Autodesk 2008 Annual Report Download - page 159

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Management’s allocation of the purchase price, based on a valuation of acquired assets and liabilities, is as
follows:
Alias:
Developed technologies (6 year useful life) ......................................... $ 34.8
Customer relationships (7 year useful life) ......................................... 29.8
Trade name (6 year useful life) .................................................. 8.1
In-process research and development ............................................. 7.9
Goodwill .................................................................... 132.5
Deferred revenue ............................................................. (5.1)
Net tangible assets ............................................................ (0.1)
Restructuring reserve .......................................................... (9.4)
$198.5
In-process research and development represents incomplete Alias research and development projects that
had not reached technological feasibility and had no alternative future use as of the acquisition date and was
recorded during fiscal 2006 as research and development expense on the Consolidated Statement of Income.
Customer relationships represent the underlying relationships and agreements with Alias’s existing
customers. Trade name represents the estimated fair value of the Alias trade name and trademarks. The $132.5
million of goodwill, the majority of which is not deductible for tax purposes, was assigned to the Media and
Entertainment Segment ($79.5 million) and to the Manufacturing Solutions Division of the Design Solutions
Segment ($53.0 million). During the second quarter of fiscal year 2007, Autodesk recorded an increase to
goodwill of $11.5 million primarily related to an increase in deferred tax liabilities for book/tax intangible asset
basis differences. During the third quarter of fiscal 2007, Autodesk recorded a reduction to goodwill of
$1.7 million because actual costs incurred under the Alias Restructuring Plan was less than what the Company
originally estimated at the time the acquisition was recorded. Goodwill represents excess of the purchase price
over the fair value of the acquired net tangible and intangible assets.
The deferred revenue amount of $5.1 million represents the estimated fair value of the support obligations
assumed from Alias in connection with this acquisition. As a result of the fair value determination in accordance
with SFAS 141, Autodesk recorded an adjustment to reduce the carrying value of Alias’ deferred revenue
balance at the acquisition date by $12.0 million to $5.1 million. The support obligations assumed from Alias
were fulfilled by the middle of fiscal 2008.
Autodesk management approved a restructuring plan directly resulting from the Alias acquisition and
involving the elimination of employee positions, facilities and fixed assets of Alias (“Alias Restructuring Plan”).
The total restructuring reserve established for this plan was reflected as an allocation item in the total purchase
price consideration of the Alias acquisition. The Alias Restructuring Plan was established in accordance with
EITF 95-3, and the total estimated cost of the Alias Restructuring Plan was originally $11.1 million. This plan
involved termination of approximately 130 positions worldwide at an estimated cost for severance and
outplacement of approximately $8.8 million. In addition, this plan also involves costs associated with exiting
leased facilities and abandonment of certain assets of approximately $2.3 million. Autodesk completed the
integration of Alias during the second quarter of fiscal 2007.
The following unaudited pro forma financial information summarizes the combined results of operations of
Autodesk and Alias, on a pro forma basis, as though the companies had been combined as of the beginning of
each of the periods presented. The pro forma financial information is presented for informational purposes only
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2008 Annua
l Report