Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 02, 2016 | Feb. 06, 2016 | Jul. 04, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CADENCE DESIGN SYSTEMS INC | ||
Entity Central Index Key | 813,672 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 2, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-02 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 5,641,117,000 | ||
Entity Common Stock, Shares Outstanding | 305,358,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 616,686 | $ 932,161 |
Short-term investments | 94,498 | 90,445 |
Receivables, net | 164,848 | 122,492 |
Inventories | 56,762 | 56,394 |
2015 notes hedges | 0 | 523,930 |
Prepaid expenses and other | 31,967 | 126,313 |
Total current assets | 964,761 | 1,851,735 |
Property, plant and equipment, net | 228,599 | 230,112 |
Goodwill | 551,772 | 553,767 |
Acquired intangibles, net | 296,482 | 360,932 |
Long-term receivables | 4,498 | 3,644 |
Other assets | 304,903 | 209,366 |
Total assets | 2,351,015 | 3,209,556 |
Current liabilities: | ||
Convertible notes | 0 | 342,499 |
2015 notes embedded conversion derivative | 0 | 523,930 |
Accounts payable and accrued liabilities | 238,022 | 225,375 |
Current portion of deferred revenue | 298,285 | 301,287 |
Total current liabilities | 536,307 | 1,393,091 |
Long-term liabilities: | ||
Long-term portion of deferred revenue | 30,209 | 54,726 |
Long-term debt | 348,788 | 348,676 |
Other long-term liabilities | 59,596 | 79,489 |
Total long-term liabilities | $ 438,593 | $ 482,891 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - $0.01 par value; authorized 400 shares, none issued or outstanding | $ 0 | $ 0 |
Common stock - $0.01 par value; authorized 600,000 shares; issued and outstanding shares: 309,392 and 291,584, respectively | 1,863,086 | 1,851,427 |
Treasury stock, at cost; 19,768 shares and 14,453 shares, respectively | (400,555) | (203,792) |
Accumulated deficit | (73,991) | (326,408) |
Accumulated other comprehensive income | (12,425) | 12,347 |
Total stockholders' equity | 1,376,115 | 1,333,574 |
Total liabilities and stockholders' equity | $ 2,351,015 | $ 3,209,556 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for receivables | $ 0 | $ 0 |
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 400,000 | 400,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock shares issued (in shares) | 309,392,000 | 291,584,000 |
Common stock shares outstanding (in shares) | 309,392,000 | 291,584,000 |
Treasury stock (in shares) | 19,768,000 | 14,453,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Revenue: | |||
Product and maintenance | $ 1,578,944 | $ 1,479,151 | $ 1,357,934 |
Services | 123,147 | 101,781 | 102,182 |
Total revenue | 1,702,091 | 1,580,932 | 1,460,116 |
Costs and expenses: | |||
Cost of product and maintenance | 155,659 | 156,333 | 132,245 |
Cost of service | 82,794 | 67,373 | 67,956 |
Marketing and sales | 402,432 | 399,688 | 378,157 |
Research and development | 637,567 | 603,006 | 534,022 |
General and administrative | 109,982 | 113,619 | 121,314 |
Amortization of acquired intangibles | 23,716 | 24,017 | 19,416 |
Restructuring and other charges | 4,511 | 10,252 | 17,999 |
Total costs and expenses | 1,416,661 | 1,374,288 | 1,271,109 |
Income from operations | 285,430 | 206,644 | 189,007 |
Interest expense | (28,311) | (34,121) | (37,581) |
Other income, net | 10,477 | 8,479 | 7,570 |
Income before provision (benefit) for income taxes | 267,596 | 181,002 | 158,996 |
Provision (benefit) for income taxes | 15,179 | 22,104 | (5,247) |
Net income | $ 252,417 | $ 158,898 | $ 164,243 |
Net income per share - basic (in usd per share) | $ 0.88 | $ 0.56 | $ 0.59 |
Net income per share - diluted (in usd per share) | $ 0.81 | $ 0.52 | $ 0.56 |
Weighted average common shares outstanding - basic (shares) | 288,018 | 283,349 | 277,796 |
Weighted average common shares outstanding - diluted (shares) | 312,302 | 306,775 | 294,564 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 252,417 | $ 158,898 | $ 164,243 |
Other comprehensive loss, net of tax effects: | |||
Foreign currency translation adjustments | (25,276) | (11,476) | (21,470) |
Changes in unrealized holding gains or losses on available-for-sale securities, net of reclassification adjustments for realized gains and losses | 169 | (305) | (180) |
Changes in defined benefit plan liabilities | 335 | (183) | 2,011 |
Total other comprehensive loss, net of tax effects | (24,772) | (11,964) | (19,639) |
Comprehensive income | $ 227,645 | $ 146,934 | $ 144,604 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock, Shares | Common Stock, Par Value and Capital in Excess of Par | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning balance at Dec. 29, 2012 | $ 915,171 | $ 1,721,556 | $ (200,786) | $ (649,549) | $ 43,950 | |
Beginning balance, shares at Dec. 29, 2012 | 280,644 | |||||
Comprehensive income | ||||||
Net income | 164,243 | 164,243 | ||||
Other comprehensive loss, net of taxes | $ (19,639) | (19,639) | ||||
Purchase of treasury stock, shares | 0 | |||||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures | $ 42,657 | (35,541) | 78,198 | 0 | ||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares | 8,726 | |||||
Stock received for payment of employee taxes on vesting of restricted stock | (20,140) | (2,586) | (17,554) | |||
Stock received for payment of employee taxes on vesting of restricted stock, shares | (1,237) | |||||
Tax effect related to employee stock transactions allocated to equity | 6,999 | 6,999 | ||||
Stock options assumed in acquisitions | 529 | 529 | ||||
Stock-based compensation expense | 66,285 | 66,285 | ||||
Ending balance at Dec. 28, 2013 | 1,156,105 | 1,757,242 | (140,142) | (485,306) | 24,311 | |
Ending balance, shares at Dec. 28, 2013 | 288,133 | |||||
Comprehensive income | ||||||
Net income | 158,898 | 158,898 | ||||
Other comprehensive loss, net of taxes | $ (11,964) | (11,964) | ||||
Purchase of treasury stock, shares | (5,856) | (5,856) | ||||
Purchase of treasury stock | $ (100,117) | (100,117) | ||||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures | 66,148 | 8,630 | 57,518 | 0 | ||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares | 10,631 | |||||
Stock received for payment of employee taxes on vesting of restricted stock | (24,727) | (3,676) | (21,051) | |||
Stock received for payment of employee taxes on vesting of restricted stock, shares | (1,324) | |||||
Tax effect related to employee stock transactions allocated to equity | 5,439 | 5,439 | ||||
Stock-based compensation expense | 83,792 | 83,792 | ||||
Ending balance at Jan. 03, 2015 | $ 1,333,574 | 1,851,427 | (203,792) | (326,408) | 12,347 | |
Ending balance, shares at Jan. 03, 2015 | 291,584 | 291,584 | ||||
Comprehensive income | ||||||
Net income | $ 252,417 | 252,417 | ||||
Other comprehensive loss, net of taxes | $ (24,772) | (24,772) | ||||
Purchase of treasury stock, shares | (16,255) | (16,255) | ||||
Purchase of treasury stock | $ (333,189) | (333,189) | ||||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures | $ 74,711 | (90,542) | 165,253 | 0 | ||
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares | 12,399 | |||||
Issuance of common shares for settlement of warrants | 23,100 | 23,122 | ||||
Stock received for payment of employee taxes on vesting of restricted stock | $ (33,651) | (4,824) | (28,827) | |||
Stock received for payment of employee taxes on vesting of restricted stock, shares | (1,458) | |||||
Tax effect related to employee stock transactions allocated to equity | 14,684 | 14,684 | ||||
Stock-based compensation expense | 92,341 | 92,341 | ||||
Ending balance at Jan. 02, 2016 | $ 1,376,115 | $ 1,863,086 | $ (400,555) | $ (73,991) | $ (12,425) | |
Ending balance, shares at Jan. 02, 2016 | 309,392 | 309,392 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Statement of Cash Flows [Abstract] | |||
Cash and cash equivalents at beginning of year | $ 932,161 | $ 536,260 | $ 726,357 |
Cash flows from operating activities: | |||
Net income | 252,417 | 158,898 | 164,243 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 118,165 | 115,634 | 98,308 |
Amortization of debt discount and fees | 9,402 | 20,529 | 25,384 |
Stock-based compensation | 92,341 | 83,792 | 66,285 |
Gain on investments, net | (2,124) | (4,707) | (5,311) |
Deferred income taxes | (13,148) | 12,478 | (2,366) |
Other non-cash items | 646 | 6,854 | 3,932 |
Changes in operating assets and liabilities, net of effect of acquired businesses: | |||
Receivables | (44,732) | (17,925) | (3,609) |
Inventories | (1,120) | (11,708) | (14,594) |
Prepaid expenses and other | (1,380) | (2,501) | 30,368 |
Other assets | (1,558) | (42,181) | (2,530) |
Accounts payable and accrued liabilities | 15,321 | 3,856 | 41,727 |
Deferred revenue | (27,019) | (11,860) | 2,506 |
Other long-term liabilities | (19,011) | 5,563 | (36,738) |
Net cash provided by operating activities | 378,200 | 316,722 | 367,605 |
Cash flows from investing activities: | |||
Purchases of available-for-sale securities | (96,531) | (124,165) | (111,702) |
Proceeds from the sale of available-for-sale securities | 60,949 | 85,384 | 77,621 |
Proceeds from the maturity of available-for-sale securities | 31,316 | 46,612 | 38,706 |
Proceeds from the sale of long-term investments | 4,570 | 1,085 | 6,234 |
Purchases of property, plant and equipment | (44,808) | (39,810) | (44,929) |
Cash paid in business combinations and asset acquisitions, net of cash acquired | 0 | (167,121) | (392,825) |
Net cash used for investing activities | (44,504) | (198,015) | (426,895) |
Cash flows from financing activities: | |||
Proceeds from issuance of debt | 0 | 348,649 | 0 |
Proceeds from revolving credit facility | 0 | 100,000 | 100,000 |
Payment on revolving credit facility | 0 | (100,000) | (100,000) |
Payment of convertible notes | (349,999) | (1) | (144,639) |
Payment of convertible notes embedded conversion derivative liability | (530,643) | (1) | 0 |
Proceeds from convertible notes hedges | 530,643 | 1 | 0 |
Principal payments on receivable financing | 0 | 0 | (2,526) |
Payment of debt issuance costs | 0 | (6,500) | 0 |
Payment of acquisition-related contingent consideration | 0 | (1,835) | (677) |
Excess tax benefits from stock-based compensation | 15,591 | 7,583 | 9,034 |
Proceeds from issuance of common stock | 74,938 | 65,913 | 42,657 |
Stock received for payment of employee taxes on vesting of restricted stock | (33,651) | (24,727) | (20,140) |
Payments for repurchases of common stock | (333,189) | (100,117) | 0 |
Net cash provided by (used for) financing activities | (626,310) | 288,965 | (116,291) |
Effect of exchange rate changes on cash and cash equivalents | (22,861) | (11,771) | (14,516) |
Increase (decrease) in cash and cash equivalents | (315,475) | 395,901 | (190,097) |
Cash and cash equivalents at end of year | 616,686 | 932,161 | 536,260 |
Supplemental cash flow information: | |||
Cash paid for interest | 19,918 | 9,963 | 12,429 |
Cash paid (received) for income taxes, net | 29,494 | 26,453 | (3,084) |
Non-cash investing and financing activities: | |||
Stock options assumed in acquisitions | 0 | 0 | 529 |
Available-for-sale securities received from customer | $ 0 | $ 1,695 | $ 240 |
Business Overview
Business Overview | 12 Months Ended |
Jan. 02, 2016 | |
Accounting Policies [Abstract] | |
BUSINESS OVERVIEW | BUSINESS OVERVIEW Cadence Design Systems, Inc., or Cadence, develops system design enablement, or SDE, solutions that its customers use to design whole electronics systems and increasingly small and complex integrated circuits, or ICs, and electronic devices. Cadence’s solutions are designed to help its customers reduce the time to bring an electronics system, IC or electronic device to market and to reduce their design, development and manufacturing costs. Cadence’s SDE product offerings include electronic design automation, or EDA, software, emulation and prototyping hardware, system interconnect and analysis and two categories of intellectual property, or IP, commonly referred to as verification IP, or VIP, and design IP. Cadence provides maintenance for its software, emulation and prototyping hardware, and IP product offerings. Cadence also provides engineering services related to methodology, education, hosted design solutions and design services for advanced ICs and development of custom IP. These services help Cadence’s customers manage and accelerate their electronics product development processes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation Cadence’s fiscal year-end is the Saturday closest to December 31. Fiscal 2015 and fiscal 2013 were 52-week years. Fiscal 2014 was a 53-week year ending on January 3, 2015. The consolidated financial statements include the accounts of Cadence and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly owned by Cadence. Certain prior period balances have been reclassified to conform to the current period presentation. Use of Estimates Preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles, or U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Standards In November 2015, the FASB issued a new standard to simplify the presentation of deferred income taxes. The new standard requires that deferred tax assets and liabilities be classified as non-current in the statement of financial position. Cadence elected to early adopt the new standard effective January 2, 2016 on a prospective basis. Adoption of this standard resulted in a reclassification of Cadence’s net current deferred tax asset to long term on its consolidated balance sheet as of January 2, 2016 . No prior periods were retrospectively adjusted. In May 2014, the Financial Accounting Standards Board, or FASB, issued a comprehensive revenue recognition standard for revenue associated with the delivery of goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date of December 15, 2016. Accordingly, the updated standard is effective for Cadence in the first quarter of fiscal 2018. Cadence has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its Consolidated Financial Statements and related disclosures. In April 2015, the FASB issued a new accounting standard requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the associated debt liability. The new standard is effective for us in the first quarter of fiscal 2016 and requires retrospective application. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. In April 2015, the FASB also issued a new accounting standard that provides explicit guidance with respect to accounting for fees paid in a cloud computing arrangement. The new standard is effective for Cadence in the first quarter of fiscal 2016 and allows for prospective or retrospective application. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. In September 2015, the FASB issued a new accounting standard to simplify the accounting for measurement period adjustments that occur in periods after a business combination is consummated. The new standard requires that an acquirer recognize adjustments to provisional amounts in the reporting period in which the adjustment amounts are determined and eliminates the requirement to retrospectively adjust the financial statements for measurement period adjustments. The new standard is effective for Cadence in the first quarter of fiscal 2016. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. Cash, Cash Equivalents and Short-Term Investments Cadence considers all highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents. Cadence’s short-term investments include marketable debt securities with original maturities greater than three months on the date of purchase and marketable equity securities. Cadence considers its entire portfolio of marketable debt and equity securities to be available for sale and available to fund current operations. Available-for-sale debt and equity securities are carried at fair value, with the unrealized gains and losses presented net of tax as a separate component of other comprehensive income. Unrealized and realized gains and losses are determined using the specific identification method. Cadence recognizes gains on its available-for-sale securities when they are realized. Cadence recognizes losses on its available-for-sale securities when they are realized or when Cadence has determined that an other-than-temporary decline in fair value has occurred. For an available-for-sale debt security, an other-than-temporary decline in fair value has occurred when the security’s fair value is less than its amortized cost basis and Cadence intends to sell the security, or it is more likely than not that Cadence will be required to sell the security before recovery of its amortized cost basis. Cadence records realized gains, realized losses and other-than-temporary impairments as part of other income, net in the consolidated income statements. Foreign Operations Cadence transacts business in various foreign currencies. The United States dollar is the functional currency of Cadence’s consolidated entities operating in the United States and certain of its consolidated subsidiaries operating outside the United States. The functional currency for Cadence’s other consolidated entities operating outside of the United States is generally the local country’s currency. Cadence translates the financial statements of consolidated entities whose functional currency is not the United States dollar into United States dollars. Cadence translates assets and liabilities at the exchange rate in effect as of the financial statement date and translates income statement accounts using an average exchange rate for the period. Cadence includes adjustments from translating assets and liabilities into United States dollars, and the effect of exchange rate changes on intercompany transactions of a long-term investment nature in stockholders’ equity as a component of accumulated other comprehensive income. Cadence reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature, as well as gains and losses from foreign currency transactions of a monetary nature in other income, net, in the consolidated income statements. Revenue Recognition Software and IP Revenue Recognition Cadence licenses its software and IP products using three different license types: • Term licenses; • Subscription licenses; and • Perpetual licenses. Term licenses - Cadence’s term license arrangements offer customers the right to: • Access and use all products delivered at the outset of an arrangement throughout the entire term of the arrangement, generally two to three years, with no rights to return; and • Remix among the products delivered at the outset of the arrangement, so long as the cumulative contractual value of all products in use does not exceed the total license fee determined at the outset of the arrangement. Subscription licenses - In addition to the rights of a term license, Cadence’s subscription license arrangements also offer customers the right to: • Use unspecified additional products that become commercially available during the term of the arrangement; and • Remix into other unspecified additional products that may become available during the term of the arrangement, so long as the cumulative contractual value of all products in use does not exceed the total license fee determined at the outset of the arrangement. In general, product and maintenance revenue associated with term and subscription licenses is recognized ratably over the term of the license, commencing upon the later of the effective date of the arrangement or delivery of the licensed product. Perpetual licenses - Cadence’s perpetual licenses consist of software licensed on a perpetual basis with no right to return or ability to remix the licensed software. Cadence licenses its design IP under a perpetual license on a per-design basis. In general, product revenue associated with perpetual licenses where VSOE exists for the undelivered maintenance is recognized upon delivery of the licensed product and maintenance revenue is recognized ratably over the maintenance term. If VSOE does not exist for the undelivered maintenance in a perpetual license, product revenue is recognized ratably over the maintenance term. If certain other criteria are met, revenue for design IP is recognized upon delivery and we accrue the expected costs of maintenance. Hardware Revenue Recognition Cadence generally has a minimum of two deliverables in arrangements involving the sale or lease of its hardware products. The first deliverable is the hardware product and software essential to the functionality of the hardware product, and the second deliverable is the right to receive maintenance on the hardware product and its software. Cadence allocates consideration between these deliverables based on the relative standalone selling price for each deliverable. Consideration allocated to the hardware product and its essential software is recognized as revenue at the time of delivery provided all other conditions for revenue recognition have been met. Consideration allocated to maintenance is recognized as revenue ratably over the maintenance term. Services Revenue Recognition Services revenue primarily consists of revenue received for performing engineering services. These services are generally not related to the functionality of the products licensed. In certain instances, Cadence will customize its IP on a fixed fee basis. Revenue from service contracts is recognized either on the time and materials method, as work is performed, or on the percentage-of-completion method. If a service contract is considered to be part of a multiple element arrangement, or MEA, that includes a software contract, revenue is generally recognized ratably over the duration of the software contract. For contracts with fixed or not-to-exceed fees, Cadence estimates on a monthly basis the percentage-of-completion based on the progress to completion of the services. Cadence has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. If different conditions were to prevail such that accurate estimates could not be made, then the use of the completed contract method would be required and the recognition of all revenue and costs would be deferred until the project was completed. Such a change could have a material impact on Cadence’s results of operations. Revenue Recognition Criteria Although the timing and amount of revenue recognition differs based on the deliverables in each arrangement, Cadence begins revenue recognition for an arrangement when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collection of the resulting receivable is probable. Persuasive evidence of an arrangement - Generally, Cadence uses a contract signed by the customer as evidence of an arrangement for subscription and term licenses, licenses of its IP products and hardware leases. If a contract signed by the customer does not exist, Cadence has historically used a purchase order as evidence of an arrangement for software perpetual licenses, hardware sales, maintenance renewals and small fixed-price service projects, such as training classes and small methodology service engagements. For all other service engagements, Cadence uses a signed professional services agreement and a statement of work to evidence an arrangement. In cases where both a signed contract and a purchase order exist, Cadence considers the signed contract to be the most persuasive evidence of the arrangement. Sales through Cadence’s distributors are evidenced by a master agreement governing the relationship, together with binding purchase orders from the distributor on a transaction-by-transaction basis. Product delivery - Software and VIP, and the corresponding access keys, are generally delivered to customers electronically. Electronic delivery occurs when Cadence provides the customer access to the software. Occasionally, Cadence will deliver software on a DVD with standard transfer terms of free-on-board, or F.O.B., shipping point. Design IP is also delivered electronically via download from a secure site. Cadence’s software and IP license agreements generally do not contain conditions for acceptance. Delivery of an entire hardware system is deemed to occur upon its successful installation. For certain hardware products, installation is the responsibility of the customer, as the system is fully functional at the time of shipment and delivery is deemed to be complete when the products are shipped with freight terms of F.O.B. shipping point. Fee is fixed or determinable - Cadence assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Cadence has established a history of collecting under the original contract without providing concessions on payments, products or services. For installment contracts that do not include a substantial upfront payment, Cadence only considers that a fee is fixed or determinable if the arrangement has payment periods that are equal to or less than the term of the licenses and the payments are collected in equal or nearly equal installments, when evaluated over the entire term of the arrangement. Cadence has a history of collecting receivables under software installment contracts of up to five years for which the fee has been assessed as fixed or determinable. Significant judgment is involved in assessing whether a fee is fixed or determinable. Cadence must also make these judgments when assessing whether a contract amendment to a term arrangement (primarily in the context of a license extension or renewal) constitutes a concession. Cadence’s experience has been that it is able to determine whether a fee is fixed or determinable. While Cadence does not expect that experience to change, if Cadence no longer were to have a history of collecting under the original contract without providing concessions, revenue would be required to be recognized when payments become due and payable. Such a change could have a material impact on Cadence’s results of operations. Collection is probable - Cadence assesses the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history, its current creditworthiness and geographic location. If in Cadence’s judgment collection of a fee is not probable, Cadence does not record revenue until the uncertainty is removed, which is generally upon receipt of cash payment. Multiple Element Arrangements An MEA is any arrangement that includes or contemplates rights for a combination of software, IP or hardware products, services, training or maintenance in a single arrangement. From time to time, Cadence may include individual deliverables in separately priced and separately executed contracts with the same customer. Cadence evaluates all relevant facts and circumstances in determining whether the separate contracts should be accounted for individually as distinct arrangements or whether the separate contracts are, in substance, an MEA. Significant judgment is involved in determining whether a group of contracts might be so closely related that they are, in effect, part of a single arrangement. Cadence’s judgments about whether several contracts together comprise an MEA can affect the timing of revenue recognition under those contracts, which could have an effect on its results of operations for the periods involved. For an MEA that includes software and nonsoftware elements, Cadence allocates the total consideration based on the relative standalone selling prices of each element. In these circumstances, Cadence is required to use a hierarchy to determine the standalone selling price to be used for allocating consideration to deliverables as follows: • Vendor specific objective evidence of fair value, or VSOE; • Third-party evidence of selling price, or TPE; and • Best estimate of the selling price, or BESP. Vendor-specific objective evidence of fair value - Cadence’s VSOE for maintenance is based upon the customer’s stated annual renewal rates and VSOE for services is based on the price charged when the services are sold separately. Cadence has not established VSOE for certain products, including software and IP licenses and hardware products, or for annual maintenance that is not cancellable by the customer. Third-party evidence of selling price - TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, Cadence’s offerings contain significant differentiation such that comparable pricing of products with similar functionality cannot be obtained. Furthermore, Cadence is unable to reliably determine what similar competitor products’ selling prices are when those products are sold on a standalone basis. Therefore, Cadence typically is not able to obtain TPE and TPE is not used to determine any standalone selling prices. Best estimate of the selling price - Cadence calculates the BESP of its hardware products based on its pricing practices, including the historical average prices charged for comparable hardware products. Cadence’s process for determining BESP for its software deliverables takes into account multiple factors that vary depending upon the unique facts and circumstances related to each deliverable. Key external and internal factors considered in developing the BESPs include prices charged by Cadence for similar arrangements, historical pricing practices and the nature of the product. In addition, when developing BESPs, Cadence may consider other factors as appropriate, including the pricing of competitive alternatives if they exist, and product-specific business objectives. For MEAs that contain software and nonsoftware elements, Cadence allocates the consideration to software or software-related elements as a group, and to any nonsoftware element separately based on the standalone selling price hierarchy. The consideration allocated to each element is then recognized as revenue when the basic revenue recognition criteria are met for each element. Once the consideration is allocated to the group of software and software-related elements, it then follows the recognition principles of software revenue recognition accounting standards. For MEAs involving only software and software-related deliverables, VSOE must exist to allocate the total fee among all delivered and undelivered elements, or if VSOE of all undelivered elements exists, revenue is recognized using the residual method. Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized up front as the elements are delivered. If VSOE does not exist for all elements to support the allocation of the total fee among all elements of the arrangement, or if VSOE does not exist for all undelivered elements to apply the residual method, revenue is recognized ratably over the term of the undelivered elements. Other Factors Regarding Revenue Recognition Taxes collected from customers and remitted to governmental authorities - Cadence applies the net basis presentation for taxes collected from customers and remitted to governmental authorities. Derivative Financial Instruments Cadence enters into foreign currency forward exchange contracts with financial institutions to protect against currency exchange risks associated with existing assets and liabilities. A foreign currency forward exchange contract acts as a hedge by increasing in value when underlying assets decrease in value or underlying liabilities increase in value due to changes in foreign exchange rates. Conversely, a foreign currency forward exchange contract decreases in value when underlying assets increase in value or underlying liabilities decrease in value due to changes in foreign exchange rates. The forward contracts are not designated as accounting hedges and, therefore, the unrealized gains and losses are recognized in other income, net, in advance of the actual foreign currency cash flows. The fair value of these forward contracts is recorded in accrued liabilities or in other current assets. These forward contracts generally have maturities of 90 days or less. Receivables Cadence’s receivables, net includes invoiced accounts receivable and the current portion of unbilled receivables. Unbilled receivables represent amounts Cadence has recorded as revenue for which payments from a customer are due over time. Cadence’s accounts receivable and unbilled receivables were initially recorded at the transaction value. Cadence’s long-term receivables balance includes receivable balances to be invoiced more than one year after each balance sheet date. Allowances for Doubtful Accounts Each fiscal quarter, Cadence assesses its ability to collect outstanding receivables, and provides allowances for a portion of its receivables when collection is not probable. Cadence analyzes the creditworthiness of its customers, historical experience, changes in customer demand and the overall economic climate in the industries that Cadence serves. Provisions are made based upon a specific review of customer receivables and are recorded in operating expenses. Inventories Inventories are stated at the lower of cost or market value. Cadence’s inventories include high technology parts and components for complex emulation and prototyping hardware systems. These parts and components are specialized in nature and may be subject to rapid technological obsolescence. While Cadence has programs to minimize the required inventories on hand and considers technological obsolescence when estimating required reserves to reduce recorded amounts to market values, it is reasonably possible that such estimates could change in the near term. Cadence’s policy is to reserve for inventory in excess of 12-month demand or for other known obsolescence or realization issues. Property, Plant and Equipment Property, plant and equipment is stated at historical cost. Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows: Computer equipment and related software 2-7 years Buildings 25-32 years Leasehold improvements Shorter of the lease term or the estimated useful life Building improvements and land improvements Estimated useful life Furniture and fixtures 3-5 years Equipment 3-5 years Cadence capitalizes certain costs of software developed for internal use. Capitalization of software developed for internal use begins at the application development phase of the project. Amortization begins when the computer software is substantially complete and ready for its intended use. Amortization is recorded on a straight-line basis over the estimated useful life. Cadence capitalized costs of software developed for internal use of $2.0 million , $2.1 million , and $4.7 million during fiscal 2015 , 2014 and 2013 , respectively. Cadence recorded depreciation and amortization expense of $48.7 million , $49.2 million and $49.5 million during fiscal 2015 , 2014 and 2013 , respectively, for property, plant and equipment. Software Development Costs Software development costs are capitalized beginning when a product’s technological feasibility has been established by completion of a working model of the product and amortization begins when a product is available for general release to customers. The period between the achievement of technological feasibility and the general release of Cadence’s products has typically been of short duration. Costs incurred during fiscal 2015 , 2014 and 2013 were not material. Goodwill Cadence conducts a goodwill impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of Cadence’s single reporting unit may be less than its carrying amount. Cadence’s goodwill impairment test consists of two steps. The first step requires that Cadence compare the estimated fair value of its single reporting unit to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, Cadence would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. Long-Lived Assets, Including Acquired Intangibles Cadence’s definite-lived, long-lived assets consist of property, plant and equipment and other acquired intangibles. Acquired intangibles with definite lives are amortized on a straight-line basis over the remaining estimated economic life of the underlying products and technologies, which range from one to fourteen years. Cadence reviews its definite-lived, long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of an asset or asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset or asset group is expected to generate. If it is determined that the carrying amount of an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset or asset group exceeds its fair value. Non-Marketable Investments Cadence’s non-marketable investments include its investments in privately-held companies. These investments are initially recorded at cost and are included in other assets in the consolidated balance sheets. Cadence accounts for these investments using either the cost method or the equity method of accounting. Cadence reviews the fair value of its non-marketable investments on a regular basis to determine whether the investments in these companies are other-than-temporarily impaired. Cadence considers investee financial performance and other information received from the investee companies, as well as any other available estimates of the fair value of the investee companies in its review. If Cadence determines the carrying value of an investment exceeds its fair value, and that difference is other than temporary, Cadence writes down the value of the investment to its fair value. Cadence records investment write-downs in other income, net, in the consolidated income statements. Nonqualified Deferred Compensation Trust Executive officers, senior management and members of Cadence’s Board of Directors may elect to defer compensation payable to them under Cadence’s Nonqualified Deferred Compensation Plan, or the NQDC. Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC. The selected investments held in the NQDC accounts are classified as trading securities. Trading securities are carried at fair value, with the unrealized gains and losses recognized in the consolidated income statements as other income, net. These trading securities are classified in other assets in the consolidated balance sheets because the securities are not available for Cadence’s use in its operations. Cadence’s obligation with respect to the NQDC trust is recorded in other long-term liabilities on the consolidated balance sheets. Increases and decreases in the NQDC trust liability are recorded as compensation expense in the consolidated income statements. Deferred Revenue Deferred revenue arises when customers are billed for products or services in advance of revenue recognition. Cadence’s deferred revenue consists primarily of unearned revenue on product licenses and the related maintenance for which revenue is recognized over the duration of the license. The fees for term and subscription licenses are generally billed quarterly in advance and the related revenue is recognized over multiple periods over the ensuing license period. Maintenance on perpetual licenses is generally renewed annually, billed in full in advance, and the corresponding revenue is recognized over the 12 -month maintenance term. Comprehensive Income Other comprehensive income (loss) is reported as a component of stockholders’ equity and includes foreign currency translation gains and losses, changes in defined benefit plan liabilities, and unrealized gains and losses on marketable securities that are available for sale. Cadence reports comprehensive income (loss) in the consolidated statements of comprehensive income. Accounting for Income Taxes Cadence accounts for the effect of income taxes in its consolidated financial statements using the asset and liability method. This process involves estimating actual current tax liabilities together with assessing carryforwards and temporary differences resulting from differing treatment of items, such as depreciation, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, measured using enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be recovered or settled. Cadence then records a valuation allowance to reduce the deferred tax assets to the amount that Cadence believes is more likely than not to be realized based on its judgment of all available positive and negative evidence. The weight given to the potential effect of negative and positive evidence is commensurate with the extent to which the strength of the evidence can be objectively verified. This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the following: • The nature and history of current or cumulative financial reporting income or losses; • Sources of future taxable income; • The anticipated reversal or expiration dates of the deferred tax assets; and • Tax planning strategies. Cadence takes a two-step approach to recognizing and measuring the financial statement benefit of uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement of the audit. Cadence classifies interest and penalties on unrecognized tax benefits as income tax expense or benefit. Restructuring Charges Cadence records personnel-related restructuring charges with customary termination benefits when the costs are both probable and estimable. Cadence records personnel-related restructuring charges with non-customary termination benefits when the plan has been communicated to the affected employees. Cadence records facilities-related restructuring charges in the period in which the affected facilities are vacated. In connection with facilities-related restructuring plans, Cadence has made a number of estimates and assumptions related to losses on excess facilities that have been vacated or consolidated, particularly the timing of subleases and sublease terms. Closure and space reduction costs included in the restructuring charges include payments required under leases less any applicable estimated sublease income a |
Debt
Debt | 12 Months Ended |
Jan. 02, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Cadence’s outstanding debt as of January 2, 2016 and January 3, 2015 was as follows: January 2, 2016 January 3, 2015 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value 2015 Notes $ — $ — $ — $ 349,999 $ (7,500 ) $ 342,499 2024 Notes 350,000 (1,212 ) 348,788 350,000 (1,324 ) 348,676 Revolving credit facility — — — — — — Total outstanding debt $ 350,000 $ (1,212 ) $ 348,788 $ 699,999 $ (8,824 ) $ 691,175 2015 Notes In June 2010, Cadence issued $350.0 million principal amount of 2.625% Cash Convertible Senior Notes due June 1, 2015, or the 2015 Notes. During fiscal 2015 , Cadence settled the outstanding principal amount of $350.0 million and paid note holders accrued interest of $3.8 million . The 2015 Notes contained a conversion feature, or the 2015 Notes Embedded Conversion Derivative, that entitled the holders of the notes to receive additional cash payments if the notes were converted prior to maturity. During fiscal 2015 , Cadence paid $530.6 million to holders of the 2015 notes that converted prior to maturity. Cadence received proceeds of $530.6 million from the 2015 Notes Hedges, which fully offset the additional cash payments associated with the 2015 Notes Embedded Conversion Derivative. 2015 Notes Hedges Cadence entered into hedge transactions, or the 2015 Notes Hedges, in connection with the issuance of the 2015 Notes. The purpose of the 2015 Notes Hedges was to limit Cadence’s exposure to the additional cash payments above the principal amount of the 2015 Notes that was due to the holders who elected to convert their notes prior to maturity. As a result of the 2015 Notes Hedges, Cadence’s maximum cash exposure upon conversion or maturity of the 2015 Notes was the remaining principal balance of the notes and accrued interest. The 2015 Notes Hedges expired on June 1, 2015, and were settled in cash. 2015 Warrants At the time of issuance of the 2015 Notes, Cadence entered into separate warrant transactions, or the 2015 Warrants, for the purchase of up to approximately 46.4 million shares of Cadence’s common stock at a strike price of $10.78 per share, for total proceeds of $37.5 million , which was recorded as an increase in stockholders’ equity. As a result of the 2015 Warrants, Cadence experienced dilution to its diluted earnings per share when its average closing stock price exceeded $10.78 for any fiscal quarter until all of the warrants expired. All of the warrants expired between September and December 2015. Upon expiration of the 2015 Warrants, Cadence issued shares of common stock to the purchasers of the 2015 Warrants that represented the value by which the specified daily volume weighted average price of Cadence’s common stock exceeded the strike price of $10.78 , as stipulated in the warrant agreements. During fiscal 2015 , Cadence issued, on a net settlement basis, approximately 23.1 million shares of common stock to the 2015 Warrant counterparties. 2024 Notes In October 2014, Cadence issued $350.0 million aggregate principal amount of 4.375% Senior Notes due October 15, 2024, or the 2024 Notes. Cadence received net proceeds of $342.4 million from the issuance of the 2024 Notes, net of a discount of $1.4 million and issuance costs of $6.2 million . Both the discount and issuance costs are being amortized to interest expense over the term of the 2024 Notes using the effective interest method. Interest is payable in cash semi-annually in April and October. The 2024 Notes are unsecured and rank equal in right of payment to all of Cadence’s existing and future senior indebtedness. Cadence may redeem the 2024 Notes, in whole or in part, at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) the sum of the present values of the remaining scheduled payments of principal and interest, plus any accrued and unpaid interest, as more particularly described in the indenture governing the 2024 Notes. The indenture governing the 2024 Notes includes customary representations, warranties and restrictive covenants, including, but not limited to, restrictions on Cadence’s ability to grant liens on assets, enter into sale and lease-back transactions, or merge, consolidate or sell assets, and also includes customary events of default. Revolving Credit Facility Cadence maintains a senior unsecured revolving credit facility with a group of lenders led by Bank of America, N.A., as administrative agent. The credit facility provides for borrowings up to $250.0 million , with the right to request increased capacity up to an additional $150.0 million upon the receipt of lender commitments, for total maximum borrowings of $400.0 million . The credit facility, as amended, expires on September 19, 2019 and has no subsidiary guarantors. Any outstanding loans drawn under the credit facility are due at maturity on September 19, 2019 . Outstanding borrowings may be paid at any time prior to maturity. Interest accrues on borrowings under the credit facility at either LIBOR plus a margin between 1.25% and 2.0% per annum or at the base rate plus a margin between 0.25% and 1.0% per annum. The interest rate applied to borrowings is determined by Cadence’s consolidated leverage ratio as specified by the credit facility agreement. Interest is payable quarterly. A commitment fee ranging from 0.20% to 0.35% is assessed on the daily average undrawn portion of revolving commitments. The credit facility contains customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens, make certain investments (including acquisitions), dispose of certain assets and make certain payments, including share repurchases and dividends. In addition, the credit facility contains financial covenants that require Cadence to maintain a leverage ratio not to exceed 2.75 to 1 , and a minimum interest coverage ratio of 3 to 1 . As of January 2, 2016 and January 3, 2015 , Cadence had no outstanding balance under the revolving credit facility and was in compliance with all financial covenants. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Jan. 02, 2016 | |
Cash, Cash Equivalents and Investments [Abstract] | |
CASH, CASH EQUIVALENTS AND INVESTMENTS | CASH, CASH EQUIVALENTS AND INVESTMENTS Cadence’s cash, cash equivalents and short-term investments at fair value as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, 2016 January 3, 2015 (In thousands) Cash and cash equivalents $ 616,686 $ 932,161 Short-term investments 94,498 90,445 Cash, cash equivalents and short-term investments $ 711,184 $ 1,022,606 Cash and Cash Equivalents The following table summarizes Cadence’s cash and cash equivalents at fair value as of January 2, 2016 and January 3, 2015 : As of January 2, January 3, (In thousands) Cash and interest bearing deposits $ 255,995 $ 203,665 Money market funds 360,691 728,496 Total cash and cash equivalents $ 616,686 $ 932,161 Short-Term Investments The following tables summarize Cadence’s short-term investments as of January 2, 2016 and January 3, 2015 : As of January 2, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Corporate debt securities $ 34,905 $ 1 $ (77 ) $ 34,829 Bank certificates of deposit 15,049 1 (4 ) 15,046 United States Treasury securities 36,372 2 (88 ) 36,286 United States government agency securities 4,151 1 — 4,152 Commercial paper 1,993 — — 1,993 Marketable debt securities 92,470 5 (169 ) 92,306 Marketable equity securities 1,817 375 — 2,192 Total short-term investments $ 94,287 $ 380 $ (169 ) $ 94,498 As of January 3, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Corporate debt securities $ 34,919 $ 6 $ (31 ) $ 34,894 Bank certificates of deposit 21,900 10 — 21,910 United States Treasury securities 19,375 12 (13 ) 19,374 United States government agency securities 9,209 3 (4 ) 9,208 Commercial paper 3,184 4 (2 ) 3,186 Marketable debt securities 88,587 35 (50 ) 88,572 Marketable equity securities 1,817 56 — 1,873 Total short-term investments $ 90,404 $ 91 $ (50 ) $ 90,445 As of January 2, 2016 , no securities held by Cadence had been in an unrealized loss position for greater than nine months. The amortized cost and estimated fair value of marketable debt securities included in short-term investments as of January 2, 2016 , by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties. Amortized Cost Fair Value (In thousands) Due in less than one year $ 50,777 $ 50,751 Due in one to three years 41,693 41,555 Total marketable debt securities included in short-term investments $ 92,470 $ 92,306 Realized gains and losses from the sale of marketable debt and equity securities are recorded in other income, net in the consolidated income statements. Non-Marketable Investments Cadence’s non-marketable investments generally consist of voting preferred stock, convertible debt or other instruments of privately-held entities and are included in other assets on Cadence’s consolidated balance sheets. If Cadence determines that it has the ability to exercise significant influence over the issuer, which may include considering whether the investments are in-substance common stock, the investment is accounted for using the equity method. Cadence records in the consolidated income statements as other income, net, realized gains and losses from the sale of non-marketable investments, write downs related to cost method investments due to other-than-temporary declines in value and its proportional share of issuers’ gains or losses related to equity method investments. The equity method income or loss recorded by Cadence is based on its percentage ownership in the issuer. Cadence’s non-marketable investments as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Cost method $ 1,081 $ 1,081 Equity method 2,836 5,058 Total non-marketable investments $ 3,917 $ 6,139 |
Receivables and Allowances for
Receivables and Allowances for Doubtful Accounts | 12 Months Ended |
Jan. 02, 2016 | |
Receivables [Abstract] | |
RECEIVABLES, NET | RECEIVABLES, NET Cadence’s current and long-term receivables balances as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Accounts receivable $ 107,041 $ 79,410 Unbilled accounts receivable 57,807 43,082 Long-term receivables 4,498 3,644 Total receivables $ 169,346 $ 126,136 Less allowance for doubtful accounts — — Total receivables, net $ 169,346 $ 126,136 Cadence’s customers are primarily concentrated within the semiconductor and electronics systems industries. As of January 2, 2016 , one customer accounted for 12% of Cadence’s total receivables, and no other customer accounted for 10% or more of Cadence’s total receivables. As of January 3, 2015 , no one customer accounted for 10% or more of Cadence’s total receivables. As of January 2, 2016 , approximately 45% of Cadence’s total receivables were attributable to the ten customers with the largest balances of total receivables. As of January 3, 2015 , approximately 43% of Cadence’s total receivables were attributable to the ten customers with the largest balances of total receivables. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Cadence’s income before provision (benefit) for income taxes included income from the United States and from foreign subsidiaries for fiscal 2015 , 2014 and 2013 , is as follows: 2015 2014 2013 (In thousands) United States $ 47,867 $ 12,680 $ 20,092 Foreign subsidiaries 219,729 168,322 138,904 Total income before provision (benefit) for income taxes $ 267,596 $ 181,002 $ 158,996 Cadence’s foreign subsidiaries are generally subject to lower statutory tax rates than the United States statutory federal income tax rate of 35% . Cadence’s provision (benefit) for income taxes was comprised of the following items for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Current: Federal $ (10,265 ) $ (13,754 ) $ (40,494 ) State and local (713 ) (1,159 ) 2,574 Foreign 24,622 19,100 28,040 Total current 13,644 4,187 (9,880 ) Deferred: Federal (13,165 ) 2,075 4,888 State and local 1,751 1,633 3,037 Foreign (1,734 ) 8,770 (10,291 ) Total deferred (13,148 ) 12,478 (2,366 ) Tax expense allocated to shareholders’ equity 14,683 5,439 6,999 Total provision (benefit) for income taxes $ 15,179 $ 22,104 $ (5,247 ) The provision (benefit) for income taxes differs from the amount estimated by applying the United States statutory federal income tax rate of 35% to income before provision (benefit) for income taxes for fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Provision computed at federal statutory income tax rate $ 93,659 $ 63,350 $ 55,648 State and local income tax, net of federal tax effect 3,621 1,168 4,085 Foreign income tax rate differential (56,873 ) (39,012 ) (39,144 ) Non-deductible share-based compensation costs 2,687 5,726 2,053 Change in deferred tax asset valuation allowance (11,066 ) 10,065 18,354 Tax credits (19,243 ) (17,331 ) (18,372 ) Repatriation of foreign earnings 50 (2,910 ) (2,116 ) Non-deductible research and development expense 336 2,195 3,043 Tax effects of intra-entity transfer of assets (7,928 ) (5,397 ) 270 Domestic production activity deduction — (1,281 ) (1,088 ) Withholding taxes 5,119 4,064 3,333 Interest and penalties not included in tax settlements 331 (382 ) 1,701 Increase (decrease) in unrecognized tax benefits not included in tax settlements 3,530 157 (33,730 ) Other 956 1,692 716 Provision (benefit) for income taxes $ 15,179 $ 22,104 $ (5,247 ) Effective tax rate 6 % 12 % (3 )% In December 2015, the Protecting Americans from Tax Hikes Act of 2015 was signed into law, retroactively extending the United States federal research and development credit from January 1, 2015. As a result, Cadence recognized the retroactive benefit of approximately $10.1 million in the fourth quarter of 2015, the period in which the legislation was enacted. The components of deferred tax assets and liabilities consisted of the following as of January 2, 2016 and January 3, 2015 : As of January 2, January 3, (In thousands) Deferred tax assets: Tax credit carryforwards $ 189,672 $ 180,127 Reserves and accruals 54,774 65,935 Intangible assets 29,256 38,938 Capitalized research and development expense for income tax purposes 26,332 33,552 Operating loss carryforwards 25,208 25,285 Deferred income 16,407 19,534 Capital loss carryforwards 20,552 21,494 Stock-based compensation costs 17,612 20,009 Depreciation and amortization 22,442 10,904 Investments 7,113 6,825 Other — 1,332 Total deferred tax assets 409,368 423,935 Valuation allowance (91,677 ) (102,742 ) Net deferred tax assets 317,691 321,193 Deferred tax liabilities: Intangible assets (45,697 ) (57,040 ) Undistributed foreign earnings (25,156 ) (28,026 ) Other (1,390 ) (1,607 ) Total deferred tax liabilities (72,243 ) (86,673 ) Total net deferred tax assets $ 245,448 $ 234,520 The table of deferred tax assets and liabilities above does not include certain deferred tax assets as of January 2, 2016 that arose directly from tax deductions related to stock compensation greater than compensation recognized for financial reporting. Stockholders’ equity will be increased $8.1 million if and when such deferred tax assets are ultimately realized. Cadence uses tax law ordering when determining when excess tax benefits have been realized. Cadence early adopted ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” effective January 2, 2016 on a prospective basis. Adoption of this ASU resulted in a reclassification