Autodesk 2006 Annual Report Download - page 119

Download and view the complete annual report

Please find page 119 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

Management’s allocation of the purchase consideration, which is based on valuations of acquired assets
performed by a third-party appraiser, is as follows:
Developed technology (4 year useful life) ................. $ 3.1
In-process research and development ..................... 1.2
Customer relationships (3.5 year useful life) ............... 0.2
Goodwill ................................................... 9.4
Net tangible assets ........................................ 0.1
$14.0
The value assigned to IPR&D, which was expensed during the second quarter of fiscal 2006, was determined
by identifying projects in areas where technological feasibility had not been achieved and alternative future uses
did not exist.
The goodwill balance of $9.4 million, which is deductible for tax purposes, was assigned to the Media and
Entertainment Segment. This acquired asset relates to the premium paid for Colorfront’s color correction
technology, which provides Autodesk with further long-term growth opportunities in the digital film industry.
Compass Systems GmbH (“Compass”)
In March 2005, Autodesk acquired certain assets of Compass Systems GmbH, the European-based developer
of the Compass family of data management solutions, for cash consideration of $16.5 million. The acquisition is
intended to allow Autodesk to more quickly expand its data management solution and deliver on its plans to
provide a comprehensive data management solution for small- and medium-size manufacturers. Immediately
prior to the acquisition, Compass was owned 50.1% by one of Autodesk’s largest resellers.
Management’s allocation of the purchase consideration, based on a valuation of acquired assets and
liabilities performed in-part by a third-party appraiser, is as follows:
Developed technology (3 year useful life) ................. $ 3.7
Customer relationships (7 year useful life) ................ 6.5
Backlog .................................................... 0.2
Goodwill ................................................... 5.8
Net tangible assets ........................................ 0.3
$16.5
The goodwill balance of $5.8 million was assigned to the Manufacturing Solutions Division of Autodesk’s
Design Solutions Segment and is deductible for tax purposes. This asset is attributed to the premium paid for
the electronic data management and product data management channel expertise which provides an opportunity
for Autodesk to enhance its growth in these markets.
MechSoft.com, Inc. (“MechSoft”)
In April 2004, Autodesk acquired certain assets of MechSoft for approximately $6.5 million in cash. This
acquisition provides technology that complements Autodesk’s manufacturing solutions with tools that enable
users to embed engineering calculations into their designs based on how parts function.
2006 Annual Report
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Business Combinations (Continued)
73