Autodesk, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

Fiscal Year Ended January 31,

2019

2018

(Unaudited)

Operating activities:

Net loss

$

(80.8)

$

(566.9)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation, amortization and accretion

95.2

108.4

Stock-based compensation expense

249.5

261.4

Deferred income taxes

(6.8)

(39.1)

Restructuring and other exit costs, net

31.7

94.1

Other operating activities

2.2

7.3

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(25.4)

13.3

Prepaid expenses and other current assets

7.5

(9.9)

Accounts payable and accrued liabilities

(58.5)

(13.9)

Deferred revenue

197.0

168.3

Accrued income taxes

(34.5)

(22.1)

Net cash provided by operating activities

377.1

0.9

Investing activities:

Purchases of marketable securities

(138.2)

(514.0)

Sales of marketable securities

319.6

489.0

Maturities of marketable securities

211.4

594.3

Acquisitions, net of cash acquired

(1,040.2)

—

Capital Expenditures

(67.0)

(50.7)

Other investing activities

4.0

(12.2)

Net cash (used in) provided by investing activities

(710.4)

506.4

Financing activities:

Proceeds from issuance of common stock, net of issuance costs

90.9

94.4

Taxes paid related to net share settlement of equity awards

(143.4)

(143.1)

Repurchase and retirement of common stock

(293.5)

(699.0)

Proceeds from debt, net of discount

500.0

496.9

Repayment of debt

—

(400.0)

Other financing activities

(2.1)

(5.8)

Net cash provided by (used in) financing activities

151.9

(656.6)

Effect of exchange rate changes on cash and cash equivalents

(10.6)

14.2

Net decrease in cash and cash equivalents

(192.0)

(135.1)

Cash and cash equivalents at beginning of the period

1,078.0

1,213.1

Cash and cash equivalents at end of the period

$

886.0

$

1,078.0

Autodesk, Inc.

Reconciliation of GAAP financial measures to non-GAAP financial measures

(In millions, except per share data)

To supplement our consolidated financial statements presented on a GAAP basis, Autodesk provides investors with certain non-GAAP measures including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP diluted shares used in per share calculation and free cash flow. These non-GAAP financial measures are adjusted to exclude certain costs, expenses, gains and losses, including stock-based compensation expense, CEO transition costs, restructuring charges and other facility exit costs, acquisition related costs, amortization of developed technology, amortization of purchased intangibles, gain and loss on strategic investments and dispositions, and related income tax expenses. See our reconciliation of GAAP financial measures to non-GAAP financial measures herein.  We believe these exclusions are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future, as well as to facilitate comparisons with our historical operating results.  These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of Autodesk's underlying operational results and trends and our marketplace performance.  For example, non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside our core operating results.  In addition, these non-GAAP financial measures are among the indicators management uses as a basis for our planning and forecasting of future periods.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies.  The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results.  The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States.  Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

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

Three Months Ended
January 31,

Fiscal Year Ended January
31,

2019

2018

2019

2018

(Unaudited)

(Unaudited)

GAAP cost of maintenance and subscription revenue

$

56.7

$

52.8

$

216.0

$

214.4

Stock-based compensation expense

(3.7)

(3.4)

(13.1)

(11.9)

Non-GAAP cost of maintenance and subscription revenue

$

53.0

$

49.4

$

202.9

$

202.5

GAAP cost of license and other revenue

$

15.4

$

16.6

$

54.4

$

72.6

Stock-based compensation expense

(1.5)

(0.9)

(4.5)

(4.0)

Non-GAAP cost of license and other revenue

$

13.9

$

15.7

$

49.9

$

68.6

GAAP amortization of developed technology

$

4.9

$

3.7

$

15.5

$

16.4

Amortization of developed technology

(4.9)

(3.7)

(15.5)

(16.4)

Non-GAAP amortization of developed technology

$

—

$

—

$

—

$

—

GAAP gross profit

$

660.3

$

480.7

$

2,283.9

$

1,753.2

Stock-based compensation expense

5.2

4.3

17.6

15.9

Amortization of developed technology

4.9

3.7

15.5

16.4

Non-GAAP gross profit

$

670.4

$

488.7

$

2,317.0

$

1,785.5

GAAP marketing and sales

$

320.8

$

301.5

$

1,183.9

$

1,087.3

Stock-based compensation expense

(31.7)

(27.2)

(109.4)

(107.3)

Non-GAAP marketing and sales

$

289.1

$

274.3

$

1,074.5

$

980.0

GAAP research and development

$

190.4

$

182.2

$

725.0

$

755.5

Stock-based compensation expense

(25.4)

(21.2)

(82.5)

(82.9)

Non-GAAP research and development

$

165.0

$

161.0

$

642.5

$

672.6

GAAP general and administrative

$

100.7

$

80.1

$

340.1

$

305.2

Stock-based compensation expense

(11.7)

(9.4)

(40.0)

(38.9)

CEO transition costs (1)

—

0.2

0.1

(21.4)

Acquisition related costs

(11.9)

—

(16.2)

—

Non-GAAP general and administrative

$

77.1

$

70.9

$

284.0

$

244.9

GAAP amortization of purchased intangibles

$

6.2

$

4.9

$

18.0

$

20.2

Amortization of purchased intangibles

(6.2)

(4.9)

(18.0)

(20.2)

Non-GAAP amortization of purchased intangibles

$

—

$

—

$

—

$

—

GAAP restructuring and other exit costs, net

$

1.9

$

93.9

$

41.9

$

94.1

Restructuring and other exit costs, net

(1.9)