of Cadence’s net current deferred tax asset to the net non-current deferred tax asset in the consolidated balance sheet as of January 2, 2016 . No prior periods were retrospectively adjusted. For information regarding new accounting standards applicable to Cadence, see Note 2 in the notes to consolidated financial statements under the heading “New Accounting Standards.” Cadence regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. During fiscal 2015, Cadence determined that there was sufficient positive evidence to judge that $317.7 million of deferred tax assets were more likely than not to be realized. The evidence that the Company relied on to make this determination included the following: • The magnitude and duration of Cadence’s profitability in the United States; • Cadence’s multi-year history of approximately 90% of the aggregate value of its bookings being of a type that revenue is recurring in nature; • Cadence’s existing revenue backlog as of January 2, 2016 that provides Cadence with an objective source of future revenues to be recognized in fiscal 2016 and subsequent periods; and • Cadence’s expectation of having sufficient sources of income in the future to prevent the expiration of deferred tax assets. During fiscal 2015 and 2014, Cadence maintained valuation allowances of $91.7 million and $102.7 million , respectively, on certain federal, state and foreign deferred tax assets because the realization of these deferred tax assets require future income of a specific character or amount that Cadence considered uncertain. The valuation allowance primarily relates to the following: • Tax credits in certain states that are accumulating at a rate greater than Cadence’s capacity to utilize the credits and tax credits in certain states where it is likely the credits will expire unused; • Federal, state and foreign deferred tax assets related to investments and capital losses that can only be utilized against gains that are capital in nature; and • Foreign tax credits that can only be fully utilized if Cadence has sufficient income of a specific character in the future. Cadence provides for United States income taxes on the earnings of foreign subsidiaries unless the earnings are considered indefinitely invested outside of the United States. Cadence intends to indefinitely reinvest $594.2 million of undistributed earnings of its foreign subsidiaries as of January 2, 2016 , to meet the working capital and long-term capital needs of its foreign subsidiaries. Cadence has not calculated the unrecognized deferred tax liability for these indefinitely reinvested foreign earnings because it was impracticable due to the complexities and uncertainties of the hypothetical calculation. As of January 2, 2016 , Cadence’s operating loss carryforwards were as follows: Amount Expiration Periods (In thousands) Federal* $ 25,976 from 2021 through 2035 California* 240,885 from 2016 through 2035 Other states (tax effected, net of federal benefit)* 3,177 from 2016 through 2035 Foreign (tax effected) 7,193 from 2032 through indefinite _____________ * Includes net operating losses that arose directly from tax deductions for stock compensation greater than compensation recognized for financial reporting. As of January 2, 2016 , Cadence had tax credit carryforwards of: Amount Expiration Periods (In thousands) Federal* $ 139,820 from 2016 through 2035 California 30,455 indefinite Other states 6,150 from 2016 through 2030 Foreign 13,246 from 2017 through 2035 _____________ *Certain of Cadence’s foreign tax credits are anticipated and as a result do not yet have an expiration period. Examinations by Tax Authorities Taxing authorities regularly examine Cadence’s income tax returns. In September 2015, a Cadence foreign subsidiary entered into a settlement agreement with a foreign tax authority with respect to its tax returns from 2010 through 2012. As a result of the settlement, Cadence recognized a tax benefit of $1.2 million from the recognition of previously unrecognized tax benefits. The settlement also provided Cadence with additional visibility into when it could expect to utilize certain tax credits, which in turn allowed Cadence to release $12.6 million of valuation allowance on anticipated credits. As of January 2, 2016 Cadence’s earliest tax years that remain open to examination and the assessment of additional tax include: Jurisdiction Earliest Tax Year Open to Examination United States - Federal 2012 United States - California 2011 Hungary 2007 Unrecognized Tax Benefits The changes in Cadence’s gross amount of unrecognized tax benefits during fiscal 2015 , 2014 and 2013 are as follows: 2015 2014 2013 (In thousands) Unrecognized tax benefits at the beginning of the fiscal year $ 97,224 $ 78,279 $ 92,378 Gross amount of the increases (decreases) in unrecognized tax benefits of tax positions taken during a prior year* (7,331 ) 8,301 6,196 Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year 7,513 12,381 5,119 Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes (9,571 ) — (15,171 ) Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations (119 ) (86 ) (11,850 ) Effect of foreign currency translation 104 (1,651 ) 1,607 Unrecognized tax benefits at the end of the fiscal year $ 87,820 $ 97,224 $ 78,279 Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence’s effective tax rate $ 48,335 $ 57,127 $ 49,458 _________ * Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions The total amounts of interest, net of tax, and penalties recognized in the consolidated income statements as provision (benefit) for income taxes for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Interest $ 110 $ 255 $ (12,470 ) Penalties (127 ) (748 ) (7,698 ) The total amounts of gross accrued interest and penalties recognized in the consolidated balance sheets as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Interest $ 1,128 $ 1,155 Penalties 270 446 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2016 | |
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 2027. 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 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Rent expense $ 27,406 $ 26,666 $ 25,450 As of January 2, 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) 2016 $ 21,669 $ (671 ) $ 20,998 2017 13,009 (80 ) 12,929 2018 8,996 — 8,996 2019 6,199 — 6,199 2020 2,600 — 2,600 Thereafter 2,608 — 2,608 Total lease payments $ 55,081 $ (751 ) $ 54,330 Of the operating lease payments noted above, $0.4 million was accrued as part of Cadence’s restructuring plans as of January 2, 2016 and will be charged against the restructuring accrual as paid. Purchase Obligations Cadence had purchase obligations of $48.2 million as of January 2, 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 2015 , 2014 or 2013 . 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 2015 , 2014 or 2013 . |
Stock Repurchase Programs
Stock Repurchase Programs | 12 Months Ended |
Jan. 02, 2016 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAMS | STOCK REPURCHASE PROGRAMS In July 2015, Cadence’s Board of Directors approved an 18 -month plan to repurchase shares of Cadence common stock of up to an aggregate of $1.2 billion , beginning in the third quarter of fiscal 2015. The actual timing and amount of repurchases are subject to business and market conditions, corporate and regulatory requirements, acquisition opportunities and other factors. The stock repurchase program may be suspended, modified or discontinued at any time. Total repurchase authorizations that remained in effect as of January 2, 2016 were as follows: Authorization Date Amount Remaining Authorization (In thousands) February 2008 $ 500,000 $ — August 2008 500,000 381,083 July 2015 578,804 578,804 Total remaining authorization $ 959,887 The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Shares repurchased 16,255 5,856 — Total cost of repurchased shares $ 333,189 $ 100,117 $ — |
Stock Compensation Plans and St
Stock Compensation Plans and Stock Based Compensation | 12 Months Ended |
Jan. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION | STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION Equity Incentive Plans Cadence’s Omnibus Plan provides for the issuance of both incentive and non-qualified options, restricted stock awards, restricted stock units, stock bonuses and the rights to acquire restricted stock to both executive and non-executive employees. During fiscal 2015, Cadence’s shareholders approved an amendment to the Omnibus Plan to increase the number of shares of common stock authorized for issuance by 7.5 million . As of January 2, 2016 , the total number of shares available for issuance under the Omnibus Plan is approximately 23.0 million plus any shares that are forfeited under prior plans. Options granted under the Omnibus Plan have an exercise price not less than the fair market value of the stock on the date of grant. Options and restricted stock generally vest over a three to four -year period. Options granted under the Omnibus Plan expire seven years from the date of grant. Vesting of restricted stock awards granted under the Omnibus Plan may require the attainment of specified performance criteria. Cadence’s 1995 Directors Stock Incentive Plan, or the Directors Plan, provides for the issuance of non-qualified options, restricted stock awards and restricted stock units to its non-employee directors. Options granted under the Directors Plan have an exercise price not less than the fair market value of the stock on the date of grant. The maximum number of shares available for issuance under the Directors Plan is approximately 3.6 million . Options granted under the Directors Plan expire after ten years, and options, restricted stock awards and restricted stock units vest one year from the date of grant. Cadence has assumed certain options granted to employees of acquired companies, or Acquired Options. The Acquired Options were assumed by Cadence outside of its stock option plans, and each option is administered under the terms of the respective original plans of the acquired companies. All of the Acquired Options have been adjusted for the price conversion under the terms of the acquisition agreement between Cadence and the relevant acquired company. If the Acquired Options are canceled, forfeited or expire, they do not become available for future grant. No additional options will be granted under any of the acquired companies’ plans. Stock-based Compensation Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the Employee Stock Purchase Plan, or ESPP, during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Stock options $ 7,903 $ 11,870 $ 13,100 Restricted stock 78,615 65,894 49,019 ESPP 5,823 6,028 4,166 Total stock-based compensation expense $ 92,341 $ 83,792 $ 66,285 Income tax benefit $ 24,294 $ 20,544 $ 16,236 Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Cost of product and maintenance $ 2,436 $ 2,244 $ 1,596 Cost of services 3,561 3,280 2,321 Marketing and sales 21,654 20,580 15,642 Research and development 49,755 43,173 32,999 General and administrative 14,935 14,515 13,727 Total stock-based compensation expense $ 92,341 $ 83,792 $ 66,285 Stock Options The exercise price of each stock option granted under Cadence’s employee equity incentive plans is equal to or greater than the closing price of Cadence’s common stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average grant date fair value of options granted and the weighted-average assumptions used in the model for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 Dividend yield None None None Expected volatility 26.8 % 29.2 % 40.0 % Risk-free interest rate 1.61 % 1.59 % 0.86 % Expected term (in years) 5.0 4.8 4.7 Weighted-average fair value of options granted $ 4.60 $ 3.89 $ 4.93 A summary of the changes in stock options outstanding under Cadence’s equity incentive plans during fiscal 2015 is presented below: Weighted- Average Weighted- Average Remaining Contractual Terms Aggregate Intrinsic Shares Exercise Price (Years) Value (In thousands) (In thousands) Options outstanding as of January 3, 2015 13,876 $ 9.71 Granted 1,305 17.25 Exercised (5,948 ) 8.79 Canceled and forfeited (256 ) 12.26 Options outstanding as of January 2, 2016 8,977 $ 11.35 3.5 $ 84,954 Options vested as of January 2, 2016 7,098 $ 10.35 3.1 $ 74,264 Options vested as of, and expected to vest after, January 2, 2016 8,976 $ 11.35 3.5 $ 84,947 Cadence had total unrecognized compensation expense, net of estimated forfeitures, related to stock option grants of $ 8.2 million as of January 2, 2016 , which will be recognized over the remaining vesting period. The remaining weighted-average vesting period of unvested awards is 2.3 years . The total intrinsic value of and cash received from options exercised during fiscal 2015 , 2014 and 2013 was: 2015 2014 2013 (In thousands) Intrinsic value of options exercised $ 67,363 $ 24,032 $ 15,114 Cash received from options exercised 52,261 46,123 27,569 Restricted Stock Generally, restricted stock, which includes restricted stock awards and restricted stock units, vests over three to four years and is subject to the employee’s continuing service to Cadence. The vesting of certain restricted stock grants is subject to attainment of specified performance criteria. Each fiscal quarter, Cadence estimates the probability of the achievement of these performance goals and recognizes any related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any one period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed. Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2015 , 2014 and 2013 was as follows: 2015 2014 2013 (In thousands) Stock-based compensation expense related to performance-based grants $ 5,544 $ 5,227 $ 4,340 A summary of the changes in restricted stock outstanding under Cadence’s equity incentive plans during fiscal 2015 , is presented below: Weighted- Average Grant Date Weighted- Average Remaining Vesting Terms Aggregate Intrinsic Shares Fair Value (Years) Value (In thousands) (In thousands) Unvested shares as of January 3, 2015 10,451 $ 15.51 Granted 5,849 19.62 Vested (5,019 ) 14.68 Forfeited (704 ) 16.34 Unvested shares as of January 2, 2016 10,577 $ 18.13 1.1 $ 220,103 Unvested shares expected to vest after January 2, 2016 10,000 $ 18.08 1.1 $ 208,091 Cadence had total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock grants of $143.7 million as of January 2, 2016 , which will be recognized over the remaining vesting period. The remaining weighted-average vesting period of unvested awards is 2.0 years. The total fair value realized by employees upon vesting of restricted stock during fiscal 2015 , 2014 and 2013 was: 2015 2014 2013 (In thousands) Fair value of restricted stock realized upon vesting $ 99,564 $ 75,283 $ 58,091 Employee Stock Purchase Plan Cadence provides an ESPP, as amended from time to time. Under the terms of the ESPP, Cadence is authorized to issue up to 74.0 million shares of common stock. Under the terms of the ESPP, for the offering period that commenced February 1, 2014, a majority of Cadence employees are eligible to purchase Cadence’s common stock in an amount not to exceed 7% of their annual base earnings plus bonuses and commissions, and subject to a limit in any calendar year of $9,411.76 worth of common stock. Under the ESPP and through the January 31, 2014 purchase date, a majority of Cadence’s employees could purchase Cadence’s common stock at a price equal to 85% of the lower of the fair market value at the beginning or the end of the applicable offering period, in an amount not to exceed 5% of their annual base earnings plus bonuses and commissions, and subject to a limit in any calendar year of $7,058.82 worth of common stock. Each offering period has a six -month duration beginning on either February 1 or August 1. The purchase dates fall on the last days of the six-month offering periods. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes option pricing model. The weighted-average grant date fair value of purchase rights granted under the ESPP and the weighted-average assumptions used in the model for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 Dividend yield None None None Expected volatility 22.9 % 24.2 % 25.7 % Risk-free interest rate 0.13 % 0.06 % 0.09 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value of options granted $ 4.23 $ 3.39 $ 3.21 Shares of common stock issued under the ESPP for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands, except per share amounts) Cadence shares purchased under the ESPP 1,519 1,689 1,382 Cash received for the purchase of shares under the ESPP $ 22,449 $ 20,017 $ 15,088 Weighted-average purchase price per share $ 14.78 $ 11.85 $ 10.91 Reserved for Future Issuance As of January 2, 2016 , Cadence had reserved the following shares of authorized but unissued common stock for future issuance: Shares (In thousands) Employee equity incentive plans* 21,523 Employee stock purchase plans 6,660 Directors stock option plans* 1,845 Total 30,028 _____________ * Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units. |
Acquisitions and Acquisition-Re
Acquisitions and Acquisition-Related Contingent Consideration | 12 Months Ended |
Jan. 02, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND ACQUISITIONS-RELATED CONTINGENT CONSIDERATION | ACQUISITIONS In June 2014, Cadence acquired Jasper Design Automation, Inc., or Jasper, a privately held provider of formal analysis solutions based in Mountain View, California. The acquired technology complements Cadence’s existing system design and verification platforms. Total cash consideration for Jasper, after taking into account adjustments for certain costs, and cash held by Jasper at closing of $28.7 million , was $139.4 million . Cadence will also make payments to certain employees through the third quarter of fiscal 2017 subject to continued employment and other conditions. Cadence also completed two other business combinations during fiscal 2014 for total cash consideration of $27.5 million , after taking into account cash acquired of $2.1 million . In April, 2013, Cadence acquired Tensilica, Inc., or Tensilica, a privately held provider of configurable dataplane processing units. Total cash consideration for Tensilica, after taking into account adjustments for certain costs and cash held by Tensilica at closing of $26.3 million , was $319.3 million . Cadence will also make payments to certain employees through the second quarter of fiscal 2016 subject to continued employment and other conditions. Acquisition-related Transaction Costs Transaction costs associated with acquisitions were $0.7 million , $3.7 million and $8.7 million during fiscal 2015 , 2014 and 2013 , respectively. These costs consist of professional fees and administrative costs and were expensed as incurred in Cadence’s consolidated income statements. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangibles | 12 Months Ended |
