Goodwill and Acquired Intangibles

3 Months Ended

Mar. 29, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill during the three months ended March 29, 2014 were as follows:



	Gross Carrying Amount
	(In thousands)
Balance as of December 28, 2013	$	456,905
Goodwill resulting from acquisitions	20,756
Effect of foreign currency translation	1,329
Balance as of March 29, 2014	$	478,990

Acquired Intangibles, Net

Acquired intangibles as of March 29, 2014 were as follows, excluding intangibles that were fully amortized as of December 28, 2013:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	248,836	$	(56,632	)	$	192,204
Agreements and relationships	161,892		(47,679		)	114,213
Tradenames, trademarks and patents	9,719		(3,210		)	6,509
Total acquired intangibles with definite lives	420,447		(107,521		)	312,926
In-process technology	3,572		—			3,572
Total acquired intangibles	$	424,019	$	(107,521	)	$	316,498

In-process technology as of March 29, 2014 consists of acquired projects that, if completed, will contribute to Cadence’s ability to offer additional IP solutions to its customers. As of March 29, 2014, these projects were expected to be complete in six to twelve months. During the three months ended March 29, 2014, there were no significant transfers from in-process technology to existing technology.

Acquired intangibles as of December 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	$	237,624	$	(53,243	)	$	184,381
Agreements and relationships	170,760		(53,607		)	117,153
Distribution rights	30,100		(30,100		)	—
Tradenames, trademarks and patents	9,519		(2,870		)	6,649
Total acquired intangibles with definite lives	448,003		(139,820		)	308,183
In-process technology	3,510		—			3,510
Total acquired intangibles	$	451,513	$	(139,820	)	$	311,693

Amortization expense from existing technology and maintenance agreements is included in cost of product and maintenance. Amortization of acquired intangibles for the three months ended March 29, 2014 and March 30, 2013 was as follows:



	Three Months Ended
	March 29, 2014		March 30, 2013
	(In thousands)
Cost of product and maintenance	$	7,576	$	3,807
Amortization of acquired intangibles	5,210		3,791
Total amortization of acquired intangibles	$	12,786	$	7,598

Estimated amortization expense for intangible assets with definite lives for the following five fiscal years and thereafter is as follows:



	(In thousands)
2014 – remaining period	$	38,792
2015	51,220
2016	45,360
2017	41,550
2018	38,609
Thereafter	97,395
Total estimated amortization expense	$	312,926

- 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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