Goodwill and Acquired Intangibles

6 Months Ended

Jul. 04, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill during the six months ended July 4, 2015 were as follows:



	Gross Carrying Amount
	(In thousands)
Balance as of January 3, 2015	$	553,767
Effect of foreign currency translation	64
Balance as of July 4, 2015	$	553,831

Acquired Intangibles, Net

Acquired intangibles as of July 4, 2015 were as follows, excluding intangibles that were fully amortized as of January 3, 2015:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	328,447	$	(104,637	)	$	223,810
Agreements and relationships	173,554		(75,905		)	97,649
Tradenames, trademarks and patents	10,119		(4,840		)	5,279
Total acquired intangibles with definite lives	512,120		(185,382		)	326,738
In-process technology	1,600		—			1,600
Total acquired intangibles	$	513,720	$	(185,382	)	$	328,338

In-process technology as of July 4, 2015 consisted of acquired projects that, if completed, will contribute to Cadence’s ability to offer additional software solutions to its customers. As of July 4, 2015, these projects were expected to be complete in three to six months. During the six months ended July 4, 2015, there were no transfers from in-process technology to existing technology.

Acquired intangibles as of January 3, 2015 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	$	328,325	$	(84,822	)	$	243,503
Agreements and relationships	175,202		(65,512		)	109,690
Tradenames, trademarks and patents	10,619		(4,480		)	6,139
Total acquired intangibles with definite lives	514,146		(154,814		)	359,332
In-process technology	1,600		—			1,600
Total acquired intangibles	$	515,746	$	(154,814	)	$	360,932

Amortization expense from existing technology and maintenance agreements is included in cost of product and maintenance. Amortization of acquired intangibles for the three and six months ended July 4, 2015 and June 28, 2014 was as follows:



	Three Months Ended				Six Months Ended
	July 4, 2015		June 28, 2014		July 4, 2015		June 28, 2014
	(In thousands)
Cost of product and maintenance	$	10,105	$	8,613	$	20,278	$	16,189
Amortization of acquired intangibles	6,119		5,579		12,350		10,789
Total amortization of acquired intangibles	$	16,224	$	14,192	$	32,628	$	26,978

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



	(In thousands)
2015 – remaining period	$	31,600
2016	57,330
2017	52,627
2018	48,944
2019	42,935
Thereafter	93,302
Total estimated amortization expense	$	326,738

- 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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