Goodwill and Acquired Intangibles

6 Months Ended

Jun. 29, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill during the six months ended June 29, 2013 were as follows:



	Gross Carrying Amount
	(In thousands)
Balance as of December 29, 2012	$	233,266
Goodwill resulting from acquisitions	227,959
Effect of foreign currency translation	(3,669		)
Balance as of June 29, 2013	$	457,556

Acquired Intangibles, Net

Acquired intangibles as of June 29, 2013 were as follows, excluding intangibles that were fully amortized as of December 29, 2012:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	231,562	$	(39,088	)	$	192,474
Agreements and relationships	171,550		(44,018		)	127,532
Distribution rights	30,100		(30,100		)	—
Tradenames, trademarks and patents	9,519		(2,200		)	7,319
In-process technology	10,380		—			10,380
Total acquired intangibles	$	453,111	$	(115,406	)	$	337,705

In-process technology as of June 29, 2013 consists of projects acquired during the six months ended June 29, 2013, and if completed, will contribute to Cadence's ability to offer additional IP solutions to its customers. These projects are expected to be complete in 12 to 24 months.

Acquired intangibles as of December 29, 2012 were as follows, excluding intangibles that were fully amortized as of December 31, 2011:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	112,940	$	(30,171	)	$	82,769
Agreements and relationships	133,764		(37,769		)	95,995
Distribution rights	30,100		(28,595		)	1,505
Tradenames, trademarks and patents	12,485		(7,816		)	4,669
Total acquired intangibles	$	289,289	$	(104,351	)	$	184,938

Amortization expense from existing technology intangible assets and maintenance agreement intangible assets is included in cost of product and maintenance. Amortization of acquired intangibles for the three and six months ended June 29, 2013 and June 30, 2012 was as follows:



	Three Months Ended				Six Months Ended
	June 29, 2013		June 30, 2012		June 29, 2013		June 30, 2012
	(In thousands)
Cost of product and maintenance	$	5,760	$	2,891	$	9,567	$	5,790
Amortization of acquired intangibles	5,327		3,643		9,118		7,429
Total amortization of acquired intangibles	$	11,087	$	6,534	$	18,685	$	13,219

Estimated amortization expense for the following five fiscal years and thereafter is as follows:



	(In thousands)
2013 – remaining period	$	24,531
2014	50,152
2015	49,590
2016	43,854
2017	40,236
Thereafter	129,342
Total estimated amortization expense	$	337,705

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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