(93.9)

(41.9)

(94.1)

Non-GAAP restructuring and other exit costs, net

$

—

$

—

$

—

$

—

GAAP operating expenses

$

620.0

$

662.6

$

2,308.9

$

2,262.3

Stock-based compensation expense

(68.8)

(57.8)

(231.9)

(229.1)

Amortization of purchased intangibles

(6.2)

(4.9)

(18.0)

(20.2)

CEO transition costs (1)

—

0.2

0.1

(21.4)

Acquisition related costs

(11.9)

—

(16.2)

—

Restructuring and other exit costs, net

(1.9)

(93.9)

(41.9)

(94.1)

Non-GAAP operating expenses

$

531.2

$

506.2

$

2,001.0

$

1,897.5

GAAP Spend

$

697.0

$

735.7

$

2,594.8

$

2,565.7

Stock-based compensation expense

(74.0)

(62.1)

(249.5)

(245.0)

Amortization of developed technology

(4.9)

(3.7)

(15.5)

(16.4)

Amortization of purchased intangibles

(6.2)

(4.9)

(18.0)

(20.2)

CEO transition costs (1)

—

0.2

0.1

(21.4)

Acquisition related costs

(11.9)

—

(16.2)

—

Restructuring and other exit costs, net

(1.9)

(93.9)

(41.9)

(94.1)

Non-GAAP Spend

$

598.1

$

571.3

$

2,253.8

$

2,168.6

GAAP income (loss) from operations

$

40.3

$

(181.9)

$

(25.0)

$

(509.1)

Stock-based compensation expense

74.0

62.1

249.5

245.0

Amortization of developed technology

4.9

3.7

15.5

16.4

Amortization of purchased intangibles

6.2

4.9

18.0

20.2

CEO transition costs (1)

—

(0.2)

(0.1)

21.4

Acquisition related costs

11.9

—

16.2

—

Restructuring and other exit costs, net

1.9

93.9

41.9

94.1

Non-GAAP income (loss) from operations

$

139.2

$

(17.5)

$

316.0

$

(112.0)

GAAP interest and other expense, net

$

(7.3)

$

(16.4)

$

(17.7)

$

(48.2)

(Gain) loss on strategic investments and dispositions

(3.0)

7.0

(12.5)

16.5

Restructuring and other exit costs, net

(4.7)

—

(10.2)

—

Non-GAAP interest and other expense, net

$

(15.0)

$

(9.4)

$

(40.4)

$

(31.7)

GAAP benefit (provision) for income taxes

$

31.7

$

24.8

$

(38.1)

$

(9.6)

Discrete GAAP tax items

(19.1)

(10.5)

(31.4)

(20.7)

Income tax effect of non-GAAP adjustments

(36.1)

(7.3)

17.2

67.7

Non-GAAP (provision) benefit for income tax

$

(23.5)

$

7.0

$

(52.3)

$

37.4

GAAP net income (loss)

$

64.7

$

(173.5)

$

(80.8)

$

(566.9)

Stock-based compensation expense

74.0

62.1

249.5

245.0

Amortization of developed technology

4.9

3.7

15.5

16.4

Amortization of purchased intangibles

6.2

4.9

18.0

20.2

CEO transition costs (1)

—

(0.2)

(0.1)

21.4

Acquisition related costs

11.9

—

16.2

—

Restructuring and other exit costs, net

(2.8)

93.9

31.7

94.1

(Gain) loss on strategic investments and dispositions

(3.0)

7.0

(12.5)

16.5

Discrete GAAP tax items

(19.1)

(10.5)

(31.4)

(20.7)

Income tax effect of non-GAAP adjustments

(36.1)

(7.3)

17.2

67.7

Non-GAAP net income (loss)

$

100.7

$

(19.9)

$

223.3

$

(106.3)

GAAP diluted net income (loss) per share (2)

$

0.29

$

(0.79)

$

(0.37)

$

(2.58)

Stock-based compensation expense

0.33

0.28

1.12

1.11

Amortization of developed technology

0.02

0.02

0.08

0.08

Amortization of purchased intangibles

0.03

0.02

0.08

0.09

CEO transition costs (1)

—

—

—

0.09

Acquisition related costs

0.05

—

0.07

—

Restructuring and other exit costs, net

(0.01)

0.43

0.14

0.43

(Gain) loss on strategic investments and dispositions

(0.01)

0.03

(0.05)

0.08

Discrete GAAP tax items

(0.08)

(0.05)

(0.14)

(0.09)

Income tax effect of non-GAAP adjustments

(0.16)

(0.03)

0.08

0.31

Non-GAAP diluted net income (loss) per share (2)

$

0.46

$

(0.09)

$

1.01

$

(0.48)

GAAP diluted shares used in per share calculation

221.3

219.1

218.9

219.5

Shares included in non-GAAP net income per share, but excluded from GAAP net loss per share as they would have been anti-dilutive

—

—

3.1

—

Non-GAAP diluted weighted average shares used in per share calculation

221.3

219.1

222.0

219.5

Cash flow from operating activities

$

311.5

$

79.3

$

377.1

$

0.9

Capital expenditures

17.6

11.4

67.0

50.7

Free cash flow

$

293.9

$

67.9

$

310.1

$

(49.8)

(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 three months and fiscal year ended January 31, 2018, respectively.  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.

(2)

Net income (loss) per share were computed independently for each of the periods presented; therefore the sum of the net income (loss) per share amount for the quarters may not equal the total for the year.