Autodesk 2001 Annual Report Download - page 47

44 FY 01 Autodesk, Inc.
(in millions)
Balance at Balance at
February 1, Charges January 31,
2000 Additions utilized Reversals 2001
Employee termination costs $ 1.0 $ — $ (0.4) $ (0.4) $ 0.2
Office closure costs 0.7 — (0.3) (0.3) 0.1
Legal entity liquidations 0.5 — (0.1) (0.3) 0.1
Total $ 2.2 $ — $ (0.8) $ (1.0) $ 0.4
The value assigned to purchased technology ($12.7 million)
was determined based on the expected future cash flows of
the existing developed technologies, discounted for the
characteristics and applications of the product, the size of
existing markets, growth rates of existing and future mar-
kets, as well as an evaluation of past and anticipated
product-life cycles.
Proforma financial results, as defined by Accounting
Principles Board Opinion No. 16,“Business Combinations,”
have not been provided since this acquisition was not
material.
Note 12. Nonrecurring Charges
During fiscal 2001, Autodesk recorded nonrecurring cred-
its totaling $1.2 million, which resulted from accrual
reversals. The underlying liabilities, which were originally
established in fiscal 2000, were settled for less than origi-
nally estimated.
During fiscal 2000, Autodesk recorded nonrecurring
charges totaling $34.7 million, which primarily resulted
from the acquisition of Discreet ($17.1 million), acquisition
of VISION ($3.3 million) 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 litigation reserve established in fiscal 1999. The litiga-
tion matter was settled for less than originally estimated.
Of the $17.1 million of charges resulting from the acquisi-
tion of Discreet,$14.1 million related to transaction costs,
$2.6 million related to restructuring costs and $0.4 mil-
lion related to one-time costs.
Of the $15.5 million of corporate restructuring charges,
which resulted from Autodesk’s efforts to reduce operat-
ing expenses, $11.7 million related to termination and
other employee costs associated with the elimination of
350 positions, most of which occurred in the U.S.; $3.2 mil-
lion related to office closure costs; and $0.6 million related
to one-time costs. Employee termination costs included
wage continuation, advance notice pay and medical and
other benefits. Office closure costs included losses on
operating lease payments ($1.1 million) and the write-off
of leasehold improvements and equipment ($2.1 million).
During fiscal 2001, the restructuring was substantially
completed. The following table sets forth the restructur-
ing activity during fiscal 2001:
During fiscal 1999, Autodesk recorded nonrecurring
charges totaling $19.7 million, which resulted from the
acquisition of Genius ($13.1 million) and certain other
charges ($8.9 million). These nonrecurring charges were
offset by $2.3 million of excess lease-related reserves,
which were associated with a fiscal 1996 restructuring,
that Discreet reversed.
Of the $8.9 million of other charges, $1.5 million
related to the consolidation of certain development
centers, $2.2 million related to the write-off of pur-
chased technologies associated with these operations,
$1.7 million related to staff reductions in Asia Pacific,
$2.5 million related to costs involving a certain litiga-
tion matter, and $1.0 million related to the write-down
to fair market value of older computer equipment. At
January 31, 2000, there were no remaining liabilities
associated with these nonrecurring charges.
Note 13. Litigation Accrual Reversal
In fiscal 1995, Autodesk recorded a significant reserve as a
result of a judgment against Autodesk on a claim involv-
ing a trade-secret misappropriation. Autodesk appealed
the judgment and as a result of the appeal decision, which
was finalized in May 1998, the amount levied against
Autodesk was significantly reduced. During fiscal 1999,
Autodesk reversed the remaining unutilized litigation
accrual of $18.2 million and interest accrual of $2.7 million.
Note 14. Segments
Autodesk’s operating results have been aggregated into
two reportable segments: the Discreet Segment and the
Design Solutions Segment.
The Discreet Segment derives revenues from the sale of its
products to creative professionals for a variety of