The discussion in our 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 are any statements that look to future events and consist of, among other things, our business strategies, including those discussed below in "Strategy" below, anticipated future net revenue, future operating margin and other future financial results (by product type and geography) and operating expenses, the effectiveness of our internal reorganization and restructuring efforts, the effectiveness of efforts to reduce our operating expenses, expected market trends, including the growth of cloud, mobile and social computing, the effect of unemployment and availability of credit, the effects of the weak global economic conditions, our backlog, expected trends in certain financial metrics, the impact of acquisitions and investment activities, the effect of fluctuations in exchange rates and our hedging activities on our financial results, our abilities to successfully expand adoption of our products, our ability to gain market acceptance of new businesses and sales initiatives, our ability to successfully increase sales of product suites as part of our overall sales strategy, and the impact of economic volatility and geopolitical activities in certain countries, particularly emerging economy countries, and the resulting effect on our financial results. In addition, forward-looking statements also consist of statements involving expectations regarding product acceptance, continuation of our stock repurchase program, statements regarding our liquidity and short-term and long-term cash requirements, as well as, statements involving trend analyses and statements including such words as "may," "believe," "could," "anticipate," "would," "might," "plan," "expect," and similar expressions or the negative of these terms or other comparable terminology. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements as a result of the factors set forth below in Part II, Item 1A, "Risk Factors," and in our other reports filed with the U.S. Securities and Exchange Commission. We assume no obligation to update the forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.

Note: A glossary of terms used in this Form 10-Q appears at the end of this Item 2.

Strategy

Autodesk's vision is to help people imagine, design and create a better world. We do this by developing software for the world's designers, architects, engineers, and digital artists-the people who create the world's products, buildings, infrastructure, films, and games. Autodesk serves customers in three primary markets: architecture, engineering and construction; manufacturing; and digital media and entertainment.

Our goal is to provide our customers with the world's most valuable, innovative, and engaging software and services. Our product and services portfolio allows our customers to digitally visualize, simulate, and analyze their projects, helping them to better understand the consequences of their design decisions; save time, money, and resources; and become more innovative.

Today, complex challenges such as globalization, urbanization, and sustainable design are driving our customers to new levels of performance and competitiveness, and we are committed to helping them address those challenges and take advantage of new opportunities. To achieve these goals, we are capitalizing on two of our strongest competitive advantages: our ability to bring advanced technology to mainstream markets, and the breadth and depth of our product portfolio.

By innovating in existing technology categories, we bring powerful new design capabilities to volume markets. Our products are designed to be easy-to-learn and use, and to provide customers with a low cost of deployment, a low total cost of ownership, and a rapid return on investment. In addition, our software architecture allows for extensibility and integration with other products. The breadth of our technology and product line gives us a unique competitive advantage, because it allows our customers to address a wide variety of problems in ways that transcend industry and disciplinary boundaries. This is particularly important in helping our customers address the complex challenges mentioned above. We also believe that our technological leadership and global brand recognition have positioned us well for long-term growth and industry leadership.

In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers, third-party developers, customers, educational institutions, faculty and students is a key competitive advantage. This network of relationships provides us with a broad and deep reach into volume markets around the world. Our distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and support our products quickly and easily. We have a significant number of registered third-party developers who create products that work well with Autodesk products and extend them for a variety of specialized applications. Users with expertise in our products are broadly and globally available from educational institutions and in the existing workforce. We offer extensive educational programs, including student versions of software, curricula, and faculty development. We have an extensive global community of students

who are experienced with our software and poised to become the next generation of professional users - thus reducing the cost of training and providing fresh talent for our customers. Our global network of distributors, resellers, third party developers, customers, educational institutions and students has been developed over our thirty year history. We believe it is an enduring competitive advantage that is difficult for others to replicate.

