which we compete. 8/8 directors Senior Leadership Experience Nominees who have served in senior leadership positions enhance the Board’s ability to identify and develop those qualities in management. They also bring a practical understanding of organizations, processes, strategy, risk management and methods to drive change and growth. Outside Public Company Board Service 6/8 directors Nominees who have served on other public company boards offer advice and insights with regard to the dynamics and operation of a board of directors, the relations of a board with senior management and oversight of a changing mix of strategic, operational and compliance-related matters. s l a i r e t a M y x o r P Financial Experience 8/8 directors Nominees who have knowledge of financial markets, financing operations and accounting and financial reporting processes assist us in understanding, advising and overseeing our capital structure, financing and investing activities and our financial reporting and internal controls. International Experience 8/8 directors As a global organization with offices in 124 locations in the United States and internationally, nominees with global expertise bring useful business and cultural perspectives that relate to many significant aspects of our business. As reflected in the charts below, we have an experienced and balanced slate of Board nominees. See “Information and Qualifications” below for more detail regarding each director nominee’s qualifications and relevant experience. 2018 Proxy Statement 19 _____________________________________________________________________________________ THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES LISTED BELOW. ______________________________________________________________________________________________________ Information and Qualifications The name, age as of March 31, 2018, certain biographical information about each nominee and the nominees' unique qualifications to serve on the Board are set forth below. There are no family relationships among any of our directors or executive officers. See “Corporate Governance” and “Executive Compensation—Compensation of Directors” below for additional information regarding the Board, including procedures for nominations of directors. P r o x y M a t e r i a l s Andrew Anagnost Director Age: 53 Director since 2017 Dr. Anagnost joined Autodesk in September 1997 and has served as President and Chief Executive Officer since June 2017. Dr. Anagnost served as Co-CEO from February 2017 to June 2017, Chief Marketing Officer from December 2016 to June 2017 and as the Company’s Senior Vice President, Business Strategy & Marketing, from March 2012 to June 2017. From December 2009 to March 2012, Dr. Anagnost was Vice President, Product Suites and Web Services of the Company. Prior to this position, Dr. Anagnost served as Vice President of CAD/CAE products for the manufacturing division of the Company from March 2007 to December 2009. Previously, Dr. Anagnost held other senior management positions at the Company. Prior to joining the Company, Dr. Anagnost held various engineering, sales, marketing and product management positions at Lockheed Aeronautical Systems Company and EXA Corporation. He also served as an NRC post-doctoral fellow at NASA Ames Research Center. Dr. Anagnost holds a bachelor of science degree in Mechanical Engineering from the California State University, and holds both a MS in Engineering Science and a PhD in Aeronautical Engineering and Computer Science from Stanford University. Dr. Anagnost brings to the Board extensive experience in the technology industry and has spent nearly two decades in management roles within Autodesk. As our President and Chief Executive Officer, Dr. Anagnost possesses a deep knowledge and understanding of Autodesk's business, operations, and employees; the opportunities and risks we face; and management's strategy and plans for accomplishing Autodesk's goals. Pursuant to Dr. Anagnost’s employment agreement, Autodesk has agreed to nominate Dr. Anagnost to serve as a member of the Board for as long as he is employed by Autodesk. 2018 Proxy Statement 20 Crawford W. Beveridge Non-Executive Chairman of the Board of Directors, Autodesk, Inc. Age: 72 Director since 1993 Mr. Beveridge is the non-executive Chairman of the Board of Directors. From April 2006 until January 2010, Mr. Beveridge served as Executive Vice President and Chairman EMEA, APAC and the Americas of Sun Microsystems, Inc. From March 1985 to December 1990 and from March 2000 to April 2006, Mr. Beveridge held other positions at Sun Microsystems, including Executive Vice President and Chief Human Resources Officer. From January 1991 to March 2000, Mr. Beveridge served as the Chief Executive Officer of Scottish Enterprise. Before joining Sun Microsystems in 1985, he held HR management positions in the United States and Europe with Hewlett-Packard, Digital Equipment Corporation and Analog Devices Inc. Mr. Beveridge served as a non-executive board member of iomart Group plc from September 2011 to December 2017. Mr. Beveridge is independent and his three decades of experience in the high technology industry provide him with a deep understanding of Autodesk's technology and business. His management positions with Sun Microsystems have also provided him with critical insight into the operational requirements of a global company and the management and consensus-building skills required to lead our Board as non-executive Chairman and to serve on our Corporate Governance and Nominating Committee. Mr. Beveridge's extensive international experience, gained from his roles as Chief Executive of Europe's largest economic development agency and as a member of the Council of Economic Advisers for Scotland, provides a valuable perspective to our Board. s l a i r e t a M y x o r P Karen Blasing Director Age: 61 Director since 2018 Ms. Blasing has over 25 years of executive operational and financial leadership experience in the technology industry. Ms. Blasing served as the chief financial officer of Guidewire Software, Inc. from 2009 to March 2015. Prior to Guidewire, Ms. Blasing served as the chief financial officer for Force 10 Networks and the Senior Vice President of Finance for salesforce.com, inc. Ms. Blasing also served as chief financial officer for Nuance Communications, Inc. and Counterpane Internet Security, Inc., and held senior finance roles for Informix (now IBM Informix) and Oracle Corporation. Ms. Blasing has served on the boards of directors of Ellie Mae, Inc. since June 2015 and Zscaler, Inc. since January 2017. Ms. Blasing is independent and has over 25 years of executive operational and financial experience in the technology industry. Ms. Blasing experience at Guidewire Software, Force 10 Networks, salesforce.com and Nuance Communications provides her with a strong understanding of Autodesk's business and international operational challenges. Her experience as a chief financial officer provides her with the financial acumen necessary to serve on our Audit Committee. 2018 Proxy Statement 21 Reid French Director Age: 46 Director since 2017 Mr. French has served as Chief Executive Officer of Applied Systems, Inc., a software solutions and services provider in the insurance industry, since September 2011. Previously, Mr. French was Chief Operating Officer at Intergraph Corporation, a global geospatial and computer-aided design software company, from April 2005 until October 2010 when Intergraph was acquired by Hexagon AB. From October 2003 to April 2005, Mr. French was Executive Vice President of Strategic Planning and Corporate Development at Intergraph. Prior to joining Intergraph, Mr. French served as Chief Operating Officer, North America for Solution 6 Group, Ltd., Australia's largest software company, directing all regional operations including sales & marketing, product development, services and support. Prior to Solution 6, Mr. French served as a strategic planner in the Business Planning & Development group for Walt Disney World, a business unit of The Walt Disney Company. Prior to Disney, Mr. French worked in investment banking with The Robinson-Humphrey Company, managing various transactions within the technology sector. He sits on the board of directors for Applied and The Lovett School in Atlanta. P r o x y M a t e r i a l s Mr. French is independent and his executive operational and strategic leadership experience in the technology industry provide him with a deep understanding of Autodesk's technology and business. Mr. French’s years of service as an executive officer and his service on the board of directors of Applied provide him with the corporate governance knowledge necessary to serve on our Compensation and Human Resources Committee. Mary T. McDowell Director Age: 53 Director since 2010 Ms. McDowell has served as the Chief Executive Officer and member of the board of directors at Polycom, Inc. since September 2016. Prior to Polycom, Ms. McDowell was an Executive Partner at Siris Capital, LLC. She served as Executive Vice President in charge of Nokia’s Mobile Phone unit from July 2010 to July 2012 and as Executive Vice President and Chief Development Officer of Nokia Corporation from January 2008 to July 2010. Previously, Ms. McDowell served as Executive Vice President and General Manager of Enterprise Solutions of Nokia from January 2004 to December 2007. Prior to joining Nokia in 2004, Ms. McDowell spent 17 years in various executive, managerial and other positions at Compaq Computer Corporation and Hewlett-Packard Company, including serving as Senior Vice President, Industry-Standard Servers of Hewlett- Packard. Ms. McDowell has served as a director of UBM plc since August 2014. Ms. McDowell previously served as a director of Bazaarvoice, Inc. from December 2014 to October 2016 and NAVTEQ Corporation, a subsidiary of Nokia, from July 2008 until July 2010. Ms. McDowell is independent and brings to our Board extensive management experience in the technology industry. Her two and a half decades of experience working for global technology companies focused on innovation and collaboration provide her with a firm understanding of Autodesk's core mission, business and technology. Her years of service as an executive officer at Polycom, Nokia and other technology companies, including Compaq Computer and Hewlett-Packard, provide her with the executive compensation knowledge necessary to serve as Chair of our Compensation and Human Resources Committee. 2018 Proxy Statement 22 Lorrie M. Norrington Director Age: 58 Director since 2011 Ms. Norrington has over 35 years of operating experience in technology, software, and internet businesses. Ms. Norrington currently serves as an adviser and in an Operating Partner capacity for Lead Edge Capital. Lead Edge is a growth equity firm that partners with world-class entrepreneurs and exceptional technology businesses. Ms. Norrington served as President of eBay Marketplaces from July 2008 to September 2010. Previously, she served in a number of senior management roles at eBay from July 2006 until June 2008. Prior to joining eBay, Ms. Norrington served from June 2005 to July 2006 as President and CEO of Shopping.com, Inc., an online shopping comparison site. Prior to joining Shopping.com, Ms. Norrington served from August 2001 to January 2005, initially as Executive Vice President of small business, and later in the office of the CEO, at Intuit Inc., a business and financial management software company. Prior to joining Intuit, Ms. Norrington served in a variety of executive positions at General Electric Corporation over a twenty-year period, working in a broad range of industries and businesses. Ms. Norrington has served on the boards of directors of Colgate-Palmolive since September 2015 and HubSpot since September 2013. Previously, she served on the boards of directors of DIRECTV from February 2011 until it was acquired by AT&T in July 2015; Lucasfilm, from June 2011 until it was acquired by Disney in December 2012; McAfee, Inc. from December 2009 until it was acquired by Intel in February 2011; and Shopping.com from November 2004 until it was acquired by eBay in August 2005. s l a i r e t a M y x o r P Ms. Norrington is independent and has extensive experience in online commerce SaaS, and valuable management experience in technology and manufacturing industries. Her three decades of building businesses, and adapting to and capitalizing on rapid technological advancement provide Ms. Norrington with a unique perspective. As Autodesk evolves its business model to better serve customer needs and demands, her experience as a chief executive officer provides her with the financial acumen necessary to serve on our Audit Committee. Also, she is an accredited fellow of the National Association of Corporate Directors and brings significant governance knowledge to the Board. Betsy Rafael Director Age: 56 Director since 2013 Ms. Rafael has over 30 years of executive financial experience in the technology industry. Ms. Rafael served as Principal Accounting Officer of Apple Inc. from January 2008 to October 2012, and as its Vice President and Corporate Controller from August 2007 until October 2012. From April 2002 to September 2006, Ms. Rafael served as Vice President, Corporate Controller and Principal Accounting Officer of Cisco Systems, Inc., and held the position of Vice President, Corporate Finance of Cisco Systems from September 2006 to August 2007. From December 2000 to April 2002, Ms. Rafael was the Executive Vice President, Chief Financial Officer, and Chief Administrative Officer of Aspect Communications, Inc., a provider of customer relationship portals. From April 2000 to November 2000, Ms. Rafael was Senior Vice-President and CFO of Escalate, Inc., an enterprise e-commerce application service provider. From 1994 to 2000, Ms. Rafael held a number of senior positions at Silicon Graphics International Corp. (“SGI”), culminating her career at SGI as Senior Vice President and Chief Financial Officer. Prior to SGI, Ms. Rafael held senior management positions in finance with Sun Microsystems, Inc. and Apple Computers. Ms. Rafael began her career with Arthur Young & Company. Ms. Rafael has served on the board of directors of Echelon Corporation since November 2005, GoDaddy Inc. since May 2014 and Shutterfly since June 2016. Ms. Rafael previously served on the board of directors of PalmSource, Inc. 2018 Proxy Statement 23 P r o x y M a t e r i a l s Ms. Rafael is independent and has over 30 years of executive financial experience in the technology industry. Ms. Rafael’s experience at Apple and Cisco, including her finance and executive roles, provides her with a strong understanding of Autodesk's industry, business and international operational challenges. Her experience as a principal accounting officer provides her with the financial acumen necessary to serve as the Chair of our Audit Committee. Stacy J. Smith Director Age: 55 Director since 2011 Mr. Smith served as Group President of Sales, Manufacturing and Operations at Intel Corporation from February 2017 to January 2018. He served as the Executive Vice President, Manufacturing, Operations and Sales of Intel Corporation from October 2016 to February 2017. From November 2012 to October 2016, he served as Executive Vice President, Chief Financial Officer. Previously, Mr. Smith served as Senior Vice President, Chief Financial Officer from January 2010 to November 2012; Vice President, Chief Financial Officer from 2007 to 2010; and Vice President, Assistant Chief Financial Officer from 2006 to 2007. From 2004 to 2006, Mr. Smith served as Vice President, Finance and Enterprise Services and Chief Information Officer. Mr. Smith joined Intel in 1988. Mr. Smith previously served on the boards of directors of Virgin America from February 2014 until it was acquired by Alaska Air Group in December 2016 and of Gevo, Inc. from June 2010 to June 2014. Mr. Smith is independent and brings over two decades of experience in the technology industry. Mr. Smith's experience at Intel, including his finance and executive roles, and his time spent overseas, provide him with a strong understanding of Autodesk's industry, business and international operational challenges. Mr. Smith's years of service as an executive officer at Intel provide him with the corporate governance knowledge necessary to serve on our Compensation and Human Resources Committee. Proxy 2018 Proxy Statement 24 PROPOSAL TWO - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has selected Ernst & Young LLP as the independent registered public accounting firm to audit the consolidated financial statements of Autodesk for the fiscal year ending January 31, 2019, and recommends that the stockholders vote to ratify that appointment. In the event of a negative vote on this proposal, the Audit Committee will reconsider its selection. Even if the selection of Ernst & Young LLP is ratified, the Audit Committee, in its discretion, may direct the selection of a different independent registered public accounting firm at any time if the Audit Committee determines that such a change would be in the best interests of Autodesk and its stockholders. Ernst & Young LLP has been retained as our independent registered public accounting firm continuously since the fiscal year ended January 31, 1983. We expect a representative of Ernst & Young LLP to be present at the Annual Meeting. The representative will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions. ______________________________________________________________________________________________________ THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. ______________________________________________________________________________________________________ s l a i r e t a M y x o r P Principal Accounting Fees and Services The following table presents fees billed for professional audit services and other services rendered to Autodesk by Ernst & Young LLP and its affiliates for the fiscal years ended January 31, 2018 and 2017. Audit Fees (1) Audit-Related Fees (2) Tax Fees (3) All Other Fees (4) Total Fiscal 2018 Fiscal 2017 (in millions) 5.0 $ 0.4 0.4 — 5.8 $ 4.7 0.3 0.7 0.1 5.8 $ $ _________________ (1) Audit Fees consisted of fees billed for professional services rendered for the integrated audit of Autodesk's annual financial statements and management's report on internal controls included in Autodesk's Annual Reports on Form 10-K, for the review of the financial statements included in Autodesk's Quarterly Reports on Form 10-Q, and for other services, including statutory audits and services rendered in connection with SEC filings. (2) Audit-Related fees consisted of fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. This category includes fees arising from accounting-related consulting services. (3) Tax Fees consisted of fees billed for tax compliance, consultation and planning services. (4) Other fees consisted of fees for license compliance consultation services. 2018 Proxy Statement 25 Pre-Approval of Audit and Non-Audit Services Generally, all audit and non-audit services provided by Ernst & Young LLP and its affiliates to Autodesk must be pre-approved by the Audit Committee. The Audit Committee is presented with a detailed listing of the individual audit and non-audit services and fees (separately describing audit-related services, tax services and other services) expected to be provided by Ernst & Young LLP and its affiliates during the year. The Audit Committee is also responsible for the audit fee negotiations associated with Autodesk's retention of Ernst & Young LLP. Periodically, the Audit Committee receives an update of all pre-approved audit and non-audit services conducted, and information regarding any new audit and non-audit services to be provided by Ernst & Young LLP and its affiliates. The Audit Committee reviews the update and approves the proposed services if they are deemed acceptable. To ensure prompt handling of unexpected matters, the Chair of the Audit Committee has authority to amend or modify the list of approved audit and non-audit services and fees so long as such additional or amended services do not affect Ernst & Young LLP's independence under applicable SEC rules. The Chair reports any such action taken at subsequent Audit Committee meetings. P r o x y M a t e r i a l s Rotation The Audit Committee periodically reviews and evaluates the performance of Ernst & Young LLP’s lead audit partner, oversees the required rotation of the lead audit partner responsible for our audit, and reviews and considers the selection of the lead audit partner. At this time, the Audit Committee and the Board believe that the continued retention of Ernst & Young LLP to serve as our independent registered public accounting firm is in the best interests of Autodesk and its stockholders. 2018 Proxy Statement 26 s l a i r e t a M y x o r P PROPOSAL THREE - NON-BINDING VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION We are asking our stockholders to vote, on a non-binding advisory basis, to approve the compensation of our named executive officers as described in the section titled “Compensation Discussion and Analysis” (or “CD&A”) below and the accompanying compensation tables and narrative discussion in this Proxy Statement (a “Say-on-Pay” vote). Stockholders are encouraged to read that information in its entirety to obtain a complete understanding of Autodesk's executive compensation program philosophy, design and linkage to stockholder interests. Autodesk has designed its compensation programs to reward executives for producing strong results that are aligned with the interests of stockholders. We emphasize variable “long-term” and “at risk” compensation dependent upon prospective financial, strategic and stock price performance and a retrospective assessment of Autodesk's success to determine pay opportunities. In fiscal 2018, 92% of our current CEO's and 84% of all other continuing NEOs’ total compensation was variable in nature and “at risk” and 86% of our current CEO’s and 73% of all other continuing NEOs’ total compensation consisted of long-term equity. Fiscal 2018 Business Model Transition and Performance Metrics The software industry is undergoing a transition from the PC to cloud, mobile and social computing. Our strategy is to lead the industries we serve to cloud-based technologies and business models. As part of the transition, we discontinued selling new perpetual licenses and now offer term-based subscriptions for our products, cloud service offerings, and flexible enterprise business agreements (collectively referred to as "subscription plan"). Over time, Autodesk’s business model transition will result in a more predictable, recurring and profitable business. However, during the transition, traditional financial metrics such as revenue, margins, EPS and cash flow from operations have been adversely impacted. This is primarily a result of revenue for new subscription offerings being recognized over time rather than up front and subscription offerings generally have a lower initial price than perpetual offerings. Despite the lower initial price, our subscription plan offerings are expected to increase the lifetime value of Autodesk’s customers. Following Dr. Anagnost’s appointment to CEO, and in consultation with the Board, he established three strategic priorities of completing the subscription transition, digitizing the Company, and re-imagining manufacturing, construction, and production. To free up resources to pursue these strategic priorities, we commenced a world-wide restructuring plan in the fourth quarter of fiscal 2018. Through the restructuring, we seek to reduce our investments in areas not aligned with our strategic priorities. At the same time, we plan to further invest primarily in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with our strategic priorities, we are better positioning ourselves to meet our long-term goals, while maintaining our goal to keep non-GAAP spend flat in fiscal 2019. To incent long-term value creation and strong financial performance during the transition, we adopted performance metrics for our bonus and equity plans that align with the key drivers of success during the business model transition and reflect the health of the business during the transition. The following performance metrics were used for our CEO during fiscal 2018: Performance Metrics ● Total Annualized Recurring Revenue ("ARR") ● Net Total Subscription Additions ● Non-GAAP Total Spend ● Total Subscription Renewal rate ● Relative TSR (multi-year) ● Free Cash Flow Per Share 2018 Proxy Statement 27 Our executive officers’ continued successful implementation of our business model drove the following fiscal 2018 results:  Total ARR was $2.05 billion, an increase of 25% from fiscal 2017; of which subscription plan ARR was $1.18 billion.  Total subscriptions were 3.72 million, an increase of 20% from fiscal 2017; of which subscription plan subscriptions were 2.27 million.  Subscription plan ARR and subscriptions base surpassed the base of maintenance plan ARR and subscriptions.  Deferred revenue was $1.96 billion, an increase of 9% from fiscal 2017.  Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.28 billion, an increase of approximately 25% from fiscal 2017.  Total GAAP spend (cost of revenue plus operating expenses) was $2,566 million, an increase of 1% from fiscal 2017.  Total non-GAAP spend was $2,169 million, an increase of 1% from fiscal 2017. A reconciliation of GAAP to non- GAAP results is provided in Appendix A.  Total subscription renewal rate was 80.9%.  During fiscal 2018 our stock price increased by 42% and over five years our stock price increased by 197%. P r o x y M a t e r i a l s The Compensation and Human Resources Committee (the “Committee”) considered those performance factors in reaching its decisions regarding pay for the NEOs for fiscal 2018. Stockholder Engagement and Actions Taken Autodesk and the Committee value the input of our stockholders. In fiscal 2018, 95% of the votes cast on our Say-on-Pay proposal were favorable, which reflected strong stockholder support for our executive compensation programs. In fiscal 2018, the Chairman of our Board, alongside key management team members, continued our annual outreach and contacted stockholders representing over 63% of the outstanding shares. Our engagement team met with governance professionals from passive funds as well as portfolio managers from active funds. The breadth of the Company’s outreach program enabled us to gather feedback from a significant cross-section of Autodesk’s stockholder base. Based on these discussions, the Committee found that our stockholders continued to be supportive of our executive transition, our executive compensation programs and the alignment between our CEO pay and Autodesk’s performance, particularly in light of our stage in the business model transition. In addition, our stockholders provided us helpful input regarding compensation design and disclosure. The Committee carefully considered stockholder feedback as part of its ongoing review of our executive compensation program and will continue to consider stockholder feedback regarding compensation design and metrics as we emerge from our business model transition. As described below in “Fiscal 2019 Executive Incentive Plan,” the Committee approved annual incentive metrics for fiscal 2019 that differ from those used for PSU awards, largely in response to input from our stockholders. Compensation Guiding Principles The executive compensation program is designed to attract, motivate, and retain talented executives and provide a rigorous framework that is tied to stockholder returns, Company performance, long-term strategic corporate goals, and individual performance. The general compensation objectives are to:  Recruit and retain the highest caliber of executives through competitive rewards;  Motivate executive officers to achieve business and financial goals;  Balance rewards for short- and long-term performance; and  Align rewards with stockholder value creation. 2018 Proxy Statement 28 Within this framework, the total compensation for each executive officer varies based on multiple dimensions:  Whether Autodesk achieves its short-term and long-term financial and non-financial objectives, including execution on its business model transition;  Autodesk's TSR relative to the companies included in the S&P Computer Software Select Index and companies in the North American Technology Software Index;  The specific role and responsibility of the officer;  Each individual officer’s skills, competency, contributions and performance;  Internal pay parity considerations, and  Retention considerations. Executive compensation is variable and balanced between short- and long-term performance, all of which is tied to Autodesk's absolute and relative financial and stock price performance. s l a i r e t a M y x o r P Our executive compensation program emphasizes variable compensation with both annual and long-term performance components. In fiscal 2018, 92% of our current CEO's and 84% of all other continuing NEOs’ total compensation was variable in nature and “at risk” and 86% of our current CEO’s and 73% of all other continuing NEOs’ total compensation consisted of long-term equity. Our incentive programs reward strong annual financial and operational performance, as well as relative TSR over one-, two-, and three-year performance periods. 2018 Proxy Statement 29 Leading Compensation Governance Practices Autodesk’s executive compensation objectives are supported by policies and strong governance practices that align executives’ interests with the interests of our stockholders. Some of the program’s most notable features are highlighted in the table below and summarized in the CD&A. Robust stockholder outreach program Yes Large percentage of NEO total pay tied to achievement of critical financial and stockholder value creation No No hedging Prohibition on option re-pricing Representative peer group No executive benefits and limited perquisites Significant stock ownership requirements Clawback policy Double-trigger change in control arrangements with no excise tax gross-up Equity award grant policy Effective risk management Independent compensation committee and consultant Vote Recommendation P r o x y M a t e r i a l s When casting the 2018 Say-on-Pay vote, we encourage our stockholders to consider our fiscal 2018 stockholder outreach and the collective changes we have made to the executive compensation program in recent years to more closely align the total direct compensation opportunity of the named executive officers with Autodesk's objectives of driving meaningful annual financial growth and maximizing long-term value. Accordingly, we ask our stockholders to vote “FOR” the advisory, non- binding Say-on-Pay proposal at the Annual Meeting. ____________________________________________________________________________________________________ THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ADVISORY (NON-BINDING) PROPOSAL APPROVING NAMED EXECUTIVE OFFICER COMPENSATION. ____________________________________________________________________________________________________ 2018 Proxy Statement 30 CORPORATE GOVERNANCE Autodesk is committed to the highest standards of corporate ethics and diligent compliance with financial accounting and reporting rules. Our Board provides independent leadership in the exercise of its responsibilities. Our executive officers oversee a strong system of internal controls and compliance with corporate policies and applicable laws and regulations. Our employees operate in a climate of responsibility, candor and integrity. Corporate Governance Guidelines; Code of Business Conduct and Ethics We believe the highest standards of corporate governance and business conduct are essential to running our business efficiently, serving our stockholders well, and maintaining our integrity in the marketplace. Over the years, we have devoted substantial attention to the subject of corporate governance and have developed Corporate Governance Guidelines (the “Guidelines”). The Guidelines set forth the principles that guide our Board's exercise of its responsibility to oversee corporate governance, maintain its independence, evaluate its own performance and the performance of our executive officers, and set corporate strategy. On a regular basis, the Board reviews our governance practices, corporate governance developments and stockholder feedback to ensure continued effectiveness. s l a i r e t a M y x o r P The Board first adopted the Guidelines in December 1995 and has refined them periodically since.      In March 2007, the Board amended the Guidelines to provide for majority voting in director elections, except for contested elections. The 2007 amendments also required each director to submit a resignation that will take effect if such director fails to receive a majority vote in any subsequent election and the Board accepts the resignation. In March 2009, the Board amended the Guidelines to provide for a non-executive Chairman of the Board. In March 2010, the Board amended the Guidelines to, among other things, clearly outline the Board's responsibility for overseeing Autodesk's risk management. In December 2011, the Board amended the Guidelines to, among other things, address changes in a director's occupation. In December 2016, the Board amended the Guidelines to enhance related party transaction processes, align restrictions relating to multiple directorships, and expand on compliance. The Guidelines are available on our website at www.autodesk.com under “Investor Relations-Corporate Governance.” In addition, we have adopted a Code of Business Conduct for directors and employees, and a Code of Ethics for Senior Executive and Financial Officers, including our principal executive officer, principal financial officer, principal accounting officer, all senior vice presidents, and all individuals reporting to our principal financial officer, to ensure that our business is conducted in a consistently legal and ethical manner. Our current Code of Business Conduct and Code of Ethics for Senior Executive and Financial Officers are available on our website at www.autodesk.com under “Investor Relations-Corporate Governance.” We will post on this section of our website any amendment to our Code of Business Conduct or Code of Ethics for Senior Executive and Financial Officers, as well as any waivers of these Codes that are required to be disclosed by the rules of the SEC or The NASDAQ Global Select Market (“NASDAQ”). 2018 Proxy Statement 31 Stock Ownership Guidelines The Board believes directors and executive officers should have a meaningful financial stake in Autodesk in order to further align their interests with Autodesk’s stockholders. To that end, the Board has adopted mandatory ownership guidelines for the directors and executive officers. These mandatory ownership guidelines require all executive officers and directors to hold shares of Autodesk’s Common Stock equivalent in value to a multiple of his or her base salary or cash retainer. The current stock ownership guidelines are as follows: CEO Executive Vice President Senior Vice President Director Multiple of Base Salary/Cash Retainer 6.0 times 3.0 times 3.0 times 5.0 times The Board reviews progress against these guidelines and requirements annually and updates them as appropriate. See the section titled “Executive Compensation—Compensation Discussion and Analysis” below for additional information regarding Autodesk's stock ownership guidelines. P r o x y M a t e r i a l s Independence of the Board As required by applicable NASDAQ listing standards, a majority of the members of our Board qualify as “independent.” The Board has determined that, with the exception of Andrew Anagnost, our President and CEO, and Carl Bass, our former President and CEO, all of its members are “independent directors” as that term is defined by applicable NASDAQ listing standards. That definition includes a series of objective tests, including that the director is not an employee of the company and has not engaged in various types of business dealings with the company. The Board also previously determined that Jeff Clarke and Scott Ferguson, who served on the Board during fiscal 2018, were independent under applicable SEC rules and NASDAQ listing standards for membership on the Board and on all committees of the Board on which they served prior to their respective resignations. In addition, as further required by applicable NASDAQ listing standards, the Board has made a subjective determination as to each independent director that no relationships exist that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making its independence determinations, the Board considered that Ms. McDowell and Messrs. French, Smith and Clarke are or were executive officers at entities that have arms-length, ordinary course commercial relationships with Autodesk and that amounts paid or received by those entities for products or services in fiscal 2018 were not material. The Board determined that the foregoing relationships would not interfere with the exercise of independent judgment by Ms. McDowell and Messrs. French, Smith and Clarke in carrying out their responsibilities as directors. The independent directors meet regularly in executive session, without executive officers present, as part of the quarterly meeting procedure. The Chairman presides at executive sessions, which are intended to facilitate open discussion among the independent directors. Outside Board Memberships We have a highly experienced and engaged Board of Directors. We value the diverse perspectives that our directors’ outside board memberships bring to our Boardroom. Directors who serve on other public company boards offer advice and insights with regard to the dynamics and operation of a Board of Directors, the relations of a board with senior management and oversight of a changing mix of strategic, operational and compliance-related matters. 2018 Proxy Statement 32 However, in order to ensure sufficient time and attention to meet the responsibilities of Board membership, our Corporate Governance Guidelines state that directors shall serve on no more than five boards of directors of publicly traded companies, including this Board, without consent of the Corporate Governance and Nominating Committee. Per our corporate governance guidelines, directors shall advise the Chairman of the Board or the Lead Independent Director, as applicable, and the Corporate Governance and Nominating Committee before accepting an invitation to serve on an additional for-profit corporate board of directors. The Corporate Governance and Nominating Committee reviews on an annual basis, in the context of recommending a slate of directors for stockholder approval, the composition of the Board, including matters such as other board commitments. Board Meetings and Board Committees The Board held a total of ten meetings (including regularly scheduled and special meetings) during fiscal 2018. Each director then serving attended at least 75% of the total number of meetings of the Board and committees of which he or she was a member during fiscal 2018. The Board currently has three standing committees: an Audit Committee, a Compensation and Human Resources Committee, and a Corporate Governance and Nominating Committee. Each committee has adopted a written charter approved by the Board. All three charters are available on Autodesk's website at www.autodesk.com under “Investor Relations-Corporate Governance.” s l a i r e t a M y x o r P Audit Committee The Audit Committee, which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act, currently consists of Betsy Rafael (Chair), Karen Blasing, Thomas Georgens and Lorrie M. Norrington, each of whom is “independent” as such term is defined for audit committee members by applicable NASDAQ listing standards. The Board has determined that each member of the Audit Committee is an “audit committee financial expert” as defined in the rules of the SEC. The Audit Committee held nine meetings during fiscal 2018. See “Report of the Audit Committee of the Board of Directors” on page 85 for more information regarding the functions of the Audit Committee. Compensation and Human Resources Committee The Compensation and Human Resources Committee currently consists of Mary T. McDowell (Chair), Reid French and Stacy J. Smith, each of whom qualifies as independent for compensation committee purposes under applicable NASDAQ listing standards, the requirements of Section 162(m) of the Code, and SEC Rule 16b-3. The Compensation and Human Resources Committee reviews compensation and benefits for our executive officers and has authority to grant stock options, RSUs and PSUs to executive officers and non-executive employees under our stock plans. As non-employee directors, the members of the Compensation and Human Resources Committee are not eligible to participate in Autodesk’s discretionary employee stock programs. RSUs are granted automatically to non-employee directors under the non- discretionary 2012 Outside Directors' Stock Plan. See the section titled “Executive Compensation-Compensation Discussion and Analysis” below for a description of Autodesk's processes and procedures for determining executive compensation. The Compensation and Human Resources Committee may form and delegate authority to subcommittees when appropriate. The Compensation and Human Resources Committee held nine meetings during fiscal 2018. The “Report of the Compensation Committee” is included in this Proxy Statement on page 59. 2018 Proxy Statement 33 Corporate Governance and Nominating Committee P r o x y M a t e r i a l s The Corporate Governance and Nominating Committee currently consists of Thomas Georgens (Chair), Crawford W. Beveridge and Richard S. Hill. Each of Messrs. Georgens, Beveridge and Hill qualifies as an independent director under applicable NASDAQ listing standards. The Corporate Governance and Nominating Committee is responsible for developing general criteria regarding the qualifications and selection of members of the Board, and for recommending candidates for election to the Board. The Corporate Governance and Nominating Committee also is responsible for developing overall governance guidelines, overseeing the performance of the Board, and reviewing and making recommendations regarding director composition and the mandates of Board committees. The Corporate Governance and Nominating Committee will consider recommendations of candidates for the Board submitted by Autodesk stockholders. For more information, see the section titled “Corporate Governance- Nominating Process for Recommending Candidates for Election to the Board” below. The Corporate Governance and Nominating Committee held five meetings during fiscal 2018. Board Leadership Structure Our Corporate Governance Guidelines direct the Board to fill the Chairman of the Board and Chief Executive Officer positions after considering a number of factors, including the current size of our business, composition of the Board, current candidates for such positions, and our succession planning goals. Currently, we separate the positions of Chief Executive Officer and non- executive Chairman of the Board. Since March 2009, Mr. Beveridge, who previously served as our Lead Director, has served as our non-executive Chairman. Our Corporate Governance Guidelines also provide that, in the event the Chairman of the Board is not an independent director, the Board must elect a “Lead Independent Director.” The responsibilities of the Chairman of the Board or the Lead Independent Director include setting the agenda for each meeting of the Board, in consultation with the Chief Executive Officer; presiding at executive sessions; and facilitating communication with the Board, executive officers and stockholders. Separating the positions of Chief Executive Officer and Chairman of the Board allows our President and Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman of the Board to lead the Board in its fundamental role of providing independent advice to, and oversight of, management. The Board believes that having an independent director serve as Chairman is the appropriate leadership structure for Autodesk at this time and demonstrates our commitment to good corporate governance. In addition, as described above, our Board has three standing committees, consisting entirely of independent directors. The Board delegates substantial responsibility to these committees, which report their activities and actions back to the full Board. We believe having independent committees with independent chairpersons is an important aspect of the leadership structure of our Board. Risk Oversight Our Board, as a whole and through its committees, is responsible for the oversight of risk management. Our executive officers are responsible for the day-to-day management of the material risks Autodesk faces. In its oversight role, our Board must satisfy itself that the risk management processes designed and implemented by our executive officers are adequate and functioning as designed. The involvement of the full Board in setting our business strategy at least annually is a key part of its oversight of risk management, its consideration of our executive officers' appetite for risk, and its determination of what constitutes an appropriate level of risk. The full Board receives updates from our executive officers and outside advisers regarding certain risks Autodesk faces, including litigation, cyber security, data privacy, corporate governance best practices and various operating risks. 2018 Proxy Statement 34 s l a i r e t a M y x o r P In addition, each Board committee oversees certain aspects of risk management. For example, our Audit Committee is responsible for overseeing the management of risks associated with Autodesk's financial reporting, accounting and auditing matters; our Compensation and Human Resources Committee oversees our executive officer succession planning and risks associated with our compensation policies and programs; and our Corporate Governance and Nominating Committee oversees the management of risks associated with director independence, conflicts of interest, composition and organization of our Board, and director succession planning. Board committees report their findings to the full Board. Senior executive officers attend all meetings of the Board and its standing committees and are available to address any questions or concerns raised by the Board regarding risk management and any other matters. Annually, the Board holds strategic planning sessions with senior executive officers to discuss strategies, key challenges, and risks and opportunities for Autodesk. Sustainability Autodesk’s long-standing commitment to sustainability is reflected in our products, services and operations. To help our customers imagine, design, and create a better world, we focus our efforts where we can have the greatest impact: providing sustainability-enabling solutions, delivering free sustainable design learning and training opportunities, providing software grants to qualifying nonprofits and entrepreneurs and leading by example with our sustainable business practices. Through our products and services, we are supporting our customers to better understand and improve the environmental performance of everything they make. Autodesk develops solutions that our customers can use to design a future in which our built environment, infrastructure, and manufacturing serve the needs of all, within the limits of the planet. We help our customers proactively understand, optimize, and improve the environmental performance of everything they make, with a focus on resource productivity. We help them to innovate and respond to changes in climate change regulations, building codes, physical climate parameters, and other climate- related developments. We continue to expand the solutions, education, and support we offer, helping customers secure a competitive advantage for a low carbon future by designing high-performance buildings, resilient cities and infrastructure, and more efficient transportation, factories, and products. Although our biggest opportunity to improve our shared future is through the designers who use our software, we also work to reduce the direct impact of our operations. We are investing in best practices to mitigate our greenhouse gas (GHG) emissions and climate change risk through renewable energy, energy efficiency, and disaster management and recovery strategies. We are on track to meet our science-based target to reduce our absolute GHG emissions by an estimated 43 percent by 2020. By the end of fiscal 2017, Autodesk had reduced its net GHG emissions for its operational boundary by 44% from our fiscal 2009 baseline to 156,000 metric tons of carbon dioxide equivalent. We achieved this through increased investment in renewable energy and energy efficiency in our global real estate portfolio, and continued transition from physical to cloud and electronic software delivery. The Autodesk Foundation, a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts. The purpose of the Foundation is twofold: to support employees to create a better world at work, at home, and in the community by matching employee’s volunteer time and/or donations to nonprofit organizations; and to support organizations and individuals using design to drive positive social and environmental impact. In the latter case, we use grant funding, software donations, and training to accomplish this goal, selecting the most impactful and innovative organizations around the world, thus, leading to a better future for our planet. On our behalf, the Foundation also administers a discounted software donation program to nonprofit organizations, social and environmental entrepreneurs, and others who are developing design solutions that will shape a more sustainable future. 2018 Proxy Statement 35 More information about our sustainability commitments and performance can be found in our annual sustainability reports, which we have published on our website since 2008. Our fiscal 2018 sustainability report will be released in the second quarter of fiscal 2019. Compensation Committee Interlocks and Insider Participation P r o x y M a t e r i a l s The current members of the Compensation and Human Resources Committee are Mary T. McDowell, Reid French and Stacy J. Smith. In addition, Scott Ferguson served on the Compensation and Human Resources Committee during fiscal 2018. No director who served as a member of the Compensation and Human Resources Committee during fiscal 2018 is or was formerly an officer or employee of Autodesk or any of its subsidiaries. No interlocking relationship exists between any director who served as a member of the Compensation and Human Resources Committee during fiscal 2018 and the compensation committee of any other company, nor has any such interlocking relationship existed in the past. Nominating Process for Recommending Candidates for Election to the Board The Corporate Governance and Nominating Committee is responsible for, among other things, determining the criteria for membership on the Board and recommending candidates for election to the Board. It is the policy of the Corporate Governance and Nominating Committee to consider recommendations for candidates to the Board from stockholders. Stockholder recommendations for candidates to the Board must be directed in writing to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: Chief Legal Officer, and must include the candidate's name, home and business contact information, detailed biographical data and qualifications; information regarding any relationships between the candidate and Autodesk within the last three years; and evidence that the nominating person owns Autodesk stock. The Corporate Governance and Nominating Committee’s criteria and process for evaluating and identifying the candidates that it selects, or recommends to the full Board for selection, as director nominees are as follows:  The Corporate Governance and Nominating Committee regularly reviews the current composition and size of the Board.  The Corporate Governance and Nominating Committee oversees a periodic evaluation of the performance of the Board as a whole and evaluates the performance of individual members of the Board eligible for re-election at the annual meeting of stockholders.  In its evaluation of director candidates, including the members of the Board eligible for re-election, the Corporate Governance and Nominating Committee seeks to achieve a balance of knowledge, experience and skills on the Board. The Corporate Governance and Nominating Committee considers: (1) the current size and composition of the Board and the needs of the Board and its committees; (2) such factors as character, judgment, diversity, age, expertise, business experience, length of service, independence, and other commitments; (3) relationships between directors and Autodesk's customers and suppliers; and (4) such other factors as the Committee may consider appropriate.  While the Corporate Governance and Nominating Committee has not established specific minimum qualifications for director candidates, the Corporate Governance and Nominating Committee believes that candidates and nominees must reflect a Board that comprises directors who (1) are predominantly independent; (2) have high integrity; (3) have broad, business-related knowledge and experience at the policy-making level in business or technology, including their understanding of the software industry and Autodesk's business in particular; (4) have qualifications that will increase overall Board effectiveness; (5) have varied and divergent experiences, viewpoints and backgrounds; and (6) meet other requirements as may be required by applicable rules, such as financial literacy or financial expertise with respect to audit committee members. 2018 Proxy Statement 36  With regard to candidates who are properly recommended by stockholders or by other means, the Corporate Governance and Nominating Committee will review the qualifications of any such candidate, which review may, in the Corporate Governance and Nominating Committee’s discretion, include interviewing references, direct interviews with the candidate, or other actions the Corporate Governance and Nominating Committee deems necessary or proper.  The Corporate Governance and Nominating Committee has the authority to retain and terminate any third-party search firm to identify director candidates, and has the authority to approve the fees and retention terms of such search firm.  The Corporate Governance and Nominating Committee will apply these same principles when evaluating Board candidates who may be elected initially by the full Board to fill vacancies or to add additional directors prior to the annual meeting of stockholders at which directors are elected.  After completing its review and evaluation of director candidates, the Corporate Governance and Nominating Committee selects, or recommends to the full Board for selection, the director nominees. The Corporate Governance and Nominating Committee does not have a formal written policy with regard to the consideration of diversity in identifying director nominees. However, as discussed above, diversity is one of the numerous criteria the Corporate Governance and Nominating Committee reviews before recommending a candidate. Attendance at Annual Stockholders' Meetings by Directors Autodesk does not have a formal policy regarding attendance by members of the Board at the Annual Meeting of Stockholders. Directors are encouraged, but not required, to attend. All of our directors then serving attended the 2017 Annual Meeting of Stockholders either in person or telephonically. s l a i r e t a M y x o r P Contacting the Board Communications from stockholders to the non-employee directors should be addressed to the non-executive Chairman as follows: Autodesk, Inc., c/o Chief Legal Officer, 111 McInnis Parkway, San Rafael, California 94903, Attention: Non-Executive Chairman. EXECUTIVE COMPENSATION Compensation Discussion and Analysis Throughout this proxy statement, the individuals included in the Summary Compensation Table on page 60 are referred to as our “named executive officers” or “NEOs.” For fiscal 2018, our NEOs were:  Andrew Anagnost, Chief Executive Officer and President;  R. Scott Herren, Senior Vice President and Chief Financial Officer;  Steven M. Blum, Senior Vice President, Worldwide Field Operations; and  Pascal W. Di Fronzo, Senior Vice President, Corporate Affairs, Chief Legal Officer and Corporate Secretary; 2018 Proxy Statement 37 as well as former employees:  Carl Bass, former Chief Executive Officer and President; P r o x y M a t e r i a l s  Amar Hanspal, former Co-CEO, Senior Vice President, Products and Chief Product Officer; and  Jan Becker, former Senior Vice President and Chief Human Resources Officer and Corporate Real Estate. The information in this discussion provides perspective and narrative analysis relating to, and should be read along with, the executive compensation tables beginning on page 60. Executive Transition In February 2017, Carl Bass announced he was stepping down from his Chief Executive Officer and President roles. Mr. Bass’ separation as CEO led to a number of changes to our executive management team:   The Board formed an interim Office of the Chief Executive to oversee the Company's day-to-day operations, which was headed by Dr. Anagnost and Mr. Hanspal who served as interim Co-CEOs. In June 2017, after an extensive review process and search, the Board appointed Dr. Anagnost as President and CEO and a member of the Board.  Mr. Hanspal then elected to resign from his role at the Company.  In October 2017, Ms. Becker, having helped the Board and management transition through the management changes in in fiscal 2018, also chose to resign. Mr. Bass, Mr. Hanspal and Ms. Becker, though no longer employees of the Company, are included as NEOs pursuant to applicable SEC disclosure requirements. As a result of these changes, the Compensation and Human Resources Committee (the “Committee”) made a number of compensation-related decisions (which are described below) in addition to its customary duties in overseeing our executive compensation program. These decisions related to Co-CEO stipends and equity grants, CEO promotion compensation and separation compensation. The material terms and conditions of these arrangements are described more fully below. Executive Summary Fiscal 2018 Business Model Transition and Performance Metrics The software industry is undergoing a transition from the PC to cloud, mobile and social computing. Our strategy is to lead the industries we serve to cloud-based technologies and business models. As part of the transition, we discontinued selling new perpetual licenses and now offer term-based subscriptions for our products, cloud service offerings, and flexible enterprise business agreements (collectively referred to as "subscription plan"). 2018 Proxy Statement 38 Over time, Autodesk’s business model transition will result in a more predictable, recurring and profitable business. However, during the transition, traditional financial metrics such as revenue, margins, EPS and cash flow from operations have been adversely impacted. This is primarily a result of revenue for new subscription offerings being recognized over time rather than up front and subscription offerings generally have a lower initial price than perpetual offerings. Despite the lower initial price, our subscription plan offerings are expected to increase the lifetime value of Autodesk’s customers. Following Dr. Anagnost’s appointment to CEO, and in consultation with the Board, he established three strategic priorities of completing the subscription transition, digitizing the Company, and re-imagining manufacturing, construction, and production. To free up resources to pursue these strategic priorities, we commenced a world-wide restructuring plan in the fourth quarter of fiscal 2018. Through the restructuring, we seek to reduce our investments in areas not aligned with our strategic priorities. At the same time, we plan to further invest primarily in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with our strategic priorities, we are better positioning ourselves to meet our long-term goals, while maintaining our goal to keep non-GAAP spend flat in fiscal 2019. To incent long-term value creation and strong financial performance during the transition, we adopted performance metrics for our bonus and equity plans that align with the key drivers of success during the business model transition and reflect the health of the business during the transition. The following performance metrics were used for our CEO during fiscal 2018: s l a i r e t a M y x o r P Performance Metrics       Total Annualized Recurring Revenue ("ARR") Net Total Subscription Additions Non-GAAP Total Spend Total Subscription Renewal rate Relative TSR (multi-year) Free Cash Flow Per Share Our executive officers’ continued successful implementation of our business model drove the following fiscal 2018 results:   Total ARR was $2.05 billion, an increase of 25% from fiscal 2017; of which subscription plan ARR was $1.18 billion. Total subscriptions were 3.72 million, an increase of 20% from fiscal 2017; of which subscription plan subscriptions were 2.27 million. Subscription plan ARR and subscriptions base surpassed the base of maintenance plan ARR and subscriptions.   Deferred revenue was $1.96 billion, an increase of 9% from fiscal 2017.    Total deferred revenue (deferred revenue plus unbilled deferred revenue) was $2.28 billion, an increase of approximately 25% from fiscal 2017. Total GAAP spend (cost of revenue plus operating expenses) was $2,566 million, an increase of 1% from fiscal 2017. Total non-GAAP spend was $2,169 million, an increase of 1% from fiscal 2017. A reconciliation of GAAP to non-GAAP results is provided in Appendix A. Total subscription renewal rate was 80.9%.   During fiscal 2018 our stock price increased by 42% and over five years our stock price increased by 197%. The Committee considered those performance factors in reaching its decisions regarding pay for the NEOs for fiscal 2018. 2018 Proxy Statement 39 Say-on-Pay Results and Stockholder Outreach Autodesk and the Committee value the input of our stockholders. In 2017, 95% of the votes cast on our Say-on-Pay proposal were favorable, which reflected strong stockholder support for our executive compensation programs. In fiscal 2018, the Chairman of our Board, alongside key management team members, continued our annual outreach and contacted stockholders representing over 63% of the outstanding shares. Our engagement team met with governance professionals from passive funds as well as portfolio managers from active funds. The breadth of the Company’s outreach program enabled us to gather feedback from a significant cross-section of Autodesk’s stockholder base. Based on these discussions, the Committee found that our stockholders continued to be supportive of our executive transition, our executive compensation programs and the alignment between our CEO pay and Autodesk’s performance, particularly in light of our stage in the business model transition. In addition, our stockholders provided us helpful input regarding compensation design and disclosure. The Committee carefully considered stockholder feedback as part of its ongoing review of our executive compensation program and will continue to consider stockholder feedback regarding compensation design and metrics as we emerge from our business model transition. As described below in “Fiscal 2019 Executive Incentive Plan,” the Committee approved annual incentive metrics for fiscal 2019 that differ from those used for PSU awards, largely in response to input from our stockholders. Emphasis on Variable “At Risk” Performance Executive Compensation Our executive compensation program emphasizes variable compensation with both annual and long-term performance components. In fiscal 2018, 92% of our current CEO's and 84% of all other continuing NEOs’ total compensation was variable in nature and “at risk” and 86% of our current CEO’s and 73% of all other continuing NEOs’ total compensation consisted of long-term equity. Our incentive programs reward strong annual financial and operational performance, as well as relative TSR over one-, two-, and three-year performance periods. The charts below demonstrate the fiscal 2018 pay mix between base salary, actual short-term incentives, and targeted long-term equity compensation for the current CEO and all other continuing NEOs. P r o x y M a t e r i a l s 2018 Proxy Statement 40 Executive Compensation and Corporate Performance The chart below highlights the multi-year relationship between the CEO’s total compensation, the percentage achievement against annual cash incentives as well as the Company’s annual and cumulative Total Shareholder Return. ) s 0 0 0 ( n o i t a s n e p m o C l a t o T O E C $15,000 $10,000 $5,000 $0 FY 18 TSR +42%; Over 5 Years +197% 14.78 13.33 300% 38.98 43.00 9.56 250% N/A 6.54 16.48 200% 5.23 Company Performance and Total Shareholder Return vs. CEO Total Compensation 31-Mar-17 4.04 31-Dec-17 2.82 31-Mar-17 31-Jul-17 31-Dec-17 31-Jan-17 31-Dec-17 28-Apr-17 30-Sep-17 30-Sep-17 28-Feb-17 FY 14 TSR: +32% FY 15 TSR: +5% 31-Jan-18 31-Mar-17 31-Oct-17 Annual Cash Incentive Achievement vs. Target: 109% 31-Jan-18 FY 16 TSR: -13% Annual Cash Incentive Achievement vs. Target: 101% 4.85 5.18 5.03 1.28 1.29 FY 17 TSR: +74% 5.52 1.94 1.16 2.41 10.48 4.02 2.72 Annual Cash Incentive 2.06 Achievement vs. Target: 94% 25% Annual Cash Incentive Achievement vs. Target: 98% Annual Cash Incentive Achievement vs. Target: 31% $8,297 $11,040 $12,177 $10,724 $12,346 Fiscal 2014 Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 CEO Total Compensation (000s) (1) TSR - Year Over Year (% in Boxes)(2) Attainment of Annual Incentive Cash Goals (3) e c i r P k c o t S d e x e d n I 8.44 23.25 150% 83.14 16.92 13.79 100% 25.24 73% 50% 0% s l a i r e t a M y x o r P _________________ (1) Total Compensation is based on the amounts in the Summary Compensation Table; the fiscal 2014 - fiscal 2017 data is for Mr. Bass and the fiscal 2018 data is for Dr. Anagnost. (2) TSR shown in boxes is calculated by comparing year-over-year changes in the closing price of Autodesk’s Common Stock at each fiscal year-end. The green line reflects Autodesk’s cumulative total shareholder return indexed off 100% from the beginning of fiscal 2014 through the end of fiscal 2018. (3) Percentage of achievement against annual cash incentives in place during each fiscal year. Fiscal 2018 Executive Compensation Decisions Below is a description of the annual compensation decisions made for the NEOs based on results for the just-completed fiscal year. March 2017 Base Salary: The Committee considered an analysis of the base salary for each role, an assessment of each executive officer’s experience, skills and performance level, and Autodesk’s performance. Based on those factors, the executive officers’ base salaries were increased by 0% to 3% for fiscal 2018. Equity Awards: The Committee approved annual equity awards for our NEOs in the form of PSUs and restricted stock units (“RSUs”). Our NEOs received 50% of their shares in PSUs and 50% in RSUs. The vesting of the PSUs is contingent upon performance against the metrics used within Autodesk’s equity incentive plan. In determining the size of equity awards, the Committee considered the Company’s performance; market data for each executive; the individual skills, experience, and performance of each executive; and the optimal mix of cash and equity compensation to ensure that equity awards would motivate the creation of long-term value while satisfying the Committee’s retention objectives March 2018 Annual Cash Incentive Awards: Consistent with fiscal 2018 financial results, the Committee determined that, based on attainment of the performance metrics used within Autodesk’s cash incentive plan, the annual cash incentive award for our CEO and for our NEOs were paid out at 97.8% of their target award opportunity (for more discussion of cash awards, see “Annual Short-Term Incentive Compensation” below). 2018 Proxy Statement 41 In conjunction with the executive transition described above, the Committee also made the following compensation decisions described below at various points throughout the year relating to Co-CEO stipends and equity grants, CEO promotion compensation and separation compensation for executives who left the Company. February 2017 Bass Transition Agreement(1): In connection with Mr. Bass’ separation from service as President and CEO and provision of transition services, Mr. Bass received separation payments and benefits that were contractually stipulated under his employment agreement. June 2017 P r o x y M a t e r i a l s Co-CEO Stipends and Equity Grants: In consideration of their service as Co-CEOs during a transition period, Dr. Anagnost and Mr. Hanspal each received monthly cash stipends and one-time equity grants scheduled to vest 100% on July 1, 2018. In determining stipend amounts, the Committee targeted the Co-CEOs’ total annual cash compensation plus stipend to be approximately midway between the Co-CEOs’ current total annual cash compensation and the median total annual cash compensation of CEOs from our compensation peer group. Anagnost Employment Agreement: In connection with the promotion of Dr. Anagnost to President and CEO, he received: a base salary increase to $800,000, an annual cash incentive award target percentage increase to 125% and additional equity grants in the form of RSUs and PSUs. These pay changes were made in reference to relevant market data, internal pay parity, and Dr. Anagnost’s tenure in the role. The PSU vesting is contingent on the Company’s performance against fiscal 2020 free cash flow per share and ARR goals. Hanspal Separation Agreement(1): Following Dr. Anagnost’s appointment as CEO and in connection with Mr. Hanspal’s separation from service, Mr. Hanspal received separation payments and benefits. