Acquisition-Related Contingent Consideration

3 Months Ended

Mar. 31, 2012

Acquisition-Related Contingent Consideration [Abstract]

ACQUISITION-RELATED CONTINGENT CONSIDERATION

NOTE 3. ACQUISITION-RELATED CONTINGENT CONSIDERATION

For business combinations completed after January 3, 2009, contingent consideration is recorded at fair value on the acquisition date and adjusted to fair value at the end of each reporting period.

One of the fiscal 2011 acquisitions includes contingent consideration payments based on certain future financial measures associated with the acquired technology. This contingent consideration arrangement requires payments of up to $5.0 million if certain financial measures are met during the three-year period subsequent to October 1, 2011. The fair value of the contingent consideration arrangement recorded on the date of the acquisition was $3.5 million. The fair value of the contingent consideration as of March 31, 2012 was $3.8 million and included $0.3 million of accretion recorded after the date of acquisition.

Cadence may be obligated to make cash payments in connection with business combinations and asset acquisitions, based on, or subject to the satisfaction of, certain performance metrics. If performance is such that these payments are fully achieved, Cadence may be obligated to pay up to an aggregate of $31.4 million over the next 49 months. Of the $31.4 million, up to $20.7 million would be recorded as operating expenses in the Condensed Consolidated Income Statements and up to $5.6 million would be recorded as additional goodwill.