Autodesk 2000 Annual Report Download - page 46

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Autodesk, Inc. FY 00
D-Vision Systems, Inc. (“D-Vision”)
On July 15, 1997, Discreet acquired all of the out-
standing shares of capital stock of D-Vision, an Illinois
corporation,pursuant to a Stock Purchase Agreement.
As a result of this acquisition, Discreet acquired the
D-Vision OnLINE and PRO software products for non-
linear video and digital media editing solutions includ-
ing related know-how and goodwill.The $27.2 million
purchase price was paid through a combination of
0.2 million newly issued common shares that had a
value of $10.7 million,and approximately $10.8 million
in cash.
Of the $27.2 million purchase price, $5.3 million was
allocated to IPR&D and was expensed during fiscal
1998 since the technology had not yet reached tech-
nological feasibility and had no alternative future use;
$3.1 million was allocated to an intangible asset, pur-
chased technology; and $16.7 million was allocated
to goodwill.
Lightscape Technologies,Inc.(“Lightscape”)
On December 2, 1997, Discreet entered into an Agree-
ment and Plan of Merger and Reorganization with
Lightscape,a Delaware corporation.The merger closed
on December 30, 1997. As a result of the merger,
Discreet acquired, among other products, the Light-
scape product,a software application which integrates
radiosity and raytracing with physically based lighting,
including related know-how and goodwill.The aggre-
gate purchase consideration of $7.6 million consisted
primarily of $6.4 million of assumed liabilities.
Of the $7.6 million purchase price, $1.7 million was
allocated to IPR&D and was expensed during fiscal
1998 since the technology had not yet reached tech-
nological feasibility and had no alternative future use;
and $4.3 million was allocated to goodwill.
Note 10. Nonrecurring Charges
During fiscal 2000, Autodesk recorded nonrecur-
ring charges totaling $34.7 million, which primarily
resulted from the acquisition of Discreet ($17.1 mil-
lion), acquisition of VISION ($3.3 million—See Note 9),
and a corporate restructuring that occurred during
the third quarter ($15.5 million). These nonrecurring
charges were offset by a $1.0 million reversal of a liti-
gation reserve established in fiscal 1999.The litigation
matter was settled for less than originally estimated.
Of the $17.1 million of charges resulting from the
acquisition of Discreet, $14.1 million related to trans-
action costs, which included fees paid to investment
bankers, attorneys, accountants and financial printers;
$2.6 million related to restructuring costs, which con-
sisted primarily of employee termination costs and
legal entity liquidations, and $0.4 million related to
one-time costs.At January 31, 2000, the remaining lia-
bilities associated with these charges totaled $1.0 mil-
lion, of which $0.5 million related to transaction costs
and $0.5 million related to the legal entity liquidation
portion of the restructuring.
Of the $15.5 million of corporate restructuring charges,
which resulted from Autodesk’s efforts to reduce oper-
ating expenses, $11.7 million related to termination
and other employee costs associated with the elimi-
nation of 350 positions,most of which occurred in the
U.S.; $3.2 million related to office closure costs; and
$0.6 million related to one-time costs. Employee ter-
mination costs included wage continuation, advance
notice pay and medical and other benefits.The liabili-
ties associated with the employee terminations will be
substantially settled over the next several months.
Office closure costs included losses on operating lease
payments ($1.1 million) and the write-off of leasehold
improvements and equipment ($2.1 million). The
following table sets forth the restructuring activity
during fiscal 2000:
(in millions)
Balance at Balance at
February 1, Charges January 31,
1999 Additions utilized Reversals 2000
Employee termination costs $ — $ 13.4 $ (11.5) $ (0.9) $ 1.0
Office closure costs 0.3 3.3 (2.6) (0.3) 0.7
Legal entity liquidations 0.4 0.9 (0.4) (0.4) 0.5
One-time costs — 0.9 (0.9) — —
Total $ 0.7 $ 18.5 $ (15.4) $ (1.6) $ 2.2