Indicate by check mark whether the ~~Registrant~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 days:

Indicate by check mark whether the ~~Registrant~~registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

As of ~~November 30, 2003,~~May 31, 2004, there were approximately ~~112.8~~113.5 million shares of the Registrant’s Common Stock outstanding.


	October 31, 2003			January 31, 2003			April 30, 2004			January 31, 2004
	(Unaudited)			(Audited)			(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	234,710		$	186,377		$	304,147		$	282,249
Marketable securities		66,125			60,643			49,780			81,275
Accounts receivable, net		131,623			132,803			142,630			166,816
Inventories		11,773			12,284			16,686			17,365
Deferred income taxes		28,615			28,923			24,170			25,410
Income taxes receivable		24,128			—
Prepaid expenses and other current assets		28,201			28,602			27,830			24,137

Total current assets		525,175			449,632			565,243			597,252
Marketable securities		152,343			164,029			165,463			165,976
Computer equipment, software, furniture and leasehold improvements, at cost:
Computer equipment, software and furniture		210,574			210,900			208,614			206,319
Leasehold improvements		33,714			32,913			34,288			34,526
Less accumulated depreciation		(174,969	)		(167,691	)		(179,350	)		(174,371	)

Net computer equipment, software, furniture and leasehold improvements		69,319			76,122			63,552			66,474
Purchased technologies and capitalized software, net		21,637			30,125			18,546			19,378
Goodwill, net		160,164			155,945
Goodwill								163,885			160,094
Deferred income taxes								3,760			—
Other assets		6,190			7,797			9,851			7,986

	$	934,828		$	883,650		$	990,300		$	1,017,160


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	50,816		$	45,122		$	46,639		$	52,307
Accrued compensation		65,678			44,869			65,871			92,830
Accrued income taxes		54,679			39,802			44,403			50,695
Deferred revenues		107,248			93,241			137,220			127,276
Other accrued liabilities		56,791			86,994			56,188			61,814

Total current liabilities		335,212			310,028			350,321			384,922
Deferred income taxes, net		1,461			1,678			—			7,849
Other liabilities		1,669			2,736			2,756			2,746

Commitments and contingencies

Stockholders’ equity:
Preferred stock		—			—			—			—
Common stock and additional paid-in capital		468,900			479,874			519,300			473,673
Accumulated other comprehensive loss		(7,819	)		(11,568	)		(8,889	)		(4,754	)
Deferred compensation		(729	)		(2,185	)		(285	)		(451	)
Retained earnings		136,134			103,087			127,097			153,175

Total stockholders’ equity		596,486			569,208			637,223			621,643

	$	934,828		$	883,650		$	990,300		$	1,017,160


	Nine months ended October 31,						Three months ended April 30,
	2003			2002			2004			2003
Operating activities
Net income	$	62,717		$	25,491		$	42,505		$	7,508
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		35,966			36,698			12,502			12,307
Stock compensation expense								197			557
Net loss on fixed asset disposals								212			—
Write-downs of cost method investments		61			1,292			—			26
Tax benefits from employee stock plans		—			8,554			24,414			—
Changes in operating assets and liabilities		1,862			(28,849	)
Restructuring related charges, net								4,326			—
Changes in operating assets and liabilities, net of business combinations								(28,993	)		(2,992	)

Net cash provided by operating activities		100,606			43,186			55,163			17,406

Investing activities
Net sales and maturities of marketable securities		4,927			115,291
Net sales and maturities of available-for-sale marketable securities								30,757			1,876
Business combinations								(6,500	)		(5,150	)
Capital and other expenditures		(18,716	)		(28,806	)		(5,864	)		(4,083	)
Acquisitions, net of cash acquired		(5,150	)		(143,531	)
Other investing activities		(51	)		(2,073	)		(843	)		52

Net cash used in investing activities		(18,990	)		(59,119	)
Net cash provided by (used in) investing activities								17,550			(7,305	)

Financing activities
Repayment of notes payable and borrowings		—			(210	)
Repurchases of common stock		(81,062	)		(45,399	)
Proceeds from issuance of common stock		50,798			71,283
Proceeds from issuance of common stock, net of issuance costs								104,934			15,123
Repurchase of common stock								(149,033	)		(29,881	)
Dividends paid		(10,076	)		(10,223	)		(3,302	)		(3,347	)

Net cash (used in) provided by financing activities		(40,340	)		15,451
Net cash used in financing activities								(47,401	)		(18,105	)

Effect of exchange rate changes on cash and cash equivalents		7,057			7,235			(3,414	)		1,070

Net increase in cash and cash equivalents		48,333			6,753

Net increase (decrease) in cash and cash equivalents								21,898			(6,934	)
Cash and cash equivalents at beginning of year		186,377			157,687			282,249			186,377

Cash and cash equivalents at end of period	$	234,710		$	164,440		$	304,147		$	179,443

Supplemental cash flow information:
Net cash paid during the period for income taxes	$	2,058		$	23,307
Net cash paid (received) during the period for income taxes							$	4,668		$	(123	)

The accompanying unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. Other than adjustments related to our fiscal 2004 restructuring plan, as further described below in Note 6 “Restructuring Reserves,” all adjustments are of a normal recurring nature. These statements should be read in conjunction with the consolidated financial statements and related notes, together with management’s discussion and analysis of financial ~~condition~~position and results of operations, contained in Autodesk’s fiscal ~~2003~~2004 Annual Report on Form 10-K. The results of operations for the three ~~and nine~~ months ended ~~October 31, 2003~~April 30, 2004 are not necessarily indicative of the results for the entire fiscal year ending January 31, ~~2004.~~2005 or for any other period.

Certain reclassifications, ~~involving cash equivalents and short-term marketable securities~~described as follows, have been made to prior year ~~cash equivalents and short-term marketable securities~~numbers to conform to current year presentation. Autodesk previously classified Information Technology and other corporate service costs that benefit the entire organization as General and Administrative expenses in our Consolidated Statements of Income. During the fourth quarter of fiscal 2004, Autodesk re-evaluated its cost allocation methodology and reclassified these costs to other functional areas of the business that benefit from these services. This reclassification had no impact on Autodesk’s total income from operations or net income.

The effect of this reclassification on the previously reported condensed consolidated financial statements for the quarter ended April 30, 2003 is as follows (in thousands):

As permitted by Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure” (“SFAS 148”) amends the disclosure requirements of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent disclosures in both annual and interim financial statements regarding the method of accounting for stock-based employee compensation and the effect of the method used on reported results., Autodesk has elected to continue to follow the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) to account for employee stock options.

The following table illustrates the effect on net income and earnings per share if Autodesk ~~is required under~~had applied the fair value recognition provisions of SFAS 123, as amended by SFAS 148, to ~~disclose pro forma information regarding option grants made to its employees based on specified valuation techniques that produce estimated~~stock-based employee compensation ~~charges. The pro forma information is as follows~~ (in thousands, except per share amounts):

	Three months ended October 31,						Nine months ended October 31,
	2003			2002			2003			2002			Three months ended April 30,
Net income (loss) – as reported	$	22,606		$	(3,910	)	$	62,717		$	25,491
													2004			2003
Net income – as reported													$	42,505		$	7,508
Add: Stock-based employee compensation cost, net of related tax effects, included in the determination of net income as reported		368			604			1,061			1,523			150			347
Deduct: Total stock-based employee compensation cost determined under the fair value based method for all awards, net of related tax effects		(10,951	)		(13,877	)		(34,746	)		(37,320	)		(12,017	)		(11,806	)

Pro forma net income	$	12,023		$	(17,183	)	$	29,032		$	(10,306	)
Pro forma net income (loss)													$	30,638		$	(3,951	)

Net income (loss) per share:
Basic – as reported	$	0.20		$	(0.03	)	$	0.56		$	0.23		$	0.38		$	0.07

Basic – pro forma	$	0.11		$	(0.15	)	$	0.26		$	(0.09	)	$	0.27		$	(0.04	)

Diluted – as reported	$	0.20		$	(0.03	)	$	0.55		$	0.22		$	0.36		$	0.07

Diluted – pro forma	$	0.11		$	(0.15	)	$	0.26		$	(0.09	)	$	0.26		$	(0.04	)


	October 31, 2003		January 31, 2003		April 30, 2004		January 31, 2004
Raw materials and finished goods	$	9,398	$	9,851	$	13,578	$	13,875
Demonstration inventory		2,375		2,433
Demonstration inventory, net						3,108		3,490

	$	11,773	$	12,284	$	16,686	$	17,365

Inventories are stated at the lower of standard cost (determined on the first-in, first-out method) or market. Appropriate consideration is given to excess and obsolete inventory levels in evaluating lower of cost or market.

Purchased technologies and capitalized software and the related accumulated amortization ~~are~~were as follows (in thousands):


	October 31, 2003			January 31, 2003			April 30, 2004			January 31, 2004
Purchased technologies	$	131,934		$	133,029		$	134,941		$	133,041
Capitalized software		18,445			18,444			21,780			20,875

		150,379			151,473			156,721			153,916
Less: Accumulated amortization		(128,742	)		(121,348	)		(138,175	)		(134,538	)

Purchased technologies and capitalized software, net	$	21,637		$	30,125		$	18,546		$	19,378

Expected future amortization expense for purchased technologies and capitalized software for the ~~three~~nine months ended January 31, ~~2004~~2005 and each of the fiscal years thereafter is as follows (in thousands):

Period ending January 31,
2004	$	4,004

Year ending January 31,
2005		12,873	$	10,947
2006		3,349		4,287
2007		928		1,560
2008		483		1,070
2009				682

Total	$	21,637	$	18,546

The changes in the carrying amount of goodwill ~~by reportable segment~~ during the ~~nine~~three months ended ~~October 31, 2003~~April 30, 2004 are as follows (in thousands):

The following table sets forth the restructuring plan activities during the ~~first nine~~three months ~~of fiscal~~ended April 30, 2004 (in thousands). The balances at January 31, 2003 in the table below have been adjusted by $2.7 million to reflect actual charges utilized and reversals related to Board approved restructuring reserves. While the actual charges utilized and reversals were properly reflected in Autodesk’s financial statements as of and for the fiscal year ended January 31, 2003, they had not been properly reflected in the restructuring reserves table in the Notes to Consolidated Financial Statements in Autodesk’s Form 10-K for the fiscal year ended January 31, 2003. This adjustment did not impact Autodesk’s financial position, results of operations, cash flows, or earnings per share. The balance at ~~October 31, 2003~~April 30, 2004 is included in ~~“Other~~other accrued ~~liabilities”~~liabilities on our Condensed Consolidated Balance Sheet.


	Balance at January 31, 2003		Additions	Charges Utilized			Reversals	Balance at October 31, 2003		Balance at January 31, 2004		Additions		Charges Utilized			Reversals			Balance at April 30, 2004
Office closure costs	$	12,856	—	$	(6,049	)	—	$	6,807	$	7,686	$	1,819	$	(3,667	)	$	(109	)	$	5,729
Employee termination costs		8,252	—		(6,619	)	—		1,633		1,167		6,540		(4,888	)		—			2,819

Total	$	21,108	—	$	(12,668	)	—	$	8,440	$	8,853	$	8,359	$	(8,555	)	$	(109	)	$	8,548

During the fourth quarter of fiscal 2004, the Board of Directors approved a restructuring plan involving the elimination of employee positions and the closure of a number of offices worldwide. This plan, which we refer to as the fiscal 2004 restructuring plan, is designed to further reduce operating expense levels to help achieve Autodesk’s targeted operating margins as well as redirect resources to product development, sales development and other critical areas. The expected total charges under this plan are approximately $28.0 million, with $18.0 million attributable to one-time termination benefits and $10.0 million attributable to office closure costs. As a result of the restructuring activities completed during the fourth quarter of fiscal 2004 and the first quarter of fiscal 2005 and through attrition, the Company expects to achieve its targeted efficiencies with a lower level of involuntary terminations; consequently, the expected total charges under this plan were reduced in the first quarter of fiscal 2005 from a previous estimate of $37.0 million to the approximately $28.0 million noted above. This plan is expected to be substantially complete by the end of the third quarter of fiscal 2005.

During the three months ended April 30, 2004, Autodesk recorded gross restructuring charges of $8.4 million under the fiscal 2004 restructuring plan. Of this amount, approximately $6.5 million related to the

elimination of positions and approximately $1.8 million related to the closure of facilities. Partially off-setting this charge was a reversal of $0.1 million related to a change in estimates underlying office closure costs liabilities originally established under the fiscal 2002 restructuring plan. The underlying liabilities were ultimately settled for less than originally estimated. Charges utilized include $0.2 million of non-cash charges for the three months ended April 30, 2004. Since inception of the fiscal 2004 restructuring plan, Autodesk recorded restructuring charges totaling $12.1 million.

An analysis of the fiscal 2004 restructuring plan charges by reportable segment is included in Note 11, “Segments.”

Autodesk adopted FASB Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” at the beginning of our fiscal year 2003.

In the normal course of business, Autodesk provides indemnifications of varying ~~scope to~~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.~~our products or services. Autodesk accrues for known warranty and indemnification issues if a loss is probable and can be reasonably estimated. Historically, costs related to these ~~guarantees~~warranties and indemnifications have not been significant, but because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these guarantees on its future results of operations.

In connection with the sale or license to third parties of assets or businesses, Autodesk has entered into customary indemnity agreements related to the assets or businesses sold or licensed. Historically, costs related to these guarantees have not been significant, but because potential future costs are highly variable, Autodesk is unable to estimate the maximum potential impact of these guarantees 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 director and officer insurance coverage that ~~limits~~reduces its exposure and ~~enables~~would generally 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.

~~on which~~jury and as a result, Spatial ~~intends~~asserts that it is entitled to ~~challenge~~a new trial. After reviewing the ~~jury’s finding. Autodesk does not know any basis on which an~~arguments made in the appeal, ~~would be successful, and accordingly, believes that~~we believe the ultimate resolution of this matter will not have a material effect on ~~its~~Autodesk’s consolidated statements of financial ~~condition,~~position, results of operations or cash flows. However, it is possible that an unfavorable resolution of this matter could occur and materially affect ~~the~~our future results of operations, cash flows or financial position in a particular period.