Jan. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND ACQUIRED INTANGIBLES | GOODWILL AND ACQUIRED INTANGIBLES Goodwill The changes in the carrying amount of goodwill during fiscal 2015 and 2014 were as follows: Gross Carrying Amount (In thousands) Balance as of December 28, 2013 $ 456,905 Goodwill resulting from acquisitions 102,025 Measurement period adjustments (3,476 ) Effect of foreign currency translation (1,687 ) Balance as of January 3, 2015 553,767 Effect of foreign currency translation (1,995 ) Balance as of January 2, 2016 $ 551,772 Measurement period adjustments to goodwill are applied based on new information obtained about preliminary amounts recognized for a business combination. During fiscal 2014, Cadence recorded measurement period adjustments associated with revisions to initial estimates of certain liabilities assumed with its acquisition of Jasper and certain tax estimates and assumptions made for one of its other fiscal 2014 acquisitions. These adjustments resulted in a decrease to goodwill. Cadence completed its annual goodwill impairment test during the third quarter of fiscal 2015 and determined that the fair value of Cadence’s single reporting unit substantially exceeded the carrying amount of its net assets and that no impairment existed. Acquired Intangibles, Net Acquired intangibles as of January 2, 2016 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 $ 329,627 $ (124,097 ) $ 205,530 Agreements and relationships 173,325 (86,808 ) 86,517 Tradenames, trademarks and patents 10,119 (5,684 ) 4,435 Total acquired intangibles 513,071 (216,589 ) 296,482 During fiscal 2015, Cadence completed certain projects previously included in in-process technology and transferred approximately $1.6 million 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 expense for fiscal 2015 , 2014 and 2013 , by consolidated income statement caption, was as follows: 2015 2014 2013 (In thousands) Cost of product and maintenance $ 40,532 $ 36,907 $ 24,023 Amortization of acquired intangibles 23,716 24,017 19,416 Total amortization of acquired intangibles $ 64,248 $ 60,924 $ 43,439 Estimated amortization expense for intangible assets with definite lives for the following five fiscal years and thereafter is as follows: (In thousands) 2016 $ 57,450 2017 52,770 2018 49,112 2019 43,132 2020 37,944 Thereafter 56,074 Total estimated amortization expense $ 296,482 |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Jan. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER CHARGES | RESTRUCTURING AND OTHER CHARGES Cadence has initiated various restructuring plans in an effort to better align its resources with its business strategy. These restructuring plans have primarily been comprised of severance payments and termination benefits related to headcount reductions, estimated lease losses related to facilities vacated under the restructuring plans and charges related to assets abandoned as part of the restructuring plans. During fiscal 2015, Cadence initiated a restructuring plan, or the 2015 Restructuring Plan, and recorded restructuring and other charges of approximately $4.2 million related to severance payments and termination benefits. As of January 2, 2016 , total liabilities related to the 2015 Restructuring Plan were $0.6 million . Cadence expects to make cash payments for severance and related benefits for the 2015 Restructuring Plan through the fourth quarter of fiscal 2016. Cadence also initiated restructuring plans during both fiscal 2014 and fiscal 2013, or the 2014 and 2013 Restructuring Plans, and recorded combined restructuring and other charges under both plans of approximately $29.0 million related to severance payments and termination benefits and impairments of certain long-lived assets. As of January 2, 2016 , total liabilities related to various restructuring plans initiated prior to fiscal 2015 were $0.5 million . Cash payments for restructuring plans initiated prior to fiscal 2015 will be made through fiscal 2017. The following table presents activity for Cadence’s restructuring plans during fiscal 2015 , 2014 and 2013 : Severance and Benefits Excess Facilities Other Total (In thousands) Balance, December 29, 2012 $ — $ 4,343 $ — $ 4,343 Restructuring and other charges, net 17,589 101 309 17,999 Non-cash charges — — (309 ) (309 ) Cash payments (6,944 ) (951 ) — (7,895 ) Effect of foreign currency translation 27 59 — 86 Balance, December 28, 2013 $ 10,672 $ 3,552 $ — $ 14,224 Restructuring and other charges (credits), net 8,004 (945 ) 3,193 10,252 Non-cash charges — — (2,450 ) (2,450 ) Cash payments (13,967 ) (1,056 ) (262 ) (15,285 ) Effect of foreign currency translation (247 ) (284 ) — (531 ) Balance, January 3, 2015 $ 4,462 $ 1,267 $ 481 $ 6,210 Restructuring and other charges (credits), net 3,636 1,095 (220 ) 4,511 Non-cash charges — (116 ) — (116 ) Cash payments (7,322 ) (1,798 ) (261 ) (9,381 ) Effect of foreign currency translation (25 ) (62 ) — (87 ) Balance, January 2, 2016 $ 751 $ 386 $ — $ 1,137 The remaining liability for Cadence’s restructuring plans is recorded in the consolidated balance sheet as follows: As of January 2, 2016 (In thousands) Accounts payable and accrued liabilities $ 990 Other long-term liabilities 147 Total liabilities $ 1,137 |
Other Income, Net
Other Income, Net | 12 Months Ended |
Jan. 02, 2016 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | OTHER INCOME, NET Cadence’s other income, net, for fiscal 2015 , 2014 and 2013 was as follows: 2015 2014 2013 (In thousands) Interest income $ 2,667 $ 1,827 $ 1,706 Gains on sale of marketable debt and equity securities, net 21 722 1,364 Gains on non-marketable investments 2,348 2,524 1,098 Gains (losses) on securities in NQDC trust (369 ) 3,415 3,293 Gains on foreign exchange 5,606 1,742 285 Write-down of non-marketable investments — (1,956 ) (464 ) Other income, net 204 205 288 Total other income, net $ 10,477 $ 8,479 $ 7,570 |
Net Income per Share
Net Income per Share | 12 Months Ended |
Jan. 02, 2016 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income during the period by the weighted-average number of shares of common stock outstanding during that period, less unvested restricted stock awards. Diluted net income per share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock method of accounting. The calculations for basic and diluted net income per share for fiscal 2015 , 2014 and 2013 are as follows: 2015 2014 2013 (In thousands, except per share amounts) Net income $ 252,417 $ 158,898 $ 164,243 Weighted-average common shares used to calculate basic net income per share 288,018 283,349 277,796 Convertible notes — — 8 2015 Warrants 16,434 15,930 10,549 Stock-based awards 7,850 7,496 6,211 Weighted-average common shares used to calculate diluted net income per share 312,302 306,775 294,564 Net income per share - basic $ 0.88 $ 0.56 $ 0.59 Net income per share - diluted $ 0.81 $ 0.52 $ 0.56 The 2015 Warrants expired on various dates from September 2015 through December 2015, and Cadence issued approximately 23.1 million shares of common stock to the purchasers of the 2015 Warrants. The following table presents shares of Cadence’s common stock outstanding for fiscal 2015 , 2014 and 2013 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: 2015 2014 2013 (In thousands) 2013 Warrants* — — 6,830 Options to purchase shares of common stock 1,029 2,773 5,973 Non-vested shares of restricted stock 60 18 846 Total potential common shares excluded 1,089 2,791 13,649 ____________ * These warrants expired on various dates from February 2014 through April 2014. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Jan. 02, 2016 | |
Balance Sheet Components [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS A summary of certain balance sheet components as of January 2, 2016 and January 3, 2015 is as follows: As of January 2, January 3, (In thousands) Inventories: Raw materials $ 40,499 $ 42,428 Finished goods 16,263 13,966 Inventories $ 56,762 $ 56,394 Prepaid expenses and other: Prepaid expenses and other current assets $ 31,967 $ 31,856 Deferred income taxes — 94,457 Prepaid expenses and other $ 31,967 $ 126,313 Property, plant and equipment: Computer equipment and related software $ 471,842 $ 445,536 Buildings 126,156 126,382 Land 55,898 55,926 Leasehold, building and land improvements 90,400 91,128 Furniture and fixtures 21,847 22,424 Equipment 42,274 40,637 In-process capital assets 1,527 630 Total cost 809,944 782,663 Less: Accumulated depreciation and amortization (581,345 ) (552,551 ) Property, plant and equipment, net $ 228,599 $ 230,112 Other assets: Deferred income taxes $ 245,651 $ 140,969 Other long-term assets 59,252 68,397 Other assets $ 304,903 $ 209,366 Accounts payable and accrued liabilities: Payroll and payroll-related accruals $ 155,592 $ 151,526 Accounts payable 25,152 12,102 Income taxes payable - current 11,024 9,118 Accrued operating liabilities 46,254 52,629 Accounts payable and accrued liabilities $ 238,022 $ 225,375 |
Fair Value
Fair Value | 12 Months Ended |
Jan. 02, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets; • Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during fiscal 2015. On a quarterly basis, Cadence measures at fair value certain financial assets and liabilities. The fair value of financial assets and liabilities was determined using the following levels of inputs as of January 2, 2016 and January 3, 2015 : Fair Value Measurements as of January 2, 2016: Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 360,691 $ 360,691 $ — $ — Short-term investments: Corporate debt securities 34,829 — 34,829 — Bank certificates of deposit 15,046 — 15,046 — United States Treasury securities 36,286 36,286 — — United States government agency securities 4,152 4,152 — — Commercial paper 1,993 — 1,993 — Marketable equity securities 2,192 2,192 — — Trading securities held NQDC trust 24,905 24,905 — — Total Assets $ 480,094 $ 428,226 $ 51,868 $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts 362 — 362 — Total Liabilities $ 362 $ — $ 362 $ — Fair Value Measurements as of January 3, 2015: Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 728,496 $ 728,496 $ — $ — Short-term investments: Corporate debt securities 34,894 — 34,894 — Bank certificates of deposit 21,910 — 21,910 — United States Treasury securities 19,374 19,374 — — United States government agency securities 9,208 9,208 — — Commercial paper 3,186 — 3,186 — Marketable equity securities 1,873 1,873 — — Trading securities held in NQDC trust 27,034 27,034 — — 2015 Notes Hedges 523,930 — 523,930 — Total Assets $ 1,369,905 $ 785,985 $ 583,920 $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 3,163 $ — $ 3,163 $ — 2015 Notes Embedded Conversion Derivative 523,930 — 523,930 — Total Liabilities $ 527,093 $ — $ 527,093 $ — Level 1 Measurements Cadence’s cash equivalents held in money market funds, available-for-sale United States Treasury securities, United States government agency securities, marketable equity securities and the trading securities held in Cadence’s NQDC trust are measured at fair value using level 1 inputs. Level 2 Measurements As of January 3, 2015 , the 2015 Notes Hedges and the 2015 Notes Embedded Conversion Derivative were measured at fair value using a combination of level 1 and level 2 inputs. These instruments were not actively traded and were valued using an option pricing model that used observable market data for all inputs, such as implied volatility of Cadence’s common stock, risk-free interest rate and other factors. Cadence’s available-for-sale corporate debt securities, bank certificates of deposit and commercial paper are measured at fair value using level 2 inputs. Cadence obtains the fair values of its level 2 available-for-sale securities from a professional pricing service and validates the fair values by assessing the pricing methods and inputs and by comparing the fair values to another independent source. Cadence’s foreign currency exchange contracts are measured at fair value using observable foreign currency exchange rates. |
Employee and Director Benefit P
Employee and Director Benefit Plans | 12 Months Ended |
Jan. 02, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE AND DIRECTOR BENEFIT PLANS | EMPLOYEE AND DIRECTOR BENEFIT PLANS Cadence maintains various defined contribution plans for its eligible U.S. and non-U.S. employees. For employees in the United States, Cadence maintains a 401(k) savings plan to provide retirement benefits through tax-deferred salary deductions and may make discretionary contributions, as determined by the Board of Directors, which cannot exceed a specified percentage of the annual aggregate salaries of those employees eligible to participate. Cadence’s total contributions made to these plans during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Contributions to defined contribution plans $ 22,337 $ 21,121 $ 20,055 Executive Officers and Directors may also elect to defer compensation payable to them under Cadence’s NQDC. Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC. These investments are classified as trading securities in the consolidated balance sheets and gains and losses are recognized as other income, net in the consolidated income statements. Net recognized gains (loss) of trading securities during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Trading securities $ (369 ) $ 3,415 $ 3,293 Certain of Cadence’s international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for Cadence’s defined benefit retirement plans is recorded in other long-term liabilities in the consolidated balance sheets. The unfunded projected benefit obligation for these retirement plans as of January 2, 2016 , January 3, 2015 and December 28, 2013 was as follows: January 2, January 3, December 28, (In thousands) Unfunded projected benefit obligation - defined benefit retirement plans $ 6,131 $ 6,794 $ 7,160 Cadence recorded total expense related to these defined benefit retirement plans during fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Expense related to defined benefit retirement plans $ 1,359 $ 1,799 $ 1,817 |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Jan. 02, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
OTHER COMPREHENSIVE INCOME | OTHER COMPREHENSIVE INCOME (LOSS) Cadence’s other comprehensive income (loss) is comprised of foreign currency translation gains and losses, changes in defined benefit plan liabilities, and changes in unrealized holding gains and losses on available-for-sale securities net of reclassifications for realized gains and losses, as presented in Cadence’s consolidated statements of comprehensive income. Accumulated other comprehensive income (loss) was comprised of the following as of January 2, 2016 , and January 3, 2015 : As of January 2, January 3, (In thousands) Foreign currency translation gain (loss) $ (9,569 ) $ 15,707 Changes in defined benefit plan liabilities (3,066 ) (3,401 ) Unrealized holding gains on available-for-sale securities 210 41 Total accumulated other comprehensive income (loss) $ (12,425 ) $ 12,347 For fiscal 2015 , 2014 and 2013 , there were no significant amounts reclassified to net income from foreign currency translation gain (loss) or changes in defined benefit plan liabilities components of accumulated other comprehensive income (loss). Changes in unrealized holding gains or losses on available-for-sale securities includes the following for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Unrealized holding gains or losses $ 202 $ (156 ) $ (127 ) Reclassification of unrealized holding gains or losses to other income, net (33 ) (149 ) (53 ) Changes in unrealized holding gains or losses $ 169 $ (305 ) $ (180 ) |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jan. 02, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Segment reporting is based on the “management approach,” following the method that management organizes the company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. Cadence’s chief operating decision maker is its President and Chief Executive Officer, or CEO, who reviews Cadence’s consolidated results as one operating segment. In making operating decisions, the CEO primarily considers consolidated financial information, accompanied by disaggregated information about revenues by geographic region. Outside the United States, Cadence markets and supports its products and services primarily through its subsidiaries. Revenue is attributed to geography based upon the country in which the product is used or services are delivered. Long-lived assets are attributed to geography based on the country where the assets are located. The following table presents a summary of revenue by geography for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Americas: United States $ 782,419 $ 696,608 $ 648,714 Other Americas 25,960 23,357 22,940 Total Americas 808,379 719,965 671,654 Asia 413,588 360,280 289,065 Europe, Middle East and Africa 316,684 328,724 303,593 Japan 163,440 171,963 195,804 Total $ 1,702,091 $ 1,580,932 $ 1,460,116 The following table presents a summary of long-lived assets by geography as of January 2, 2016 , January 3, 2015 and December 28, 2013 : As of January 2, January 3, December 28, (In thousands) Americas: United States $ 189,665 $ 200,760 $ 207,694 Other Americas 387 578 294 Total Americas 190,052 201,338 207,988 Asia 24,767 22,145 23,508 Europe, Middle East and Africa 12,832 5,951 6,326 Japan 948 678 893 Total $ 228,599 $ 230,112 $ 238,715 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Jan. 02, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT On January 28, 2016, Cadence entered into a $300.0 million three -year senior unsecured non-amortizing term loan facility, or the 2019 Term Loan, with a group of lenders led by JPMorgan Chase Bank, N.A., as administrative agent. The 2019 Term Loan is unsecured, and the proceeds will be used for general corporate purposes, including the repurchase of its common stock. Amounts outstanding under the 2019 Term Loan initially accrue interest at a rate equal to LIBOR plus a margin of 1.125% per annum, which may increase to a rate equal to LIBOR plus a margin of up to 1.875% per annum, depending on Cadence’s leverage ratio. The covenants of the 2019 Term Loan are consistent with Cadence’s existing five-year senior unsecured revolving credit facility and include customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens and make certain investments, asset dispositions and restricted payments. In addition, the term loan agreement contains certain financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 2.75 to 1 , with a step-up to 3.25 to 1 for one year following an acquisition by Cadence of at least $250.0 million that results in a pro forma leverage ratio between 2.50 to 1 and 3.00 to 1 . The term loan agreement also requires Cadence to maintain an EBITDA to interest charges ratio of at least 3.00 to 1 . |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Cadence’s fiscal year-end is the Saturday closest to December 31. Fiscal 2015 and fiscal 2013 were 52-week years. Fiscal 2014 was a 53-week year ending on January 3, 2015. The consolidated financial statements include the accounts of Cadence and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly owned by Cadence. Certain prior period balances have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates Preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles, or U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
