Autodesk 2006 Annual Report Download - page 120

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Management’s allocation of the purchase consideration, which is based on valuations of acquired assets
performed, in part, by a third party appraiser, is as follows (in thousands):
Developed technologies (3 year useful life) ............... $1.9
Other assets ............................................... 0.7
Goodwill ................................................... 3.9
$6.5
The $3.9 million of goodwill, which was deductible for tax purposes, was assigned to the Manufacturing
Solutions Division of the Design Solutions Segment. The goodwill was attributed to the premium paid for a reduced
time to market and competitive advantage with respect to future growth of Autodesk’s 3D-based products.
Note 11. Restructuring Reserves
During the fourth quarter of fiscal 2006, management approved a restructuring plan directly resulting from
the Alias acquisition and involving the elimination of employee positions, facilities and fixed assets of Alias (“Alias
Restructuring Plan”). Total estimated cost of the Alias Restructuring Plan is $11.1 million. The total restructuring
reserve established for this plan was reflected as an adjustment to the total purchase price consideration of the
Alias acquisition. The Alias Restructuring Plan was established in accordance with Emerging Issues Task
Force 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.” Therefore, the utilization
from this reserve will not be reflected as a restructuring expense but instead reflected as a reduction from
this reserve.
During the fourth quarter of fiscal 2004, the Board of Directors approved a restructuring plan that resulted
in the elimination of 402 positions and the closure of a number of offices worldwide with a total cost of
$27.5 million (“Fiscal 2004 Plan”). This plan was designed to improve efficiencies across the organization, reduce
operating expense levels to help achieve the Company’s targeted operating margins and redirect resources to
product development, sales development and other critical areas. Of the $27.5 million, $23.4 million was
attributable to termination benefits including severance benefits, medical benefits and outplacement costs. In
addition, approximately $4.0 million of the restructuring charges was attributable to lease termination costs,
which include losses on operating leases as well as the impairment of related leasehold improvements and
equipment. The actions approved under the Fiscal 2004 Plan were completed during the fourth quarter of fiscal
2005. The remaining outstanding lease termination costs relate to operating lease agreements expiring between
fiscal 2007 and fiscal 2012.
During the second quarter of fiscal 2002, the Board of Directors approved a formal restructuring plan that
included employee terminations and the closure of certain facilities worldwide (“Fiscal 2002 Plan”). This plan
was designed to reduce the Company’s overall operating expense levels. The actions approved under the Fiscal
2002 Plan were completed during the first half of fiscal 2003. The remaining outstanding liabilities relate to on-
going lease termination costs for outstanding operating lease agreements expiring between the fourth quarter
of fiscal 2006 and the fourth quarter of fiscal 2015.
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10. Business Combinations (Continued)
74