~~Generally,~~On May 13, 2004, Nuvo Services, LLC (“Nuvo”) filed suit in United States District Court, District of Arizona against Autodesk seeking to compel arbitration of Nuvo’s claim that Autodesk breached a contract that

allegedly existed between Nuvo and a company acquired by Buzzsaw.com (“Buzzsaw”) in 2000. Autodesk acquired Buzzsaw in 2001. In the complaint, Nuvo alleges that Autodesk breached the contract by assigning certain technology acquired as part of its acquisition of Buzzsaw to a third party without Nuvo’s prior consent. The complaint seeks unspecified damages and recovery of the amount in which Autodesk was unjustly enriched by the assignment. Autodesk has not been served with the complaint. While Autodesk believes the ultimate resolution of this matter will not have a material effect on Autodesk’s consolidated statements of financial position, results of operations or cash flows, it is possible that an unfavorable resolution of this matter could occur and materially affect our future results of operations, cash flows or financial position in a particular period.

We are involved in legal proceedings from time to time arising from the normal course of business activities. In ~~its~~our opinion, resolution of ~~these~~pending matters is not expected to have a material adverse impact on ~~its~~our consolidated results of operations, cash flows or our financial position. However, it is possible that an unfavorable resolution of ~~a matter~~one or more such proceedings could in the future materially affect ~~the~~our future results of operations, cash flows or financial position in a particular period.

During the ~~nine~~three months ended ~~October 31, 2003~~April 30, 2004 Autodesk repurchased and retired ~~5.0~~5.2 million shares of its common stock ~~through open market purchases~~ at an average repurchase price of ~~$16.21~~$28.76 per share. As a result, common stock and additional paid-in capital and retained earnings were reduced for the ~~nine~~three months ended ~~October 31, 2003~~April 30, 2004 by ~~$61.5~~$83.7 million and ~~$19.6~~$65.3 million, respectively.

In addition, during the ~~nine~~three months ended ~~October 31, 2003~~April 30, 2004 Autodesk paid cash dividends of ~~$0.09 per common share, or~~ $0.03 per common share ~~per fiscal quarter,~~ reducing retained earnings by ~~$10.1~~$3.3 million.

Autodesk’s total comprehensive income, including net unrealized gains and losses on the Company’s available for sale securities and cumulative foreign currency translation adjustments, was as follows, net of tax (in thousands):

~~The following is a~~A reconciliation of the numerators and denominators used in the basic and diluted net income per share amounts follows (in thousands):


	Three months ended October 31,					Nine months ended October 31,				Three months ended April 30,
	2003		2002			2003		2002		2004		2003
Numerator:
Numerator for basic and diluted per share amount – net income (loss)	$	22,606	$	(3,910	)	$	62,717	$	25,491
Numerator for basic and diluted net income per share – net income										$	42,505	$	7,508

Denominator:
Denominator for basic net income per share — weighted average shares		111,220		112,809			111,497		113,161		112,052		111,775
Effect of dilutive common stock options		2,946		—			2,163		1,789		7,231		1,671

Denominator for dilutive net income per share		114,166		112,809			113,660		114,950		119,283		113,446

~~For the three months ended October 31, 2003, options to purchase 8.6 million weighted average shares were excluded from the~~

The computation of diluted net income per ~~share. For~~share does not include 0.2 million options for the ~~nine months ended October 31, 2003~~first quarter of fiscal 2005 and ~~2002,~~17.4 million options ~~to purchase 14.0 million weighted average shares and 17.8 million weighted average shares, respectively, were excluded from~~for the ~~computation~~first quarter of ~~diluted net income per share.~~fiscal 2004. Such options were excluded

because the options had exercise prices greater than the average market prices of Autodesk common stock during the ~~period~~respective periods and therefore were not dilutive.

~~For the three months ended October 31, 2002, all outstanding options, a total of 29.3 million, were excluded from the computation of diluted net loss per share because Autodesk incurred a loss.~~

Autodesk’s operating results are aggregated into two reportable segments: the ~~Discreet~~Design Solutions Segment and the ~~Design Solutions~~Discreet Segment. During the first quarter of fiscal ~~2004,~~2005, Autodesk modified its segment disclosure to align the segment disclosure with ~~how~~the method by which Autodesk’s business is currently being managed and evaluated. Under the revised segment disclosure, a significant amount of costs previously not allocated to either reportable segment, such as geographic sales and marketing expenditures, are being allocated to the Design Solutions Segment, thereby reducing the Design Solutions Segment profitability. Also, certain costs of operations previously allocated to the Discreet and the Design Solutions Segments are no longer being allocated. Additionally, the Locations Services Division is no longer included with the Design Solutions Segment and is reflected as Other. Prior period numbers have been restated to reflect the current segment alignment.

The Discreet Segment derives revenues from the sale of its products to creative professionals for a variety of applications, including feature films, television programs, commercials, music and corporate videos, game production, web design and interactive web streaming.Location Services Division, which is not included in either reportable segment, is reflected as Other.

The Design Solutions Segment derives revenues from the sale of design software products and services for professionals or consumers who design, build, manage and own building projects or manufactured goods and from the sale of mapping and geographic information systems technology to public and private users. The Design Solutions Segment consists primarily of the following business divisions: Manufacturing Solutions Division, Infrastructure Solutions Division, ~~(formerly Geographic Information Services),~~ Building Solutions Division and the Platform Technology Division and Other, which includes Autodesk ~~Professional Services.~~Consulting. Sales of AutoCAD, AutoCAD upgrades and AutoCAD LT in the aggregate accounted for ~~45%~~48% and 44% of ~~Autodesk’s~~our consolidated net revenues during the ~~nine~~three months ended ~~October 31,~~April 30, 2004 and 2003, respectively.

The Discreet Segment derives revenues from the sale of its products to creative professionals for a variety of applications, including feature films, television programs, commercials, music and ~~2002, respectively.~~corporate videos, game production, web design and interactive web streaming.

Both segments primarily distribute their respective products through authorized dealers and distributors, and, in some cases, they also sell their products directly to end-users. Autodesk evaluates each segment’s performance on the basis of income from operations before income taxes. Autodesk currently does not separately accumulate and report asset information by segment, except for certain assets such as goodwill. Information concerning the operations of Autodesk’s reportable segments is as follows (in thousands):

¹	For purposes of comparison with the current quarter and year to date information, segment data for the three and nine months ended October 31, 2002 have been restated to reflect the current segment reporting.


	Three months ended April 30,
	2004			2003
Net revenues:
Design Solutions	$	261,642		$	174,230
Discreet		36,130			36,536
Other		104			—

	$	297,876		$	210,766

Income (loss) from operations:
Design Solutions	$	114,968		$	56,039
Discreet		1,719			(939	)
Unallocated amounts⁽¹⁾		(63,166	)		(48,493	)

	$	53,521		$	6,607

Net revenues attributable to the major divisions within the Design Solutions Segment are as follows (in thousands):


	Three months ended October 31,				Nine months ended October 31,				Three months ended April 30,
	2003		2002		2003		2002		2004		2003
Net revenues:
Manufacturing Solutions Division	$	33,272	$	24,607	$	92,461	$	91,558	$	44,806	$	30,126
Infrastructure Solutions Division		28,699		23,664		76,755		75,034		33,610		22,628
Building Solutions Division		20,787		16,942		52,997		54,926		27,134		15,929
Platform Technology Division and Other		117,357		92,784		331,299		307,217		156,092		105,547

	$	200,115	$	157,997	$	553,512	$	528,735	$	261,642	$	174,230

Information regarding Autodesk’s operations by geographic area is as ~~follows:~~follow (in thousands):


	Three months ended October 31,				Nine months ended October 31,				Three months ended April 30,
	2003		2002		2003		2002		2004		2003
Net revenues:
United States	$	88,351	$	74,715	$	239,029	$	245,120
U.S. customers									$	103,988	$	78,774
Other Americas		16,558		12,757		42,852		41,713		17,557		13,377

Total Americas		104,909		87,472		281,881		286,833		121,545		92,151
Europe, Middle East and Africa		77,630		58,167		224,835		196,338		108,767		68,062
Asia Pacific		51,323		43,062		149,617		146,258		67,564		50,553

Total net revenues	$	233,862	$	188,701	$	656,333	$	629,429	$	297,876	$	210,766

The following table sets forth the fiscal 2004 restructuring plan activities for Autodesk’s reportable segments during the three months ended April 30, 2004 (in thousands):

The expected total charges under this plan are approximately $28.0 million, with approximately $13.0 million attributable to the Design Solutions Segment, approximately $9.0 million attributable to the Discreet Segment and approximately $6.0 million not allocable to either segment. Since inception of the fiscal 2004 restructuring plan, the Design Solutions Segment and the Discreet Segment recorded restructuring charges totaling $6.1 million and $4.4 million, respectively.

Autodesk uses derivative instruments to manage its earnings and cash flow exposures to fluctuations in foreign currency exchange rates. Under its risk management strategy, Autodesk uses foreign currency forward and option contracts to manage its exposures of underlying assets, liabilities and other obligations, which exist as part of the ongoing business operations. These foreign currency instruments by policy have maturities of less

than three months and settle before the end of each quarterly period. Generally, Autodesk’s practice is to hedge a majority of its short-term foreign exchange transaction exposures. Contracts are primarily denominated in ~~Euro,~~euros, Swiss francs, Canadian dollars, British pounds and Japanese yen. Autodesk does not enter into any foreign exchange derivative instruments for trading or speculative purposes.

Autodesk’s forward contracts, which are not designated as hedging instruments under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging ~~Activities,”~~Activities” (“SFAS 133”), have average maturities of ~~90 days or less.~~less than three months. The forwards are used to reduce the exchange rate risk associated primarily with receivables and payables. Forward contracts are marked-to-market at the end of each reporting period, with gains and losses recognized as other income or expense to offset the gains or losses resulting from the settlement of the underlying foreign currency denominated receivables and payables. ~~Autodesk~~

recorded net gains of $0.4 million and net losses of $0.2 million on foreign currency transactions for the three months ended October 31, 2003 and 2002, respectively. Autodesk recorded net gains on foreign currency transactions of $1.4 million and $0.7 million for the nine months ended October 31, 2003 and 2002, respectively.

The notional amounts of foreign currency contracts ~~are $17.6~~were $22.4 million at ~~October 31, 2003~~April 30, 2004 and ~~$32.0~~$26.0 million at January 31, ~~2003.~~2004. While the contract or notional amount is often used to express the volume of foreign exchange contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of Autodesk to the counterparties.

In addition to the forward contracts, Autodesk utilizes foreign currency option collar contracts to reduce the exchange rate impact on the net revenue of certain anticipated transactions. These option contracts, which are designated and documented as cash flow hedges and qualify for hedge accounting treatment under SFAS 133, have maturities of less than three months and settle before the end of each fiscal quarter. For cash flow hedges, derivative gains and losses included in comprehensive income are reclassified into earnings at the time the forecasted revenue is recognized or the option expires. ~~Autodesk’s financial exposure is generally limited to the amount paid for the options.~~

The notional amounts of foreign currency option contracts ~~are $51.6~~were $41.8 million at ~~October 31, 2003~~April 30, 2004 and ~~$36.2~~$42.0 million at January 31, ~~2003~~2004 and the critical terms were generally the same as those of the underlying exposure. Gains, if any, from the effective portion of the option contracts, as determinable under SFAS 133, are recognized as net revenues, while the ineffective portion of the option contract is recorded in interest and other ~~income.~~

~~During the three months ended October 31, 2003, there were $0.4 million~~income, net. Net settlement gains recorded ~~against~~as net ~~revenue. There~~revenues were ~~no settlement gains or losses recorded~~$0.2 million during the three months ended ~~October 31, 2002.~~April 30, 2004 and zero during the three months ended April 30, 2003. Amounts associated with the cost of the options totaling $0.2 million were recorded in ~~Interest~~interest and other income, net during the three months ended ~~October 31, 2003~~April 30, 2004 and 2002. During the nine months ended October 31, 2003, there were $0.3 million in net settlement gains recorded as net revenues. During the nine months ended October 31, 2002 there were $0.6 million in net settlement losses recorded as net revenues. Amounts associated with the cost of the options totaling $0.6 million and $0.7 million were recorded in Interest and other income, net during the nine months ended October 31, 2003 and 2002, respectively.April 30, 2003.

The following ~~acquisitions were~~acquisition was accounted for under ~~the purchase method~~Statement of ~~accounting and, accordingly,~~Financial Accounting Standards No. 141, “Business Combinations”. Accordingly, the results of operations ~~of each acquisition~~ are included in the accompanying condensed consolidated statements of ~~operations~~income since the acquisition date, and the related assets and liabilities were recorded based upon their relative fair values at the date of acquisition. Pro forma results of operations have not been presented ~~for either of the acquisitions~~ because the effects of ~~these acquisitions~~the acquisition were not ~~material~~significant to Autodesk on either an individual or an aggregate basis. These acquisitions will help Autodesk customers create accurate 3D models of both electrical and mechanical components of their products as well as 2D representations of electrical systems, document all of the systems inherent to these products, and manage and share design data inside the engineering workgroup and throughout its internal and external enterprise.Autodesk.

In ~~February 2003,~~April 2004, Autodesk acquired certain assets of ~~Linius Technologies, Inc. (“Linius”)~~MechSoft for approximately ~~$1.0~~$6.5 million in cash. ~~In addition,~~This acquisition provides technology that complements Autodesk’s manufacturing solutions with tools that enable users to embed engineering calculations into their designs based on how parts function. Autodesk ~~assumed approximately $0.2 million in liabilities. Linius developed and sold software that allows a wire harness designer~~plans to ~~create 3D prototypes.~~

integrate key components of MechSoft’s technology into future versions of Autodesk ~~allocated~~Inventor Series. Autodesk’s allocation of the purchase consideration, ~~to the following intangible~~which is based on valuations of acquired assets performed by a third party, is as follows (in thousands):

~~$0.2 million to purchased technology and $1.0 million to goodwill. The purchased technology is being amortized on a straight-line basis over an estimated useful life of 3 years. The goodwill~~purposes, was assigned to the Manufacturing Solutions Division of the Design Solutions Segment.

In March 2003, Autodesk acquired certain assets of VIA Development Corporation (“VIA”) for approximately $4.2 million in cash. VIA developed and provided various electrical schematics, wire diagram, and controls engineering automation software. Autodesk allocated the purchase consideration The goodwill is attributable to the ~~following intangible assets, which are deductible~~premium paid for ~~tax purposes: $0.7 million~~technology that accelerates our time to purchased technology and $3.5 million to goodwill. The purchased technology is being amortized on a straight-line basis over an estimated useful life of 2 years. The goodwill was assigned to the Manufacturing Solutions Division of the Design Solutions Segment.

During the second quarter of fiscal 2004, Autodesk recognized an income tax benefit of $ 19.7 million due to the favorable resolution of an industry-wide matter surrounding its Foreign Sales Corporationmarket for the fiscal years ended 1993 through 1998. The income tax benefit was recognized upon the resolution with the United States Tax Court and IRS Appeals which occurred during the second quarter. The income tax benefit represents amounts previously paid by Autodesk related to this matter.