We continually strive to increase the business value of our design tools to our customers in a number of ways. First, we seek to address an increasing portion of our customers' workflow with products that extend the value of our customers' digital design information into visualization, analysis and simulation. Second, we seek to improve our product interoperability and usability, thus improving our customers' productivity and effectiveness. Third, we continue to develop new ways to deliver capability and value to our customers, such as product suites, cloud-based services, and delivery of our solutions on mobile devices and new hardware platforms. Fourth, we extend our customers' workflow with products for adjacent users and for the "customers of our customers," thus increasing the value of the design information our customers produce. Finally, we continue to develop new lines of consumer products and services that are delivered and experienced through the Web, tablets, and mobile devices providing our advanced visualization technologies to consumers-a whole new category of Autodesk customer.

Autodesk was founded during the platform transition from mainframes and engineering workstations to personal computers. We developed and sustained a compelling value proposition based upon desktop software for the personal computer. Just as the transition from mainframes to personal computers transformed the industry thirty years ago, we believe our industry is undergoing a similar transition from the personal computer to cloud, mobile and social computing. During the first quarter of the fiscal year, we undertook a number of important organizational changes to drive the success of our business. These changes were made in order to address major business initiatives including our desire to accelerate the business' move to the cloud, transform our customers' experience, increase industry focus to meet customer demands, and develop more effective marketing. The reorganization included changes to the structure and alignment of our product development and marketing teams and re-organizing our sales teams by industry.

While these changes were intended to better serve our customers and drive future growth, we have encountered challenges in the execution of these efforts which have impacted our financial results in the short term. In order to achieve these organizational changes and to further our strategy, in the third quarter of the fiscal year we commenced a company-wide restructuring plan. While we are reducing our overall staffing levels in the near-term, we will continue to invest in key development areas. We anticipate taking a pre-tax charge in the range of $50 million to $60 million in connection with the restructuring. Approximately $40 million to $45 million in pre-tax charges will be taken in the third quarter of fiscal 2013. Most of the remaining charge will be taken in the fourth quarter of fiscal 2013. If we are unable to successfully complete our reorganizational efforts we may need to undertake additional restructuring efforts, and our business and operating results may be harmed.

Our growth strategy is predicated upon leading the transition in the industries we serve into the cloud in three ways:

• Grow. We believe sufficient opportunity remains in our PC-based software business, and we intend to continue to grow this business. In particular we are offering product suites with improved interoperability and usability to enhance our customers' productivity. We are continuing to drive maintenance and new licensing models to better match the business needs of our customers. We will continue to emphasize developing direct relationships with large, global customers and growing in emerging economies.

• Transform. At the same time we grow our desktop software business, we are migrating many of our products to the cloud. This entails development of new cloud computing infrastructure and redesigning our applications to leverage the cloud. We are also developing new capabilities that are enabled by the cloud such as collaborative PLM and on line simulation. Our goal is to lead our industry in transitioning to the cloud.

• Expand. We believe that the combination of cloud, mobile, and social computing affords us the opportunity to expand our business into new markets. For example, we have added new customers through our consumer products. We intend to continue to develop our business to both add new customers and find new capabilities to incorporate in our core business.

We believe that expanding our customers' portfolios to include our suites presents a meaningful growth opportunity and is an important part of our overall strategy. As our customers in all industries adopt our design suites, we believe they will experience an increase in their productivity and the value of their design data. For the three and six months ended July 31, 2012, revenue from suites increased 5% and 18%, respectively, as compared to the same periods in the prior fiscal year. As a percentage of revenue, suites comprised 29% in both the three and six months ended July 31, 2012, respectively, as compared to 29% and 26% in the three and six months ended July 31, 2011, respectively.

