Autodesk 2002 Annual Report Download - page 54

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The acquisition was accounted for under the purchase method of accounting pursuant to SFAS 141.
Management’s allocation of the purchase price, which is based on valuations of acquired assets performed by a
third party, resulted in negative goodwill of approximately $11.0 million. In accordance with Statement of
Financial Accounting Standards No. 141, “Business Combinations,” the carrying values of Buzzsaw’s long-lived
assets were reduced proportionately to the extent of the negative goodwill balance. Management’s allocation of
the purchase price is as follows (in thousands):
Cash .............................................................. $ 229
Accounts receivable, net .............................................. 1,426
Prepaid and other current assets ......................................... 798
Deferred tax assets ................................................... 23,787
Deposits and other long-term assets ...................................... 730
Total assets ..................................................... 26,970
Liabilities assumed ................................................... 13,345
Deferred revenues ................................................... 2,625
Total liabilities .................................................. 15,970
Net assets .......................................................... $11,000
The deferred tax asset represents the expected utilization of Buzzsaw’s net operating losses that Autodesk
expects to realize and the tax effect of temporary differences resulting from the allocation of the purchase price.
The following unaudited pro forma summary is provided for illustrative purposes only and is not necessarily
indicative of the consolidated results of operations for future periods or that actually would have been realized
had Autodesk acquired the remaining 60 percent interest in Buzzsaw on February 1, 2000.
The pro forma summary includes the impact of certain adjustments resulting from the allocation of the
purchase consideration and reversal of the equity in net losses that Autodesk recognized.
Fiscal year ended January 31,
(in thousands, except per share data) 2002 2001 2000
(unaudited)
Netrevenues............................................ $953,255 $941,678 $848,051
Netincome ............................................. $ 76,042 $ 85,856 $ 5,928
Basic earnings per share ................................... $ 0.70 0.75 $ 0.05
Diluted earnings per share ................................. $ 0.68 $ 0.73 $ 0.05
Autodesk believes that Buzzsaw’s future ongoing operating losses will be significantly less than what
Buzzsaw historically incurred. In an effort to reduce operating costs and expenses, Buzzsaw eliminated 141
positions (55 percent of its workforce) between January 1, 2001, and August 20, 2001. Additionally, as part of
the acquisition, Autodesk closed Buzzsaw’s headquarters office in San Francisco, California, and moved the
Buzzsaw employees to a new Autodesk office location, which is also in San Francisco (see Note 11,
Restructuring and Other for further discussion). As a result of these recent actions, Autodesk does not believe
that the pro forma information above is indicative of Autodesk’s future combined operating results or financial
position.
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