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” (“SFAS 149”). SFAS 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS 149 is generally effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. Adoption of SFAS 149 did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

During November 2003, the Board of Directors approved a new restructuring plan that involves the elimination of between 550 and 650 positions and the closure of a number of offices worldwide. This plan is designed to further reduce operating expense levels to help achieve our targeted operating margins as well as redirect resources tocomplementary manufacturing design product development, sales development and other critical areas. The restructuring charge under this plan is estimated to be $37.0 million and is expected to be incurred over the four quarters beginning the fourth quarter of fiscal 2004.enhancements.

The discussion in ~~“Management’s~~our Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations (“MD&A”) 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 consist of, among other things, statements regarding anticipated future net revenues, revenue mix, costs and expenses, ~~gross~~operating margins, allowance for bad debts, level of product returns, restructuring activity, planned annual release cycles and short-term and long-term cash requirements, as well as statements involving trend analyses and statements including such words as “we believe” and “plan” and similar expressions. These forward-looking statements 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 the factors set forth below, ~~included~~ in “Risk Factors Which May Impact Future Operating Results” and in our other reports filed with the Securities and Exchange Commission.

Our goal is to be the world’s leading design software and digital content company, offering customers progressive business solutions through powerful technology, products and services. Our focus is to help customers in the building, manufacturing, infrastructure and digital media sectors increase the value of their digital design data and improve efficiencies across the entire lifecycle management processes.

We believe that our ability to make technology available to mainstream markets is one of our competitive advantages. By innovating in existing technology categories, we bring powerful design products to volume markets. Our architecture allows for extensibility and integration. Our products are designed to be easy to learn and use, and to provide customers low cost of deployment, low total cost of ownership and a rapid return on investment.

We have created a large global community of resellers, third party developers and customers allowing us broad reach into volume markets. Our reseller network is extensive, and provides our customers with resources for the purchase, support and training of our products globally in an effective and cost efficient manner. We have a significant number of registered third party developers, creating products that run on top of our products, further extending our reach into volume markets. Our installed base of millions of users has made Autodesk products a worldwide design software standard. Users trained on Autodesk products are broadly available both from universities and the existing work force, reducing the cost of training for our customers.

Our growth strategy derives from these core strengths. We continue to increase the business value of our desktop design tools for our customers in a number of ways. We improve the performance and functionality of existing products with each new release. Beyond our general design products, we develop products addressing specific vertical market needs. In addition, we believe that migration from our 2D products to our 3D products

presents a significant growth opportunity. While the rate of migration to 3D varies from industry to industry, adoption of 3D design software should increase the productivity of our customers. However, this migration also poses various risks to us. In particular, if we do not successfully convert our 2D customer base to our 3D products, then sales of our 2D products may decrease without a corresponding conversion of customer seats to 3D products, which would harm our business.

Additionally, we are creating products to address our customers’ needs for better design information management tools, also known as lifecycle management. We believe that for each author of design information, there are five to 10 users of that information, whom we call downstream users. We are developing and introducing products that will allow downstream users, both within and external to our customer enterprises, to manage and share their designs. Our large installed base provides a unique opportunity to grow from design and engineering departments to adjacent departments and into the supply chain.

Expanding our geographic coverage is a key element of our growth strategy. We believe that the rapidly growing economies in China and Eastern Europe present significant growth opportunities for the company. In support of our growth efforts in China, we opened our China Application Development Center during fiscal 2004. With a level of understanding of local markets that could not be obtained from remote operations, the Center will develop products to specifically address the Chinese market. In addition, we believe that our products will have a competitive advantage as a result of being engineered locally. Our ability to conduct research and development at various locations throughout the world allows us to optimize product development and lower costs. International development, however, involves significant costs and challenges, including whether we can adequately protect our intellectual property and derive significant revenue in areas where software piracy is a substantial problem.

A significant part of our growth strategy is based upon improving the installed base business model. A key element of this change is our current plan to release major products on at least an annual basis. Strong annual release cycles have a number of benefits. In particular, they permit us to deliver key performance and functionality improvements to the customer on a regular and timely basis. Annual releases also drive annual product retirement programs, thereby reducing the volatility of revenues we have experienced in the past, as both the release of the new version and retirement of the oldest supported version happen annually. Volatility may also be reduced through the Autodesk Subscription Program, as revenue is recognized ratably over the subscription contract period.

We are continually focused on improving productivity and efficiency in all areas of the company. Doing so will allow us to increase our investment in growth initiatives. During fiscal 2004, we conducted a rigorous study of our cost structure. Through the services of a major consulting firm, we benchmarked Autodesk metrics against averages of other companies as well as other leading software companies. As a result of the study, we are implementing efficiency initiatives throughout the company. Longer term, we will continue to balance operating margin targets with revenue growth opportunities.

Autodesk generates significant cash flow. Our uses of cash include a $0.03 per share quarterly dividend, share repurchases to offset the dilutive impact of our employee stock plans, mergers and acquisitions, and investments in growth initiatives. We continually evaluate merger and acquisition and divestiture opportunities to the extent they support our strategy. Our typical acquisitions provide adjacency to our current products and services, specific technology or expertise and quick product integration. Additionally, we continue to invest internally in growth initiatives including lifecycle management and Autodesk Location Services.

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, net revenues, costs and expenses

and related disclosures. We regularly ~~evaluate~~re-evaluate our estimates and assumptions. Actual results may differ from these estimates under different assumptions or conditions.

We believe that of 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. Our accounting policies and practices are in compliance with Statement of Position 97-2, “Software Revenue Recognition,” as amended, and SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial ~~Statements.~~Statements,” as amended.

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 ~~collectibility~~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.

~~Revenue~~For multiple element arrangements that include software products, we allocate and defer revenue for the undelivered elements based on their vendor-specific objective evidence (“VSOE”) of fair value, which is ~~recognized~~the price charged when that element is sold separately or the price as set by management with the relevant authority. 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.

Our assessment of likelihood of collection is also a critical element in determining the ~~sale is~~timing of revenue recognition.

Our product ~~or service related. Product~~ sales to distributors and resellers are generally recognized at the time ~~of shipment as long as~~title to our product passes to the distributor or reseller, provided all other criteria for revenue recognition are met. This policy is predicated on our ability to estimate sales returns. We are also required to evaluate whether our distributors and resellers have ~~been met. Subscription, customer support~~the ability to honor their commitment to make fixed and determinable payments, regardless of whether they collect cash 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.

In addition to product sales, Autodesk recognizes maintenance revenues from our subscription program and hosted service revenues ~~are recognized~~ ratably over the contract periods. Customer consulting and training revenues are recognized as the services are performed.

Allowance for Bad Debts. We maintain allowances for bad debts for estimated losses resulting from the inability of our customers to make required payments. ~~At October 31, 2003, our~~Our bad debt reserve was ~~$10.1 million.~~$9.9 million at April 30, 2004 and $9.7 million at January 31, 2004.

Estimated reserves are determined 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 specific problem accounts. The use of different estimates or assumptions could produce different allowance balances. While we believe our existing reserve for doubtful accounts is adequate and ~~proper,~~appropriate, additional reserves may be required should the financial condition of our customers deteriorate or as unusual circumstances arise.

Product ~~Return~~Returns and Price Adjustment Reserves. With the exception of contracts with certain distributors, our sales contracts do not contain specific product-return privileges. However, we permit our distributors and resellers to return product in certain instances, generally when new product releases supercede older versions. ~~At October 31, 2003, our~~Our product returns reserves were ~~$20.7 million.~~

$20.6 million at April 30, 2004 and at January 31, 2004. Product returns as a percentage of applicable revenues were ~~4.1%~~4.8% and ~~4.3%~~5.1% for the three months ended ~~October~~April 30, 2004 and 2003, respectively.

For certain distributors in Europe, we offer incremental discounts, or price adjustments, ranging from less than 1% to 4%, for certain qualifying sales. At April 30, 2004 and January 31, ~~2003~~2004, our price adjustment reserves were $3.0 million and ~~2002,~~$4.2 million, respectively. ~~For the nine months ended October 31, 2003 and 2002, product returns~~Price adjustment claims as a percentage of applicable revenues were ~~5.9%~~4.5% and ~~5.0%,~~5.3% for the three months ended April 30, 2004 and 2003, respectively.

The product ~~return~~returns and price adjustment reserves are based on estimated channel inventory levels, the timing of new product introductions, channel sell-in for applicable markets, historical experience of actual product returns and price adjustment rates and other factors. The greater the channel inventory level or the closer the proximity of a major new product release such as AutoCAD ~~2004,~~2005, the more product returns we expect. Similarly, the higher the applicable channel sell-in or the higher the channel inventory level, the more price adjustment claims we expect. During the three ~~and nine~~ months ended ~~October 31, 2003,~~April 30, 2004, we recorded a ~~provision~~reserve for product returns of ~~$6.6~~$10.9 million and ~~$29.8~~a reserve for price adjustments of $2.3 million, ~~respectively,~~both of which reduced our ~~gross revenue for those respective periods.~~

While we believe our accounting practice for establishing and monitoring product returns and price adjustment reserves is adequate and ~~proper,~~appropriate, any adverse activity or unusual circumstances could result in an increase in reserve levels in the period in which such determinations are made.

Realizability of Long-Lived Assets. We assess the realizability of our long-lived assets and related intangible assets, other than goodwill, annually during the fourth fiscal quarter, 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 impact the continued uses of the assets; significant negative industry or economic trends; and the results of past impairment reviews.

In assessing the recoverability of these long-lived assets, we first determine their fair values, which are based on assumptions regarding the estimated future cash flows that could reasonably be generated by these assets. When assessing long-lived assets, we use undiscounted cash flow ~~models.~~models which include assumptions regarding projected cash flows and future uses of the asset or asset group. Variances in these assumptions could have a significant impact on our conclusion as to whether an asset is impaired or the amount of the impairment charge. Impairment charges, if any, result in situations where the 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.

Goodwill. ~~On February 1, 2002, we adopted~~As required under Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible ~~Assets.~~Assets,” ~~Therefore,~~ we no longer amortize ~~goodwill. We~~goodwill, but test goodwill for impairment annually in the fourth quarter or sooner should events or changes in circumstances indicate potential impairment. As changes in business conditions and our assumptions occur, we may be required to record impairment charges.

Deferred Tax Assets. We currently have ~~$27.2~~$27.9 million of net deferred tax assets, mostly arising from net operating losses, tax credits, reserves and timing differences for purchased technologies and capitalized software offset by the establishment of U.S. deferred tax liabilities on unremitted earnings from certain foreign subsidiaries. We perform a quarterly assessment of the recoverability of these net deferred tax assets, which is principally dependent upon our achievement of projected future taxable income of approximately ~~$70.0~~$72.0 million in specific geographies. Our judgments regarding future profitability may change due to future market conditions and other factors. These changes, if any, may require possible material adjustments to these net deferred tax assets, resulting in a reduction in net income in the period when such determinations are made.

Restructuring Expenses. During the fourth quarter of fiscal ~~year~~2004, the Board of Directors approved a restructuring plan involving the elimination of employee positions and the closure of a number of offices worldwide. This plan, which we refer to as the 2004 restructuring plan, is designed to further reduce operating expense levels to help achieve our targeted operating margins as well as redirect resources to product development, sales development and other critical areas. As a result of the restructuring activities completed during the previous two fiscal quarters and through attrition, we expect to achieve our targeted efficiencies with a lower level of involuntary terminations; consequently, we now expect the total charge under the fiscal 2004 restructuring plan to be approximately $28.0 million, as compared to the $37.0 million originally estimated. This plan is expected to be substantially complete by the end of the third quarter of fiscal 2005.

During the three months ended ~~January 31, 2003,~~April 30, 2004, we recorded gross restructuring charges of ~~$25.9~~$8.4 million under the fiscal 2004 restructuring plan. Of this amount, approximately $6.5 million related to the reduction of ~~which $12.5~~headcount in the first quarter of fiscal 2005 and approximately $1.8 million related to the closure of ~~several domestic and international offices. These~~facilities. The office closure costs were based upon the projected rental payments through the remaining terms of the underlying operating leases, offset by projected sublease income. The projected sublease income amounts were calculated by using information provided by third-party real estate brokers ~~and~~as well as management judgments and were based on assumptions for each of the real estate markets where the leased offices were located. Should real estate markets worsen and we are not able to sublease the properties as expected, we will record additional expenses in the period when such rental payments are made. This situation occurred during each of fiscal 2002, ~~and~~ 2003 and 2004; we therefore recorded additional charges as a result of the inability to sublease abandoned offices. If the real estate markets subsequently improve, and we are able to sublease the properties earlier or at more favorable rates than projected, we will reverse a portion of the underlying restructuring accruals, which will result in increased net income in the period when such sublease becomes effective.

During November 2003, the Board of Directors approved a new restructuring plan that involves the elimination of between 550 and 650 positions and the closure of a number of offices worldwide. This plan is designed to further reduce operating expense levels to help achieve our targeted operating margins as well as redirect resources to product development, sales development and other critical areas. The restructuring charge under this plan is estimated to be $37.0 million and is expected to be incurred over the four quarters beginning the fourth quarter of fiscal 2004.

Legal Contingencies. As described in Part II. Item ~~1. Legal~~1, “Legal Proceedings,” 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 reserves 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 results of operations.

Stock Option Accounting. We do not record compensation expense when stock option grants are awarded to employees at exercise prices equal to the fair market value of Autodesk common stock on the date of grant.

Had we recorded compensation expense from stock option grants, our net income would have been substantially less. In addition, if we are required to record compensation expense, our ability to achieve our target operating margins will be adversely affected. The impact of expensing employee stock awards is further described in Note 2.2, “Stock-Based Compensation” in the Notes to Condensed Consolidated Financial Statements.

