8-KOther EventsExhibits & Filings

Autodesk, Inc. 8-K Report, Corporate Update (Oct 6, 2006)

Filed October 6, 2006For Securities:ADSK

Summary

Autodesk, Inc. (ADSK) filed an 8-K on October 6, 2006, to provide an update on its ongoing voluntary review of stock option grant practices and related accounting issues. The review, conducted by the Audit Committee with external legal counsel and overseen by Ernst & Young LLP, has reached a preliminary conclusion that the accounting measurement dates for certain past broad-based employee stock option grants may differ from their recorded grant dates. This could result in additional non-cash stock-based compensation expense, although the exact amount and impact on historical financial statements are not yet determined. The company expects to incur approximately $4 million in expenses related to this review in the third quarter of fiscal 2007. Investors should note that this review is ongoing and the conclusions are preliminary. There is a possibility of restatements of financial results, and the process could impact the timing and amount of stock-based compensation expense, lead to accounting adjustments, affect the company's ability to file reports timely, and potentially result in litigation or regulatory action. Importantly, the company stated that any additional stock-based compensation expense would not affect previously reported cash positions or revenues.

Key Highlights

  • 1Autodesk is voluntarily reviewing its stock option grant practices and related accounting.
  • 2A preliminary conclusion suggests that accounting measurement dates for some past stock option grants differ from recorded grant dates.
  • 3The company anticipates recording additional non-cash stock-based compensation expense, but the amount is undetermined.
  • 4Expenses of approximately $4 million are expected in Q3 FY2007 related to the review process.
  • 5The company is working to become current in its SEC filings after the review is completed.
  • 6Any additional compensation expense will not impact reported cash or revenues.
  • 7The review's outcome could lead to financial restatements, litigation, or regulatory actions.

Frequently Asked Questions

The 8-K filing addresses an ongoing voluntary review by Autodesk's Audit Committee concerning the company's stock option grant practices and related accounting issues. The preliminary findings suggest a potential discrepancy between the recorded grant dates and the actual accounting measurement dates for certain past employee stock option grants.

The review may result in additional non-cash stock-based compensation expense being recorded by Autodesk. However, the exact amount of this expense, as well as the specific accounting and tax impacts, have not yet been determined. The company also anticipates incurring approximately $4 million in expenses related to conducting this review itself.

Autodesk explicitly states that any additional non-cash stock-based compensation expense recorded as a result of this review will not affect the Company's previously reported cash positions or revenues. These are non-cash accounting adjustments.

The review is preliminary, and there is no assurance that it won't lead to changes or restatements of financial results. Potential risks include accounting adjustments to financial statements, impacts on the company's ability to file reports timely, potential litigation from shareholders or employees, actions by regulatory agencies like the SEC, and negative tax implications.