New Accounting Standards | New Accounting Standards In November 2015, the FASB issued a new standard to simplify the presentation of deferred income taxes. The new standard requires that deferred tax assets and liabilities be classified as non-current in the statement of financial position. Cadence elected to early adopt the new standard effective January 2, 2016 on a prospective basis. Adoption of this standard resulted in a reclassification of Cadence’s net current deferred tax asset to long term on its consolidated balance sheet as of January 2, 2016 . No prior periods were retrospectively adjusted. In May 2014, the Financial Accounting Standards Board, or FASB, issued a comprehensive revenue recognition standard for revenue associated with the delivery of goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date of December 15, 2016. Accordingly, the updated standard is effective for Cadence in the first quarter of fiscal 2018. Cadence has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its Consolidated Financial Statements and related disclosures. In April 2015, the FASB issued a new accounting standard requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the associated debt liability. The new standard is effective for us in the first quarter of fiscal 2016 and requires retrospective application. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. In April 2015, the FASB also issued a new accounting standard that provides explicit guidance with respect to accounting for fees paid in a cloud computing arrangement. The new standard is effective for Cadence in the first quarter of fiscal 2016 and allows for prospective or retrospective application. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. In September 2015, the FASB issued a new accounting standard to simplify the accounting for measurement period adjustments that occur in periods after a business combination is consummated. The new standard requires that an acquirer recognize adjustments to provisional amounts in the reporting period in which the adjustment amounts are determined and eliminates the requirement to retrospectively adjust the financial statements for measurement period adjustments. The new standard is effective for Cadence in the first quarter of fiscal 2016. Adoption of this standard will not have a material impact on Cadence’s consolidated financial statements. |
Cash, Cash Equivalents and Short-Term Investments | Cash, Cash Equivalents and Short-Term Investments Cadence considers all highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents. Cadence’s short-term investments include marketable debt securities with original maturities greater than three months on the date of purchase and marketable equity securities. Cadence considers its entire portfolio of marketable debt and equity securities to be available for sale and available to fund current operations. Available-for-sale debt and equity securities are carried at fair value, with the unrealized gains and losses presented net of tax as a separate component of other comprehensive income. Unrealized and realized gains and losses are determined using the specific identification method. Cadence recognizes gains on its available-for-sale securities when they are realized. Cadence recognizes losses on its available-for-sale securities when they are realized or when Cadence has determined that an other-than-temporary decline in fair value has occurred. For an available-for-sale debt security, an other-than-temporary decline in fair value has occurred when the security’s fair value is less than its amortized cost basis and Cadence intends to sell the security, or it is more likely than not that Cadence will be required to sell the security before recovery of its amortized cost basis. Cadence records realized gains, realized losses and other-than-temporary impairments as part of other income, net in the consolidated income statements. |
Foreign Operations | Foreign Operations Cadence transacts business in various foreign currencies. The United States dollar is the functional currency of Cadence’s consolidated entities operating in the United States and certain of its consolidated subsidiaries operating outside the United States. The functional currency for Cadence’s other consolidated entities operating outside of the United States is generally the local country’s currency. Cadence translates the financial statements of consolidated entities whose functional currency is not the United States dollar into United States dollars. Cadence translates assets and liabilities at the exchange rate in effect as of the financial statement date and translates income statement accounts using an average exchange rate for the period. Cadence includes adjustments from translating assets and liabilities into United States dollars, and the effect of exchange rate changes on intercompany transactions of a long-term investment nature in stockholders’ equity as a component of accumulated other comprehensive income. Cadence reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature, as well as gains and losses from foreign currency transactions of a monetary nature in other income, net, in the consolidated income statements. |
Revenue Recognition | Revenue Recognition Software and IP Revenue Recognition Cadence licenses its software and IP products using three different license types: • Term licenses; • Subscription licenses; and • Perpetual licenses. Term licenses - Cadence’s term license arrangements offer customers the right to: • Access and use all products delivered at the outset of an arrangement throughout the entire term of the arrangement, generally two to three years, with no rights to return; and • Remix among the products delivered at the outset of the arrangement, so long as the cumulative contractual value of all products in use does not exceed the total license fee determined at the outset of the arrangement. Subscription licenses - In addition to the rights of a term license, Cadence’s subscription license arrangements also offer customers the right to: • Use unspecified additional products that become commercially available during the term of the arrangement; and • Remix into other unspecified additional products that may become available during the term of the arrangement, so long as the cumulative contractual value of all products in use does not exceed the total license fee determined at the outset of the arrangement. In general, product and maintenance revenue associated with term and subscription licenses is recognized ratably over the term of the license, commencing upon the later of the effective date of the arrangement or delivery of the licensed product. Perpetual licenses - Cadence’s perpetual licenses consist of software licensed on a perpetual basis with no right to return or ability to remix the licensed software. Cadence licenses its design IP under a perpetual license on a per-design basis. In general, product revenue associated with perpetual licenses where VSOE exists for the undelivered maintenance is recognized upon delivery of the licensed product and maintenance revenue is recognized ratably over the maintenance term. If VSOE does not exist for the undelivered maintenance in a perpetual license, product revenue is recognized ratably over the maintenance term. If certain other criteria are met, revenue for design IP is recognized upon delivery and we accrue the expected costs of maintenance. Hardware Revenue Recognition Cadence generally has a minimum of two deliverables in arrangements involving the sale or lease of its hardware products. The first deliverable is the hardware product and software essential to the functionality of the hardware product, and the second deliverable is the right to receive maintenance on the hardware product and its software. Cadence allocates consideration between these deliverables based on the relative standalone selling price for each deliverable. Consideration allocated to the hardware product and its essential software is recognized as revenue at the time of delivery provided all other conditions for revenue recognition have been met. Consideration allocated to maintenance is recognized as revenue ratably over the maintenance term. Services Revenue Recognition Services revenue primarily consists of revenue received for performing engineering services. These services are generally not related to the functionality of the products licensed. In certain instances, Cadence will customize its IP on a fixed fee basis. Revenue from service contracts is recognized either on the time and materials method, as work is performed, or on the percentage-of-completion method. If a service contract is considered to be part of a multiple element arrangement, or MEA, that includes a software contract, revenue is generally recognized ratably over the duration of the software contract. For contracts with fixed or not-to-exceed fees, Cadence estimates on a monthly basis the percentage-of-completion based on the progress to completion of the services. Cadence has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. If different conditions were to prevail such that accurate estimates could not be made, then the use of the completed contract method would be required and the recognition of all revenue and costs would be deferred until the project was completed. Such a change could have a material impact on Cadence’s results of operations. Revenue Recognition Criteria Although the timing and amount of revenue recognition differs based on the deliverables in each arrangement, Cadence begins revenue recognition for an arrangement when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collection of the resulting receivable is probable. Persuasive evidence of an arrangement - Generally, Cadence uses a contract signed by the customer as evidence of an arrangement for subscription and term licenses, licenses of its IP products and hardware leases. If a contract signed by the customer does not exist, Cadence has historically used a purchase order as evidence of an arrangement for software perpetual licenses, hardware sales, maintenance renewals and small fixed-price service projects, such as training classes and small methodology service engagements. For all other service engagements, Cadence uses a signed professional services agreement and a statement of work to evidence an arrangement. In cases where both a signed contract and a purchase order exist, Cadence considers the signed contract to be the most persuasive evidence of the arrangement. Sales through Cadence’s distributors are evidenced by a master agreement governing the relationship, together with binding purchase orders from the distributor on a transaction-by-transaction basis. Product delivery - Software and VIP, and the corresponding access keys, are generally delivered to customers electronically. Electronic delivery occurs when Cadence provides the customer access to the software. Occasionally, Cadence will deliver software on a DVD with standard transfer terms of free-on-board, or F.O.B., shipping point. Design IP is also delivered electronically via download from a secure site. Cadence’s software and IP license agreements generally do not contain conditions for acceptance. Delivery of an entire hardware system is deemed to occur upon its successful installation. For certain hardware products, installation is the responsibility of the customer, as the system is fully functional at the time of shipment and delivery is deemed to be complete when the products are shipped with freight terms of F.O.B. shipping point. Fee is fixed or determinable - Cadence assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Cadence has established a history of collecting under the original contract without providing concessions on payments, products or services. For installment contracts that do not include a substantial upfront payment, Cadence only considers that a fee is fixed or determinable if the arrangement has payment periods that are equal to or less than the term of the licenses and the payments are collected in equal or nearly equal installments, when evaluated over the entire term of the arrangement. Cadence has a history of collecting receivables under software installment contracts of up to five years for which the fee has been assessed as fixed or determinable. Significant judgment is involved in assessing whether a fee is fixed or determinable. Cadence must also make these judgments when assessing whether a contract amendment to a term arrangement (primarily in the context of a license extension or renewal) constitutes a concession. Cadence’s experience has been that it is able to determine whether a fee is fixed or determinable. While Cadence does not expect that experience to change, if Cadence no longer were to have a history of collecting under the original contract without providing concessions, revenue would be required to be recognized when payments become due and payable. Such a change could have a material impact on Cadence’s results of operations. Collection is probable - Cadence assesses the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history, its current creditworthiness and geographic location. If in Cadence’s judgment collection of a fee is not probable, Cadence does not record revenue until the uncertainty is removed, which is generally upon receipt of cash payment. Multiple Element Arrangements An MEA is any arrangement that includes or contemplates rights for a combination of software, IP or hardware products, services, training or maintenance in a single arrangement. From time to time, Cadence may include individual deliverables in separately priced and separately executed contracts with the same customer. Cadence evaluates all relevant facts and circumstances in determining whether the separate contracts should be accounted for individually as distinct arrangements or whether the separate contracts are, in substance, an MEA. Significant judgment is involved in determining whether a group of contracts might be so closely related that they are, in effect, part of a single arrangement. Cadence’s judgments about whether several contracts together comprise an MEA can affect the timing of revenue recognition under those contracts, which could have an effect on its results of operations for the periods involved. For an MEA that includes software and nonsoftware elements, Cadence allocates the total consideration based on the relative standalone selling prices of each element. In these circumstances, Cadence is required to use a hierarchy to determine the standalone selling price to be used for allocating consideration to deliverables as follows: • Vendor specific objective evidence of fair value, or VSOE; • Third-party evidence of selling price, or TPE; and • Best estimate of the selling price, or BESP. Vendor-specific objective evidence of fair value - Cadence’s VSOE for maintenance is based upon the customer’s stated annual renewal rates and VSOE for services is based on the price charged when the services are sold separately. Cadence has not established VSOE for certain products, including software and IP licenses and hardware products, or for annual maintenance that is not cancellable by the customer. Third-party evidence of selling price - TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, Cadence’s offerings contain significant differentiation such that comparable pricing of products with similar functionality cannot be obtained. Furthermore, Cadence is unable to reliably determine what similar competitor products’ selling prices are when those products are sold on a standalone basis. Therefore, Cadence typically is not able to obtain TPE and TPE is not used to determine any standalone selling prices. Best estimate of the selling price - Cadence calculates the BESP of its hardware products based on its pricing practices, including the historical average prices charged for comparable hardware products. Cadence’s process for determining BESP for its software deliverables takes into account multiple factors that vary depending upon the unique facts and circumstances related to each deliverable. Key external and internal factors considered in developing the BESPs include prices charged by Cadence for similar arrangements, historical pricing practices and the nature of the product. In addition, when developing BESPs, Cadence may consider other factors as appropriate, including the pricing of competitive alternatives if they exist, and product-specific business objectives. For MEAs that contain software and nonsoftware elements, Cadence allocates the consideration to software or software-related elements as a group, and to any nonsoftware element separately based on the standalone selling price hierarchy. The consideration allocated to each element is then recognized as revenue when the basic revenue recognition criteria are met for each element. Once the consideration is allocated to the group of software and software-related elements, it then follows the recognition principles of software revenue recognition accounting standards. For MEAs involving only software and software-related deliverables, VSOE must exist to allocate the total fee among all delivered and undelivered elements, or if VSOE of all undelivered elements exists, revenue is recognized using the residual method. Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized up front as the elements are delivered. If VSOE does not exist for all elements to support the allocation of the total fee among all elements of the arrangement, or if VSOE does not exist for all undelivered elements to apply the residual method, revenue is recognized ratably over the term of the undelivered elements. Other Factors Regarding Revenue Recognition Taxes collected from customers and remitted to governmental authorities - Cadence applies the net basis presentation for taxes collected from customers and remitted to governmental authorities. |
Derivative Financial Instruments | Derivative Financial Instruments Cadence enters into foreign currency forward exchange contracts with financial institutions to protect against currency exchange risks associated with existing assets and liabilities. A foreign currency forward exchange contract acts as a hedge by increasing in value when underlying assets decrease in value or underlying liabilities increase in value due to changes in foreign exchange rates. Conversely, a foreign currency forward exchange contract decreases in value when underlying assets increase in value or underlying liabilities decrease in value due to changes in foreign exchange rates. The forward contracts are not designated as accounting hedges and, therefore, the unrealized gains and losses are recognized in other income, net, in advance of the actual foreign currency cash flows. The fair value of these forward contracts is recorded in accrued liabilities or in other current assets. These forward contracts generally have maturities of 90 days or less. |
