Autodesk 2002 Annual Report Download - page 57

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 11. Restructuring and Other
During fiscal 2002 Autodesk recognized $33.6 million of restructuring and other charges. These charges
resulted from restructuring activities ($24.5 million), in-process research and development expenses related to
the acquisition of Media 100 ($3.2 million—see Note 10), the wind-down costs associated with the dissolution of
RedSpark ($3.6 million—see Note 5), and a goodwill write-off of $2.3 million. The write-off of goodwill
primarily related to an acquired GIS business and resulted from a strategic decision to abandon the underlying
product line.
Of the $3.6 million of RedSpark wind-down costs, $1.5 million related to losses on asset disposals and $2.1
million related to employee termination costs. At January 31, 2002 the remaining liability totaled $0.1 million.
Of the $24.5 million associated with restructuring activities during fiscal 2002, $19.2 million related to the
closure of several domestic and international offices and $5.3 million related to employee termination costs.
Office closure costs of $19.2 million included losses on operating leases and the write-off of leasehold
improvements and equipment. These asset write-offs totaled $1.8 million. Employee termination costs associated
with staff reductions mostly in the United States consisted of wage continuation, advance notice pay and medical
benefits. These restructuring activities were part of a formal exit plan that was approved by the Board of
Directors and were part of an effort to reduce operating expense levels.
During fiscal 2002, 236 employee positions were terminated, approximately one-third of which were held
by RedSpark employees, as a result of the dissolution of RedSpark.
The following table sets forth the restructuring activities, including RedSpark wind-down costs, which
occurred during fiscal 2002. The table excludes the goodwill write-off and in-process research and development
charge.
Balance at
February 1,
2001 Additions
Charges
Utilized Reversals
Balance at
January 31,
2002
(in thousands)
Office closure costs .......................... $ 211 $19,408 $(2,125) $ — $17,494
Employee termination costs ................... 180 7,397 (3,069) — 4,508
Losses on asset disposals - RedSpark ............ — 1,292 (1,292) — —
Total ................................. $ 391 $28,097 $(6,486) $ — $22,002
In addition to the restructuring charges described above, Autodesk recorded a $2.5 million liability during
the third quarter of fiscal 2002 for the closure of Buzzsaw’s headquarters. This amount is reflected in the table
above. The liability, which consisted primarily of losses on the underlying operating lease was recorded as part
of the Buzzsaw purchase consideration allocation.
During fiscal 2001, Autodesk recorded credits totaling $1.2 million, which resulted from accrual reversals.
The underlying liabilities, which were originally established in fiscal 2000 primarily as a result of restructuring
activity, were settled for less than originally estimated.
During fiscal 2000, Autodesk recorded restructuring and other charges totaling $34.7 million, which
primarily resulted from the acquisition of Discreet ($17.1 million), in-process research and development
expenses resulting from the acquisition of VISION ($3.3 million) and a corporate restructuring that occurred
during the third quarter ($15.5 million). These charges were offset by a $1.0 million reversal of a litigation
reserve established in fiscal 1999. The litigation matter was settled for less than originally estimated.
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