Autodesk 2004 Annual Report Download - page 74

value by $1.8 million to an amount equal to the fair value of the Media 100-based products. This charge was
recorded in cost of license and other revenues for the Discreet Segment of Autodesk.
Buzzsaw.com, Inc. (“Buzzsaw”)
On August 20, 2001, Autodesk acquired the remaining outstanding stock of Buzzsaw it did not own for
$15.0 million in cash plus the assumption of $13.3 million of liabilities. Prior to the acquisition, Autodesk held
a 40% interest in Buzzsaw, a privately held company that provided leading online collaboration applications
to improve efficiencies and reduce costs for the building industry. The acquisition of Buzzsaw is part of
Autodesk’s strategy to extend its business to complementary new markets. Buzzsaw’s results of operations,
which are not material in relation to Autodesk, have been included in the consolidated financial statements
since the acquisition date. Prior to the acquisition date, Autodesk accounted for its interest in Buzzsaw using
the equity method of accounting.
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 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% interest in Buzzsaw on February 1, 2001.
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.
(in thousands, except per share data)
Fiscal year ended
January 31,
2002
Net revenues .............................................. $953,255
Net income ................................................ $ 76,042
Basic earnings per share .................................. $ 0.70
Diluted earnings per share ................................ $ 0.68
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.
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Business Combinations (Continued)
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