Autodesk 2003 Annual Report Download - page 68

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 SFAS 141, 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 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,
2002 2001
(in thousands, except per
share data)
Netrevenues ............................................... $953,255 $941,678
Netincome ................................................ $76,042 $ 85,856
Basic earnings per share ...................................... $0.70 $ 0.75
Diluted earnings per share ..................................... $0.68 $ 0.73
Autodesk believes that Buzzsaw’s future on-going 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).
During the period from February 1, 2001 to August 20, 2001, Autodesk recognized $1.2 million of losses
associated with its equity investment in Buzzsaw. None of these losses were recognized during the second or
third quarters since Autodesk had previously expensed all prior investments made. During the fiscal year ended
January 31, 2001, Autodesk recognized $16.3 million of losses associated with its equity investment in Buzzsaw.
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