Overview of ~~the Three and Nine Months Ended October 31, 2003~~First Quarter 2005

Our net revenues were 41% higher for the three months ended ~~October 31, 2003 were 24% higher~~April 30, 2004 as compared to net revenues for the three months ended October 31, 2002 primarily due to increased upgrade and subscription revenues as well as the positive effects of changes in foreign currencies. The increased upgrade revenues are due in part to the announcement of our intention to retire the AutoCAD 2000-based product series during early calendar 2004. Our operating margin was 12% for the three months ended October 31, 2003 compared to an operating loss of 4% for the three months ended October 31, 2002. This increase is primarily due to higher revenues coupled with the restructuring charges incurred during the three months ended October 31, 2002. Our net revenues for the nine months ended October 31, 2003 were up 4% compared to the nine months ended October 31, 2002. The corresponding operating margin was 7% for the nine months ended October 31, 2003 as compared to 4% for the nine months ended October 31, 2002. The increase in revenue for the nine month period was primarily due to the positive effects of changes in foreign currencies as well as increased upgrade and subscription revenues. In addition, the 24% increase in net revenues for the three month period ended October 31, 2003, as compared to the prior fiscal year, more than offset the lower revenues achieved in the first half of fiscal 2004 compared to the same period in the prior fiscal ~~year. The increase in operating margin is~~year primarily due to strong upgrade, subscription and new seat revenues, coupled with the ~~restructuring charges incurred during~~positive effects of changes in foreign currencies, principally driven by the ~~nine months ended October 31, 2002.~~

~~During fiscal 2002, we introduced~~strength of the ~~Autodesk Subscription Program~~euro, and a decrease in our backlog of license product orders. Driven by volume growth, upgrade revenues in the ~~United States. Under the program, customers who own the most recent version~~first quarter of ~~the underlying product participate in a simplified upgrade process, feature-enhancing extensions and other ancillary services. During~~fiscal 2005 increased 116% compared to the first quarter of fiscal 2004 ~~we completed~~due to the ~~rollout~~strength of our current product releases, in particular, the ~~Autodesk Subscription Program and~~AutoCAD 2005 family of products released during the ~~third~~first quarter of fiscal 2005. In addition, new seat revenues increased 30% from the first quarter of fiscal 2004, ~~we launched three~~again largely attributable to the recent release of the AutoCAD 2005 product series. Subscription revenues increased 56% from the same period in the prior fiscal year, as our subscription program continues to attract new customers with new enhancements ~~to our North American programs –~~such as Web support direct from Autodesk, e-learning and multi-year contracts. ~~Subscriptions are now available to our customers in most major markets worldwide. Through this program, which is available for a majority of our products, we offer customers access to~~

With the most current product enhancements while allowing us to reduce our dependence on revenues from customer upgrades when new product cycles occur. Deferred subscription revenues grew to $66.5 million as of October 31, 2003 from $56.7 million as of January 31, 2003. Subscription revenue is recognized ratably over the liferetirement of the ~~contracts.~~

We generate a significant amount of our revenue in the United States, Japan, Germany, United Kingdom, Italy, ~~Greater~~France, China and Canada. The weaker value of the U.S. dollar, relative to international currencies, had a positive impact of ~~$6.0~~$11.8 million on operating results in the ~~third~~first quarter of fiscal ~~quarter 2004~~2005 compared to ~~the same period in~~ the prior fiscal year. Had exchange rates from the ~~comparable period last year~~first quarter of fiscal 2004 been in effect during ~~the three months ended October 31, 2003,~~fiscal 2005, translated international revenue billed in local currencies would have been ~~$10.2~~$17.0 million lower and operating expenses would have been ~~$4.2~~$5.2 million lower.

Our operating expenses, excluding restructuring and other, increased $28.2 million for the three months ended April 30, 2004 as compared to the same period in the prior fiscal year, but declined as a percentage of revenue. The increase is due primarily to higher commission and bonus costs based on current financial performance as well as higher marketing costs. Our operating margins are very sensitive to changes in revenues, given the relatively fixed nature of most of our operating expenses, which consist primarily of employee-related expenditures, facilities costs and depreciation and amortization expense. ~~The operating margin for our Design Solutions Segment was 40% for the three months ended October 31, 2003 as compared~~In future periods, employee-related expenditures will increase if we are required to 32% for the three months ended October 31, 2002 and was 35% for both the nine months ended October 31, 2003 and 2002. The fluctuations in operating margins for the Design Solutions Segment were primarily due to changes in net revenues. The operating loss for our Discreet Segment as a percentage of net revenue was 3% for the three months ended October 31, 2003 as compared to 13% for the three months ended October 31, 2002 and was 2% for the nine months ended October 31, 2003 as compared to 12% for the nine months ended October 31, 2002. The improved operating margins for the Discreet Segment were due in part to increased revenues and management’s focus on controlling operating expenses.expense employee stock option grants.

During ~~the second and third quarters of~~ fiscal 2004, with the help of a major consulting firm, we ~~have~~ analyzed our operations and cost structure. We ~~have~~ identified a number of opportunities ~~to improve operating efficiencies~~ to help achieve our targeted operating margins as well as redirect funds to the most promising growth areas, such as product lifecycle management and ~~to redirect resources to product~~ development of our China sales and development ~~and other critical areas to invest for future growth.~~infrastructure. As we execute on these plans, we ~~will~~continued to incur restructuring charges ~~over the four quarters beginning the fourth quarter of fiscal 2004.~~

~~During~~during the first quarter of fiscal 2004, we acquired two new businesses, Linius Technologies, Inc. and VIA Development Corporation. These investments supplement existing technology. For a more detailed discussion, see Note 13. “Business Combinations,” in2005. We expect to incur additional charges relating to these plans through the ~~Notes to Condensed Consolidated Financial Statements.~~third quarter of fiscal 2005.

During the ~~nine~~three months ended ~~October 31, 2003,~~April 30, 2004 we ~~maintained a strong balance sheet and~~ generated ~~$100.6~~$55.2 million of cash from our operating ~~activities.~~activities as compared to $17.4 million during the same period in the prior fiscal year. We ~~finished~~closed the ~~third~~first quarter of fiscal ~~2004~~2005 with ~~$453.2~~$519.4 million in cash and marketable securities, a higher deferred revenue balance and an improved days sales outstanding position as compared to the ~~previous quarter. Over 60%~~same period in the prior fiscal year. Approximately 70% of the deferred revenues balance at ~~October 31, 2003~~April 30, 2004, as compared to 63% for the same period in the prior fiscal year, consisted of customer subscription contracts which will be recognized as revenue ratably over the life of the contracts, which is generally one year.

	Three Months Ended October 31,						Nine Months Ended October 31,
	2003		2002		% Change		2003		2002		% Change		Three Months Ended April 30, 2004		Increase (decrease) compared to prior year period					Three Months Ended April 30, 2003
	($ in millions)												Three Months Ended April 30, 2004		$			%		Three Months Ended April 30, 2003
Net Revenues by Geographic Area:
													(in millions)
Net revenues:
License and other													$	260.5	$	73.6		39	%	$	186.9
Maintenance														37.4		13.5		56			23.9

													$	297.9	$	87.1		41	%	$	210.8

Net revenues by geographic area:
Americas	$	104.9	$	87.4	20	%	$	281.9	$	286.8	(2	)%	$	121.5	$	29.4		32	%	$	92.1
Europe, Middle East and Africa		77.7		58.2	33			224.8		196.3	15			108.8		40.7		60			68.1
Asia Pacific		51.3		43.1	19			149.6		146.3	2			67.6		17.0		34			50.6

	$	233.9	$	188.7	24	%	$	656.3	$	629.4	4	%	$	297.9	$	87.1		41	%	$	210.8

Net Revenues by Operating Segment:
Net revenues by operating segment:
Design Solutions	$	200.2	$	158.0	27	%	$	553.5	$	528.7	5	%	$	261.7	$	87.5		50	%	$	174.2
Discreet		33.5		30.5	10			102.5		98.7	4			36.1		(0.5	)	(1	)		36.6
Other		0.2		0.2	—			0.3		2.0	(85	)		0.1		0.1		n/a			—

	$	233.9	$	188.7	24	%	$	656.3	$	629.4	4	%	$	297.9	$	87.1		41	%	$	210.8

Net Design Solutions Revenues:
Manufacturing Solutions Division	$	33.3	$	24.6	35	%	$	92.4	$	91.6	1	%	$	44.8	$	14.7		49	%	$	30.1
Infrastructure Solutions Division		28.7		23.7	21			76.8		75.0	2			33.6		10.9		48			22.7
Building Solutions Division		20.8		16.9	23			53.0		54.9	(3	)		27.2		11.3		71			15.9
Platform Technology Division and Other		117.4		92.8	27			331.3		307.2	8			156.1		50.6		48			105.5

	$	200.2	$	158.0	27	%	$	553.5	$	528.7	5	%	$	261.7	$	87.5		50	%	$	174.2

~~Our net~~Net revenues increased to $297.9 million in the first quarter of fiscal 2005 from $210.8 million in the first quarter of fiscal 2004. Net revenues increased in all three listed geographic areas, due primarily to strong upgrade, subscription and new seat revenues, and to a lesser extent to the positive effects of changes in foreign currencies and a decrease in backlog of license product orders.

During the first half of fiscal 2004, customers in the industries we serve, particularly manufacturing, commercial construction and media and entertainment, were impacted by economic pressures in their own businesses, resulting in a difficult customer purchasing environment. During the last half of fiscal 2004 and through the first quarter of fiscal 2005, we saw a lessening of these economic pressures across the industries that constitute our customer base, particularly in the manufacturing and media and entertainment sectors. However, uncertainty remains as to the sustainability of an economic recovery in the industries we serve.

License and other revenues for the ~~three months ended October 31, 2003~~first quarter of fiscal 2005 were ~~$233.9~~$260.5 million as compared to ~~$188.7~~$186.9 million in the same period ~~last~~of the prior fiscal year. Net revenues in the Americas increased by 20%, net revenues in the Europe, Middle East and Africa region increased by 33% and net revenues in Asia Pacific increased by 19%. For the nine months ended October 31, 2003, net revenues were $656.3 million as compared to $629.4 million in the same period last year. Net revenues in the Americas decreased by 2%, net revenues in the Europe, Middle East and Africa region increased by 15% and net revenues in Asia Pacific increased by 2%. As previously described, theThe increase ~~in net revenues for the three and nine month periods~~ was primarily due to increased upgrade and ~~subscription~~new seat revenues across all major products as ~~well as~~a result of our new product releases, and to a lesser extent to the positive impact of changes in foreign ~~currencies. In addition,~~currencies and a decrease in backlog of license product orders. We expect significant upgrade revenues during fiscal 2005 as a result of new product releases across our divisions and the ~~24% increase~~announcement of the January 2005 retirement of the AutoCAD 2000i-based product series. The installed base of the AutoCAD 2000i release is similar in size to the then remaining installed base of the AutoCAD 2000 release at the time of its retirement in January 2004.

Maintenance revenues, consisting of revenues derived from the subscription program, were $37.4 million for the first quarter of fiscal 2005 as compared to $23.9 million for the first quarter of fiscal 2004. As a percentage of total net revenues, maintenance revenues were 13% and 11% for the ~~three month~~first quarter of fiscal 2005 and fiscal 2004, respectively. Our subscription program, now available to most customers worldwide, continues to attract new customers with our planned annual product release cycle and new enhancements, such as Web support direct from Autodesk and e-learning. We expect maintenance revenues to continue to increase as a percentage of total net revenues.

Net revenues in the Americas increased 32% to $121.5 million in the first quarter of fiscal 2005 as compared to $92.1 million in same period ~~ended October 31, 2003,~~of the prior fiscal year. The increase is largely due to strong upgrade, new seat and subscription revenue during the first quarter of fiscal 2005 and a decrease in backlog of license product orders, as compared to the ~~prior fiscal year, more than offset the lower revenues achieved in the first half of fiscal 2004 as compared to the same period in the prior fiscal year. Should the~~ difficult selling environment ~~encountered~~experienced during most of the first half of fiscal ~~2004 return, our net revenues in future periods will be adversely impacted.~~

Net revenues in the Americas for the three months ended October 31, 2003 were $104.9 million compared to $87.4 million for the three months ended October 31, 2002. Net revenues in the Americas for the nine months ended October 31, 2003 were $281.9 million compared to $286.8 million for the nine months ended October 31, 2002. The increase in Americas revenues for the three months ended October 31, 2003 was due primarily to higher sales of Design Solutions product upgrades and subscriptions. For the nine month period ended October 31, 2003, the improvement in the current fiscal quarter is still offset by the difficult selling environment experienced in the first half of fiscal 2004. ~~In addition, a reorganization of the Americas sales organization during the first quarter of fiscal 2004 may have had a moderate adverse effect on that quarter.~~

Net revenues in the Europe, Middle East and Africa (“EMEA”) region ~~for~~increased 60% to $108.8 million in the ~~three months ended October 31, 2003 were $77.7~~first quarter of fiscal 2005 from $68.1 million ~~as compared to $58.2 million for~~in the ~~three months ended October 31, 2002. Net revenues in Europe, Middle East and Africa region for~~same period of the nine months ended October 31, 2003 were $224.8 million as compared to $196.3 million for the nine months ended October 31, 2002. The increase in net revenues in Europe, Middle East and Africa region for the three and nine month periods wasprior fiscal year due primarily to strong upgrade, new seat and subscription sales and to a lesser extent to favorable exchange ~~rates.~~

~~Net~~rates and a decrease in backlog of license product orders. Ignoring the effects of changes in foreign currencies during the current quarter, net revenues for EMEA increased approximately 42% in ~~Asia Pacific for~~ the ~~three months ended October 31, 2003 were $51.3 million~~first quarter of fiscal 2005 as compared to ~~$43.1 million for~~ the three months ended October 31, 2002. Net revenues in Asia Pacific for the nine months ended October 31, 2003 were $149.6 million as compared to $146.3 million for the nine months ended October 31, 2002. The increase in net revenues in Asia Pacific for the three month period was due primarily to strong new seat sales across a broad range of products as well as strong upgrade and subscription sales and the impact of favorable exchange rates. The increase in net revenues for the nine month period was due primarily to strong upgrade and subscription sales offset in part by the impact of severe acute respiratory syndrome (“SARS”), especially in the Greater China region, during the secondfirst quarter of fiscal 2004.

Net revenues ~~for the Discreet Segment were $33.5~~in Asia Pacific increased 34% to $67.6 million in the ~~three months ended October 31, 2003 as compared to $30.5~~first quarter of fiscal 2005 from $50.6 million in the same period ~~last year. For~~of the ~~nine months ended October 31, 2002, net revenues for the Discreet Segment were $102.5 million as compared to $98.7 million in the same period last~~prior fiscal year. The increase in ~~Discreet Segment~~net revenues ~~for the three and nine month periods~~ was again due primarily to ~~demand~~strong upgrade, new seat and subscription sales and to a lesser extent to favorable exchange rates. Ignoring the effects of changes in foreign currencies during the current quarter, net revenues for ~~our advanced systems products in conjunction with the release of a new generation of workstation by Silicon Graphics, Inc. late~~Asia Pacific increased approximately 24% in the ~~third~~first quarter of fiscal ~~2004. Our Discreet advanced system products are generally sold~~2005 as ~~an integrated solution on workstations from Silicon Graphics, Inc. In addition,~~compared to the ~~Discreet Segment revenues benefited from the release of 3ds max 6 during the third~~first quarter of fiscal 2004.