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. September 2017 Becker Separation Agreement(1): After having helped the Board and management transition through the fiscal 2018 management changes, and in connection with Ms. Becker’s separation from service, Ms. Becker received separation payments and benefits. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. ___________ 1 Compensation was conditioned upon a general release of claims and continued compliance with non-competition, employee non- solicitation, non-disparagement and confidentiality covenants as well as the provision of transition services. Compensation Guiding Principles The Committee believes that Autodesk’s executive compensation program should be designed to attract, motivate, and retain talented executives and should provide a rigorous framework that is tied to stockholder returns, Company performance, long- term strategic corporate goals, and individual performance. The general compensation objectives are to: • Recruit and retain the highest caliber of executives through competitive rewards; • Motivate executive officers to achieve business and financial goals; • Balance rewards for short- and long-term performance; and • Align rewards with stockholder value creation. 2018 Proxy Statement 42 Within this framework, the total compensation for each executive officer varies based on multiple dimensions: • Whether Autodesk achieves its short-term and long-term financial and non-financial objectives, including execution on its business model transition; • Autodesk’s TSR relative to companies in the S&P Computer Software Select Index and companies in the North American Technology Software Index; • The specific role and responsibility of the officer; • Each individual officer’s skills, competency, contributions and performance; • Internal pay parity considerations; and • Retention considerations. The Compensation-Setting Process s l a i r e t a M y x o r P The Committee reviews and approves all components of each executive officer’s compensation. CEO Pay Decisions As described above under “Executive Transition,” as a result of fiscal 2018 CEO changes, the Committee made compensation- related decisions throughout the year relating to Co-CEO stipends and equity grants and CEO promotion compensation. In making these decisions, the Committee took into account individual performance assessments, along with competitive compensation data and internal pay parity considerations. The Committee set target levels to be aggressive, yet achievable, with diligent effort during the fiscal year. The Committee formulated recommendations on CEO compensation in consultation with its independent consultant, consulted with the other independent directors, and then approved the CEO compensation. Executive Officer Pay Decisions The CEO makes recommendations to the Committee regarding the base salary, annual cash incentive awards, and equity awards for each executive officer other than himself. These recommendations are based on the CEO’s assessment of each executive officer’s performance during the year, competitive compensation data, internal pay parity and retention considerations. The CEO reports on the performance of the executive officers and their business functions during the year in light of corporate goals and objectives. The CEO bases his evaluation on his knowledge of each executive officer’s performance and from others with knowledge of their performance, including feedback provided by the executive officers and their direct reports. The Human Resources Group assists the CEO in assessing each executive officer’s performance and providing market compensation data for each role. In executing the responsibilities set forth in its charter, the Committee relies on a number of resources to provide input to the decision-making process. 2018 Proxy Statement 43 Independent consultant The Committee retained Exequity LLP as its compensation adviser for fiscal 2018. Exequity provided advice and recommendations on many issues: total compensation philosophy; program design, including program goals, components, and metrics; peer data; compensation trends in the high technology sector and general market for senior executives; separation plans; the compensation of the CEO and the other executive officers; and disclosure of our executive pay programs. The Committee has considered the independence of Exequity in light of NASDAQ's listing standards for compensation committee independence and the rules of the SEC. The Committee requested and received a written confirmation from Exequity addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these considerations and concluded that the work performed by Exequity did not raise any conflict of interest. P r o x y M a t e r i a l s Management The Committee also consults with management and Autodesk’s Human Resources Group regarding executive and non- executive employee compensation plans, including administration of Autodesk’s equity incentive plans. Competitive Compensation Positioning and Peer Group To ensure our executive compensation practices are competitive and consistent with the Committee’s guiding principles, Exequity and management provide the Committee with compensation data for each executive role. This data is drawn from a group of companies in relevant industries that compete with Autodesk for executive talent (the “compensation peer group”). Where sufficient data for our compensation peer group was not available, market data from similarly sized San Francisco Bay Area companies was used. The Committee uses this data, as well as information about broader technology industry compensation practices, when deliberating on the compensation of the executive officers. The compensation peer group is selected based upon multiple criteria, including industry positioning, competition for talent, company size, financial results and geographic footprint. During Autodesk’s business model transition, Autodesk’s revenue has been negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. The Committee took this into consideration when analyzing the composition of Autodesk’s peer group. 2018 Proxy Statement 44 The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: Company Reported Fiscal Year Revenue ($'s in Billions) Market Capitalization as of 1/31/2018 ($'s in billions) Adobe Systems, Inc. Akamai Technologies, Inc. CA, Inc. Citrix Systems, Inc. Electronic Arts, Inc. Intuit Inc. Juniper Networks, Inc. Mentor Graphics Corporation National Instruments Corporation NetApp, Inc. Nuance Communications, Inc. PTC Inc. Red Hat, Inc. salesforce.com, inc. Symantec Corporation Synopsys, Inc. Autodesk, Inc. Autodesk Percentile Ranking 1-Dec-17 31-Dec-17 31-Mar-17 31-Dec-17 31-Mar-17 31-Jul-17 31-Dec-17 31-Jan-17 31-Dec-17 28-Apr-17 30-Sep-17 30-Sep-17 28-Feb-17 31-Jan-18 31-Mar-17 31-Oct-17 31-Jan-18 7.30 2.50 4.04 2.82 4.85 5.18 5.03 1.28 1.29 5.52 1.94 1.16 2.41 10.48 4.02 2.72 2.06 25% 98.13 11.38 14.78 13.33 38.98 43.00 9.56 N/A 6.54 16.48 5.23 8.44 23.25 83.14 16.92 13.79 25.24 73% s l a i r e t a M y x o r P In September 2017, the Committee reviewed the compensation peer group that would be used for fiscal 2019 compensation decision making. The Committee determined that each of the peers was still appropriate, except for Mentor Graphics Corporation which was removed as a result of its acquisition by Siemens AG in March 2017. The Committee also chose to add Ansys, Inc and Cadence Design Systems Inc, given their size, industry comparability and the fact that they compete with Autodesk for executive talent. When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s compensation competitive and within market norms. This also provides flexibility for variances in compensation where appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention considerations. 2018 Proxy Statement 45 Principal Elements of the Executive Compensation Program The principal elements of Autodesk’s annual executive compensation program are described below. Payout Range N/A Performance Measures None, although performance of the individuals is taken into account by the Committee when setting and reviewing base salary levels 0% - 150% of target Fiscal 2018: Performance against total ARR, net total subscription additions, subscription renewal rate and non-GAAP total spend 0% - 180% of target shares Fiscal 2018: Performance against total ARR, net total subscription additions, subscription renewal rate and non-GAAP total spend adjusted based upon Autodesk’s TSR relative to companies in the North American Technology Software Index over one-, two-, and three- year performance periods Change in Autodesk stock price Autodesk stock price 0% -200% of target shares For our new CEO’s long-term promotion PSUs, performance against fiscal 2020 free cash flow per share and ARR Change in Autodesk stock price Autodesk stock price Element Base Salary Purpose Forms basis for competitive compensation package Short-term Incentive Opportunities Motivate achievement of strategic priorities relating to the business model transition while maintaining our year- over-year non-GAAP spend P r o x y M a t e r i a l s Performance Stock Unit awards (“PSUs”) Align compensation with key drivers of the business and relative shareholder return Operation Base salary reflects competitive market conditions, individual performance, and internal parity Target percentage determined by competitive market practices and internal parity Actual bonus payouts are determined by the extent to which performance compares to targeted goals established at the beginning of the performance period Size of award determined by competitive market practices, corporate and individual performance and internal parity Encourage focus on near- term and long-term strategic objectives Percentage of shares vesting is determined by the extent to which performance compares to targeted goals established at the beginning of the performance period CEO promotion grant Vesting over three years Restricted Stock Unit Awards (“RSUs”) Encourage focus on long- term shareholder value creation Promote retention Size of award determined by competitive market practices, corporate and individual performance and internal parity and retention considerations Recipients earn shares if they remain employed through the three-year vesting period 2018 Proxy Statement 46 When setting the goals for the short-term incentive opportunity and the PSUs, the Committee considered the overlap of goals to be appropriate at this time in light of the critical importance of these goals during this stage of the business model transition. The use of relative TSR over one-, two-, and three-year performance periods against market indices differentiates PSUs from the short-term incentive program and aligns those awards with the long-term interests of our stockholders. Minimizing the use of overlapping metrics was a consideration of the Committee at the times it approved fiscal 2019 incentive compensation designs and Dr. Anagnost’s long-term promotion PSUs (which also include free cash flow per share as a metric). As described below in “Fiscal 2019 Executive Incentive Plan,” the annual incentives established for NEOs in fiscal 2019 employ a mix of performance metrics that varies from those used for the PSU awards. s l a i r e t a M y x o r P Base Salary and Co-CEO Stipends Base salary is used to provide the executive officers with a competitive amount of fixed annual cash compensation. The Committee views base salary as a reliable source of income for the executive officers and an important recruiting and retention tool. The Committee sets base salaries at a competitive level that recognizes the scope, responsibility, and skills required of each position, as well as market conditions and internal pay equity. February 2017 Co-CEO Stipends: While serving as interim Co-CEOs, in addition to their annual base salaries, Dr. Anagnost and Mr. Hanspal each received a monthly cash stipend. In determining stipend amounts, the Committee targeted the Co-CEOs’ total annual cash compensation plus stipend to be approximately midway between the Co-CEOs’ current total annual cash compensation and the median total annual cash compensation of CEOs from our compensation peer group. In light of salary differentials and in order for their annual cash compensation plus stipend to be equivalent, Dr. Anagnost received a monthly stipend of $70,000 and Mr. Hanspal received a monthly stipend of $50,000. March 2017 June 2017 Base Salaries: The Committee considered an analysis of the base salary for each executive role, an assessment of each executive officer’s experience, skills and performance level, and Autodesk’s performance. As a result, the Committee elected to increase executive officer base salaries by 0% to 3%. Anagnost Employment Agreement: When Dr. Anagnost was promoted to President and Chief Executive Office, the Committee considered an analysis of market data, internal equity and that Dr. Anagnost was new to his role when setting his base salary. As a result, the Committee increased his base salary to $800,000. While Dr. Anagnost’s base salary is below the median market position of our compensation peer group, the Committee expects to increase his base salary over time, commensurate with performance. Annual Short-Term Incentive Compensation At the beginning of each fiscal year, the Committee establishes target award opportunities, payout metrics and performance targets for the Autodesk, Inc. Executive Incentive Plan. This annual cash incentive is intended to motivate and reward participants for achieving company-wide annual financial and non-financial objectives as well as individual objectives. Target Award Opportunities and Fiscal 2018 Executive Incentive Plan The Committee sets the target annual cash incentive award opportunity for each eligible executive officer based on competitive assessments, the executive’s particular role, and internal parity considerations. Based on the Committee’s review of these factors, the Committee set the fiscal 2018 cash incentive target for each of the NEOs at the same percentage as it was in fiscal 2017, other than for Dr. Anagnost, whose short-term incentive target was increased when he was appointed Chief Executive Officer and President. These target opportunities are expressed as a percentage of the NEO’s annualized base salary, and range from 75% to 125%. A NEO may receive an earned award that is greater or less than the target award opportunity, depending upon Autodesk’s performance. 2018 Proxy Statement 47 In fiscal 2018, bonus awards for each of our NEOs were funded under the Autodesk, Inc. Executive Incentive Plan (“Fiscal 2018 EIP”). Cash bonuses under this plan are generally intended to qualify as tax deductible “performance-based compensation” to the extent allowed under Section 162(m) of the Internal Revenue Code. At the beginning of the fiscal year, the Committee established funding performance thresholds, which, if achieved, would establish maximum Fiscal 2018 EIP funding at 190% of target. For fiscal 2018, the Committee selected total ARR, net total subscription additions and subscription renewal rates as the funding metrics. Autodesk’s fiscal 2018 performance of $2,054 million in ARR, 0.611 million in net total subscription additions and 80.9% in total subscription renewal rates exceeded the funding threshold, resulting in the maximum bonus award funding for each executive. The Committee then exercised its negative discretion to reduce the actual bonus awards for each of the participants based on pre-established performance measures (as described below). P r o x y M a t e r i a l s Company Performance Measures and Performance At the beginning of fiscal 2018, the Committee approved Fiscal 2018 EIP performance measures to align our CEO’s and NEOs’ bonus opportunities with the Company’s strategic priorities. The metrics selected align our incentives with the key drivers of success during the business model transition. In its exercise of negative discretion, the Committee considered the performance attainment versus specific targets to determine payouts. For the CEO and other NEOs, the Committee assessed the performance of the Company against targets set at the beginning of the fiscal year based on the criteria below; the final award could range from 0% to 150% of the target award. This calculation yielded a bonus payout of 97.8% of target, as shown below: Performance Metric Weighting Total ARR Net Total Subscription Additions Total Subscription Renewal Rate Non-GAAP Total Spend Total 40% 30% 15% 15% 100% Actual $2,054M 0.611M 80.9% $2,169M Target $2,050M 0.657M 80.6% $2,175M Funding % 100.8% 89.4% 102.5% 102.1% 97.8% Based on the level of achievement of the performance objectives, in March 2018 the Committee approved short-term incentive awards for the NEOs as follows : (1) Andrew Anagnost1 R. Scott Herren Steve M. Blum Pascal Di Fronzo Short-Term Incentive Target as a Percentage of Base Salary 75% / 125% 75% 75% 75% Short-Term Incentive Target Short-Term Incentive Payout $741,014 $440,250 $419,250 $366,750 $724,711 $430,565 $410,027 $358,682 Short-Term Incentive Payout as a Percentage of Target 97.8% 97.8% 97.8% 97.8% ____ 1 Dr. Anagnost’s incentive target and payout were prorated for his base salary and bonus target percentage in each role. No bonus payouts were awarded to Mr. Bass, Mr. Hanspal or Ms. Becker as they terminated prior to end of fiscal 2018. 2018 Proxy Statement 48 s l a i r e t a M y x o r P Fiscal 2019 Executive Incentive Plan In fiscal 2019, the bonus awards for each of our NEOs will continue to be determined under the Autodesk, Inc. Executive Incentive Plan. Near the beginning of the fiscal year, the Committee established total ARR, non-GAAP operating income and absolute stockholder return as the funding metrics. If the funding metrics are achieved, in its exercise of negative discretion, the Committee will consider the performance attainment versus specific targets to determine payouts. The Committee will assess the financial and operational performance of the Company based on the following metrics and weighting: Performance Metric Total ARR Non-GAAP Operating Income Weighting 70% 30% The Committee believes that the metrics selected for fiscal 2019 will align our incentives with the key drivers of success. The final awards for our NEOs could range from 0% to 200% of target, depending on achieved performance level. The Committee’s choice of metrics was also driven by stockholder feedback to minimize the overlap of metrics between the bonus and equity plans and include a profitability metric. As we progress through our business model transition we will continue to evaluate the appropriateness and weighting of these performance metrics. Long-Term Incentive Compensation Autodesk uses long-term incentive compensation in the form of equity awards to align executive pay opportunities with stockholder value creation, and to motivate and reward executive officers for effectively executing longer-term strategic and operational objectives. February 2017 Equity Awards On February 8, 2017, Mr. Bass stepped down as President and Chief Executive Officer. To ensure Autodesk's continued focus on business performance and technological innovation, the Board formed the Office of the Chief Executive Officer to oversee the Company's day-to-day operations during the transition. Dr. Anagnost and Mr. Hanspal were appointed as Co-CEOs. In connection with their appointment as interim Co-CEOs, Dr. Anagnost and Mr. Hanspal were each granted the following equity awards which vest 100% on July 1, 2018. The use of RSUs and the vesting schedule was chosen to provide additional retention through the appointment of a new CEO and through our business model transition: Andrew Anagnost Amar Hanspal _____ Target Value of RSU Award $1,500,000 $1,500,000 RSU Award (#) (1) 17,936 17,936 (1) Number of shares determined by the average closing stock price over the last 20 trading days prior to the date of grant. 2018 Proxy Statement 49 March 2017 Equity Awards During fiscal 2018, the Committee approved annual equity awards in the form of PSUs and RSUs for the NEOs. The Committee elected to use the following mix of PSUs and RSUs to complement the performance aspects of PSUs with the long- term retention component of RSUs. P r o x y M a t e r i a l s In arriving at the total number of PSUs and RSUs to award to an executive officer, the Committee considered Autodesk’s performance in fiscal 2017, competitive market data for the executive’s position, historical grants, outstanding equity, individual performance of the executive and internal pay parity. In particular, the Committee noted the progress of Autodesk’s business model transition, which is indicative of strong execution during our business model transition and which positions the Company well for continued stockholder value creation. Key performance indicia reflecting progress in fiscal 2017 include: 16% ARR 21% Subscriptions 18% Deferred Revenue 74% Stock Price As a result of this analysis, the following equity awards were approved: Andrew Anagnost R. Scott Herren Steve Blum Pascal Di Fronzo Amar Hanspal Jan Becker Target Value of PSU + RSU Award Target PSU Award (#)(1) RSU Award (#)(1) $3,000,000 $2,500,000 $2,000,000 $1,500,000 $3,000,000 $1,500,000 17,502 14,585 11,668 8,751 17,502 8,751 17,502 14,585 11,668 8,751 17,502 8,751 _________________ (1) Number of shares determined by the weighting of PSUs and RSUs and the average closing stock price over the last 20 trading days prior to the date of grant. 2018 Proxy Statement 50 PSU Awards The current PSU design was adopted following extensive stockholder outreach and incorporates a number of features stockholders identified as being most important, namely, multiple performance metrics, TSR relative to peers, and a multi-year measurement period. The PSU awards provide for a minimum, target and maximum number of shares to be earned based upon predetermined performance criteria. • For fiscal 2018 awards, PSU vesting will be contingent upon achievement of performance goals adopted by the Committee (“Performance Results”) and Autodesk’s TSR compared against companies in the S&P North American Technology Software Index with a market capitalization over $2B (“Relative TSR”) over one-, two- and three-year performance periods. • In fiscal 2018, we measured Performance Results based on total ARR, net total subscription additions, total subscription renewal rate and non-GAAP total spend. • The use of these different goals motivates management to drive Autodesk’s ongoing business model transition and, combined with Relative TSR and vesting over one-, two- and three-year performance periods, aligns these awards with the long-term interests of our stockholders. s l a i r e t a M y x o r P Performance Results for the relevant performance period could result in PSU attainment of 0% to 150% of target. Once the Performance Results percentage is established, it is multiplied by a percentage ranging from 80% to 120%, depending on Autodesk’s Relative TSR for the period. The combined impact of these performance criteria is that PSUs could be earned from 0% to 180% of target. The chart below illustrates the attainment mechanics for the PSUs approved in fiscal 2018. Fiscal 2018 Fiscal 2019 Fiscal 2020 1st Fiscal 2018 PSU Tranche 2nd Fiscal 2018 PSU Tranche 3rd Fiscal 2018 PSU Tranche Fiscal 2018 Target Shares Fiscal 2019 Target Shares Fiscal 2020 Target Shares Fiscal 2018 Performance Results (0%–150% of Target) Fiscal 2019 Performance Results (0%–150% of Target) Fiscal 2020 Performance Results (0%–150% of Target) Fiscal 2018 Relative TSR (80%–120% of Above Result) Relative TSR Fiscal 2018 – Fiscal 2019 Relative TSR (80%–120% of Above Result) Relative TSR Fiscal 2018 – Fiscal 2020 Relative TSR (80%–120% of Above Result) An executive who has received PSU grants in three successive years will have a portion of the total PSU shares vesting in that third year be based on the combination of 3-year, 2-year and 1-year Relative TSR (see “Vesting of PSUs” below for an illustration of this cumulative effect of multiple PSU grants). 2018 Proxy Statement 51 RSU Awards March 2017: The time-based RSU awards granted to the CEO and NEOs in March 2017 vest in three equal annual installments from the date of grant. RSUs help us retain executives in a competitive environment and provide further incentive to focus on longer-term stockholder value creation. New CEO Grant P r o x y M a t e r i a l s June 2017: In June 2017, in connection with his promotion to President and Chief Executive Officer, Dr. Anagnost received a grant of PSUs and RSUs. For the PSU grants, the shares will vest based on the Company’s fiscal 2020 free cash flow per share and ARR performance. In response to stockholder feedback and in order to minimize the use of overlapping metrics, the Committee elected to use a different design and metrics to measure the Company’s long-term performance against key goals highlighted in our business model transformation. In determining the size of these awards, the Committee took into account competitive compensation data, Dr. Anagnost’s time in the role and the unrealized value of his unvested equity awards. The time-based RSU component will vest in three equal annual installments from the date of grant. RSUs help us retain Dr. Anagnost in a competitive environment and provide further incentive to focus on longer-term stockholder value creation. The following equity awards were approved: PSUs RSUs _______ Target Value of Award Target PSU Award (#) (1) $4,400,000 $1,600,000 39,840 N / A RSU Award (#) (1) N / A 14,487 (1) Number of shares determined by the weighting of PSUs and RSUs and the average closing stock price over the last 20 trading days prior to the date of grant. As the result of Dr. Anagnost’s one-time Co-CEO and CEO promotion related equity grants, his fiscal 2018 compensation as reflected in the Summary Compensation Table is higher than his expected targeted annual compensation in fiscal 2019. Vesting of PSUs in 2018 In March 2018, the Committee reviewed and certified the attainment levels for performance measures for the third tranche of PSUs awarded in March 2015, the second tranche of PSUs awarded in March 2016, and the first tranche of PSUs awarded in March 2017. For each award, the Committee measured the following performance: Fiscal 2018 financial goal attainment versus target was based on the criteria below: Performance Metric Total ARR Net Total Subscription Additions Total Subscription Renewal Rate Non-GAAP Total Spend Total 2018 Proxy Statement 52 Weighting 40% 30% 15% 15% 100% Actual $2,054M 0.611M 80.9% $2,169M Target $2,050M 0.657M 80.6% $2,175M Funding % 100.8% 89.4% 102.5% 102.1% 97.8% Autodesk’s Relative TSR was based on: Performance Period Fiscal 2016 - Fiscal 2018 Fiscal 2017 - Fiscal 2018 Fiscal 2018 Autodesk TSR (1) 98.5% 142.9% 37.3% (2) Percentile Rank 66th 85th 40th Payout Multiplier 113% 120% 92% _________________ (1) Based on 31 -day average closing stock price (+/- 15 days) at the beginning of each period and the end of fiscal 2018. (2) Fiscal 2016 - fiscal 2018 and fiscal 2017 - fiscal 2018 relative TSR was measured against companies in the S&P Computer Software Select Index. In fiscal 2017 this index was discontinued. Consequently, for outstanding PSUs, Autodesk compared TSR relative to the companies which comprised the index as of the date of its discontinuation. For PSUs granted in fiscal 2018, relative TSR was measured against companies in the S&P North American Technology Software Index with a market capitalization over $2B. The combination of financial attainment and Relative TSR results yielded the following PSU attainments: s l a i r e t a M y x o r P March 2015 3rd Tranche Fiscal 2016 Award March 2016 2nd Tranche Fiscal 2017 Award March 2017 1st Tranche Fiscal 2018 Award : : : X Fiscal 2016 - Fiscal 2018 Relative TSR 113% Fiscal 2018 Financial Goal Attainment X Fiscal 2017 - Fiscal 2018 Relative TSR 120% 97.8% X Fiscal 2018 Relative TSR 92% = = = Percent of PSU Target Award 110.5% Percent of PSU Target Award 117.4% Percent of PSU Target Award 90.0% Based on this performance, the PSU awards were earned as follows: March 2015 Award 3rd Tranche March 2016 Award 2nd Tranche March 2017 Award 1st Tranche Target Number of PSUs Actual Number of PSUs Earned Target Number of PSUs Actual Number of PSUs Earned Target Number of PSUs Actual Number of PSUs Earned 6,105 11,880 6,105 4,455 26,730 6,105 4,455 6,746 13,127 6,746 4,922 29,536 6,746 4,922 6,628 7,149 5,362 4,766 28,597 7,149 4,766 7,781 8,392 6,294 5,595 33,572 8,392 5,595 5,951 4,959 3,967 2,975 N/A 5,951 2,975 5,355 4,463 3,570 2,677 N/A 5,355 2,677 Andrew Anagnost R. Scott Herren Steve M. Blum Pascal W. Di Fronzo Former Executive Officers: Carl Bass Amar Hanspal Jan Becker 2018 Proxy Statement 53 March 2018 Equity Awards In March 2018, the Committee approved a mix of PSUs and RSUs for each of our NEOs. The fiscal 2019 PSU awards are structured in the same manner as the fiscal 2018 PSU awards, however financial performance will be measured based on the following metrics and weighting: Performance Metric Total ARR Free Cash Flow Per Share NEO Weighting 70% 30% P r o x y M a t e r i a l s The Committee selected these metrics to align our incentives with key drivers of stockholder value and success during fiscal 2019. The Committee’s choice of metrics was also driven by stockholder feedback to minimize the overlap of metrics between the bonus and equity plans and include a cash flow metric. The financial performance results will continue to be adjusted based on Autodesk’s Relative TSR over one-, two- and three-year performance periods. Relative TSR will be measured against companies in the S&P North American Technology Software Index with a market capitalization over $2B. Our CEO’s and NEOs’ annual awards are broken down as follows: Executive Benefits Welfare and Other Employee Benefits Autodesk has established a tax-qualified Section 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to length of service. The plan is intended to qualify under Section 401(a) of the Code so that contributions by employees, and income earned on plan contributions, generally are not taxable to employees until withdrawn. Other benefits provided to the executive officers are the same as those provided to all of Autodesk’s full-time employees. These include medical, dental, and vision benefits, health and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance, and basic life insurance coverage. Autodesk also makes contributions to health savings plans on behalf of any employee who is a participant in a plan with a high deductible feature. 2018 Proxy Statement 54 Perquisites and Other Personal Benefits Autodesk does not, as a general practice, provide material benefits or special considerations to the executive officers that it does not provide to other employees. However, from time to time, when deemed appropriate by the Committee, certain executive officers receive perquisites and other personal benefits that are competitively prudent or otherwise in Autodesk’s best interest. s l a i r e t a M y x o r P Employment Agreement and Post-Employment Compensation Transition Agreement with Former CEO On February 6, 2017, Mr. Bass and the Company entered into a Transition and Separation Agreement (the “Transition Agreement”) under which Mr. Bass resigned from his positions as the Company’s President and Chief Executive Officer. Under the Transition Agreement, Mr. Bass served as a part-time employee in the role of special advisor to the Co-CEOs through May 7, 2017. During the transition period, Mr. Bass received a monthly payment of $12,500 from the Company and continued health benefits. The Transition Agreement superseded and replaced Mr. Bass’ employment agreement. The Transition Agreement provided Mr. Bass with the same compensation that he would have received under his employment agreement’s “voluntary termination related to a transition” provisions. The provisions provided for compensation as if his employment had been involuntarily terminated other than in connection with a change in control. The compensation consisted of: (i) payment of two (2.0) times of his base salary for 12 months; (ii) accelerated vesting of his unvested RSUs; (iii) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); and (iv) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 12 months following termination or the date Mr. Bass becomes covered under similar health plans. This compensation was conditioned upon re-execution and non- revocation by Mr. Bass of a general release of claims and continued compliance with certain non-competition, non-solicitation, non-disparagement and confidentiality covenants set forth in the Transition Agreement. Employment Agreements with New CEO In connection with Dr. Anagnost’s appointment as CEO, Dr. Anagnost entered into an employment agreement with the Company which defines the respective rights of the Company and Dr. Anagnost. This agreement provided general protection for Dr. Anagnost in the event of termination without cause or resignation for good reason and has been a valuable tool to incent Dr. Anagnost to become our CEO. The protections afforded to him in the event of a change of control provide Autodesk with an increased level of confidence that he would remain with Autodesk up to and for some period of time after a change of control. Continuity in the event of a change in control ultimately enhances stockholder value, and discourages benefits simply for consummating a change in control. Details of the agreement with Dr. Anagnost can be found beginning on page 71. Separation Agreement with Former Co-CEO Following a 30-year career with the Company, most recently as Co-CEO, Mr. Hanspal entered into a separation agreement with the Company on June 19, 2017. Under the separation agreement, Mr. Hanspal received the following separation payments and benefits: (i) a lump-sum payment of an amount equal to one and one-half (1.5) times the sum of his annual base salary; (ii) a lump-sum payment in an amount equal to one and one-half (1.5) times his target annual incentive; (iii) accelerated vesting of his unvested RSUs that would have vested had he remained employed through July 1, 2018; (iv) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); (v) a lump-sum payment in an amount equal 2018 Proxy Statement 55 P r o x y M a t e r i a l s to the estimated cost of his continued health benefits under COBRA for eighteen (18) months, as grossed up for taxes; and (vi) a lump-sum payment in respect of an untaken vacation leave benefit of six weeks of base salary. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. In approving the separation agreement, the Committee took into account Mr. Hanspal’s years of service in senior management positions, as well as his continued support and contributions to the Company through a time of major operational transformation, particularly in light of the uncertainty resulting from recent changes to the Board and executive team. This compensation was conditioned upon re-execution and non- revocation by Mr. Hanspal of a general release of claims and continued compliance with non-competition, employee non- solicitation, non-disparagement and confidentiality covenants set forth in the separation agreement as well as the provision of transition services. Separation Agreement with Former SVP, CHRO Following a 25-year career with the Company and having helped the Board and management transition through fiscal 2018 management changes, Ms. Becker entered into a separation agreement with the Company on October 3, 2017. Under the separation agreement, Ms. Becker received the following separation payments and benefits: (i) a lump-sum payment of an amount equal to one (1.0) times the sum of her annual base salary; (ii) accelerated vesting of her unvested RSUs that would have vested had she remained employed through July 1, 2018 plus accelerated vesting of the final tranche of the time-based RSUs granted on March 10, 2016 which otherwise would have vested on March 25, 2019; (iii) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); and (iv) a lump-sum payment in an amount equal to the estimated cost of her continued health benefits under COBRA for five (5) months, as grossed up for taxes. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. In approving the separation agreement, the Committee took into account Ms. Becker’s years of service in senior management positions, and her continued support and contributions to the Company through a time of major operational transformation, particularly in light of the uncertainty resulting from recent changes to the Board and executive team. This compensation was conditioned upon re- execution and non-revocation by Ms. Becker of a general release of claims and continued compliance with non-competition, employee non-solicitation, non-disparagement and confidentiality covenants set forth in the separation agreement as well as the provision of transition services. Change in Control Program To ensure the continued service of key executive officers in the event of a potential change in control of Autodesk, the Board has adopted the Autodesk, Inc. Executive Change in Control Program. Each of the NEOs, among other employees, is a participant in the program. The payments and benefits available under this program are designed to encourage the continued services of the NEOs in the event of a potential change in control of Autodesk and to allow for a smooth leadership transition thereafter. Further, these arrangements are intended to provide incentives to the NEOs to execute strategic initiatives that are aligned with shareholder value creation, even if these initiatives may result in the elimination of a NEO’s position. The Executive Change in Control Program provides continuity in the event of a change in control transaction, which is designed to further enhance stockholder value. Payment and benefits under the Executive Change in Control Program are provided only in the event of a qualifying termination of employment following a change in control (“double trigger”). Autodesk does not offer tax reimbursement or “gross-up” payments under the Executive Change in Control Program. The material terms and conditions of the Executive Change in Control Program, as well as an estimate of the potential payments and benefits payable in the event of a termination of employment in connection with a change in control of Autodesk, are set forth in “Change-in-Control Arrangements and Employment Agreements” below. 2018 Proxy Statement 56 Leading Compensation Governance Practices Autodesk’s executive compensation objectives are supported by policies and strong governance practices that align executives’ interests with the interests of our stockholders. Some of the program’s most notable features are highlighted in the table and summarized below. Robust stockholder outreach program No hedging Yes No Large percentage of NEO total pay tied to achievement of critical financial and stockholder value creation Representative peer group Significant stock ownership requirements Clawback policy Double-trigger change in control arrangements with no excise tax gross-up Equity award grant policy Effective risk management Independent compensation committee and consultant Mandatory Stock Ownership Guidelines Prohibition on option re-pricing No executive benefits and limited perquisites s l a i r e t a M y x o r P The Board believes that stock ownership by the executive officers is important to tie the risks and rewards inherent in stock ownership to the executive officers, and has adopted mandatory guidelines for stock ownership by executive officers. In March 2018, the Committee amended the guidelines to measure ownership as a multiple of base salary as opposed to a fixed number of shares. In establishing these guidelines, the Committee referenced competitive market practices. These mandatory ownership guidelines require all executive officers to hold shares of Autodesk’s Common Stock equivalent in value to a multiple of his or her base salary at the appropriate executive officer level. This is intended to create clear guidelines that tie a portion of the executive officer’s net worth to the performance of Autodesk’s stock price. The current stock ownership guidelines are as follows: Multiple of Base Salary CEO 6.0 times Executive Vice President 3.0 times Senior Vice President 3.0 times Executive officers have four years from the later of either (i) March 2017 or (ii) their hire or promotion to a new, higher-level position, to satisfy the required level of stock ownership. For purposes of satisfying the required stock ownership level, shares of Common Stock subject to outstanding RSU awards are counted as shares owned. Each of the NEOs satisfies the mandatory stock ownership guidelines. Clawback Policy Executive officer cash incentive-based compensation may be recovered at the discretion of the Board if an executive officer has engaged in fraudulent or other intentional misconduct and the misconduct caused a material restatement of our financial statements. 2018 Proxy Statement 57 Derivatives Trading and Anti-Hedging Policy Executive officers, members of the Board, and all other employees are prohibited from investing in derivative securities related to Autodesk’s Common Stock and engaging in short sales or other short-position transactions in shares of Autodesk’s Common Stock. This policy does not restrict ownership of company-granted awards, such as options to purchase shares of Common Stock or PSU or RSU awards, which have been granted by the Committee. Autodesk’s insider trading policy prohibits the trading of derivatives or the hedging of Autodesk’s common equity securities by all employees, including the executive officers, and members of the Board. Equity Award Grant Policy P r o x y M a t e r i a l s All equity awards granted to the executive officers are approved by the Committee. Approval of the equity awards for the executive officers generally occurs at the Committee’s regularly scheduled quarterly meetings. In addition to these meetings, the Committee granted RSU awards to Dr. Anagnost and Mr. Hanspal in February 2017 for serving as Co-CEOs and granted PSU and RSU awards to Dr. Anagnost in June 2017 upon his promotion to President and CEO. Effective Risk Management Each year, the Committee evaluates Autodesk’s compensation-related risk profile and the Committee has concluded that our fiscal 2018 compensation policies and practices did not create risks that were reasonably likely to have a material adverse effect on Autodesk. Regulatory Considerations and Practices Autodesk continuously reviews and evaluates the impact of the tax laws and accounting practices and related interpretations on the executive compensation program. For example, the Committee considers Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), which results in recognition of compensation expense for share-based payment awards, and Section 409A of the Code, which affects deferred compensation arrangements, as it evaluates, structures, and implements changes to the program. Deductibility Limitation Section 162(m) of the Code, as amended by the recently-enacted Tax Cuts and Jobs Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to NEOs, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date. In the past, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as performance-based. Our compensation programs were designed to permit the Company to qualify for the performance-based exception, although the Company reserved the right to pay compensation that did not qualify as performance-based. While the Committee has considered the deductibility of compensation as a factor in making compensation decisions, it has retained the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation would not be fully tax-deductible. The Committee is continuing to assess the impact of Section 162(m) of the Code, as amended, on our compensation programs. 2018 Proxy Statement 58 Taxation of Deferred Compensation Section 409A of the Code imposes significant additional taxes in the event an executive officer, director, or service provider receives “deferred compensation” that does not satisfy the restrictive conditions of the provision. Section 409A applies to a wide range of compensation arrangements, including traditional nonqualified deferred compensation plans, certain equity awards, and separation arrangements. To assist employees with avoiding additional taxes under Section 409A, Autodesk has structured equity awards in a manner intended to comply with the applicable Section 409A conditions. Taxation of “Golden Parachute” Payments Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to an excise tax if, in connection with a change in control, they receive payments or benefits that exceed certain prescribed limits. In addition, the relevant company or a successor may forfeit a deduction on the amounts subject to this additional tax. Autodesk did not provide any executive officer with a “gross-up” or other reimbursement payment for any tax liability the executive might owe as a result of the application of Sections 280G or 4999 during fiscal 2017. In addition, Autodesk has not agreed and is not otherwise obligated to provide any NEO with such a “gross-up” or other reimbursement or to otherwise address the application of Sections 280G or 4999 in connection with payments or benefits arising from a change in control. s l a i r e t a M y x o r P Accounting for Stock-Based Compensation Autodesk follows ASC Topic 718 for stock-based compensation awards. ASC Topic 718 requires Autodesk to measure the compensation expense for all share-based payment awards made to employees (including executive officers) and members of the Board, including options to purchase shares of Common Stock, based on the grant date “fair value” of these awards. Fair value is calculated for accounting purposes and reported in the compensation tables below, even though the executive officers and directors may never realize any value from their awards. ASC Topic 718 also requires Autodesk to recognize the compensation cost of these share-based payment awards in the income statements over the period that an employee or director is required to render service in exchange for the stock option or other award. Report of the Compensation Committee The Compensation and Human Resources Committee of the Board of Directors, which is composed solely of independent members of the Board of Directors, assists the Board in fulfilling its responsibilities regarding compensation matters and, pursuant to its Charter, is responsible for determining the compensation of Autodesk’s executive officers. The Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement as required by Item 402(b) of Regulation S-K with Autodesk’s management team. Based on this review and discussion, the Compensation and Human Resources Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. COMPENSATION AND HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS Mary T. McDowell, Chair Reid French Stacy J. Smith 2018 Proxy Statement 59 P r o x y M a t e r i a l s Summary Compensation Table and Narrative Disclosure This narrative discussion, as well as the table and footnotes below, summarizes our named executive officers’ compensation for fiscal 2018, 2017 and 2016. The named executive officers are Andrew Anagnost (President and Chief Executive Officer), R. Scott Herren (Senior Vice President and Chief Financial Officer) and the next most highly compensated individuals who were serving as executive officers of Autodesk on January 31, 2018, the last day of our most recent fiscal year. Autodesk did not have a fifth executive officer serving as of January 31, 2018. Named executive officers also include Carl Bass (Former President and Chief Executive Officer), Amar Hanspal (Former Co-Chief Executive Officer, Chief Product Officer and SVP, PDG) and Jan Becker (Former SVP, Chief Human Resources Officer and Corporate Real Estate). For information on our compensation objectives, see the discussion under the heading “Compensation Discussion and Analysis.” Salary Named executive officers are paid a cash-based salary. We did not provide equity or other non-cash items to our named executive officers as salary compensation during fiscal 2018, 2017 and 2016. Bonus This column represents payments made to our named executive officers for amounts that relate to: signing bonuses, as in the case of Mr. Herren, who received a sign-on bonus paid in two equal $75,000 installments, with the second installment paid in fiscal 2016; and other miscellaneous amounts, such as payments made in recognition of years of service as part of an Autodesk company-wide program. Stock Awards Amounts shown in this column do not reflect compensation actually received by our named executive officers. Instead, the amounts reported represent the aggregate grant date fair values of PSU awards and RSU awards, as determined pursuant to ASC Topic 718. For Mr. Hanspal and Ms. Becker, amounts also include the accounting expense for accelerated vesting of previously granted RSUs and continued vesting of previously granted PSUs in connection with their separation of service from the Company. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in our fiscal 2018 Annual Report on Form 10-K filed on March 22, 2018. Equity and Non-Equity Incentive Plan Compensation Non-equity incentive plan compensation represents amounts earned for services performed during the relevant fiscal year pursuant to our short-term cash incentive plan ("EIP") for all executive officers shown. The amounts shown in the Non-Equity Incentive Plan Compensation column below reflect the total cash amounts awarded. Cash amounts awarded under the EIP are payable in the first quarter of the following fiscal year. All Other Compensation This column represents all other compensation for the relevant fiscal year not reported in the previous columns, such as severance payments, payment of relocation and temporary housing expenses, reimbursement of certain tax expenses, authorized familial travel and gifts in connection with business trips, Autodesk’s matching contributions to pre-tax savings plans, insurance premiums, and personal gifts. Generally, unless the items included in this category exceed the greater of $25,000 or 10% of the total amount of perquisites received by a given named executive officer, individual perquisites are not separately identified and quantified. 2018 Proxy Statement 60 The Summary Compensation Table below presents information concerning the total compensation of our named executive officers for fiscal 2018, 2017 and 2016. Mr. Di Fronzo and Ms. Becker were not named executive officers in fiscal 2017 and 2016 so their compensation is not presented for those periods. Fiscal Year 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 Salary ($) 659,846 423,231 416,769 586,446 574,385 570,000 558,480 547,033 472,577 488,565 Stock Awards ($) (j) Bonus ($)(i) 1,200 10,601,052 4,272,160 2,256,279 3,535,328 4,335,028 778,219 2,469,381 3,882,746 2,097,062 1,915,351 — — — — 75,000 900 — — — Non-Equity Incentive Plan Compensation ($) 724,711 285,390 311,850 430,565 387,315 423,225 410,027 368,872 470,355 358,682 Total ($) All Other Compensation ($) 358,897 12,345,706 5,034,940 54,159 3,030,836 45,938 4,590,524 38,185 5,384,874 88,146 2,074,270 227,826 3,508,369 69,581 4,935,422 136,771 3,156,423 116,429 2,768,182 5,584 s l a i r e t a M y x o r P 2018 2017 2016 2018 2017 2016 2018 57,500 1,108,461 1,094,508 241,154 554,231 467,155 309,723 5,673,104 — 8,316,948 1,000 9,615,521 — — 13,593,723 4,392,077 2,256,279 7,420,097 1,000 — 1,500 — 1,289,750 1,383,250 — 373,725 349,241 — 2,331,001 8,061,605 7,620 10,723,779 83,398 12,176,677 1,804,771 15,639,648 5,327,826 3,081,890 8,208,926 6,793 9,215 477,606 Name and Principal Position (a) Andrew Anagnost Chief Executive Officer and President (b) R. Scott Herren, Senior Vice President and Chief Financial Officer (c) Steven M. Blum, Senior Vice President, Worldwide Field Operations (d) Pascal W. Di Fronzo, Senior Vice President, Corporate Affairs, General Counsel and Secretary (e) Former Executive Officers: Carl Bass, Former Chief Executive Officer and President (f) Amar Hanspal, Former Co-CEO, Chief Product Officer and SVP, PDG (g) Jan Becker, Former Senior Vice President, Chief Human Resources Officer and Corporate Real Estate (h) _____________ (a) Mr. Bass stepped down as President and CEO effective February 8, 2017 but continued as a member of the Board. The Board appointed Dr. Anagnost and Mr. Hanspal as Co-CEOs until Dr. Anagnost was appointed President and CEO effective June 19, 2017. Mr. Hanspal separated from the Company in July 2017 and Ms. Becker separated from the Company in October 2017. (b) Dr. Anagnost's fiscal 2018 salary reflects a partial year of service as SVP and a partial year of service as CEO. Dr. Anagnost's other compensation includes Co-CEO stipends of $305,667, payment of legal fees, authorized executive travel and gifts in connection with a business trip, tax gross-ups of $17,141 for certain perquisites, the 401(k) plan match, and standard health benefits. (c) Mr. Herren's fiscal 2018 other compensation includes authorized executive travel and gifts in connection with a business trip, tax gross-ups of $15,659 for certain perquisites, the 401(k) plan match and standard health benefits. (d) Mr. Blum’s fiscal 2018 other compensation includes $36,921 authorized executive and spouse travel and gifts in connection with a business trip, tax gross-ups of $27,116 for certain perquisites, the 401(k) plan match, and standard health benefits. (e) Mr. Di Fronzo's fiscal 2018 other compensation includes the 401(k) plan match and standard health benefits. (f) Mr. Bass' fiscal 2018 salary reflects a partial year of service. Mr. Bass' fiscal 2018 stock awards include a $250,000 RSU for service as a non-employee director of the Board. Mr. Bass' fiscal 2018 other compensation includes separation payments of $2,200,000, director retainer fees of $45,245, payment of legal fees, tax gross-ups of $27,195 for certain perquisites, COBRA payments and standard health benefits. 2018 Proxy Statement 61 (g) Mr. Hanspal's fiscal 2018 salary reflects a partial year of service. Mr. Hanspal's fiscal 2018 stock awards include $8,707,478 relating to an accounting expense in connection with the acceleration of RSUs and continued vesting of PSUs based on Company performance. Mr. Hanspal's fiscal 2018 other compensation includes separation payments of $1,507,212, Co-CEO stipends of $218,333, COBRA payments, tax gross-ups of $37,928, the 401(k) plan match and standard health benefits. (h) Ms. Becker's fiscal 2018 salary reflects a partial year of service. Ms. Becker's fiscal 2018 stock awards include $5,504,745 relating to an accounting expense in connection with the acceleration of RSUs and continued vesting of PSUs based on Company performance. Ms. Becker's fiscal 2018 other compensation includes separation payments of $453,000, COBRA payments, tax gross- ups of $11,623 for certain perquisites, the 401(k) plan match and standard health benefits. Fiscal 2018 amounts for Dr. Anagnost, Mr. Blum and Ms. Becker were payments made in recognition of years of service as part of Autodesk's company-wide program. (i) (j) Amounts consist of the aggregate grant date value for PSU and RSU awards computed in accordance with FASB ASC Topic 718, based on target levels of achievement (the probable outcome at grant) in the case of PSUs. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 22, 2018. The maximum value of PSU awards generally is capped at 180% of target. The PSUs granted to Dr. Anagnost in June 2017 which vest based on fiscal 2020 performance are capped at 200% of target. For Mr. Hanspal and Ms. Becker, amounts also include the accounting expense for accelerated vesting of previously granted RSUs and continued vesting of previously granted PSUs in connection with their separation of service from the Company. The maximum values for PSU awards granted in fiscal 2018 are as follows: Dr. Anagnost: $11,641,004; Mr. Herren: $3,328,939; Mr. Blum: $2,640,569; Mr. Di Fronzo: $2,094,395; Mr. Bass: $9,761,596; Mr. Hanspal: $4,228,435; and Ms. Becker: $2,942,932. Actual PSU awards earned in fiscal 2018 by the named executive officers are shown in “Long-Term Incentive Compensation" in the “Compensation Discussion and Analysis.” P r o x y M a t e r i a l s Grants of Plan-Based Awards in Fiscal 2018 Grants of plan-based awards reflect grants made to our named executive officers under our non-equity incentive plans and equity compensation plans during fiscal 2018. The following tables include potential threshold, target and maximum amounts payable under our short-term cash incentive plan (EIP) for performance during fiscal 2018, and do not constitute compensation on top of the amounts included in the Summary Compensation Table. However, these amounts do not reflect amounts actually earned for fiscal 2018. The following table also includes amounts relating to PSUs and RSUs issued under our 2012 Stock Plan. For Mr. Hanspal and Ms. Becker, amounts also include the accounting expense for accelerated vesting of RSUs and continued vesting of PSUs in connection with their separation of service from the Company. See “Change in Control Arrangements and Employment Agreements” below for a further description of certain terms relating to these awards. See “Annual Incentive Award Decisions" and “Long-Term Incentive Compensation" in the “Compensation Discussion and Analysis” section above for actual amounts earned in fiscal 2018 by the named executive officers and further discussion of the role of plan-based and other awards in our overall executive compensation program. 2018 Proxy Statement 62 The following tables present information concerning grants of plan-based awards to each of the named executive officers during fiscal 2018: Estimated Future Payouts Under Non- Equity Incentive Plan Awards (a) Estimated Future Payouts Under Equity Incentive Plan Awards (b) Name Andrew Anagnost R. Scott Herren Steve M. Blum Pascal W. Di Fronzo Grant Date Threshold ($) Target ($) 2/23/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 6/19/2017 6/19/2017 (c) 6/19/2017 (c) 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 3/14/2017 — — — — — — — — — — — — — — — — — — — — — — — — Maximum ($) — — — — — — — — 1,407,926 — — — — 836,475 — — — — 796,575 — — — — 696,825 — — — — — — — — 741,014 — — — — 440,250 — — — — 419,250 — — — — 366,750 Threshold ($) Target (#) — — — — 6,105 — 6,628 — 5,951 — — — — 21,731 — 18,109 Maximum (#) — — 10,989 11,930 10,711 — 43,462 36,218 Grant Date Fair Value of Stock Awards ($) (e) All Other Stock Awards: Number of Shares of Stock (#)(d) 17,936 1,562,226 17,502 1,503,597 579,853 668,500 519,522 14,487 1,537,940 — 2,306,963 — 1,922,451 — — — s l a i r e t a M y x o r P — — — 11,880 7,149 — 4,959 — — — — — — — — — — 6,105 5,362 3,967 — 4,455 4,766 2,975 — 21,384 12,868 8,926 — 10,989 9,651 7,140 — 8,019 8,578 5,355 14,585 1,252,997 — 1,128,362 721,048 — 432,921 — 11,668 1,002,398 579,853 540,811 346,319 — — — 8,751 — — — 751,798 423,136 480,699 259,718 2018 Proxy Statement 63 Estimated Future Payouts Under Non-Equity Incentive Plan Awards (a) Estimated Future Payouts Under Equity Incentive Plan Awards (b) All Other Stock Awards: Number of Shares of Stock (#)(d) Grant Date Fair Value of Stock Awards ($) (e) Name Grant Date Threshold ($) Target ($) Maximum ($) Threshold ($) Target (#) Maximum (#) P r o x y M a t e r i a l s Former Executive Officers: Carl Bass 3/14/2017 3/14/2017 6/14/2017 2/23/2017 Amar Hanspal (f) 3/14/2017 3/14/2017 3/14/2017 3/14/2017 6/19/2017 6/19/2017 6/19/2017 6/19/2017 6/19/2017 6/19/2017 6/19/2017 6/19/2017 Jan Becker (f) 3/14/2017 3/14/2017 3/14/2017 3/14/2017 9/30/2017 9/30/2017 9/30/2017 9/30/2017 9/30/2017 9/30/2017 9/30/2017 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 424,875 — — — — — — — — — — — 339,750 — — — — — — — — — — — — — — — — — 807,262 — — — — — — — — — — — 645,525 — 26,730 — 28,597 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 7,149 5,951 6,105 6,105 7,149 5,951 — — — — — — 4,455 4,766 2,975 4,455 4,766 2,975 — — — — 48,114 51,474 — — — 12,868 10,711 10,989 10,989 12,868 10,711 — — — — — — 8,019 8,578 5,355 8,019 8,578 5,355 — — — — — 2,538,815 — 2,884,293 249,995 2,354 17,936 1,562,226 17,502 1,503,597 721,048 — 519,522 — 579,853 — 750,121 — 904,706 — 694,303 — 648,107 6,105 7,149 758,938 22,870 2,427,879 17,936 1,904,086 619,337 5,834 751,798 8,751 423,136 — 480,699 — 259,718 — 600,623 — 649,701 — 384,638 — 4,455 506,222 9,532 1,083,121 17,152 1,948,982 331,459 2,917 ________________ (a) Reflects target and maximum dollar amounts payable under the EIP for performance during fiscal 2018, as described in “Compensation Discussion and Analysis—Elements of Executive Compensation Programs.” “Threshold” refers to the minimum amount payable for a certain level of performance; “Target” refers to the amount payable if specified performance targets are reached; and “Maximum” refers to the maximum payout possible. (b) Represents shares of our Common Stock subject to each of the PSU awards granted to the named executive officers in fiscal 2018 under our 2012 Stock Plan. These columns show the awards that were possible at the threshold, target and maximum levels of performance. Shares were to be earned based upon total ARR, net total subscription additions, total subscription renewal rate and non-GAAP total spend goals for fiscal 2018 adopted by the Compensation Committee (the “Annual Financial Results”), as well as TSR compared against the companies in the S&P Computer Software Select Index or the S&P North American Technology Software Index with a market capitalization over $2B (“Relative TSR”). In each case, Annual Financial Results for the relevant performance period could result in PSU attainment, subject to the Relative TSR modifier, of 0%-150% of target. Once that Annual Financial Results percentage is established, it is multiplied by a percentage ranging from 80%-120%, depending on Autodesk's Relative TSR performance for the period. Ultimately, PSUs could be earned from 0%-180% of target. Actual PSU awards earned in fiscal 2018 by the named executive officers under this program are shown in “Long-Term Incentive Compensation” in the “Compensation Discussion and Analysis.” 2018 Proxy Statement 64 (c) Represents shares of our Common Stock subject to PSU awards granted to the CEO on June 19, 2017. For these PSU grants, the shares will vest based on the Company’s fiscal 2020 free cash flow per share and ARR performance. Fiscal 2020 free cash flow per share and ARR performance could result in PSU attainment of 0%-200% of target. RSUs granted on February 23, 2017 vest as to 100% of the total shares on July 1, 2018. RSUs granted on March 14, 2017 vest in three equal annual installments beginning on the first anniversary of the date of grant. RSUs granted to Dr. Anagnost on June 19, 2017 vest in three equal annual installments beginning on the first anniversary of the date of grant. (d) Reflects the grant date fair value of each equity award. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 22, 2018. These amounts do not correspond to the actual value that will be realized by the named executive officers upon the vesting of RSUs or the sale of the Common Stock underlying such awards. (e) For Mr. Hanspal and Ms. Becker, RSUs and PSUs shown as granted on June 19, 2017 and September 30, 2017, respectively, represent the modification of pre-existing awards in connection with their separation of service from the Company. s l a i r e t a M y x o r P 2018 Proxy Statement 65 Outstanding Equity Awards at Fiscal 2018 Year End The following table presents information concerning outstanding unvested RSU and PSU awards for each named executive officer as of January 31, 2018. This table includes RSUs and PSUs granted under the 2012 Stock Plan. Unless otherwise indicated, all RSU awards vest in three equal annual installments beginning on the first anniversary of the date of grant. Number of Shares of Stock That Have Not Vested (#) Stock Awards Market Value of Shares of Stock That Have Not Vested ($) (a) Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested ($) 6,746 (b) 6,105 7,781 (c) 13,255 22,870 (d) 17,936 (e) 5,355 (f) 17,502 14,487 21,731 (g) — 13,127 (b) 14,298 8,392 (c) 22,870 (d) 14,585 4,463 (f) 6,746 (b) 6,105 6,294 (c) 10,723 22,870 (d) 3,570 (f) 11,668 4,922 (b) 4,455 9,532 5,595 (c) 17,152 (d) 2,677 (f) 8,751 779,973 705,860 899,639 1,532,543 2,644,229 2,073,760 619,145 2,023,581 1,674,987 2,512,538 — 1,517,744 1,653,135 970,283 2,644,229 1,686,318 516,012 779,973 705,860 727,712 1,239,793 2,644,229 412,763 1,349,054 569,082 515,087 1,102,090 646,894 1,983,114 309,515 1,011,791 — — — — — — — — — — 18,109 (g) — — — — — — — — — — 2,093,763 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Grant Date 3/12/2015 3/12/2015 3/10/2016 3/10/2016 6/1/2016 2/23/2017 3/14/2017 3/14/2017 6/19/2017 6/19/2017 6/19/2017 3/12/2015 3/10/2016 3/10/2016 6/1/2016 3/14/2017 3/14/2017 3/12/2015 3/12/2015 3/10/2016 3/10/2016 6/1/2016 3/14/2017 3/14/2017 3/12/2015 3/12/2015 3/10/2016 3/10/2016 6/1/2016 3/14/2017 3/14/2017 Name Andrew Anagnost P r o x y M a t e r i a l s R. Scott Herren Steve M. Blum Pascal W. Di Fronzo 2018 Proxy Statement 66 Number of Shares of Stock That Have Not Vested (#) Stock Awards Market Value of Shares of Stock That Have Not Vested ($) (a) Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested ($) 29,536 (b) 33,572 (c) 2,354 (h) 6,746 (b) 8,392 (c) 5,355 (f) 4,922 (b) 5,595 (c) 2,677 (f) 3,414,952 3,881,595 272,169 779,973 970,283 619,145 569,082 646,894 309,515 — — — — — — — — — — — — — — — — — — Grant Date 3/12/2015 3/10/2016 6/14/2017 3/12/2015 3/10/2016 3/14/2017 3/12/2015 3/10/2016 3/14/2017 Name Former Executive Officers: Carl Bass Amar Hanspal Jan Becker ________________ (a) Market value of RSUs that have not vested is computed by multiplying (i) $115.62, the closing price on the NASDAQ of Autodesk Common Stock on January 31, 2018, the last trading day of fiscal 2018, by (ii) the number of shares of stock underlying RSU awards. (b) Awards relate to the third-year tranche of PSU awards granted on March 12, 2015 under the 2012 Plan. These PSUs were subject to achievement of total ARR, net total subscription additions, total subscription renewal rate and non-GAAP total spend goals for fiscal 2018 adopted by the Compensation and Human Resources Committee, as well as TSR compared against the companies in the S&P Computer Software Select Index. The third-year tranche of these PSUs were earned as of January 31, 2018 and subject to vest on March 26, 2018. (c) Awards related to the second-year tranche of PSU awards granted on March 10, 2016 under the 2012 Plan. These PSUs were subject to achievement of total ARR, net total subscription additions, total subscription renewal rate and non-GAAP total spend goals for fiscal 2018 adopted by the Compensation and Human Resources Committee, as well as TSR compared against the companies in the S&P Computer Software Select Index. The second-year tranche of these PSUs were earned as of January 31, 2018 and subject to vest on March 26, 2018. (d) RSUs granted on June 1, 2016 vest as to approximately one-third of the total shares on the first anniversary of the date of grant and approximately two-thirds of the total shares upon the second anniversary of the date of grant. (e) RSUs granted on February 23, 2017 vest as to 100% of the total shares on July 1, 2018. (f) Awards related to the first-year tranche of PSU awards granted on March 14, 2017 under the 2012 Plan. These PSUs were subject to achievement of total ARR, net total subscription additions, total subscription renewal rate and non-GAAP total spend goals for fiscal 2018 adopted by the Compensation and Human Resources Committee, as well as TSR compared against the S&P North American Technology Software Index with a market capitalization over $2 billion. The first-year tranche of these PSUs were earned as of January 31, 2018 and subject to vest on March 26, 2018. (g) Awards related to the PSU awards granted on June 19, 2017 under the 2012 Plan. These PSUs are subject to achievement of fiscal 2020 free cash flow per share and ARR goals adopted by the Compensation and Human Resources Committee. The first-year tranche of these PSUs were earned as of January 31, 2018 and subject to vest on March 26, 2018. (h) Non-employee director RSU granted on June 14, 2017 vest as to 100% of total shares on June 12, 2018. s l a i r e t a M y x o r P 2018 Proxy Statement 67 Option Exercises and Stock Vested at Fiscal 2018 Year End The following table presents certain information concerning the exercise of stock options and vesting of stock awards held by each of the named executive officers during fiscal 2018. Named Executive Officer Andrew Anagnost R. Scott Herren Steve M. Blum Pascal W. Di Fronzo Former Executive Officers: Carl Bass Amar Hanspal Jan Becker ______________ P r o x y M a t e r i a l s Option Awards Stock Awards Number of Shares Acquired on Exercise (#) — — 40,872 — — 27,500 — Value Realized on Exercise ($) (a) — — 1,687,274 — — 1,754,744 — Number of Shares Acquired on Vesting (#) 50,816 50,198 44,834 37,436 Value Realized on Vesting ($) (a) 4,691,207 5,101,749 4,174,933 3,460,057 201,286 111,797 71,492 17,954,607 10,998,427 7,449,376 (a) For options exercised, reflects the number of shares acquired upon exercise multiplied by the difference between the closing market price of our Common Stock as reported on the NASDAQ on the date of exercise and the exercise price of the underlying stock option. For stock awards vested, reflects the number of shares acquired on vesting of RSUs or PSUs multiplied by the closing market price of our Common Stock as reported on the NASDAQ on the vesting date. Nonqualified Deferred Compensation for Fiscal 2018 Under our Nonqualified Deferred Compensation Plan, certain United States-based officers (including named executive officers) may defer compensation earned such as salary or awards under the short-term cash incentive plan (EIP). Deferral elections are made by eligible executive officers each year during an “open enrollment” period for amounts to be earned in the following year. Autodesk does not make any contribution for executive officers under the Nonqualified Deferred Compensation Plan. Prior to April 2013, we maintained our Autodesk, Inc. Equity Incentive Deferral Plan, which permitted certain executive officers to defer up to 50% of their EIP award. The following table presents information regarding non-qualified deferred compensation activity for each listed officer during fiscal 2018: Named Executive Officer Andrew Anagnost R. Scott Herren Steve M. Blum Pascal W. Di Fronzo Former Executive Officers: Carl Bass Amar Hanspal Jan Becker _____________ Executive Contributions (Distributions) in Fiscal Year ($) — — 110,662 (14,402 ) 967,313 (43,456 ) (56,503 ) Aggregate Earnings/ (Losses) in Fiscal Year ($) (a) 302,343 — 250,660 52,857 24,789 8,107 2,352 Aggregate Balance At Fiscal Year End ($) 3,067,376 — 1,339,941 239,783 1,809,780 — — (a) None of the earnings or losses in this column are reflected in the Summary Compensation Table because they are not considered preferential or above market. 