Expanding our geographic coverage is another key element of our growth strategy. While emerging economies are important for all global businesses, we believe they hold special opportunity for Autodesk. Much of the growth in the world's construction and manufacturing is happening in emerging economies. Further, emerging economies face many of the challenges that our design technology can help address, for example infrastructure build-out. We believe that emerging economies continue to present long-term growth opportunities for us. Revenue from emerging countries remained flat and increased 3% during the three and six months ended July 31, 2012, respectively, as compared to the same periods of the prior fiscal year. Revenue from emerging countries represented 15% of net revenue for both the three and six months ended July 31, 2012, and 16% and 15% of net revenue during the three and six months ended July 31, 2011, respectively. While we believe there are long-term growth opportunities in emerging economies, conducting business in these countries presents significant challenges, including economic volatility, geopolitical risk, local competition, intellectual property protection, poorly developed business infrastructure, scarcity of talent and software piracy.

Our strategy includes improving our product functionality and expanding our product offerings through internal development as well as through the acquisition of products, technology and businesses. Acquisitions often increase the speed at which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions regarding acquisitions. We currently anticipate that we will acquire products, technology and businesses as compelling opportunities become available.

Our strategy depends upon a number of assumptions, including that we will be able to continue making our technology available to mainstream markets; leverage our large global network of distributors, resellers, third-party developers, customers, educational institutions, and students; improve the performance and functionality of our products; and adequately protect our intellectual property. If the outcome of any of these assumptions differs from our expectations, we may not be able to implement our strategy, which could potentially adversely affect our business. For further discussion regarding these and related risks see Part II, Item 1A, "Risk Factors."

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements are prepared in conformity with U.S. generally accepted accounting principles. In preparing our Condensed Consolidated Financial Statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in our Condensed Consolidated Financial Statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We regularly reevaluate our assumptions, judgments and estimates. Our significant accounting policies are described in Note 1, "Business and Summary of Significant Accounting Policies," in the Notes to Consolidated Financial Statements in our Form 10-K for the fiscal year ended January 31, 2012 (the "2012 Form 10-K"). In addition, we highlighted those policies that involve a higher degree of judgment and complexity with further discussion of these judgmental areas in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2012 Form 10-K. We believe these policies are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. Updates on the relevant periodic financial disclosures related to these policies are provided below.

Goodwill. As of July 31, 2012, a hypothetical 10% decrease in the fair value of our reporting units would not have an impact on the carrying value of goodwill, nor result in impairment of goodwill. For further discussion see Note 9, "Goodwill," in the Notes to the Condensed Consolidated Financial Statements.

Income Taxes. We currently have $181.6 million of net deferred tax assets, primarily a result of tax credits, net operating losses and timing differences for reserves, accrued liabilities, stock options and restricted stock units, fixed assets, deferred revenue, purchased technologies and capitalized intangibles, partially offset by the establishment of U.S. deferred tax liabilities on unremitted earnings from certain foreign subsidiaries, deferred tax liabilities associated with tax method change on advanced payments and valuation allowances against U.S. and Canadian deferred tax assets. We perform a quarterly assessment of the recoverability of these net deferred tax assets and believe that we will generate sufficient future taxable income in appropriate tax jurisdictions to realize the net deferred tax assets. Our judgments regarding future profitability may change due to future market conditions and other factors. Any change in future profitability may require material adjustments to these net deferred tax assets, resulting in a reduction in net income in the period when such determination is made. We believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business. It is possible that these positions may be challenged by jurisdictional tax authorities and that such challenges may have a significant impact on our effective tax rate.

Overview of the Three and Six Months Ended July 31, 2012

                            Three Months Ended     As a % of Net     Three Months Ended    As a % of Net
(in millions)                 July 31, 2012           Revenue          July 31, 2011          Revenue
Net Revenue                 $          568.7              100 %      $          546.3             100 %
Cost of revenue                         59.8               11 %                  57.4              11 %
Gross Profit                           508.9               89 %                 488.9              89 %
Operating expenses                     416.0               73 %                 393.9              72 %
Income from Operations      $           92.9               16 %      $           95.0              17 %