Receivables | Receivables Cadence’s receivables, net includes invoiced accounts receivable and the current portion of unbilled receivables. Unbilled receivables represent amounts Cadence has recorded as revenue for which payments from a customer are due over time. Cadence’s accounts receivable and unbilled receivables were initially recorded at the transaction value. Cadence’s long-term receivables balance includes receivable balances to be invoiced more than one year after each balance sheet date. |
Allowance for Doubtful Accounts | Allowances for Doubtful Accounts Each fiscal quarter, Cadence assesses its ability to collect outstanding receivables, and provides allowances for a portion of its receivables when collection is not probable. Cadence analyzes the creditworthiness of its customers, historical experience, changes in customer demand and the overall economic climate in the industries that Cadence serves. Provisions are made based upon a specific review of customer receivables and are recorded in operating expenses. |
Inventories | Inventories Inventories are stated at the lower of cost or market value. Cadence’s inventories include high technology parts and components for complex emulation and prototyping hardware systems. These parts and components are specialized in nature and may be subject to rapid technological obsolescence. While Cadence has programs to minimize the required inventories on hand and considers technological obsolescence when estimating required reserves to reduce recorded amounts to market values, it is reasonably possible that such estimates could change in the near term. Cadence’s policy is to reserve for inventory in excess of 12-month demand or for other known obsolescence or realization issues. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at historical cost. Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows: Computer equipment and related software 2-7 years Buildings 25-32 years Leasehold improvements Shorter of the lease term or the estimated useful life Building improvements and land improvements Estimated useful life Furniture and fixtures 3-5 years Equipment 3-5 years Cadence capitalizes certain costs of software developed for internal use. Capitalization of software developed for internal use begins at the application development phase of the project. Amortization begins when the computer software is substantially complete and ready for its intended use. Amortization is recorded on a straight-line basis over the estimated useful life. |
Software Development Costs | Software Development Costs Software development costs are capitalized beginning when a product’s technological feasibility has been established by completion of a working model of the product and amortization begins when a product is available for general release to customers. The period between the achievement of technological feasibility and the general release of Cadence’s products has typically been of short duration. |
Goodwill | Goodwill Cadence conducts a goodwill impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of Cadence’s single reporting unit may be less than its carrying amount. Cadence’s goodwill impairment test consists of two steps. The first step requires that Cadence compare the estimated fair value of its single reporting unit to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value of its net assets, Cadence would be required to complete the second step of the test by analyzing the fair value of its goodwill. If the carrying value of the goodwill exceeds its fair value, an impairment charge is recorded. |
Long-lived Assets, Including Acquired Intangibles | Long-Lived Assets, Including Acquired Intangibles Cadence’s definite-lived, long-lived assets consist of property, plant and equipment and other acquired intangibles. Acquired intangibles with definite lives are amortized on a straight-line basis over the remaining estimated economic life of the underlying products and technologies, which range from one to fourteen years. Cadence reviews its definite-lived, long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of an asset or asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset or asset group is expected to generate. If it is determined that the carrying amount of an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset or asset group exceeds its fair value. |
Non-Marketable Investments | Non-Marketable Investments Cadence’s non-marketable investments include its investments in privately-held companies. These investments are initially recorded at cost and are included in other assets in the consolidated balance sheets. Cadence accounts for these investments using either the cost method or the equity method of accounting. Cadence reviews the fair value of its non-marketable investments on a regular basis to determine whether the investments in these companies are other-than-temporarily impaired. Cadence considers investee financial performance and other information received from the investee companies, as well as any other available estimates of the fair value of the investee companies in its review. If Cadence determines the carrying value of an investment exceeds its fair value, and that difference is other than temporary, Cadence writes down the value of the investment to its fair value. Cadence records investment write-downs in other income, net, in the consolidated income statements. |
Nonqualified Deferred Compensation Trust | Nonqualified Deferred Compensation Trust Executive officers, senior management and members of Cadence’s Board of Directors may elect to defer compensation payable to them under Cadence’s Nonqualified Deferred Compensation Plan, or the NQDC. Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC. The selected investments held in the NQDC accounts are classified as trading securities. Trading securities are carried at fair value, with the unrealized gains and losses recognized in the consolidated income statements as other income, net. These trading securities are classified in other assets in the consolidated balance sheets because the securities are not available for Cadence’s use in its operations. Cadence’s obligation with respect to the NQDC trust is recorded in other long-term liabilities on the consolidated balance sheets. Increases and decreases in the NQDC trust liability are recorded as compensation expense in the consolidated income statements. |
Deferred Revenue | Deferred Revenue Deferred revenue arises when customers are billed for products or services in advance of revenue recognition. Cadence’s deferred revenue consists primarily of unearned revenue on product licenses and the related maintenance for which revenue is recognized over the duration of the license. The fees for term and subscription licenses are generally billed quarterly in advance and the related revenue is recognized over multiple periods over the ensuing license period. Maintenance on perpetual licenses is generally renewed annually, billed in full in advance, and the corresponding revenue is recognized over the 12 -month maintenance term. |
Comprehensive Income | Comprehensive Income Other comprehensive income (loss) is reported as a component of stockholders’ equity and includes foreign currency translation gains and losses, changes in defined benefit plan liabilities, and unrealized gains and losses on marketable securities that are available for sale. Cadence reports comprehensive income (loss) in the consolidated statements of comprehensive income. |
Accounting for Income Taxes | Accounting for Income Taxes Cadence accounts for the effect of income taxes in its consolidated financial statements using the asset and liability method. This process involves estimating actual current tax liabilities together with assessing carryforwards and temporary differences resulting from differing treatment of items, such as depreciation, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, measured using enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be recovered or settled. Cadence then records a valuation allowance to reduce the deferred tax assets to the amount that Cadence believes is more likely than not to be realized based on its judgment of all available positive and negative evidence. The weight given to the potential effect of negative and positive evidence is commensurate with the extent to which the strength of the evidence can be objectively verified. This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the following: • The nature and history of current or cumulative financial reporting income or losses; • Sources of future taxable income; • The anticipated reversal or expiration dates of the deferred tax assets; and • Tax planning strategies. Cadence takes a two-step approach to recognizing and measuring the financial statement benefit of uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement of the audit. Cadence classifies interest and penalties on unrecognized tax benefits as income tax expense or benefit. |
Restructuring Charges | Restructuring Charges Cadence records personnel-related restructuring charges with customary termination benefits when the costs are both probable and estimable. Cadence records personnel-related restructuring charges with non-customary termination benefits when the plan has been communicated to the affected employees. Cadence records facilities-related restructuring charges in the period in which the affected facilities are vacated. In connection with facilities-related restructuring plans, Cadence has made a number of estimates and assumptions related to losses on excess facilities that have been vacated or consolidated, particularly the timing of subleases and sublease terms. Closure and space reduction costs included in the restructuring charges include payments required under leases less any applicable estimated sublease income after the facilities are abandoned, lease buyout costs and certain contractual costs to maintain facilities during the period after abandonment. Cadence records estimated provisions for termination benefits and outplacement costs along with other personnel-related restructuring costs, long-term asset impairments related to abandoned assets and other costs associated with the restructuring plan. Cadence regularly evaluates the adequacy of its lease loss accruals and severance and related benefits accruals, and adjusts the balances based on actual costs incurred or changes in estimates and assumptions. Subsequent adjustments to restructuring accruals are classified in restructuring and other charges in the consolidated income statements. |
Stock-Based Compensation | Stock-Based Compensation Cadence recognizes the cost of employee services received in exchange for awards of equity instruments as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the value of the award and is recognized as expense, less expected forfeitures, over the requisite service period, which is typically the vesting period. Cadence recognizes stock-based compensation expense on the straight-line method for awards that only contain a service condition and on the graded-vesting method for awards that contain both a service and performance condition. |
Treasury Stock | Treasury Stock Cadence generally issues shares related to its stock-based compensation plans from shares held in treasury. When treasury stock is reissued at an amount higher than its cost, the difference is recorded as a component of capital in excess of par in the consolidated statements of stockholders’ equity. When treasury stock is reissued at an amount lower than its cost, the difference is recorded as a component of capital in excess of par to the extent that gains exist to offset the losses. If there are no accumulated treasury stock gains in capital in excess of par, the losses upon reissuance of treasury stock are recorded as a component of accumulated deficit in the consolidated statements of stockholders’ equity. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments, including derivative financial instruments, that may potentially subject Cadence to concentrations of credit risk, consist principally of cash and cash equivalents, short-term investments, long-term investments, accounts receivable and forward contracts. Cadence’s short-term investments include debt securities issued by financial institutions, corporations, the United States Treasury and other United States government agencies. Credit exposure related to Cadence’s foreign currency forward contracts is limited to the realized and unrealized gains on these contracts. |
Advertising | Advertising Cadence expenses the costs of advertising as incurred. |
Fair Value of Financial Instruments | Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets; • Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred. |
Commitments and Contingencies | 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. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Accounting Policies [Abstract] | |
Depreciation and amortization over the estimated useful lives, using the straight-line method | Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows: Computer equipment and related software 2-7 years Buildings 25-32 years Leasehold improvements Shorter of the lease term or the estimated useful life Building improvements and land improvements Estimated useful life Furniture and fixtures 3-5 years Equipment 3-5 years |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Debt Disclosure [Abstract] | |
Summary of debt outstanding | Cadence’s outstanding debt as of January 2, 2016 and January 3, 2015 was as follows: January 2, 2016 January 3, 2015 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value 2015 Notes $ — $ — $ — $ 349,999 $ (7,500 ) $ 342,499 2024 Notes 350,000 (1,212 ) 348,788 350,000 (1,324 ) 348,676 Revolving credit facility — — — — — — Total outstanding debt $ 350,000 $ (1,212 ) $ 348,788 $ 699,999 $ (8,824 ) $ 691,175 |
Cash, Cash Equivalents and In31
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Cash, Cash Equivalents and Investments [Abstract] | |
Summary of cash, cash equivalents and short-term investments | Cadence’s cash, cash equivalents and short-term investments at fair value as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, 2016 January 3, 2015 (In thousands) Cash and cash equivalents $ 616,686 $ 932,161 Short-term investments 94,498 90,445 Cash, cash equivalents and short-term investments $ 711,184 $ 1,022,606 |
Summary of cash and cash equivalents | The following table summarizes Cadence’s cash and cash equivalents at fair value as of January 2, 2016 and January 3, 2015 : As of January 2, January 3, (In thousands) Cash and interest bearing deposits $ 255,995 $ 203,665 Money market funds 360,691 728,496 Total cash and cash equivalents $ 616,686 $ 932,161 |
Summary of short-term investments | The following tables summarize Cadence’s short-term investments as of January 2, 2016 and January 3, 2015 : As of January 2, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Corporate debt securities $ 34,905 $ 1 $ (77 ) $ 34,829 Bank certificates of deposit 15,049 1 (4 ) 15,046 United States Treasury securities 36,372 2 (88 ) 36,286 United States government agency securities 4,151 1 — 4,152 Commercial paper 1,993 — — 1,993 Marketable debt securities 92,470 5 (169 ) 92,306 Marketable equity securities 1,817 375 — 2,192 Total short-term investments $ 94,287 $ 380 $ (169 ) $ 94,498 As of January 3, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Corporate debt securities $ 34,919 $ 6 $ (31 ) $ 34,894 Bank certificates of deposit 21,900 10 — 21,910 United States Treasury securities 19,375 12 (13 ) 19,374 United States government agency securities 9,209 3 (4 ) 9,208 Commercial paper 3,184 4 (2 ) 3,186 Marketable debt securities 88,587 35 (50 ) 88,572 Marketable equity securities 1,817 56 — 1,873 Total short-term investments $ 90,404 $ 91 $ (50 ) $ 90,445 |
Contractual maturity of marketable debt investments | The amortized cost and estimated fair value of marketable debt securities included in short-term investments as of January 2, 2016 , by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties. Amortized Cost Fair Value (In thousands) Due in less than one year $ 50,777 $ 50,751 Due in one to three years 41,693 41,555 Total marketable debt securities included in short-term investments $ 92,470 $ 92,306 |
Carrying value of non-marketable securities | Cadence’s non-marketable investments as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Cost method $ 1,081 $ 1,081 Equity method 2,836 5,058 Total non-marketable investments $ 3,917 $ 6,139 |
Receivables and Allowances fo32
Receivables and Allowances for Doubtful Accounts (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Receivables [Abstract] | |
Current and long-term accounts receivable balances | Cadence’s current and long-term receivables balances as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Accounts receivable $ 107,041 $ 79,410 Unbilled accounts receivable 57,807 43,082 Long-term receivables 4,498 3,644 Total receivables $ 169,346 $ 126,136 Less allowance for doubtful accounts — — Total receivables, net $ 169,346 $ 126,136 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |
Income before provision (benefit) for income taxes | Cadence’s income before provision (benefit) for income taxes included income from the United States and from foreign subsidiaries for fiscal 2015 , 2014 and 2013 , is as follows: 2015 2014 2013 (In thousands) United States $ 47,867 $ 12,680 $ 20,092 Foreign subsidiaries 219,729 168,322 138,904 Total income before provision (benefit) for income taxes $ 267,596 $ 181,002 $ 158,996 |
Components of income taxes provision (benefits) | Cadence’s provision (benefit) for income taxes was comprised of the following items for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Current: Federal $ (10,265 ) $ (13,754 ) $ (40,494 ) State and local (713 ) (1,159 ) 2,574 Foreign 24,622 19,100 28,040 Total current 13,644 4,187 (9,880 ) Deferred: Federal (13,165 ) 2,075 4,888 State and local 1,751 1,633 3,037 Foreign (1,734 ) 8,770 (10,291 ) Total deferred (13,148 ) 12,478 (2,366 ) Tax expense allocated to shareholders’ equity 14,683 5,439 6,999 Total provision (benefit) for income taxes $ 15,179 $ 22,104 $ (5,247 ) |