2018 Proxy Statement 68 CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). The fiscal 2018 annual total compensation of our CEO was $12,345,706. The fiscal 2018 annual total compensation of our median compensated employee was $115,892, and the ratio of these amounts was 106.5 to 1. To identify the median employee, we examined the compensation of all our full- and part-time employees (other than our CEO) as of the last day of our fiscal year. We used target total direct compensation as our consistently applied compensation measure. Target total direct compensation for this purpose consisted of each employee’s estimated salary earnings, target non-equity incentive opportunity for fiscal 2018, and the fair market value price of his or her equity incentive awards granted in fiscal 2018. We also converted all employee compensation, on a country-by-country basis, to U.S. dollars based on the applicable year-end exchange rate. After identifying the median employee, we calculated the annual total compensation for such employee using the same methodology that we used for our named executive officers as set forth in the Summary Compensation Table. The Company had three individuals who served as CEO during fiscal 2018. We elected to use the compensation of Dr. Anagnost, our CEO as of January 31, 2018, for purposes of determining the CEO pay ratio. s l a i r e t a M y x o r P The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation, allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. 2018 Proxy Statement 69 P r o x y M a t e r i a l s Change-in-Control Arrangements and Employment Agreements In an effort to ensure the continued service of our key executive officers in the event of a change-in-control, each of our current executive officers, among other employees, participate in an amended and restated Executive Change in Control Program (the “Program”) that was approved by the Board in March 2006 and amended most recently in December 2016. Dr. Anagnost had a change-in-control provision in his employment agreement, as noted below. Executive Change in Control Program Under the terms of the Program, if, within sixty days prior or twelve months following a "change in control," an executive officer who participates in the Program is terminated without "cause," or voluntarily terminates his or her employment for "good reason" (as those terms are defined in the Program), the executive officer will receive (among other benefits), following execution of a release and non-solicit agreement:  An amount equal to one and one-half times the sum of the executive officer’s annual base salary and average annual bonus, plus the executive officer’s pro-rata bonus, provided the Company bonus targets are satisfied, payable in a lump sum;  Acceleration of all of the executive officer’s outstanding incentive equity awards, including stock options and RSUs; and  Reimbursement of the total applicable premium cost for medical and dental coverage for the executive officer and his or her eligible spouse and dependents until the earlier of 18 months from the date of termination or when the executive officer becomes covered under another employer’s employee benefit plans.  An executive officer who is terminated for any other reason will receive severance or other benefits only to the extent the executive would be entitled to receive them under our then-existing benefit plans and policies. If the benefits provided under the Program constitute parachute payments under Section 280G of the Code and are subject to the excise tax imposed by Section 4999 of the Code, then such benefits will be (1) delivered in full, or (2) delivered to such lesser extent that would result in no portion of the benefits being subject to the excise tax, whichever results in the executive officer receiving the greatest amount of benefits. As defined in the Program, a “change in control” occurs if any person acquires 50% or more of the total voting power represented by voting securities, if Autodesk sells all or substantially all its assets, if Autodesk merges or consolidates with another corporation, or if the composition of the Board changes substantially. Fiscal 2017 RSUs and PSUs During fiscal 2017, the RSUs and PSUs granted to our named executive officers (other than Mr. Bass) provided for accelerated vesting in the event of termination of the named executive officer by the Company without “cause” or by the named executive officer for "good reason" each as defined in the award agreement. The Committee approved the vesting provisions to foster stability and continuity for the leadership team during a time of major operational transformation, particularly in light of the uncertainty that resulted from the fiscal 2017 changes to the Board composition. 2018 Proxy Statement 70 Employment Agreement with Andrew Anagnost In connection with Dr. Anagnost’s appointment as CEO, in June 2017, Dr. Anagnost entered into an employment agreement with the Company which provides for, among other things, certain payments and benefits to be provided to Dr. Anagnost in the event his employment is terminated without “cause” or he resigns for “good reason,” including in connection with a “change of control,” as each such term is defined in Dr. Anagnost's employment agreement. In the event Dr. Anagnost's employment is terminated by Autodesk without cause or if Dr. Anagnost resigns for good reason and in each case such termination is not in connection with a change of control, Dr. Anagnost would receive (i) payment of 200% of his then current base salary for 12 months; (ii) payout of his pro-rata bonus for the fiscal year in which termination occurs, provided Autodesk bonus targets are satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting of all of his then outstanding, unvested equity awards (other than any awards that vest in whole or in part based on performance); (iv) with respect to his then outstanding unvested equity awards that vest in whole or in part based on performance, those awards will vest, as if he had remained continuously employed by Autodesk through the end of the performance period in which his employment is terminated, based on the extent, if any, that the underlying performance criteria for those awards are satisfied for that performance period, as prorated to reflect the number of days in which he was employed during such period; and (v) reimbursement for premiums paid for continued health benefits for Dr. Anagnost and his eligible dependents until the earlier of 12 months following termination or the date Dr. Anagnost becomes covered under similar health plans. In addition, Dr. Anagnost is subject to non-solicitation and non-competition covenants for 12 months following a termination that gives rise to the severance benefits discussed above. s l a i r e t a M y x o r P If, in connection with a change of control, Dr. Anagnost 's employment is terminated by Autodesk without cause or if Dr. Anagnost resigns for good reason, Dr. Anagnost would receive (i) a lump sum payment in an amount equal to 200% of his then current annual base salary and average annual bonus; (ii) payout of his pro-rata bonus for the fiscal year of Autodesk in which termination occurs provided Autodesk bonus targets are satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting of all of his then outstanding unvested equity awards, including awards that would otherwise vest only upon satisfaction of performance criteria; and (iv) reimbursement for premiums paid for continued health benefits for Dr. Anagnost and his eligible dependents until the earlier of 18 months following termination or the date Dr. Anagnost becomes covered under similar health plans. Transition Agreement with Carl Bass On February 6, 2017, Mr. Bass and the Company entered into a Transition and Separation Agreement (the “Transition Agreement”) under which Mr. Bass resigned from his positions as the Company’s President and Chief Executive Officer. Under the Transition Agreement, Mr. Bass served as a part-time employee in the role of special advisor to the Co-CEOs through May 7, 2017. During the transition period, Mr. Bass received a monthly payment of $12,500 from the Company and continued health benefits. The Transition Agreement superseded and replaced Mr. Bass’ employment agreement. The Transition Agreement provided Mr. Bass with the same compensation that he would have received under his employment agreement’s “voluntary termination related to a transition” provisions. The provisions provided for compensation as if his employment had been involuntarily terminated other than in connection with a change in control. The compensation consisted of: (i) payment of two (2.0) times of his base salary for 12 months; (ii) accelerated vesting of his unvested RSUs; (iii) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); and (iv) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 12 months following termination or the date Mr. Bass becomes covered under similar health plans. This compensation was conditioned upon re-execution and non- revocation by Mr. Bass of a general release of claims and continued compliance with certain non-competition, non-solicitation, non-disparagement and confidentiality covenants set forth in the Transition Agreement. 2018 Proxy Statement 71 Separation Agreement with Former Co-CEO Following a 30-year career with the Company, most recently as Co-CEO, Mr. Hanspal entered into a separation agreement with the Company on June 19, 2017. Under the separation agreement, Mr. Hanspal received the following separation payments and benefits: (i) a lump-sum payment of an amount equal to one and one-half (1.5) times the sum of his annual base salary; (ii) a lump-sum payment in an amount equal to one and one-half (1.5) times his target annual incentive; (iii) accelerated vesting of his unvested RSUs that would have vested had he remained employed through July 1, 2018; (iv) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); (v) a lump-sum payment in an amount equal to the estimated cost of his continued health benefits under COBRA for eighteen (18) months, as grossed up for taxes; and (vi) a lump-sum payment in respect of an untaken vacation leave benefit of six weeks of base salary. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. In approving the separation agreement, the Committee took into account Mr. Hanspal’s years of service in senior management positions, as well as his continued support and contributions to the Company through a time of major operational transformation, particularly in light of the uncertainty resulting from recent changes to the Board and executive team. This compensation was conditioned upon re-execution and non- revocation by Mr. Hanspal of a general release of claims and continued compliance with non-competition, employee non- solicitation, non-disparagement and confidentiality covenants set forth in the separation agreement as well as the provision of transition services. P r o x y M a t e r i a l s Separation Agreement with Former SVP, CHRO Following a 25-year career with the Company and having helped the Board and management transition through fiscal 2018 management changes, Ms. Becker entered into a separation agreement with the Company on October 3, 2017. Under the separation agreement, Ms. Becker received the following separation payments and benefits: (i) a lump-sum payment of an amount equal to one (1.0) times the sum of her annual base salary; (ii) accelerated vesting of her unvested RSUs that would have vested had she remained employed through July 1, 2018 plus accelerated vesting of the final tranche of the time-based RSUs granted on March 10, 2016 which otherwise would have vested on March 25, 2019; (iii) vesting of unvested PSUs based on fiscal 2018 Company performance (with the remaining PSUs forfeited); and (iv) a lump-sum payment in an amount equal to the estimated cost of her continued health benefits under COBRA for five (5) months, as grossed up for taxes. These benefits were consistent with competitive practices pertaining to the separation of long-tenured executives. In approving the separation agreement, the Committee took into account Ms. Becker’s years of service in senior management positions, and her continued support and contributions to the Company through a time of major operational transformation, particularly in light of the uncertainty resulting from recent changes to the Board and executive team. This compensation was conditioned upon re- execution and non-revocation by Ms. Becker of a general release of claims and continued compliance with non-competition, employee non-solicitation, non-disparagement and confidentiality covenants set forth in the separation agreement as well as the provision of transition services. Potential Payments Upon Termination or Change in Control The tables below list the estimated amount of compensation payable to each of the named executive officers in the event of voluntary termination, involuntary not-for-cause termination, for cause termination, termination following a change in control, and termination in the event of disability or death of the executive. The amounts shown for Messrs. Bass and Hanspal and Ms. Becker are actual amounts paid based upon their separation agreements. The amounts for all other all named executive officers assume that such termination was effective as of January 31, 2018, and include all components of compensation, benefits and perquisites payable under the Executive Change in Control Program effective during the 2018 fiscal year or pursuant to fiscal 2017 RSUs and PSUs, or, in the case of Dr. Anagnost, pursuant to his employment agreement, discussed above. Estimated amounts for share-based compensation are based on the closing price of our Common Stock on the NASDAQ on Tuesday, January 31, 2018, which was $115.62 per share. The actual amounts for all named executive officers to be paid out can only be determined at the time of such executive’s separation. 2018 Proxy Statement 72 Andrew Anagnost Executive Benefits and Payments Compensation: Base Salary (1) Short-Term Cash Incentive Plan (EIP) (2) Equity Awards (3) Benefits and perquisites: Health Insurance (4) Disability Income (5) Accidental Death or Dismemberment (6) Life Insurance (7) Total Executive Benefits and Payments Upon Separation R. Scott Herren Executive Benefits and Payments Compensation: Base Salary (1) Short-Term Cash Incentive Plan (EIP) (2) Equity Awards (3) Benefits and perquisites: Health Insurance (4) Disability Income (5) Accidental Death or Dismemberment (6) Life Insurance (7) Total Executive Benefits and Payments Upon Separation Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2018 ($) Voluntary Termination on 1/31/2018 ($) Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2018 ($) For Cause Termination on 1/31/2018 ($) Disability on 1/31/2018 ($) Death on 1/31/2018 ($) — — — — — — — 1,600,000 724,711 13,903,999 24,974 — — — — — — — — — — 1,600,000 — — 1,339,671 19,523,246 — 19,523,246 — 19,523,246 37,461 — 24,974 2,769,114 — — — — 2,000,000 — 2,000,000 2,000,000 s l a i r e t a M y x o r P — 16,253,684 — 22,500,378 24,317,334 23,523,246 Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2018 ($) — — 5,123,931 — — — — Voluntary Termination on 1/31/2018 ($) — — — — — — — Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2018 ($) For Cause Termination on 1/31/2018 ($) Disability on 1/31/2018 ($) Death on 1/31/2018 ($) — — — — — — — 880,500 — — 1,038,470 10,696,700 — 10,696,700 — 10,696,700 33,052 — 22,034 2,424,320 — — — — 1,761,000 — 1,761,000 1,174,000 — 5,123,931 — 12,648,722 14,904,054 13,631,700 2018 Proxy Statement 73 Steven M. Blum Voluntary Termination on 1/31/2018 ($) — — — — — — — — P r o x y M a t e r i a l s Executive Benefits and Payments Compensation: Base Salary (1) Short-Term Cash Incentive Plan (EIP) (2) Equity Awards (3) Benefits and perquisites: Health Insurance (4) Disability Income (5) Accidental Death or Dismemberment (6) Life Insurance (7) Total Executive Benefits and Payments Upon Separation Pascal W. Di Fronzo Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2018 ($) — — 4,503,977 — — — — Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2018 ($) For Cause Termination on 1/31/2018 ($) Disability on 1/31/2018 ($) Death on 1/31/2018 ($) — — — — — — — 838,500 — — 1,241,801 9,233,644 — 9,233,644 — 9,233,644 37,585 — — — 25,057 2,741,303 2,000,000 — — — 2,000,000 2,000,000 4,503,977 — 11,351,530 14,000,004 13,233,644 Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2018 ($) — — 3,636,249 — — — — 3,636,249 Voluntary Termination on 1/31/2018 ($) — — — — — — — — Executive Benefits and Payments Compensation: Base Salary (1) Short-Term Cash Incentive Plan (EIP) (2) Equity Awards (3) Benefits and perquisites: Health Insurance (4) Disability Income (5) Accidental Death or Dismemberment (6) Life Insurance (7) Total Executive Benefits and Payments Upon Separation Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2018 ($) For Cause Termination on 1/31/2018 ($) Disability on 1/31/2018 ($) Death on 1/31/2018 ($) — — — — — — — — 733,500 — — 883,398 7,241,049 — 7,241,049 — 7,241,049 36,826 — 24,551 — — — — 2,000,000 — 2,000,000 489,000 8,894,773 9,265,600 9,730,049 2018 Proxy Statement 74 Carl Bass Executive Benefits and Payments (8) Compensation: Base Salary Short-Term Cash Incentive Plan (EIP) Equity Awards Benefits and perquisites: Health Insurance Disability Income Accidental Death or Dismemberment Life Insurance Total Executive Benefits and Payments Upon Separation Amar Hanspal Executive Benefits and Payments (9) Compensation: Base Salary Short-Term Cash Incentive Plan (EIP) Equity Awards Benefits and perquisites: Health Insurance Disability Income Accidental Death or Dismemberment Life Insurance Total Executive Benefits and Payments Upon Separation Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2018 ($) 2,200,000 — 10,391,973 52,117 — — — 12,644,090 Voluntary Termination on 1/31/2018 ($) 888,462 618,750 8,205,731 76,000 — — — 9,788,943 s l a i r e t a M y x o r P 2018 Proxy Statement 75 P r o x y M a t e r i a l s Jan Becker Executive Benefits and Payments (10) Compensation: Base Salary Short-Term Cash Incentive Plan (EIP) Equity Awards Benefits and perquisites: Health Insurance Disability Income Accidental Death or Dismemberment Life Insurance Total Executive Benefits and Payments Upon Separation ______________ Voluntary Termination on 1/31/2018 ($) 453,000 — 5,417,959 18,124 — — — 5,889,083 (1) Base Salary: For Dr. Anagnost, the amounts shown would be paid in accordance with his employment agreement that was in effect as of January 31, 2018. For the other continuing named executive officers, the amounts shown would be paid in accordance with the Executive Change in Control Program effective at the end of the 2018 fiscal year. (2) Short-Term Cash Incentive Plan (EIP): For Dr. Anagnost, the amounts shown would be paid in accordance with his employment agreement that was in effect as of January 31, 2018. For the other continuing named executive officers, the amounts shown would be paid in accordance with the Executive Change in Control Program effective at the end of 2018 fiscal year. These amounts are based on the cash value of the short-term cash incentive plan. (3) Equity Awards: Pursuant to the Company's form of RSU and PSU award agreement, in the case of Disability or Death, unvested time- based RSUs vest in full and unvested PSUs vest at target. For Dr. Anagnost, the amounts shown for other termination scenarios reflect the value of unvested equity awards accelerated in accordance with his employment agreement that was in effect as of January 31, 2018. For the other continuing named executive officers, the amounts shown for other termination scenarios reflect the value of unvested equity awards accelerated in accordance with the Executive Change in Control Program effective at the end of 2018 fiscal year or in accordance with the fiscal 2017 RSUs and PSUs. Reported values are based on the closing price of our Common Stock on January 31, 2018 ($115.62 per share) for RSUs and PSUs and target PSUs. (4) Health Insurance: For Dr. Anagnost, in accordance with his employment agreement that was in effect as of January 31, 2018, these amounts represent the cost of continuing coverage for Dr. Anagnost and his dependents. The amount shown in the Involuntary Not for Cause or Voluntary for Good Reason (Except Change in Control) Termination column reflects twelve months of coverage after separation. The amounts in the Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination column reflect eighteen months of coverage after separation. For the other continuing named executive officers, these amounts represent the cost of continuing coverage for medical and dental benefits for each executive and his or her dependents (i) in the case of the Disability column, for twelve months in accordance with Autodesk's benefits program, and (ii) in the case of the Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination column, for eighteen months after separation in accordance with the Executive Change in Control Program effective at the end of the 2018 fiscal year. (5) Disability Income: Reflects the estimated present value of all future payments to each executive under his or her elected disability program, which represent 100% of base salary for the first 90 days, and then 66- 2/3% of salary thereafter, with a maximum of $20,000 per month, until the age of 67. These payments would be made by the insurance provider, not by Autodesk. (6) Accidental Death or Dismemberment: Reflects the lump-sum amount payable to each executive or his or her beneficiaries by Autodesk’s insurance provider in the event of the executive’s accidental death. There is also a prorated lump sum payment for dismemberment. The amount shown as payable upon dismemberment is based upon the payout for the most severe dismemberment under the plan. (7) Life Insurance: Reflects the lump-sum amount payable to beneficiaries by Autodesk’s insurance provider in the event of the executive’s death. (8) For Mr. Bass, the amounts shown are pursuant to his transition and separation agreement: (i) 200% of his base salary for 12 months; (ii) accelerated vesting of his unvested RSUs; (iii) PSU vesting based upon fiscal 2018 performance; and (iv) premiums paid for continued health benefits for Mr. Bass and his eligible dependents for 12 months. Equity Award reported values are based on the closing price of our Common Stock on May 8, 2017 ($93.39), Mr. Bass' separation date, and PSUs at target; actual value of RSUs and PSUs on vest dates were higher due to stock price and PSU attainment. 2018 Proxy Statement 76 (9) For Mr. Hanspal, the amounts shown are pursuant to his separation agreement: (i) 150% of his annual base salary, plus payment of 100% of salary for a vacation leave benefit of six weeks; (ii) 150% of his target annual incentive; (iii) accelerated vesting of his unvested RSUs that would have vested had he remained employed through July 1, 2018; (iv) PSU vesting based upon fiscal 2018 performance; (v) a lump-sum payment in an amount equal to the estimated cost of his continued health benefits under COBRA for 18 months, as grossed up for taxes. Equity Award reported values are based on the closing price of our Common Stock on July 10, 2017 ($103.74), Mr. Hanspal's separation date, and PSUs at target; actual value of PSUs on vest date was higher due to stock price and PSU attainment. (10) For Ms. Becker, the amounts shown are pursuant to her separation agreement: (i) 100% of her annual base salary; (ii) accelerated vesting of her unvested RSUs that would have vested had she remained employed through July 1, 2018 plus accelerated vesting of the final tranche of the time-based RSUs granted on March 10, 2016 which otherwise would have vested on March 25, 2019; (iii) PSU vesting based upon fiscal 2018 performance; and (iv) a lump-sum payment in an amount equal to the estimated cost of her continued health benefits under COBRA for five months, as grossed up for taxes. Equity Award reported values are based on the closing price of our Common Stock on October 9, 2017 ($117.14), Ms. Becker's separation date, and PSUs at target; actual value of PSUs on vest date was higher due to stock price and PSU attainment. Compensation of Directors During fiscal 2018, our non-employee directors were eligible to receive the annual compensation set forth below: Member of the Board of Directors Non-executive Chairman of the Board Chair of the Audit Committee Chair of the Compensation and Human Resources Committee Chair of the Corporate Governance and Nominating Committee $75,000 and RSUs ($250,000 equivalent) $65,000 an additional an additional an additional an additional $25,000 $20,000 $10,000 The annual compensation cycle for non-employee directors begins on the date of the annual stockholders' meeting and ends on the date of the next annual stockholders meeting (“Directors' Compensation Cycle”). Director compensation in the tables below represents the portion of annual compensation with respect to service during Autodesk's fiscal 2018. No later than December 31 of the year prior to a director's re-election to the Board, the director can elect to receive up to 100% of his or her annual fees in the form of RSUs issued at a rate of $1.20 worth of stock for each $1.00 of cash compensation foregone. If cash is elected, cash compensation is accrued monthly and paid quarterly, in arrears. The RSUs are issued at the beginning of the Directors' Compensation Cycle on the date of the annual meeting of stockholders and will vest on the date of the annual meeting of stockholders in the following year, provided that the recipient is a director on such date. s l a i r e t a M y x o r P 2018 Proxy Statement 77 Non-Employee Director Annual Compensation Cycle June 14, 2017 Annual Stockholder Meeting - June 12, 2018 Annual Stockholder Meeting Director Carl Bass Crawford W. Beveridge Karen Blasing (a) Reid French (a) Thomas Georgens (b) Richard (Rick) S. Hill (b) Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors Jeff Clarke (c) Scott Ferguson (c) P r o x y M a t e r i a l s % Annual Fees Elected to Convert to RSUs (June 15, 2016 - June 14, 2017) % Annual Fees Elected to Convert to RSUs (June 14, 2017 - June 12, 2018) N/A — N/A N/A — N/A 100 100 — 100 — — — 100 N/A — — 10 100 100 — 100 — 100 ________________ (a) Karen Blasing joined the Board on March 21, 2018 and Mr. French joined the Board on July 19, 2017 and were not eligible to make cash to RSU elections for the applicable non-employee director annual compensation cycles. (b) Messrs. Bass, Georgens and Hill are not standing for re-election at the Annual Meeting. (c) Messrs. Clarke and Ferguson resigned from the Board on June 19, 2017 pursuant to the terms of a Settlement Agreement. During fiscal 2018, Autodesk's 2012 Outside Directors' Stock Plan provided for the automatic grant of RSUs to our non- employee directors. Upon being elected or appointed to our Board, each non-employee director would be provided an initial grant of RSUs with a grant date value of $250,000 and prorate the award based on service on the date such director joined the Board (“Initial RSUs”), with subsequent annual grants of RSUs with a grant date value of $250,000 on the date of the Annual Meeting (“Subsequent Annual RSUs”). $250,000 x The number of calendar days from the Date of Grant to the Company’s next annual meeting of stockholders 365 Fair Market Value of a Share on the Date of Grant / Result is rounded = down to the nearest whole number of shares Initial RSUs vest upon the annual meeting of stockholders following the date of grant. Subsequent Annual RSUs vest over a one-year period. If a non-employee director is appointed on the on the date of an Annual Meeting, such non-employee director is not eligible to an Initial RSU. The tables below present information concerning the compensation paid by us to each of our non-employee directors for fiscal 2018. Karen Blasing was not a director of the Company during fiscal 2018 and did not receive compensation from the Company during that period. Mr. Bass, who was an Autodesk employee during fiscal 2018, received director compensation for the portion of the fiscal year in which he was a non-employee director. Mr. Bass' director compensation is included with his employee compensation in the Summary Compensation Table, but is not listed in the Director Compensation Tables below. Dr. 2018 Proxy Statement 78 Anagnost, who was an Autodesk employee during fiscal 2018, did not receive additional compensation for his service as a director. Current Directors (a) Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke Scott Ferguson ______________ Fees Earned or Paid in Cash ($) (b) 140,000 30,444 85,000 75,000 95,000 75,000 100,000 75,000 Stock Awards ($) (c) 249,995 224,579 249,995 249,995 249,995 249,995 249,995 249,995 114,537 37,500 249,995 249,995 Total ($) 389,995 255,023 334,995 324,995 344,995 324,995 349,995 324,995 364,532 287,495 s l a i r e t a M y x o r P (a) Mr. French joined the Board on July 19, 2017 and received prorated fees and 2,037 Initial RSUs. Messrs. Clarke and Ferguson resigned from the Board on June 19, 2017 pursuant to the terms of a Settlement Agreement and forfeited their Subsequent Annual Grants and received prorated fees. Mr. Clarke received a one-time payment of $77,037, representing the value of forfeited RSUs for which he had provided Board service but had not yet vested. (b) Fees Earned or Paid in Cash reflects the dollar amounts of fees earned. As noted above, during fiscal 2018, directors could elect to receive up to 100% of their compensation in the form of RSUs in lieu of cash. The following table represents actual cash received by the directors in fiscal 2018 based on their elections. See footnote (c) for more information regarding the RSUs granted in lieu of cash. Current Directors Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke Scott Ferguson Fees Actually Paid in Cash ($) 70,000 30,444 85,000 71,250 — — 100,000 — 114,537 37,500 (c) The Stock Awards column reflects (i) the grant date fair value of the Initial RSUs and Subsequent Annual RSUs and (ii) the pro-rata grant date fair value of 20% of the stock awards the directors earned during fiscal 2018 in lieu of cash. The 20% represents the premium of $1.20 worth of stock for each $1.00 of cash compensation foregone. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in our fiscal 2018 Annual Report on Form 10-K filed on March 22, 2018. These amounts do not correspond to the actual value that will be realized by the directors upon the vesting of RSUs or the sale of the Common Stock underlying such awards. 2018 Proxy Statement 79 The following table shows the total amounts and fair values, as well as the 20% premium, of RSUs granted on June 15, 2016, in lieu of cash foregone for the June 15, 2016 through June 14, 2017 Directors' Compensation Cycle: Current Directors Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke Scott Ferguson P r o x y M a t e r i a l s Restricted Stock Unit Total Number of Shares (#) Number of Shares Representing the 20% Premium (#) Grant Date Fair Value of Stock Awards ($) Grant Date Fair Value of the 20% Premium of the Stock Awards ($) — — — — 2,013 1,589 — 1,589 — — — — — — 335 264 — 264 — — — — — — 113,956 89,953 — 89,953 — — — — — — 18,964 14,945 — 14,945 — — The following table shows the total amounts and fair values, as well as the 20% premium, of RSUs granted on June 14, 2017, in lieu of cash foregone for the June 14, 2017 through June 12, 2018 Directors' Compensation Cycle: Current Directors Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke Scott Ferguson (a) Restricted Stock Unit Total Number of Shares (#) Number of Shares Representing the 20% Premium (#) Grant Date Fair Value of Stock Awards ($) 1,581 — — 84 1,073 847 — 847 — 847 263 — — 14 178 141 — 141 — 141 167,902 — — 8,921 113,953 89,951 — 89,951 — 89,951 Grant Date Fair Value of the 20% Premium of the Stock Awards ($) 27,931 — — 1,487 18,904 14,974 — 14,974 — 14,974 ____________ (a) Mr. Ferguson forfeited his RSUs upon resigning from the Board. 2018 Proxy Statement 80 The following tables show the total amounts and fair values of Subsequent Annual RSUs and Initial RSUs granted during fiscal 2018. Current Directors Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke (a) Scott Ferguson (a) Restricted Stock Unit Grant Date(s) Number of Shares (#) Grant Date Fair Value of Stock Awards ($) 6/14/2017 7/18/2017 6/14/2017 6/14/2017 6/14/2017 6/14/2017 6/14/2017 6/14/2017 6/14/2017 6/14/2017 2,354 2,037 2,354 2,354 2,354 2,354 2,354 2,354 2,354 2,354 249,995 224,579 249,995 249,995 249,995 249,995 249,995 249,995 249,995 249,995 s l a i r e t a M y x o r P ______________ (a) Messrs. Clarke and Ferguson forfeited their RSUs upon resigning from the Board. The aggregate number of each director's stock options and RSUs outstanding at January 31, 2018, was: Current Directors Crawford W. Beveridge Reid French Thomas Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Former Directors: Jeff Clarke Scott Ferguson Aggregate Number of Shares Underlying Stock Options Outstanding Aggregate Number of Shares Underlying Outstanding Restricted Stock Units — — — — — — — — — 3,935 2,037 2,354 7,799 3,427 3,201 2,354 3,201 — — 2018 Proxy Statement 81 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information concerning the beneficial ownership of Autodesk’s Common Stock as of March 31, 2018, for each person or entity who is known by Autodesk to own beneficially more than 5% of the outstanding shares of Autodesk Common Stock, each of Autodesk’s directors (including the nominees for directors), each of the named executive officers, including former executive officers, and all directors and executive officers as a group. 5% Stockholders, Directors and Officers (1) P r o x y M a t e r i a l s Principal Stockholders: FMR LLC (4) The Vanguard Group, Inc. (5) BlackRock, Inc. (6) Loomis Sayles & Co., L.P. (7) Non-Employee Directors: Carl Bass Crawford W. Beveridge Karen Blasing (8) Reid French (9) Tom Georgens Richard (Rick) S. Hill Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Named Executive Officers: Andrew Anagnost R. Scott Herren Steven M. Blum Pascal W. Di Fronzo Former Executive Officers: Amar Hanspal Jan Becker All directors and executive officers as a group (16 individuals) (16) Common Stock Beneficially Owned (2) Percentage Beneficially Owned (3) 22,809,481 22,250,636 16,813,275 11,228,654 39,995 22,236 — 20 29,663 5,362 40,689 12,286 7,646 44,017 28,543 20,448 37,138 14,567 — 35,700 302,610 10.4 % 10.2 % 7.7 % 5.1 % * * — * * * * * * * * * * * * * * _______________ * Represents less than one percent (1%) of the outstanding Common Stock. (1) Unless otherwise indicated in their respective footnote, the address for each listed person is c/o Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903. (2) The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under Rule 13d-3, beneficial ownership includes any shares the individual or entity has the right to acquire within 60 days of March 31, 2018, through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person or entity has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares shown as beneficially owned. (3) The total number of shares of Common Stock outstanding as of March 31, 2018, was 219,129,083. (4) As of December 31, 2017, the reporting date of FMR LLC ’s most recent filing with the SEC pursuant to Section 13(g) of the Exchange Act filed on February 13, 2018, pursuant to which FMR LLC reported to have sole voting power with respect to 1,134,920 shares, sole dispositive power with respect to 22,809,481 shares and shared voting and dispositive power with respect to 0 shares. The address of the reporting persons is 245 Summer Street, Boston, Massachusetts 02210. 2018 Proxy Statement 82 (5) As of December 31, 2017, the reporting date of The Vanguard Group, Inc.’s most recent filing with the SEC pursuant to Section 13(g) of the Exchange Act filed on February 12, 2018, The Vanguard Group, Inc. was deemed to have sole voting power with respect to 302,113 shares, sole dispositive power with respect to 21,911,419 shares, shared voting power with respect to 44,405 shares, and shared dispositive power with respect to 339,217 shares. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. (6) As of December 31, 2017, the reporting date of BlackRock, Inc.’s most recent filing with the SEC pursuant to Section 13(g) of the Exchange Act filed on January 29, 2018, BlackRock, Inc. was deemed to have sole voting power with respect to 14,666,061 shares, sole dispositive power with respect to 16,813,275 shares, and shared voting and dispositive power with respect to 0 shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. (7) As of December 31, 2017, the reporting date of Loomis, Sayles & Co. L.P. most recent filing with the SEC pursuant to Section 13(g) of the Exchange Act filed on February 14, 2018, Loomis, Sayles & Co. L.P. was deemed to have sole voting power with respect to 7,691,184 shares, sole dispositive power with respect to 11,228,654 shares, and shared voting and shared dispositive power with respect to 0 shares. The address of Loomis, Sayles & Co. L.P. is One Financial Center, Boston, MA 02111. (8) Upon appointment to the Board on March 21, 2018, Ms. Blasing was granted 419 restricted stock units, none of which vest within 60 days of March 31, 2018. (9) Upon appointment to the Board on July 19, 2017, Mr. French was granted 2,037 restricted stock units, none of which vest within 60 days of March 31, 2018. Includes 20 shares held indirectly by trust. Mr. French disclaims beneficial ownership of the shares held by trust to the extent of his pecuniary interest. s l a i r e t a M y x o r P 2018 Proxy Statement 83 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS P r o x y M a t e r i a l s Review, Approval or Ratification of Related Person Transactions Autodesk's Related Party Transactions Policy states that all transactions between or among Autodesk and its wholly-owned subsidiaries and any Related Party, as defined in the Policy, requires the approval or ratification of the Chief Financial Officer. Non-routine transactions with vendors and suppliers to Autodesk and its wholly-owned subsidiaries require the prior written approval of the Corporate Controller. In addition, in accordance with our Code of Business Conduct and the charter for the Audit Committee, our Audit Committee reviews and approves or ratifies “related person” transactions. Any related person transaction will be disclosed in an SEC filing as required by the rules of the SEC. For purposes of these procedures, “related person” and “transaction” have the meanings contained in Item 404 of Regulation S-K. Family Member of Former Executive Officer Employed by the Company Mr. Hanspal’s sister-in-law is employed by the Company as a Sr. Technical Product Manager. The salary being paid to her is commensurate with her respective duties as a Sr. Technical Product Manager of the Company. During fiscal 2018, the Company paid her a base salary of approximately $165,428, a bonus of $40,000 and granted her 976 restricted stock units. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC and the NASDAQ. Such executive officers, directors and stockholders also are required by SEC rules to furnish us with copies of all Section 16(a) forms that they file. Based solely on our review of the copies of such reports furnished to us and written representations that no other reports were required to be filed during fiscal 2018, we are not aware of any late Section 16(a) filings. 2018 Proxy Statement 84 REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS The Audit Committee is a committee of the Board consisting solely of independent directors as required by the listing standards of the NASDAQ and rules of the SEC. The Audit Committee operates under a written charter approved by the Board, which is available on Autodesk's website at www.autodesk.com under “Investor Relations—Corporate Governance.” The composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual basis. As described more fully in its charter, the Audit Committee’s role includes the oversight of our financial, accounting and reporting processes; our system of internal accounting and financial controls; and oversight of the management of risks associated with the Company’s financial reporting, accounting and auditing matters. The Audit Committee is directly responsible for the appointment, compensation, engagement, retention, termination and services of our independent registered public accounting firm, Ernst & Young LLP, including conducting a review of its independence; reviewing and approving the planned scope of our annual audit; overseeing Ernst & Young LLP’s audit work; reviewing and pre-approving any audit and permissible non-audit services and fees that may be performed by Ernst & Young LLP; reviewing with management and Ernst & Young LLP compliance by Autodesk with establishing and maintaining an adequate system of internal financial and disclosure controls; reviewing our critical accounting policies and the application of accounting principles; monitoring the rotation of partners of Ernst & Young LLP on our audit engagement team as required by regulation; reviewing the Company’s treasury policies and tax positions; and overseeing the performance of our internal audit function. The Audit Committee establishes and oversees compliance by Autodesk with the procedures for handling complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for confidential, anonymous submission of concerns by employees regarding accounting and auditing matters. The Audit Committee’s role also includes meeting to review our annual audited financial statements and quarterly financial statements with management and Ernst & Young LLP. The Audit Committee held nine meetings during fiscal 2018. Management is responsible for the quarterly and annual financial statements and the reporting process, including the systems of internal controls. Ernst & Young LLP is responsible for expressing an opinion on the conformity of our audited financial statements with generally accepted accounting principles. Within this context, the Audit Committee reviewed and discussed the audited financial statements for fiscal 2018 with management and Ernst & Young LLP. s l a i r e t a M y x o r P The Audit Committee has received the written disclosures and letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence, has discussed with Ernst & Young LLP the independence of that firm, and has considered whether the provision of non-audit services was compatible with maintaining the independence of that firm. In addition, the Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, “Communications with Audit Committees.” The Audit Committee also discussed with management and with Ernst & Young LLP the evaluation of Autodesk’s internal controls and the effectiveness of Autodesk’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee discussed with Autodesk’s internal and independent auditors the overall scope and plans for their respective audits. In addition, the Audit Committee met with the internal and the independent auditors, with and without management present, on a regular basis in fiscal 2018 and discussed the results of their examinations and the overall quality of Autodesk’s financial reporting. 2018 Proxy Statement 85 On the basis of these reviews and discussions, the Audit Committee recommended to the Board (and the Board has approved) that Autodesk’s audited financial statements be included in Autodesk’s Annual Report on Form 10-K for the fiscal year ended January 31, 2018, for filing with the SEC. AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Betsy Rafael (Chair) Karen Blasing Thomas Georgens Lorrie M. Norrington P r o x y M a t e r i a l s OTHER MATTERS The Board does not know of any other matters to be presented at the Annual Meeting. If any other matters are properly presented at the Annual Meeting, shares of Common Stock represented by proxy will be voted in accordance with the discretion of the proxy holders. It is important that your shares be represented at the Annual Meeting, regardless of the number of shares that you hold. Autodesk urges you to vote at your earliest convenience. THE BOARD OF DIRECTORS May 1, 2018 San Rafael, California 2018 Proxy Statement 86 Appendix A Reconciliation of GAAP financial measure to non-GAAP financial measure This Proxy Statement contains information regarding a financial measure, non-GAAP spend, that is not calculated in accordance with GAAP. Non-GAAP spend is calculated as our GAAP spend adjusted to exclude stock-based compensation expense, amortization of developed technology, amortization of purchased intangibles, CEO transition costs and restructuring charges and other facility exit costs. We believe that this non-GAAP financial measure is appropriate to enhance an overall understanding of our fiscal 2018 performance in relation to the principal elements of Autodesk’s annual executive compensation program considered by the Compensation Committee, as described in the “Compensation Discussion and Analysis” section of this Proxy Statement. 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. 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 non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the directly comparable financial measure prepared in accordance with GAAP in the United States. s l a i r e t a M y x o r P Investors should review the reconciliation of non-GAAP spend to its most directly comparable GAAP financial measure, GAAP spend, as provided in the following tables (in millions): GAAP Spend Stock-based compensation expense Amortization of developed technology Amortization of purchased intangibles CEO transition costs (1) Restructuring charges and other facility exit costs, net Non-GAAP Spend Deferred revenue Unbilled deferred revenue Non-GAAP Total deferred revenue $ $ $ $ + s u m ( D 4 : d 8 ) Fiscal Year Ended January 31, 2018 2017 (Unaudited) 2,565.7 (245.0 ) (16.4 ) (20.2 ) (21.4 ) (94.1 ) 2,168.6 $ $ Fiscal Year Ended January 31, 2018 2017 1,955 326 2,281 $ $ 2,530.6 (221.8 ) (40.0 ) (31.8 ) — (80.5 ) 2,156.5 1,788 30 1,818 ________ (1) CEO transition costs include stock-based compensation of ($0.2) million and $16.4 million related to the acceleration of eligible stock awards for the fiscal year ended January 31, 2018. CEO transition costs also include severance payments, legal fees incurred with the CEO transition and recruiting costs related to the search for a new CEO. 2018 Proxy Statement 87 P r o x y M a t e r i a l s [THIS PAGE INTENTIONALLY LEFT BLANK] 2018 Proxy Statement 88 The Committee reviews the compensation peer group each year to ensure that the comparisons remain meaningful and relevant. Based on the Committee’s review, the fiscal 2018 compensation peer group consisted of the following companies: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________________________ Revenue ($'s in Billions) Reported Fiscal Year Company Market Capitalization as of 1/31/2018 ($'s in billions) Adobe Systems, Inc. Akamai Technologies, Inc. 1-Dec-17 31-Dec-17 CA, Inc. FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2018 31-Mar-17 31-Mar-17 31-Dec-17 4.04 2.82 4.85 13.33 38.98 14.78 Citrix Systems, Inc. Electronic Arts, Inc. Intuit Inc. Juniper Networks, Inc. 31-Jul-17 31-Dec-17 or 7.30 2.50 5.18 5.03 Mentor Graphics Corporation National Instruments Corporation TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 31-Dec-17 31-Jan-17 6.54 1.28 1.29 N/A 28-Apr-17 Commission File Number: 0-14338 _____________________________________________________________ 30-Sep-17 AUTODESK INC. 30-Sep-17 28-Feb-17 (Exact name of registrant as specified in its charter) 2.41 5.52 1.94 1.16 NetApp, Inc. Nuance Communications, Inc. PTC Inc. Red Hat, Inc. salesforce.com, inc. Symantec Corporation Synopsys, Inc. Autodesk, Inc. Autodesk Percentile Ranking Delaware (State or other jurisdiction of incorporation or organization) 111 McInnis Parkway, San Rafael, California (Address of principal executive offices) 31-Jan-18 31-Mar-17 31-Oct-17 31-Jan-18 10.48 4.02 2.72 2.06 25% 94-2819853 (I.R.S. employer Identification No.) 94903 (Zip Code) 98.13 11.38 43.00 9.56 16.48 5.23 8.44 23.25 83.14 16.92 13.79 25.24 73% Registrant’s telephone number, including area code: (415) 507-5000 _____________________________________________________________ In September 2017, the Committee reviewed the compensation peer group that would be used for fiscal 2019 compensation Securities registered pursuant to Section 12(b) of the Act: decision making. The Committee determined that each of the peers was still appropriate, except for Mentor Graphics Corporation which was removed as a result of its acquisition by Siemens AG in March 2017. The Committee also chose to add Ansys, Inc and Cadence Design Systems Inc, given their size, industry comparability and the fact that they compete with Autodesk for executive talent. Name of each exchange on which registered The NASDAQ Stock Market LLC (NASDAQ Global Select Market) Title of each class Common Stock, $0.01 Par Value No (“Exchange Act”). Yes Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding Securities registered pursuant to Section 12(g) of the Act: None _____________________________________________________________ When determining the base salary, incentive targets, equity grants and target total direct compensation opportunity for each of Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 our NEOs, the Committee references the median data from our compensation peer group for each component and in the aggregate. In practice, actual compensation awards may be above or below the median levels, depending on Autodesk’s 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 financial and operational performance and each executive officer’s experience, skills and performance. The Committee believes days. Yes that referencing the total compensation packages of the companies in the compensation peer group keeps Autodesk’s Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File compensation competitive and within market norms. This also provides flexibility for variances in compensation where No appropriate, based on each executive officer’s leadership, contributions and particular skills or expertise as well as retention Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K considerations. or any amendment to this Form 10-K. required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes As of July 31, 2017, the last business day of the registrant’s most recently completed second fiscal quarter, there were approximately 218.5 million shares No of the registrant’s common stock outstanding that were held by non-affiliates, and the aggregate market value of such shares held by non-affiliates of the registrant (based on the closing sale price of such shares on the NASDAQ Global Select Market on July 31, 2017) was approximately $24.2 billion. Shares of the registrant’s common stock held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of March 12, 2018, the registrant had outstanding 218,327,862 shares of common stock. Portions of the Proxy Statement for registrant’s Annual Meeting of Stockholders (the “Proxy Statement”), are incorporated by reference in Part III of this Form 10-K to the extent stated herein. The Proxy Statement will be filed within 120 days of the registrant’s fiscal year ended January 31, 2018. DOCUMENTS INCORPORATED BY REFERENCE 2018 Form 10-K 1 2018 Proxy Statement 45 2018 Form 10-K 1 2018 Form 10-K 1 t r o p e R t r o p e R l a u n n A 8 1 0 2 l a u n n A 8 1 0 2 - [THIS PAGE INTENTIONALLY LEFT BLANK] ology industry 2 2 0 0 1 1 8 8 A A n n n n u u a a l l R R e e p p o o r r t t 2018 Form 10-K 2 2018 Form 10-K 2 2018 Proxy Statement 44 2018 Form 10-K 2 AUTODESK, INC. FORM 10-K TABLE OF CONTENTS Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Exhibits and Financial Statement Schedules Form 10-K Summary Signatures PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14. PART IV Item 15. Item 16. Page 5 14 30 30 30 30 31 34 35 61 62 106 106 106 107 108 108 108 108 109 109 111 t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 3 2018 Form 10-K 3 FORWARD-LOOKING INFORMATION The discussion in this Annual Report on Form 10-K contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements are any statements that look to future events and consist of, among other things, our business strategies, future financial results ( by product type and geography) and subscriptions, the effectiveness of our restructuring efforts, the effectiveness of our efforts to successfully manage transitions to new business models and markets, our expectations regarding the continued transition of our business model, expectations for and our ability to increase our subscription base, expected market trends, including the growth of cloud and mobile computing, the effect of unemployment, the availability of credit, the effects of global economic conditions, the effects of revenue recognition, the effects of newly recently issued accounting standards, expected trends in certain financial metrics, including expenses, the impact of acquisitions and investment activities, expectations regarding our cash needs, the effects of fluctuations in exchange rates and our hedging activities on our financial results, our ability to successfully expand adoption of our products, our ability to gain market acceptance of new businesses and sales initiatives, and the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries, the timing and amount of purchases under our stock buy-back plan, and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Item 1A, “Risk Factors,” and in our other reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update the forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 4 2018 Form 10-K 4 ITEM 1. BUSINESS Note: A glossary of terms used in this Form 10-K appears at the end of this Item 1. PART I GENERAL We are a global leader in design software and services, offering customers productive business solutions through powerful technology products and services. We serve customers in architecture, engineering and construction; product design and manufacturing; and digital media and entertainment industries. Our customers are able to design, fabricate, manufacture and build anything by visualizing, simulating and analyzing real-world performance early in the design process. These capabilities allow our customers to foster innovation, optimize their designs, streamline their manufacturing and construction processes, save time and money, improve quality, communicate plans, and collaborate with others. Our professional software products are sold globally, both directly to customers and through a network of resellers and distributors. Segments We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions, allocating resources and assessing performance as the source of our reportable segments. The Company's chief operating decision maker ("CODM") allocates resources and assesses the operating performance of the Company as a whole. As such, Autodesk has one segment manager (the CODM), and one operating segment. A summary of our revenue by geographic area and product family is found in Note 13, “Segment, Geographic and Product Family Information,” in the Notes to our Consolidated Financial Statements. Corporate Information We were incorporated in California in April 1982 and were reincorporated in Delaware in May 1994. Our principal executive office is located at 111 McInnis Parkway, San Rafael, California 94903, and the telephone number at that address is (415) 507-5000. Our internet address is www.autodesk.com. The information posted on our website is not incorporated into this Annual Report on Form 10-K. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Investor Relations portion of our web site at www.autodesk.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The public may also read and copy any material we file with the SEC at the SEC's Public Reference Room at 100 F Street N.E. Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1 (800) SEC-0330. t r o p e R l a u n n A 8 1 0 2 PRODUCTS Our architecture, engineering and construction products improve the way building, infrastructure, and industrial projects are designed, built, and operated. Our product development and manufacturing software provides manufacturers in automotive, transportation, industrial machinery, consumer products and building product industries with comprehensive digital design, engineering, manufacturing and production solutions. These technologies bring together data from all phases of the product development and production life cycle, creating a digital pipeline that supports greater productivity and accuracy through process automation. Our digital media and entertainment products provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing for design visualization, visual effects and games production. Our portfolio of products and services enables our customers to foster innovation, optimize and improve their designs, save time and money, improve quality, communicate plans, and collaborate with others. Autodesk’s product offerings include: • AutoCAD AutoCAD software, which is our largest single revenue-generating product, is a customizable and extensible CAD application for professional design, drafting, detailing, and visualization. AutoCAD software provides digital tools that can be 2018 Form 10-K 5 2018 Form 10-K 5 2 0 1 8 A n n u a l R e p o r t used independently and in conjunction with other specific applications in fields ranging from construction and civil engineering to manufacturing and plant design. • AutoCAD LT AutoCAD LT software is purpose built for professional drafting and detailing. AutoCAD LT includes document sharing capability without the need for software customization or certain advanced functionality found in AutoCAD. Users can share all design data with team members who use AutoCAD or other Autodesk products built on AutoCAD. AutoCAD LT software is our second largest revenue-generating product. • Industry Collections Autodesk's Industry Collections provide our customers with increased access to a broader selection of Autodesk products, greater value, more flexibility, and a simpler way to subscribe and manage Autodesk subscriptions. The collections are tailored to provide the essential software needed by professionals within each industry: AEC, Product Design, and M&E. The AEC Collection aims to help our customers design, engineer, and construct higher quality, more predictable building and civil infrastructure projects, commonly used by AEC industry experts, such as AutoCAD, AutoCAD Civil3D, and Revit. The Product Design Collection offers connected, professional-grade tools that help our customers make great products today and compete in the changing manufacturing landscape of the future. The collection offers access to a wide range of our products, including AutoCAD and Inventor. The M&E Collection provides end-to-end creative tools for entertainment creation. This collection enables animators, modelers and visual effect artists to access the tool they need, including Maya and 3ds Max, to create compelling effects, 3D characters and digital worlds. • CAM Solutions Our computer-aided manufacturing ("CAM") software offers industry-leading solutions for Computer Numeric Control ("CNC") machining, inspection, and modeling for manufacturing. A comprehensive line-up of expert products, including PowerMill, FeatureCAM, PowerInspect, PowerShare, and others, help our customers manufacture complex, innovative products and components with maximum quality, control, and production efficiency. • AutoCAD Civil 3D AutoCAD Civil 3D products provide a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects. Using a model-centric approach that automatically updates documentation as design changes are made, AutoCAD Civil 3D products enable civil engineers, designers, drafters, and surveyors to significantly boost productivity and deliver higher-quality designs and construction documentation faster. With AutoCAD Civil 3D products, the entire project team works from the same consistent, up-to-date model so they stay coordinated throughout all project phases. • Maya Maya software provides 3D modeling, animation, effects, rendering and compositing solutions that enable film and video artists, game developers, and design visualization professionals to digitally create engaging, lifelike images, realistic animations and simulations, extraordinary visual effects, and full length animated feature films. • 3ds Max 3ds Max software provides 3D modeling, animation, and rendering solutions that enable game developers, design visualization professionals and visual effects artists to digitally create realistic images, animations, and complex scenes and to digitally communicate abstract or complex mechanical, architectural, engineering, and construction concepts. • Revit Revit software is built for Building Information Modeling ("BIM") to help professionals design, build, and maintain higher-quality, more energy-efficient buildings. Using the information-rich models created with Revit, architects, engineers, 2018 Form 10-K 6 2018 Form 10-K 6 and construction firms can collaborate to make better-informed decisions earlier in the design process to deliver projects with greater efficiency. Revit includes features for architectural, mechanical, electrical and plumbing design as well as structural engineering and construction, providing a comprehensive solution for the entire building project team. • Inventor Inventor enables manufacturers to go beyond 3D design to digital prototyping by giving engineers a comprehensive and flexible set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation. Engineers can integrate AutoCAD drawings and model-based design data into a single digital model, creating a virtual representation of a final product that enables them to validate the form, fit, and function of the product before it is ever built. • BIM 360 BIM 360 construction management cloud-based software enables almost anytime, anywhere access to project data throughout the building construction lifecycle. BIM 360 empowers those in the field to better anticipate and act, and those in the back office to optimize and manage all aspects of construction performance. • Shotgun Shotgun is cloud-based software for review and production tracking in the M&E industry. Creative companies use the Shotgun platform to provide essential business tools for managers and visual collaboration tools for artists and supervisors, who often work globally with distributed teams. • Fusion 360 Fusion 360 is the first 3D CAD, CAM, and Computer-aided Engineering ("CAE") tool of its kind. It connects the entire product development process on a single cloud-based platform that works on both Apple and PC operating systems. PRODUCT DEVELOPMENT AND INTRODUCTION The technology industry is characterized by rapid technological change in computer hardware, operating systems, and software. In addition, our customers’ requirements and preferences rapidly evolve, as do their expectations of the performance of our software and services. To keep pace with these changes, we maintain a vigorous program of new product development to address demands in the marketplace for our products. The software industry is undergoing a transition from the personal computer to cloud, social, and mobile computing. In fiscal 2018, we continued to successfully implement a strategic transition of our business model announced in fiscal 2014. To support our transition, effective February 1, 2016, we discontinued the sale of new commercial seats of most individual software products, which are now exclusively available by desktop subscription, and discontinued selling perpetual licenses of suites while introducing industry collections effective August 1, 2016. Industry collections allow access to a broad set of products and cloud services that exceeds those previously available in suites - simplifying the customers' ability to access a complete set of industry tools. Additionally, on June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Through this program we offer discounts to those maintenance plan customers that move to subscription plan offerings, while at the same time increasing maintenance plan pricing over time for customers that remain on maintenance plans. Subscription plan offerings are designed to give our customers increased flexibility with how they use our products and service offerings and to attract a broader range of customers such as project- based users and small businesses. Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. We dedicate considerable technical and financial resources to research and development to further enhance our existing products and to create new products and technologies to expand our market opportunity. For example, in fiscal 2018, we continued and expanded our investments in construction. We continued to make investments in the traditional data creation tools to support the design and pre-construction phases, while expanding our investment in the areas of site execution with process and project management cloud-based tools. Recognizing the value of data continuity across the construction lifecycle of design, building and operations, we made investments in the handover and operations phase of the project through our cloud- based tools. To connect the phases of construction upstream with design, we invested in and announced our cloud-based project delivery platform that allows individuals, teams and projects to be connected across all phases in a common data platform. We anticipate ongoing investments in construction that support pre-construction, site execution as well as the handover phase of the project and will continue to invest in connecting workflows and data across the ecosystem of the project. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 7 2018 Form 10-K 7 2 0 1 8 A n n u a l R e p o r t Research and development expenditures were $755.5 million or 37% of fiscal 2018 net revenue, $766.1 million or 38% of fiscal 2017 net revenue and $790.0 million or 32% of fiscal 2016 net revenue. Our software is primarily developed internally; however, we also use independent firms and contractors to perform some of our product development activities. Additionally, we acquire products or technology developed by others by purchasing or licensing products and technology from third parties. We continually review these investments in an effort to ensure that we are generating sufficient revenue or gaining a competitive advantage to justify their costs. The majority of our research and product development is performed in the United States, China, Singapore, Canada, and the United Kingdom. However, we employ experienced software developers in many of our other locations. Translation and localization of our products are performed in a number of local markets, principally Singapore and Switzerland. We generally localize and translate our products into German, French, Italian, Spanish, Russian, Japanese, Korean, and simplified and traditional Chinese. We plan to continue managing significant product development operations internationally over the next several years. We believe that our ability to conduct research and development at various locations throughout the world allows us to optimize product development, lower costs, and integrate local market knowledge into our development activities. We continually assess the significant costs and challenges, including intellectual property protection, against the benefits of our international development activities. For further discussion regarding risks from our product development and introduction efforts, see Item 1A, “Risk Factors.” MARKETING AND SALES We license or sell our products and services globally, primarily through indirect channels consisting of distributors and resellers. To a lesser extent we also transact directly with our enterprise and named account customers and with customers through our online Autodesk branded store. Our indirect channel model includes both a two-tiered distribution structure, where distributors sell to resellers, and a one-tiered structure, where Autodesk sells directly to resellers. We have a network of approximately 1,600 resellers and distributors worldwide. For fiscal 2018, approximately 70% of our revenue was derived from indirect channel sales through distributors and resellers. We anticipate that our channel mix will continue to change, particularly as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models. Importantly, we expect our indirect channel will continue to transact and support the majority of our future revenue. We employ a variety of incentive programs and promotions to align our reseller channel with our business strategies. Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor and reseller networks. The loss of, or a significant reduction in, business with any one of our major distributors or large resellers could harm our business; see Item 1A, “Risk Factors,” for further discussion. Sales through our largest distributor, Tech Data Corporation and its global affiliates, accounted for 31%, 30%, and 25% of our net revenue for fiscal years ended January 31, 2018, 2017, and 2016, respectively. We believe our business is not substantially dependent on Tech Data. Our customers through Tech Data are the resellers and end users who purchase our software licenses and services. Should any of the agreements between us and Tech Data be terminated for any reason, we believe the resellers and end users who currently purchase our products through Tech Data would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue. No other distributor, reseller, or direct customer accounted for 10% or more of our revenue. Our customer-related operations are divided into three geographic regions, the Americas; Europe, Middle East, and Africa (“EMEA”), and Asia Pacific (“APAC”). Each geographic region is supported by global marketing and sales organizations. These organizations develop and manage overall marketing and sales programs and work closely with a network of domestic and international sales offices. Fiscal 2018 net revenue in the Americas, EMEA, and APAC was $871.1 million (42%), $815.4 million (40%), and $370.1 million (18%), respectively. We believe that international sales will continue to comprise the majority of our total net revenue. Adverse economic conditions and currency exchange rates in the countries that contribute a significant portion of our net revenue, including emerging economies, may have an adverse effect on our business in those countries and our overall financial performance. A summary of our financial information by geographic location is found in Note 13, “Segment, Geographic and Product Family Information,” in the Notes to Consolidated Financial Statements. Our international operations and sales subject us to a variety of risks; see Item 1A, “Risk Factors,” for further discussion. 2018 Form 10-K 8 2018 Form 10-K 8 We also work directly with reseller and distributor sales organizations, computer manufacturers, other software developers, and peripherals manufacturers in cooperative advertising, promotions, and trade-show presentations. We employ mass-marketing techniques such as webcasts, seminars, telemarketing, direct mailings, sponsorships, advertising in business and trade journals, and social media. We have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products and services. We generate revenue primarily through various offerings that provide recurring revenue. Under our maintenance plan program, our customers who own a perpetual use license for the most recent version of the underlying product are able to renew a previously purchased maintenance plan that provides them with unspecified upgrades when and if available, and receive online support during the term of their maintenance contract. Under our subscription plan, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions through term-based product subscriptions, cloud service offerings, and enterprise business agreements. With the discontinuation of the sale of perpetual licenses, we have transitioned away from selling a mix of perpetual licenses and maintenance plans in favor of a consolidated subscription model. CUSTOMER AND RESELLER SUPPORT We provide technical support and training to customers through a multi-tiered support model, augmented by direct programs designed to address certain specific customer needs. Most of our customers receive support and training from the resellers and distributors from which they purchased subscriptions or licenses for our products or services, with Autodesk in turn providing second tier support to the resellers and distributors. Other customers are supported directly via self-service using the Autodesk Knowledge Network which guides customers to answers in our online support assets, support forums, webinars or to support representatives using a number of different modalities such as social media, phone, email and webchat. We also support our resellers and distributors through technical product training, sales training classes, webinars and other knowledge sharing programs. EDUCATION, SUSTAINABILITY, AND PHILANTHROPIC PROGRAMS Education Autodesk is committed to helping fuel a lifelong passion for design and making among students of all ages, both within and outside the classroom. We offer free educational licenses of Autodesk's professional software to students, educators, and accredited educational institutions worldwide. We inspire and support beginners with Tinkercad, a simple online 3D design and 3D printing tool. Through Autodesk Design Academy, we provide secondary and postsecondary schools hundreds of standards- aligned class projects to support design-based disciplines in Science, Technology, Engineering, Digital Arts, and Math (STEAM) using Autodesk's professional-grade design, engineering and entertainment software. Autodesk Design Academy curricula is also syndicated on iTunes U and Udemy, where millions of students go to learn online. Classes and projects are available on our Instructables website for anyone looking to expand their "making" skills. Our intention is to make Autodesk software ubiquitous and the design and making software of choice for those poised to become the next generation of professional users. Sustainability Programs To help our customers imagine, design, and make a better world, our Sustainability initiatives focus our efforts on the area where we can have the greatest impact enabling sustainable practices through our products delivering free sustainable- design learning and training resources, providing software grants to qualifying nonprofits and entrepreneurs, and leading by example with our sustainable business practices. Through our products and services, we are supporting our customers to better understand and improve the environmental performance of everything they make. Climate Change In addressing the global challenges posed by climate change, we make it possible for our customers to innovate and respond to associated changes in regulation, building code, physical climate parameters and other climate-related developments. This effort can directly and indirectly create more demand for existing and new Autodesk products and services in the short and long-term. Furthermore, our leadership is committed to taking climate action and that commitment goes hand- in-hand with our reputation in the marketplace. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 9 2018 Form 10-K 9 2 0 1 8 A n n u a l R e p o r t Climate Change Management Actions To drive continued progress and meet growing demand, we continue to expand the solutions, education, and support we offer, helping customers secure a competitive advantage for a low-carbon future by designing high-performance buildings, resilient cities and infrastructure, and more efficient transportation and products. To continue to grow this market, we provide software and support to early stage entrepreneurs and start-up companies who are designing clean technologies. We plan to expand these offerings in the future based upon demand and opportunity in response to challenges posed by climate change. Internally, we are investing in best practices to mitigate our greenhouse gas emissions and climate change risk through investments in renewable energy, energy efficiency, disaster management and recovery strategies, and materials innovation. We are on track to meet our science-based greenhouse gas reduction target of 43% absolute emissions by 2020. Climate Change Governance With oversight from our CEO, the Sustainability & Foundation Team has direct responsibility for setting and implementing the corporate sustainability strategy, including the climate change strategy. Emissions Performance & Other Key Performance Indicators By end of fiscal 2017, Autodesk had reduced its net greenhouse gas emissions for its operational boundary by 44% from our fiscal year 2009 baseline to 156,000 metric tons of carbon dioxide equivalent. This reduction was accomplished through increased investment in renewable energy and energy efficiency in our global real estate portfolio, and continued transition from physical software delivery to cloud and electronic software delivery. More information about our sustainability commitment can be found in our annual sustainability reports, which we have published on our website since 2008. Our fiscal 2018 sustainability report will be published in the second quarter of fiscal 2019. Philanthropy The Autodesk Foundation (the "Foundation"), a privately funded 501(c)(3) charity organization established and solely funded by us, leads our philanthropic efforts. The purpose of the Foundation is twofold: to support employees to create a better world at work, at home, and in the community by matching employee’s volunteer time and/or donations to nonprofit organizations; and to support organizations and individuals using design to drive positive social and environmental impact. In the latter case, we use grant funding, software donations, and training to accomplish this goal, selecting the most impactful and innovative organizations around the world, thus, leading to a better future for our planet. On our behalf, the Foundation also administers a discounted software donation program to nonprofit organizations, social and environmental entrepreneurs, and others who are developing design solutions that will shape a more sustainable future. DEVELOPER PROGRAMS Our business and our customers benefit from our relationships with an extensive developer network. These developers create and sell their own interoperable products that further enhance the range of integrated solutions available to our customers. One of our key strategies is to maintain an open-architecture design of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third- parties to customize solutions for a wide variety of highly specific uses. We offer several programs that provide strategic investment funding, technological platforms, user communities, technical support, forums, and events to developers who develop add-on applications for our products. For example, we have created our web services platform, Autodesk Forge. The Forge Platform includes a number of web services that enable software developers to rapidly develop the next generation of applications, and experiences that will power the future of making things. Forge facilitates the development of a single connected ecosystem for integrating Autodesk applications with other enterprise, web and mobile solutions. COMPETITION The markets for our products are highly competitive, are subject to rapid change, and can have complex interdependencies between many of the larger businesses. We strive to increase our competitive separation by investing in research and development, allowing us to bring new products to market and create exciting new versions of existing products that offer compelling efficiencies for our customers. We also compete through investments in marketing and sales to more effectively reach new customers and better serve existing customers. 2018 Form 10-K 10 2018 Form 10-K 10 Our competitors include large, global, publicly traded companies; small, geographically focused firms; startup firms; and solutions produced in-house by their users. Our primary global competitors include Adobe Systems Incorporated, ANSYS, Inc., Apple Inc., AVEVA Group plc, Avid Technology, Inc., Bentley Systems, Inc., Dassault Systèmes S.A. and its subsidiary Dassault Systèmes SolidWorks Corp., Intergraph Corporation, a wholly owned subsidiary of Hexagon AB, MSC Software Corporation, Nemetschek AG, PTC, 3D Systems, Siemens PLM, SONY Corporation, Technicolor, and Trimble Navigation Limited, among others. The software industry has limited barriers to entry, and the availability of computing power with continually expanding performance at progressively lower prices contributes to the ease of market entry. The industry is presently undergoing a platform shift from the personal computer to cloud and mobile computing. This shift further lowers barriers to entry and poses a disruptive challenge to established software companies. The design software market is characterized by vigorous competition in each of the vertical markets in which we compete, both from existing competitors and by entry of new competitors with innovative technologies. Competition is increasingly enhanced by consolidation of companies with complementary products and technologies and the possibility that competitors in one vertical segment may enter other vertical segments that we serve. In addition, some of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources than we do. Because of these and other factors, competitive conditions in these industries are likely to continue to intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit margins, and loss of market share, any of which could harm our business. See Item 1A, “Risk Factors,” for further discussion of risks regarding competition. We believe that our future results depend largely upon our ability to better serve customers by offering new products, including cloud and mobile computing products, whether by internal development or acquisition, and to continue to provide existing product offerings that compete favorably with respect to ease of use, reliability, performance, range of useful features, continuing product enhancements, reputation, price, and training. INTELLECTUAL PROPERTY AND LICENSES We maintain an active program to legally protect our investment in technology through intellectual property rights. We protect our intellectual property through a combination of patent, copyright, trademark and trade secret protections, confidentiality procedures, and contractual provisions. The nature and extent of legal protection associated with each such intellectual property right depends on, among other things, the type of intellectual property right and the given jurisdiction in which such right arises. We believe that our intellectual property rights are valuable and important to our business. Nonetheless, our intellectual property rights may not be successfully asserted in the future or may be invalidated, circumvented or challenged. In addition, the laws and enforcement of the laws of various foreign countries where our products are distributed do not protect our intellectual property rights to the same extent as U.S. laws. Enforcement of intellectual property rights against alleged infringers can sometimes lead to costly litigation and counterclaims. Our inability to protect our proprietary information could harm our business. From time to time, we receive claims alleging infringement of a third party’s intellectual property rights, including patents. Disputes involving our intellectual property rights or those of another party have in the past and may in the future lead to, among other things, costly litigation or product shipment delays, which could harm our business. We retain ownership of software we develop. Our combined hybrid offerings include both desktop software and cloud functionality. Desktop software is licensed to users pursuant to ‘click through’ or signed license agreements containing restrictions on duplication, disclosure, and transfer. Cloud software and associated services are provided to users pursuant to on-line or signed terms of service agreements containing restrictions on access and use. We believe that because of the limitations of laws protecting our intellectual property and the rapid, ongoing technological changes in both the computer hardware and software industries, we must rely principally upon software engineering and marketing skills to continually maintain and enhance our competitive market position. While we have recovered some revenue resulting from the unauthorized use of our software products, we are unable to measure the full extent to which piracy of our software products exists. We believe, however, that software piracy is and can be expected to be a persistent problem that negatively impacts our revenue and financial results. We believe that our transition from perpetual use software licenses to a subscription-based business model combined with the change from desktop to cloud- based computing will shift the incentives and means by which software is pirated. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 11 2018 Form 10-K 11 In addition, through various licensing arrangements, we receive certain rights to intellectual property of others. We expect to maintain current licensing arrangements and to secure licensing arrangements in the future, as needed and to the extent available on reasonable terms and conditions, to support continued development and sales of our products and services. Some of these licensing arrangements require or may require royalty payments and other licensing fees. The amount of these payments and fees may depend on various factors, including but not limited to: the structure of royalty payments, offsetting considerations, if any, and the degree of use of the licensed technology. See Item 1A, “Risk Factors,” for further discussion of risks related to protecting our intellectual property. PRODUCTION AND SUPPLIERS The production of our software products and services involves duplication or hosting of software media. The way that we deliver software has evolved during our business model transition. For certain cloud-based products, we use a combination of co-located hosting facilities and increasingly Amazon Web Services and to a lesser degree other infrastructure-as-a-service providers. Over 95% of our customers choose an electronic software download option for both initial product fulfillment and subsequent product updates. Customers who choose electronic fulfillment receive the latest version of the software from our vendor’s secure servers. Customers may also obtain our software through media such as DVDs and USB flash drives available from multiple sources. The purchase of media and the transfer of the software programs onto media for distribution to customers are performed by us and by licensed subcontractors. Packaging materials are produced to our specifications by outside sources. Production is performed in leased facilities operated by independent third-party contractors. To date, we have not experienced any material difficulties or delays in the production of our software and documentation. EMPLOYEES 2 0 1 8 A n n u a l R e p o r t As of January 31, 2018, we employed approximately 8,800 people. None of our employees in the United States are represented by a labor union. In certain foreign countries, our employees are represented by work councils. We have never experienced any work stoppages and believe our employee relations are good. Reliance upon employees in other countries entails various risks and changes in these foreign countries, such as government instability or regulation unfavorable to foreign- owned businesses, which could negatively impact our business in the future. ACQUISITIONS Over the past three years, we acquired new technology or supplemented our technology by purchasing businesses or technology related assets focused in specific markets or industries. For the fiscal years ended January 31, 2018, 2017, and 2016, we acquired companies and technology related assets, some of which were accounted for as business combinations. The following were significant acquisitions for fiscal years 2018, 2017, and 2016: Date of closing November 2015 Company netfabb GmbH ("netfabb") Details The acquisition of netfabb GmbH (“netfabb”) provided Autodesk with software solutions that reduced production costs and increased efficiency in 3D printing and additive manufacturing. DEFERRED REVENUE AND UNBILLED DEFERRED REVENUE Our deferred revenue balance at January 31, 2018 was $1,955.1 million and primarily relates to subscription and maintenance agreements invoiced for which the revenue has not yet been recognized but will be recognized as revenue ratably over the life of the contracts. The term of our subscription contracts is typically between one and three years. We define unbilled deferred revenue as contractually stated or committed orders under multi-year billing plans for subscription, services, license and maintenance for which the associated deferred revenue has not been recognized and the customer has not been invoiced. Unbilled deferred revenue is not included on our Condensed Consolidated Balance Sheet until invoiced to the customer. (in millions) Deferred revenue Unbilled deferred revenue (1) Total 2018 Form 10-K 12 2018 Form 10-K 12 Fiscal Year Ended January 31, 2018 $ $ 1,955.1 326.4 2,281.5  ________________ (1) This is our first year presenting this metric and we are not able to provide historical information at this time. Comparative information will not be available until fiscal 2019. We expect that the amount of unbilled deferred revenue and deferred revenue will change from quarter to quarter for several reasons, including the specific timing, duration and size of large customer subscription and support agreements, varying billing cycles of such agreements, the specific timing of customer renewals, foreign currency fluctuations and the timing of when billed and unbilled deferred revenue are recognized as revenue. GLOSSARY OF TERMS Annualized Recurring Revenue (ARR)— Represents the annualized value of our average monthly recurring revenue for the preceding three months. "Maintenance plan ARR” captures ARR relating to traditional maintenance attached to perpetual licenses. "Subscription plan ARR" captures ARR relating to subscription offerings. Refer to the definition of recurring revenue below for more details on what is included within ARR. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation. ARR is currently one of our key performance metrics to assess the health and trajectory of our business. ARR should be viewed independently of revenue and deferred revenue as ARR is a performance metric and is not intended to be combined with any of these items. Annualized Revenue Per Subscription (ARPS)—Is calculated by dividing our annualized recurring revenue by the total number of subscriptions. Building Information Modeling (BIM)—Describes a model-based technology linked with a database of project information, and is the process of generating and managing information throughout the life cycle of a building. BIM is used as a digital representation of the building process to facilitate exchange and interoperability of information in digital formats. Cloud Service Offerings—Represents individual term-based offerings deployed through web browser technologies or in a hybrid software and cloud configuration. Cloud service offerings that are bundled with other product offerings are not captured as a separate cloud service offering. Constant Currency (CC) Growth Rates—We attempt to represent the changes in the underlying business operations by eliminating fluctuations caused by changes in foreign currency exchange rates as well as eliminating hedge gains or losses recorded within the current and comparative periods. We calculate constant currency growth rates by (i) applying the applicable prior period exchange rates to current period results and (ii) excluding any gains or losses from foreign currency hedge contracts that are reported in the current and comparative periods. Enterprise Business Agreements (EBAs)—Represents programs providing enterprise customers with token-based access or a fixed maximum number of seats to a broad pool of Autodesk products over a defined contract term. Industry Collections—Autodesk industry collections are a combination of products and services that target a specific user objective and support a set of workflows for that objective. Our Industry Collections consist of: Autodesk Architecture, Engineering and Construction Collection, Autodesk Product Design Collection, and Autodesk Media and Entertainment Collection. We introduced industry collections effective August 1, 2016 to replace our suites. License and Other Revenue—Represents (1) perpetual license revenue and (2) other revenue. Perpetual license revenue includes software license revenue from the sale of perpetual licenses, and Creative Finishing. Other revenue includes revenue such as standalone consulting and training, and is recognized over time as the services are performed. Maintenance Plans—Our maintenance plans provide our customers with a cost effective and predictable budgetary option to obtain the productivity benefits of our new releases and enhancements when and if released during the term of their contracts. Under our maintenance plans, customers are eligible to receive unspecified upgrades when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally between one and three years. Product Subscriptions—Provide customers the most flexible, cost-effective way to access and manage 3D design, engineering, and entertainment software tools. Our product subscriptions currently represent a hybrid of desktop and SaaS functionality, which provides a device-independent, collaborative design workflow for designers and their stakeholders. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 13 2018 Form 10-K 13 2 0 1 8 A n n u a l R e p o r t Recurring revenue—Consists of the revenue for the period from our traditional maintenance plans and revenue from our subscription plan offerings. It excludes subscription revenue related to consumer product offerings, select Creative Finishing product offerings, education offerings, and third party products. Recurring revenue acquired with the acquisition of a business is captured when total subscriptions are captured in our systems and may cause variability in the comparison of this calculation. Subscription Plans—Comprises our term-based product subscriptions, cloud service offerings, and enterprise business agreements (EBAs). Subscriptions represent a combined hybrid offering of desktop software and cloud functionality which provides a device-independent, collaborative design workflow for designers and their stakeholders. With subscription, customers can use our software anytime, anywhere, and get access to the latest updates to previous versions. Subscription revenue—Includes subscription fees from product subscriptions, cloud service offerings, and enterprise business agreements (EBAs) and all other services as part of a bundled subscription agreement accounted for as a single unit of accounting. (i.e. cloud services, maintenance, and consulting). Total Subscriptions—Consists of subscriptions from our maintenance plans and subscription plan offerings that are active and paid as of the fiscal year end date. For certain cloud service offerings and enterprise business agreements (EBAs), subscriptions represent the monthly average activity reported within the last three months of the fiscal year end date. Total subscriptions do not include education offerings, consumer product offerings, select Creative Finishing product offerings, Autodesk Buzzsaw, Autodesk Constructware, and third party products. Subscriptions acquired with the acquisition of a business are captured once the data conforms to our subscription count methodology and when added, may cause variability in the comparison of this calculation. Unbilled deferred revenue—Unbilled deferred revenue represents contractually stated or committed orders under multi- year billing plans for subscription, services, license and maintenance for which the associated deferred revenue has not been recognized and the customer has not been invoiced. Unbilled deferred revenue is not included on our Consolidated Balance Sheet until invoiced to the customer. ITEM 1A. RISK FACTORS We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control. In addition to the other information contained in this Form 10-K, the following discussion highlights some of these risks and the possible impact of these factors on our business, financial condition, and future results of operations. If any of the following risks actually occur, our business, financial condition, or results of operations may be adversely impacted, causing the trading price of our common stock to decline. In addition, these risks and uncertainties may impact the “forward-looking” statements described elsewhere in this Form 10-K and in the documents incorporated herein by reference. They could affect our actual results of operations, causing them to differ materially from those expressed in “forward-looking” statements. Global economic and political conditions may further impact our industries, business and financial results. Our overall performance depends largely upon domestic and worldwide economic and political conditions. The United States and other international economies have experienced cyclical downturns from time to time in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, decreased government spending, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy. These economic conditions can occur abruptly. If economic growth in countries where we do business slows or if such countries experience further economic recessions, customers may delay or reduce technology purchases. Our customers include government entities, including the U.S. federal government, and if spending cuts impede the ability of governments to purchase our products and services, our revenue could decline. In addition, a number of our customers rely, directly and indirectly, on government spending. Geopolitical trends toward nationalism and protectionism and the weakening or dissolution of international trade pacts may increase the cost of, or otherwise interfere with, conducting business. These trends have increased levels of political and economic unpredictability globally, and may increase the volatility of global financial markets; the impact of such developments on the global economy remains uncertain. Political instability or adverse political developments in any of the countries in which we do business could harm our business, results of operations and financial condition. A financial sector credit crisis could impair credit availability and the financial stability of our customers, including our distribution partners and channels. A disruption in the financial markets may also have an effect on our derivative counter-parties and could also impair our banking partners, on which we rely for operating cash management. Any of 2018 Form 10-K 14 2018 Form 10-K 14 these events could harm our business, results of operations and financial condition. If we fail to successfully manage our business model transition to cloud-based products and more flexible product licenses, our results of operations could be negatively impacted. To address the industry transition from personal computer to cloud, mobile, and social computing, we accelerated our move to the cloud and are offering more flexible product licenses. To support our transition, we discontinued selling new perpetual licenses of most individual software products effective February 1, 2016, and discontinued selling new perpetual licenses of suites effective August 1, 2016. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Through this program we offer discounts to those maintenance plan customers that move to subscription plan offerings, while at the same time increasing maintenance plan pricing over time for customers that remain on maintenance. As a result, we expect to derive an increasing portion of our revenues in the future from subscriptions. This subscription model prices and delivers our products in a way that differs from the historical perpetual pricing and delivery methods. These changes reflect a significant shift from perpetual license sales and distribution of our software in favor of providing our customers the right to access certain of our software in a hosted environment or use downloaded software for a specified subscription period. During the first three years of the transition, revenue, billings, gross margin, operating margin, net income (loss), earnings (loss) per share, deferred revenue, and cash flow from operations have been impacted as more revenue is recognized ratably rather than upfront and as new offerings bring a wider variety of price points. Our ability to achieve our financial objectives is subject to risks and uncertainties. The new offerings require a considerable investment of technical, financial, legal, and sales resources, and a scalable organization. Market acceptance of such offerings is affected by a variety of factors, including but not limited to: security, reliability, performance, current license terms, customer preference, social/community engagement, customer concerns with entrusting a third party to store and manage their data, public concerns regarding privacy and the enactment of restrictive laws or regulations. Whether our business model transition will prove successful and will accomplish our business and financial objectives is subject to numerous risks and uncertainties, including but not limited to: customer demand, attach and renewal rates, channel acceptance, our ability to further develop and scale infrastructure, our ability to include functionality and usability in such offerings that address customer requirements, tax and accounting implications, pricing, and our costs. In addition, the metrics we use to gauge the status of our business model transition may evolve over the course of the transition as significant trends emerge. If we are unable to successfully establish these new offerings and navigate our business model transition in light of the foregoing risks and uncertainties, our results of operations could be negatively impacted. t r o p e R l a u n n A 8 1 0 2 Our strategy to develop and introduce new products and services exposes us to risks such as limited customer acceptance, costs related to product defects, and large expenditures, each of which may not result in additional net revenue or could result in decreased net revenue. Rapid technological changes, as well as changes in customer requirements and preferences, characterize the software industry. Just as the transition from mainframes to personal computers transformed the industry 30 years ago, we believe our industry is undergoing a similar transition from the personal computer to cloud, mobile, and social computing. Customers are also reconsidering the manner in which they license software products, which requires us to constantly evaluate our business model and strategy. In response, we are focused on providing solutions to enable our customers to be more agile and collaborative on their projects. We devote significant resources to the development of new technologies. In addition, we frequently introduce new business models or methods that require a considerable investment of technical and financial resources such as our introduction of flexible license and service offerings. It is uncertain whether these strategies will prove successful or whether we will be able to develop the necessary infrastructure and business models more quickly than our competitors. We are making such investments through further development and enhancement of our existing products and services, as well as through acquisitions of new product lines. Such investments may not result in sufficient revenue generation to justify their costs and could result in decreased net revenue. If we are not able to meet customer requirements, either with respect to our software or hardware products or the manner in which we provide such products, or if we are not able to adapt our business model to meet our customers' requirements, our business, financial condition or results of operations may be adversely impacted. In particular, a critical component of our growth strategy is to have customers of our AutoCAD and AutoCAD LT products expand their portfolios to include our other offerings and cloud-based services. We want customers using individual Autodesk products to expand their portfolio with our other offerings and cloud-based services, and we are taking steps to accelerate this migration. At times, sales of licenses of our AutoCAD and AutoCAD LT or individual Autodesk flagship products have decreased without a corresponding increase in industry collections or cloud-based 2018 Form 10-K 15 2018 Form 10-K 15 2 0 1 8 A n n u a l R e p o r t services revenue or without purchases of customer seats to our industry collections. Should this continue, our results of operations will be adversely affected. Also, adoption of our cloud and mobile computing offerings and changes in the delivery of our software and services to our customers, such as product subscription offerings, will change the way in which we recognize revenue relating to our software and services, with a potential negative impact on our financial performance. The accounting impact of these offerings and other business decisions are expected to result in an increase in the percentage of our ratable revenue, as well as recurring revenue, making for a more predictable business over time, while potentially reducing our upfront perpetual revenue stream. Our executive management team must act quickly, continuously, and with vision, given the rapidly changing customer expectations and technology advancements inherent in the software industry, the extensive and complex efforts required to create useful and widely accepted products and the rapid evolution of cloud computing, mobile devices, new computing platforms, and other technologies, such as consumer products. Although we have articulated a strategy that we believe will fulfill these challenges, if we fail to execute properly on that strategy or adapt that strategy as market conditions evolve, we may fail to meet our customers' expectations, fail to compete with our competitors' products and technology, and lose the confidence of our channel partners and employees. This in turn could adversely affect our business and financial performance. A significant portion of our revenue is generated through maintenance revenue; if decreases in maintenance revenue are not offset by increases in subscription revenue, our future revenue and financial results will be negatively impacted. Our maintenance customers have no obligation to renew their maintenance contracts after the expiration of their maintenance period, which is typically one year. The discontinuance of our perpetual licenses for most individual software products on February 1, 2016 and for perpetual suites on August 1, 2016 resulted in the loss of future opportunities to sell maintenance. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. As a result, we expect customer renewal rates will decline or fluctuate over time as a result of a number of factors, including the overall global economy, the health of their businesses, the perceived value of the maintenance program and planned maintenance pricing increases. If our non-renewing maintenance customers do not transition to subscriptions, our future revenue and financial results will be negatively impacted. We may not be able to predict subscription renewal rates and their impact on our future revenue and operating results. Our customers are not obligated to renew their subscriptions for our offerings, and they may elect not to renew. We cannot assure renewal rates, or the mix of subscriptions renewals. Customer renewal rates may decline or fluctuate due to a number of factors, including offering pricing, competitive offerings, customer satisfaction, and reductions in customer spending levels or customer activity due to economic downturns or financial markets uncertainty. If our customers do not renew their subscriptions or if they renew on less favorable terms, our revenues may decline. Revenue from our offerings may be difficult to predict during our business model transition. The discontinuance of our perpetual licenses for most individual software products on February 1, 2016 and for perpetual suites on August 1, 2016 has and will continue to result in the loss of future upfront licensing revenue. This also has frozen the growth of our maintenance revenue because there will be no further opportunities to attach maintenance licensing. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. As a result, we expect our maintenance revenue to decline over time, but it may decline more quickly than anticipated due to low maintenance renewals. At the same time, our subscription revenue may not grow as rapidly as anticipated. Our subscription pricing allows customers to use our offerings at a lower initial cost when compared to the sale of a perpetual license. Although our subscriptions are designed to increase the number of customers who purchase offerings and create a recurring revenue stream that is more predictable over time, it creates risks related to the timing of revenue recognition and expected reductions in cash flows in the near term. Actions that we are taking to restructure our business in alignment with our strategic priorities may not be as effective as anticipated. During the fourth quarter of fiscal 2018, we commenced a world-wide restructuring plan to support the Company's strategic priorities of completing the subscription transition; digitizing the Company; and re-imagining manufacturing, construction, and production. Through the restructuring, we seek to reduce our investment in areas not aligned with our strategic priorities, including in areas related to research and development and go-to-market activities. At the same time, we plan to further invest in strategic priority areas related to as digital infrastructure, customer success, and construction. 2018 Form 10-K 16 2018 Form 10-K 16 As a result of these actions, we will incur additional costs in the short term that will have the effect of reducing our GAAP operating margins. We may encounter challenges in the execution of these efforts, and these challenges could impact our financial results. If we are unable to successfully complete our restructuring efforts, our business and operating results may be harmed. We are dependent on international revenue and operations, exposing us to significant regulatory, global economic, intellectual property, collections, currency exchange rate, taxation, political instability and other risks, which could adversely impact our financial results. We are dependent on our international operations for a significant portion of our revenue. International net revenue represented 64% and 63% of our net revenue in fiscal 2018 and 2017, respectively. Our international revenue, including that from emerging economies, is subject to general economic and political conditions in foreign markets, including conditions in foreign markets resulting from economic and political conditions in the U.S. Our revenue is also impacted by the relative geographical and country mix of our revenue over time. At times, these factors adversely impact our international revenue, and consequently our business as a whole. Our dependency on international revenue makes us much more exposed to global economic and political trends, which can negatively impact our financial results, even if our results in the U.S. are strong for a particular period. We anticipate that our international operations will continue to account for a significant portion of our net revenue, and, as we expand our international development, sales and marketing expertise, will provide significant support to our overall efforts in countries outside of the U.S. Risks inherent in our international operations include: • • • • • • • • • • • economic volatility; fluctuating currency exchange rates, including risks related to any hedging activities we undertake; unexpected changes in regulatory requirements and practices; delays resulting from difficulty in obtaining export licenses for certain technology; different purchase patterns as compared to the developed world; tariffs, quotas, and other trade barriers and restrictions; operating in locations with a higher incidence of corruption and fraudulent business practices, particularly in emerging economies; increasing enforcement by the U.S. under the Foreign Corrupt Practices Act, and adoption of stricter anti- corruption laws in certain countries, including the United Kingdom; difficulties in staffing and managing foreign sales and development operations; local competition; longer collection cycles for accounts receivable; • U.S. and foreign tax law changes impacting how multinational companies are taxed; • • • • tax arrangements with foreign governments, including our ability to meet and renew the terms of those tax arrangements; laws regarding the management of and access to data and public networks; possible future limitations upon foreign owned businesses; increased financial accounting and reporting burdens and complexities; t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 17 2018 Form 10-K 17 2 0 1 8 A n n u a l R e p o r t • • • • inadequate local infrastructure; greater difficulty in protecting intellectual property; software piracy; and other factors beyond our control, including popular uprisings, terrorism, war, natural disasters, and diseases. Some of our business partners also have international operations and are subject to the risks described above. The Brexit vote has exacerbated and may further exacerbate many of the risks and uncertainties described above. The proposed withdrawal of the United Kingdom from the European Union could, among other potential outcomes, adversely affect the tax, tax treaty, currency, operational, legal and regulatory regimes to which our businesses in the region are subject. The withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union and significantly disrupt trade between the United Kingdom and the European Union and other parties. Further, uncertainty around these and related issues could lead to adverse effects on the economy of the United Kingdom and the other economies in which we operate. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks. We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls. Our offerings are subject to U.S. export controls and economic sanctions laws and regulations that prohibit the shipment of certain products and services without the required export authorizations or export to locations, governments, and persons targeted by U.S. sanctions. While we have processes in place to prevent our offerings from being exported in violation of these laws, including obtaining authorizations as appropriate and screening against U.S. Government and international lists of restricted and prohibited persons, we cannot guarantee that these processes will prevent all violations of export control and sanctions laws. We also note that if our channel partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties. We presently incorporate export control and sanctions compliance requirements in our channel partner agreements. Complying with export control and sanctions regulations for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities. Violations of U.S. sanctions or export control laws can result in fines or penalties. While we have extensive compliance procedures in place, licensing of our product offerings may have been made in potential violation of the export control and economic sanctions laws. We filed a Voluntary Self Disclosure in December 2016 with the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) with respect to the sale of certain licenses in an aggregate amount of less than $700,000. We are currently waiting for OFAC to complete its review of this matter. We could be subject to monetary penalties or other sanctions by OFAC in connection with its review of this issue. Our software is highly complex and may contain undetected errors, defects or vulnerabilities, each of which could harm our business and financial performance. The software products that we offer are complex, and despite extensive testing and quality control, may contain errors, defects or vulnerabilities. Some errors, defects and vulnerabilities in our software products may only be discovered after the product or service has been released. Any errors, defects or vulnerabilities could result in the need for corrective releases to our software products, damage to our reputation, loss of revenue, an increase in product returns or lack of market acceptance of our products, any of which would likely harm our business and financial performance. Existing and increased competition and rapidly evolving technological changes may reduce our revenue and profits. The software industry has limited barriers to entry, and the availability of computing devices with continually expanding performance at progressively lower prices contributes to the ease of market entry. The industry is presently undergoing a platform shift from the personal computer to cloud and mobile computing. This shift further lowers barriers 2018 Form 10-K 18 2018 Form 10-K 18 to entry and poses a disruptive challenge to established software companies. The markets in which we compete are characterized by vigorous competition, both by entry of competitors with innovative technologies and by consolidation of companies with complementary products and technologies. In addition, some of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources. Furthermore, a reduction in the number and availability of compatible third-party applications, or our inability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, and new computing platforms, may adversely affect the sale of our products. Because of these and other factors, competitive conditions in the industry are likely to intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit margins and loss of market share, any of which would likely harm our business. We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. Because we conduct a substantial portion of our business outside the U.S., we face exposure to adverse movements in foreign currency exchange rates. These exposures may change over time as business practices evolve and economic conditions change. Our exposure to adverse movements in foreign currency exchange rates could have a material adverse impact on our financial results and cash flows. We use derivative instruments to manage a portion of our cash flow exposure to fluctuations in foreign currency exchange rates. As part of our risk management strategy, we use foreign currency contracts to manage a portion of our exposures of underlying assets, liabilities, and other obligations, which exist as part of our ongoing business operations. These foreign currency instruments have maturities that extend for one to twelve months in the future, and provide us with some protection against currency exposures. However, our attempts to hedge against these risks may not be completely successful, resulting in an adverse impact on our financial results. The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given fiscal period. Although our foreign currency cash flow hedge program extends beyond the current quarter in order to reduce our exposure to foreign currency volatility, we do not attempt to completely mitigate this risk, and in any case, will incur transaction fees in adopting such hedging programs. Such volatility, even when it increases our revenues or decreases our expenses, impacts our ability to accurately predict our future results and earnings. Security incidents may compromise the integrity of our or our customers’ products, services, data or intellectual property, harm our reputation, damage our competitiveness, create additional liability and adversely impact our financial results. As we digitize the Company and use cloud and web base technologies to leverage customer data to deliver the total customer experience, we are exposed to increased security risks and the potential for unauthorized access to, or improper use of our and our customers' information. Like all software products and systems, ours are vulnerable to security incidents. We devote resources to maintain the security and integrity of our systems, products, services and applications (online, mobile and desktop). We accomplish this by enhancing security features, conducting penetration tests, code hardening, releasing security vulnerability updates and accelerating our incident response time. Despite these efforts, we may not prevent security incidents. Hackers regularly have targeted our systems, products, services and applications, and we expect them to do so in the future. The impact of security incidents could disrupt the proper functioning of our systems, products or services; cause errors in the output of our customers' work; allow unauthorized access to sensitive, data or intellectual property, including proprietary or confidential information of ours or our customers; or other destructive outcomes. The risk of a security incident, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. These threats include but are not limited to identity theft, unauthorized access, DNS attacks, wireless network attacks, viruses and worms, advanced persistent threat (APT), application centric attacks, peer-to-peer attacks, phishing, malicious file uploads, backdoor trojans and distributed denial of service (DDoS) attacks. In addition, third parties may attempt to fraudulently induce our employees, vendors, partners or users to disclose information to gain access to our data or our users’ data and there is the risk of employee, contractor, or vendor error or malfeasance. Any of the foregoing could attack our systems, products or services. Despite efforts to create security barriers to such programs, it is virtually impossible for us to entirely eliminate this risk. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 19 2018 Form 10-K 19 If any of the foregoing were to occur, our reputation may suffer, our competitive position may be diminished, customers may stop buying our products and services, we could face lawsuits and potential liability, and our financial performance could be negatively impacted. Increasing regulatory focus on privacy issues and expanding laws may impact our business or expose us to increased liability. Our strategy to digitize the Company involves increasing our use of cloud and web based technologies and applications to leverage customer data. To accomplish this strategy, we must collect customer data, which may include personal data. Federal, state and foreign government privacy and data security laws apply to the treatment of personal data. Governments, the plaintiffs’ bar, privacy advocates and customers have increased their focus on how companies collect, process, use, store, share and transmit personal data. The General Data Protection Regulation ("GDPR") will apply in all EU member states effective May 25, 2018, and replace the current EU Data Protection Directive. The GDPR introduces new data protection requirements in the EU and substantial fines for non-compliance. The GDPR increases our responsibility and potential liability in relation to personal data, and we have and will continue to put in place additional processes and programs to demonstrate compliance. Compliance with these laws is costly and could delay or impede the development of new offerings. Any failure to comply with GDPR or other data privacy laws could lead to government enforcement actions and significant penalties. Further, any perceived privacy right violation could cause result in reputational harm, third-party claims, lawsuits or investigations. Additionally, we store customer information and content and if our customers fail to comply with contractual obligations or applicable laws, it could result in litigation or reputational harm to us. GDPR, other new laws and self-regulatory codes may affect our ability to reach current and prospective customers, to understand how our products and services are being used, to respond to customer requests allowed under the laws, and to implement our new business models effectively. These new laws and regulations would similarly affect our competitors as well as our customers. These requirements could impact demand for our products and services and result in more onerous contract obligations. We rely on third-parties to provide us with a number of operational and technical services; third-party security incidents could expose us to liability, harm our reputation, damage our competitiveness and adversely impact our financial performance. We rely on third-parties, such as Amazon Web Services, to provide us with operational and technical services. These third parties may have access to our systems, provide hosting services, or otherwise process data about us, our customers, employees, or partners. Any third party security incident could compromise the integrity or availability or result in the theft of data. In addition, our operations, or the operations of our customers or partners, could be negatively affected in the event of a security breach, and could be subject to the loss or theft of confidential or proprietary information, including source code. Unauthorized access to this data may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct. If any of the foregoing were to occur, our reputation may suffer, our competitive position may be diminished, customers may stop buying our products and services, we could face lawsuits and potential liability, and our financial performance could be negatively impacted. We rely on third-party services; any interruption or delay in service from these third parties could expose us to liability, harm our reputation, damage our competitiveness and adversely impact our financial performance. We rely on a number of third party suppliers, such as Amazon Web Services, in the operation of our business for the provision of various services and materials that we use in the operation of our business and production of our products. We may from time to time rely on a single or limited number of suppliers, or upon suppliers in a single country, for these services or materials. The inability of such third parties to satisfy our requirements could disrupt our business operations or make it more difficult for us to implement our business strategy. If any of these situations were to occur, our reputation could be harmed, we could be subject to third party liability, including under data protection and privacy laws in certain jurisdictions, and our financial performance could be negatively impacted. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 20 2018 Form 10-K 20 If we do not maintain good relationships with the members of our distribution channel, our ability to generate revenue will be adversely affected. If our distribution channel suffers financial losses, becomes financially unstable or insolvent, or is not provided the right mix of incentives to sell our products, our ability to generate revenue will be adversely affected. We sell our software products both directly to end-users and through a network of distributors and resellers. For fiscal 2018 and fiscal 2017, approximately 70% and 72%, respectively, of our revenue was derived from indirect channel sales through distributors and resellers and we expect that the majority of our revenue will continue to be derived from indirect channel sales in the future. Our ability to effectively distribute our products depends in part upon the financial and business condition of our distributor and reseller network. Computer software distributors and resellers typically are not highly capitalized, have previously experienced difficulties during times of economic contraction and experienced difficulties during the past several years. We have processes to ensure that we assess the creditworthiness of distributors and resellers prior to our sales to them. In the past we have taken steps to support them, and may take additional steps in the future, such as extending credit terms and providing temporary discounts. These steps, if taken, could harm our financial results. If our distributors and resellers were to become insolvent, they would not be able to maintain their business and sales, or provide customer support services, which would negatively impact our business and revenue. We rely significantly upon major distributors and resellers in both the U.S. and international regions, including the distributor Tech Data. Tech Data accounted for 31% and 30% of our total net revenue for fiscal 2018 and 2017, respectively. Although we believe that we are not substantially dependent on Tech Data, if Tech Data were to experience a significant disruption with its business or if our relationship with Tech Data were to significantly deteriorate, it is possible that our ability to sell to end users would be, at least temporarily, negatively impacted. This could in turn negatively impact our financial results. Over time, we have modified and will continue to modify aspects of our relationship with our distributors and resellers, such as their incentive programs, pricing to them and our distribution model to motivate and reward them for aligning their businesses with our strategy and business objectives. Changes in these relationships and underlying programs could negatively impact their business and harm our business. Further, our distributors and resellers may lose confidence in our business model transition, move to competitive products, or may not have the skills or ability to support customers under the new model. The loss of or a significant reduction in business with those distributors or resellerscould harm our business. In particular, if one or more of such distributors or resellers were unable to meet their obligations with respect to accounts payable to us, we could be forced to write off such accounts and may be required to delay the recognition of revenue on future sales to these customers. These events could have a material adverse effect on our financial results. Our financial results fluctuate within each quarter and from quarter to quarter making our future revenue and financial results difficult to predict. Our quarterly financial results have fluctuated in the past and will continue to do so in the future. These fluctuations could cause our stock price to change significantly or experience declines. We also provide investors with quarterly and annual financial forward-looking guidance that could prove to be inaccurate as a result of these fluctuations. In addition to the other factors described in this Part I, Item 1A, some of the factors that could cause our financial results to fluctuate include: • • • • • general market, economic, business, and political conditions in particular geographies, including Europe, APAC, and emerging economies; failure to produce sufficient revenue, billings or subscription growth, and profitability; failure to achieve anticipated levels of customer acceptance of our business model transition, including the impact of the end of perpetual licenses and the introduction of our maintenance-to-subscription program; restructuring or other accounting charges and unexpected costs or other operating expenses; changes in product mix, pricing pressure or changes in product pricing; • weak or negative growth in one or more of the industries we serve, including AEC, manufacturing, and digital media and entertainment markets; t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 21 2018 Form 10-K 21 2 0 1 8 A n n u a l R e p o r t • • • • • • • • • • • • • • • • • • • • • • • • • • • the success of new business or sales initiatives; security breaches, related reputational harm, and potential financial penalties to customers and government entities; timing of additional investments in the development of our platform or deployment of our services; changes in revenue recognition or other accounting guidelines employed by us and/or established by the Financial Accounting Standards Board or other rule-making bodies; fluctuations in foreign currency exchange rates and the effectiveness of our hedging activity; failure to achieve and maintain cost reductions and productivity increases; dependence on and the timing of large transactions; changes in billings linearity; adjustments arising from ongoing or future tax examinations; the ability of governments around the world to adopt fiscal policies, meet their financial and debt obligations, and to finance infrastructure projects; lower renewals of our maintenance program; failure to expand our AutoCAD and AutoCAD LT customer base to related design products and services; our ability to rapidly adapt to technological and customer preference changes, including those related to cloud computing, mobile devices, new computing platforms, and 3D printing; the timing of the introduction of new products by us or our competitors; the financial and business condition of our reseller and distribution channels; failure to accurately predict the impact of acquired businesses or to identify and realize the anticipated benefits of acquisitions, and successfully integrate such acquired businesses and technologies; perceived or actual technical or other problems with a product or combination of products; unexpected or negative outcomes of matters and expenses relating to litigation or regulatory inquiries; increases in cloud services-related expenses; timing of product releases and retirements; changes in tax laws or regulations, tax arrangements with foreign governments or accounting rules, such as increased use of fair value measures; changes in sales compensation practices; failure to effectively implement our copyright legalization programs, especially in developing countries; failure to achieve sufficient sell-through in our channels for new or existing products; renegotiation or termination of royalty or intellectual property arrangements; interruptions or terminations in the business of our consultants or third-party developers; the timing and degree of expected investments in growth and efficiency opportunities; 2018 Form 10-K 22 2018 Form 10-K 22 • • • • • failure to achieve continued success in technology advancements; catastrophic events or natural disasters; regulatory compliance costs; potential goodwill impairment charges related to prior acquisitions; and failure to appropriately estimate the scope of services under consulting arrangements. We have also experienced fluctuations in financial results in interim periods in certain geographic regions due to seasonality or regional economic or political conditions. In particular, our financial results in Europe during our third quarter are usually affected by a slower summer period, and our APAC operations typically experience seasonal slowing in our third and fourth quarters. Our operating expenses are based in part on our expectations for future revenue and are relatively fixed in the short term. Accordingly, any revenue shortfall below expectations has had, and in the future could have, an immediate and significant adverse effect on our profitability. Greater than anticipated expenses or a failure to maintain rigorous cost controls would also negatively affect profitability. Our business could suffer as a result of risks, costs, charges and integration risks associated with strategic acquisitions and investments. We regularly acquire or invest in businesses, software products and technologies that are complementary to our business through acquisitions, strategic alliances or equity or debt investments. The risks associated with such acquisitions include, among others, the difficulty of assimilating products, operations and personnel, inheriting liabilities such as intellectual property infringement claims, the failure to realize anticipated revenue and cost projections, the requirement to test and assimilate the internal control processes of the acquired business in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and the diversion of management's time and attention. In addition, such acquisitions and investments involve other risks such as: • • • • • • • the inability to retain customers, key employees, vendors, distributors, business partners, and other entities associated with the acquired business; the potential that due diligence of the acquired business or product does not identify significant problems; exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to, claims from terminated employees, customers, or other third parties; the potential for incompatible business cultures; significantly higher than anticipated transaction or integration-related costs; potential additional exposure to fluctuations in currency exchange rates; and the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another business. We may not be successful in overcoming such risks, and such acquisitions and investments may negatively impact our business. In addition, such acquisitions and investments have in the past and may in the future contribute to potential fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments. These costs or charges could negatively impact our financial results for a given period, cause quarter to quarter variability in our financial results or negatively impact our financial results for several future periods. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 23 2018 Form 10-K 23 2 0 1 8 A n n u a l R e p o r t Because we derive a substantial portion of our net revenue from a small number of products, including our AutoCAD- based software products and collections, if these products are not successful, our revenue will be adversely affected. We derive a substantial portion of our net revenue from sales of licenses of a limited number of our products, including AutoCAD software, products based on AutoCAD, which include our collections that serve specific markets and products that are interoperable with AutoCAD. Any factor adversely affecting sales of these products, including the product release cycle, market acceptance, product competition, performance and reliability, reputation, price competition, economic and market conditions and the availability of third-party applications, would likely harm our financial results. During fiscal 2018 and 2017, combined revenue from our AutoCAD and AutoCAD LT products, not including collections (formerly suites) having AutoCAD or AutoCAD LT as a component, represented 20% and 16% of our total net revenue, respectively. We are investing in resources to update and improve our information technology systems to digitize the Company and support our business model transition. Should our investments not succeed, or if delays or other issues with new or existing internal technology systems disrupt our operations, our business model transition could be compromised and our business could be harmed. We rely on our network and data center infrastructure, technology systems and our websites for our development, marketing, operational, support, sales, accounting and financial reporting activities. We continually invest resources to update and improve these systems and environments in order to meet the growing and evolving requirements of our business and customers. In particular, our transition to cloud-based products and a subscription-only business model requires considerable investment in the development of technologies, as well as back office systems for technical, financial, compliance and sales resources to enable a scalable organization. Such improvements are often complex, costly and time consuming. In addition, such improvements can be challenging to integrate with our existing technology systems, or uncover problems with our existing technology systems. Unsuccessful implementation of hardware or software updates and improvements could result in disruption in our business operations, loss of customers, loss of revenue, errors in our accounting and financial reporting or damage to our reputation, all of which could compromise our business model transition. If we are not able to adequately protect our proprietary rights, our business could be harmed. We rely on a combination of patent, copyright and trademark laws, trade secret protections, confidentiality procedures and contractual provisions to protect our proprietary rights. Despite such efforts to protect our proprietary rights, unauthorized parties from time to time have copied aspects of our software products or have obtained and used information that we regard as proprietary. Policing unauthorized use of our software products is time-consuming and costly. We are unable to measure the extent to which piracy of our software products exists and we expect that software piracy will remain a persistent problem, particularly in emerging economies. Furthermore, our means of protecting our proprietary rights may not be adequate. Additionally, we actively protect the secrecy of our confidential information and trade secrets, including our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret protection for that source code. The loss of future trade secret protection could make it easier for third-parties to compete with our products by copying functionality, which could adversely affect our financial performance and our reputation. We also seek to protect our confidential information and trade secrets through the use of non-disclosure agreements with our customers, contractors, vendors and partners. However, it is possible that our confidential information and trade secrets may be disclosed or published without our authorization. If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and reputation could be negatively impacted. We may face intellectual property infringement claims that could be costly to defend and result in the loss of significant rights. As more software patents are granted worldwide, the number of products and competitors in our industry segments grows and the functionality of products in different industry segments overlaps, we expect that software product developers will be increasingly subject to infringement claims. Infringement or misappropriation claims have in the past been, and may in the future be, asserted against us, and any such assertions could harm our business. Additionally, certain patent holders without products have become more aggressive in threatening and pursuing litigation in attempts to obtain fees for licensing the right to use patents. Any such claims or threats, whether with or without merit, have been and could in the future be time-consuming to defend, result in costly litigation and diversion of resources, cause product shipment 2018 Form 10-K 24 2018 Form 10-K 24 delays or require us to enter into royalty or licensing agreements. In addition, such royalty or license agreements, if required, may not be available on acceptable terms, if at all, which would likely harm our business. From time to time we realign or introduce new business and sales initiatives; if we fail to successfully execute and manage these initiatives, our results of operations could be negatively impacted. As part of our effort to accommodate our customers' needs and demands and the rapid evolution of technology, we from time to time evolve our business and sales initiatives such as realigning our development and marketing organizations, offering software as a service, and realigning our internal resources in an effort to improve efficiency. We may take such actions without clear indications that they will prove successful, and at times, we have been met with short- term challenges in the execution of such initiatives. Market acceptance of any new business or sales initiative is dependent on our ability to match our customers' needs at the right time and price. Often we have limited prior experience and operating history in these new areas of emphasis. If any of our assumptions about expenses, revenue or revenue recognition principles from these initiatives proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary materially from those anticipated, and our financial results will be negatively impacted. Net revenue, billings, earnings or subscriptions shortfalls or the volatility of the market generally may cause the market price of our stock to decline. The market price for our common stock has experienced significant fluctuations and may continue to fluctuate significantly. The market price for our common stock may be affected by a number of factors, including the other factors described in this Part I, Item 1A and the following: • • • • • • • • • • • shortfalls in our expected financial results, including net revenue, billings, ARR, ARPS, earnings, subscriptions, or other key performance metrics; results and future projections related to our business model transition; quarterly variations in our or our competitors' results of operations; general socio-economic, political or market conditions; changes in estimates of future results or recommendations or confusion on the part of analysts and investors about the short-term and long-term impact to our business resulting from our business model transition; uncertainty about certain governments' abilities to repay debt or effect fiscal policy; the announcement of new products or product enhancements by us or our competitors; unusual events such as significant acquisitions, divestitures, regulatory actions, and litigation; changes in laws, rules, or regulations applicable to our business; outstanding debt service obligations; and other factors, including factors unrelated to our operating performance, such as instability affecting the economy or the operating performance of our competitors. t r o p e R l a u n n A 8 1 0 2 Significant changes in the price of our common stock could expose us to costly and time-consuming litigation. Historically, after periods of volatility in the market price of a company's securities, a company becomes more susceptible to securities class action litigation. This type of litigation is often expensive and diverts management's attention and resources. Our business could be adversely affected if we are unable to attract and retain key personnel. Our success and ability to invest and grow depend largely on our ability to attract and retain highly skilled technical, professional, managerial, sales, and marketing personnel. Historically, competition for these key personnel has been intense. The loss of services of any of our key personnel (including key personnel joining our company through acquisitions), the inability to retain and attract qualified personnel in the future, or delays in hiring required personnel, 2018 Form 10-K 25 2018 Form 10-K 25 2 0 1 8 A n n u a l R e p o r t particularly engineering and sales personnel, could make it difficult to meet key objectives, such as timely and effective product introductions and financial goals. Our investment portfolio consists of a variety of investment vehicles in a number of countries that are subject to interest rate trends, market volatility, and other economic factors. If general economic conditions decline, this could cause the credit ratings of our investments to deteriorate, illiquidity in the financial marketplace, and we may experience a decline in interest income and an inability to sell our investments, leading to impairment in the value of our investments. It is our policy to invest our cash, cash equivalents and marketable securities in highly liquid instruments with, and in the custody of, financial institutions with high credit ratings and to limit the amounts invested with any one institution, type of security and issuer. However, we are subject to general economic conditions, interest rate trends and volatility in the financial marketplace that can affect the income that we receive from our investments, the net realizable value of our investments (including our cash, cash equivalents and marketable securities) and our ability to sell them. Any one of these factors could reduce our investment income, or result in material charges, which in turn could impact our overall net income (loss) and earnings (loss) per share. From time to time we make direct investments in privately held companies. Privately held company investments are considered inherently risky. The technologies and products these companies have under development are typically in the early stages and may never materialize, which could result in a loss of all or a substantial part of our initial investment in these companies. The evaluation of privately held companies is based on information that we request from these companies, which is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies. A loss on any of our investments may cause us to record an other-than-temporary impairment charge. The effect of this charge could impact our overall net income (loss) and earnings (loss) per share. In any of these scenarios, our liquidity may be negatively impacted, which in turn may prohibit us from making investments in our business, taking advantage of opportunities and potentially meeting our financial obligations as they come due. We are subject to legal proceedings and regulatory inquiries, and we may be named in additional legal proceedings or become involved in regulatory inquiries in the future, all of which are costly, distracting to our core business and could result in an unfavorable outcome, or a material adverse effect on our business, financial condition, results of operations, cash flows or the trading prices for our securities. We are involved in legal proceedings and receive inquiries from regulatory agencies. As the global economy has changed and our business has evolved, we have seen an increase in litigation activity and regulatory inquiries. Like many other high technology companies, the number and frequency of inquiries from U.S. and foreign regulatory agencies we have received regarding our business and our business practices, and the business practices of others in our industry, have increased in recent years. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes. Any claims or regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of significant operational resources, or otherwise harm our business. In any of these cases, our financial results, results of operations, cash flows or the trading prices for our securities could be negatively impacted. We are subject to risks related to taxation in multiple jurisdictions. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Our effective tax rate is primarily based on our expected geographic mix of earnings, statutory rates, intercompany arrangements, including the manner in which we develop, value and license our intellectual property, and enacted tax rules. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions on a worldwide basis. While we believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities and may have a significant impact on our effective tax rate. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, the U.S. government enacted significant tax law changes in December 2017, commonly referred to as the U.S. Tax Cuts and Jobs Act (the “Tax Act”), which will impact our tax obligations and effective tax rate beginning in our fiscal 2018 tax year. Increasingly, governmental tax authorities are scrutinizing corporate tax strategies. Many 2018 Form 10-K 26 2018 Form 10-K 26 countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws that, if enacted, could increase our tax obligations in many countries where we do business. If U.S. or other foreign tax authorities change applicable tax laws or successfully challenge the manner in which our profits are currently recognized, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. Uncertainties in the interpretation and application of the Tax Act could materially affect our tax obligations and effective tax rate. The Tax Act was enacted on December 22, 2017, and provides broad and significant changes to the U.S. tax code and how the U.S. imposes income tax on multinational corporations. Due to the complexity and varying interpretations of the Tax Act, the U.S. Department of Treasury and other standard-setting bodies may issue regulations and interpretative guidance that could significantly impact how we will apply the law and the ultimate impact to our results of operations from the Tax Act. The Tax Act requires complex computations to be performed that were not previously provided for in the U.S. tax law. These computations require significant judgments to be made regarding the interpretation of the provisions within the Tax Act along with preparation and analysis of information not previously required. In conjunction with the Tax Act, the SEC issued Staff Accounting Bulletin 118 (“SAB 118”) which allows for the Company to record provisional amounts until a final assessment can be made within a period not to exceed one year from the date of enactment. As a result, we have recorded a provisional estimate on the effect of the Tax Act in our financial statements based on our initial assessment. As additional regulatory guidance is issued and we continue to collect and analyze necessary data, we may make adjustments to provisional amounts previously recorded. We do not anticipate these adjustments to materially impact our provision for income taxes in the period in which the adjustments are made since we are in a full valuation allowance in the U.S. Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations. Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practice could have a significant adverse effect on our results of operations or the manner in which we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective. For example, in May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. This standard establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The standard also provides guidance on the recognition of costs related to obtaining and fulfilling customer contracts. In August 2015, FASB subsequently issued ASU 2015-14, which deferred the effectiveness of ASU 2014-09, so that it will now be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The revised effective date for the Company under the new standard will be the beginning of fiscal 2019. We are implementing changes to our policies, procedures and systems in order to successfully adopt the standard. This new standard is both technical and complex, and we expect to incur significant ongoing costs to implement and maintain compliance with this new standard. In addition, there may be greater uncertainty with respect to projecting revenue results from future operations as we work through the new revenue recognition standard. Adoption of ASU 2014-09 along with any other changes in accounting principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change. Any difficulties in the implementation of new or changed accounting standards including ASU 2014-09 could cause us to fail to meet our financial reporting obligations. If our estimates relating to our critical accounting policies are based on assumptions or judgments that change or prove to be incorrect, our operating results could fall below expectations of securities analysts and investors, resulting in a decline in our stock price. In addition, as we evolve and change our business and sales models, we are currently unable to determine how these potential changes may impact our new models, particularly in the area of revenue recognition. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 27 2018 Form 10-K 27 2 0 1 8 A n n u a l R e p o r t We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to furnish a report by our management on our internal control over financial reporting. The report contains, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. If our management or independent registered public accounting firm identifies one or more material weaknesses in our internal control over financial reporting, we would be unable to assert that such internal control over financial reporting is effective. If we are unable to assert that our internal control over financial reporting is effective (or if our independent registered public accounting firm is unable to express an opinion that our internal controls are effective), we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our business and stock price. In preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results. We make assumptions, judgments and estimates for a number of items, including the fair value of financial instruments, goodwill, long-lived assets and other intangible assets, the realizability of deferred tax assets and the fair value of stock awards. We also make assumptions, judgments and estimates in determining the accruals for employee related liabilities including commissions, bonuses, and sabbaticals; and in determining the accruals for uncertain tax positions, partner incentive programs, product returns reserves, allowances for doubtful accounts, asset retirement obligations and legal contingencies. These assumptions, judgments and estimates are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from our estimates, and such differences could significantly impact our financial results. We rely on third party technologies and if we are unable to use or integrate these technologies, our product and service development may be delayed and our financial results negatively impacted. We rely on certain software that we license from third parties, including software that is integrated with internally developed software and used in our products to perform key functions. These third-party software licenses may not continue to be available on commercially reasonable terms, and the software may not be appropriately supported, maintained or enhanced by the licensors. The loss of licenses to, or inability to support, maintain and enhance any such software could result in increased costs, or in delays or reductions in product shipments until equivalent software can be developed, identified, licensed and integrated, which would likely harm our business. Disruptions with licensing relationships and third party developers could adversely impact our business. We license certain key technologies from third parties. Licenses may be restricted in the term or the use of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for key technology on favorable terms, if at all, and any failure to do so could harm our business. Our business strategy has historically depended in part on our relationships with third-party developers who provide products that expand the functionality of our design software. Some developers may elect to support other products or may experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn. In particular markets, such disruptions have in the past, and would likely in the future, negatively impact these third-party developers and end users, which could harm our business. Additionally, technology created by outsourced product development, whether outsourced to third parties or developed externally and transferred to us through business or technology acquisitions, has certain additional risks such as effective integration into existing products, adequate transfer of technology know-how and ownership and protection of transferred intellectual property. 2018 Form 10-K 28 2018 Form 10-K 28 As a result of our strategy of partnering with other companies for product development, our product delivery schedules could be adversely affected if we experience difficulties with our product development partners. We partner with certain independent firms and contractors to perform some of our product development activities. We believe our partnering strategy allows us to, among other things, achieve efficiencies in developing new products and maintaining and enhancing existing product offerings. Our partnering strategy creates a dependency on such independent developers. Independent developers, including those who currently develop products for us in the U.S. and throughout the world, may not be able or willing to provide development support to us in the future. In addition, use of development resources through consulting relationships, particularly in non-U.S. jurisdictions with developing legal systems, may be adversely impacted by, and expose us to risks relating to, evolving employment, export and intellectual property laws. These risks could, among other things, expose our intellectual property to misappropriation and result in disruptions to product delivery schedules. Our business may be significantly disrupted upon the occurrence of a catastrophic event. Our business is highly automated and relies extensively on the availability of our network and data center infrastructure, our internal technology systems and our websites. We also rely on hosted computer services from third parties for services that we provide to our customers and computer operations for our internal use. The failure of our systems or hosted computer services due to a catastrophic event, such as an earthquake, fire, flood, tsunami, weather event, telecommunications failure, power failure, cyber attack, terrorism, or war, could adversely impact our business, financial results and financial condition. We have developed disaster recovery plans and maintain backup systems in order to reduce the potential impact of a catastrophic event, however there can be no assurance that these plans and systems would enable us to return to normal business operations. In addition, any such event could negatively impact a country or region in which we sell our products. This could in turn decrease that country's or region's demand for our products, thereby negatively impacting our financial results. If we were required to record an impairment charge related to the value of our long-lived assets, or an additional valuation allowance against our deferred tax assets, our results of operations would be adversely affected. Our long-lived assets are tested for impairment if indicators of impairment exist. If impairment testing shows that the carrying value of our long-lived assets exceeds their estimated fair values, we would be required to record a non-cash impairment charge, which would decrease the carrying value of our long-lived assets, as the case may be, and our results of operations would be adversely affected. Our deferred tax assets include net operating loss, amortizable tax assets and tax credit carryforwards that can be used to offset taxable income and reduce income taxes payable in future periods. Each quarter, we assess the need for a valuation allowance, considering both positive and negative evidence to determine whether all or a portion of the deferred tax assets are more likely than not to be realized. In fiscal 2016, we determined that it was more likely than not that the Company would not realize our U.S. deferred tax assets and established a valuation allowance against our U.S. deferred tax assets. We continued to have a full valuation allowance against our U.S. deferred tax assets in fiscal 2018. Changes in the amount of the valuation allowance could result in a material non- cash expense or benefit in the period in which the valuation allowance is adjusted and our results of operations could be materially affected. We will continue to perform these tests and any future adjustments may have a material effect on our financial condition and results of operations. We issued $1.6 billion aggregate principal amount of unsecured notes in debt offerings and have an existing $400.0 million revolving credit facility, and expect to incur other debt in the future, which may adversely affect our financial condition and future financial results. In June 2017, we issued $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. In June 2015, we issued 3.125% notes due June 15, 2020 in an aggregate principal amount of $450.0 million and 4.375% notes due June 15, 2025 in an aggregate principal amount of $300.0 million. In December 2012, we issued 3.6% notes due December 15, 2022 in an aggregate principal amount of $350.0 million. As the debt matures, we will have to expend significant resources to either repay or refinance these notes. For example, in July 2017, we redeemed outstanding senior notes due December 15, 2017, for a total cash repayment of $401.8 million by using the proceeds from the notes we issued in 2017. If we decide to refinance notes in the future, we may be required to do so on different or less favorable terms or we may be unable to refinance the notes at all, both of which may adversely affect our financial condition. We also have a $400.0 million revolving credit facility. As of January 31, 2018, we had no outstanding borrowings on the line of credit. Although we have no current plans to borrow under this credit facility, we may use the proceeds of any future borrowing for general corporate purposes, or for future acquisitions or expansion of our business. Our existing t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 29 2018 Form 10-K 29 and future levels of indebtedness may adversely affect our financial condition and future financial results by, among other things: • • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; requiring the dedication of a greater than expected portion of our expected cash from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and • limiting our flexibility in planning for, or reacting to, changes in our business and our industry. This credit agreement contains customary covenants that could restrict the imposition of liens on Autodesk’s assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain the financial covenants. The financial covenants consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and, after April 30, 2018, a minimum interest coverage ratio. We are required to comply with the covenants set forth in our unsecured notes and revolving credit facility. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, we would not be able to incur additional indebtedness under the credit facility and any outstanding indebtedness may be declared immediately due and payable. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities. Under certain circumstances, if our credit ratings are downgraded or other negative action is taken, the interest rate payable by us under our revolving credit facility could increase. Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and could affect the terms of any such financing. ITEM 1B. UNRESOLVED STAFF COMMENTS None ITEM 2. PROPERTIES We lease 2,128,261 square feet of office space in 124 locations in the United States and internationally through our foreign subsidiaries. Our executive offices are located in leased office space in San Francisco, California, and our corporate headquarters are located in leased office space in San Rafael, California. Our San Rafael facilities consist of approximately 189,000 square feet under leases that have expiration dates ranging from February 2018 to December 2019. Our San Francisco facilities consist of approximately 264,000 square feet under leases that have expiration dates ranging from December 2018 to December 2023. We and our foreign subsidiaries lease additional space in various locations throughout the world for local sales, product development, and technical support personnel. All facilities are in good condition. Our facilities are operating at capacities averaging 80% occupancy worldwide as of January 31, 2018. We believe that our existing facilities and offices are adequate to meet our requirements for the foreseeable future. See Note 8, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements for more information about our lease commitments. ITEM 3. LEGAL PROCEEDINGS We are involved in a variety of claims, suits, investigations, and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, piracy prosecution, business practices, and other matters. In our opinion, resolution of pending matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows, or financial position. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect our results of operations, cash flows, or financial position in a particular period, however, based on the information known by us as of the date of this filing and the rules and regulations applicable to the preparation of our financial statements, any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss. 2 0 1 8 A n n u a l R e p o r t ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 2018 Form 10-K 30 2018 Form 10-K 30 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the NASDAQ Global Select Market under the symbol ADSK. The following table lists the intraday high and low sales prices for each quarter in the last two fiscal years. Fiscal 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Dividends High Low $ $ 90.94 $ 115.25 125.01 131.10 62.42 $ 61.42 73.40 83.96 80.04 91.17 104.77 103.19 41.60 49.82 56.80 67.15 We did not declare any cash or stock dividends in either fiscal 2018 or fiscal 2017. We anticipate that, for the foreseeable future, we will not pay any cash or stock dividends. Stockholders As of January 31, 2018, the number of common stockholders of record was 388. Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by the record holders. Issuer Purchases of Equity Securities Autodesk's stock repurchase program is largely to help offset the dilution from the issuance of stock under our employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders, and has the effect of returning excess cash generated from our business to stockholders. The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, cash requirements for acquisitions, economic and market conditions, stock price and legal and regulatory requirements. In September 2016, the Board of Directors approved a plan which authorized the repurchase of up to an additional 30.0 million shares of the Company's common stock. As of January 31, 2018, 10.4 million shares have been repurchased under this plan. During the three and twelve months ended January 31, 2018, we repurchased 2.5 million and 6.9 million shares, respectively, of our common stock under the Board of Director authorized share repurchase program. At January 31, 2018, 19.6 million shares remained available for repurchase under the repurchase program approved by the Board of Directors. See Note 9, “Stockholders' (Deficit) Equity (Deficit),” in the Notes to Consolidated Financial Statements for further discussion. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 31 2018 Form 10-K 31 The following table provides information about the repurchase of common stock in open-market transactions during the quarter ended January 31, 2018: (Shares in millions) November 1- November 30 December 1 - December 31 January 1 - January 31 Total Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2) 0.4 2.0 0.1 2.5 $ $ 109.18 107.35 113.26 107.86 0.4 2.0 0.1 2.5 21.7 19.7 19.6 ____________________ (1) Represents shares purchased in open-market transactions under the stock repurchase program approved by the Board of Directors. (2) These amounts correspond to the plan approved by the Board of Directors in September 2016 that authorizes the repurchase of 30.0 million shares. The plan does not have a fixed expiration date. Sales of Unregistered Securities There were no sales of unregistered securities during the three months ended January 31, 2018. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 32 2018 Form 10-K 32 Company Stock Performance The following graph shows a five-year comparison of cumulative total return (equal to dividends plus stock appreciation) for our Common Stock, the Standard & Poor’s 500 Stock Index, and the Dow Jones U.S. Software Index. The following graph and related information will not be deemed to be “soliciting material” or to be “filed” with the SEC, nor will such information be incorporated by reference into any filing pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into such filing. Comparison of Five Year Cumulative Total Stockholder Return (1) t r o p e R l a u n n A 8 1 0 2 ___________________ (1) Assumes $100 invested on January 31, 2013, in Autodesk’s stock, the Standard & Poor’s 500 Stock Index, and the Dow Jones U.S. Software Index, with reinvestment of all dividends. Total stockholder returns for prior periods are not an indication of future investment returns. 2018 Form 10-K 33 2018 Form 10-K 33 ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data is not necessarily indicative of results of future operations, and should be read in conjunction with Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and the consolidated financial statements and related notes thereto included in Item 8 of this Form 10-K to fully understand factors that may affect the comparability of the information presented below. The financial data for the fiscal years ended January 31, 2018 and 2017 are derived from, and are qualified by reference to, the audited consolidated financial statements that are included in this Form 10-K. The Consolidated Statements of Operations and the Consolidated Statements of Cash Flows data for the year ended January 31, 2016 are derived from, and are qualified by reference to, the audited consolidated financial statements that are included in this Form 10-K. The Consolidated Balance Sheet data for the fiscal year ended January 31, 2016 and the remaining financial data for the fiscal years ended January 31, 2015 and 2014 are derived from audited, consolidated financial statements which are not included in this Form 10-K. For the Fiscal Year: Net revenue (Loss) income from operations Net (loss) income Cash flow from operations Common Stock Data: Basic net (loss) income per share Diluted net (loss) income per share At Year End: Total assets Long-term liabilities Stockholders’ (deficit) equity 2 0 1 8 A n n u a l R e p o r t Fiscal Year Ended January 31, 2018 2017 2016 2015 2014 (In millions, except per share data) $ 2,056.6 $ 2,031.0 $ 2,504.1 $ 2,512.2 $ 2,273.9 (509.1) (566.9) 0.9 (499.6) (582.1) 169.7 1.3 (330.5) 414.0 120.7 81.8 708.6 $ (2.58) $ (2.61) $ (1.46) $ 0.36 $ (2.58) (2.61) (1.46) 0.35 284.8 228.8 572.6 1.02 1.00 $ 4,113.6 $ 4,798.1 $ 5,515.3 $ 4,909.7 $ 4,589.9 2,246.4 (256.0) 1,879.1 733.6 2,304.7 1,619.6 1,290.4 2,219.2 1,256.9 2,261.5 2018 Form 10-K 34 2018 Form 10-K 34 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion in our MD&A and elsewhere in this Form 10-K contains trend analyses and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are any statements that look to future events and consist of, among other things, our business strategies, including those discussed in “Strategy” and “Overview of Fiscal 2018” below, future net revenue, operating expenses, recurring revenue, annualized recurring revenue, annualized revenue per subscription, other future financial results (by product type and geography) and subscriptions, the effectiveness of our restructuring efforts, the effectiveness of our efforts to successfully manage transitions to new business models and markets, our expectations regarding the continued transition of our business model, expectations for our maintenance plan and subscription plan subscriptions, our ability to increase our subscription base, expected market trends, including the growth of cloud and mobile computing, the effect of unemployment, the availability of credit, our expectations for our restructuring, the effects of global economic conditions, the effects of revenue recognition, the effects of recently issued accounting standards, expected trends in certain financial metrics, including expenses, the impact of acquisitions and investment activities, expectations regarding our cash needs, the effects of fluctuations in exchange rates and our hedging activities on our financial results, our ability to successfully expand adoption of our products, our ability to gain market acceptance of new businesses and sales initiatives, the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries, the timing and amount of purchases under our stock buy-back plan, and the effects of potential non-cash charges on our financial results and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product capability and acceptance, remediation to our controls environment, statements regarding our liquidity and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “may,” “believe,” “could,” “anticipate,” “would,” “might,” “plan,” “expect,” and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of a number of factors, including those set forth below in Part II, Item 1A, “Risk Factors,” and in our other reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update the forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. Strategy Autodesk makes software for people who make things. If you have ever driven a high-performance car, admired a towering skyscraper, used a smartphone, or watched a great film, chances are you have experienced what millions of Autodesk customers are doing with our software. Autodesk gives you the power to make anything. Autodesk was founded during the platform transition from mainframe computers and engineering workstations to personal computers. We developed and sustained a compelling value proposition based upon desktop software for the personal computer. Just as the transition from mainframes to personal computers transformed the industry over 30 years ago, we believe our industry is undergoing a similar transition from the personal computer to cloud, mobile, and social computing. To address this transition, we have accelerated our move to the cloud and mobile devices and are offering more flexible licensing. Our product subscriptions currently represent a hybrid of desktop software and cloud functionality, which provides a device- independent, collaborative design workflow for designers and their stakeholders. Our SaaS offerings, for example, BIM 360, Shotgun, Fusion, and AutoCAD 360 Pro, provide tools, including mobile and social capabilities, to streamline design, collaboration, building and manufacturing and data management processes. We believe that customer adoption of these new offerings will continue to grow as customers across a range of industries begin to take advantage of the scalable computing power and flexibility provided through these new services. Our strategy is to lead the industries we serve to cloud-based technologies and business models. This entails both a technological shift and a business model shift. As part of the transition, we discontinued selling new perpetual licenses of most individual software products effective February 1, 2016, and discontinued selling new perpetual licenses of suites while introducing industry collections effective August 1, 2016. Industry collections provide our customers with increased access to a broader selection of Autodesk products and services that exceeds those previously available in suites - simplifying the customer ability to get access to a complete set of tools for their industry. We now offer subscriptions for individual products and industry collections, cloud service offerings, and flexible enterprise business agreements (collectively referred to as "subscription plan"). These subscription plan offerings are designed to give our customers more flexibility with how they use our products and service offerings and to attract a broader range of customers, such as project-based users and small businesses. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 35 2018 Form 10-K 35 With the discontinuation of the sale of most perpetual licenses, we have transitioned away from selling a mix of perpetual licenses and term-based product subscriptions toward a single subscription model. On June 15, 2017, we commenced a program to incentivize maintenance plan customers to move to subscription plan offerings. Through this program we offer discounts to those maintenance customers that move to a subscription plan, while at the same time increasing maintenance plan pricing over time for customers that remain on maintenance. To provide more meaningful information as to the performance of different categories of product and services, we have changed our presentation of revenue and cost of revenue on our Condensed Consolidated Statements of Operations effective the first quarter of fiscal 2018. See Note 1, "Business and Summary of Significant Accounting Policies," for additional information. During the first three years of the transition, revenue, margins, EPS, deferred revenue and cash flow from operations have been impacted as more revenue is recognized ratably rather than upfront and as subscription plan offerings generally have a lower initial purchase price. As we progress through the current stage of the business model transition, annualized recurring revenue ("ARR"), growth of billings, and total subscriptions better reflect business momentum. To further analyze progress, we disaggregate our growth between the original maintenance model ("maintenance plan") and the subscription plan model. Maintenance plan subscriptions peaked in the fourth quarter of our fiscal 2016 as we discontinued selling new maintenance plan subscriptions in fiscal 2017, and we expect them to decline slowly over time as maintenance plan customers continue to convert to our subscription plans. In order to support our strategic priorities of completing the subscription transition, digitizing the Company, and re- imagining manufacturing, construction, and production, we commenced a world-wide restructuring plan in the fourth quarter of fiscal 2018. Through the restructuring, we seek to reduce our investments in areas not aligned with our strategic priorities, including in areas related to research and development and go-to-market activities. At the same time, we plan to further invest in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with our strategic priorities, we are positioning ourselves to meet our long-term goals, while keeping non-GAAP spend flat in fiscal 2019. We anticipate incurring pre-tax restructuring charges of $135 million to $149 million, substantially all of which would result in cash expenditures, $124 million to $137 million of which would be for one-time employee termination benefits, and $11 million to $12 million of which would be for facilities-related and other costs. If we are unable to successfully complete our reorganizational efforts we may need to undertake additional restructuring efforts, and our business and operating results may be harmed. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 36 2018 Form 10-K 36 We sell our products and services globally, through a combination of indirect and direct channels. Our indirect channels include value added resellers, direct market resellers, distributors, computer manufacturers, and other software developers. Our direct channels include internal sales resources dedicated to selling in our largest accounts, our highly specialized products, and business transacted through our online Autodesk branded store. The following chart shows our split between indirect and direct channels for the fiscal years ended January 31, 2018, 2017 and 2016: t r o p e R l a u n n A 8 1 0 2 We anticipate that our channel mix will continue to change as we scale our online Autodesk branded store business and our largest accounts shift towards direct-only business models. However, we expect our indirect channel will continue to transact and support the majority of our customers and revenue as we move beyond the business model transition. We employ a variety of incentive programs and promotions to align our direct and indirect channels with our business strategies. In addition, we have a worldwide user group organization and we have created online user communities dedicated to the exchange of information related to the use of our products. One of our key strategies is to maintain an open-architecture design of our software products to facilitate third-party development of complementary products and industry-specific software solutions. This approach enables customers and third parties to customize solutions for a wide variety of highly specific uses. We offer several programs that provide strategic investment funding, technological platforms, user communities, technical support, forums, and events to developers who develop add-on applications for our products. For example, we have established the Autodesk Forge program to support innovators that build solutions to facilitate the development of a single connected ecosystem for the future of how things are designed, made, and used as well as support ideas that push the boundaries of 3D printing. In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, third-party developers, customers, educational institutions, educators, and students is a key competitive advantage which has been cultivated over an extensive period of time. This network of partners and relationships provides us with a broad and deep reach into volume markets around the world. Our distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our products quickly and easily. We have a significant number of registered third-party developers who create products that work well with our products and extend them for a variety of specialized applications. Autodesk is committed to helping fuel a lifelong passion for design in students of all ages. We offer free educational licenses of Autodesk software worldwide to students, educators, and accredited educational institutions. We inspire and support beginners with Tinkercad, a simple online 3D design and 3D printing tool. Through Autodesk Design Academy, we provide 2018 Form 10-K 37 2018 Form 10-K 37 2 0 1 8 A n n u a l R e p o r t secondary and postsecondary school markets hundreds of standards-aligned class projects to support design-based disciplines in Science, Technology, Engineering, Digital Arts, and Math (STEAM) while using Autodesk's professional-grade 3D design, engineering and entertainment software used in industry. We also have made Autodesk Design Academy curricula available on iTunes U and Udemy. Our intention is to make Autodesk software ubiquitous and the design and making software of choice for those poised to become the next generation of professional users. Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions regarding acquisitions. We currently anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available. Our strategy depends upon a number of assumptions to successfully make the transition toward new cloud and mobile platforms, including: the related technology and business model shifts; making our technology available to mainstream markets; leveraging our large global network of distributors, resellers, third-party developers, customers, educational institutions, and students; improving the performance and functionality of our products; and adequately protecting our intellectual property. If the outcome of any of these assumptions differs from our expectations, we may not be able to implement our strategy, which could potentially adversely affect our business. For further discussion regarding these and related risks, see Part I, Item 1A, “Risk Factors.” Critical Accounting Policies and Estimates Our Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles. In preparing our Consolidated Financial Statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our Consolidated Financial Statements. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments, and estimates. Our significant accounting policies are described in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements. We believe that of all our significant accounting policies, the following policies involve a higher degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collection is probable. However, determining whether and when some of these criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue we report. For multiple element arrangements containing only software and software-related elements, we allocate the sales price among each of the deliverables using the residual method, under which revenue is allocated to undelivered elements based on our vendor-specific objective evidence (“VSOE”) of fair value. VSOE is the price charged when an element is sold separately or a price set by management with the relevant authority. If we do not have VSOE of an undelivered software license, we defer revenue recognition on the entire sales arrangement until all elements for which we do not have VSOE are delivered. If we do not have VSOE for undelivered product subscriptions, maintenance or services, the revenue for the arrangement is recognized over the longest contractual service period in the arrangement. We are required to exercise judgment in determining whether VSOE exists for each undelivered element based on whether our pricing for these elements is sufficiently consistent. For multiple elements arrangements involving non-software elements, including cloud subscription services, our revenue recognition policy is based upon the accounting guidance contained in Accounting Standards Codification ("ASC") 605, Revenue Recognition. For these arrangements, we first allocate the total arrangement consideration based on the relative selling prices of the software group of elements as a whole and to the non-software elements. We then further allocate consideration within the software group to the respective elements within that group using the residual method as described above. We exercise judgment and use estimates in connection with the determination of the amount of revenue to be recognized in each accounting period. We allocate the total arrangement consideration among the various elements based on a selling price hierarchy. The selling price for a deliverable is based on its VSOE if available, third-party evidence ("TPE") if VSOE is not available, or the best estimated selling price ("BESP") if neither VSOE nor TPE is available. BESP represents the price at which Autodesk would transact for the deliverable if it were sold regularly on a standalone basis. To establish BESP for those elements for which 2018 Form 10-K 38 2018 Form 10-K 38 neither VSOE nor TPE are available, we perform a quantitative analysis of pricing data points for historical standalone transactions involving such elements for a twelve-month period. As part of this analysis, we monitor and evaluate the BESP against actual pricing to ensure that it continues to represent a reasonable estimate of the standalone selling price, considering several other external and internal factors including, but not limited to, pricing and discounting practices, contractually stated prices, the geographies in which we offer our products and services, and the type of customer (i.e. distributor, value-added reseller, and direct end user, among others). We analyze BESP at least annually or on a more frequent basis if a significant change in our business necessitates a more timely analysis or if we experience significant variances in our selling prices. In situations when we have multiple contracts with a single counterparty, we use the guidance in ASC 985-605 to evaluate both the form and the substance of the arrangements to determine if they should be combined and accounted for as one arrangement or as separate arrangements. Our assessment of the likelihood of collection is also a critical factor in determining the timing of revenue recognition. If we do not believe that collection is probable, the revenue will be deferred until payment is received. Our indirect channel model includes both a two-tiered distribution structure, where distributors sell to resellers, and a one-tiered structure where Autodesk sells directly to resellers. Our subscription revenue from distributors and resellers generally commences recognition at the time access is provided to their customers, provided all other criteria for revenue recognition are met. This policy is predicated on our ability to estimate sales returns, among other criteria. We are also required to evaluate whether our distributors and resellers have the ability to honor their commitment to make fixed or determinable payments, regardless of whether they collect payment from their customers. If we were to change any of these assumptions or judgments, it could cause a material increase or decrease in the amount of revenue that we report in a particular period. As part of the indirect channel model, we have a partner incentive program that uses quarterly attainment of monetary rewards to motivate distributors and resellers to achieve mutually agreed upon business goals in a specified time period. A portion of these incentives reduce license and other revenue in the current period. The remainder, which relates to incentives on our Subscription Program, is recorded as a reduction to deferred revenue in the period the subscription transaction is billed and subsequently recognized as a reduction to subscription revenue over the contract period. These incentive balances do not require significant assumptions or judgments. Depending on how the payments are made, the reserves associated with the partner incentive program are treated on the balance sheet as either contra account receivable or accounts payable. Marketable Securities and Privately Held Company Investments. As described in Note 2, “Financial Instruments,” in the Notes to the Consolidated Financial Statements, our investments in marketable securities are measured at the end of each reporting period and reported at fair value. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining the fair value of our investments, we are sometimes required to use various alternative valuation techniques. Inputs to valuation techniques are either observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. This is generally true for our cash and cash equivalents and the majority of our marketable securities, which we consider to be Level 1 assets and Level 2 assets. However, determining the fair value of marketable securities or convertible note investments in privately held companies when observable inputs are not available (Level 3) requires significant judgment. For example, we use probability weighted discounted cash flow models, in which some of the inputs are unobservable in the market, to estimate the fair value of our convertible debt securities. These assumptions are inherently subjective and involve significant management judgment. Whenever possible, we use observable market data and rely on unobservable inputs only when observable market data is not available, when determining fair value. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 39 2018 Form 10-K 39 2 0 1 8 A n n u a l R e p o r t All of Autodesk’s marketable securities and privately held company investments are subject to a periodic impairment review. We recognize an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Autodesk considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than Autodesk’s cost basis, the financial condition and near-term prospects of the investee, and Autodesk’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in the market value. Business Combinations. We allocate the fair value of the consideration transferred to the assets and liabilities acquired, as well as to in-process research and development based on their estimated fair values at the acquisition date. Any residual purchase price is recorded as goodwill. The purchase price allocation requires us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets and deferred revenue obligations. Although we believe the assumptions and estimates we have made are reasonable, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Examples of critical estimates used in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to: • • • future expected cash flows from sales, maintenance agreements, and acquired developed technologies; the acquired company's trade name, trademark and existing customer relationship, as well as assumptions about the period of time the acquired trade name and trademark will continue to be used in the our product portfolio; expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and • discount rates used to determine the present value of estimated future cash flows. These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates, and if such events occur we may be required to record a charge against the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities. Realizability of Long-Lived Assets. We assess the realizability of our long-lived assets and related intangible assets, other than goodwill, quarterly, or sooner should events or changes in circumstances indicate the carrying values of such assets may not be recoverable. We consider the following factors important in determining when to perform an impairment review: significant under-performance of a business or product line relative to budget; shifts in business strategies which affect the continued uses of the assets; significant negative industry or economic trends; and the results of past impairment reviews. When such events or changes in circumstances occur, we assess recoverability of these assets. We assess recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If impairment indicators were present based on our undiscounted cash flow models, which include assumptions regarding projected cash flows, we would perform a discounted cash flow analysis to assess impairments on long-lived assets. Variances in these assumptions could have a significant impact on our conclusion as to whether an asset is impaired or the amount of any impairment charge. Impairment charges, if any, result in situations where any fair values of these assets are less than their carrying values. In addition to our recoverability assessments, we routinely review the remaining estimated useful lives of our long-lived assets. Any reduction in the useful life assumption will result in increased depreciation and amortization expense in the quarter when such determinations are made, as well as in subsequent quarters. We will continue to evaluate the values of our long-lived assets in accordance with applicable accounting rules. As changes in business conditions and our assumptions occur, we may be required to record impairment charges. Income Taxes. We account for income taxes under the asset and liability approach. Under this method, deferred tax assets, including those related to tax loss carryforwards and credits, and deferred tax liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We recognize the tax benefit for an uncertain tax position when it meets a more 2018 Form 10-K 40 2018 Form 10-K 40 likely than not threshold. We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense. A valuation allowance is recorded to reduce deferred tax assets when management cannot conclude that it is more likely than not that the net deferred tax asset will be recovered. The valuation allowance is determined by assessing both positive and negative evidence to determine whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets. In assessing the need for valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. Beginning in the second quarter of fiscal 2016, we considered cumulative losses in the U.S. arising from the Company’s business model transition as a significant source of negative evidence. Considering this negative evidence and the absence of sufficient positive objective evidence that we would generate sufficient taxable income in the U.S. to realize the deferred tax assets, we determined that it was more likely than not that the Company would not realize U.S. federal and state deferred tax assets and recorded a valuation allowance on our federal and state deferred tax assets. We continue to have a full valuation allowance against our U.S. deferred tax assets in fiscal 2018. As we continually strive to optimize our overall business model, tax planning strategies may become feasible and prudent whereby management may determine that it is more likely than not that the federal and state deferred tax assets will be realized; therefore, we will continue to evaluate the evidence around our ability to utilize our net deferred tax assets each quarter, both in the US and in foreign jurisdictions, based on all available evidence, both positive and negative. Stock-Based Compensation. We measure stock-based compensation cost at the grant date fair value of the award, and recognize expense ratably over the requisite service period, which is generally the vesting period. We estimate the fair value of certain stock-based payment awards (including grants of employee stock purchases related to the employee stock purchase plan) using either the Black-Scholes-Merton option-pricing model or a binomial-lattice model (e.g., Monte Carlo simulation model). To determine the grant-date fair value of our stock-based payment awards, we use a Black-Scholes model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case we use the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. These variables include our expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award, and expected dividends. The variables used in these models are reviewed on a quarterly basis and adjusted, as needed. Share-based compensation cost for restricted stock is measured on the closing fair market value of our common stock on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense in our Consolidated Statements of Operations. t r o p e R l a u n n A 8 1 0 2 Legal Contingencies. As described in Part I, Item 3, “Legal Proceedings” and Part II, Item 8, Note 8, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements, we are periodically involved in various legal claims and proceedings. We routinely review the status of each significant matter and assess our potential financial exposure. If the potential loss from any matter is considered probable and the amount can be reasonably estimated, we record a liability for the estimated loss. Because of inherent uncertainties related to these legal matters, we base our loss accruals on the best information available at the time. As additional information becomes available, we reassess our potential liability and may revise our estimates. Such revisions could have a material impact on future quarterly or annual results of operations. Restructuring Charges and other facility exit costs, net and Accruals. The Company’s restructuring plans include one– time termination benefits as well as certain contractual termination benefits. We record costs associated with exit activities related to restructuring plans in accordance with the ASC Topic 420, Exit or Disposal Obligations. Liabilities for costs associated with an exit or disposal activity are recognized in the period in which the liability is incurred. The timing of associated cash payments is dependent upon the type of exit cost and may extend over a 12-month period or longer. We record restructuring charge liabilities in “Other accrued liabilities,” or "Other liabilities" in the consolidated balance sheet. Restructuring charges include employee termination costs, facility closure, accelerated depreciation of certain assets and relocation costs, and contract termination costs. One–time termination benefits are recognized as a liability at estimated fair value when the approved plan of termination has been communicated to employees, unless employees must provide future service that is longer than the statutory requirement, in which case the benefits are recognized ratably over the future service period. For the facility-related restructuring charges, we recognize upon exiting all or a portion of a leased facility and meeting cease-use and other requirements. The amount of restructuring charges is based on the fair value of the lease obligation for the abandoned space, which includes a sublease assumption that could be reasonably obtained. We also recognize accelerated depreciation related to assets at the time we commit to a plan to abandon. 2018 Form 10-K 41 2018 Form 10-K 41 Restructuring charges require significant estimates and assumptions, including sub-lease income and expenses for severance and other employee separation costs. Our estimates involve a number of risks and uncertainties, some of which are beyond our control, including future real estate market conditions and our ability to successfully enter into subleases or termination agreements with terms as favorable as those assumed when arriving at our estimates. We monitor these estimates and assumptions on at least a quarterly basis for changes in circumstances and any corresponding adjustments to the accrual are recorded in our statement of operations in the period when such changes are known. Recently Issued Accounting Standards See Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition. Overview of Fiscal 2018 • Total net revenue increased 1 percent during fiscal 2018 as compared to the prior fiscal year. • Total ARR increased 25 percent as of January 31, 2018, as compared to the end of fiscal 2017. • Total subscriptions increased 20 percent to $3.72 million. • The base of both subscription plan ARR and subscriptions surpassed the base of maintenance plan ARR and subscriptions. • Total spend (cost of revenue + operating expenses) increased 1 percent. • Total deferred revenue (short term + long term deferred revenue) increased 9 percent. We are undergoing a business model transition in which we have discontinued selling new perpetual licenses for most of our products in favor of subscriptions. During the first three years of the transition, revenue, margins, EPS, deferred revenue and cash flow from operations were impacted as more revenue is recognized ratably rather than upfront and as product subscription plan offerings generally have a lower initial purchase price. Revenue Analysis During fiscal 2018, net revenue increased 1%, as compared to the prior fiscal year, primarily due to a 102% increase in subscription revenue. The increase in subscription revenue was partially offset by a 64% decrease in license and other revenue. Further discussion of the drivers of these results are described below under the heading “Results from Operations.” We rely significantly upon major distributors and resellers in both the U.S. and international regions, including Tech Data Corporation and its global affiliates (collectively, “Tech Data”). Total sales to Tech Data accounted for 31%, 30%, and 25% of our consolidated net revenue during fiscal 2018, 2017, and 2016, respectively. Our customers through Tech Data are the resellers and end users who purchase our software licenses and services. Should any of the agreements with Tech Data be terminated for any reason, we believe the resellers and end users who currently purchase our products through Tech Data would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue. Consequently, we believe our business is not substantially dependent on Tech Data. Business Model Transition Metrics In order to help better understand our financial performance during and after the business model transition, we use several metrics including recurring revenue, total subscriptions, ARR, and annualized revenue per subscription ("ARPS"). ARR, ARPS, and recurring revenue are performance metrics and should be viewed independently of revenue and deferred revenue as ARR, ARPS, and recurring revenue are not intended to be combined with those items. Our determination and presentation may differ from that of other companies. Please refer to the Glossary of Terms for the definitions of these metrics. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 42 2018 Form 10-K 42 The following table outlines our recurring revenue metric for the fiscal years ended 2018, 2017, and 2016: Fiscal Year Ended January 31, 2018 Change compared to prior fiscal year end $ % Fiscal Year Ended January 31, 2017(1) Change compared to prior fiscal year end $ % Fiscal Year Ended January 31, 2016(1) Recurring Revenue (in millions) (2) $ 1,882.3 $ 342.0 22% $ 1,540.3 $ 160.2 12% $ 1,380.1 As a percentage of net revenue 92% 76% 55% ________________ (1) Prior periods have been adjusted to conform with current period's presentation. (2) The acquisition of a business may cause variability in the comparison of recurring revenue in this table above and recurring revenue derived from the revenue reported in the Consolidated Statement of Operations. The following table outlines our ARR, subscriptions, and ARPS metrics as of fiscal years ended January 31, 2018 and 2017: ARR (in millions) Subscription plan ARR Maintenance plan ARR Total ARR (2) Number of Subscriptions (in thousands) Subscription plan Maintenance plan Total subscriptions ARPS (ARR divided by number of Subscriptions) Subscription plan ARPS Maintenance plan ARPS Total ARPS (3) Change compared to prior fiscal year January 31, 2018 $ % January 31, 2017 (1) $ $ $ $ $ $ 1,175.0 $ 603.6 106 % $ 571.4 879.1 $ (188.9) (18)% $ 1,068.0 2,054.1 $ 414.7 25 % $ 1,639.4 2,266.8 1,179.7 1,448.9 3,715.7 (569.1) 610.6 109 % (28)% 20 % 1,087.1 2,018.0 3,105.1 518 607 553 $ $ $ (8) 78 25 (2)% $ 15 % $ 5 % $ 526 529 528 t r o p e R l a u n n A 8 1 0 2 ________________ (1) Prior periods have been adjusted to conform with the current period's presentation. (2) The acquisition of a business may cause variability in the comparison of ARR reported in this table above and ARR derived from the revenue reported in the Consolidated Statement of Operations. (3) There are small variances between ARR and total subscriptions due in part to the inherent limitation with collecting all subscriptions information. For example, Buzzsaw and Constructware are included with ARR but not in total subscriptions due to these inherent limitations. We do not view these variances as meaningful to amounts or quarterly comparisons presented here for ARPS. Total ARR increased 25% as of January 31, 2018 as compared to the end of fiscal 2017, due to a 106% increase in subscription plan ARR, which for the first time represents the majority of our total ARR. The increase in subscription plan ARR was driven by growth in all subscription plan types, led by product subscription. The increase was partially offset by an 18% decrease in maintenance plan ARR. Subscription plan subscriptions increased 109% or approximately 1.2 million as compared to the end of fiscal 2017, driven by growth in all subscription plan types, led by new product subscriptions. Subscription plan subscriptions benefited from approximately 342,000 maintenance subscribers that were converted to product subscription under the maintenance-to- subscription program during the fiscal year ended January 31, 2018. Maintenance plan subscriptions decreased 28% or approximately 569,000 as compared to the end of fiscal 2017, primarily as a result of the discontinuation of new maintenance agreement sales as well as the maintenance-to-subscription program in which approximately 342,000 maintenance plan subscriptions were converted to product subscription during the fiscal year 2018 Form 10-K 43 2018 Form 10-K 43 2 0 1 8 A n n u a l R e p o r t ended January 31, 2018. The net decrease was expected and we expect to see ongoing declines in maintenance plan subscriptions going forward as part of the business model transition. The rate of decline will vary based on the number of subscriptions subject to renewal, the renewal rate, and our ability to incentivize customers to switch over to enterprise business agreements ("EBAs") or product subscriptions. ARPS was $553, a 5% increase compared to the prior fiscal year primarily driven by a 15% increase in maintenance plan ARPS as a result of the maintenance-to-subscription program and a 14% increase in product subscription ARPS, which is a component of our subscription plan. Partially offsetting the increase in maintenance plan and product subscription ARPS was a decrease in both cloud and EBA subscription ARPS. Our ARPS is currently, and will continue to be, affected by various factors including subscription term-length, migration from maintenance plan subscriptions, geography and product mix, promotions, sales linearity within a quarter, pricing changes, and foreign currency. We expect to see ARPS fluctuate up or down on a quarterly basis. As we progress through our business model transition, we expect all of the impacts of these factors to start to stabilize. Foreign Currency Analysis We generate a significant amount of our revenue in the U.S., Germany, Japan, the United Kingdom and Canada. The following table shows the impact of foreign exchanges rate changes on our net revenue and total spend: Revenue Spend (1) Fiscal Year Ended January 31, 2018 Percent change compare d to prior fiscal year (as reported) Constant Currency percent change compared to prior fiscal year (2) Positive/ Negative/Neutral impact from foreign exchange rate changes 1% 1% 2% 1% Negative Neutral ________________ (1) Our total spend is defined as cost of revenue plus operating expenses. (2) Please refer to Glossary of Terms for the definitions of our constant currency growth rates. Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend, and income (loss) from operations in future periods. We use foreign currency contracts to reduce the exchange rate effect on a portion of the net revenue of certain anticipated transactions but do not attempt to completely mitigate the impact of fluctuations of such foreign currency against the U.S. dollar. Deferred Revenue and Unbilled Deferred Revenue Our deferred revenue balance at January 31, 2018, was $1.96 billion and primarily relates to subscription and maintenance agreements invoiced for which the revenue has not yet been recognized but will be recognized as revenue ratably over the life of the contracts. The term of our subscription contracts is typically between one and three years. We define unbilled deferred revenue as contractually stated or committed orders under multi-year billing plans for subscription, services, license and maintenance for which the associated deferred revenue has not been recognized and the customer has not been invoiced. Unbilled deferred revenue is not included on our Consolidated Balance Sheet until invoiced to the customer. (in millions) Deferred revenue Unbilled deferred revenue (1) Total Fiscal Year Ended January 31, 2018 $ $ 1,955.1 326.4 2,281.5 ________________ (1) This is our first year presenting this metric and we are not able to provide historical information at this time. Comparative information will not be available until our first quarter of fiscal 2019. 2018 Form 10-K 44 2018 Form 10-K 44 We expect that the amount of unbilled deferred revenue and deferred revenue will change from quarter to quarter for several reasons, including the specific timing, duration and size of large customer subscription and support agreements, varying billing cycles of such agreements, the specific timing of customer renewals, foreign currency fluctuations and the timing of when unbilled deferred revenue is recognized as revenue. Balance Sheet and Cash Flow Items At January 31, 2018, we had $1.51 billion in cash and marketable securities. This amount includes the aggregate net proceeds of $492.0 million, after deducting the underwriting discounts and related offering expenses, from our June 2017 registered underwritten public offering of $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. On July 27, 2017, we redeemed in full, $400.0 million in aggregate principal amount of outstanding 1.95% senior notes due December 15, 2017. To redeem the notes, we used a portion of the proceeds of the June 2017 notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest from June 15, 2017, to, but excluding, the redemption date. Total cash repayment was $401.8 million. Our cash flow from operations decreased 99% to $0.9 million for the fiscal year ended January 31, 2018 from $169.7 million for the fiscal year ended January 31, 2017. We repurchased 6.9 million shares of our common stock for $690.1 million during fiscal 2018. Comparatively, we repurchased 9.7 million shares of our common stock for $631.6 million during fiscal 2017. Further discussion regarding the balance sheet and cash flow activities are discussed below under the heading “Liquidity and Capital Resources.” Results of Operations Net Revenue Income Statement Presentation Maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license. Under our maintenance plan, customers are eligible to receive unspecified upgrades, when and if available, and technical support. We recognize maintenance revenue over the term of the agreements, generally between one and three years. Subscription revenue consists of our term-based product subscriptions, cloud service offerings, and flexible enterprise business arrangements. Note that with the change in our presentation of revenue in our condensed consolidated statement of operations in the first quarter of fiscal 2018, our term-based product subscriptions and flexible enterprise business arrangements are classified and presented in a single line item. Revenue from these arrangements is recognized ratably over the contract term. Revenue for our cloud service offerings is recognized ratably over the contract term commencing with the date our service is made available to customers and when all other revenue recognition criteria have been satisfied. License and other revenue consists of (1) license revenue and (2) other revenue. License revenue includes software license revenue from the sale of perpetual licenses. Other revenue includes revenue such as consulting and training, and is recognized over time as the services are performed. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 45 2018 Form 10-K 45 (in millions) Net Revenue: Fiscal Year Ended January 31, 2018 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2017 Management Comments Maintenance (1) $ 989.6 $ (113.5) (10)% $1,103.1 The decrease in maintenance revenue is driven by the discontinuation of new maintenance agreements. We expect maintenance revenue will slowly decline; however, the rate of decline will vary based on the number of renewals, the renewal rate, and our ability to incentivize maintenance plan customers to switch over to subscription plan offerings. Subscription (1) 894.3 451.2 102 % 443.1 The increase in subscription revenue is primarily a result of the business model transition. We saw growth across all subscription plan types, led by product subscriptions and enterprise business agreements. Total maintenance and subscription 1,883.9 337.7 22 % 1,546.2 revenue License and other (1) (2) 172.7 (312.1) (64)% 484.8 The decrease in license revenue is driven by the business model transition, and the discontinuation of suite license sales, resulting in a decrease in revenue from perpetual licenses. $ 2,056.6 $ 25.6 1 % $2,031.0 ____________________ (1) Prior periods have been adjusted to conform with current period's presentation. See Note 1, "Business and Summary of Significant Accounting Policies" of our consolidated financial statements for additional information. (2) Within license and other revenue, there was an 18% decrease in other revenue during fiscal 2018 as compared to fiscal 2017. Other revenue represented 5% and 6% of total revenue for fiscal 2018 and 2017, respectively. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 46 2018 Form 10-K 46 (in millions) Net Revenue: Fiscal Year Ended January 31, 2017 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2016 Management Comments Maintenance (1) $ 1,103.1 $ (49.4) (4)% $1,152.5 The decrease in maintenance revenue is driven by the discontinuation of new maintenance agreements. We expect maintenance revenue will slowly decline; however, the rate of decline will vary based on the number of renewals, the renewal rate, and our ability to incentivize maintenance plan customers to switch over to subscription plan offerings. Subscription (1) 443.1 215.0 94 % 228.1 The increase in subscription revenue is primarily a result of the business model transition. We saw growth across all subscription plan types, led by product subscriptions and enterprise business agreements. Total maintenance and subscription 1,546.2 165.6 12 % 1,380.6 revenue License and other (1) (2) 484.8 (638.7) (57)% 1,123.5 The decrease in license and other revenue is driven by the discontinuation of our perpetual license sales in favor of subscription offerings. $ 2,031.0 $ (473.1) (19)% $2,504.1 ____________________ (1) Prior periods have been adjusted to conform with current period's presentation. See Note 1, "Business and Summary of Significant Accounting Policies" of our consolidated financial statements for additional information. (2) Within license and other revenue, there was a 17% decrease in other revenue during fiscal 2017 as compared to fiscal 2016. Other revenue represented 6% and 6% of total revenue for fiscal 2017 and 2016, respectively. Net Revenue by Product Family Our product offerings are focused in four primary product families: AEC, MFG, AutoCAD and AutoCAD LT (“ACAD”), and M&E. During the business model transition, revenue has been and will be negatively impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. As part of the transition, we discontinued selling new perpetual licenses of most individual software products effective February 1, 2016, and discontinued selling new perpetual licenses of suites effective August 1, 2016. These broad impacts are reflected in the summary below. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 47 2018 Form 10-K 47 (in millions) Net Revenue by Product Family: Architecture, Engineering and Construction ("AEC") Fiscal Year Ended January 31, 2018 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2017 Management Comments $ 866.5 (14.4) (2)% $ 880.9 Driven by a net decrease in AEC collections and legacy suites due to the discontinuation of perpetual licenses. The decrease was partially offset by an increase in revenue from individual AEC product offerings and EBAs driven by the respective increases in subscription additions. Manufacturing ("MFG") 589.2 (36.6) (6)% 625.8 Driven by a net decrease in MFG collections AutoCAD and AutoCAD LT ("ACAD") 401.4 74.7 23 % and legacy suites due to the discontinuation of perpetual licenses, partially offset by an increase in revenue from MFG EBAs driven by an increase in subscription additions. 326.7 Driven by increases in both AutoCAD LT and AutoCAD due to increases in subscription additions. 2 0 1 8 A n n u a l R e p o r t Media and Entertainment ("M&E") 152.0 13.1 9 % 138.9 Driven by an increase in Animation, partially offset by a decrease in Creative Finishing. Other 47.5 (11.2) (19)% 58.7 $2,056.6 $ 25.6 1 % $2,031.0 (in millions) Net Revenue by Product Family: Fiscal Year Ended January 31, 2017 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2016 Management Comments Architecture, Engineering and Construction ("AEC") $ 880.9 $ (68.2) (7)% $ 949.1 Driven by a decrease in revenue from individual product offerings. Manufacturing ("MFG") 625.8 (98.8) (14)% 724.6 Driven by a decrease in individual product offerings and a decrease in our MFG suites. AutoCAD and AutoCAD LT ("ACAD") 326.7 (268.1) (45)% 594.8 As part of the transition to term-based product Media and Entertainment ("M&E") 138.9 (21.1) (13)% subscriptions for our individual software products in February 2016, products like AutoCAD and AutoCAD LT were negatively impacted when compared to the same period in the prior fiscal year as revenue is recognized ratably rather than upfront. 160.0 Driven by a decrease in Creative Finishing, as we exited the Creative Finishing hardware business at the beginning of the fourth quarter of fiscal 2016. Other 58.7 (16.9) (22)% 75.6 $ 2,031.0 $ (473.1) (19)% $ 2,504.1 2018 Form 10-K 48 2018 Form 10-K 48 Net Revenue by Geographic Area Constant Currency Change compared to prior fiscal year Change compared to prior fiscal year $ % % Fiscal Year Ended January 31, 2017 Fiscal Year Ended January 31, 2018 Constant Currency Change compared to prior fiscal year Change compared to prior fiscal year $ % % Fiscal Year Ended January 31, 2016 (in millions) Net Revenue: Americas U.S. Other Americas Total Americas Europe, Middle East, and Africa ("EMEA") Asia Pacific ("APAC") $ 740.4 $ (1.7) 130.7 871.1 815.4 370.1 0.9 (0.8) 15.0 11.4 — % 1 % — % 2 % 3 % 1 % * * —% 4% 2% $ 742.1 $ (61.8) 129.8 871.9 800.4 358.7 (39.1) (100.9) (134.2) (238.0) 2% $ 2,031.0 $ (473.1) (8)% (23)% (10)% (14)% (40)% (19)% $ * * (10)% (8)% (39)% 803.9 168.9 972.8 934.6 596.7 (16)% $ 2,504.1 Total Net Revenue (1) $ 2,056.6 $ 25.6 Emerging Economies $ 226.5 (1.0) — % —% $ 227.5 (138.4) (38)% (37)% $ 365.9 ____________________ (1) Totals may not sum due to rounding. * Constant currency data not provided at this level. We believe that international revenue will continue to comprise a majority of our net revenue. Unfavorable economic conditions in the countries that contribute a significant portion of our net revenue, including in emerging economies such as Brazil, Russia, India, and China, may have an adverse effect on our business in those countries and our overall financial performance. Changes in the value of the U.S. dollar relative to other currencies have significantly affected, and could continue to significantly affect, our financial results for a given period even though we hedge a portion of our current and projected revenue. Increases to the levels of political and economic unpredictability in the global market may impact our future financial results. Additionally, during the first three years of the business model transition, revenue has been impacted as more revenue is recognized ratably rather than upfront and as new product offerings generally have a lower initial purchase price. While the transition to a subscription model has had a broad impact within all markets, it has had a particular impact to emerging economies as sales of perpetual licenses have historically comprised a greater percentage of total emerging economy sales in comparison to mature markets. t r o p e R l a u n n A 8 1 0 2 Cost of Revenue and Operating Expenses Cost of maintenance and subscription revenue includes the labor costs of providing product support to our maintenance and subscription customers, including allocated IT and facilities costs, shipping and handling costs, professional services fees related to operating our network and cloud infrastructure, royalties, depreciation expense and operating lease payments associated with computer equipment, data center costs, salaries, related expenses of network operations, and stock-based compensation expense. Cost of license and other revenue includes labor costs associated with product setup, costs of consulting and training services contracts, and collaborative project management services contracts. Cost of license and other revenue also includes stock-based compensation expense, direct material and overhead charges, allocated IT and facilities costs, professional services fees and royalties. Direct material and overhead charges include the cost associated with electronic and physical fulfillment. Cost of revenue, at least over the near term, is affected by the volume and mix of product sales, fluctuations in consulting costs, amortization of developed technology, new customer support offerings, royalty rates for licensed technology embedded in our products and employee stock-based compensation expense. 2018 Form 10-K 49 2018 Form 10-K 49 Marketing and sales expenses include salaries, bonuses, benefits and stock-based compensation expense for our marketing and sales employees, the expense of travel, entertainment and training for such personnel, the costs of programs aimed at increasing revenue, such as advertising, trade shows and expositions, and various sales and promotional programs. Marketing and sales expenses also include labor costs associated with sales and order management, sales and dealer commissions, payment processing fees, the cost of supplies and equipment, gains and losses on our operating expense cash flow hedges, and allocated IT and facilities costs. Research and development expenses, which are expensed as incurred, consist primarily of salaries, bonuses, benefits and stock-based compensation expense for research and development employees, and the expense of travel, entertainment and training for such personnel, professional services such as fees paid to software development firms and independent contractors, gains and losses on our operating expense cash flow hedges, and allocated IT and facilities costs. General and administrative expenses include salaries, bonuses, transition costs, benefits and stock-based compensation expense for our CEO, finance, human resources and legal employees, as well as professional fees for legal and accounting services, certain foreign business taxes, gains and losses on our operating expense cash flow hedges, expense of travel, entertainment and training, net IT and facilities costs, and the cost of supplies and equipment. 2 0 1 8 A n n u a l R e p o r t (in millions) Cost of revenue: Maintenance and subscription (1) Fiscal Year Ended January 31, 2018 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2017 $ 214.4 $ 22.7 12 % $ 191.7 License and other (1) 72.6 (37.6) (34)% 110.2 Amortization of developed technology (1) 16.4 (23.6) (59)% 40.0 Total cost of revenue $ 303.4 Marketing and sales $ 1,087.3 $ $ (38.5) (11)% $ 341.9 64.8 6 % $ 1,022.5 Research and development 755.5 (10.6) (1)% 766.1 General and administrative 305.2 17.4 6 % 287.8 Amortization of purchased 20.2 (11.6) (36)% 31.8 intangibles Restructuring charges and other facility exit costs, net 94.1 13.6 17 % 80.5 $ 2,262.3 $ 73.6 3 % $ 2,188.7 Management Comments Up due to an increase in employee-related costs driven by increased headcount associated with maintenance and subscription services in support of the business model transition. Down due to lower employee-related costs from reduced headcount associated with license and other revenue products and services as a result of our move to a subscription based business model. Down as previously acquired developed technologies continue to become fully amortized while fewer assets are acquired compared to the prior year. Up due to increase in employee-related costs from higher headcount, increased commissions, and increased stock-based compensation expense from a higher fair value of awards granted. Down due to a decrease in employee-related costs from lower headcount. Up driven by costs associated with the CEO transition and an increase in stock-based compensation expense from a higher fair value of awards granted, partially offset by a decrease in employee-related costs from lower headcount. Down as previously acquired intangible assets continue to become fully amortized and fewer assets are acquired compared to the prior year. Driven by the Fiscal 2018 Plan to re-balance resources to better align with the Company's strategic priorities and position itself to meet long-term goals. Costs associated with the Fiscal 2018 Plan are principally from employee termination benefits, lease termination costs and other exit costs. 2018 Form 10-K 50 2018 Form 10-K 50 Fiscal Year Ended January 31, 2017 Change compared to prior fiscal year $ % Fiscal Year Ended January 31, 2016 Management Comments (in millions) Cost of revenue: Maintenance and subscription (1) License and other (1) $ 191.7 $ 29.4 18 % $ 162.3 Amortization of developed technology (1) 110.2 (49.2) (31)% 159.4 40.0 (9.0) (18)% 49.0 Total cost of revenue $ 341.9 $ (28.8) (8)% $ 370.7 Marketing and sales Research and development General and administrative Amortization of purchased intangibles Restructuring charges and other facility exit costs, net $ 1,022.5 $ 7.0 1 % $ 1,015.5 766.1 (23.9) (3)% 790.0 287.8 (5.6) (2)% 293.4 31.8 (1.4) (4)% 33.2 80.5 $ 2,188.7 $ 80.5 56.6 * — 3 % $ 2,132.1 Up due to increases in employee related costs and direct costs associated with our subscription plan offerings, such as royalties and fulfillment costs. Down due to lower professional fees and employee- related costs from reduced headcount associated with license and other revenue products and the elimination of our Creative Finishing hardware business that was exited in the fourth quarter of fiscal 2016. Down as previously acquired developed technologies continue to become fully amortized while fewer assets are acquired compared to the prior year. Up due to increases in stock-based compensation and advertising and promotional expenses, offset by a decrease in employee-related costs from reduced headcount and lower professional fees. Down due to a decrease in professional fees and employee-related costs, partially offset by an increase in stock-based compensation expense. Down due to decreases in bad debt expense and professional fees. Down as previously acquired intangible assets continue to become fully amortized and fewer assets are acquired compared to the prior year. Driven by the Fiscal 2017 Plan to re-balance staffing levels and reduce operating expenses to better align with the evolving needs of the Company. Costs associated with the Fiscal 2017 Plan are principally from employee termination benefits, lease termination costs and other exit costs. t r o p e R l a u n n A 8 1 0 2 ____________________ (1) Prior periods have been adjusted to conform with current period's presentation. See Note 11, Business and Summary of Significant Accounting Policies, Basis of Presentation, of our consolidated financial statements for additional information. * Percentage is not meaningful. The following table highlights our expectation for the absolute dollar change and percent of revenue change between the fiscal 2019 as compared to fiscal 2018: Cost of Revenue Marketing and sales Research and development General and administrative Amortization of purchased intangibles Absolute dollar impact Percent of net revenue impact Decrease Increase Increase Increase Decrease Decrease Decrease Decrease Decrease Flat 2018 Form 10-K 51 2018 Form 10-K 51 Interest and Other Expense, Net The following table sets forth the components of interest and other expense, net: Interest and investment expense, net Loss on foreign currency (Loss) gain on strategic investments Other income Interest and other expense, net Fiscal Year Ended January 31, 2018 2017 (in millions) 2016 $ $ (34.5) $ (29.7) $ (33.9) (3.3) (16.4) 6.0 (3.3) 0.3 8.5 — 3.8 8.5 (48.2) $ (24.2) $ (21.6) 2 0 1 8 A n n u a l R e p o r t Interest and other expense, net, increased $24.0 million during fiscal 2018, as compared to fiscal 2017, primarily related to increases in impairment losses on certain of our privately-held strategic investments and interest expense resulting from our June 2017 issuance of $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. Interest and other expense, net, increased $2.6 million during fiscal 2017, as compared to fiscal 2016, primarily related to a decrease in gains on certain of our privately-held strategic investments and an increase in losses on foreign currency. This increase was partially offset by a decrease in interest and investments expense, net, that was primarily driven by mark to market gains on deferred compensation plans partially offset by an increase in interest expense resulting from the June 2015 issuance of $450.0 million aggregate principal amount of 3.125% senior notes due June 15, 2020 and $300.0 million aggregate principal amount of 4.375% senior notes due June 15, 2025. Interest expense and investment income fluctuates based on average cash, marketable securities and debt balances, average maturities and interest rates. Gains and losses on foreign currency are primarily due to the impact of re-measuring foreign currency transactions and net monetary assets into the functional currency of the corresponding entity. The amount of the gain or loss on foreign currency is driven by the volume of foreign currency transactions and the foreign currency exchange rates for the year. Provision for Income Taxes We account for income taxes and the related accounts under the liability method. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted rates expected to be in effect during the year in which the basis differences reverse. Income tax expense was $9.6 million and $58.3 million for fiscal 2018 and 2017, respectively, relative to pre-tax losses of $557.3 million and $523.8 million, respectively, for the same periods. Tax expense for fiscal 2018 consists primarily of foreign tax expense including withholding tax, and tax amortization on indefinite-lived intangibles offset by a benefit on the revaluation of our deferred tax liability due to the corporate rate reduction under the Tax Act. Tax expense for fiscal 2017 consisted primarily of foreign tax expense including withholding tax, and tax amortization on indefinite-lived intangibles. The Tax Act was enacted on December 22, 2017, and provides broad and significant changes to the U.S. tax code and how the U.S. imposes income tax on multinational corporations. The Tax Act requires complex computations to be performed that were not previously provided for in the U.S. tax law. These computations require significant judgments to be made regarding the interpretation of the provisions within the Tax Act along with preparation and analysis of information not previously required. In conjunction with the Tax Act, the SEC issued SAB 118 that allows for the Company to record provisional amounts until a final assessment can be made within a period not to exceed one year from the date of enactment. We have not completed our determination of the accounting implications of the Tax Act on our results of operations. However, we have reasonably estimated the effects of the Tax Act and recorded provisional amounts in our financial statements as of January 31, 2018. We recorded a provisional tax benefit for the impact of the Tax Act of approximately $32.3 million. This amount is primarily comprised of the remeasurement of our indefinite-lived deferred tax liability resulting from the permanent reduction in the U.S. statutory corporate rate from 35% to 21%. We recorded a provisional estimate of the 2018 Form 10-K 52 2018 Form 10-K 52 mandatory one-time tax on accumulated earnings of our foreign subsidiaries that is primarily offset by other current year operating losses and net operating loss carryforwards that are fully valued resulting in no impact to the current year effective tax rate. As additional regulatory guidance is issued and we continue to collect and analyze necessary data, we may make adjustments to provisional amounts previously recorded. We do not anticipate these adjustments to materially impact our provision for income taxes in the period in which the adjustments are made since we are in a full valuation allowance in the U.S. A valuation allowance is recorded to reduce deferred tax assets when management cannot conclude that it is more likely than not that the net deferred tax asset will be recovered. The valuation allowance is determined by assessing both positive and negative evidence to determine whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis. Significant judgment is required in determining whether the valuation allowance should be recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence including past operating results and estimates of future taxable income. Beginning in the second quarter of fiscal 2016, we considered recent cumulative losses in the U.S. arising from the Company's business model transition as a significant source of negative evidence. Considering this negative evidence and the absence of sufficient positive objective evidence that we would generate sufficient taxable income in the U.S. to realize the deferred tax assets, we determined that it was more likely than not that the Company would not realize the U.S. federal and state deferred tax assets and recorded a full valuation allowance. As we continually strive to optimize our overall business model, tax planning strategies may become feasible whereby management may determine that it is more likely than not that the federal and state deferred tax assets will be realized; as a result, we will continue to evaluate the realizability of our net deferred tax assets each quarter, both in the U.S. and in foreign jurisdictions, based on all available evidence, both positive and negative. As of January 31, 2018, the Company had $337.6 million of gross unrecognized tax benefits, of which $304.8 million would reduce our valuation allowance, if recognized. The remaining $32.8 million would impact the effective tax rate. It is possible that the amount of unrecognized tax benefits will change in the next twelve months; however, an estimate of the range of the possible change cannot be made at this time. Our future effective annual tax rate may be materially impacted by the amount of benefits and charges from tax amounts associated with our foreign earnings that are taxed at rates different from the federal statutory rate, changes in valuation allowances, level of profit before tax, accounting for uncertain tax positions, business combinations, closure of statute of limitations or settlement of tax audits, and changes in tax laws including impacts of the Tax Act. A significant amount of our earnings is generated by our Europe and Asia Pacific subsidiaries. Our future effective tax rates may be adversely affected to the extent earnings are lower than anticipated in countries where we have lower statutory tax rates. At January 31, 2018, we had non-current foreign net deferred tax assets of $68.0 million that management believes are more likely than not to be realized in future years. For additional information regarding our income tax provision and reconciliation of our effective rate to the federal statutory rate of 33.81%, see Note 4, “Income Taxes,” in the Notes to Consolidated Financial Statements. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 53 2018 Form 10-K 53 2 0 1 8 A n n u a l R e p o r t Other Financial Information In addition to our results determined under U.S. generally accepted accounting principles (“GAAP”) discussed above, we believe the following non-GAAP measures are useful to investors in evaluating our operating performance. For the fiscal years ended January 31, 2018, 2017, and 2016, our gross profit, gross margin, (loss) income from operations, operating margin, net (loss) income, diluted net (loss) income per share and diluted shares used in per share calculation on a GAAP and non-GAAP basis were as follows (in millions except for gross margin, operating margin, and per share data): Gross profit Non-GAAP gross profit Gross margin Non-GAAP gross margin (Loss) income from operations Non-GAAP (loss) income from operations Operating margin Non-GAAP operating margin Net loss Non-GAAP net (loss) income Diluted net (loss) income per share (1) Non-GAAP diluted (loss) income per share (1) GAAP diluted weighted average shares used in per share calculation Non-GAAP diluted weighted average shares used in per share calculation Fiscal Year Ended January 31, 2018 2017 2016 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,753.2 1,785.5 85 % 87 % (509.1) (112.0) (25)% (5)% (566.9) (106.3) (2.58) (0.48) 219.5 219.5 (Unaudited) 1,689.1 1,743.2 83 % 86 % (499.6) (125.5) (25)% (6)% (582.1) (111.0) (2.61) (0.50) 222.7 222.7 $ $ $ $ $ $ $ $ 2,133.4 2,194.2 85% 88% 1.3 280.7 —% 11% (330.5) 194.1 (1.46) 0.84 226.0 230.7 _______________ (1) Net (loss) income per share were computed independently for each of the periods presented; therefore the sum of the net (loss) income per share amount for the quarters may not equal the total for the year. For our internal budgeting and resource allocation process and as a means to provide consistency in period-to-period comparisons, we use non-GAAP measures to supplement our consolidated financial statements presented on a GAAP basis. These non-GAAP measures do not include certain items that may have a material impact upon our reported financial results. We also use non-GAAP measures in making operating decisions because we believe those measures provide meaningful supplemental information regarding our earning potential and performance for management by excluding certain benefits, credits, expenses and charges that may not be indicative of our core business operating results. For the reasons set forth below, we believe these non- GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. This allows investors and others to better understand and evaluate our operating results and future prospects in the same manner as management, compare financial results across accounting periods and to those of peer companies and to better understand the long-term performance of our core business. We also use some of these measures for purposes of determining company-wide incentive compensation. There are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures included above are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business. 2018 Form 10-K 54 2018 Form 10-K 54 Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (In millions except for gross margin, operating margin, and per share data): Gross profit Stock-based compensation expense Amortization of developed technologies Non-GAAP gross profit Gross margin Stock-based compensation expense Amortization of developed technologies Non-GAAP gross margin (Loss) income from operations Stock-based compensation expense Amortization of developed technologies Amortization of purchased intangibles CEO transition costs (1) Restructuring charges and other facility exit costs, net Non-GAAP (loss) income from operations Operating margin Stock-based compensation expense Amortization of developed technologies Amortization of purchased intangibles CEO transition costs (1) Restructuring charges and other facility exit costs, net Non-GAAP operating margin Net loss Stock-based compensation expense Amortization of developed technologies Amortization of purchased intangibles CEO transition costs (1) Restructuring charges and other facility exit costs, net Loss (gain) on strategic investments Establishment of valuation allowance on deferred tax assets Discrete tax provision items Income tax effect of non-GAAP adjustments Non-GAAP net (loss) income Fiscal Year Ended January 31, 2018 2017 2016 (Unaudited) $ $ 1,753.2 $ 1,689.1 $ 2,133.4 15.9 16.4 14.1 40.0 11.8 49.0 1,785.5 $ 1,743.2 $ 2,194.2 85 % 1 % 1 % 87 % 83 % 1 % 2 % 86 % $ (509.1) $ (499.6) $ 245.0 16.4 20.2 21.4 94.1 221.8 40.0 31.8 — 80.5 85% 1% 2% 88% 1.3 197.2 49.0 33.2 — — $ (112.0) $ (125.5) $ 280.7 (25)% 12 % 1 % 1 % 1 % 5 % (5)% (25)% 11 % 2 % 2 % — % 4 % (6)% $ (566.9) $ (582.1) $ 245.0 221.8 16.4 20.2 21.4 94.1 16.5 — (20.7) 67.7 40.0 31.8 — 80.5 (0.3) — (2.7) 100.0 $ (106.3) $ (111.0) $ —% 8% 2% 1% —% —% 11% (330.5) 197.2 49.0 33.2 — — (3.7) 230.9 0.8 17.2 194.1 t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 55 2018 Form 10-K 55 Diluted net (loss) income per share (2) Stock-based compensation expense Amortization of developed technologies Amortization of purchased intangibles CEO transition costs (1) Restructuring charges and other facility exit costs, net Loss (gain) on strategic investments Establishment of valuation allowance on deferred tax assets Discrete tax provision items Income tax effect of non-GAAP adjustments Non-GAAP diluted (loss) income per share (2) Fiscal Year Ended January 31, 2018 2017 2016 (Unaudited) $ (2.58) $ (2.61) $ (1.46) 1.11 0.08 0.09 0.09 0.43 0.08 — (0.09) 0.31 1.00 0.18 0.14 — 0.35 — — (0.01) 0.45 $ (0.48) $ (0.50) $ 0.86 0.21 0.15 — — (0.01) 1.01 — 0.08 0.84 2 0 1 8 A n n u a l R e p o r t _______________ (1) CEO transition costs include stock-based compensation of $16.4 million related to the acceleration of eligible stock awards in conjunction with the Company's former CEOs' transition agreements. (2) Net (loss) income per share were computed independently for each of the periods presented; therefore the sum of the net (loss) income per share amount for the quarters may not equal the total for the year. Our non-GAAP financial measures may exclude the following: Stock-based compensation expenses. We exclude stock-based compensation expenses from non-GAAP measures primarily because they are non-cash expenses and management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies. Amortization of developed technologies and purchased intangibles. We incur amortization of acquisition-related developed technology and purchased intangibles in connection with acquisitions of certain businesses and technologies. Amortization of developed technologies and purchased intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Management finds it useful to exclude these variable charges from our cost of revenues to assist in budgeting, planning, and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of developed technologies and purchased intangible assets will recur in future periods. CEO transition costs. We exclude amounts paid to the Company's former CEOs upon departure under the terms of their transition agreements, including severance payments, acceleration of restricted stock units, and continued vesting of performance stock units, and legal fees incurred with the transition. Also excluded from our non-GAAP measures are recruiting costs related to the search for a new CEO. These costs represent non-recurring expenses and are not indicative of our ongoing operating expenses. We further believe that excluding the CEO transition costs from our non-GAAP results is useful to investors in that it allows for period-over-period comparability. Goodwill impairment. This is a non-cash charge to write-down goodwill to fair value when there was an indication that the asset was impaired. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Restructuring charges and other facility exit costs (benefits), net. These expenses are associated with realigning our business strategies based on current economic conditions. In connection with these restructuring actions or other exit actions, we recognize costs related to termination benefits for former employees whose positions were eliminated, the closure of facilities and cancellation of certain contracts. We exclude these charges because these expenses are not reflective of ongoing business and operating results. We believe it is useful for investors to understand the effects of these items on our total operating expenses. 2018 Form 10-K 56 2018 Form 10-K 56 Loss (gain) on strategic investments. We exclude gains and losses related to our strategic investments from our non-GAAP measures primarily because management finds it useful to exclude these variable gains and losses on these investments in assessing our financial results. Included in these amounts are non-cash unrealized gains and losses on the derivative components and realized gains and losses on the sale or losses on the impairment of these investments. We believe excluding these items is useful to investors because these excluded items do not correlate to the underlying performance of our business and these losses or gains were incurred in connection with strategic investments which do not occur regularly. Establishment of a valuation allowance on certain net deferred tax assets. This is a non-cash charge to record a valuation allowance on certain deferred tax assets. As explained above, management finds it useful to exclude certain non-cash charges to assess the appropriate level of various cash expenses to assist in budgeting, planning, and forecasting future periods. Discrete tax items. We exclude the GAAP tax provision, including discrete items, from the non-GAAP measure of net (loss) income, and include a non-GAAP tax provision based upon the projected annual non-GAAP effective tax rate. Discrete tax items include income tax expenses or benefits that do not relate to ordinary income from continuing operations in the current fiscal year, unusual or infrequently occurring items, or the tax impact of certain stock-based compensation. Examples of discrete tax items include, but are not limited to, certain changes in judgment and changes in estimates of tax matters related to prior fiscal years, certain costs related to business combinations, certain changes in the ability to utilize deferred tax assets or changes in tax law. Management believes this approach assists investors in understanding the tax provision and the effective tax rate related to ongoing operations. We believe the exclusion of these discrete tax items provides investors with useful supplemental information about our operational performance. Income tax effects on the difference between GAAP and non-GAAP costs and expenses. The income tax effects that are excluded from the non-GAAP measures relate to the tax impact on the difference between GAAP and non-GAAP expenses, primarily due to stock-based compensation, amortization of purchased intangibles, restructuring charges and other facilities exit costs, and impacts of the corporate rate reduction and one-time deemed mandatory repatriation of certain foreign earnings under the Tax Act, net for GAAP and non-GAAP measures. Liquidity and Capital Resources Our primary source of cash is from subscriptions to our products, maintenance payments, and related services. Our primary use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities and overhead costs. In addition to operating expenses, we also use cash to fund our stock repurchase program and invest in our growth initiatives, which include acquisitions of products, technology and businesses. See further discussion of these items below. At January 31, 2018, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.5 billion and net accounts receivable of $438.2 million. In June 2017, we issued $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027. In June 2015, we issued $450.0 million aggregate principal amount of 3.125% notes due June 15, 2020, and $300.0 million aggregate principal amount of 4.375% notes due June 15, 2025. In December 2012, we issued $400.0 million aggregate principal amount of 1.95% notes due December 15, 2017, and $350.0 million aggregate principal amount of 3.6% notes due December 15, 2022 (all five series of notes collectively, the “Notes”). In July 2017, we redeemed in full $400.0 million in aggregate principal amount of outstanding 1.95% senior notes due December 15, 2017. The redemption was completed pursuant to the optional redemption provisions of the first supplemental indenture dated December 13, 2012. To redeem the notes, we used a portion of the proceeds of the June 2017 Notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest. Total cash repayment was $401.8 million. The Company did not incur any additional early termination penalties relating to such redemption. As of January 31, 2018, we have $1.6 billion aggregate principal amount of Notes outstanding. In addition, we have a line of credit facility that permits unsecured short-term borrowings of up to $400.0 million with a May 2020 maturity date, with an option to request an increase in the amount of the credit facility by up to an additional $100.0 million. This credit agreement contains customary covenants that could restrict the imposition of liens on our assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if we fail to maintain the financial covenants. The financial covenants consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and after April 30, 2018, a minimum interest coverage ratio. As of January 31, 2018, we are compliant with all financial covenants related to our line of credit facility and as of March 22, 2018, we have no amounts outstanding under the credit facility. If we are unable to remain in compliance with the covenants, we will not be able to draw on our credit facility. Borrowings under the credit facility and the t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 57 2018 Form 10-K 57 2 0 1 8 A n n u a l R e p o r t net proceeds from the offering of the Notes are available for general corporate purposes. Our cash and cash equivalents are held by diversified financial institutions globally. Our primary commercial banking relationship is with Citigroup and its global affiliates. In addition, Citibank N.A., an affiliate of Citigroup, is one of the lead lenders and agent in the syndicate of our $400.0 million line of credit. Long-term cash requirements for items other than normal operating expenses are anticipated for the following: repayment of debt; common stock repurchases; the acquisition of businesses, software products, or technologies complementary to our business; and capital expenditures, including the purchase and implementation of internal-use software applications. Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and, in certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions regarding acquisitions. We currently anticipate that we will continue to acquire products, technology, and businesses as compelling opportunities become available. Our decision to acquire businesses or technology is dependent on our business needs, the availability of suitable sellers and technology, and our own financial condition. Our cash, cash equivalents, and marketable securities balances are concentrated in a few locations around the world, with substantial amounts held outside of the United States. As of January 31, 2018, approximately 74% of our total cash or cash equivalents and marketable securities are located in foreign jurisdictions and that percentage will fluctuate subject to business needs. There are several factors that can impact our ability to utilize foreign cash balances, such as foreign exchange restrictions, foreign regulatory restrictions or adverse tax costs. The Tax Act includes a mandatory one-time tax on accumulated earnings of foreign subsidiaries and generally eliminates U.S. taxes on foreign subsidiary distributions in future periods. As a result, earnings in foreign jurisdictions are generally available for distribution to the U.S. with little to no incremental U.S. taxes. We expect to meet our liquidity needs through current cash balances, ongoing cash flows, external borrowings, or a combination. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure we have the proper liquidity available in the locations in which it is needed. Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the risks detailed in Part I, Item 1A titled “Risk Factors.” However, based on our current business plan and revenue prospects, we believe that our existing balances, our anticipated cash flows from operations and our available credit facility will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next 12 months. Our revenue, earnings, cash flows, receivables, and payables are subject to fluctuations due to changes in foreign currency exchange rates, for which we have put in place foreign currency contracts as part of our risk management strategy. See Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” for further discussion. (in millions) Net cash provided by operating activities Net cash provided by (used in) investing activities Net cash used in financing activities Fiscal year ended January 31, 2018 2017 2016 $ 0.9 $ 169.7 $ 414.0 506.4 (656.6) 272.0 (809.5) (578.3) 343.2 Net cash provided by operating activities of $0.9 million for fiscal 2018 consisted of $330.7 million of non-cash expenses, including stock-based compensation expense, depreciation, amortization and accretion expense, and $135.7 million of cash flow provided by changes in operating assets and liabilities, offsetting our net loss of $566.9 million. The primary working capital source of cash was an increase in deferred revenue from $1,788.0 million as of January 31, 2017, to $1,955.1 million as of January 31, 2018. The primary working capital uses of cash were decreases in accrued income taxes and other accrued liabilities. Net cash provided by investing was $506.4 million for fiscal 2018 and was primarily due to the sale and maturities of marketable securities. These cash inflows were partially offset by purchases of marketable securities and capital expenditures. 2018 Form 10-K 58 2018 Form 10-K 58 At January 31, 2018, our short-term investment portfolio had an estimated fair value of $245.2 million and a cost basis of $236.4 million. The portfolio fair value consisted of $99.3 million invested in corporate debt securities, $37.1 million invested in U.S. government securities, $27.5 million invested in commercial paper, $13.1 million invested in asset backed securities, and $9.2 million invested in other short-term securities. At January 31, 2018, $59.0 million of trading securities were invested in a defined set of mutual funds as directed by the participants in our Deferred Compensation Plan (see Note 6, “Deferred Compensation,” in the Notes to Consolidated Financial Statements for further discussion). Net cash used in financing activities was $656.6 million fiscal 2018 and was primarily due to repurchases of our common stock and the repayment of debt noted earlier in this section. These cash outflows were offset in part by the issuance of debt also noted earlier in this section. Contractual Obligations The following table summarizes our significant financial contractual obligations at January 31, 2018, and the effect such obligations are expected to have on our liquidity and cash flows in future periods. Notes Operating lease obligations Purchase obligations Deferred compensation obligations Pension obligations Asset retirement obligations Total (1) Total Fiscal 2019 Fiscal Years 2010-2021 (in millions) Fiscal Years 2022-2023 Thereafter $ 1,955.6 $ 57.3 $ 555.7 $ 434.9 $ 907.7 247.0 147.6 59.0 67.6 10.6 61.3 63.8 3.4 7.1 2.9 80.5 59.7 9.0 12.9 7.3 47.5 14.8 8.3 12.8 0.1 57.7 9.3 38.3 34.8 0.3 $ 2,487.4 $ 195.8 $ 725.1 $ 518.4 $ 1,048.1 ____________________ (1) This table generally excludes amounts already recorded on the balance sheet as current liabilities, certain purchase obligations as discussed below, long term deferred revenue, and amounts related to income tax liabilities for uncertain tax positions, since we cannot predict with reasonable reliability the timing of cash settlements to the respective taxing authorities (see Note 4, “Income Taxes” to the Notes to Consolidated Financial Statements). Notes consist of the Senior Notes issued in December 2012, June 2015 and June 2017 described above. Operating lease obligations consist primarily of obligations for facilities, net of sublease income, computer equipment and other equipment leases. Purchase obligations are contractual obligations for purchase of goods or services and are defined as agreements that are enforceable and legally binding on Autodesk and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Purchase obligations relate primarily to enterprise subscription agreements, IT infrastructure costs, and marketing costs. Deferred compensation obligations relate to amounts held in a rabbi trust under our non-qualified deferred compensation plan. See Note 6, “Deferred Compensation,” in our Notes to Consolidated Financial Statements for further information regarding this plan. Pension obligations relate to our obligations for pension plans outside of the U.S. See Note 14, “Retirement Benefit Plans,” in our Notes to Consolidated Financial Statements for further information regarding these obligations. Asset retirement obligations represent the estimated costs to bring certain office buildings that we lease back to their original condition after the termination of the lease. Purchase orders or contracts for the purchase of supplies and other goods and services are not included in the table above. We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 59 2018 Form 10-K 59 orders may represent authorizations to purchase rather than binding agreements. Our purchase orders are based on our current procurement or development needs and are fulfilled by our vendors within short time horizons. We do not have significant agreements for the purchase of supplies or other goods specifying minimum quantities or set prices that exceed our expected requirements for three months. In addition, we have certain software royalty commitments associated with the shipment and licensing of certain products. The expected timing of payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed- upon amounts for some obligations. We provide indemnifications of varying scopes and certain guarantees, including limited product warranties. Historically, costs related to these warranties and indemnifications have not been significant, but because potential future costs are highly variable, we are unable to estimate the maximum potential impact of these guarantees on our future results of operations. Issuer Purchases of Equity Securities Autodesk's stock repurchase program provides Autodesk with the ability to offset the dilution from the issuance of stock under our employee stock plans and reduce shares outstanding over time, and has the effect of returning excess cash generated from our business to stockholders. Under the share repurchase program, Autodesk may repurchase shares from time to time in open market transactions, privately-negotiated transactions, accelerated share repurchase programs, tender offers, or by other means. The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, remaining shares available in the authorized pool, cash requirements for acquisitions, economic and market conditions, stock price and legal and regulatory requirements. During the three and twelve months ended January 31, 2018, we repurchased 2.5 million and 6.9 million shares of our common stock, respectively. At January 31, 2018, 19.6 million shares remained available for repurchase under the repurchase program approved by the Board of Directors. This programs does not have a fixed expiration date. See Note 9, “Stockholders' (Deficit) Equity,” in the Notes to Consolidated Financial Statements for further discussion. Off-Balance Sheet Arrangements As of January 31, 2018, we did not have any significant off-balance sheet arrangements other than operating leases, as defined in Item 303(a)(4)(ii) of Regulation S-K. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 60 2018 Form 10-K 60 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign currency exchange risk Our revenue, earnings, cash flows, receivables, and payables are subject to fluctuations due to changes in foreign currency exchange rates. Our risk management strategy utilizes foreign currency contracts to manage our exposure to foreign currency volatility that exists as part of our ongoing business operations. We utilize cash flow hedge contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. In addition, we use balance sheet hedge contracts to reduce the exchange rate risk associated primarily with foreign currency denominated receivables and payables. As of January 31, 2018, and 2017, we had open cash flow and balance sheet hedge contracts with future settlements within one to twelve months. Contracts were primarily denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars, and Australian dollars. We do not enter into foreign exchange derivative instruments for trading or speculative purposes. The notional amount of our option and forward contracts was $949.5 million and $640.0 million at January 31, 2018, and 2017, respectively. We use foreign currency contracts to reduce the exchange rate impact on the net revenue and operating expenses of certain anticipated transactions. A sensitivity analysis performed on our hedging portfolio as of January 31, 2018, indicated that a hypothetical 10% appreciation of the U.S. dollar from its value at January 31, 2018 and 2017 would increase the fair value of our foreign currency contracts by $57.9 million and $60.9 million, respectively. A hypothetical 10% depreciation of the dollar from its value at January 31, 2018, and 2017 would decrease the fair value of our foreign currency contracts by $83.2 million and $32.5 million, respectively. Interest Rate Risk Interest rate movements affect both the interest income we earn on our short-term investments and the market value of certain longer term securities. At January 31, 2018, we had $1,078.6 million of cash equivalents and marketable securities, including $245.2 million classified as short-term marketable securities and $190.8 million classified as long-term marketable securities. If interest rates were to move up by 50 or 100 basis points over a twelve month period, the market value change of our marketable securities would have an unrealized gain or loss of $1.4 million and $2.8 million, respectively. Other Market Risk From time to time we make direct investments in privately held companies. Privately held company investments generally are considered inherently risky. The technologies and products these companies have under development are typically in the early stages and may never materialize, which could result in a loss of all or a substantial part of our initial investment in these companies. The evaluation of privately held companies is based on information that we request from these companies, which is not subject to the same disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the timing and accuracy of the data received from these companies. See Note 2, "Financial Instruments" for further discussion regarding our privately held investments. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 61 2018 Form 10-K 61 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA AUTODESK, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Fiscal year ended January 31, 2018 2017 2016 Net revenue: Maintenance Subscription Total maintenance and subscription revenue License and other Total net revenue Cost of revenue: Cost of maintenance and subscription revenue Cost of license and other revenue Amortization of developed technology Total cost of revenue Gross profit Operating expenses: Marketing and sales Research and development General and administrative Amortization of purchased intangibles Restructuring charges and other facility exit costs, net Total operating expenses (Loss) income from operations Interest and other expense, net Loss before income taxes Provision for income taxes Net loss Basic net loss per share Diluted net loss per share Weighted average shares used in computing basic net loss per share Weighted average shares used in computing diluted net loss per share 2 0 1 8 A n n u a l R e p o r t $ 989.6 $ 1,103.1 $ 894.3 1,883.9 172.7 2,056.6 214.4 72.6 16.4 303.4 1,753.2 443.1 1,546.2 484.8 2,031.0 191.7 110.2 40.0 341.9 1,152.5 228.1 1,380.6 1,123.5 2,504.1 162.3 159.4 49.0 370.7 1,689.1 2,133.4 1,087.3 1,022.5 1,015.5 755.5 305.2 20.2 94.1 766.1 287.8 31.8 80.5 790.0 293.4 33.2 — 2,262.3 2,188.7 2,132.1 (509.1) (48.2) (557.3) (9.6) (499.6) (24.2) (523.8) (58.3) $ $ $ (566.9) $ (582.1) $ (2.58) $ (2.58) $ 219.5 219.5 (2.61) $ (2.61) $ 222.7 222.7 1.3 (21.6) (20.3) (310.2) (330.5) (1.46) (1.46) 226.0 226.0 See accompanying Notes to Consolidated Financial Statements. 2018 Form 10-K 62 2018 Form 10-K 62 AUTODESK, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In millions) Net loss Other comprehensive loss, net of reclassifications: Net loss on derivative instruments (net of tax effect of $3.2, ($1.1), and $0.6) Change in net unrealized (loss) gain on available-for-sale securities (net of tax effect of $0.1, ($0.5), and $0.0) Change in defined benefit pension items (net of tax effect of ($0.7), ($0.9), and $0.9) Net change in cumulative foreign currency translation gain (loss) (net of tax effect of ($4.8), $0.2, and $0.5) Total other comprehensive income (loss) Total comprehensive loss Fiscal year ended January 31, 2018 2017 2016 $ (566.9) $ (582.1) $ (330.5) (31.2) (1.1) (27.1) (0.2) 4.5 81.6 54.7 1.3 (5.5) (52.1) (57.4) (1.4) (4.6) (34.7) (67.8) $ (512.2) $ (639.5) $ (398.3) See accompanying Notes to Consolidated Financial Statements. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 63 2018 Form 10-K 63 AUTODESK, INC. CONSOLIDATED BALANCE SHEETS (In millions, except per share data) ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivable, net Prepaid expenses and other current assets Total current assets Marketable securities Computer equipment, software, furniture, and leasehold improvements, net Developed technologies, net Goodwill Deferred income taxes, net Other assets Total assets LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable Accrued compensation Accrued income taxes Deferred revenue Current portion of long-term notes payable, net Other accrued liabilities Total current liabilities Long-term deferred revenue Long-term income taxes payable Long-term deferred income taxes Long-term notes payable, net Long-term other liabilities Commitments and contingencies Stockholders’ (deficit) equity: 2 0 1 8 A n n u a l R e p o r t Preferred stock, $0.01 par value; shares authorized 2.0; none issued or outstanding at January 31, 2018 and 2017 Common stock and additional paid-in capital, $0.01 par value; shares authorized 750.0; 218.3 outstanding at January 31, 2018 and 220.3 outstanding at January 31, 2017 Accumulated other comprehensive loss Accumulated deficit Total stockholders’ (deficit) equity Total liabilities and stockholders' (deficit) equity January 31, 2018 January 31, 2017 $ 1,078.0 $ 1,213.1 245.2 438.2 116.5 686.8 452.3 108.4 1,877.9 2,460.6 $ $ 190.8 145.0 27.1 1,620.2 81.7 170.9 306.2 158.6 45.7 1,561.1 63.9 202.0 4,113.6 $ 4,798.1 94.7 $ 250.9 28.0 1,551.6 — 198.0 2,123.2 403.5 41.6 66.6 1,586.0 148.7 93.5 238.2 50.0 1,270.1 398.7 134.9 2,185.4 517.9 39.3 91.5 1,092.0 138.4 — — 1,952.7 (123.8) (2,084.9) (256.0) 1,876.3 (178.5) (964.2) 733.6 $ 4,113.6 $ 4,798.1 See accompanying Notes to Consolidated Financial Statements. 2018 Form 10-K 64 2018 Form 10-K 64 AUTODESK, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Operating Activities Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, amortization, and accretion Stock-based compensation expense Deferred income taxes Restructuring charges and other facility exit costs, net Other operating activities Changes in operating assets and liabilities, net of business combinations: Accounts receivable Prepaid expenses and other current assets Accounts payable and accrued liabilities Deferred revenue Accrued income taxes Net cash provided by operating activities Investing Activities Purchases of marketable securities Sales of marketable securities Maturities of marketable securities Acquisitions, net of cash acquired Capital expenditures Other investing activities Net cash provided by (used in) investing activities Financing Activities Proceeds from issuance of common stock Taxes paid related to net share settlement of equity awards Repurchase and retirement of common shares Proceeds from debt, net of discount Repayments of debt Other financing activities Net cash (used in) provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of fiscal year Cash and cash equivalents at end of fiscal year Supplemental cash flow information: Cash paid during the year for interest Net cash paid during the year for income taxes Fiscal year ended January 31, 2018 2017 2016 $ (566.9) $ (582.1) $ (330.5) 108.4 261.4 (39.1) 94.1 7.3 13.3 (9.9) (13.9) 168.3 (22.1) 0.9 (514.0) 489.0 594.3 — (50.7) (12.2) 506.4 94.4 (143.1) (699.0) 496.9 (400.0) (5.8) (656.6) 14.2 (135.1) 139.2 221.8 (38.8) 80.5 (7.7) 201.5 (13.5) 2.7 267.0 (100.9) 169.7 (1,867.9) 1,257.7 1,057.2 (85.2) (76.0) (13.8) 272.0 119.6 (76.2) (621.7) — — — (578.3) (3.3) (139.9) 1,213.1 1,078.0 54.6 84.5 $ $ $ 1,353.0 1,213.1 47.6 77.7 $ $ $ $ $ $ 145.8 197.2 235.9 — (25.0) (195.5) (2.8) 24.9 360.5 3.5 414.0 (2,250.1) 329.4 1,376.6 (148.5) (72.4) (44.5) (809.5) 110.8 (51.6) (458.0) 748.3 — (6.3) 343.2 (5.3) (57.6) 1,410.6 1,353.0 34.7 59.1 t r o p e R l a u n n A 8 1 0 2 See accompanying Notes to Consolidated Financial Statements. 2018 Form 10-K 65 2018 Form 10-K 65 Total stockholders' (deficit) equity 2,219.2 $ 59.2 197.2 0.3 (330.5) (67.8) (458.0) 1,619.6 43.4 221.8 119.9 (582.1) (57.4) (631.6) 733.6 (48.7) 261.4 (566.9) 54.7 (690.1) (256.0) 499.4 — — — (330.5) — (249.7) (80.8) — — 113.0 (582.1) — (414.3) (964.2) — — (566.9) — (553.8) (2,084.9) $ AUTODESK, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY (In millions) Common stock and additional paid-in capital Shares Amount Accumulated other comprehensive loss Retained earnings (Accumulated deficit) Balances, January 31, 2015 Common shares issued under stock plans Stock-based compensation expense Tax benefits from employee stock plans Net loss Other comprehensive (loss) Repurchase and retirement of common shares Balances, January 31, 2016 Common shares issued under stock plans Stock-based compensation expense Cumulative effect of accounting changes Net loss Other comprehensive (loss) Repurchase and retirement of common shares Balances, January 31, 2017 Common shares issued under stock plans Stock-based compensation expense Net loss Other comprehensive income Repurchase and retirement of common shares Balances, January 31, 2018 227.0 5.9 — — — — (8.5) 224.4 5.6 — — — — (9.7) 220.3 4.9 — — — (6.9) 218.3 $ $ 1,773.1 59.2 197.2 0.3 — — (208.3) 1,821.5 43.4 221.8 6.9 — — (217.3) 1,876.3 (48.7) 261.4 — — (136.3) 1,952.7 $ $ (53.3) $ — — — — (67.8) — (121.1) — — — — (57.4) — (178.5) — — — 54.7 — (123.8) $ See accompanying Notes to Consolidated Financial Statements. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 66 2018 Form 10-K 66 AUTODESK, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS January 31, 2018 (Tables in millions of dollars, except per share data, unless otherwise indicated) 1. Business and Summary of Significant Accounting Policies Business Autodesk, Inc. (“Autodesk” or the “Company”) is a world leading design software and services company, offering customers productive business solutions through powerful technology products and services. The Company serves customers in the architecture, engineering, and construction; manufacturing; and digital media, consumer, and entertainment industries. The Company’s sophisticated software products, offered through a hybrid of desktop and cloud functionality, enable its customers to experience their ideas before they are real by allowing them to imagine, design, and create their ideas and to visualize, simulate, and analyze real-world performance early in the design process by creating digital prototypes. These capabilities allow Autodesk’s customers to foster innovation, optimize and improve their designs, help save time and money, improve quality, and collaborate with others. Autodesk software products are sold globally, both directly to customers and through a network of resellers and distributors. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Autodesk and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Change in Presentation During the first quarter of fiscal 2018, the Company changed its historical presentation of its revenue and cost of revenue categories. Previously, the Company presented revenue and cost of revenue on two lines: subscription, and license and other. Included within subscription was maintenance revenue for all of the Company's software products and revenue for the Company's cloud service offerings. License and other revenue included product license revenue, standalone consulting services, and other immaterial items. Also, included within license and other revenue was an allocation of the estimated value of the software license from the Company's term-based product subscriptions and enterprise offerings, which contain a software license, maintenance and cloud services. For these arrangements, as there is no vendor-specific-objective evidence ("VSOE") for the related maintenance, the arrangement consideration was allocated between the license and maintenance deliverables based on best estimated selling prices in our consolidated statements of operations. The Company performed the allocation because it provided a meaningful presentation to investors based on the Company's then current product mix. As part of the Company's technological and business model transition, the Company discontinued the sale of most of its perpetual licenses, transitioning away from selling a mix of perpetual licenses and term-based product subscriptions to a single subscription model involving a combined hybrid offering of desktop software and cloud functionality, which provides a device- independent, collaborative design workflow for designers and their stakeholders. Fiscal 2018 marks the first full year in the Company's history that it sold substantially all term-based product subscriptions. To better reflect this shift in its business, the Company adopted a revised presentation in the first quarter of fiscal 2018, including the separation of subscription revenue and maintenance revenue on distinct line items on the Company's consolidated statement of operations. Subscription revenue now consists of our term-based product subscriptions, cloud service offerings, and flexible enterprise business arrangements. Note that with the change in presentation of revenue in the Company’s consolidated statement of operations in fiscal 2018, term-based product subscriptions and flexible enterprise business arrangements are classified and presented in a single line item. Maintenance revenue is presented as a separate line item in the new presentation and consists of revenue from the Company's existing maintenance plan agreements and related renewals. License and other revenue will continue to be presented as a separate line item and include any residual perpetual licenses sold, standalone consulting services, and other immaterial items. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 67 2018 Form 10-K 67 In connection with these revisions, the Company also revised its cost of revenue classification to present cost of subscription and maintenance revenue and amortization of developed technology separately. Cost of license and other revenue will continue to be presented as a separate line item. This change in presentation does not affect the Company's total net revenues, total cost of net revenues or overall gross margin. The following table shows reclassified amounts to conform to the periods' presentation: Fiscal Year Ended January 31, 2017 Fiscal Year Ended January 31, 2016 Previously Reported Change in Presentation Reclassification Current Presentation Previously Reported Change in Presentation Reclassification Current Presentation N/A $ 1,103.1 $ 1,103.1 N/A $ 1,152.5 $ 1,152.5 $ $ 1,290.0 741.0 (846.9) (256.2) 443.1 $ 1,277.2 (1,049.1) 228.1 484.8 1,226.9 (103.4) 1,123.5 2,031.0 $ — $ 2,031.0 $ 2,504.1 $ — $ 2,504.1 Net revenue: Maintenance (1) Subscription License and other Total Cost of revenue: 2 0 1 8 A n n u a l R e p o r t Maintenance and subscription (2) $ 151.3 $ 40.4 $ 191.7 $ 156.1 $ 6.2 $ 162.3 License and other 190.6 (80.4) 110.2 214.6 (55.2) 159.4 Amortization of developed technology (1) N/A 40.0 40.0 N/A 49.0 Total $ 341.9 $ — $ 341.9 $ 370.7 $ — $ 49.0 370.7 _______________ (1) These lines were not previously reported in the Consolidated Statement of Operations. (2) Previously, titled "Subscription." Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in Autodesk’s consolidated financial statements and notes thereto. These estimates are based on information available as of the date of the consolidated financial statements. On a regular basis, management evaluates these estimates and assumptions. Actual results may differ materially from these estimates. Examples of significant estimates and assumptions made by management involve the determination of the fair value of acquired assets and liabilities, goodwill, financial instruments including strategic investments, long-lived assets and other intangible assets, the realizability of deferred tax assets, and the fair value of stock awards. The Company also makes assumptions, judgments, and estimates in determining the accruals for uncertain tax positions, provisional estimates associated with the December 22, 2017 enactment of the U.S. Tax Cuts and Jobs Act ("Tax Act"), variable compensation, partner incentive programs, product returns reserves, allowances for doubtful accounts, asset retirement obligations, and legal contingencies. Foreign Currency Translation and Transactions The assets and liabilities of Autodesk’s foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at exchange rates that approximate those rates in effect during the period in which the underlying transactions occur. Foreign currency translation adjustments are recorded as other comprehensive (loss) income. Gains and losses realized from foreign currency transactions, those transactions denominated in currencies other than the foreign subsidiary’s functional currency, are included in interest and other income, net. Monetary assets and liabilities are remeasured using foreign currency exchange rates at the end of the period, and non-monetary assets are remeasured based on historical exchange rates. 2018 Form 10-K 68 2018 Form 10-K 68 Derivative Financial Instruments Autodesk accounts for its derivative instruments as either assets or liabilities on the balance sheet and carries them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. Derivatives that do not qualify for hedge accounting are adjusted to fair value through earnings. See Note 2, "Financial Instruments" for information regarding Autodesk's hedging activities. Cash and Cash Equivalents Autodesk considers all highly liquid investments with insignificant interest rate risk and remaining maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents are recorded at cost, which approximates fair value. Marketable Securities and Privately Held Company Investments Marketable securities are stated at fair value. Marketable securities maturing within one year that are not restricted are classified as current assets. Substantially all marketable debt and equity investments held by Autodesk are classified as current based on the nature of the investments and their availability for use in current operations. Autodesk determines the appropriate classification of its marketable securities at the time of purchase and re-evaluates such classification as of each balance sheet date. Autodesk carries all “available-for-sale securities” at fair value, with unrealized gains and losses, net of tax, reported in stockholders’ equity (deficit) until disposition or maturity. Autodesk carries all “trading securities” at fair value, with unrealized gains and losses, recorded in “Interest and other income, net” in the Company’s Consolidated Statements of Operations. The cost of securities sold is based on the specific-identification method. Autodesk regularly invests in non-marketable debt and equity securities of privately held companies. The carrying values of such investments are included in other long-term assets. For the majority of our privately held company investments, we use the cost method of accounting. All of Autodesk’s marketable securities and privately held company investments are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Autodesk considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than Autodesk’s cost basis, the financial condition and near-term prospects of the investee, and Autodesk’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in the market value. For additional information, see “Concentration of Credit Risk” within this Note 1 and Note 2, “Financial Instruments.” Accounts Receivable, Net Accounts receivable, net, consisted of the following as of January 31: t r o p e R l a u n n A 8 1 0 2 Trade accounts receivable Less: Allowance for doubtful accounts Product returns reserve Partner programs and other obligations Accounts receivable, net 2018 2017 469.2 $ (2.3) (0.2) (28.5) 438.2 $ 477.5 (1.5) (0.2) (23.5) 452.3 $ $ Allowances for uncollectible trade receivables are based upon historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with problem accounts. As part of the indirect channel model, Autodesk has a partner incentive program that uses quarterly attainment of monetary rewards to motivate distributors and resellers to achieve mutually agreed upon business goals in a specified time period. A portion of these incentives reduce license and other revenue in the current period. The remainder, which relates to incentives on our Subscription Program, is recorded as a reduction to deferred revenue in the period the subscription transaction is billed and subsequently recognized as a reduction to subscription revenue over the contract period. These incentive balances 2018 Form 10-K 69 2018 Form 10-K 69 do not require significant assumptions or judgments. Depending on how the payments are made, the reserves associated with the partner incentive program are treated on the balance sheet as either contra account receivable or accounts payable. Concentration of Credit Risk Autodesk places its cash, cash equivalents, and marketable securities in highly liquid instruments with, and in the custody of, multiple diversified financial institutions globally with high credit ratings and limits the amounts invested with any one institution, type of security, and issuer. Autodesk’s primary commercial banking relationship is with Citigroup Inc. and its global affiliates. Citibank, N.A., an affiliate of Citigroup, is one of the lead lenders and an agent in the syndicate of Autodesk’s $400.0 million line of credit facility. It is Autodesk’s policy to limit the amounts invested with any one institution by type of security and issuer. The bank counterparties to the derivative contracts potentially expose Autodesk to credit-related losses in the event of their nonperformance. However, to mitigate that risk, Autodesk only contracts with counterparties who meet the Company's minimum requirements under its counterparty risk assessment process. Autodesk monitors counterparty risk on at least a quarterly basis and will adjust its exposure to various counterparties as necessary. Autodesk generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. However, Autodesk does not have any master netting arrangements in place with collateral features. Autodesk’s accounts receivable are derived from sales to a large number of resellers, distributors, and direct customers in the Americas; EMEA; and APAC geographies. Autodesk performs ongoing evaluations of these partners' financial condition and limits the amount of credit extended when deemed necessary, but generally does not require collateral from such parties. Total sales to the Company's largest distributor Tech Data Corporation, and its global affiliates (“Tech Data”), accounted for 31%, 30%, and 25% of Autodesk's net revenue for fiscal years ended January 31, 2018, 2017, and 2016, respectively. The majority of the net revenue from sales to Tech Data is for sales made outside of the United States. In addition, Tech Data accounted for 31% and 20% of trade accounts receivable as of January 31, 2018, and 2017, respectively. Computer Equipment, Software, Furniture, and Leasehold Improvements, Net Computer equipment, software, and furniture are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the lease term. Depreciation expense was $67.6 million in fiscal 2018, $73.1 million in fiscal 2017, and $60.6 million in fiscal 2016. Computer equipment, software, furniture, leasehold improvements and the related accumulated depreciation at January 31 2 0 1 8 A n n u a l R e p o r t were as follows: Computer hardware, at cost Computer software, at cost Leasehold improvements, land and buildings, at cost Furniture and equipment, at cost Computer software, hardware, leasehold improvements, furniture, and equipment, at cost Less: Accumulated depreciation 2018 2017 $ 217.1 $ 72.6 228.9 63.4 582.0 (437.0) 206.1 73.5 206.3 58.2 544.1 (385.5) 158.6 Computer software, hardware, leasehold improvements, furniture, and equipment, net $ 145.0 $ Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities, if material, and immediately expensed for preliminary project activities and post-implementation activities. These capitalized costs are amortized over the software’s expected useful life, which is generally three years. 2018 Form 10-K 70 2018 Form 10-K 70 Software Development Costs Software development costs incurred prior to the establishment of technological feasibility are included in research and development expenses. Autodesk defines establishment of technological feasibility as the completion of a working model. Software development costs incurred subsequent to the establishment of technological feasibility through the period of general market availability of the products are capitalized and generally amortized over a three-year period, if material. Autodesk had no material capitalized software development costs at January 31, 2018, and January 31, 2017. Other Intangible Assets, Net Other intangible assets include developed technologies, customer relationships, trade names, patents, user lists and the related accumulated amortization. These assets are shown as “Developed technologies, net” and as part of “Other assets” in the Consolidated Balance Sheet. The majority of Autodesk’s other intangible assets are amortized to expense over the estimated economic life of the product, which ranges from two to ten years. Amortization expense for developed technologies, customer relationships, trade names, patents, and user lists was $36.6 million in fiscal 2018, $72.2 million in fiscal 2017 and $82.6 million in fiscal 2016. Other intangible assets and related accumulated amortization at January 31 were as follows: Developed technologies, at cost Customer relationships, trade names, patents, and user lists, at cost (1) Other intangible assets, at cost (2) Less: Accumulated amortization Other intangible assets, net _______________ (1) (2) Included in “Other assets” in the accompanying Consolidated Balance Sheets. Includes the effects of foreign currency translation. 2018 2017 578.5 $ 372.5 951.0 (895.8) 55.2 $ 583.6 375.9 959.5 (862.0) 97.5 $ $ The weighted average amortization period for developed technologies, customer relationships, trade names, patents, and user lists during fiscal 2018 was 4.9 years. Excluding in-process research and development, expected future amortization expense for developed technologies, customer relationships, trade names, patents, and user lists for each of the fiscal years ended thereafter is as follows: t r o p e R l a u n n A 8 1 0 2 2019 2020 2021 2022 Thereafter Total Goodwill Fiscal Year ended January 31, $ $ 28.0 16.1 7.7 3.4 — 55.2 Goodwill consists of the excess of the consideration transferred over the fair value of net assets acquired in business combinations. Autodesk tests goodwill for impairment annually in its fourth fiscal quarter or more often if circumstances indicate a potential impairment may exist, or if events have affected the composition of reporting units. When goodwill is assessed for impairment, Autodesk has the option to perform an assessment of qualitative factors of impairment (“optional assessment”) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given fiscal year, qualitative factors to consider include cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. If, after assessing the totality of events or 2018 Form 10-K 71 2018 Form 10-K 71 2 0 1 8 A n n u a l R e p o r t circumstances, it is more likely than not that the fair value of the reporting unit is greater than its carrying value, then performing the quantitative impairment test is unnecessary. The quantitative impairment test is necessary when either Autodesk does not use the optional assessment or, as a result of the optional assessment, it is not more likely than not that the fair value of the reporting unit is greater than its carrying value. As described in the "Accounting Standards Adopted" section of Note 1, Autodesk early adopted ASU 2017-04, which simplifies the subsequent measurement of goodwill to eliminate Step 2 from the goodwill impairment test, removing the need to determine the implied fair value of goodwill and comparing it to the carrying amount of that goodwill to measure the impairment loss, if any. In situations in which an entity's reporting unit is publicly traded, the fair value of the Company may be approximated by its market capitalization, in performing the quantitative impairment test. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced to fair value through an impairment charge recorded in the Company's statements of operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The value of Autodesk’s goodwill could also be impacted by future adverse changes such as: (i) declines in Autodesk’s actual financial results, (ii) a sustained decline in Autodesk’s market capitalization, (iii) a significant slowdown in the worldwide economy or the industries Autodesk serves, or (iv) changes in Autodesk’s business strategy. For the annual impairment test, Autodesk's market capitalization was substantially in excess of the carrying value of the Company as of January 31, 2018. Accordingly, Autodesk has determined there was no goodwill impairment during the year ended January 31, 2018. In addition, Autodesk did not recognize any goodwill impairment losses in fiscal 2017 or 2016. The following table summarizes the changes in the carrying amount of goodwill during the fiscal years ended January 31, 2018 and 2017: Goodwill, beginning of the year Less: accumulated impairment losses, beginning of the year Additions arising from acquisitions during the year Effect of foreign currency translation, measurement period adjustments, and other (1) Goodwill, end of the year January 31, 2018 January 31, 2017 $ $ 1,710.3 $ (149.2) — 59.1 1,684.2 (149.2) 62.8 (36.7) 1,620.2 $ 1,561.1 _______________ (1) Purchase accounting adjustments reflect revisions made to the Company’s preliminary purchase price allocations during fiscal 2018 and 2017. Impairment of Long-Lived Assets At least annually or more frequently as circumstances dictate, Autodesk reviews its long-lived assets for impairment whenever impairment indicators exist. Autodesk continually monitors events and changes in circumstances that could indicate the carrying amounts of its long-lived assets may not be recoverable. When such events or changes in circumstances occur, Autodesk assesses recoverability of these assets. Recoverability is measured by comparison of the carrying amounts of the assets to the future undiscounted cash flow the assets are expected to generate. If the long-lived assets are considered to be impaired, the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds its fair market value. Autodesk did not recognize any material impairments of long-lived assets during the fiscal years ended January 31, 2018, 2017, and 2016, respectively. In addition to the recoverability assessments, Autodesk routinely reviews the remaining estimated useful lives of its long- lived assets. Any reduction in the useful life assumption will result in increased depreciation and amortization expense in the quarter when such determinations are made, as well as in subsequent quarters. Deferred Tax Assets Deferred tax assets arise primarily from tax credits, net operating losses, and timing differences for reserves, accrued liabilities, stock options, deferred revenue, purchased technologies, and capitalized intangibles, partially offset by U.S. deferred tax liabilities on acquired intangibles, and valuation allowances against U.S. and foreign deferred tax assets. Autodesk performed a quarterly assessment of the recoverability of these net deferred tax assets and believe it will generate sufficient 2018 Form 10-K 72 2018 Form 10-K 72 future taxable income in appropriate tax jurisdictions to realize the net deferred tax assets. They are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce gross deferred tax assets to the amount that is "more likely than not" to be realized. Revenue Recognition Autodesk recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collection is probable. For multiple element arrangements containing only software and software-related elements, Autodesk allocates the sales price among each of the deliverables using the residual method, under which a portion of the total arrangement consideration is allocated to undelivered elements based on their vendor-specific objective evidence (“VSOE”) of fair value and the remainder or residual of the total consideration is recognized as revenue for the delivered elements. VSOE is the price charged when an element is sold separately or a price set by management with the relevant authority. If Autodesk does not have VSOE of an undelivered element, revenue recognition is deferred on the entire sales arrangement until all elements for which Autodesk does not have VSOE are delivered. If Autodesk does not have VSOE for undelivered product subscriptions, maintenance or services, the total consideration for the arrangement is recognized ratably over the longest contractual service period in the arrangement. For multiple element arrangements involving non-software elements, including cloud subscription services, our revenue recognition policy is based upon the accounting guidance contained in ASC 605, Revenue Recognition. For these arrangements, Autodesk first allocates the total arrangement consideration based on the relative selling prices of the software group of elements as a whole and to the non-software elements. Autodesk then further allocates consideration within the software group to the respective elements within that group using the residual method as described above. Autodesk exercises judgment and uses estimates in connection with the determination of the amount of revenue to be recognized in each accounting period. Autodesk allocates the total arrangement consideration among the various elements based on a selling price hierarchy. The selling price for a deliverable is based on its VSOE if available, third-party evidence ("TPE") if VSOE is not available, or the best estimated selling price ("BESP") if neither VSOE nor TPE is available. BESP represents the price at which Autodesk would transact for the deliverable if it were sold regularly on a standalone basis. To establish BESP for those elements for which neither VSOE nor TPE are available, Autodesk performs a quantitative analysis of pricing data points for historical standalone transactions involving such elements for a twelve-month period. As part of this analysis, Autodesk monitors and evaluates the BESP against actual pricing to ensure that it continues to represent a reasonable estimate of the standalone selling price, considering several other external and internal factors including, but not limited to, pricing and discounting practices, contractually stated prices, the geographies in which Autodesk offers products and services, and the type of customer (i.e. distributor, value-added reseller, and direct end user, among others). Autodesk analyzes BESP at least annually or on a more frequent basis if a significant change in our business necessitates a more timely analysis, or if significant selling price variances are experienced. In situations when Autodesk has multiple contracts with a single counterparty, Autodesk uses the guidance in ASC 985-605 to evaluate both the form and the substance of the arrangements to determine if they should be combined and accounted for as one arrangement or as separate arrangements. Autodesk’s assessment of the likelihood of collection is also a critical factor in determining the timing of revenue recognition. If Autodesk does not believe that collection is probable, the revenue will be deferred until payment is received. Autodesk's maintenance revenue consists of renewal fees for existing maintenance plan agreements that were initially purchased with a perpetual software license. Under the maintenance plan, customers are eligible to receive unspecified upgrades, when and if available, and technical support. Autodesk recognizes maintenance revenue ratably over the term of the maintenance agreement, which is generally between one and three years. Autodesk's subscription revenue consists of term-based product subscriptions, cloud service offerings, and flexible enterprise business arrangements. With Autodesk's subscription plan, customers can use Autodesk software anytime, anywhere, and get access to the latest updates to previous versions. Revenue from these arrangements is recognized ratably over the contract term. Revenue for Autodesk's cloud service offerings is recognized ratably over the contract term, commencing with the date Autodesk's service is made available to customers and when all other revenue recognition criteria have been satisfied. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 73 2018 Form 10-K 73 2 0 1 8 A n n u a l R e p o r t License and other revenue consists of two components: license revenue and other revenue. License revenue includes software license revenue from the sale of perpetual licenses. Other revenue includes revenue such as standalone consulting and training, and is recognized over time as the services are performed. Taxes Collected from Customers Autodesk nets taxes collected from customers against those remitted to government authorities in the consolidated financial statements. Accordingly, taxes collected from customers are not reported as revenue. Shipping and Handling Costs Shipping and handling costs are included in cost of revenue for all periods presented. Stock-based Compensation Expense The following table summarizes stock-based compensation expense for fiscal 2018, 2017, and 2016, respectively, as follows: Cost of maintenance and subscription revenue Cost of license and other revenue Marketing and sales Research and development General and administrative Stock-based compensation expense related to stock awards and Employee Qualified Stock Purchase Plan ("ESPP") purchases Tax benefit Fiscal Year Ended January 31, 2018 2017 2016 $ 11.9 $ 4.0 107.3 82.9 55.3 261.4 (2.6) $ 8.6 5.5 94.1 81.3 32.3 221.8 (2.6) 5.8 6.0 85.2 70.4 29.8 197.2 (1.6) Stock-based compensation expense related to stock awards and ESPP purchases, net $ 258.8 $ 219.2 $ 195.6 Autodesk determines the grant date fair value of its share-based payment awards using a Black-Scholes Merton ("BSM") option pricing model or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case Autodesk uses a binomial-lattice model (e.g., Monte Carlo simulation model). The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Autodesk uses the following assumptions to estimate the fair value of stock-based awards: Fiscal Year Ended January 31, 2018 Fiscal Year Ended January 31, 2017 Fiscal Year Ended January 31, 2016 Range of expected volatilities Range of expected lives (in years) Expected dividends Performance Stock Unit ESPP Performance Stock Unit 32% N/A —% 31% - 34% 38 - 39% 0.5 - 2.0 —% N/A —% ESPP 30 - 40% 0.5 - 2.0 —% Range of risk-free interest rates 1.0% - 1.2% 0.9% - 1.4% 0.6 - 0.7% 0.5 - 0.9% Performance Stock Unit 27% N/A —% 0.2% ESPP 28 -29% 0.5 - 2.0 —% 0.1 - 0.7% Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures: (1) a measure of historical volatility in the trading market for the Company’s common stock, and (2) the implied volatility of traded forward call options to purchase shares of the Company’s common stock. The expected volatility for performance stock units subject to market conditions includes the expected volatility of Autodesk's peer companies within the S&P Computer Software Select Index or S&P North American Technology Software Index with a market capitalization over $2.00 billion, depending on the award type. Autodesk estimates the expected life of stock-based awards using both exercise behavior and post-vesting termination behavior as well as consideration of outstanding options. The range of expected lives of ESPP awards are based upon the four, six-month exercise periods within a 24-month offering period. 2018 Form 10-K 74 2018 Form 10-K 74 Autodesk did not pay cash dividends in fiscal 2018, 2017, or 2016 and does not anticipate paying any cash dividends in the foreseeable future. Consequently, an expected dividend yield of zero is used in the BSM option pricing model and the Monte Carlo simulation model. The risk-free interest rate used in the BSM option pricing model and the Monte Carlo simulation model for stock-based awards is the historical yield on U.S. Treasury securities with equivalent remaining lives. Autodesk recognizes expense only for the stock-based awards that ultimately vest. Autodesk accounts for forfeitures of stock-based awards as those forfeitures occur. Advertising Expenses Advertising costs are expensed as incurred. Total advertising expenses incurred were $31.1 million in fiscal 2018, $33.6 million in fiscal 2017, and $29.8 million in fiscal 2016. Net (Loss) Income Per Share Basic net (loss) income per share is computed based on the weighted average number of shares of common stock outstanding for the period, excluding stock options and restricted stock. Diluted net (loss) income per share is computed based upon the weighted average shares of common shares outstanding for the period and potentially dilutive common shares, including the effect of stock options and restricted stock units under the treasury stock method. Defined Benefit Pension Plans The funded status of Autodesk's defined benefit pension plans is recognized in the Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation for the fiscal years presented. The projected benefit obligation represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels. The fair value of plan assets represents the current market value of Autodesk's cumulative company and participant contributions made to the various plans in effect. Net periodic benefit cost is recorded in the Consolidated Statements of Operations and includes service cost, interest cost, expected return on plan assets, amortization of prior service costs, and gains or losses previously recognized as a component of other comprehensive loss. Certain events, such as changes in the employee base, plan amendments, and changes in actuarial assumptions may result in a change in the defined benefit obligation and the corresponding change to other comprehensive income. Gains and losses and prior service costs not recognized as a component of net periodic benefit cost in the Consolidated Statements of Operations as they arise are recognized as a component of other comprehensive (loss) income in the Consolidated Statements of Comprehensive (Loss) Income. Those gains and losses and prior service costs are subsequently amortized as a component of net periodic benefit cost over the average remaining service lives of the plan participants using a corridor approach to determine the portion of gain or loss subject to amortization. The measurement of projected benefit obligations and net periodic benefit cost is based on estimates and assumptions that reflect the terms of the plans and use participant-specific information such as compensation, age and years of services, as well as certain assumptions, including estimates of discount rates, expected return of plan assets, rate of compensation increases, interest rates, and mortality rates. Accounting Standards in Fiscal 2018 With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by FASB or adopted by the Company during the fiscal year ended January 31, 2018, that are of significance, or potential significance, to the Company. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 75 2018 Form 10-K 75 2 0 1 8 A n n u a l R e p o r t Accounting Standards Adopted Autodesk adopted FASB's Accounting Standards Update No. 2017-04 ("ASU 2017-04"), "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" during the three months ended April 30, 2017. The ASU simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new guidance is required to be applied on a prospective basis and as such, Autodesk used the simplified test in its annual fourth fiscal quarter testing. ASU 2017-04 did not have a material impact on Autodesk's consolidated financial statements. Recently Issued Accounting Standards But Not Yet Adopted In February 2018, the FASB issued Accounting Standards Update No. 2018-02 (“ASU 2018-02”), “Income Statement- Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The amendment allows entities to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The amendment only impacts the income tax effect of the passage of the Tax Cuts and Jobs Act but does not affect the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. The amendment is effective for Autodesk fiscal year beginning February 1, 2019, with early adoption permitted. Autodesk is currently evaluating the accounting, transition, and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. In August 2017, FASB issued Accounting Standards Update No. 2017-12 ("ASU 2017-12"), "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." The targeted amendments help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. For cash flow and net investment hedges as of the adoption date, the guidance requires a modified retrospective approach. The amended presentation and disclosure guidance is required only prospectively. The amendments are effective for Autodesk's fiscal year beginning February 1, 2019, with early adoption permitted. Autodesk is currently evaluating the accounting, transition, and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. In February 2017, FASB issued Accounting Standards Update No. 2017-05 ("ASU 2017-05"), "Other Income– Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." The ASU, among other things, clarifies the scope of the derecognition of nonfinancial assets, the definition of in substance financial assets, and impacts the accounting for partial sales of nonfinancial assets by requiring full gain recognition upon the sale. The amendments are effective for Autodesk's fiscal year beginning February 1, 2018. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The effect of the implementation will depend upon the nature of the Company's future acquisitions or dispositions, if any. The adoption of the guidance would not have had a material impact on acquisitions prior to the current period and on the Company's consolidated statements of financial condition and results of operations. In January 2017, FASB issued Accounting Standards Update No. 2017-01 ("ASU 2017-01"), "Business Combinations: Clarifying the Definition of a Business" which provides a more robust framework to use in determining when a set of assets and activities is considered a business. The amendments will be effective for Autodesk's fiscal year beginning February 1, 2018. The new guidance is required to be applied on a prospective basis. The effect of the implementation will depend upon the nature of the Company's future acquisitions, if any. In October 2016, FASB issued Accounting Standards Update No. 2016-16 ("ASU 2016-16"), “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory” which requires that entities recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The amendments will be effective for Autodesk's fiscal year beginning February 1, 2018. The new guidance is required to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Autodesk does not believe the ASU will have a material impact on its consolidated financial statements. 2018 Form 10-K 76 2018 Form 10-K 76 In June 2016, FASB issued Accounting Standards Update No. 2016-13 ("ASU 2016-13") regarding ASC Topic 326, "Financial Instruments - Credit Losses," which modifies the measurement of expected credit losses of certain financial instruments. Autodesk plans to adopt ASU 2016-13 as of the effective date which represents Autodesk’s fiscal year beginning February 1, 2020. Autodesk does not believe the ASU will have a material impact on its consolidated financial statements. In February 2016, FASB issued Accounting Standards Update No. 2016-02 ("ASU 2016-02") regarding ASC Topic 842, "Leases." The amendments in this ASU require balance sheet recognition of lease assets and lease liabilities by lessees for leases classified as operating leases, with an optional policy election to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. The amendments also require new disclosures, including qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. Autodesk plans to adopt ASU 2016-02 in Autodesk’s fiscal year beginning February 1, 2019. The amendments require a modified retrospective approach with optional practical expedients. Autodesk is currently evaluating the accounting, transition, and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. In January 2016, FASB issued Accounting Standards Update No. 2016-01 ("ASU 2016-01") regarding ASC Topic 825-10, "Financial Instruments - Overall." The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, and require equity securities to be measured at fair value, unless the measurement alternative method has been elected, with changes in fair value recognized through net income. The amendments also simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment for impairment quarterly at each reporting period. The amendments in ASU 2016-01 will be effective for Autodesk's fiscal year beginning February 1, 2018. An entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption, with prospective adoption of the amendments related to equity securities without readily determinable fair values existing as of the date of adoption. Autodesk does not believe ASU 2016-01 will have a material impact on its consolidated financial statements. In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (ASC Topic 606),” which supersedes the revenue recognition requirements in "Revenue Recognition (ASC Topic 605)." ASU 2014-09 provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, FASB issued Accounting Standards Update No. 2015-14 to defer the effective date by one year with early adoption permitted as of the original effective date. In addition, FASB issued Accounting Standards Update No. 2016-08, Accounting Standards Update No. 2016-10, Accounting Standards Update No. 2016-12, and Accounting Standard Update No. 2016-20 in March 2016, April 2016, May 2016, and December 2016, respectively, to help provide interpretive clarifications on the new guidance in ASC Topic 606. Autodesk will adopt ASU 2014-09 as of February 1, 2018, using the modified retrospective transition method. The Company's implementation efforts are substantially complete. The Company has concluded that the desktop software and related cloud services that are included in the majority of its product subscription offerings and enterprise arrangements are not distinct in the context of the contract as they are considered highly interrelated and represent a single combined performance obligation that should be recognized over time. Therefore, the new standard will not result in a material change in the timing and amount of the recognition of revenue for the majority of the Company's product subscription offerings and enterprise arrangements. One impact of the new standard relates to product subscriptions that do not incorporate substantial cloud services. A limited number of Autodesk's product subscriptions do not incorporate substantial cloud services, and under ASU 2014-09, will be recognized as distinct license and service performance obligations. Currently, under ASC Topic 605, licenses sold with undelivered elements without VSOE are recognized ratably over the term of the undelivered elements. Under ASC Topic 606, Autodesk is no longer required to establish VSOE to recognize software license revenue separately from the other elements and will recognize software licenses once the customer obtains control of the license, which is generally upon delivery of the license. Therefore, revenue allocated to the licenses in these offerings under Topic 606 will be recognized at a point in time instead of over the contract term. While the Company is still evaluating, Autodesk believes the impact of the change to the timing of revenue recognition is expected to have a balance sheet pre-tax impact at the date of adoption of approximately $80 - $100 million reduction to the deferred revenue balance. Another significant provision under ASU 2014-09 includes the capitalization and amortization of costs associated with obtaining a contract, most significantly sales commissions. The amortization period for the Company's deferred costs will be t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 77 2018 Form 10-K 77 recognized over the estimated period of benefit. The Company expects there to be a balance sheet pre-tax impact at the date of adoption recognizing the deferred sales commission capitalization costs of approximately $102 - $112 million. 2. Financial Instruments The following tables summarize the Company's financial instruments' amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category as of January 31, 2018 and 2017. January 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1 Level 2 Level 3 $ 5.0 $ — $ — $ 5.0 $ 5.0 $ — $ 2 0 1 8 A n n u a l R e p o r t Cash equivalents (1): Agency bonds Certificates of deposit Commercial paper Corporate debt securities Custody cash deposit Money market funds Municipal bonds Sovereign debt Marketable securities: Short-term available-for-sale Asset backed securities Commercial paper Corporate debt securities Other (2) U.S. government securities Short-term trading securities Mutual funds Long-term available-for-sale Agency bonds Asset backed securities Corporate debt securities Municipal bonds Sovereign debt U.S. government securities Convertible debt securities (3) Derivative contract assets (4) Derivative contract liabilities (5) 17.4 324.2 5.0 5.2 278.8 5.0 2.0 13.1 27.5 99.4 9.2 37.1 50.1 13.7 36.8 100.2 12.7 2.8 25.5 7.5 2.0 — — — — — — — — — — — — — 8.9 — — 0.1 — — — 0.5 7.5 — — — — — — — — — — (0.1) — — — (0.1) (0.2) (0.4) (0.1) — (0.2) (0.2) (1.3) 17.4 324.2 5.0 5.2 278.8 5.0 2.0 13.1 27.5 99.3 9.2 37.1 17.4 — 5.0 5.2 — 5.0 — — — 99.3 7.7 37.1 59.0 59.0 13.6 36.6 99.9 12.6 2.8 25.3 7.8 8.2 13.6 — 99.9 12.6 — 25.3 — — — — 324.2 — — 278.8 — 2.0 13.1 27.5 — 1.5 — — — 36.6 — — 2.8 — — 7.2 (26.6) — — — — — — — — — — — — — — — — — — — — 7.8 1.0 — 8.8 (26.6) (26.6) Total $ 1,080.2 $ 17.0 $ (29.2) $1,068.0 $ 392.1 $ 667.1 $ Included in “Cash and cash equivalents” in the accompanying Consolidated Balance Sheets. ____________________ (1) (2) Consists of agency bonds, certificates of deposit, sovereign debt, and municipal bonds. (3) Considered “available for sale” and included in “Other assets” in the accompanying Consolidated Balance Sheets. (4) Included in “Prepaid expenses and other current assets,” “Other assets,” or “Other accrued liabilities” in the accompanying Consolidated Balance Sheets. Included in “Other accrued liabilities” in the accompanying Consolidated Balance Sheets. (5) 2018 Form 10-K 78 2018 Form 10-K 78 January 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1 Level 2 Level 3 $ — $ — $ Cash equivalents (1): Agency bonds Certificates of deposit Commercial paper Corporate debt securities Custody cash deposit Money market funds Municipal bonds Sovereign debt U.S. government securities Marketable securities: Short-term available-for-sale Agency bonds Asset backed securities Certificates of deposit Commercial paper Corporate debt securities Municipal bonds Sovereign debt U.S. government securities Short-term trading securities Mutual funds Long-term available-for-sale Agency bonds Asset backed securities Corporate debt securities Municipal bonds Sovereign debt U.S. government securities Convertible debt securities (2) Derivative contract assets (3) Derivative contract liabilities (4) $ 6.0 63.1 207.4 40.2 3.2 256.5 5.0 15.0 309.5 13.2 19.6 157.3 109.2 234.7 43.4 30.0 32.3 44.8 7.1 65.8 172.1 10.7 1.5 48.8 4.9 2.2 — — — — — — — — — — — — — — — — — 2.5 — 0.1 0.1 — — 0.1 2.3 12.3 — 6.0 63.1 207.4 40.2 3.2 256.5 5.0 15.0 309.5 13.2 19.6 157.3 109.2 234.5 43.4 30.0 32.3 $ 6.0 63.1 — 40.2 3.2 — 5.0 — 309.5 13.2 — 157.3 — 234.5 43.4 — 32.3 $ — $ — 207.4 — — 256.5 — 15.0 — — 19.6 — 109.2 — — 30.0 — 47.3 47.3 — — — — — — — — — — — — (0.2) — — — — — — 7.1 65.9 7.1 — (0.1) 172.1 172.1 — — — (1.6) (1.3) 10.7 1.5 48.9 5.6 13.2 (10.4) (10.4) 10.7 — 48.9 — — — — 65.9 — — 1.5 — — 11.9 (10.4) — — — — — — — — — — — — — — — — — — — — — — — — 5.6 1.3 — 6.9 t r o p e R l a u n n A 8 1 0 2 Total $ 1,903.5 $ 17.4 $ (13.6) $1,907.3 $1,193.8 $ 706.6 $ Included in “Cash and cash equivalents” in the accompanying Consolidated Balance Sheets. ____________________ (1) (2) Considered "available for sale" securities and included in "Other assets" in the accompanying Consolidated Balance Sheets. Included in “Prepaid expenses and other current assets,” "Other assets," or “Other accrued liabilities” in the accompanying (3) Consolidated Balance Sheets. Included in “Other accrued liabilities” in the accompanying Consolidated Balance Sheets. (4) Autodesk classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Generally marketable securities with remaining maturities of less than 12 months are classified as short-term and marketable securities with remaining maturities greater than 12 months are classified as long-term. Autodesk may sell certain of its marketable securities prior to their stated maturities for strategic purposes or in anticipation of credit deterioration. Autodesk applies fair value accounting for certain financial assets and liabilities, which consist of cash equivalents, marketable securities, and other financial instruments, on a recurring basis. The Company defines fair value as the price that 2018 Form 10-K 79 2018 Form 10-K 79 2 0 1 8 A n n u a l R e p o r t would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and (Level 3) unobservable inputs for which there is little or no market data, which require Autodesk to develop its own assumptions. When determining fair value, Autodesk uses observable market data and relies on unobservable inputs only when observable market data is not available. There have been no transfers between fair value measurement levels during the year ended January 31, 2018. Autodesk's cash equivalents, marketable securities, and financial instruments are primarily classified within Level 1 or Level 2 of the fair value hierarchy. Autodesk values it's available for sale securities on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1) or inputs other than quoted prices that are observable either directly or indirectly in determining fair value (Level 2). Autodesk's Level 2 securities are valued primarily using observable inputs other than quoted prices in active markets for identical assets and liabilities. Autodesk's Level 3 securities consist of investments held in convertible debt securities, and derivative contracts which are valued using probability weighted discounted cash flow models as some of the inputs to the models are unobservable in the market. A reconciliation of the change in Autodesk’s Level 3 items for the fiscal year ended January 31, 2018 was as follows: Balances, January 31, 2017 Purchases Gains (losses) included in earnings (1) Gains included in OCI Balances, January 31, 2018 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Convertible Debt Securities Derivative Contracts Total $ $ 1.3 1.1 (1.4) — 1.0 $ $ $ 5.6 5.9 (3.2) (0.5) 6.9 7.0 (4.6) (0.5) 7.8 $ 8.8 ____________________ (1) Included in “Interest and other expense, net” in the accompanying Consolidated Statement of Operations. The following table summarizes the estimated fair value of Autodesk's “available-for-sale securities” classified by the contractual maturity date of the security: Due within in 1 year Due in 1 year through 5 years Due in 5 years through 10 years Due after 10 years Total January 31, 2018 Cost Fair Value 193.8 $ 186.9 3.7 1.1 194.0 186.0 3.7 1.1 385.5 $ 384.8 $ $ As of January 31, 2018, and 2017, Autodesk had no material securities, individually and in the aggregate, in a continuous unrealized loss position for greater than twelve months. As of January 31, 2018, and 2017, Autodesk had $112.3 million and $117.2 million, respectively, in direct investments in privately held companies accounted for under the cost method, which are periodically assessed for other-than-temporary impairment. , Autodesk does not intend to sell these cost method investments and it is not more likely than not that Autodesk will be required to sell the investment before recovery of the amortized cost bases, which may be maturity. Therefore, Autodesk does not consider those investments to be other-than-temporarily impaired at January 31, 2018. Autodesk estimates fair value of its cost method investments considering available information such as pricing in recent rounds of financing, current cash positions, earnings and cash flow forecasts, recent operational performance, and any other readily available market data. 2018 Form 10-K 80 2018 Form 10-K 80 If Autodesk determines that an other-than-temporary impairment has occurred, Autodesk writes down the investment to its fair value. During fiscal 2018 and 2017, Autodesk recorded $15.5 million and $1.3 million, respectively, in other-than- temporary impairment on its privately held equity and debt investments. The impairment expense was recorded in “Interest and other expense, net” on the Company's Consolidated Statements of Operations. The sales or redemptions of “available-for-sale securities” in fiscal 2018, 2017, and 2016 resulted in a loss of $0.3 million, gain of $1.5 million, and gain of $0.1 million, respectively. The loss and gains were recorded in "Interest and other expense, net" on the Company's Consolidated Statements of Operations. Proceeds from the sale and maturity of marketable securities for fiscal 2018 and fiscal 2017 were $1.1 billion and $2.3 billion, respectively. Derivative Financial Instruments Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term exposures to fluctuations in foreign currency exchange rates which exist as part of ongoing business operations. Autodesk's general practice is to hedge a portion of transaction exposures denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian dollars and Australian dollars. These instruments have maturities between one and twelve months in the future. Autodesk does not enter into derivative instrument transactions for trading or speculative purposes. The bank counterparties to the derivative contracts potentially expose Autodesk to credit-related losses in the event of their nonperformance. However, to mitigate that risk, Autodesk only contracts with counterparties who meet the Company's minimum requirements under its counterparty risk assessment process. Autodesk monitors counterparty risk on at least a quarterly basis and will adjust its exposure to various counterparties as necessary. Autodesk generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. However, Autodesk does not have any master netting arrangements in place with collateral features. Foreign currency contracts designated as cash flow hedges Autodesk uses foreign currency contracts to reduce the exchange rate impact on a portion of the net revenue or operating expense of certain anticipated transactions. These contracts are designated and documented as cash flow hedges. The effectiveness of the cash flow hedge contracts is assessed quarterly using regression analysis as well as other timing and probability criteria. To receive cash flow hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and the hedges are expected to be highly effective in offsetting changes to future cash flows on hedged transactions. The gross gains and losses on these hedges are included in “Accumulated other comprehensive loss” and are reclassified into earnings at the time the forecasted revenue or expense is recognized. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, Autodesk reclassifies the gain or loss on the related cash flow hedge from “Accumulated other comprehensive loss” to “Interest and other expense, net” in the Company's Consolidated Financial Statements at that time. The net notional amounts of these contracts are presented net settled and were $619.9 million at January 31, 2018 and $369.4 million at January 31, 2017. Outstanding contracts are recognized as either assets or liabilities on the balance sheet at fair value. The majority of the net loss of $16.6 million remaining in “Accumulated other comprehensive loss” as of January 31, 2018, is expected to be recognized into earnings within the next twelve months. Derivatives not designated as hedging instruments Autodesk uses foreign currency contracts that are not designated as hedging instruments to reduce the exchange rate risk associated primarily with foreign currency denominated receivables, payables, and cash. These forward contracts are marked- to-market at the end of each month with gains and losses recognized as “Interest and other expense, net.” These derivative instruments do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these derivative instruments are intended to offset the gains or losses resulting from the revaluation and settlement of the underlying foreign currency denominated receivables, payables, and cash. The net notional amounts of these foreign currency contracts are presented net settled and were $329.6 million at January 31, 2018, and $270.6 million at January 31, 2017. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 81 2018 Form 10-K 81 In addition to these foreign currency contracts, Autodesk holds derivative instruments issued by privately held companies, which are not designated as hedging instruments. These derivatives consist of certain conversion options on the convertible debt securities held by Autodesk and an option to acquire a privately held company. These derivatives are recorded at fair value as of each balance sheet date and are recorded in “Other assets.” Changes in the fair values of these instruments are recognized in “Interest and other expense, net.” Fair Value of Derivative Instruments: The fair value of derivative instruments in Autodesk’s Consolidated Balance Sheets were as follows as of January 31, 2018, and January 31, 2017: Balance Sheet Location January 31, 2018 January 31, 2017 Fair Value at Derivative Assets Foreign currency contracts designated as cash flow hedges Derivatives not designated as hedging instruments Total derivative assets Derivative Liabilities Prepaid expenses and other current assets Prepaid expenses and other current assets and Other assets Foreign currency contracts designated as cash flow hedges Derivatives not designated as hedging instruments Other accrued liabilities Other accrued liabilities Total derivative liabilities $ $ $ $ 6.2 $ 10.1 2.0 8.2 $ 18.7 $ 7.9 26.6 $ 3.2 13.3 4.5 6.0 10.5 The effects of derivatives designated as hedging instruments on Autodesk’s Consolidated Statements of Operations were as follows for the fiscal years ended January 31, 2018, 2017, and 2016, respectively (amounts presented include any income tax effects): Amount of (loss) gain recognized in accumulated other comprehensive loss on derivatives (effective portion) Amount and location of gain (loss) reclassified from accumulated other comprehensive loss into (loss) income (effective portion) Net revenue Operating expenses Total Amount and location of loss recognized in (loss) income on derivatives (ineffective portion and amount excluded from effectiveness testing) Interest and other expense, net Foreign Currency Contracts Fiscal Year Ended January 31, 2018 2017 2016 (21.3) $ 6.3 $ 2.2 8.0 1.9 9.9 $ $ 9.2 $ (1.8) 7.4 $ 39.8 (10.5) 29.3 (0.2) $ (0.3) $ (0.7) $ $ $ $ The effects of derivatives not designated as hedging instruments on Autodesk’s Consolidated Statements of Operations were as follows for the fiscal years ended January 31, 2018, 2017, and 2016, respectively (amounts presented include any income tax effects): Amount and location of loss recognized in loss (income) on derivatives Interest and other expense, net Fiscal Year Ended January 31, 2018 2017 2016 $ (19.1) $ (11.1) $ (1.7) 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 82 2018 Form 10-K 82 3. Employee and Director Stock Plans Stock Plans As of January 31, 2018, Autodesk maintained two active stock plans for the purpose of granting equity awards to employees and to non-employee members of Autodesk’s Board of Directors: the 2012 Employee Stock Plan (as amended, the “2012 Employee Plan”), which is available only to employees, and the Autodesk 2012 Outside Directors’ Stock Plan (“2012 Directors' Plan”), which is available only to non-employee directors. The 2012 Employee Plan was approved by Autodesk's stockholders and became effective on January 6, 2012. Since the 2012 Stock Plan was adopted by stockholders in January 2012, Autodesk has received stockholder approval to increase the number of shares subject to the plan by 36.1 million shares. The 2012 Employee Plan replaced the 2008 Employee Stock Plan, as amended ("2008 Plan"), and no further equity awards may be granted under the 2008 Plan. The 2012 Employee Plan reserves up to 57.3 million shares which includes 51.3 million shares reserved under the 2012 Employee Plan, as well as up to 6.0 million shares forfeited under certain prior employee stock plans during the life of the 2012 Employee Plan. The 2012 Employee Plan permits the grant of stock options, restricted stock units, and restricted stock awards. Each restricted stock unit or restricted stock award granted will be counted against the shares authorized for issuance under the 2012 Employee Plan as 1.79 shares. If a granted option, restricted stock unit, or restricted stock award expires or becomes unexercisable for any reason, the unpurchased or forfeited shares that were granted may be returned to the 2012 Employee Plan and may become available for future grant under the 2012 Employee Plan. As of January 31, 2018, 41.1 million shares subject to options or restricted stock awards have been granted under the 2012 Employee Plan. Options and restricted stock that were granted under the 2012 plan vest over periods ranging from immediately upon grant to over a three year period and options expire 10 years from the date of grant. The 2012 Employee Plan will expire on June 30, 2022. At January 31, 2018, 21.3 million shares were available for future issuance under the 2012 Employee Plan. The 2012 Director's Plan was approved by Autodesk's stockholders and became effective on January 6, 2012. The 2012 Directors' Plan replaced the 2010 Outside Directors' Stock Plan, as amended ("2010 Plan"). The 2012 Directors' Plan permits the grant of stock options, restricted stock units, and restricted stock awards to non-employee members of Autodesk’s Board of Directors. Each restricted stock unit or restricted stock award granted will be counted against the shares authorized for issuance under the 2012 Directors' Plan as 2.11 shares. As of January 31, 2018, 0.9 million shares subject to restricted stock unit awards have been granted under the 2012 Directors' Plan. Restricted stock units that were granted under the 2012 Outside Directors' Plan vest over one to three years from the date of grant. On March 12, 2015, the Board reduced the number of shares reserved for issuance under the 2012 Directors' Plan by 0.9 million shares, so that 1.7 million shares are now reserved for issuance under the 2012 Directors' Plan. The 2012 Directors' Plan will expire on June 30, 2022. At January 31, 2018, 0.9 million shares were available for future issuance under the 2012 Director's Plan. The following sections summarize activity under Autodesk’s stock plans. Stock Options: A summary of stock option activity for the fiscal year ended January 31, 2018 is as follows: Number of Shares (in millions) Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate Intrinsic Value (1) (in millions) Options outstanding at January 31, 2017 Exercised Options vested, exercisable and outstanding at January 31, 2018 Shares available for grant at January 31, 2018 0.6 $ (0.4) 0.2 $ 22.2 39.25 38.66 40.49 2.87 $ 16.4 _______________ (1) Represents the total pre-tax intrinsic value, based on Autodesk’s closing stock price of $115.62 per share as of January 31, 2018, which would have been received by the option holders had all option holders exercised their options as of that date. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 83 2018 Form 10-K 83 2 0 1 8 A n n u a l R e p o r t As of January 31, 2018, compensation cost related to stock options has been fully recognized. The following table summarizes information about the pre-tax intrinsic value of options exercised during the fiscal years ended January 31, 2018, 2017, and 2016: Pre-tax intrinsic value of options exercised (1) Fiscal year ended January 31, 2018 2017 2016 $ 22.8 $ 32.0 $ 32.6 —————— (1) The intrinsic value of options exercised is calculated as the difference between the exercise price of the option and the market value of the stock on the date of exercise. The following table summarizes information about options vested and exercisable, and outstanding at January 31, 2018: Range of per-share exercise prices: $28.56 - $36.44 $38.55 - $38.55 $41.62 - $41.62 Number of Shares (in thousands) Weighted average exercise price per share 32.6 $ 1.8 184.4 218.8 $ 34.23 38.55 41.62 40.49 These options will expire if not exercised at specific dates ranging through September 2022. Restricted Stock Units: A summary of restricted stock activity for the fiscal year ended January 31, 2018 is as follows: Unvested restricted stock at January 31, 2017 Granted Vested Canceled/Forfeited Performance Adjustment (1) Unvested restricted stock at January 31, 2018 Unreleased Restricted Stock Units (in thousands) Weighted average grant date fair value per share 7,622.4 $ 2,481.8 (3,765.7) (692.5) 24.7 5,670.7 $ 60.13 106.55 57.85 69.08 61.79 82.94 _______________ (1) Based on Autodesk's financial results and relative total stockholder return for the fiscal 2017 performance period. The performance stock units were attained at rates ranging from 99.7% to 114.7% of the target award. For the restricted stock granted during fiscal years ended January 31, 2018, 2017, and 2016, the weighted average grant date fair value was $106.55, $65.95, and $52.53, respectively. The fair value of the shares vested during fiscal years ended January 31, 2018, 2017, and 2016 was $399.7 million, $232.2 million, and $193.3 million, respectively. During the fiscal year ended January 31, 2018, Autodesk granted 2.2 million restricted stock units. Restricted stock units vest over periods ranging from immediately upon grant to a pre-determined date that is typically within three years from the date of grant. Restricted stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting rights. The fair value of the restricted stock units is expensed ratably over the vesting period. Autodesk recorded stock-based compensation expense related to restricted stock units of $202.1 million, $173.0 million, and $146.4 million during fiscal years ended January 31, 2018, 2017, and 2016, respectively. As of January 31, 2018, total compensation cost not yet recognized of $310.2 million related to non-vested awards, is expected to be recognized over a weighted average period of 1.65 years. At January 31, 2018, the number of restricted stock units granted but unvested was 5.1 million. 2018 Form 10-K 84 2018 Form 10-K 84 During the fiscal year ended January 31, 2018, Autodesk granted 0.3 million performance stock units for which the ultimate number of shares earned is determined based on the achievement of performance criteria at the end of the stated service and performance period. During the period, Autodesk granted two different types of performance stock units. The performance criteria for the first type of performance stock units were based on a mix of net subscription additions, Annualized Recurring Revenue ("ARR"), non-GAAP total spend, and total subscription renewal rate goals adopted by the Compensation and Human Resource Committee, as well as total stockholder return compared against companies in the S&P Computer Software Select Index or the S&P North American Technology Software Index ("Relative TSR"). These performance stock units vest over a three-year period and have the following vesting schedule: • Up to one third of the performance stock units may vest following year one, depending upon the achievement of the performance criteria for fiscal 2018 as well as 1-year Relative TSR (covering year one). • Up to one third of the performance stock units may vest following year two, depending upon the achievement of the performance criteria for year two as well as 2-year Relative TSR (covering years one and two). • Up to one third of the performance stock units may vest following year three, depending upon the achievement of the performance criteria for year three as well as 3-year Relative TSR (covering years one, two and three). The performance criteria for the second type of performance stock units granted to our Chief Executive Officer during the fiscal year ended January 31, 2018 were based on fiscal 2020 free cash flow per share and ARR goals adopted by the Compensation and Human Resource Committee. These performance stock units vest in March 2020 based on the Company's fiscal 2020 performance against the performance criteria. Performance stock units are not considered outstanding stock at the time of grant, as the holders of these units are not entitled to any of the rights of a stockholder, including voting rights. Autodesk has determined the grant-date fair value for these awards using the stock price on the date of grant or if the awards are subject to a market condition, a Monte Carlo simulation model. The fair value of the performance stock units is expensed using the accelerated attribution over the vesting period. Autodesk recorded stock-based compensation expense related to performance stock units of $33.7 million, $22.9 million, and $23.2 million during fiscal years ended January 31, 2018, 2017, and 2016 respectively. As of January 31, 2018, total compensation cost not yet recognized of $6.8 million related to unvested performance stock units, is expected to be recognized over a weighted average period of 0.76 years. At January 31, 2018, the number of performance stock units granted but unvested was 0.6 million. Autodesk recorded stock-based compensation expense related to the acceleration of eligible performance stock awards in conjunction with the Company's former CEO transition agreement of $7.3 million for the fiscal year ended January 31, 2018. t r o p e R l a u n n A 8 1 0 2 1998 Employee Qualified Stock Purchase Plan (“ESPP”) Under Autodesk’s ESPP, which was approved by stockholders in 1998, eligible employees may purchase shares of Autodesk’s common stock at their discretion using up to 15% of their eligible compensation, subject to certain limitations, at 85% of the lower of Autodesk's closing price (fair market value) on the offering date or the exercise date. The offering period for ESPP awards consists of four, six-month exercise periods within a 24-month offering period. At January 31, 2018, a total of 9.1 million shares were available for future issuance. Under the ESPP, the Company issues shares on the first trading day following March 31 and September 30 of each fiscal year. The ESPP expires during fiscal 2018. A summary of the ESPP activity for the years ended January 31, 2018, 2017 and 2016 is as follows: Issued shares Average price of issued shares Weighted average grant date fair value of awards granted under the ESPP Fiscal Year Ended January 31, 2018 2017 2016 2.0 39.03 32.41 $ $ 2.3 36.99 19.20 $ $ 2.1 36.29 11.85 $ $ Autodesk recorded $25.7 million, $25.9 million, and $27.1 million of compensation expense associated with the ESPP in fiscal 2018, 2017, and 2016, respectively. 2018 Form 10-K 85 2018 Form 10-K 85 Equity Compensation Plan Information The following table summarizes the number of outstanding options and awards granted to employees and directors, as well as the number of securities remaining available for future issuance under these plans as of January 31, 2018: Plan category Equity compensation plans approved by security holders Total (a) (b) (c) Number of securities to be issued upon exercise of outstanding options (in millions) Weighted-average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (in millions) 5.9 5.9 $ $ 40.49 40.49 31.3 (1) 31.3 ____________________ (1) Included in this amount are 9.1 million securities available for future issuance under Autodesk’s ESPP. 4. Income Taxes The provision for income taxes consists of the following: Federal: Current Deferred State: Current Deferred Foreign: Current Deferred 2 0 1 8 A n n u a l R e p o r t Fiscal year ended January 31, 2018 2017 2016 $ (0.8) $ (19.3) $ 1.6 8.4 (0.3) 2.2 50.9 (23.1) (1.9) 1.3 93.9 (45.0) $ 9.6 $ 58.3 $ (4.7) 220.9 0.5 20.9 68.4 4.2 310.2 Foreign pretax (loss) income was $(76.2) million in fiscal 2018, $(27.6) million in fiscal 2017, and $218.2 million in fiscal 2016. 