                             Six Months Ended      As a % of Net      Six Months Ended     As a % of Net
(in millions)                 July 31, 2012           Revenue          July 31, 2011          Revenue
Net Revenue                 $        1,157.3              100 %      $        1,074.6             100 %
Cost of revenue                        118.6               10 %                 112.0              10 %
Gross Profit                         1,038.7               90 %                 962.6              90 %
Operating expenses                     851.8               74 %                 789.0              73 %
Income from Operations      $          186.9               16 %      $          173.6              16 %

In the three and six months ended July 31, 2012, our business grew year over year as evidenced by our increases in revenue, and gross profit. Contributing to the year over year increases in revenue were increases in revenue from new seat license revenue and maintenance revenue. In addition, we experienced increases in revenue for many of our major products, reportable segments and geographic areas during the three and six months ended July 31, 2012 as compared to the same periods in the prior fiscal year. The reasons for these increases are discussed below under the heading "Results of Operations." Although we were able to deliver year over year growth in revenue, we noted a decline in demand across our geographic regions due in part to the execution related challenges arising from our recent internal organizational changes, including reorganizing our sales teams by industry. These execution related challenges, combined with an uneven global economy, resulted in lower than anticipated revenue results for the quarter. In light of the uneven macroeconomic environment and our focus on improving operating margins, we had been taking a prudent approach to spending for the fiscal year. We remain focused on working through these internal challenges as rapidly as possible, while continuing to satisfy the needs of our customers around the world. Our income from operations decreased 2% in the three months ended July 31, 2012, compared to same period in the prior fiscal year. Our total operating margin decreased as a percentage of revenue from 17% for the three months ended July 31, 2011 to 16% during the three months ended July 31, 2012. The decrease was primarily due to net revenue increasing at a slower rate than our operating expenses. Net revenue increased $22.4 million or 4% for the three months ended July 31, 2012, as compared to the same period in the prior fiscal year, while our operating expenses increased $22.1 million, or 6% for the three months ended July 31, 2012. The 6% increase in operating expenses in the three months ended July 31, 2012, as compared to the three months ended July 31, 2011 was due to primarily to an increase in salaries and benefits due to increased headcount and merit increases.
Our income from operations increased 8% in the six months ended July 31, 2012, compared to same period in the prior fiscal year. Our total operating margin remained relatively flat as a percentage of revenue at 16% for the six months ended July 31, 2012 and 2011 primarily due to the increase in income from operations and ongoing cost management efforts. Net revenue increased $82.7 million or 8% for the six months ended July 31, 2012, as compared to the same period in the prior fiscal year, while our operating expenses increased $62.8 million, or 8% for the six months ended July 31, 2012. The 8% increase in operating expenses in the six months ended July 31, 2012, as compared to the six months ended July 31, 2011 was due to primarily to an increase in salaries and benefits due to increased headcount and merit increases.
We generate a majority of our revenue in the U.S., Japan, Germany, France, and Canada. Included in the overall increase in revenue were impacts associated with foreign currency. Our revenue benefited from foreign exchange rate changes during the six months ended July 31, 2012, as compared to the same periods in the prior fiscal year. During the three and six months ended July 31, 2012 net revenue increased 4% and 8%, respectively, compared to the same periods in the prior fiscal year; had applicable exchange rates from the three and six months ended July 31, 2011 been in effect during the three and six months ended July 31, 2012, and had we excluded foreign exchange hedge gains and losses from the three and six months ended July 31, 2012 and 2011 ("on a constant currency basis"), net revenue would have increased 4% and 7% respectively, compared to the same periods in the prior fiscal year. During the three and six months ended July 31, 2012, total spend, defined as cost of revenue plus operating expenses, increased 5% and 8%, respectively, compared to the same periods in the prior fiscal year as

reported and increased 7% and 8%, respectively, on a constant currency basis. Changes in the value of the U.S. dollar may have a significant effect on net revenue, total spend and income from operations in future periods. We use foreign currency contracts to reduce the exchange rate effect on a portion of the net revenue of certain anticipated transactions, but do not attempt to completely mitigate the impact of fluctuation of such foreign currency against the U.S. dollar.