Net revenues for the Design Solutions Segment were $200.2 million in the three months ended October 31, 2003 as compared to $158.0 million in the same period last year. Net revenues from sales of combined AutoCAD and AutoCAD LT products were $105.3 million in the three months ended October 31, 2003 as compared to $82.1 million in the same period last year. The increase in revenues from AutoCAD and AutoCAD LT was primarily due to an increase in AutoCAD upgrade and subscription revenues worldwide during the quarter as well as favorable exchange rates and a slightly improved spending environment across the industries we serve. For the ~~nine months ended October 31, 2003,~~first quarter of fiscal 2005, net revenues for the Design Solutions Segment were ~~$553.5~~$261.7 million as compared to ~~$528.7~~$174.2 million in the same period ~~last~~in the prior fiscal year. ~~Net~~Aggregate net revenues from sales of ~~combined~~ AutoCAD and AutoCAD LT products ~~were $297.5~~increased to $142.7 million in the ~~nine months ended October 31, 2003 as compared to $274.8~~first quarter of fiscal 2005 from $92.9 million in the ~~same period last year.~~first quarter of fiscal 2004. The increase in net revenues ~~during~~in the ~~nine months ended October 31, 2003~~current fiscal quarter for both the Design Solutions Segment and combined AutoCAD and AutoCAD LT products was due primarily to strong upgrade, new seat and subscription sales and to a ~~slightly improved spending environment across~~lesser extent to a decrease in backlog of license product orders and to favorable exchange rates. Revenue from new seat licenses accounted for 55% of Design Solutions Segment revenues for the ~~industries we serve beginning late in the second~~first quarter of fiscal 2005 as compared to 61% for fiscal 2004, and ~~continuing through all~~upgrade revenue accounted for 24% of revenues for the ~~current~~first quarter of fiscal 2005 as compared to 15% for the first quarter of fiscal 2004. Maintenance revenue accounted for 14% of total Design Solutions Segment revenue for the first quarter of fiscal 2005 as ~~well as strong upgrade and subscription sales coupled with favorable exchange rates.~~compared to 13% in the first quarter of fiscal 2004. Although we have been shifting our focus to more vertically-oriented product lines, sales of AutoCAD, AutoCAD upgrades and AutoCAD LT continue to comprise a significant portion of our net revenues. Such sales, which are reflected in the net revenues for the Platform Technology Division and Other, accounted for ~~45%~~48% and 44% of our consolidated net revenues for the ~~three month periods ended October 31, 2003~~first quarter of fiscal 2005 and ~~2002, respectively,~~2004, respectively. A critical component of our growth strategy is to convert our 2D customer base, including customers of AutoCAD, AutoCAD LT, and ~~45%~~related vertical industry products, to our 3D products such as Autodesk Inventor Series or Autodesk Revit. However, should sales of AutoCAD, AutoCAD upgrades and ~~44%~~AutoCAD LT products decrease without a corresponding conversion of the customer seats to 3D products, our results of operations will be adversely affected.

Net revenues for the ~~nine month periods ended October 31, 2003 and 2002, respectively.~~Discreet Segment remained relatively constant at $36.1 million in the first quarter of fiscal 2005 as compared to $36.6 million in the first quarter of fiscal 2004. Animation revenues increased 13%, offset by a 7% decline in Advanced Systems revenue, due primarily to the timing of the annual National Association of Broadcasters (NAB) trade show which occurred earlier in first quarter of fiscal 2004 than it did during fiscal 2005, contributing to greater revenue in the first quarter of fiscal 2004.

The weaker value of the U.S. dollar, relative to international currencies, had a positive impact on net revenues in the ~~three and nine months ended October 31, 2003.~~first quarter of fiscal 2005. Had exchange rates from the ~~same period last~~prior year been in effect in the ~~three and nine months ended October 31, 2003,~~first quarter of fiscal 2005, translated international revenue billed in local currencies would have been ~~$10.2~~$17.0 million ~~and $40.5 million lower, respectively.~~lower. Changes in the value of the U.S. dollar may have a significant impact on net revenues in future periods. To ~~minimize~~reduce this impact, we utilize foreign currency option collar contracts to reduce the current ~~quarter~~period exchange rate impact on the net revenue of certain anticipated transactions.

International sales accounted for approximately ~~62%~~65% of our net revenues in the ~~three months ended October 31, 2003~~first quarter of fiscal 2005 as compared to ~~60%~~63% in the same period ~~last year. For~~of the ~~nine months ended October 31, 2003, international sales accounted for approximately 64% of our net revenues as compared to 61% in the same period last~~prior fiscal year. We believe that international sales will continue to comprise a significant portion of net revenues. Economic weakness in any of the countries which contribute a significant portion of our net revenues would have a material adverse effect on our business.

Autodesk previously classified Information Technology and other corporate service costs that benefit the entire organization as General and Administrative expenses in our Consolidated Statements of Income. During the fourth quarter of fiscal 2004, Autodesk re-evaluated its cost allocation methodology and reclassified these costs to other functional areas of the business that benefit from these services. As a result, General and Administrative expenses for the three months ended April 30, 2003 have been reduced by $12.3 million and total ~~revenues.~~

	Three Months Ended October 31,								Nine Months Ended October 31,
	2003			2002			% Change		2003			2002			% Change	Three Months Ended April 30, 2004			Increase compared to prior year period				Three Months Ended April 30, 2003
	($ in millions)															Three Months Ended April 30, 2004			$		%		Three Months Ended April 30, 2003
Cost of revenues	$	35.4		$	31.8		11	%	$	107.2		$	106.7		—
																(in millions)
Cost of revenues:
License and Other																$	37.6		$	2.6	7	%	$	35.0
Maintenance																	4.3			1.1	34			3.2

																$	41.9		$	3.7	10	%	$	38.2

As a percentage of net revenues		15	%		17	%				16	%		17	%			14	%						18	%

Cost of license and other revenues ~~include~~includes direct material and overhead charges, royalties, amortization of purchased technology and capitalized software and the labor cost of processing orders and fulfilling service contracts. Direct material and overhead charges include the cost of hardware sold (mainly workstations manufactured by ~~Silicon Graphics Inc.~~SGI for the Discreet Segment), costs associated with transferring our software to electronic media, printing of user manuals and packaging materials and shipping and handling costs.

~~The increase in cost~~Cost of license and other revenues ~~for~~increased 7% during the three months ended ~~October 31, 2003~~April 30, 2004, or $2.6 million, as compared to the same period in the prior fiscal year, primarily due to increased volume and changes in product mix, off-set in part by reduced royalty expenses for licensed technology embedded in our products.

Cost of maintenance revenues includes direct program costs, amortization of capitalized software and overhead charges. Cost of maintenance revenues increased $1.1 million during the three months ended ~~October 31, 2002 was~~April 30, 2004 as compared to the same period in the prior fiscal year primarily due to incremental direct program costs incurred as part of the ~~overall increase in revenues. Despite increased sales, cost~~expansion of ~~revenues was relatively flat as a percentage of revenue for~~ the ~~nine months ended October 31, 2003 and the nine months ended October 31, 2002 primarily as a result of changes in product mix.~~subscription program.

In the future, cost of revenues as a percentage of net revenues is likely to continue to be impacted by the mix of product sales, increased consulting and hosted service costs, software amortization costs, royalty rates for licensed technology embedded in our products and the geographic distribution of sales. ~~However, we expect future cost of revenues as a percentage of net revenues to remain within the historical range of 15 to 18 percent during the remainder of this fiscal year.~~


	Three Months Ended October 31,								Nine Months Ended October 31,								Three Months Ended April 30, 2004			Increase compared to prior year period				Three Months Ended April 30, 2003
	2003			2002			% Change		2003			2002			% Change		Three Months Ended April 30, 2004			$		%		Three Months Ended April 30, 2003
	($ in millions)																(in millions)
Marketing and sales	$	89.9		$	82.1		10	%	$	259.0		$	251.2		3	%	$	109.3		$	16.9	18	%	$	92.4
As a percentage of net revenues		38	%		44	%				39	%		40	%				37	%						44	%

Marketing and sales expenses include salaries, dealer and sales commissions, ~~and~~ travel and facility costs for our marketing, sales, dealer training and support ~~personnel.~~personnel and overhead charges. These expenses also include programs aimed at increasing revenues, such as advertising, trade shows and expositions, as well as various sales and promotional programs designed for specific sales channels and end users.

The increase of $16.9 million in marketing and sales expenses ~~for~~when comparing the ~~three months ended October 31, 2003 compared to~~first quarter of fiscal 2005 with the ~~three months ended October 31, 2002~~first quarter of fiscal 2004 was ~~primarily~~ due ~~to higher bonus accruals to reflect current levels of financial performance and due~~primarily to increased commission, bonus and other incentive compensation expenses ~~as a result of higher levels of~~related to the increased sales ~~and increased~~volume, incremental costs related to ~~trade shows~~a customer relationship management project, as well as higher advertising and ~~conferences. Our marketing and sales expenses increased for the nine months ended October 31, 2003 as compared to 2002 primarily due to increased commission and bonus expenses~~promotion costs related to ~~higher levels of sales.~~new product introductions.

We expect to continue to invest in marketing and sales of our products to develop market opportunities and to promote our competitive position. Accordingly, we expect marketing and sales expenses to continue to be significant, both in absolute dollars and as a percentage of net revenues.


	Three Months Ended October 31,								Nine Months Ended October 31,								Three Months Ended April 30, 2004			Increase compared to prior year period				Three Months Ended April 30, 2003
	2003			2002			% Change		2003			2002			% Change		Three Months Ended April 30, 2004			$		%		Three Months Ended April 30, 2003
	($ in millions)																(in millions)
Research and development	$	48.6		$	41.2		18	%	$	141.7		$	133.0		7	%	$	57.9		$	6.3	12	%	$	51.6
As a percentage of net revenues		21	%		22	%				22	%		21	%				19	%						24	%

Research and development expenses consist primarily of salaries and benefits for software engineers, contract development fees, ~~and~~ depreciation of computer equipment used in software ~~development.~~development and overhead charges.

~~Research and development expenses, while remaining essentially flat as a percentage~~The increase of revenue, increased in absolute dollars for the three months ended October 31, 2004 as compared to the three months ended October 31, 2002, as a result of higher bonus accruals to reflect current levels of financial performance and higher professional fees related to our manufacturing division. The increase$6.3 million in research and development expenses ~~for~~when comparing the ~~nine months ended October 31, 2003 compared~~first quarter of fiscal 2005 with the first quarter of fiscal 2004 was primarily due to ~~the nine months ended October 31, 2002 was due~~$4.9 million related to higher bonus accruals ~~to reflect~~and benefits based on current ~~levels of~~ financial performance and incremental costs associated with ~~the acquisition of Revit Technology Corporation in April 2002.~~purchased technology.

We expect that research and development spending will continue to be significant ~~for the remainder of fiscal 2004~~in future periods as we continue to invest in product development.


	Three Months Ended October 31,								Nine Months Ended October 31,								Three Months Ended April 30, 2004			Increase compared to prior year period				Three Months Ended April 30, 2003
	2003			2002			% Change		2003			2002			% Change		Three Months Ended April 30, 2004			$		%		Three Months Ended April 30, 2003
	($ in millions)																(in millions)
General and administrative	$	32.1		$	28.1		14	%	$	99.9		$	95.8		4	%	$	27.1		$	5.1	23	%	$	22.0
As a percentage of net revenues		14	%		15	%				15	%		15	%				9	%						10	%

General and administrative expenses include our ~~information systems,~~ finance, human resources, legal costs and other administrative operations. We generally do not allocate these costs to the business divisions they support. As a result, such expenses impact general and administrative rather than cost of revenues, marketing and sales or research and development expenses.overhead charges.

The ~~absolute dollar~~ increase of $5.1 million in general and administrative expenses ~~for~~when comparing the ~~three months ended October 31, 2003 compared to~~first quarter of fiscal 2005 with the ~~three months ended October 31, 2002~~first quarter of fiscal 2004 was due primarily ~~due~~ to higher bonus accruals and benefits based on current financial performance.

Since we do not plan to ~~reflect current levels~~complete our restructuring activities until the end of ~~financial performance~~the third quarter of fiscal 2005 and ~~management consulting expenses offset by a reversal of a litigation reserve~~we plan to incur incremental costs related to our assessment of internal controls as required by the ~~Spatial matter (see Note 7. “Commitments and Contingencies,” in the Notes to Condensed Consolidated Financial Statements). General and administrative expenses~~Sarbanes-Oxley Act of 2002 for the nine months ended October 31, 2003 increased slightly as compared to the nine months ended October 31, 2002 primarily due to higher bonus accruals to reflect current levels of financial performance and management consulting expenses offset in part by a reversal of a litigation reserve related to the Spatial matter and general cost reductions.

Wefiscal 2005, we currently expect that ~~for the remainder of fiscal 2004,~~ general and administrative expense, as a percentage of net revenues, will ~~remain consistent with the level experienced~~continue to be significant in fiscal ~~2003.~~

There were no restructuring charges in the three or nine months ended October 31, 2003. During the nine months ended October 31, 2002, Autodesk recognized $18.6 million of restructuring charges related to office closures and employee termination costs. Of this amount, $8.1 million related to office closures in Europe and the United States and $10.1 million related to employee termination costs which were part of formal plans approved by our Board of Directors during fiscal 2002 and fiscal 2003, respectively, in connection with our efforts to reduce operating expense levels.

During ~~November 2003,~~the fourth quarter of fiscal 2004, the Board of Directors approved a ~~new~~ restructuring plan ~~that involves~~involving the elimination of ~~between 550 and 650~~employee positions and the closure of a number of offices ~~worldwide.~~worldwide having a total expected cost of $28.0 million, with $18.0 million attributable to one-time termination benefits and $10.0 million attributable to office closure costs. This plan, which we refer to as the fiscal 2004 restructuring plan, is designed to further reduce operating expense levels to help achieve our targeted operating margins as well as redirect resources to product development, sales development and other critical areas. ~~The~~As a result of the restructuring ~~charge under this plan is estimated to be $37.0 million and is expected to be incurred over the four quarters beginning~~activities completed during the fourth quarter of fiscal ~~2004.~~2004 and the first quarter of fiscal 2005 and through attrition, we expect to achieve our targeted efficiencies with a lower level of involuntary terminations; consequently, the expected total charges under the fiscal 2004 restructuring plan were reduced from a previous estimate of $37.0 million to the approximately $28.0 million noted above. As a result of the fiscal 2004 restructuring plan, we expect to realize pretax savings of $9.8 million per quarter upon completion of the plan, resulting in an annual savings of $39.2 million to be reflected in each on-going cost and expense line item in the consolidated statements of income. This plan is expected to be substantially complete by the end of the third quarter of fiscal 2005.

