Autodesk 2003 Annual Report Download - page 69

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 11. Restructuring and Other
The following table sets forth the components of Restructuring and Other for the fiscal years ended
January 31,:
2003 2002 2001
(In thousands)
Restructuring and exit charges, net .............................. $25,887 $28,097 $(1,234)
Acquired in-process research and development charges ............. — 3,180 —
Goodwill write off ........................................... — 2,353 —
$25,887 $33,630 $(1,234)
During fiscal 2003 Autodesk recognized $25.9 million of restructuring and other charges resulting solely
from restructuring activities. Of the $25.9 million, $10.7 million related to additional costs associated with the
fiscal 2002 restructuring plan, $18.2 million related to a new fiscal 2003 restructuring plan and a credit of $3.0
million was recorded as a result of accrual reversals. Of the $10.7 million, $1.2 million related to the further
consolidation of certain European offices and the remaining $9.5 million resulted from changes to estimated
accrued liabilities related to vacated facilities. Since the offices were closed in fiscal 2002, there has been a
significant downturn in the real estate market, particularly in Northern California where some of the offices are
located. As such, Autodesk is unable to either buy-out the remaining lease obligations at favorable amounts or
sub-lease the space at amounts originally estimated during fiscal 2002.
During the third quarter of fiscal 2003 the Board of Directors approved a new restructuring plan that
resulted in the termination of 394 employees and the closure of several additional international and domestic
offices. This plan was designed to help further reduce operating expense levels as well as redirect resources to
product development and other critical areas. During the year ended ended January 31, 2003, Autodesk
recognized $18.2 million of expenses as part of this restructuring effort, of which $16.5 million related to
employee termination costs and $1.7 million related to office closures. Employee termination costs consisted of
wage continuation, advance notice pay, medical benefits and outplacement costs for 184 employees in the U.S.
and 210 employees outside the U.S. Office closure costs included losses on operating leases and the write-off of
leasehold improvements and equipment. During fiscal year 2003 we also reversed $2.0 million and $1.0 million
of accruals related to restructuring reserves established in fiscal 2002 and fiscal 2000, respectively. The facility-
related accruals were settled for less than originally estimated.
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 Infrastructure Solutions Division (formerly GIS) business and resulted from a
strategic decision to abandon the underlying product line.
Of the $3.6 million of RedSpark wind-down costs, $1.3 million related to losses on asset disposals and
$2.3 million related to employee termination costs.
Of the $24.5 million associated with restructuring activities during fiscal 2002, $19.4 million related to the
closure of several domestic and international offices and $5.1 million related to employee termination costs.
Office closure costs of $19.4 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
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