Autodesk 2001 Annual Report Download - page 46

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Autodesk, Inc. FY 01
Prior to the acquisition, Discreet’s fiscal year ended on
June 30. As a result of differing year-ends, Autodesk’s con-
solidated statements of operations, stockholders’ equity
and cash flows for the fiscal year ended January 31, 1999
were combined with Discreet’s financial statements for
the twelve months ended December 31, 1998.
Additionally, Discreet’s January 1999 results have been
excluded from the accompanying statements of opera-
tions as a result of changing Discreet’s year-end to
January 31. In January 1999, Discreet recognized net rev-
enues of $3.8 million and incurred a net loss of
$5.0 million. The loss was recorded as an adjustment to
retained earnings during fiscal 2000.
In addition to the acquisition of Discreet, the following
acquisitions occurred over the past three years.
VISION* Solutions (“VISION”)
On April 22, 1999, Autodesk acquired VISION, a
vendor of enterprise automated mapping/facilities man-
agement/geographic information systems (AM/FM/GIS)
solutions. This acquisition was accounted for under the
purchase method of accounting. Of the $26.0 million pur-
chase price, which was paid in cash, $3.3 million
represented the value of in-process research and develop-
ment (“IPR&D”) that had not yet reached technological
feasibility and had no alternative future use, and as such,
was expensed during fiscal 2000. Of the remaining pur-
chase price, $17.6 million was allocated to goodwill and
$2.1 million was allocated to other intangibles.
Proforma financial results, as defined by Accounting
Principles Board Opinion No. 16,“Business Combinations,”
have not been provided since this acquisition was not
material.
Genius CAD Software GmbH (“Genius”)
On May 4, 1998, Autodesk entered into an agreement with
Genius, a German limited liability company, to purchase
various mechanical CAD software applications and tech-
nologies. Autodesk accounted for this acquisition under
the purchase method of accounting. Of the total purchase
price of $68.9 million, which was paid in cash, $13.1 million
was allocated to IPR&D and was expensed since the tech-
nology had not reached technological feasibility and had
no alternative future use; $12.7 million was allocated to an
intangible asset, purchased technology; and $41.6 million
was allocated to goodwill.
The value assigned to the IPR&D ($13.1 million) was deter-
mined by identifying research projects in areas for which
technological feasibility had not been achieved.The calcu-
lations of value were adjusted to reflect the value creation
efforts of Genius prior to the close of the acquisition. The
value was determined by estimating the costs remaining
to develop the purchased in-process technology into
commercially viable products,estimating the resulting net
cash flows from such projects, and discounting the net
cash flows back to their present value. The discount rate
included a factor that took into account the uncertainty
surrounding the successful development of the pur-
chased in-process technology projects.
(in millions)
Three months
ended
April 30, 1999 Year ended
(unaudited) January 31, 1999
Net revenues:
Autodesk $ 177.7 $ 761.7
Discreet 25.0 132.1
$ 202.7 $ 893.8
Net income (loss):
Autodesk $ (7.3) $ 90.6
Discreet (9.8) 6.5
$ (17.1) $ 97.1
Note 11. Business Combinations
Discreet Logic Inc. (“Discreet”)
On March 16, 1999, Autodesk acquired Discreet by issuing
approximately 10.0 million shares of Autodesk common
stock in exchange for Discreet’s outstanding common
stock.Discreet develops, assembles,markets,sells and sup-
ports nonlinear digital systems and software for creating,
editing and compositing imagery.
Autodesk accounted for this acquisition under the pooling
of interests method. Accordingly, all prior period consoli-
dated financial statements presented were restated to
include the combined results of operations, financial posi-
tion and cash flows as though Discreet had always been
part of Autodesk. Separate results of the combined enti-
ties for the three months ended April 30, 1999 and the
fiscal year ended January 31, 1999 are as follows: