Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Lease Commitments

Facilities, equipment and vehicles are leased under various operating leases expiring at various dates through 2031. 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 2016, 2015 and 2014:



	2016		2015		2014
	(In thousands)
Rent expense	$	28,216	$	27,406	$	26,666

As of December 31, 2016, 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)
2017	$	20,735	$	(67	)	$	20,668
2018	17,647		—			17,647
2019	13,918		—			13,918
2020	9,040		—			9,040
2021	7,436		—			7,436
Thereafter	22,195		—			22,195
Total lease payments	$	90,971	$	(67	)	$	90,904

Of the operating lease payments noted above, $0.1 million was accrued as part of Cadence’s restructuring plans as of December 31, 2016 and will be charged against the restructuring accrual as paid.

Purchase Obligations

Cadence had purchase obligations of $30.4 million as of December 31, 2016 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 2016, 2015 or 2014.

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 2016, 2015 or 2014.