Goodwill and Acquired Intangibles

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill during the six months ended June 30, 2018 were as follows:



	Gross Carrying Amount
	(In thousands)
Balance as of December 30, 2017	$	666,009
Effect of foreign currency translation	(2,689		)
Balance as of June 30, 2018	$	663,320

Acquired Intangibles, Net

Acquired intangibles as of June 30, 2018 were as follows, excluding intangibles that were fully amortized as of December 30, 2017:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	330,756	$	(207,198	)	$	123,558
Agreements and relationships	146,466		(93,186		)	53,280
Tradenames, trademarks and patents	10,718		(7,671		)	3,047
Total acquired intangibles with definite lives	487,940		(308,055		)	179,885
In-process technology	71,500		—			71,500
Total acquired intangibles	$	559,440	$	(308,055	)	$	251,385

In-process technology as of June 30, 2018 consisted of acquired projects that, if completed, will contribute to Cadence's design IP offerings. As of June 30, 2018, these projects were expected to be completed in approximately six to nine months. During the six months ended June 30, 2018, there were no transfers from in-process technology to existing technology.

Acquired intangibles as of December 30, 2017 were as follows, excluding intangibles that were fully amortized as of December 31, 2016:



	Gross Carrying Amount		Accumulated Amortization			Acquired Intangibles, Net
	(In thousands)
Existing technology	$	342,810	$	(199,529	)	$	143,281
Agreements and relationships	151,063		(90,675		)	60,388
Tradenames, trademarks and patents	10,918		(7,252		)	3,666
Total acquired intangibles with definite lives	504,791		(297,456		)	207,335
In-process technology	71,500		—			71,500
Total acquired intangibles	$	576,291	$	(297,456	)	$	278,835

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 June 30, 2018 and July 1, 2017 was as follows:



	Three Months Ended				Six Months Ended
	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
	(In thousands)
Cost of product and maintenance	$	9,991	$	10,868	$	20,268	$	21,446
Amortization of acquired intangibles	3,518		3,836		7,148		7,692
Total amortization of acquired intangibles	$	13,509	$	14,704	$	27,416	$	29,138

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



	(In thousands)
2018 – remaining period	$	25,921
2019	46,222
2020	40,614
2021	36,115
2022	17,810
Thereafter	13,203
Total estimated amortization expense	$	179,885

- 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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