Goodwill and Acquired Intangibles

9 Months Ended

Sep. 28, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill during the nine months ended September 28, 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	(4,958		)
Balance as of September 28, 2013	$	456,267

Acquired Intangibles, Net

Acquired intangibles as of September 28, 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	$	236,774	$	(46,170	)	$	190,604
Agreements and relationships	171,422		(49,199		)	122,223
Distribution rights	30,100		(30,100		)	—
Tradenames, trademarks and patents	9,519		(2,535		)	6,984
In-process technology	3,996		—			3,996
Total acquired intangibles	$	451,811	$	(128,004	)	$	323,807

In-process technology as of September 28, 2013 consists of projects acquired during the nine months ended September 28, 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 6 to 12 months. During the nine months ended September 28, 2013, Cadence completed certain projects previously included in in-process technology and transferred approximately $5.5 million to existing technology.

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 for intangible assets from existing technology and maintenance agreements is included in cost of product and maintenance. Amortization of acquired intangibles for the three and nine months ended September 28, 2013 and September 29, 2012 was as follows:



	Three Months Ended				Nine Months Ended
	September 28, 2013		September 29, 2012		September 28, 2013		September 29, 2012
	(In thousands)
Cost of product and maintenance	$	7,191	$	3,874	$	16,758	$	9,664
Amortization of acquired intangibles	5,141		3,876		14,259		11,305
Total amortization of acquired intangibles	$	12,332	$	7,750	$	31,017	$	20,969

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



	(In thousands)
2013 – remaining period	$	12,446
2014	49,929
2015	49,378
2016	43,666
2017	40,060
Thereafter	128,328
Total estimated amortization expense	$	323,807

- 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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