2018 Form 10-K 86 2018 Form 10-K 86 The differences between the U.S. statutory rate and the aggregate income tax provision are as follows: Income tax provision (benefit) at U.S. Federal statutory rate State income tax benefit, net of the U.S. Federal benefit Foreign income taxed at rates different from the U.S. statutory rate U.S. valuation allowance Transition tax Increase in attributes due to ASU 2016-9 adoption Change in valuation allowance from ASU 2016-9 adoption Tax effect of non-deductible stock-based compensation Stock compensation windfall / shortfall Research and development tax credit benefit Closure of income tax audits and changes in uncertain tax positions Tax effect of officer compensation in excess of $1.0 million Non-deductible expenses Other Fiscal year ended January 31, 2018 2017 2016 $ (188.4) $ (177.0) $ (21.9) (53.3) (82.5) 408.4 — 20.7 (67.7) (11.3) 1.2 2.2 2.1 0.1 9.6 $ (17.3) 22.3 233.0 — (119.4) 119.4 18.8 (23.0) (10.3) 8.2 2.2 2.0 (0.6) 58.3 $ January 31, 2018 2017 26.7 $ $ $ (7.1) (7.6) (29.4) 345.0 — — — 19.3 — (9.4) (4.7) 1.4 2.6 0.1 310.2 37.6 136.7 127.3 39.5 18.7 76.9 24.3 173.6 128.3 27.6 790.5 t r o p e R l a u n n A 8 1 0 2 (748.0) 42.5 (70.1) (70.1) (27.6) Significant components of Autodesk’s deferred tax assets and liabilities are as follows: Stock-based compensation Research and development tax credit carryforwards Foreign tax credit carryforwards Accrued compensation and benefits Other accruals not currently deductible for tax Purchased technology and capitalized software Fixed assets Tax loss carryforwards Deferred revenue Other Total deferred tax assets Less: valuation allowance Net deferred tax assets Indefinite lived intangibles Total deferred tax liabilities Net deferred tax assets 170.3 162.2 25.9 22.9 43.4 16.5 85.7 120.3 32.4 706.3 (634.2) 72.1 (57.0) (57.0) $ 15.1 $ Autodesk’s tax expense is primarily driven by the reduction in the U.S. tax rate from 35% to 21% on the deferred tax liabilities related to indefinite lived intangibles offset by tax expense in foreign locations, withholding taxes paid on payments made to the U.S. from foreign sources, and tax amortization on indefinite-lived intangibles. Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, Autodesk considered cumulative losses arising from the Company's business model transition as a significant piece of negative evidence. Consequently, in the fiscal year 2016, Autodesk determined that a valuation allowance was required on the accumulated domestic tax attributes. In the current year, 2018 Form 10-K 87 2018 Form 10-K 87 2 0 1 8 A n n u a l R e p o r t the U.S. created incremental deferred tax assets, primarily foreign tax and R&D credits, and those deferred tax attributes have also been offset by a full valuation allowance. As a result, Autodesk has no material federal income tax expense or benefit in the current fiscal year, other than the deferred tax liabilities related to indefinite lived intangibles and the revaluation of these liabilities as a result of U.S. tax reform. The valuation allowance decreased by $113.8 million in fiscal 2018 primarily due to a change in tax rates used to value deferred tax attributes. The valuation allowance increased by $352.4 million, and $327.2 million in fiscal 2017, and 2016, respectively, primarily related to U.S. and Canadian deferred tax attributes. As Autodesk continually strives to optimize the overall business model, tax planning strategies may become feasible and prudent allowing the Company to realize many of the deferred tax assets that are offset by a valuation allowance; therefore, Autodesk will continue to evaluate the ability to utilize the net deferred tax assets each quarter, both in the U.S. and in foreign jurisdictions, based on all available evidence, both positive and negative. The Tax Act was signed into law on December 22, 2017 and provides broad and significant changes to the U.S. corporate income tax regime. The Tax Act reduces the statutory federal corporate rate from 35% to 21% effective fiscal 2019 year and forward and provides for a blended rate of 33.81% to fiscal 2018 year. The Tax Act also, among many other provisions, imposes a one-time mandatory tax on accumulated earnings of foreign subsidiaries (commonly referred to as a "transition tax"), introduces new tax regimes changing how foreign earnings are subject to U.S. tax, modifies the accelerated depreciation deduction rules, and makes updates to the deductibility of certain expenses. The SEC staff acknowledged the challenges companies face incorporating the effects of the Tax Act by the financial reporting deadlines. In response, on December 22, 2017, the SEC staff issued SAB 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete accounting for certain income tax effects of the Tax Act. Autodesk has not completed the determination of the accounting implications of the Tax Act but was able to calculate a reasonable estimate and recorded a provisional tax benefit of the Tax Act in the financial statements of approximately $32.3 million mainly driven by the corporate rate remeasurement of the indefinite-lived intangible deferred tax liability. The provisional amounts recorded are based on the Company’s current interpretation and understanding of the Tax Act and may change as the Company receives additional clarification and implementation guidance and finalizes the analysis of all impacts and positions with regard to the Tax Act. The tax impact of the mandatory one-time tax on accumulated earnings of foreign subsidiaries is primarily offset by other current year operating losses and fully valued net operating loss carryforwards resulting in no impact to the effective tax rate. As additional regulatory guidance is issued, the Company will continue to collect and analyze necessary data and may adjust provisional amounts previously recorded in the period in which the adjustments are made. Pursuant to SAB 118, the Company will complete the accounting for the tax effects of all provisions of the Tax Act within the required measurement period not to extend beyond one year from the enactment date. Realization of foreign non-current net deferred tax assets of $68.0 million is dependent upon the Company's ability to generate future taxable income in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are reduced and Autodesk then determines that it is not more likely than not to realize such deferred tax assets. As of January 31, 2018, Autodesk had $179.4 million of cumulative federal tax loss carryforwards and $939.1 million of cumulative state tax loss carryforwards, which may be available to reduce future income tax liabilities in federal and state jurisdictions. As discussed above, these cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely that not that these losses will not be utilized. These federal and state tax loss carryforwards will expire beginning fiscal 2021 through fiscal 2038 and fiscal 2020 through fiscal 2039, respectively. As of January 31, 2018, Autodesk had $138.4 million of cumulative federal research tax credit carryforwards, $72.6 million of cumulative California state research tax credit carryforwards, and $58.1 million of cumulative Canadian federal tax credit carryforwards, which may be available to reduce future income tax liabilities in the respective jurisdictions. The federal tax credit carryforwards will expire beginning fiscal 2021 through fiscal 2039, the state credit carryforwards may reduce future California income tax liabilities indefinitely, and the Canadian tax credit carryforwards will expire beginning fiscal 2027 through fiscal 2039. Autodesk also has $336.9 million of cumulative foreign tax credit carryforwards, which may be available to reduce future U. S. tax liabilities. The foreign tax credit will expire beginning fiscal 2019 through fiscal 2029. As discussed above, these cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely that not that these losses will not be utilized. Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. No ownership change has occurred through the balance sheet date that would limit a material amount of U.S. federal and state tax attributes. 2018 Form 10-K 88 2018 Form 10-K 88 As of January 31, 2018, the Company had $337.6 million of gross unrecognized tax benefits, of which $304.8 million would reduce our valuation allowance, if recognized. The remaining $32.8 million would impact the effective tax rate. It is possible that the amount of unrecognized tax benefits will change in the next twelve months; however, an estimate of the range of the possible change cannot be made at this time. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows: Fiscal Year Ended January 31, 2018 2017 2016 Gross unrecognized tax benefits at the beginning of the fiscal year $ 261.4 $ 254.3 $ 245.8 Increases for tax positions of prior years Decreases for tax positions of prior years Increases for tax positions related to the current year Decreases relating to settlements with taxing authorities Reductions as a result of lapse of the statute of limitations Gross unrecognized tax benefits at the end of the fiscal year 22.8 (22.5) 78.4 (0.8) (1.7) 11.9 (4.1) 11.1 (10.8) (1.0) 1.4 (7.0) 15.8 (0.5) (1.2) $ 337.6 $ 261.4 $ 254.3 It is the Company's continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. Autodesk had $2.8 million, $2.5 million, and $3.3 million, net of tax benefit, accrued for interest and penalties related to unrecognized tax benefits as of January 31, 2018, 2017, and 2016, respectively. There was $0.3 million, $1.5 million, and $1.3 million of net expense for interest and penalties related to tax matters recorded through the consolidated statement of operations for the years ended January 31, 2018, 2017, and 2016 respectively. Autodesk's U.S. and state income tax returns for fiscal year 2003 through fiscal year 2018 remain open to examination. The Internal Revenue Service has started an examination of the Company's U.S. consolidated federal income tax returns for fiscal years 2014 and 2015. While it is possible that the Company's tax positions may be challenged, the Company believes its positions are consistent with the tax law, and the balance sheet reflects appropriate liabilities for uncertain federal tax positions for the years being examined. Autodesk files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from fiscal year 2005 to 2018. t r o p e R l a u n n A 8 1 0 2 As a result of certain business and employment actions and capital investments undertaken by Autodesk, income earned in certain Europe and Asia Pacific countries is subject to reduced tax rates through fiscal 2019. In fiscal 2018, the Company incurred no net benefit from the tax status of these business arrangements, compared to $27.1 million benefit ($0.12 basic net income per share) in fiscal 2017, and none in fiscal 2016. 5. Acquisitions During the fiscal years ended January 31, 2018, and January 31, 2017, Autodesk completed the business combinations and technology purchases described below. The results of operations for the following acquisitions are included in the accompanying Consolidated Statements of Operations since their respective acquisition dates. Pro forma results of operations have not been presented because the effects of the acquisitions, individually and in the aggregate, were not material to Autodesk's Consolidated Financial Statements. For acquisitions accounted for as business combinations, Autodesk recorded the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values assigned to the identifiable intangible assets acquired were based on estimates and assumptions determined by management. Autodesk recorded the excess of consideration transferred over the aggregate fair values as goodwill. The goodwill recorded is primarily attributable to synergies expected to arise after the acquisitions. 2018 Form 10-K 89 2018 Form 10-K 89 2 0 1 8 A n n u a l R e p o r t Fiscal 2018 Acquisitions During the fiscal year ended January 31, 2018, Autodesk did not complete any business combinations or technology acquisitions. Fiscal 2017 Acquisitions During the fiscal year ended January 31, 2017, Autodesk completed several business combination and technology acquisitions for total cash consideration of $87.0 million. These business combinations and technology acquisitions were not material individually or in aggregate to Autodesk's Consolidated Financial Statements. The following table summarizes the fair value of the assets acquired and liabilities assumed by major class for each of the business combinations and technology acquisitions completed during the fiscal year ended January 31, 2017: Developed technologies Customer relationships Trade name Goodwill Deferred revenue (current and non-current) Deferred tax liability Net tangible (liabilities) assets Total 6. Deferred Compensation $ $ 18.8 10.2 3.8 62.8 (2.1) (7.1) 0.6 87.0 At January 31, 2018, Autodesk had marketable securities totaling $436.0 million, of which $59.0 million related to investments in debt and equity securities that are held in a rabbi trust under non-qualified deferred compensation plans. The total related deferred compensation liability was $59.0 million at January 31, 2018, of which $3.4 million was classified as current and $55.6 million was classified as non-current liabilities. The total related deferred compensation liability at January 31, 2017 was $47.3 million, of which $3.1 million was classified as current and $44.2 million was classified as non- current liabilities. The securities are recorded in the Consolidated Balance Sheets under the current portion of "Marketable securities". The current and non-current portions of the liability are recorded in the Consolidated Balance Sheets under “Accrued compensation” and “Other liabilities,” respectively. 7. Borrowing Arrangements In June 2017, Autodesk issued $500.0 million aggregate principal amount of 3.5% notes due June 15, 2027 (collectively, the “2017 Notes”). Net of a discount of $3.1 million and issuance costs of $4.9 million, Autodesk received net proceeds of $492.0 million from issuance of the 2017 Notes. Both the discount and issuance costs are being amortized to interest expense over the term of the 2017 Notes using the effective interest method. The proceeds of the 2017 Notes have been used for the repayment of $400.0 million of debt originally due December 15, 2017 and the remainder is available for general corporate purposes. Autodesk may redeem the 2017 Notes at any time, subject to a make whole premium. In addition, upon the occurrence of certain change of control triggering events, Autodesk may be required to repurchase the 2017 Notes at a price equal to 101.0% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 2017 Notes contain restrictive covenants that limit Autodesk's ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate or merge with, or convey, transfer or lease all or substantially all of its assets, subject to important qualifications and exceptions. Based on quoted market prices, the fair value of the 2017 Notes was approximately $485.6 million as of January 31, 2018. In June 2015, Autodesk issued $450.0 million aggregate principal amount of 3.125% senior notes due June 15, 2020 and $300.0 million aggregate principal amount of 4.375% senior notes due June 15, 2025 (collectively, the “2015 Notes”). Net of a discount of $1.7 million and issuance costs of $6.3 million, Autodesk received net proceeds of $742.0 million from issuance of the 2015 Senior Notes. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2015 Notes using the effective interest method. The proceeds of the 2015 Notes are available for general corporate purposes. Autodesk may redeem the 2015 Notes at any time, subject to a make whole premium. In addition, upon the occurrence of certain change of control triggering events, Autodesk may be required to repurchase the 2015 Notes, at a price 2018 Form 10-K 90 2018 Form 10-K 90 equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The 2015 Notes contain restrictive covenants that limit Autodesk's ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate or merge with, or convey, transfer or lease all or substantially all of its assets, subject to significant qualifications and exceptions. Based on quoted market prices, the fair value of the 2015 Notes was approximately $763.8 million as of January 31, 2018. In December 2012, Autodesk issued $400.0 million aggregate principal amount of 1.95% senior notes due December 15, 2017 and $350.0 million aggregate principal amount of 3.6% senior notes due December 15, 2022 (collectively, the "2012 Notes"). Autodesk received net proceeds of $739.3 million from issuance of the 2012 Notes, net of a discount of $4.5 million and issuance costs of $6.1 million. Both the discount and issuance costs are being amortized to interest expense over the respective terms of the 2012 Notes using the effective interest method. The proceeds of the 2012 Notes are available for general corporate purposes. In July 2017, Autodesk redeemed in full $400.0 million in aggregate principal amount of its outstanding 1.95% senior notes due December 15, 2017. The redemption was completed pursuant to the optional redemption provisions of the first supplemental indenture dated December 13, 2012. To redeem the notes, Autodesk used the proceeds of the 2017 Notes to pay a redemption price of approximately $400.9 million, plus accrued and unpaid interest. Total cash repayment was $401.8 million. The Company did not incur any additional early termination penalties in connection with such redemption. Based on the quoted market price, the fair value of the remaining 2012 Notes was approximately $354.4 million as of January 31, 2018. Autodesk’s line of credit facility permits unsecured short-term borrowings of up to $400.0 million with an option to request an increase in the amount of the credit facility by up to an additional $100.0 million, and is available for working capital or other business needs. This credit agreement contains customary covenants that could restrict the imposition of liens on Autodesk’s assets, and restrict the Company’s ability to incur additional indebtedness or make dispositions of assets if Autodesk fails to maintain the financial covenants. The Company renegotiated the credit agreement's financial covenants in April 2017. The financial covenants now consist of a maximum debt to total cash ratio, a fixed charge coverage ratio through April 30, 2018, and after April 30, 2018, a minimum interest coverage ratio. The line of credit is syndicated with various financial institutions, including Citibank, N.A., an affiliate of Citigroup, which is one of the lead lenders and an agent. The maturity date on the line of credit facility is May 2020. At January 31, 2018, Autodesk was in compliance with the credit facility’s covenants. At January 31, 2018, and January 31, 2017, Autodesk had no outstanding borrowings on this line of credit. 8. Commitments and Contingencies Lease commitments Autodesk leases office space and computer equipment under non-cancellable operating lease agreements that expire at various dates through 2090. The leases generally provide that Autodesk pay taxes, insurance, and maintenance expenses related to the leased assets. Certain of these lease arrangements contain escalation clauses whereby monthly rent increases over time. At January 31, 2018, the aggregate future minimum lease payments required were as follows: t r o p e R l a u n n A 8 1 0 2 2019 2020 2021 2022 2023 Thereafter Less: Sublease income $ $ 62.2 46.3 34.1 24.7 22.8 57.7 247.8 0.8 247.0 2018 Form 10-K 91 2018 Form 10-K 91 Rent expense related to these operating leases recognized on a straight-line basis over the lease period, was as follows: Rent expense Purchase commitments Fiscal Year Ended January 31, 2018 2017 2016 $ 55.9 $ 65.3 $ 58.7 In the normal course of business, Autodesk enters into various purchase commitments for goods or services. Total non- cancellable purchase commitments as of January 31, 2018, were approximately $147.6 million for periods through fiscal 2028. These purchase commitments primarily result from contracts entered into for the acquisition of IT infrastructure, marketing, and software development services, as well as includes commitments related to our investment agreements with limited liability partnership funds. Autodesk has certain royalty commitments associated with the sale and licensing of certain products. Royalty expense is generally based on a dollar amount per unit sold or a percentage of the underlying revenue. Royalty expense, which was recorded under cost of maintenance and subscription revenue and cost of license and other revenue on Autodesk’s Consolidated Statements of Operations, was $15.3 million in fiscal 2018, $16.2 million in fiscal 2017, and $17.4 million in fiscal 2016. Guarantees and Indemnifications 2 0 1 8 A n n u a l R e p o r t In the normal course of business, Autodesk provides indemnifications of varying scopes, including limited product warranties and indemnification of customers against claims of intellectual property infringement made by third parties arising from the use of its products or services. Autodesk accrues for known indemnification issues if a loss is probable and can be reasonably estimated. Historically, costs related to these indemnifications have not been significant, and because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations. In connection with the purchase, sale, or license of assets or businesses with third parties, Autodesk has entered into or assumed customary indemnification agreements related to the assets or businesses purchased, sold or licensed. Historically, costs related to these indemnifications have not been significant, and because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these indemnifications on its future results of operations. As permitted under Delaware law, Autodesk has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at Autodesk’s request in such capacity. The maximum potential amount of future payments Autodesk could be required to make under these indemnification agreements is unlimited; however, Autodesk has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable Autodesk to recover a portion of any future amounts paid. Autodesk believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. Legal Proceedings Autodesk is involved in a variety of claims, suits, investigations, and proceedings in the normal course of business activities including claims of alleged infringement of intellectual property rights, commercial, employment, piracy prosecution, business practices, and other matters. Autodesk routinely reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any matter is considered probable and the amount can be reasonably estimated, Autodesk records a liability for the estimated loss. Because of inherent uncertainties related to these legal matters, Autodesk bases its loss accruals on the best information available at the time. As additional information becomes available, Autodesk reassesses its potential liability and may revise its estimates. In the Company's opinion, resolution of pending matters is not expected to have a material adverse impact on its consolidated results of operations, cash flows, or its financial position. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect the Company's results of operations, cash flows, or financial position in a particular period, however, based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company's financial statements, any such amount is either immaterial or it is not possible to provide an estimated amount of any such potential loss. 2018 Form 10-K 92 2018 Form 10-K 92 9. Stockholders' (Deficit) Equity Preferred Stock Under Autodesk’s Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At January 31, 2018, there were no preferred shares issued or outstanding. The Board of Directors has the authority to issue the preferred stock in one or more series and to fix rights, preferences, privileges, and restrictions, including dividends and the number of shares constituting any series or the designation of such series, without any further vote or action by the stockholders. Common Stock Repurchase Program Autodesk has a stock repurchase program that is used to offset dilution from the issuance of stock under the Company’s employee stock plans and for such other purposes as may be in the interests of Autodesk and its stockholders, which has the effect of returning excess cash generated from the Company’s business to stockholders. Autodesk repurchased and retired approximately 6.9 million shares in fiscal 2018 at an average repurchase price of $100.45 per share, 9.7 million shares in fiscal 2017 at an average repurchase price of $64.73 per share, and 8.5 million shares in fiscal 2016 at an average repurchase price of $53.58. At January 31, 2018, 19.6 million shares remained available for repurchase under the repurchase program approved by the Board of Directors. The share repurchase program does not have an expiration date and the pace and timing of repurchases will depend on factors such as cash generation from operations, available surplus, the volume of employee stock plan activity, cash requirements for acquisitions, economic and market conditions, stock price and legal and regulatory requirements. 10. Interest and Other Expense, net Interest and other expense, net, consists of the following: Interest and investment expense, net Loss on foreign currency (Loss) gain on strategic investments Other income Interest and other expense, net Fiscal Year Ended January 31, 2018 2017 2016 (34.5) $ (29.7) $ (33.9) (3.3) (16.4) 6.0 (3.3) 0.3 8.5 — 3.8 8.5 (48.2) $ (24.2) $ (21.6) $ $ t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 93 2018 Form 10-K 93 11. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, net of taxes, consisted of the following: Net Unrealized Gains (Losses) on Derivative Instruments Net Unrealized Gains (Losses) on Available for Sale Securities Balances, January 31, 2016 $ 15.7 $ Other comprehensive income (loss) before reclassifications Pre-tax (gains) losses reclassified from accumulated other comprehensive income Tax effects Net current period other comprehensive (loss) income Balances, January 31, 2017 Other comprehensive (loss) income before reclassifications Pre-tax (gains) losses reclassified from accumulated other comprehensive income Tax effects Net current period other comprehensive (loss) income Balances, January 31, 2018 7.4 (7.4) (1.1) (1.1) 14.6 (24.5) (9.9) 3.2 (31.2) (16.6) $ $ 0.2 3.3 (1.5) (0.5) 1.3 1.5 (0.6) 0.3 0.1 (0.2) 1.3 Defined Benefit Pension Components Foreign Currency Translation Adjustments Total $ (28.3) $ (108.7) $ (121.1) (5.8) (52.3) (47.4) 1.2 (0.9) (5.5) (33.8) 4.3 — 0.2 (52.1) (160.8) 86.3 0.9 (0.7) 4.5 (29.3) $ 0.1 (4.8) 81.6 (79.2) $ $ (7.7) (2.3) (57.4) (178.5) 65.5 (8.6) (2.2) 54.7 (123.8) 2 0 1 8 A n n u a l R e p o r t Reclassifications related to gains and losses on available-for-sale securities are included in Interest and other expense, net. Refer to Note 2, "Financial Instruments" for the amount and location of reclassifications related to derivative instruments. Reclassifications of the defined benefit pension components are included in the computation of net periodic benefit cost. Refer to Note 14, "Retirement Benefit Plans." 12. Net Loss Per Share Basic net loss per share is computed using the weighted average number of shares of common stock outstanding for the period, excluding stock options and restricted stock units. Diluted net loss per share is based upon the weighted average number of shares of common stock outstanding for the period and potentially dilutive common shares, including the effect of stock options and restricted stock units under the treasury stock method. The following table sets forth the computation of the numerators and denominators used in the basic and diluted net loss per share amounts: Numerator: Net loss Denominator: Denominator for basic net loss per share—weighted average shares Effect of dilutive securities (1) Denominator for dilutive net loss per share Basic net loss per share Diluted net loss per share Fiscal Year Ended January 31, 2018 2017 2016 $ (566.9) $ (582.1) $ (330.5) 219.5 — 219.5 (2.58) $ (2.58) $ 222.7 — 222.7 (2.61) $ (2.61) $ 226.0 — 226.0 (1.46) (1.46) $ $ ____________________ (1) The effect of dilutive securities of 4.5 million, 4.6 million, and 4.7 million shares for the fiscal year ended January 31, 2018, 2017, and 2016, respectively, have been excluded from the calculation of diluted net loss per share as those shares would have been anti-dilutive due to the net loss incurred during those fiscal years. The computation of diluted net loss per share does not include shares that are anti-dilutive under the treasury stock method because their exercise prices are higher than the average market value of Autodesk’s stock during the fiscal year. The effect of 0.5 million, 0.1 million, and 0.1 million potentially anti-dilutive shares were excluded from the computation of net loss per share for the fiscal years ended January 31, 2018, 2017, and 2016, respectively. 2018 Form 10-K 94 2018 Form 10-K 94 13. Segment, Geographic and Product Family Information Autodesk reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions, allocating resources and assessing performance as the source of the Company’s reportable segments. The Company's chief operating decision maker ("CODM") allocates resources and assesses the operating performance of the Company as a whole. As such, Autodesk has one segment manager (the CODM), and one operating segment. Information regarding Autodesk’s revenue by geographic area and product family is as follows: Net revenue by geographic area (1): Americas U.S. Other Americas Total Americas Europe, Middle East, and Africa Asia Pacific Total net revenue Net revenue by product family: Architecture, Engineering and Construction Manufacturing AutoCAD and AutoCAD LT Media and Entertainment Other Fiscal Year Ended January 31, 2018 2017 2016 $ $ $ 740.4 $ 742.1 $ 130.7 871.1 815.4 370.1 129.8 871.9 800.4 358.7 803.9 168.9 972.8 934.6 596.7 2,056.6 $ 2,031.0 $ 2,504.1 866.5 $ 880.9 $ 589.2 401.4 152.0 47.5 625.8 326.7 138.9 58.7 949.1 724.6 594.8 160.0 75.6 $ 2,056.6 $ 2,031.0 $ 2,504.1 t r o p e R l a u n n A 8 1 0 2 __________________ (1) Revenue by geographic area is based on the bill to country. Information regarding Autodesk’s long-lived assets by geographic area is as follows: Long-lived assets (1): Americas U.S. Other Americas Total Americas Europe, Middle East, and Africa Asia Pacific Total long-lived assets January 31, 2018 2017 $ $ 99.3 $ 14.6 113.9 16.7 14.4 145.0 $ 118.8 5.9 124.7 18.7 15.2 158.6 ____________________ (1) Long-lived assets exclude deferred tax assets, marketable securities, goodwill, and other intangible assets. 2018 Form 10-K 95 2018 Form 10-K 95 14. Retirement Benefit Plans Pretax Savings Plan Autodesk has a 401(k) plan that covers nearly all U.S. employees. Eligible employees may contribute up to 75% of their pretax salary, subject to limitations mandated by the Internal Revenue Service. Autodesk makes voluntary cash contributions and matches a portion of employee contributions in cash. Autodesk’s contributions were $17.3 million in fiscal 2018, $16.4 million in fiscal 2017, and $17.3 million in fiscal 2016. Autodesk does not allow participants to invest in Autodesk common stock through the 401(k) plan. Defined Benefit Pension Plans Autodesk maintains certain defined benefit pension plans to employees primarily located in countries outside of the U.S, particularly the United Kingdom, Switzerland, and Japan. The Company deposits funds for specific plans, consistent with the requirements of local law, with insurance companies, third-party trustees, or into government-managed accounts, and accrues for the unfunded portion of the obligation, where material. Depending on the design of the plan, local customs, and market circumstances, the liabilities of a plan may exceed qualified plan assets. Benefit Obligation and Plan Assets The changes in the projected benefit obligations and plan assets for the plans described above were as follows: 2 0 1 8 A n n u a l R e p o r t Beginning projected benefit obligation Service cost Interest cost Actuarial (gain) loss Benefits paid Foreign currency exchange rate changes Curtailments and settlements Contributions by plan participants Plan amendment Ending projected benefit obligation Beginning fair value of plan assets Actual return on plan assets Contributions paid by employer Contributions paid by plan participants Benefit payments Curtailments and settlements Foreign currency exchange rate changes Ending fair value of plan assets Funded status Fiscal year ended January 31, 2018 2017 $ $ $ $ $ 146.4 5.2 2.7 (2.8) (3.3) 13.9 (8.2) 4.0 0.2 158.1 $ $ $ 107.4 3.8 6.5 4.0 (3.3) (8.0) 10.7 121.1 $ (37.0) $ 145.2 5.6 3.0 7.1 (2.6) (9.5) (6.8) 4.4 — 146.4 101.4 4.2 15.3 4.4 (2.6) (6.8) (8.5) 107.4 (39.0) The amounts recognized on the consolidated balance sheets at the end of each period were as follows: Other long-term liabilities Accumulated other comprehensive loss, before tax Net amount recognized Fiscal Year Ended January 31, 2018 2017 $ $ 37.0 31.7 68.7 $ $ 39.0 37.0 76.0 On a worldwide basis, the Company's defined benefit pension plans were 77% funded as of January 31, 2018. 2018 Form 10-K 96 2018 Form 10-K 96 As of January 31, 2018, the aggregate accumulated benefit obligation was $139.5 million for the defined benefit pension plans compared to $128.2 million as of January 31, 2017. Included in the aggregate data in the following tables are the amounts applicable to the Company's defined benefit pension plans, with accumulated benefit obligations in excess of plan assets, as well as plans with projected benefit obligations in excess of plan assets. Amounts related to such plans at the end of each period were as follows: Plans with accumulated benefit obligations in excess of plan assets: Accumulated benefit obligations Plan assets Plans with projected benefit obligations in excess of plan assets: Projected benefit obligations Plan assets Defined Benefit Pension Plan Assets Fiscal Year Ended January 31, 2018 2017 $ $ 130.7 112.1 $ 119.2 98.3 158.1 121.1 $ 146.4 107.4 The investments of the plans are managed by insurance companies or third-party investment managers selected by Autodesk's Trustees, consistent with regulations or market practice of the country where the assets are invested. Investments managed by qualified insurance companies or third-party investment managers under standard contracts follow local regulations, and Autodesk is not actively involved in their investment strategies. Defined benefit pension plan assets measured at fair value on a recurring basis consisted of the following investment categories at the end of each period as follows: Insurance contracts Other investments Total assets measured at fair value Cash Investment Fund valued using net asset value Total pension plan assets at fair value Fiscal Year Ended January 31, Level 1 — $ — — $ $ $ 2018 Level 2 53.0 17.0 70.0 $ $ Level 3 — $ — — $ 2017 Total 46.3 9.4 55.7 — 51.7 107.4 $ $ Total 53.0 17.0 70.0 0.2 50.9 121.1 t r o p e R l a u n n A 8 1 0 2 The insurance contracts in the preceding table represent the immediate cash surrender value of assets managed by qualified insurance companies. Autodesk does not have control over the target allocation or visibility of the investment strategies of those investments. Insurance contracts and investments held by insurance companies made up 44% and 43% of total plan assets as of January 31, 2018, and January 31, 2017, respectively. The assets held in the investment fund in the preceding table are invested in a diversified growth fund actively managed by Russell Investments in association with Aon Hewitt. The objective of the fund is to generate capital appreciation on a long- term basis through a diversified portfolio of investments. The fund aims to deliver equity-like returns in the medium to long term with around two-thirds the volatility of equity markets. The fair value of the assets held in the investment fund are priced monthly at net asset value without restrictions on redemption. 2018 Form 10-K 97 2018 Form 10-K 97 Estimated Future Benefit Payments Estimated benefit payments over the next 10 fiscal years are as follows: 2019 2020 2021 2022 2023 2024-2028 Funding Expectations $ Pension Benefits 7.1 6.5 6.4 6.4 6.4 34.8 Our expected required funding for the plans during fiscal 2019 is approximately $4.7 million. Net Periodic Benefit Cost The components of net periodic pension cost for the defined benefit pension plans for fiscal 2018, 2017, and 2016 are as follows: 2 0 1 8 A n n u a l R e p o r t Service cost for benefits earned during the period Interest cost on projected benefit obligation Expected return on plan assets Amortization of prior service credit Amortization of loss Settlement loss Curtailment gain Net periodic benefit cost Amounts Recorded in OCI Fiscal Year Ended January 31, 2018 2017 2016 $ $ 5.2 2.7 (3.9) (0.3) 1.2 1.9 (0.1) 6.7 $ $ 5.6 3.0 (4.2) (0.3) 1.5 1.2 — 6.8 $ $ 5.7 3.3 (3.9) (0.1) 1.4 — — 6.4 The components of other comprehensive income for the defined benefit pension plans before taxes for fiscal 2018, 2017, Fiscal Year Ended January 31, 2018 2017 2016 $ $ 0.2 $ (2.5) (1.9) (0.2) 0.3 (1.2) (5.3) $ — $ 7.2 (1.2) — 0.3 (1.5) 4.8 $ (2.2) 9.1 — — 0.1 (1.4) 5.6 and 2016 are as follows: Prior service credit for period Net (gain) loss for period Effect of settlement Effect of curtailment Amortization of prior service credit Amortization of net loss Other comprehensive (income) loss 2018 Form 10-K 98 2018 Form 10-K 98 Amounts Recorded in Accumulated Other Comprehensive Loss The amounts recorded in accumulated other comprehensive loss before taxes at the end of each period were as follows: Net prior service credit Net actuarial loss Accumulated other comprehensive loss, before tax Fiscal Year Ended January 31, 2018 2017 $ $ (3.1) $ 34.8 31.7 $ (3.6) 40.6 37.0 The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year for the qualified defined benefit pension plans are as follows: Amortization of prior service credit Amortization of the net loss Total amortization Assumptions Pension Benefits $ $ 0.2 (0.6) (0.4) Weighted average actuarial assumptions used to determine costs for the plans for each period were as follows: Fiscal Year Ended January 31, 2017 2018 2016 Discount rate Expected long-term rate of return on plan assets Rate of compensation increase 2.4% 3.3% 2.3% 3.2% 4.3% 2.2% 3.2% 3.8% 2.2% The weighted-average expected long-term rate of return for the plan assets is 3.3%. The weighted-average expected long- term rate of return on plan assets is based on the interest rates guaranteed under the insurance contracts, and the expected rate of return appropriate for each category of assets weighted for the distribution within the diversified investment fund. The assumptions used for the plans are based upon customary rates and practices for the location of the plans. Factors such as asset class allocations, long-term rates of return (actual and expected), and results of periodic asset liability modeling studies are considered when constructing the long-term rate of return assumption for our defined benefit pension plans. Weighted average actuarial assumptions used to determine benefit obligations for the plans at the end of each period were t r o p e R l a u n n A 8 1 0 2 as follows: Discount rate Rate of compensation increase Fiscal Year Ended January 31, 2017 2018 2016 1.8% 2.6% 1.7% 2.6% 2.2% 2.6% In selecting the appropriate discount rate for the plans, the Company uses country-specific information, adjusted to reflect the duration of the particular plan. The discount rate was based on highly rated long-term bond indexes and yield curves that match the duration of the plan’s benefit obligations. Defined Contribution Plans Autodesk also provides defined contribution plans in certain foreign countries where required by statute. Autodesk’s funding policy for foreign defined contribution plans is consistent with the local requirements in each country. Autodesk’s contributions to these plans were $27.2 million in fiscal 2018, $26.6 million in fiscal 2017, and $23.0 million in fiscal 2016. 2018 Form 10-K 99 2018 Form 10-K 99 Other Plans In addition, Autodesk offers a non-qualified deferred compensation plan to certain key employees whereby they may defer a portion (or all) of their annual compensation until retirement or a different date specified by the employee in accordance with terms of the plan. See Note 6, “Deferred Compensation,” for further discussion. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 100 2018 Form 10-K 100 15. Restructuring charges and other facility exit costs, net During the fourth quarter of fiscal 2018, the Board of Directors approved a world-wide restructuring plan (“Fiscal 2018 Plan”) to support the Company's strategic priorities of completing the subscription transition, digitizing the Company, and re- imagining manufacturing, construction, and production. Through the restructuring, Autodesk seeks to reduce its investments in areas not aligned with its strategic priorities, including in areas related to research and development and go-to-market activities. At the same time, Autodesk plans to further invest in strategic priority areas related to digital infrastructure, customer success, and construction. By re-balancing resources to better align with the Company’s strategic priorities, Autodesk is positioning itself to meet its long-term goals. This world-wide restructuring plan includes a reduction in force that will result in the termination of approximately 13% of the Company’s workforce, or approximately 1,150 employees, and the consolidation of certain leased facilities. The Company expects to substantially complete the reduction in force and the facilities consolidation by the end of fiscal 2019. The Company anticipates incurring pre-tax restructuring charges of $135 million to $149 million, of which $94 million was incurred during the fourth quarter of fiscal 2018. Substantially all of the charges will result in cash expenditures, $124 million to $137 million of which will be for one-time employee termination benefits, and $11 million to $12 million of which will be for facilities-related and other costs. Other costs primarily consist of legal, consulting, and other costs related to employee terminations and are expensed when incurred. During fiscal 2018, we incurred $0.4 million in lease termination costs not related to the Fiscal 2018 Plan. The following tables set forth the restructuring charges and other facility exit costs, net during the fiscal years ended January 31, 2018 and 2017: Balances, January 31, 2017 Additions Payments Adjustments (1) Balances, January 31, 2018 Fiscal 2018 Plan Employee terminations costs Facility terminations and other exit costs Fiscal 2017 Plan Employee terminations costs Facility terminations and other exit costs Other Facility Termination Costs Facility termination costs Total Current portion (2) Non-current portion (2) Total $ $ $ $ 87.3 $ (35.1) $ 6.3 0.1 0.1 0.3 (1.3) (1.5) (1.5) (3.0) $ 94.1 $ (42.4) $ — $ — 1.1 1.9 4.5 7.5 5.9 1.6 7.5 0.8 $ (2.5) 0.3 (0.3) (0.3) (2.0) $ $ $ 53.0 2.5 — 0.2 1.5 57.2 57.2 — 57.2 ____________________ (1) Adjustments primarily relate to the accelerated depreciation of fixed assets and the impact of foreign exchanges rate changes. (2) The current and non-current portions of the reserve are recorded in the Consolidated Balance Sheets under “Other accrued liabilities” and “Other liabilities,” respectively. 2018 Form 10-K 101 2018 Form 10-K 101 t r o p e R l a u n n A 8 1 0 2 Balances, January 31, 2016 Additions Payments Adjustments (1) Balances, January 31, 2017 Fiscal 2017 Plan Employee terminations costs Facility terminations and other exit costs Other Facility Termination Costs Facility termination costs Total Current portion (2) Non-current portion (2) Total $ $ $ — — — 63.3 7.1 7.4 (62.2) (3.2) (1.8) — $ 77.8 $ (67.2) $ — — — — (2.0) (1.1) (3.1) $ $ $ 1.1 1.9 4.5 7.5 5.9 1.6 7.5 _______________ (1) Adjustments include the impact of foreign currency translation. (2) The current and non-current portions of the reserve are recorded in the Consolidated Balance Sheets under “Other accrued liabilities” and “Other liabilities,” respectively. 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 102 2018 Form 10-K 102 16. Selected Quarterly Financial Information (Unaudited) Summarized quarterly financial information for fiscal 2018 and 2017 is as follows: 2018 Net revenue Gross profit Loss from operations Provision for income taxes Net loss Basic net loss per share Diluted net loss per share Loss from operations includes the following items: Stock-based compensation expense Amortization of acquisition related intangibles CEO transition costs Restructuring charges and other facility exit costs, net 2017 Net revenue Gross profit Loss from operations Provision for income taxes Net loss Basic net loss per share Diluted net loss per share Loss from operations includes the following items: Stock-based compensation expense Amortization of acquisition related intangibles Restructuring charges, net $ $ $ $ $ $ $ $ 1st quarter 2nd quarter 3rd quarter 4th quarter Fiscal year 485.7 $ 501.8 $ 515.3 $ 553.8 $ 407.5 (119.6) (8.2) (129.6) 427.2 (107.6) (17.6) (144.0) 437.8 (100.0) (8.6) (119.8) 480.7 (181.9) 24.8 (173.5) (0.59) $ (0.59) $ (0.66) $ (0.66) $ (0.55) $ (0.55) $ (0.79) $ (0.79) $ 2,056.6 1,753.2 (509.1) (9.6) (566.9) (2.58) (2.58) 59.0 $ 58.8 $ 65.1 $ 62.1 $ 245.0 10.4 11.0 (0.3) 8.9 10.6 0.5 8.7 — — 8.6 (0.2) 93.9 36.6 21.4 94.1 1st quarter 2nd quarter 3rd quarter 4th quarter Fiscal year 511.9 $ 550.7 $ 489.6 $ 478.8 $ 419.5 (149.7) (14.4) (167.7) 465.6 (62.9) (25.2) (98.2) 408.1 (119.9) (13.5) (142.8) 395.9 (167.1) (5.2) (173.4) (0.75) $ (0.75) $ (0.44) $ (0.44) $ (0.64) $ (0.64) $ (0.78) $ (0.78) $ 2,031.0 1,689.1 (499.6) (58.3) (582.1) (2.61) (2.61) 51.6 $ 54.3 $ 56.6 $ 59.3 $ 221.8 18.8 52.3 18.5 16.0 17.2 3.2 17.3 9.0 71.8 80.5 t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 103 2018 Form 10-K 103 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Autodesk, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Autodesk, Inc. (the Company) as of January 31, 2018, and 2017, the related consolidated statements of operations, comprehensive loss, stockholders’ (deficit) equity, and cash flows for each of the three years in the period ended January 31, 2018, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2018, and 2017, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2018, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 22, 2018 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 2 0 1 8 A n n u a l R e p o r t We have served as the Company's auditor since 1983. San Francisco, California March 22, 2018 /s/ ERNST & YOUNG LLP 2018 Form 10-K 104 2018 Form 10-K 104 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Autodesk, Inc. Opinion on Internal Control over Financial Reporting We have audited Autodesk, Inc.’s internal control over financial reporting as of January 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Autodesk, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2018, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the accompanying consolidated balance sheets of the Company as of January 31, 2018, and 2017, the related consolidated statements of operations, comprehensive loss, stockholders’ (deficit) equity, and cash flows for each of the three years in the period ended January 31, 2018, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) and our report dated March 22, 2018 expressed an unqualified opinion thereon. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. t r o p e R l a u n n A 8 1 0 2 Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. San Francisco, California March 22, 2018 /s/ ERNST & YOUNG LLP 2018 Form 10-K 105 2018 Form 10-K 105 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain "disclosure controls and procedures," as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in our Exchange Act reports is (i) recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission, and (ii) accumulated and communicated to Autodesk management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of January 31, 2018. Management’s Report on Internal Control over Financial Reporting 2 0 1 8 A n n u a l R e p o r t Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2018. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control—Integrated Framework. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Autodesk have been detected. Our management has concluded that, as of January 31, 2018, our internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our independent registered public accounting firm, Ernst & Young, LLP, has issued an audit report on our internal control over financial reporting, which is included in Item 8 herein. Changes in Internal Control Over Financial Reporting There were no changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the three months ended January 31, 2018, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. ITEM 9B. OTHER INFORMATION None. 2018 Form 10-K 106 2018 Form 10-K 106 PART III Certain information required by Part III is omitted from this Annual Report because we intend to file a definitive proxy statement pursuant to Regulation 14A for our Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report (the “Proxy Statement”) and certain information included therein is incorporated herein by reference. Only those sections of the Proxy Statement that specifically address the items set forth herein are incorporated by reference. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item is incorporated herein by reference to the sections entitled “Proposal One— Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” and “Corporate Governance” in our Proxy Statement. EXECUTIVE OFFICERS OF THE REGISTRANT The following sets forth certain information as of March 22, 2018, regarding our executive officers. Name Andrew Anagnost R. Scott Herren Steve M. Blum Pascal W. Di Fronzo Carmel Galvin Age Position 53 56 53 53 49 President and Chief Executive Officer SVP and Chief Financial Officer SVP, Worldwide Field Operations SVP, Corporate Affairs, Chief Legal Officer & Secretary SVP, Chief Human Resources Officer Andrew Anagnost joined Autodesk in September 1997 and has served as President and Chief Executive Officer since June 2017. Dr. Anagnost served as Co-CEO from February 2017 to June 2017, Chief Marketing Officer from December 2016 to June 2017 and as the Company’s Senior Vice President, Business Strategy & Marketing, from March 2012 to June 2017. From December 2009 to March 2012, Dr. Anagnost was Vice President, Product Suites and Web Services of the Company. Prior to this position, Dr. Anagnost served as Vice President of CAD/CAE products for the manufacturing division of the Company from March 2007 to December 2009. Previously, Dr. Anagnost held other senior management positions at the Company. Prior to joining the Company, Dr. Anagnost held various engineering, sales, marketing and product management positions at Lockheed Aeronautical Systems Company and EXA Corporation. He also served as an NRC post-doctoral fellow at NASA Ames Research Center. R. Scott Herren joined Autodesk in November 2014 and serves as Senior Vice President and Chief Financial Officer. Prior to joining Autodesk, Mr. Herren was the Senior Vice President of Finance for Citrix Systems, Inc. from September 2011 to October 2014 where he led the company’s finance, accounting, tax, treasury, investor relations, real estate, and facilities teams. From March 2000 to September 2011, Mr. Herren held a variety of leadership positions at Citrix including Vice President and Managing Director for EMEA and Vice President and General Manager of the Virtualization Systems Group. Prior to Citrix, Mr. Herren served at FedEx Corporation as Vice President, Financial Planning. Prior to FedEx, he spent 13 years at International Business Machines Corporation in senior financial positions. Steven M. Blum joined Autodesk in January 2003 and has served as Senior Vice President, Worldwide Field Operations since September 2017. Mr. Blum served as Senior Vice President, Worldwide Sales and Services from February 2011 to September 2017. From January 2003 to February 2011, he served as Senior Vice President of Americas Sales. Prior to this position, Blum was Executive Vice President of Sales and Account Management for Parago, Inc. Blum also held positions at Mentor Graphics, most recently serving as Vice President of America's sales. Before joining Mentor Graphics, he held engineering and sales positions at NCR Corporation and Advanced Micro Devices. Pascal W. Di Fronzo joined Autodesk in June 1998 and has served as SVP, Corporate Affairs, Chief Legal Officer & Secretary since December 2016. Mr. Di Fronzo served as Senior Vice President, General Counsel and Secretary from March 2007 to December 2016. From March 2006 to March 2007, Mr. Di Fronzo served as Vice President, General Counsel and Secretary, and served as Vice President, Assistant General Counsel and Assistant Secretary from March 2005 through March 2006. Previously, Mr. Di Fronzo served in other business and legal capacities in our Legal Department. Prior to joining t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 107 2018 Form 10-K 107 Autodesk, he advised high technology and emerging growth companies on business and intellectual property transactions and litigation while in private practice. Carmel Galvin joined Autodesk in March 2018 and serves as Senior Vice President, Chief Human Resources Officer (“CHRO”). Prior to joining Autodesk, from April 2016 to February 2018, Ms. Galvin was the Senior Vice President, CHRO for Glassdoor, Inc. where she led all people functions of the company, including human resources planning, learning and development, talent acquisition, employee relations and engagement. From October 2014 to April 2016, Ms. Galvin served as Senior Vice President and CHRO at Advent Software, Inc., where she oversaw the company’s global people strategies and programs. Prior to Advent, she served as Vice President of Talent & Culture Development for Deloitte’s new-venture accelerator, advising a growing portfolio of innovative companies on how to scale and adjust their culture and talent programs. Prior to Deloitte, Ms. Galvin gained 20 years of human resources experience at global companies including Moody’s KMV, Barra Inc., Visa International and IBM (Ireland) Ltd. There is no family relationship among any of our directors or executive officers. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated herein by reference to the section entitled "Corporate Governance" and “Executive Compensation,” in our Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated herein by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management,” and “Executive Compensation—Equity Compensation Plan Information” in our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated herein by reference to the section entitled “Certain Relationships and Related Party Transactions” and “Corporate Governance—Independence of the Board of Directors” in our Proxy Statement. 2 0 1 8 A n n u a l R e p o r t ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is incorporated herein by reference to the sections entitled “Proposal Two— Ratification of the Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement. 2018 Form 10-K 108 2018 Form 10-K 108 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Report: PART IV 1. Financial Statements: The information concerning Autodesk’s financial statements, and Report of Ernst & Young LLP, Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Report in Item 8, entitled “Financial Statements and Supplementary Data.” 2. Financial Statement Schedule: The following financial statement schedule of Autodesk, Inc., for the fiscal years ended January 31, 2018, 2017, and 2016, is filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements of Autodesk, Inc.: Schedule II Valuation and Qualifying Accounts Schedules not listed above have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto. 3. Exhibits: See Item 15(b) below. We have filed, or incorporated into this Report by reference, the exhibits listed on the accompanying Index to Exhibits immediately following the signature page of this Form 10-K. (b) Exhibits: We have filed, or incorporated into this Report by reference, the exhibits listed on the accompanying Index to Exhibits immediately following the signature page of this Form 10-K. (c) Financial Statement Schedules: See Item 15(a), above. ITEM 15(A)(2) FINANCIAL STATEMENT SCHEDULE II Description Fiscal Year Ended January 31, 2018 Allowance for doubtful accounts Partner Program reserves (1) Restructuring Fiscal Year Ended January 31, 2017 Allowance for doubtful accounts Partner Program reserves (1) Restructuring Fiscal Year Ended January 31, 2016 Allowance for doubtful accounts Partner Program reserves (1) Restructuring Balance at Beginning of Fiscal Year Additions Charged to Costs and Expenses or Revenues Deductions and Write-Offs Balance at End of Fiscal Year (in millions) $ $ $ 1.5 $ 2.1 $ 1.3 $ 28.1 8.4 224.3 94.1 215.9 45.3 7.6 $ (3.3) $ 2.8 $ 45.2 1.3 240.3 77.8 257.4 70.7 6.3 $ 2.3 $ 1.0 $ 36.5 1.6 267.4 — 258.7 0.3 2.3 36.5 57.2 1.5 28.1 8.4 7.6 45.2 1.3 ____________________ (1) The partner program reserves balance impacts "Accounts receivable, net" and "Accounts payable" on the accompanying Consolidated Balance Sheets. ITEM 16 FORM 10-K SUMMARY None. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 109 2018 Form 10-K 109 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 110 2018 Form 10-K 110 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES Dated: March 22, 2018 AUTODESK, INC. By: /s/ ANDREW ANAGNOST Andrew Anagnost President and Chief Executive Officer t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 111 2018 Form 10-K 111 2 0 1 8 A n n u a l R e p o r t POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Anagnost and R. Scott Herren each as his or her attorney-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities as of March 22, 2018. Signature Title /s/ ANDREW ANAGNOST Andrew Anagnost /s/ R. SCOTT HERREN R. Scott Herren /s/ PAUL UNDERWOOD Paul Underwood President and Chief Executive Officer, Director (Principal Executive Officer) Senior Vice President and Chief Financial Officer (Principal Financial Officer) Vice President and Controller (Principal Accounting Officer) /s/ CRAWFORD W. BEVERIDGE Director (Non-executive Chairman of the Board) Crawford W. Beveridge /s/ CARL BASS Carl Bass /s/ REID FRENCH Reid French /s/ THOMAS GEORGENS Thomas Georgens /s/ RICK HILL Rick Hill /s/ MARY T. MCDOWELL Mary T. McDowell /s/ LORRIE M. NORRINGTON Lorrie M. Norrington /s/ ELIZABETH RAFAEL Elizabeth Rafael /s/ STACY J. SMITH Stacy J. Smith Karen Blasing 2018 Form 10-K 112 2018 Form 10-K 112 Director Director Director Director Director Director Director Director Director Exhibit No. Description Index to Exhibits 3.1 3.2 4.1 4.2 4.3 4.4 10.1* 10.2* 10.3* 10.4* 10.5* 10.6* 10.7* 10.8* Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 filed with the Registrant’s Annual Report on Form 10-K filed on March 30, 2006) Amended and Restated Bylaws of Registrant (incorporated by reference to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K filed on March 21, 2018) Indenture dated December 13, 2012, by and between Autodesk, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 filed with the Registrant's Current Report on Form 8-K filed on December 13, 2012) First Supplemental Indenture (including Form of Notes) dated December 13, 2012, by and between Autodesk, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 filed with the Registrant's Current Report on Form 8-K filed on December 13, 2012) Second Supplemental Indenture (including Form of Notes) dated June 5, 2015, by and between Autodesk, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on June 8, 2015) Third Supplemental Indenture (including Form of Notes) dated June 8, 2017, by and between Autodesk, Inc. and U.S. Bank National Association. (incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on June 8, 2017) Description of Registrant's Performance Stock Unit Program (incorporated by reference to Item 5.02 of the Registrant's Current Report on Form 8-K filed on March 17, 2017) Registrant’s 1998 Employee Qualified Stock Purchase Plan, as amended and restated effective as of June 14, 2017 (incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q filed on August 31, 2017) Registrant’s 1998 Employee Qualified Stock Purchase Plan Forms of Subscription Agreement, as amended and restated (incorporated by reference to Exhibit 10.5 filed with the Registrant’s Quarterly Report on Form 10-Q filed on August 30, 2016) Registrant's 2012 Employee Stock Plan, as amended and restated (incorporated by reference to Exhibit 10.4 filed with the Registrant's Quarterly Report on Form 10-Q filed on August 31, 2017) Registrant's 2012 Employee Stock Plan Form of Restricted Stock Unit Agreement, as amended and restated (incorporated by reference to Exhibit 10.2 filed with the Registrant's Quarterly Report on Form 10-Q filed on August 30, 2016) Registrant's 2012 Employee Stock Plan Form of Severance Restricted Stock Unit Agreement, as amended and restated (incorporated by reference to Exhibit 10.3 filed with the Registrant's Quarterly Report on Form 10-Q filed on August 30, 2016) Registrant's 2012 Employee Stock Plan Form of Stock Option Agreement (incorporated by reference to Exhibit 10.2 filed with the Registrant's Current Report on Form 8-K filed on March 13, 2012) Registrant's 2012 Employee Stock Plan Form of Stock Option Agreement (non-U.S. Employees) (incorporated by reference to Exhibit 10.4 filed with the Registrant's Current Report on Form 8-K filed on March 13, 2012) t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 113 2018 Form 10-K 113 Exhibit No. 10.9* 10.10* 10.11* 10.12* 10.13* 10.14* 10.15* 10.16* 10.17* 10.18* 10.19* 10.20* 10.21 10.22 10.23 10.24 10.25 10.26 10.27 Description Registrant's 2012 Outside Directors' Stock Plan, as amended and restated (incorporated by reference to Exhibit 10.18 filed with the Registrant’s Annual Report on Form 10-K filed on March 21, 2017) Registrant's 2012 Outside Directors' Stock Plan Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.5 filed with the Registrant's Current Report on Form 8-K filed on March 13, 2012) Registrant’s Executive Incentive Plan, as amended and restated (incorporated by reference to Exhibit 10.23 filed with the Registrant’s Annual Report on Form 10-K filed on March 23, 2016) Registrant’s 2005 Non-Qualified Deferred Compensation Plan, as amended and restated, effective as of January 1, 2010 (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Quarterly Report on Form 10-Q filed on December 8, 2009) Participants, target awards and payout formulas for fiscal year 2018 under the Registrant's Executive Incentive Plan (incorporated by reference to Item 5.02 of the Registrant's Current Report on Form 8-K filed on March 17, 2017) Executive Change in Control Program, as amended and restated (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K filed on December 21, 2016) Sub-Plan of the Autodesk, Inc. 1998 Employee Qualified Stock Purchase Plan, as amended and restated (filed herewith) Form of Indemnification Agreement executed by the Registrant and each of its officers and directors (incorporated by reference to Exhibit 10.8 filed with the Registrant’s Annual Report on Form 10-K filed on March 31, 2005) Third Amended and Restated Employment Agreement between Registrant and Carl Bass dated March 21, 2013 (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K filed on March 25, 2013) R. Scott Herren Offer Letter dated September 23, 2014 (incorporated by reference to Exhibit 10.1 filed with the Registrant's Quarterly Report on Form 10-Q filed on December 5, 2014) Registrant’s Equity Incentive Deferral Plan as amended and restated effective as of June 12, 2008 (incorporated by reference to Exhibit 10.4 filed with the Registrant’s Quarterly Report on Form 10-Q filed on September 5, 2008) Amendment to Registrant's Equity Incentive Deferral Plan effective as of February 17, 2012 (incorporated by reference to Exhibit 10.37 filed with the Registrant's Annual Report on Form 10-K filed on March 15, 2012) Office Lease between Registrant and the J.H.S. Trust for 111 McInnis Parkway, San Rafael, CA, as amended (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2004) Fourth Amendment to Lease between Registrant and the J.H.S. Holdings L.P. for 111 McInnis Parkway, San Rafael, CA (incorporated by reference to Exhibit 10.30 filed with the Registrant’s Annual Report on Form 10-K filed on March 19, 2010) Amended and Restated Credit Agreement, dated as of May 29, 2015, by and among the Registrant, the lenders from time to time party thereto and Citibank, N.A. as agent (incorporated by reference to Exhibit 10.1 filed with the Registrant's Current Report on Form 8-K filed on May 29, 2015) Letter Amendment No. 1, dated April 26, 2017, to the Amended and Restated Credit Agreement, dated as of May 29, 2015, by and among the Registrant, the lenders from time to time party thereto and Citibank, N.A. as agent (incorporated by reference to Exhibit 10.5 filed with the Registrant's Quarterly Report on Form 10-Q filed on May 31, 2017) Agreement, dated March 10, 2016, by and among the Registrant, Sachem Head Capital Management LP, Uncas GP LLC, and Sachem Head GP LLC. (incorporated by reference to Exhibit 99.1 filed with the Registrant’s Current Report on Form 8-K filed on March 11, 2016) Agreement, dated March 10, 2016, by and among the Registrant, Eminence Capital, LP, and Eminence GP, LLC. (incorporated by reference to Exhibit 99.2 filed with the Registrant’s Current Report on Form 8-K filed on March 11, 2016) Agreement, dated February 6, 2017, by and among the Registrant, Sachem Head Capital Management LP, Uncas GP LLC, and Sachem Head GP LLC. (incorporated by reference to Exhibit 99.1 filed with the Registrant’s Current Report on Form 8-K filed on February 7, 2017) 2 0 1 8 A n n u a l R e p o r t 2018 Form 10-K 114 2018 Form 10-K 114 Exhibit No. 10.28* 10.29* 10.30 10.31 21.1 23.1 24.1 31.1 31.2 32.1† Description Transition and Separation Agreement, dated February 6, 2017, by and between the Company and Carl Bass (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K filed on February 7, 2017) Employment Agreement, dated as of June 19, 2017, by and between Autodesk, Inc. and Andrew Anagnost (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K filed on June 19, 2017) Separation Agreement, dated as of June 19, 2017, by and between Autodesk, Inc. and Amar Hanspal (incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K filed on June 19, 2017) Separation Agreement, dated as of September 30, 2017, by and between Autodesk, Inc. and Jan Becker (incorporated by reference to Exhibit 10.1 filed with the Registrant’s Quarterly Report on Form 10-Q filed on December 5, 2017) List of Subsidiaries (filed herewith) Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP) (filed herewith) Power of Attorney (contained in the signature page to this Annual Report) Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith) Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith) Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith) 101.INS †† XBRL Instance Document 101.SCH †† 101.CAL †† 101.DEF †† 101.LAB †† 101.PRE †† XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation Linkbase XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase XBRL Taxonomy Extension Presentation Linkbase ____________________ * † Denotes a management contract or compensatory plan or arrangement. The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Autodesk, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing. †† The financial information contained in these XBRL documents is unaudited. t r o p e R l a u n n A 8 1 0 2 2018 Form 10-K 115 2018 Form 10-K 115 2 0 1 8 A n n u a l R e p o r t [THIS PAGE INTENTIONALLY LEFT BLANK] 2018 Form 10-K 114 2018 Form 10-K 116 Board of Directors Company Executive Officers Corporate Headquarters Andrew Anagnost President and Chief Executive Officer, Autodesk, Inc. Andrew Anagnost President and Chief Executive Officer Steven M. Blum SVP, Worldwide Field Operations Pascal W. Di Fronzo SVP, Corporate Affairs, Chief Legal Officer & Secretary Carmel Galvin, SVP, Chief Human Resources Officer R. Scott Herren SVP, Chief Financial Officer Crawford W. Beveridge non-Executive Chairman of the Board, Autodesk, Inc. Carl Bass* Karen Blasing Reid French Thomas Georgens* Richard S. Hill* Mary T. McDowell Lorrie M. Norrington Betsy Rafael Stacy J. Smith Worldwide Headquarters Autodesk, Inc. 111 McInnis Parkway San Rafael, CA 94903 USA Asia Pacific Headquarters Autodesk Asia Pte Ltd 3 Fusionopolis Way #10-21 Symbiosis Singapore 138633 Singapore European Headquarters Autodesk Development Sàrl Rue du Puits-Godet 6 Case Postale 35 2002 Neuchâtel Switerland Legal Counsel Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, CA 94304 USA Transfer Agent Computershare Trust Company N.A. By Regular Mail P.O. BOX 505000 Louisville, KY 40233 USA Independent Registered Public Accounting Firm Ernst & Young, LLP 560 Mission Street, Suite 1600 San Fransisco, CA 94105 USA Notice of Annual Meeting Held at Autodesk, Inc.’s San Fransisco office at The Landmark at One Market Street, 2nd Floor, San Fransisco, California, USA. June 12, 2018, 3:00 p.m. Pacific time. Investor Relations For more information, including copies of this annual report free of charge, write to us at: Investor Relations, Autodesk, Inc., 111 McInnis Parkway, San Rafael, CA 94903, USA; Phone us at +1-415-507-6705; email us at investor.relations@autodesk.com; or visit our website at: www.autodesk.com. * Messrs. Bass, Georgens and Hill are not standing for reelection at the Annual Meeting. The Board thanks each of them for their distinguished service to Autodesk. FISCAL YEAR 2018 Annual Report Notice of annual meeting and proxy statement Autodesk, Inc., 111 McInnis Parkway, San Rafael, CA 94903 Autodesk is a registered trademark or trademark of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. All other brand names, product names, or trademarks belong to their respective holders. Autodesk reserves the right to alter product and services offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. © 2 018 Autodesk, Inc. All rights reserved. 

Continue reading text version or see original annual report in PDF format above