Autodesk 2004 Annual Report Download - page 73

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Management’s allocation of the purchase consideration, which is based on valuations of acquired
assets performed by a third party, is as follows (in thousands):
Fixed assets ................................................ $ 921
Developed technologies (3 year useful life)............... 21,200
Deferred stock-based compensation ..................... 4,847
Deferred tax asset ......................................... 5,298
Goodwill ................................................... 107,234
$139,500
The $107.2 million of goodwill, which is not deductible for tax purposes, was assigned to the
Building Solutions Division of Autodesk’s Design Solutions Segment. The goodwill is attributed to the
premium paid for potential next generation technology and the opportunity for enhanced revenue growth
through the development and sale of integrated model based design applications for downstream use of
modeling data.
As part of the acquisition, Autodesk granted Revit employees 0.3 million options in connection with the
assumption of their outstanding unvested options. The fair value of these options of $5.4 million was added
to the purchase consideration. At January 31, 2004, the intrinsic value of the stock options, which relate to
future services, totaled $0.3 million and is included in deferred compensation within stockholders’ equity.
During the fourth quarter of fiscal 2003, an adjustment to the purchase price of $15.4 million was
recorded in order to establish a deferred tax asset. Accordingly, goodwill was reduced by $15.4 million.
Software Division of Media 100, Inc. (“Media 100”)
During October 2001, Autodesk acquired the software division of Media 100 for $16.0 million in cash.
The acquisition provided Autodesk with streaming media technology for, among other things, the
immediate playback of content over the Internet.
Management’s allocation of the purchase price, which is based on valuations of acquired assets
performed by a third party, is as follows (in thousands):
Inventory and computer hardware ....................... $ 558
Intangible assets and amounts:
Developed technologies (3 year useful life) ........... 7,380
Brand names (6 year useful life) ........................ 620
In-process research and development (“IPR&D”) ......... 3,180
Goodwill ................................................... 4,262
$16,000
The value assigned to IPR&D, which was expensed at the time of the acquisition, was determined by
identifying projects in areas where technological feasibility had not been achieved and alternative future
uses did not exist.
The $4.3 million of goodwill, which is deductible for tax purposes, was assigned to the Discreet Segment
of Autodesk. The goodwill represented the premium paid to acquire the streaming media technology,
which is an integral part of future products.
During the fourth quarter of fiscal 2004, as part of its annual impairment analysis, Autodesk identified
a shortfall between the undiscounted cash flows and remaining net book values of developed technologies
and brand names associated with Media 100. Consequently, Autodesk wrote-down the remaining net book
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Business Combinations (Continued)
63