Commitments and Contingencies Commitments and Contingencies

12 Months Ended

Jan. 03, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Lease Commitments

Equipment, vehicles and facilities are leased under various operating leases expiring at various dates through 2025. Certain of these leases contain renewal options and escalating rent payments. Rental expense is recognized on a straight-line basis and was as follows during fiscal 2014, 2013 and 2012:

	2014		2013		2012
	(In thousands)
Rent expense	$	26,666	$	25,450	$	23,646

As of January 3, 2015, future minimum lease payments under non-cancelable operating leases were as follows:

			Committed
	Operating		Sub-lease			Net Operating
	Leases		Income			Leases
For the fiscal years:	(In thousands)
2015	$	25,140	$	(1,256	)	$	23,884
2016	19,165		(750		)	18,415
2017	11,468		(84		)	11,384
2018	7,603		—			7,603
2019	5,183		—			5,183
Thereafter	2,503		—			2,503
Total lease payments	$	71,062	$	(2,090	)	$	68,972

Of the operating lease payments noted above, $1.3 million was accrued as part of Cadence’s restructuring plans as of January 3, 2015 and will be charged against the restructuring accrual as paid.

Purchase Obligations

Cadence had purchase obligations of $47.2 million as of January 3, 2015 that were associated with agreements or commitments for purchases of goods or services.

Legal Proceedings

From time to time, Cadence is involved in various disputes and litigation that arise in the ordinary course of business. These include disputes and lawsuits related to intellectual property, indemnification obligations, mergers and acquisitions, licensing, contracts, distribution arrangements and employee relations matters. At least quarterly, Cadence reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on Cadence’s judgments using the best information available at the time. As additional information becomes available, Cadence reassesses the potential liability related to pending claims and litigation matters and may revise estimates.

Other Contingencies

Cadence provides its customers with a warranty on sales of hardware products, generally for a 90-day period. Cadence did not incur any significant costs related to warranty obligations during fiscal 2014, 2013 and 2012.

Cadence’s product license and services agreements typically include a limited indemnification provision for claims from third parties relating to Cadence’s intellectual property. If the potential loss from any indemnification claim is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. The indemnification is generally limited to the amount paid by the customer. Cadence did not incur any significant losses from indemnification claims during fiscal 2014, 2013 and 2012.