During the three months ended April 30, 2004, we recorded gross restructuring charges of $8.4 million under the fiscal 2004 restructuring plan. Of this amount, approximately $6.5 million related to the elimination of positions and approximately $1.8 million related to the closure of facilities. Partially off-setting this charge was a reversal of $0.1 million related to a change in estimates underlying office closure costs originally established under the fiscal 2002 restructuring plan. The underlying liabilities were ultimately settled for less than originally estimated.

For additional information regarding restructuring reserves, see Note 6.6, “Restructuring ~~Reserves,~~Reserves” and Note 11, “Segments,” in the Notes to Condensed Consolidated Financial Statements.

The following table sets forth the components of interest and other income, net (in thousands):


	Three Months Ended October 31,						Nine Months Ended October 31,						Three Months Ended April 30,
	2003			2002			2003			2002			2004			2003
Interest and investment income	$	1,370		$	2,022		$	4,549		$	7,673		$	1,773		$	1,685
(Losses) gains on foreign currency transactions		(369	)		(150	)		998			656
Write-downs of cost method investments		(35	)		(1,092	)		(61	)		(1,292	)
Gains (losses) on foreign currency transactions														(544	)		721
Realized gains on sales of marketable securities		431			461			1,461			1,355			460			663
Other		408			1,248			1,200			2,791			727			203

	$	1,805		$	2,489		$	8,147		$	11,183		$	2,416		$	3,272

The investment income portion of the Interest and ~~other income decreased primarily due to a decrease in interest income. Investment income~~investment line item fluctuates based on average cash and marketable securities balances, average maturities and interest rates. The decrease in interest and investment income when comparing the three and nine months ended October 31, 2003 and 2002 was primarily due to a trend of declining interest rates on the investment of cash and marketable securities balances.

Our effective income tax rate was 24% in the ~~third quarter of fiscal~~three months ended April 30, 2004 and ~~27%~~ in the third quarter of fiscal 2003. Absent the impact of the non-recurring tax benefit from the resolution of the Foreign Sales Corporation “FSC” issue, described below, our effective income tax rate was 24% in the ninethree months ended ~~October 31, 2003 and 27% in the nine months ended October 31, 2002.~~April 30, 2003. The effective tax rate for fiscal 2005 is less than the federal statutory rate of 35% due to the benefits associated with our extraterritorial income exclusion “ETI”, research credits, and tax-exempt interest. The tax rate for the third quarter of fiscal 2004 and the first nine months of fiscal 2004 was lower than the same periods last year due to a relatively higher impact of these items offset by benefits associated with our foreign earnings which are taxed at rates different from the federal statutory rate, in the ~~prior year.~~extraterritorial income exclusion (“ETI”), research credits and tax-exempt interest.

Our future effective ~~income~~ tax rate may be materially impacted by the amount of benefits associated with our foreign earnings, which are taxed at rates different from the federal statutory rate, ETI, research credits, tax-exempt interest and ~~tax-exempt interest.~~changes in the tax law.

At ~~October 31, 2003,~~April 30, 2004, we had net deferred tax assets of ~~$27.2~~$27.9 million. Realization of these assets is dependent on our ability to generate approximately ~~$70.0~~$72.0 million of future taxable income in appropriate tax jurisdictions. We believe that sufficient income will be earned in the future to realize these assets.

During the second quarter of fiscal 2004, we recognized an income tax benefit of $19.7 million due to the favorable resolution of an industry-wide matter surrounding our FSC for the fiscal years ended 1993 through 1998. Upon the resolution of issues with respect to the eligibility for and computation of interest, we also anticipate, in the future, recognizing interest income upon the refund of tax payments previously made.

~~During the nine months ended October 31, 2003, we supplemented~~We acquire new technology or supplement our ~~existing~~ technology by purchasing businesses focused in specific markets or industries. During ~~this time period,~~the three months ended April 30, 2004, we acquired the following ~~businesses:~~business:

These acquisitions were accounted for under the purchase method of accounting pursuant to Statement of Financial Accounting Standards No. 141, “Business Combinations,” (“SFAS 141”). None of the purchase price for these acquisitions was allocated to in-process research and development. For ~~a more detailed discussion of the allocation of the total purchase price for each of the~~additional information on this acquired ~~businesses described above~~business, see Note ~~13.~~13, “Business Combinations” in the Notes to Condensed Consolidated Financial Statements.

At ~~October 31, 2003,~~April 30, 2004, our principal sources of liquidity were cash and marketable securities totaling ~~$453.2~~$519.4 million and net accounts receivable of ~~$131.6~~$142.6 million. Additionally, we currently have a $40.0 million line of credit with a financial institution. Other than operating leases, we do not engage in off-balance sheet financing arrangements or have any variable-interest entities.

~~During the nine months ended October 31, 2003, we generated $100.6 million of cash from operating activities as compared to $43.2 million in the same period last year.~~ Cash flows from operating activities, together with the proceeds from stock issuances ~~resulting from~~under our employee stock plans, continue to be our principal means of generating cash. Cash flows from operating activities have historically resulted from sales of our software products and changes in working capital accounts.

During the ~~nine months ended October~~first quarter of fiscal 2005, we generated $55.2 million of cash from operating activities as compared to $17.4 million during the same period of fiscal 2004. Working capital uses of cash included decreases in accrued compensation of $27.0 million primarily due to the payout of fiscal 2004 bonuses and commissions. Other working capital uses of cash included decreases in current and deferred income taxes and increases in prepaid expenses. Working capital sources of cash included decreases in net accounts receivable of $24.2 million primarily due to improved collections across all of our geographic areas. Our days sales outstanding improved to 43 days at April 30, 2004 from 51 days at January 31, ~~2003~~2004.

During the first quarter of fiscal 2005, we generated $17.6 million in net cash ~~generated, together with cash and~~from investing activities compared to a use of $7.3 million during the same period of fiscal 2004, which resulted from higher net sales of available-for-sale marketable securities ~~available at~~in the ~~start~~first quarter of ~~the year, was used~~fiscal 2005. A portion of marketable securities were liquidated to fund ~~repurchases~~our repurchase of ~~our common stock of $81.1 million, acquisitions of two businesses for an aggregate of $5.2 million, capital and other expenditures of $18.7 million and payment of dividends of $10.1 million.~~

~~Between November 1999 and March 2001, the Board of Directors approved plans to repurchase up to 44.0~~5.2 million shares of our common ~~stock. Of these 44.0~~stock, as discussed below.

We used $47.4 million in net cash for financing activities in the first quarter of fiscal 2005, compared to $18.1 million in the same period last year. The major financing use of cash in both periods was for the repurchase of shares and the payment of dividends. During the first quarter of fiscal 2005, we repurchased 5.2 million shares ~~38.9~~for $149.0 million ~~have been~~and during the same period of fiscal 2004 we repurchased ~~and retired as of October 31, 2003. The purpose~~2.0 million shares for $29.9 million. Dividend payments were $3.3 million in each of the ~~stock repurchase program is, among other things, to help~~

~~offset~~first quarters of fiscal 2005 and 2004. The principal source of cash from financing activities was $104.9 million in the ~~dilution to earnings per share caused by~~first quarter of fiscal 2005 and $15.1 million in the first quarter of fiscal 2004 of proceeds from the issuance of common stock under our ~~employee~~ stock ~~plans. The Company expects to continue its~~option and stock ~~repurchase programs to offset its employee equity programs.~~purchase plans.

~~We have~~During fiscal 2004, we had a U.S. line of credit ~~in the United States permitting~~available that permitted unsecured short-term ~~unsecured~~ borrowings of up to $40.0 ~~million, which may be used from time to time for working capital or other business needs.~~million. This credit facility ~~expires~~expired in February ~~2004 and contains restrictive covenants that, among other provisions, require us to maintain certain financial ratios. As of October 31, 2003,~~2004. We did not renew this facility as we ~~were in compliance with these restrictive covenants and there were no borrowings outstanding under the agreement.~~

~~We generally do not enter into binding purchase commitments. Principal commitments at October 31, 2003, consisted of obligations under operating leases for facilities and some computer equipment.~~

In June 2003, we entered into a Software and Services Agreement for the purchase and implementation of customer relationship management software and services, providing for payment of $3.8 million in license fees and up to $6.7 million in services over the first 18 months of the contract. During the nine months ended October 31, 2003, we paid $4.8 million related to this agreement.

We believe our existing cash, cash equivalents, marketable securities ~~available line of credit~~ and cash generated from operations will be sufficient to satisfy our currently anticipated short-term and long-term cash requirements. Long-term cash requirements, other than normal operating expenses, are anticipated for the development of new software products and incremental product offerings resulting from the enhancement of existing products; financing anticipated growth; dividend payments; the share repurchase program; the acquisition of businesses, software products, or technologies complementary to our business; and capital expenditures, including the purchase and implementation of customer relationship management ~~software~~software.

At April 30, 2004 approximately 42% of our consolidated cash, cash equivalents and ~~services.~~marketable securities were held with financial institutions in the United States; the remaining balances are held with financial institutions outside the United States.

Our international operations are subject to currency fluctuations. To minimize the impact of these fluctuations, we use foreign currency option contracts to hedge our exposure on anticipated transactions and forward contracts to hedge our exposure on firm commitments, primarily certain receivables and payables denominated in foreign currencies. Our foreign currency instruments, by policy, have maturities of less than three months and settle before the end of each quarterly period. The principal currencies hedged during the ~~nine~~three months ended ~~October 31, 2003~~April 30, 2004 were the ~~Euro,~~euro, Swiss francs, Canadian dollars, British ~~pound,~~pounds and Japanese yen. We monitor our foreign exchange exposures to ensure the overall effectiveness of our foreign currency hedge positions.

The purpose of Autodesk’s stock repurchase program is, among other things, to help offset the dilution to earnings per share caused by the issuance of stock under our employee stock plans. The number of shares acquired and the timing of the purchases are based on several factors, including general market conditions and the trading price of the Company’s common stock. At April 30, 2004, approximately 11.9 million shares remained available for repurchase under the existing repurchase authorization.

The following table provides information about the repurchase of our common stock during the quarter ended April 30, 2004:

Other than operating leases, we do not engage in off-balance sheet financing arrangements or have any variable-interest entities. As of April 30, 2004 we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Autodesk maintains three active stock option plans for the purpose of granting stock options to employees and members of Autodesk’s Board of Directors: the 1996 Stock Plan (available only to employees), the Nonstatutory Stock Option Plan (available only to non-executive employees and consultants) and the 2000 Directors’ Option Plan (available only to non-employee directors). Additionally, there are five expired plans with options outstanding. In addition to its stock option plans, the Company’s employees are also eligible to participate in Autodesk’s 1998 Employee Qualified Stock Purchase Plan. Autodesk does not have a practice of awarding stock options to consultants.

Our stock option program is broad-based and designed to promote long-term retention. Essentially all of our employees participate. Approximately 70% of the options we granted during the first quarter of fiscal 2005 were awarded to employees other than the officers named in the table entitled “Option Grants in Last Fiscal Quarter” below, (the “Named Executive Officers”). Options granted under our equity plans vest over periods ranging from one to five years and expire within ten years of date of grant. The exercise price of the stock options is equal to the closing price of our Common Stock on the Nasdaq National Market on the grant date.

All stock option grants to executive officers are made by the Compensation and Human Resources Committee of the Board of Directors. All members of the Compensation and Human Resources Committee are independent directors, as defined inby the ~~applicable rules for issuers traded on~~listing standards of The Nasdaq Stock Market. ~~Refer to~~See the “Report of the Compensation and Human Resources Committee of the Board of Directors” in our ~~2003~~2004 Proxy Statement for further information concerning Autodesk’s policies and procedures regarding the use of stock options. Grants to our non-employee directors are non-discretionary and are pre-determined by the terms of the 2000 Directors’ Option Plan.

The following tables provide information about our stock option programs, including distribution and dilutive effect, option plan balances and in-the-money and out-of-the-money options, including participation by the Chief Executive Officer and each of the other most highly compensated executive officers named in our Proxy Statement for the fiscal year ended January 31, 2003 (the “Named Executive Officers”).

The following table provides information about the distribution and dilutive effect of our stock ~~options:~~options for the named periods:

	Nine months ended October 31, 2003	Fiscal year ended January 31,
	Nine months ended October 31, 2003	2003		2002		Three months ended April 30, 2004			Fiscal year ended January 31,
Net grants during the period as % of outstanding shares⁽¹⁾	1.8%	3.1	%	6.5	%
Grants to Named Executive Officers during the period as % of total options granted⁽²⁾	17.4%⁽³⁾	9.3	%	14.1	%
						Three months ended April 30, 2004		Three months ended April 30, 2004			2004			2003
							3.1	Three months ended April 30, 2004		%		3.1	%
Grants to Named Executive Officers during the period as % of total options granted						29.8	%⁽¹⁾		11.7	%		9.3	%
Grants to Named Executive Officers during the period as % of outstanding shares	0.7%	0.6	%	1.1	%	0.7	%		0.7	%		0.6	%
Cumulative options held by Named Executive Officers as % of total options outstanding	19.8%	18.0	%	18.9	%	23.6	%		20.9	%		18.0	%

Our stock option activity for the ~~relevant~~named periods is summarized as follows:


			Options Outstanding						Options Outstanding
(Shares in thousands)	Shares Available for Options		Number of Shares		Weighted Average Price Per Share		Shares Available for Options		Number of Shares		Weighted Average Price Per Share
Options outstanding at January 31, 2002	8,998		29,164		$	16.50
Options outstanding at January 31, 2003							9,557		29,445		$	16.19
Granted	(7,356	)	7,356			15.41	(6,460	)	6,460			17.46
Options assumed in an acquisition	12		255			1.51
Exercised	—		(3,428	)		14.42	—		(6,425	)		14.48
Canceled	3,902		(3,902	)		17.64	2,766		(3,012	)		17.13
Additional shares reserved	4,001		—			—	4,084		—			—

Options outstanding at January 31, 2003	9,557		29,445		$	16.19
Options outstanding at January 31, 2004							9,947		26,468		$	16.80
Granted	(4,222	)	4,222			15.25	(2,753	)	2,753			28.91
Exercised	—		(2,230	)		12.55	—		(5,311	)		17.22
Canceled	2,271		(2,271	)		17.38	366		(330	)		15.91
Canceled from expired plans	—		(219	)		20.84
Additional shares reserved	4,084		—			—	4,228		—			—

Options outstanding at October 31, 2003	11,690		28,947		$	16.22
Options outstanding at April 30, 2004							11,788		23,580		$	18.13

The following table compares the number of shares subject to option grants with exercise prices at or below the closing price of our ~~common stock~~Common Stock at ~~October 31, 2003~~April 30, 2004 (“in-the-money”) with the number of shares subject to option grants with exercise prices greater than the closing price of our Common Stock at the same date (“out-of-the-money”). ~~Exercisable shares are those that are vested at October 31, 2003.~~ The closing price of our Common Stock on ~~October 31, 2003,~~April 30, 2004 was ~~$19.31~~$33.51 per share.


