Autodesk 2012 Annual Report Download - page 122

Other Intangible Assets, Net
Other intangible assets include purchased technologies, customer relationships, trade names and the related accumulated
amortization. These assets are shown as “Purchased technologies, net” and as part of “Other assets” in the Consolidated
Balance Sheet. The majority of Autodesk’s other intangible assets are amortized to expense over the estimated economic life of
the product, which ranges from two to seven years. Amortization expense for purchased technologies, customer relationships,
trade names, patents, and user lists was $71.8 million in fiscal 2012, $57.8 million in fiscal 2011 and $61.2 million in fiscal
2010.
Other intangible assets and related accumulated amortization at January 31 were as follows:
Purchased technologies, at cost(1)
Customer relationships, trade names, patents, and user lists, at cost(2)
Less: Accumulated amortization
Other intangible assets, net
2012
$ 378.7
215.3
594.0
(445.2)
$ 148.8
2011
$ 313.1
179.1
492.2
(373.4)
$ 118.8
____________________
(1) Purchased technologies include $1.2 million and zero of in-process research and development technology as of January 31, 2012 and
January 31, 2011, respectively. In-process research and development is an indefinite lived asset that is held and tested at least annually
for impairment until such time that it becomes fully developed technology. Once development is completed, the technology is
amortized to expense over an applicable useful life.
(2) Included as a net balance in “Other assets” in the Consolidated Balance Sheet. Customer relationships and trade names include the
effects of foreign currency translation.
The weighted average amortization period for purchased technologies, customer relationships and trade names during
fiscal 2012 was 5.4 years. Expected future amortization expense for purchased technologies, customer relationships and trade
names for each of the fiscal years ended thereafter is as follows:
2013
2014
2015
2016
2017
Thereafter
Total
Year ending
January 31,
$ 65.7
47.1
25.5
7.9
1.0
1.6
$ 148.8
Goodwill
Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations. Autodesk
assigns goodwill to the reportable segment associated with each business combination, and tests goodwill for impairment
annually in its fourth fiscal quarter or more often if circumstances indicate a potential impairment. When assessing goodwill for
impairment, Autodesk uses discounted cash flow models that include assumptions regarding reportable segments’ projected
cash flows (“Income Approach”) and corroborates it with the estimated consideration that the Company would receive if there
were to be a sale of the reporting segment (“Market Approach”). Variances in these assumptions could have a significant impact
on Autodesk’s conclusion as to whether goodwill is impaired or the amount of any impairment charge. Impairment charges, if
any, result from instances where the fair values of net assets associated with goodwill are less than their carrying values. The
process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points
during the analysis. The value of Autodesk’s goodwill could also be impacted by future adverse changes such as: (i) declines in
Autodesk’s actual financial results, (ii) a sustained decline in Autodesk’s market capitalization, (iii) significant slowdown in the
worldwide economy or the industries Autodesk serves, or (iv) changes in Autodesk’s business strategy or internal financial
results forecasts. There was no impairment of goodwill during the year ended January 31, 2012. A hypothetical 10% decrease in
the fair value of Autodesk’s Platform Solutions and Emerging Business; Manufacturing; Architecture, Engineering and
Construction; or Media and Entertainment reporting units would not have an impact on the carrying value, nor result in an
impairment, of goodwill shown on Autodesk’s balance sheet as of January 31, 2012 for the respective reporting units.
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