Autodesk 2006 Annual Report Download - page 116

Download and view the complete annual report

Please find page 116 of the 2006 Autodesk annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

In addition, Autodesk offers a non-qualified deferred compensation plan to certain key employees
whereby they may defer a portion (or all) of their annual compensation until retirement or a different date
specified by the employee in accordance with terms of the plan. (See Note 4, “Restricted Financial Instruments”,
for further discussion).
Note 10. Business Combinations
The following acquisitions were accounted for under Statement of Financial Accounting Standards No. 141,
“Business Combinations (“SFAS 141”). Accordingly, the results of operations of each acquisition are included in
the accompanying Consolidated Statements of Income since the acquisition dates, and the related assets and
liabilities were recorded based upon their relative fair values at their respective acquisition dates. Pro forma
financial information has been presented for the Alias acquisition. Pro forma financial information for the other
acquired entities has not been presented, as their historical operations were not material to Autodesk’s
consolidated financial statements either individually or in the aggregate.
Alias Systems Holdings, Inc. (“Alias”)
In January 2006, Autodesk acquired Alias Systems Holdings, Inc., a privately held developer of 3D graphics
technology for total cash consideration of $196.8 million. A portion of the total cash consideration, $36.4 million,
has been set aside in an escrow account for two years following the acquisition date. The escrow is to be held
as partial security for certain losses incurred by Autodesk in the event of certain breaches of the representations
and warranties covered in the agreement.
In addition, Autodesk also assumed all outstanding unvested options to purchase shares of Alias
common stock, which converted into options to purchase 198,405 shares of Autodesk common stock. The fair
value of these stock options of $8.1 million increased the total purchase price consideration. The intrinsic value
of these options, which relates to future services, was $8.2 million and is included in deferred compensation within
stockholders’ equity.
Autodesk incurred approximately $1.8 million in costs directly related to the consummation of this
transaction. These costs were reflected in the total purchase price consideration.
The acquisition is being integrated into the Manufacturing Solutions Divisions of the Design Solutions
Segment and into the Media and Entertainment Segment.
Management’s preliminary allocation ofthe purchase price,whichwas based onvaluations ofacquired assets
and liabilities performed in-part by a third-party appraiser, is as follows:
Developed technologies (6 year useful life) ............... $ 34.8
In-process research and development ..................... 7.9
Customer relationships (7 year useful life) ................ 29.8
Tradenames (6 year useful life) ............................ 8.1
Goodwill ................................................... 123.0
Deferred revenue .......................................... (5.1)
Net tangible assets ........................................ 11.1
Restructuring reserve ...................................... (11.1)
$198.5
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Employee and Director Benefit Plans (Continued)
70