Autodesk 2005 Annual Report Download - page 80

Note 9. Restructuring Reserves
The following table sets forth the restructuring activities for the fiscal years ended January 31, 2003, 2004
and 2005 (in thousands). The balance at January 31, 2005 is included in other accrued liabilities on our
Consolidated Balance Sheet.
Office
Closure Costs
Employee
Termination Costs Total
Balance at January 31, 2002 ......................... $18,044 $ 4,508 $ 22,552
Additions related to 2002 plan .................... 10,693 — 10,693
Additions related to 2003 plan .................... 1,796 16,451 18,247
Charges utilized (1) ................................ (15,074) (12,707) (27,781)
Reversals .......................................... (2,053) — (2,053)
Balance at January 31, 2003 .......................... 13,406 8,252 21,658
Additions related to 2002 plan .................... 1,098 — 1,098
Additions related to 2004 plan .................... 149 3,610 3,759
Charges utilized (1) ................................ (6,220) (9,218) (15,438)
Reversals .......................................... (197) (1,477) (1,674)
Balance at January 31, 2004 ......................... 8,236 1,167 9,403
Additions related to 2002 plan .................... 3,124 — 3,124
Additions related to 2004 plan .................... 3,897 19,816 23,713
Charges utilized (1) ................................ (6,416) (16,616) (23,032)
Reversals .......................................... (137) — (137)
Balance at January 31, 2005 .......................... $ 8,704 $ 4,367 $ 13,071
(1) Charges utilized include $1.2 million, $0.1 million, and $1.3 million of non-cash charges during fiscal 2005,
2004 and 2003, respectively. Autodesk expects to pay the employee termination costs within one year, and
the office closure costs over a period ranging from one to five years.
During the fourth quarter of fiscal 2004, the Board of Directors approved a restructuring plan that involved
the elimination of approximately 600 positions and the closure of a number of offices worldwide with an
estimated charge of $37.0 million. This plan, which we refer to as the fiscal 2004 restructuring plan, was designed
to improve efficiencies across the organization, reduce operating expense levels to help achieve our targeted
operating margins and redirect resources to product development, sales development and other critical areas.
As a result of the restructuring activities completed during the fourth quarter of fiscal 2004 and throughout fiscal
2005 and through attrition, we achieved our targeted efficiencies with a lower level of involuntary terminations
than originally anticipated (402 worldwide); consequently, the total charges under the fiscal 2004 restructuring
plan were $27.5 million, rather than the $37.0 million estimate noted above. Of the $27.5 million, $23.4 million was
attributable to one-time termination benefits including severance benefits, medical benefits and outplacement
costs. In addition, approximately $4.0 million of the restructuring charges were attributable to office closure
costs, which included losses on operating leases and the write-off of leasehold improvements and equipment.
The fiscal 2004 restructuring plan was completed by the end of fiscal 2005.
During fiscal 2005, we recorded net restructuring charges of $26.7 million, of which $23.7 million related to
the fiscal 2004 restructuring plan. Of this amount, $19.8 million related to employee termination costs for 316
employees worldwide (186 in the United States and 130 outside the United States) and $3.9 million related to
the closure of facilities. Also, we recorded net restructuring charges of approximately $3.0 million related to the
fiscal 2002 restructuring plan for additional office closure costs originally established under the fiscal 2002
restructuring plan. Since the office closures in fiscal 2002, there has been a significant downturn in the
commercial real estate market, particularly in areas of the United Kingdom where some of the offices are located.
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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