	Exercisable			Unexercisable			Total			Exercisable			Unexercisable			Total
(Shares in thousands)	Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
In-the-Money	12,626	$	14.96	11,211	$	14.91	23,837	$	14.94	8,939	$	16.93	14,600	$	18.81	23,539	$	18.10
Out-of-the-Money	3,901		22.46	1,209		21.50	5,110		22.23	41		36.75	—		—	41		36.75

Total Options Outstanding	16,527	$	16.73	12,420	$	15.85	28,947	$	16.22	8,980	$	17.02	14,600	$	18.81	23,580	$	18.13

The following table sets forth, as to the Named Executive Officers, information concerning stock options granted during the three months ended ~~October 31, 2003.~~April 30, 2004.

subject to each option will immediately vest in full in the event the Company is acquired by merger or asset sale, unless the option is to be assumed by the acquiring entity. In addition, under the Change in Control Program, in the event that the Company terminates any of the Named Executive Officers within 12 months following a change in control, the shares subject to ~~each~~that person’s option will vest as to the number of shares that would have vested within the 12 months following such termination.

The following table summarizes the number of outstanding options granted to employees and directors, as well as the number of securities remaining available for future issuance, under the Company’s compensation plans at ~~October 31, 2003.~~April 30, 2004 (number of securities in thousands).

(Shares in thousands)	(a)	(b)		(c)

						(a)	(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))		Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders⁽¹⁾	19,844	$	16.14	16,893	⁽²⁾	18,178	$	18.48	18,371	⁽²⁾
Equity compensation plans not approved by security holders⁽³⁾	9,103	$	16.40	146		5,402	$	16.94	31

Total	28,947	$	16.22	17,039		23,580	$	18.13	18,402

Descriptions of each of our compensation plans may be found in our proxy statement for our 2004 Annual Meeting of Stockholders.

We operate in a rapidly changing environment that involves a number of risks, many of which are beyond our control. The following discussion highlights some of these risks and the possible impact of these factors on 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.

~~General economic conditions may affect our net revenues and harm our business.~~

As our business has grown, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. If economic growth in the U.S. and other countries’ economies is slowed, many customers may delay or reduce technology purchases. This could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies and increased price competition. In addition, weakness in the end-user market could continue to negatively affect the cash flow of our distributors and resellers who could, in turn, delay paying their obligations to us, which would increase our credit risk exposure. Any of these events would likely harm our business, results of operations and financial condition.

Because we derive a substantial portion of our net revenues from a limited number of products, if these products are not successful, our net revenues will be adversely affected.

We derive a substantial portion of our net revenues from sales of AutoCAD software, including products based on AutoCAD that serve specific vertical markets, upgrades to those products and products that are interoperable with AutoCAD. As such, any factor adversely affecting sales of these products, including product ~~life~~release cycle, market acceptance, product performance and reliability, reputation, price competition and the availability of third-party applications, would likely harm our operating results.

In the Discreet business, our customers’ buying patterns are heavily influenced by advertising and entertainment industry cycles, which ~~has~~have resulted in and may continue to have a negative impact on our operating results. In addition, Discreet’s advanced systems products rely primarily on workstations manufactured by Silicon Graphics, Inc.~~, and failure~~ (“SGI”). Failure of ~~Silicon Graphics, Inc.~~SGI to deliver products or product upgrades in a timely manner would likely result in an adverse effect upon our financial results for a given period.

Our operating results fluctuate within each quarter and from quarter to quarter making our future revenues and operating results difficult to predict.

Our quarterly operating results have fluctuated in the past and are likely to do so in the future. These fluctuations could cause our stock price to change significantly or experience declines. Some of the factors that could cause our operating results to fluctuate include the timing of the introduction of new products by us or our competitors, ~~lack~~slowing of momentum in upgrade or ~~subscription~~maintenance revenue, failure to achieve anticipated levels of customer acceptance of key new applications, unexpected costs or changes in marketing or other operating expenses, changes in product pricing or product mix, platform changes, delays in product releases, distribution channel management, changes in sales compensation practices, the timing of large systems sales and general economic or political conditions, particularly in countries where we derive a significant portion of our net revenues.

We have also experienced fluctuations in operating results in interim periods in certain geographic regions due to seasonality or regional economic conditions. In particular, our operating results in Europe during the third quarter are usually impacted by a slow summer period, and the Asia Pacific operations typically experience seasonal slowing in the third and fourth quarters. Operating expenses may also increase in periods when major product releases occur.

Additionally, our operating expenses are based in part on our expectations for future revenues and are relatively fixed in the short term. Accordingly, any revenue shortfall below expectations could have an immediate and significant adverse effect on our profitability. Further, gross margins may be adversely affected if our sales of AutoCAD LT, upgrades and advanced systems products, which historically have had lower margins, grow at a faster rate than sales of our higher-margin products.

General economic conditions may affect our net revenues and harm our business.

As our business has grown, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. If economic growth in the United States and other countries’ economies is slowed, many customers may delay or reduce technology purchases. This could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies and increased price competition. In addition, weakness in the end-user market could negatively affect the cash flow of our distributors and resellers who could, in turn, delay paying their obligations to us, which would increase our credit risk exposure. Any of these events would likely harm our business, results of operations and financial condition.

The software industry has limited barriers to entry, and the availability of desktop computers with continually expanding performance at progressively lower prices contributes to the ease of market entry. The markets in which we compete are fairly mature and 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 have greater financial, technical, sales and marketing and other resources. Furthermore, a reduction in the number and availability of ~~comparable~~compatible third-party applications 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 continued price reductions, reduced net revenues and profit margins and loss of market share, any of which would likely harm our business.

We believe that our future results depend largely upon our ability to offer products that compete favorably with respect to reliability, performance, ease of use, range of useful features, continuing product enhancements, reputation and price.

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.

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. ~~An example of this type of software is the ACIS geometric solid modeler we license from Spatial.~~ 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 could be developed, identified, licensed and integrated, which would likely harm our business.

In addition, for certain of our products and services, we rely on third party hardware and ~~services.~~services, like the workstations supplied by SGI. Financial difficulties or even failure of these third parties, like SGI, may impact our ability to deliver such products and services and, as a result, may adversely impact our business.

Disruptions with licensing relationships, independent developers and third party developers could adversely impact our business.

Independent firms and contractors perform some of our product development activities, while other technologies are licensed from third parties. Licenses may restrict use of such technology in ways that negatively affect our business. We generally either own or license the software developed by third parties.

Because talented development personnel are in high demand, independent developers, including those who currently develop products for us, may not be able or willing to provide development support to us in the future. Similarly, we may not be able to obtain and renew license agreements 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, this disruption would likely negatively impact these third-party developers and end users, which could harm our business.

Net revenues or earnings shortfalls or the volatility of the market generally may cause the market price of our stock to ~~decline, which could harm our business.~~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 following: net revenues or earnings shortfalls and changes in estimates or recommendations by securities analysts; the announcement of new products or product enhancements by us or our competitors; quarterly variations in our or our competitors’ results of operations; developments in our industry; one-time events such as acquisitions, divestitures and litigation; and general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.

In addition, stock prices for many companies in the technology sector have experienced wide fluctuations that have often been unrelated to the operating performance of such companies. Historically, after ~~extended~~ 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 efforts to develop and introduce new products and service offerings expose us to risks such as limited customer acceptance, costs related to product defects and large expenditures that may not result in additional net revenues.

Rapid technological change as well as changes in customer requirements and preferences characterize the software industry. We are devoting significant resources to the development of technologies, like our lifecycle management initiatives, and service offerings to address demands in the marketplace for increased connectivity and use of digital data created by computer-aided design software. As a result, we are transitioning to new business models, requiring a considerable investment of technical and financial resources. Such investments may not result in sufficient revenue generation to justify their costs, or competitors may introduce new products and services that ~~will~~ achieve acceptance among our current customers, adversely affecting our competitive position. In particular, a critical component of our growth strategy is to convert our 2D customer base, including customers of AutoCAD, AutoCAD LT, and related vertical industry products, to our 3D products such as Autodesk Inventor Series or Autodesk Revit. However, should sales of AutoCAD, AutoCAD upgrades and AutoCAD LT products decrease without a corresponding conversion of customer seats to 3D products, our results of operations will be adversely affected.

Additionally, the software products we offer are complex, and despite extensive testing and quality control, may contain errors or defects. These defects or errors could result in the need for corrective releases to our software products, damage to our reputation, loss of revenues, an increase in product returns or lack of market acceptance of our products, any of which would likely harm our business.

Our business could suffer as a result of risks associated with strategic acquisitions, divestitures and investments.

We periodically acquire or invest in businesses, software products and technologies that are complementary to our business through strategic alliances, equity investments and the like. For example, in February 2003 we acquired assets of Linius ~~and~~Technologies, Inc., in March 2003 we acquired ~~VIA.~~certain assets of VIA Development Corporation, and in April 2004 we acquired certain assets of MechSoft.com, Inc. The risks associated with such acquisitions or investments include, among others, the difficulty of assimilating the operations and personnel of the companies, the failure to realize anticipated synergies and the diversion of management’s time and attention. In addition, such investments and acquisitions, as well as business divestitures, may involve significant transaction-related costs. We may not be successful in overcoming such risks, and such investments, acquisitions and ~~acquisitions~~divestitures may negatively impact our business. In addition, such investments and acquisitions have in the past and may in the future contribute to potential fluctuations in quarterly results of operations. The fluctuations could arise from ~~merger-related~~transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions. These costs or charges could negatively impact results of operations for a given period or cause ~~lack of a consistent increase~~ quarter to quarter variability in our operating results.

Our international operations expose us to significant regulatory, intellectual property, collections, exchange fluctuations and other risks, which could adversely impact our future net ~~revenues.~~revenues and increase our net expenses.

We anticipate that international operations will continue to account for a significant portion of our consolidated net ~~revenues.~~revenues and will provide significant support to our overall development efforts. Risks inherent in our international operations include the following: unexpected changes in regulatory practices and tariffs, difficulties in staffing and managing foreign sales and development operations, longer collection cycles for accounts receivable, potential changes in tax laws and laws regarding the management of data, greater difficulty in protecting intellectual property and the impact of fluctuating exchange rates between the U.S. dollar and foreign currencies in markets where we do business.

Our international results will also continue to be impacted by ~~general~~ economic and political conditions in ~~these~~ foreign markets generally or in specific large foreign markets. In particular, the potential economic impact from the failure to occur of an expected continued post-SARS recovery in Asia Pacific (particularly China) in the fourth quarter of fiscal 2004 or the first quarter of fiscal 2005 could disrupt trade and market relationships in a way that could harm our business. These ~~and other~~ factors may adversely impact our future international operations and consequently our business as a whole.

Our risk management strategy uses derivative financial instruments in the form of foreign currency forward and option contracts, for the purpose of hedging foreign currency market exposures, ~~in the current~~during each quarter, which exist as a part of our ongoing business operations. Nevertheless, significant fluctuations in exchange rates between the U.S. dollar and foreign currency markets may adversely impact our future net revenues.

If we do not maintain our ~~relationship~~relationships with the members of our distribution channel, or achieve anticipated levels of sell-through, our ability to generate net revenues will be adversely affected.

We sell our software products both directly to customers and through a network of distributors and resellers. Our ability to effectively distribute our products depends in part upon the financial and business condition of our reseller network. Computer software dealers and distributors are typically not highly capitalized and have previously experienced difficulties during times of economic contraction and may do so in the future. While we have a processes to ensure that we assess the creditworthiness of dealers and distributors prior to our sales to them, if their financial condition were to deteriorate, they might not be able to make repeat purchases. In addition, the changing distribution models resulting from increased focus on direct sales to strategic accounts or from two-tiered distribution may impact our reseller network in the future. No single customer, distributor or reseller accounted for more than 10% of our consolidated net revenues in ~~the nine months ended October 31,~~during fiscal 2004, 2003 or ~~during fiscal 2003, 2002 or 2001.~~2002. We rely significantly upon major distributors and resellers in both the U.S. and international regions. The loss of or a significant reduction in business with those distributors or resellers or the failure to achieve anticipated levels of sell-through with any one of our major international distributors or large resellers could harm our business. In particular, if one or more of such resellers should be unable to meet their obligations with respect to accounts payable to us, we could be forced to write off such accounts, which could have a material adverse effect on our results of operations in a given period.

With the exception of contracts with some distributors, our sales contracts do not contain specific product-return privileges. However, we permit our distributors and resellers to return products in certain instances. For example, we generally allow our distributors and resellers to return older versions of products which have been superceded by new product releases. We anticipate that product returns will continue to be impacted by product update cycles, new product releases such as AutoCAD ~~2004~~2005 and software quality.

We establish reserves for stock balancing and product rotation. These reserves are based on historical experience, estimated channel inventory levels and the timing of new product introductions and other factors. While we maintain strict measures to monitor these reserves, actual product returns may ~~differ from~~exceed our reserve estimates, and such differences could harm our business.

If we are not able to adequately protect our proprietary rights, our business could be harmed.

We rely on a combination of patents, copyright and trademark laws, trade secrets, 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. While we have recovered some revenues resulting from the unauthorized use of our software products, we are unable to measure the extent to which piracy of our software products exists, and software piracy can be expected to be a persistent problem. Furthermore, our means of protecting our proprietary rights may not be adequate, and our competitors may independently develop similar technology.

We may face intellectual property infringement claims that could be costly to defend and result in our loss of significant rights.