We rely significantly upon major distributors and resellers in both the U.S. and international regions, including Tech Data Corporation and its global affiliates (collectively, "Tech Data"). Tech Data accounted for 23% and 22% of our total net revenue during the three and six months ended July 31, 2012, respectively. Tech Data accounted for 17% of Autodesk's total net revenue for both the three and six months ended July 31, 2011. In October 2011, Tech Data purchased certain assets of Mensch and Maschine Software ("MuM"), which has been a distributor of our products in Europe. The acquisition concentrates additional sales through Tech Data, which on a consolidated basis would have accounted for 22% and 23% of our total net revenue for the three and six months ended July 31, 2011, respectively, if the acquisition had taken place at the beginning of fiscal 2012. We believe our business is not substantially dependent on Tech Data. Our customers through Tech Data are the resellers and end users who purchase our software licenses and services. Should any of the agreements between us and Tech Data be terminated for any reason, we believe the resellers and end users who currently purchase our products through Tech Data would be able to continue to do so under substantially the same terms from one of our many other distributors without substantial disruption to our revenue.

Our primary goals for the remainder of fiscal 2013 are to grow revenue and maintain our operating margin percentage by delivering our market-leading products and solutions to our customers and investing in product functionality and new product lines, including suites offerings, while managing our operating expenses. However, in light of our second quarter performance and our reduced revenue outlook for the year, we are further reducing our spend by implementing cost cutting measures in the second half of this fiscal year. In addition, during August 2012, our Board of Directions approved a world-wide restructuring plan to accelerate our transition to the cloud and mobile computing that will result in material restructuring charges or other non-recurring charges that will have the effect of reducing our operating margins and net income for the remainder of fiscal 2013. In addition, we will continue to look closely at our cost structure to find ways that we can reduce our operating expenses to improve our operating margin while allowing continued investment in growth and productivity initiatives. There can be no assurance that we will achieve our financial goals and improve our financial results. Additionally, we believe that unemployment rates and the availability of credit to major industries we serve are important indicators for our business; if we are unable to successfully achieve our reorganization and restructuring efforts or if global economic conditions deteriorate we may not achieve our financial goals.

Revenue from flagship products was 56% and 57% of total net revenue during the three and six months ended July 31, 2012, respectively, and increased 3% for both the three and six months ended July 31, 2012, as compared to the same periods in the prior fiscal year. Revenue from suites was 29% of total net revenue for both the three and six months ended July 31, 2012 and increased 5% and 18% as compared to the same periods in the prior fiscal year. Revenue from new and adjacent products was 15% of total net revenue during both the three and six months ended July 31, 2012 and increased 5% and 7% as compared to the same periods in the prior fiscal year, respectively. We anticipate, as our new and existing customers migrate from our stand-alone products, that our revenue from suites will increase as a percentage of revenue and that our revenue from our flagship and new and adjacent products will decline as a percentage of revenue.

At July 31, 2012, we had $1,716.8 million in cash, cash equivalent and marketable securities. We completed the quarter ended July 31, 2012 with a higher deferred revenue balance and a lower accounts receivable balance as compared to the fiscal year ended January 31, 2012. Deferred revenue at July 31, 2012 was $752.0 million. Deferred revenue consists primarily of deferred maintenance revenue. To a lesser extent, deferred revenue consists of deferred license and other revenue derived from collaborative project management services, consulting services and deferred license sales. We repurchased 3.4 million shares of our common stock for $111.1 million during the three months ended July 31, 2012. Comparatively, we repurchased 2.5 million shares of our common stock for $100.8 million during the three months ended July 31, 2011. We repurchased 5.9 million shares of our common stock for $210.3 million during the . . .