~~We expect that~~As more and more software ~~product developers will be increasingly subject to infringement claims~~patents are granted worldwide, as the number of products and competitors in our industry segments grows and as the functionality of products in different industry segments ~~overlaps.~~overlap, we expect that software product developers will be increasingly subject to infringement claims. Infringement, invalidity claims or misappropriation claims may be asserted against us, and any such assertions could harm our business. Litigation often becomes more likely in times of economic downturn. Additionally, certain patent holders have become more aggressive in threatening litigation in attempts to obtain fees for licensing the right to use patents. Any such claims or threats, whether with or without merit, could be time-consuming to defend, result in costly litigation and diversion of resources, or could cause product shipment 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.

~~The loss of key personnel or the inability~~If we are required to expense options granted under our employee stock plans as compensation, our net income and earnings per share would be significantly reduced, and we may be forced to change our business practices to attract and retain ~~additional personnel could harm our business.~~employees.

~~Our continued growth~~Historically, we have used stock options as a key component of our employee compensation packages. We believe that stock options provide an incentive to our employees to maximize long-term stockholder value and, ~~success depends significantly on~~through the ~~continued service~~use of ~~highly skilled~~vesting, encourage valued employees to remain with us. Proposals related to accounting for the grant of an employee stock option as an expense have been issued for comment by the Financial Accounting Standards Board. If such proposals are implemented, our net income and earnings per share will be negatively impacted, and we will not achieve our announced target for operating margins. As a result, we may decide to reduce the number of employees who receive stock options or grant fewer options to particular employees. This could adversely affect our ability to retain existing employees and ~~independent developers. Our ability~~attract qualified candidates, and also could increase the cash compensation we would have to ~~attract and retain key personnel is dependent on a number of factors, including our continued ability~~pay to ~~grant stock incentive awards. Changes in the accounting rules for~~

stock options, which are granted to most of our employees and which have been a significant factor in attracting and retaining key technical and management experts, could have a material adverse effect on our business. The loss of key personnel or inability to recruit new employees or independent developers would negatively impact our business. We may also experience increased compensation costs to attract and retain skilled personnel. In addition, the Company’sOur planned restructuring for ~~the fourth quarter of fiscal year 2004 and during~~ fiscal year 2005 could result in disruptions to our business or to our employee base, which could negatively impact anticipated revenues during those periods. ~~Moreover, failure~~

In the fourth quarter of fiscal 2004, we announced a planned restructuring which included workforce reduction and closure of certain facilities, which we revised in the first quarter of fiscal 2005. We expect related restructuring charges to be charged through the third quarter of fiscal 2005. If we fail to effect all of the currently planned headcount and facilities reductions, ~~could negatively impact~~our results of operations ~~for~~may be negatively impacted. Additionally, disruptions to our employee base may adversely impact anticipated revenues during those ~~periods or may result in unanticipated fluctuations in quarterly results of operations.~~periods.

We have no material changes to the disclosure on this matter made in Item 7A of our report on Form 10-K for the fiscal year ended January 31, ~~2003.~~2004.

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On December 27, 2001, Spatial Corp. (“Spatial”) filed suit in Marin County Superior Court against Autodesk and one of our consultants, D-Cubed Ltd. ~~(“D-Cubed”)~~, seeking among other things, termination of a development and license agreement between Spatial and Autodesk and an injunction preventing Autodesk from working with contractors under the agreement. On October 2, 2003, a jury found that Autodesk did not breach the agreement. As the prevailing party in the action, the court awarded Autodesk approximately $2.4 million for reimbursement of attorneys’ fees and the costs of trial, which we expect will be paid during the second quarter of fiscal 2005. Spatial filed a notice of appeal on December 2, 2003 appealing the decision of the jury. ~~The notice does~~Spatial claims that certain testimony of a witness should not ~~specify~~have been considered by the ~~basis on which~~jury and as a result, Spatial ~~intends~~asserts that it is entitled to ~~challenge~~a new trial. After reviewing the ~~jury’s finding. We do not know of any basis on which an~~arguments made in the appeal, ~~would be successful, and accordingly,~~we believe ~~that~~ the ultimate resolution of this matter will not have a material effect on Autodesk’s consolidated statements of financial ~~condition,~~position, results of operations or cash flows. However, it is possible that an unfavorable resolution of this matter could occur and materially affect our future results of operations, cash flows or financial position in a particular period.

~~Generally, we~~On May 13, 2004, Nuvo Services, LLC (“Nuvo”) filed suit in United States District Court, District of Arizona against Autodesk seeking to compel arbitration of Nuvo’s claim that Autodesk breached a contract that allegedly existed between Nuvo and a company acquired by Buzzsaw.com (“Buzzsaw”) in 2000. Autodesk acquired Buzzsaw in 2001. In the complaint, Nuvo alleges that Autodesk breached the contract by assigning certain technology acquired as part of its acquisition of Buzzsaw to a third party without Nuvo’s prior consent. The complaint seeks unspecified damages and recovery of the amount in which Autodesk was unjustly enriched by the assignment. Autodesk has not been served with the complaint. While Autodesk believes the ultimate resolution of this matter will not have a material effect on Autodesk’s consolidated statements of financial position, results of operations or cash flows, it is possible that an unfavorable resolution of this matter could occur and materially affect our future results of operations, cash flows or financial position in a particular period.

We are involved in legal proceedings from time to time arising from the normal course of business activities. In our opinion, resolution of ~~these~~pending matters is not expected to have a material adverse impact on our consolidated results of operations, cash flows or our financial position. However, it is possible that an unfavorable resolution of ~~a matter~~one or more such proceedings could in the future materially affect our future results of operations, cash flows or financial position in a particular period.

~~None.~~The information concerning issuer purchases of equity securities required by this Item is incorporated by reference herein to the section of this Report entitled “Issuer Purchases of Equity Securities” in Part I Item 2 above.

On ~~August 21, 2003,~~February 26, 2004, the Company filed a Current Report on Form 8-K under Items 7 and 12 to furnish our press release announcing our financial results for the ~~quarter~~three months and fiscal year ended ~~July~~January 31, ~~2003.~~

~~On November 20, 2003, the Company filed a Current Report on Form 8-K under Item 9 to furnish our press release announcing our financial results for the quarter ended October 31, 2003.~~

On November 25, 2003, the Company filed a Current Report on Form 8-K under Item 9 to furnish our press release announcing the preliminary estimates of the restructuring charges announced in its third quarter fiscal 2004 earnings call on November 20, 2003.2004.

Pursuant to the requirements 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.

AUTODESK, INC.

(Registrant)

/s/ ALFRED J. CASTINO

Alfred J. Castino

Senior Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)


		Page No.
	PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements:

	Condensed Consolidated Statements of ~~Operations~~ Income Three ~~and nine~~ months ended ~~October 31,~~April 30, 2004 and 2003 ~~and 2002~~	3

	Condensed Consolidated Balance Sheets ~~October 31, 2003~~ April 30, 2004 and January 31, ~~2003~~2004	4

	Condensed Consolidated Statements of Cash Flows ~~Nine~~ Three months ended ~~October 31,~~April 30, 2004 and 2003 ~~and 2002~~	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1314

Item 3.	Quantitative and Qualitative ~~Disclosures~~Disclosure About Market Risk	3335

Item 4.	Controls and Procedures	33

~~PART II. OTHER INFORMATION~~36

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	3437

Item 2.	Changes in Securities and Use of Proceeds	3437

Item 3.	Defaults upon Senior Securities	3437

Item 4.	Submission of Matters to a Vote of Securities Holders	3437

Item 5.	Other Information	3437

Item 6.	Exhibits and Reports on Form 8-K	3538

	Signatures	3639


	As previously reported		As reclassified
Cost of revenues	$	36,951	$	38,242

Marketing and sales		85,538		92,354
Research and development		47,392		51,579
General and administrative		34,278		21,984
Income from operations		6,607		6,607

	Design Solutions			Discreet		Total
Balance as of January 31, 2003	$	149,539		$	6,406	$	155,945
Linius acquisition goodwill⁽¹⁾		978			—		978
VIA acquisition goodwill⁽¹⁾		3,450			—		3,450
Other		(209	)		—		(209	)

Balance as of October 31, 2003	$	153,758		$	6,406	$	160,164


	Design Solutions			Discreet		Total
Balance as of January 31, 2004	$	153,688		$	6,406	$	160,094
MechSoft acquisition goodwill⁽¹⁾		3,903			—		3,903
Other		(112	)		—		(112	)

Balance as of April 30, 2004	$	157,479		$	6,406	$	163,885

	Three months ended October 31,						Nine months ended October 31,
	2003			2002¹			2003			2002¹
Net revenues:
Design Solutions	$	200,115		$	157,997		$	553,512		$	528,735
Discreet		33,522			30,498			102,460			98,664
Other		225			206			361			2,030

	$	233,862		$	188,701		$	656,333		$	629,429

Income (loss) from operations:
Design Solutions	$	80,262		$	50,599		$	195,914		$	182,766
Discreet		(1,050	)		(3,969	)		(1,987	)		(12,170	)
Unallocated amounts²		(51,272	)		(54,475	)		(145,438	)		(146,860	)

	$	27,940		$	(7,845	)	$	48,489		$	23,736


	Design Solutions Segment					Discreet Segment						Unallocated
	Office Closure Costs		Employee Termination Costs			Office Closure Costs			Employee Termination Costs			Office Closure Costs			Employee Termination Costs			Total
Balance at January 31, 2004	$	149	$	778		$	—		$	333		$	—		$	—		$	1,260
Additions		711		2,782			327			2,835			781			923			8,359
Charges utilized		—		(2,748	)		(48	)		(1,464	)		(367	)		(676	)		(5,303	)

Balance at April 30, 2004	$	860	$	812		$	279		$	1,704		$	414		$	247		$	4,316


Developed technologies (3 year useful life)	$	1,900
Goodwill		3,903
Other assets		697

	$	6,500

	Three months ended October 31, 2003		As a % of Net Revenues		Three months ended October 31, 2002			As a % of Net Revenues
	($ in thousands)
Net revenues	$	233,862	100	%	$	188,701		100	%

Cost of revenues		35,364	15			31,835		17
Operating expenses		170,558	73			151,399		80
Amortization of purchased intangibles		—	—			26		—
Restructuring and other		—	—			13,286		7

Income (loss) from operations	$	27,940	12	%	($	7,845	)	(4	%)

	Nine months ended October 31, 2003		As a % of Net Revenues		Nine months ended October 31, 2002			As a % of Net Revenues
	($ in thousands)
Net revenues	$	656,333	100	%	$	629,429		100	%

Cost of revenues		107,211	16			106,737		17
Operating expenses		500,633	76			480,120		76
Amortization of purchased intangibles		—	—			273		—
Restructuring and other		—	—			18,563		3

Income from operations	$	48,489	7	%	$	23,736		4	%


	Three Months Ended April 30, 2004		As a % of Net Revenues		Three Months Ended April 30, 2003		As a % of Net Revenues
	(in millions)
Net Revenues	$	297.9	100	%	$	210.8	100	%
Cost of revenues		41.9	14	%		38.2	18	%
Operating expenses excluding restructuring and other charges		194.2	65	%		166.0	79	%
Restructuring and other		8.3	3	%		—	—

Income from Operations	$	53.5	18	%	$	6.6	3	%


(Shares in thousands)	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
February 1-February 29	—			—	—		—
March 1-March 31	5,183	⁽¹⁾	$	28.76	5,183	⁽¹⁾	11,868	⁽²⁾
April 1-April 30	—			—	—		—

Total	5,183		$	28.76	5,183		11,868

Name	Individual Grants
	Options Granted ⁽¹⁾⁽²⁾	% of Total Options Granted to Employees ⁽³⁾		Exercise Price Per Share		Expiration Date⁽⁴⁾	Potential Realizable Value at Assumed Annual Rates of Share Price Appreciation For Option Term (5)
	Options Granted ⁽¹⁾⁽²⁾	% of Total Options Granted to Employees ⁽³⁾		Exercise Price Per Share		Expiration Date⁽⁴⁾	5%		10%

Carol A. Bartz Chairman of the Board, Chief Executive Officer and President	200,000	10.32	%	$	17.45	9/25/13	$	2,194,842	$	5,562,161

Joseph H. Astroth Executive Vice President, Location Services Division	40,000	2.06	%	$	17.45	9/25/13	$	438,968	$	1,112,432

Carl Bass Executive Vice President, Design Solutions Group	100,000	5.16	%	$	17.45	9/25/13	$	1,097,421	$	2,781,081

Michael E. Sutton Executive Vice President, Business Operations	40,000	2.06	%	$	17.45	9/25/13	$	438,968	$	1,112,432


	Individual Grants
	Number of Securities Underlying Options Granted⁽¹⁾	Percent of Total Options Granted to Employees⁽²⁾		Exercise Price		Expiration Date⁽³⁾	Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term ($)⁽⁴⁾
Name	Number of Securities Underlying Options Granted⁽¹⁾	Percent of Total Options Granted to Employees⁽²⁾		Exercise Price		Expiration Date⁽³⁾	5%		10%
Carol A. Bartz Chairman of the Board, Chief Executive Officer and President	500,000	18.2	%	$	28.80	3/18/14	$	9,056,083	$	22,949,891

Carl Bass Senior Executive Vice President, Design Solutions Group	125,000	4.5	%	$	28.80	3/18/14	$	2,264,021	$	5,737,473

Alfred J. Castino Senior Vice President, Chief Financial Officer	75,000	2.7	%	$	28.80	3/18/14	$	1,358,412	$	3,442,484

Marcia K. Sterling Senior Vice President, General Counsel and Secretary	60,000	2.2	%	$	28.80	3/18/14	$	1,086,730	$	2,753,987

Michael E. Sutton Executive Vice President, Business Operations	60,000	2.2	%	$	28.80	3/18/14	$	1,086,730	$	2,753,987



Exhibit 31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1		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

Company ~~and Cash Paid~~

~~February 2003~~

~~Linius Technologies, Inc.~~
~~$1.0 million~~April 2004

~~Linius Technologies,~~MechSoft.com, Inc. ~~developed and sold software~~

The assets acquired from MechSoft complement Autodesk’s solutions with tools that ~~allows a wire harness designer~~enable users to ~~create 3D prototypes. This acquisition has been integrated~~embed engineering calculations into ~~our~~their designs based on how parts function. Autodesk plans to integrate key components of MechSoft’s technology into future versions of Autodesk Inventor Series. The assets acquired were assigned to the Manufacturing Solutions Division ~~within the Design Solutions Segment.~~

~~March 2003~~

~~VIA Development Corporation~~
~~$4.2 million~~

VIA Development Corporation developed and provided various electrical schematics, wire diagram, and controls engineering automation software. This acquisition has been integrated into our Manufacturing Solutions Division withinof the Design Solutions Segment.