Summary of income tax reconciliation | The provision (benefit) for income taxes differs from the amount estimated by applying the United States statutory federal income tax rate of 35% to income before provision (benefit) for income taxes for fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Provision computed at federal statutory income tax rate $ 93,659 $ 63,350 $ 55,648 State and local income tax, net of federal tax effect 3,621 1,168 4,085 Foreign income tax rate differential (56,873 ) (39,012 ) (39,144 ) Non-deductible share-based compensation costs 2,687 5,726 2,053 Change in deferred tax asset valuation allowance (11,066 ) 10,065 18,354 Tax credits (19,243 ) (17,331 ) (18,372 ) Repatriation of foreign earnings 50 (2,910 ) (2,116 ) Non-deductible research and development expense 336 2,195 3,043 Tax effects of intra-entity transfer of assets (7,928 ) (5,397 ) 270 Domestic production activity deduction — (1,281 ) (1,088 ) Withholding taxes 5,119 4,064 3,333 Interest and penalties not included in tax settlements 331 (382 ) 1,701 Increase (decrease) in unrecognized tax benefits not included in tax settlements 3,530 157 (33,730 ) Other 956 1,692 716 Provision (benefit) for income taxes $ 15,179 $ 22,104 $ (5,247 ) Effective tax rate 6 % 12 % (3 )% |
Components of deferred tax assets and liabilities | The components of deferred tax assets and liabilities consisted of the following as of January 2, 2016 and January 3, 2015 : As of January 2, January 3, (In thousands) Deferred tax assets: Tax credit carryforwards $ 189,672 $ 180,127 Reserves and accruals 54,774 65,935 Intangible assets 29,256 38,938 Capitalized research and development expense for income tax purposes 26,332 33,552 Operating loss carryforwards 25,208 25,285 Deferred income 16,407 19,534 Capital loss carryforwards 20,552 21,494 Stock-based compensation costs 17,612 20,009 Depreciation and amortization 22,442 10,904 Investments 7,113 6,825 Other — 1,332 Total deferred tax assets 409,368 423,935 Valuation allowance (91,677 ) (102,742 ) Net deferred tax assets 317,691 321,193 Deferred tax liabilities: Intangible assets (45,697 ) (57,040 ) Undistributed foreign earnings (25,156 ) (28,026 ) Other (1,390 ) (1,607 ) Total deferred tax liabilities (72,243 ) (86,673 ) Total net deferred tax assets $ 245,448 $ 234,520 |
Summary of operating loss carryforward | As of January 2, 2016 , Cadence’s operating loss carryforwards were as follows: Amount Expiration Periods (In thousands) Federal* $ 25,976 from 2021 through 2035 California* 240,885 from 2016 through 2035 Other states (tax effected, net of federal benefit)* 3,177 from 2016 through 2035 Foreign (tax effected) 7,193 from 2032 through indefinite |
Summary of tax credit carryforwards | As of January 2, 2016 , Cadence had tax credit carryforwards of: Amount Expiration Periods (In thousands) Federal* $ 139,820 from 2016 through 2035 California 30,455 indefinite Other states 6,150 from 2016 through 2030 Foreign 13,246 from 2017 through 2035 _____________ *Certain of Cadence’s foreign tax credits are anticipated and as a result do not yet have an expiration period. |
Earliest tax years open to examination by jurisdiction | As of January 2, 2016 Cadence’s earliest tax years that remain open to examination and the assessment of additional tax include: Jurisdiction Earliest Tax Year Open to Examination United States - Federal 2012 United States - California 2011 Hungary 2007 |
Unrecognized tax benefits roll forward | The changes in Cadence’s gross amount of unrecognized tax benefits during fiscal 2015 , 2014 and 2013 are as follows: 2015 2014 2013 (In thousands) Unrecognized tax benefits at the beginning of the fiscal year $ 97,224 $ 78,279 $ 92,378 Gross amount of the increases (decreases) in unrecognized tax benefits of tax positions taken during a prior year* (7,331 ) 8,301 6,196 Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year 7,513 12,381 5,119 Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes (9,571 ) — (15,171 ) Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations (119 ) (86 ) (11,850 ) Effect of foreign currency translation 104 (1,651 ) 1,607 Unrecognized tax benefits at the end of the fiscal year $ 87,820 $ 97,224 $ 78,279 Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence’s effective tax rate $ 48,335 $ 57,127 $ 49,458 _________ * Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions |
Interest and penalties recognized in consolidated income statements and balance sheets | The total amounts of interest, net of tax, and penalties recognized in the consolidated income statements as provision (benefit) for income taxes for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Interest $ 110 $ 255 $ (12,470 ) Penalties (127 ) (748 ) (7,698 ) The total amounts of gross accrued interest and penalties recognized in the consolidated balance sheets as of January 2, 2016 and January 3, 2015 were as follows: As of January 2, January 3, (In thousands) Interest $ 1,128 $ 1,155 Penalties 270 446 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of rent expense [Table Text Block] | Rental expense is recognized on a straight-line basis and was as follows during fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Rent expense $ 27,406 $ 26,666 $ 25,450 |
Schedule of future minimum lease payments for operating leases [Table Text Block] | As of January 2, 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) 2016 $ 21,669 $ (671 ) $ 20,998 2017 13,009 (80 ) 12,929 2018 8,996 — 8,996 2019 6,199 — 6,199 2020 2,600 — 2,600 Thereafter 2,608 — 2,608 Total lease payments $ 55,081 $ (751 ) $ 54,330 |
Stock Repurchase Programs (Tabl
Stock Repurchase Programs (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Equity [Abstract] | |
Amount authorized for the repurchase of common stock by authorization date [Table Text Block] | Total repurchase authorizations that remained in effect as of January 2, 2016 were as follows: Authorization Date Amount Remaining Authorization (In thousands) February 2008 $ 500,000 $ — August 2008 500,000 381,083 July 2015 578,804 578,804 Total remaining authorization $ 959,887 |
Share repurchased and the total cost of shares repurchased | The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Shares repurchased 16,255 5,856 — Total cost of repurchased shares $ 333,189 $ 100,117 $ — |
Stock Compensation Plans and 36
Stock Compensation Plans and Stock Based Compensation (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock based compensation expense and allocation by share based payment award | Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the Employee Stock Purchase Plan, or ESPP, during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Stock options $ 7,903 $ 11,870 $ 13,100 Restricted stock 78,615 65,894 49,019 ESPP 5,823 6,028 4,166 Total stock-based compensation expense $ 92,341 $ 83,792 $ 66,285 Income tax benefit $ 24,294 $ 20,544 $ 16,236 |
Stock based compensation expense and allocation by cost | Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Cost of product and maintenance $ 2,436 $ 2,244 $ 1,596 Cost of services 3,561 3,280 2,321 Marketing and sales 21,654 20,580 15,642 Research and development 49,755 43,173 32,999 General and administrative 14,935 14,515 13,727 Total stock-based compensation expense $ 92,341 $ 83,792 $ 66,285 |
Fair value of options granted and the weighted-average assumptions | The weighted-average grant date fair value of options granted and the weighted-average assumptions used in the model for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 Dividend yield None None None Expected volatility 26.8 % 29.2 % 40.0 % Risk-free interest rate 1.61 % 1.59 % 0.86 % Expected term (in years) 5.0 4.8 4.7 Weighted-average fair value of options granted $ 4.60 $ 3.89 $ 4.93 |
Summary of changes in stock options outstanding under equity incentive plans | A summary of the changes in stock options outstanding under Cadence’s equity incentive plans during fiscal 2015 is presented below: Weighted- Average Weighted- Average Remaining Contractual Terms Aggregate Intrinsic Shares Exercise Price (Years) Value (In thousands) (In thousands) Options outstanding as of January 3, 2015 13,876 $ 9.71 Granted 1,305 17.25 Exercised (5,948 ) 8.79 Canceled and forfeited (256 ) 12.26 Options outstanding as of January 2, 2016 8,977 $ 11.35 3.5 $ 84,954 Options vested as of January 2, 2016 7,098 $ 10.35 3.1 $ 74,264 Options vested as of, and expected to vest after, January 2, 2016 8,976 $ 11.35 3.5 $ 84,947 |
Intrinsic value of and cash received from options exercised | The total intrinsic value of and cash received from options exercised during fiscal 2015 , 2014 and 2013 was: 2015 2014 2013 (In thousands) Intrinsic value of options exercised $ 67,363 $ 24,032 $ 15,114 Cash received from options exercised 52,261 46,123 27,569 |
Stock-based compensation expense related to performance-based restricted stock grants | Stock-based compensation expense related to performance-based restricted stock grants for fiscal 2015 , 2014 and 2013 was as follows: 2015 2014 2013 (In thousands) Stock-based compensation expense related to performance-based grants $ 5,544 $ 5,227 $ 4,340 |
Summary of the changes in restricted stock outstanding under Cadence's equity incentive plans | A summary of the changes in restricted stock outstanding under Cadence’s equity incentive plans during fiscal 2015 , is presented below: Weighted- Average Grant Date Weighted- Average Remaining Vesting Terms Aggregate Intrinsic Shares Fair Value (Years) Value (In thousands) (In thousands) Unvested shares as of January 3, 2015 10,451 $ 15.51 Granted 5,849 19.62 Vested (5,019 ) 14.68 Forfeited (704 ) 16.34 Unvested shares as of January 2, 2016 10,577 $ 18.13 1.1 $ 220,103 Unvested shares expected to vest after January 2, 2016 10,000 $ 18.08 1.1 $ 208,091 |
Total fair value of restricted stock awards that vested | The total fair value realized by employees upon vesting of restricted stock during fiscal 2015 , 2014 and 2013 was: 2015 2014 2013 (In thousands) Fair value of restricted stock realized upon vesting $ 99,564 $ 75,283 $ 58,091 |
Weighted-average grant date fair value of purchase rights granted under ESPP and weighted average assumptions used in model | The weighted-average grant date fair value of purchase rights granted under the ESPP and the weighted-average assumptions used in the model for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 Dividend yield None None None Expected volatility 22.9 % 24.2 % 25.7 % Risk-free interest rate 0.13 % 0.06 % 0.09 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value of options granted $ 4.23 $ 3.39 $ 3.21 |
Shares of common stock issued under Employee Stock Purchase Plan | Shares of common stock issued under the ESPP for fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands, except per share amounts) Cadence shares purchased under the ESPP 1,519 1,689 1,382 Cash received for the purchase of shares under the ESPP $ 22,449 $ 20,017 $ 15,088 Weighted-average purchase price per share $ 14.78 $ 11.85 $ 10.91 |
Summary of common stock reserved for future issuance | As of January 2, 2016 , Cadence had reserved the following shares of authorized but unissued common stock for future issuance: Shares (In thousands) Employee equity incentive plans* 21,523 Employee stock purchase plans 6,660 Directors stock option plans* 1,845 Total 30,028 _____________ * Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units. |
Goodwill and Acquired Intangi37
Goodwill and Acquired Intangibles (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill during fiscal 2015 and 2014 were as follows: Gross Carrying Amount (In thousands) Balance as of December 28, 2013 $ 456,905 Goodwill resulting from acquisitions 102,025 Measurement period adjustments (3,476 ) Effect of foreign currency translation (1,687 ) Balance as of January 3, 2015 553,767 Effect of foreign currency translation (1,995 ) Balance as of January 2, 2016 $ 551,772 |
Acquired intangibles with finite and indefinite lives (excluding goodwill), excluding intangibles fully amortized at end of prior fiscal year | Acquired intangibles as of January 2, 2016 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 $ 329,627 $ (124,097 ) $ 205,530 Agreements and relationships 173,325 (86,808 ) 86,517 Tradenames, trademarks and patents 10,119 (5,684 ) 4,435 Total acquired intangibles 513,071 (216,589 ) 296,482 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 of acquired intangibles | Amortization expense for fiscal 2015 , 2014 and 2013 , by consolidated income statement caption, was as follows: 2015 2014 2013 (In thousands) Cost of product and maintenance $ 40,532 $ 36,907 $ 24,023 Amortization of acquired intangibles 23,716 24,017 19,416 Total amortization of acquired intangibles $ 64,248 $ 60,924 $ 43,439 |
Estimated amortization expense | Estimated amortization expense for intangible assets with definite lives for the following five fiscal years and thereafter is as follows: (In thousands) 2016 $ 57,450 2017 52,770 2018 49,112 2019 43,132 2020 37,944 Thereafter 56,074 Total estimated amortization expense $ 296,482 |
Restructuring and Other Charg38
Restructuring and Other Charges (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring reserve rollforward by major type of cost | The following table presents activity for Cadence’s restructuring plans during fiscal 2015 , 2014 and 2013 : Severance and Benefits Excess Facilities Other Total (In thousands) Balance, December 29, 2012 $ — $ 4,343 $ — $ 4,343 Restructuring and other charges, net 17,589 101 309 17,999 Non-cash charges — — (309 ) (309 ) Cash payments (6,944 ) (951 ) — (7,895 ) Effect of foreign currency translation 27 59 — 86 Balance, December 28, 2013 $ 10,672 $ 3,552 $ — $ 14,224 Restructuring and other charges (credits), net 8,004 (945 ) 3,193 10,252 Non-cash charges — — (2,450 ) (2,450 ) Cash payments (13,967 ) (1,056 ) (262 ) (15,285 ) Effect of foreign currency translation (247 ) (284 ) — (531 ) Balance, January 3, 2015 $ 4,462 $ 1,267 $ 481 $ 6,210 Restructuring and other charges (credits), net 3,636 1,095 (220 ) 4,511 Non-cash charges — (116 ) — (116 ) Cash payments (7,322 ) (1,798 ) (261 ) (9,381 ) Effect of foreign currency translation (25 ) (62 ) — (87 ) Balance, January 2, 2016 $ 751 $ 386 $ — $ 1,137 |
Schedule of restructuring reserve by balance sheet classification | The remaining liability for Cadence’s restructuring plans is recorded in the consolidated balance sheet as follows: As of January 2, 2016 (In thousands) Accounts payable and accrued liabilities $ 990 Other long-term liabilities 147 Total liabilities $ 1,137 |
Other Income, Net (Tables)
Other Income, Net (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Other Income and Expenses [Abstract] | |
Other income, net | Cadence’s other income, net, for fiscal 2015 , 2014 and 2013 was as follows: 2015 2014 2013 (In thousands) Interest income $ 2,667 $ 1,827 $ 1,706 Gains on sale of marketable debt and equity securities, net 21 722 1,364 Gains on non-marketable investments 2,348 2,524 1,098 Gains (losses) on securities in NQDC trust (369 ) 3,415 3,293 Gains on foreign exchange 5,606 1,742 285 Write-down of non-marketable investments — (1,956 ) (464 ) Other income, net 204 205 288 Total other income, net $ 10,477 $ 8,479 $ 7,570 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Earnings Per Share [Abstract] | |
Basic and diluted net income per share | The calculations for basic and diluted net income per share for fiscal 2015 , 2014 and 2013 are as follows: 2015 2014 2013 (In thousands, except per share amounts) Net income $ 252,417 $ 158,898 $ 164,243 Weighted-average common shares used to calculate basic net income per share 288,018 283,349 277,796 Convertible notes — — 8 2015 Warrants 16,434 15,930 10,549 Stock-based awards 7,850 7,496 6,211 Weighted-average common shares used to calculate diluted net income per share 312,302 306,775 294,564 Net income per share - basic $ 0.88 $ 0.56 $ 0.59 Net income per share - diluted $ 0.81 $ 0.52 $ 0.56 |
Potential shares of Cadence's common stock excluded | The following table presents shares of Cadence’s common stock outstanding for fiscal 2015 , 2014 and 2013 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: 2015 2014 2013 (In thousands) 2013 Warrants* — — 6,830 Options to purchase shares of common stock 1,029 2,773 5,973 Non-vested shares of restricted stock 60 18 846 Total potential common shares excluded 1,089 2,791 13,649 ____________ * These warrants expired on various dates from February 2014 through April 2014. |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Balance Sheet Components [Abstract] | |
Summary of certain balance sheet components | A summary of certain balance sheet components as of January 2, 2016 and January 3, 2015 is as follows: As of January 2, January 3, (In thousands) Inventories: Raw materials $ 40,499 $ 42,428 Finished goods 16,263 13,966 Inventories $ 56,762 $ 56,394 Prepaid expenses and other: Prepaid expenses and other current assets $ 31,967 $ 31,856 Deferred income taxes — 94,457 Prepaid expenses and other $ 31,967 $ 126,313 Property, plant and equipment: Computer equipment and related software $ 471,842 $ 445,536 Buildings 126,156 126,382 Land 55,898 55,926 Leasehold, building and land improvements 90,400 91,128 Furniture and fixtures 21,847 22,424 Equipment 42,274 40,637 In-process capital assets 1,527 630 Total cost 809,944 782,663 Less: Accumulated depreciation and amortization (581,345 ) (552,551 ) Property, plant and equipment, net $ 228,599 $ 230,112 Other assets: Deferred income taxes $ 245,651 $ 140,969 Other long-term assets 59,252 68,397 Other assets $ 304,903 $ 209,366 Accounts payable and accrued liabilities: Payroll and payroll-related accruals $ 155,592 $ 151,526 Accounts payable 25,152 12,102 Income taxes payable - current 11,024 9,118 Accrued operating liabilities 46,254 52,629 Accounts payable and accrued liabilities $ 238,022 $ 225,375 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets and liabilities | The fair value of financial assets and liabilities was determined using the following levels of inputs as of January 2, 2016 and January 3, 2015 : Fair Value Measurements as of January 2, 2016: Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 360,691 $ 360,691 $ — $ — Short-term investments: Corporate debt securities 34,829 — 34,829 — Bank certificates of deposit 15,046 — 15,046 — United States Treasury securities 36,286 36,286 — — United States government agency securities 4,152 4,152 — — Commercial paper 1,993 — 1,993 — Marketable equity securities 2,192 2,192 — — Trading securities held NQDC trust 24,905 24,905 — — Total Assets $ 480,094 $ 428,226 $ 51,868 $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts 362 — 362 — Total Liabilities $ 362 $ — $ 362 $ — Fair Value Measurements as of January 3, 2015: Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 728,496 $ 728,496 $ — $ — Short-term investments: Corporate debt securities 34,894 — 34,894 — Bank certificates of deposit 21,910 — 21,910 — United States Treasury securities 19,374 19,374 — — United States government agency securities 9,208 9,208 — — Commercial paper 3,186 — 3,186 — Marketable equity securities 1,873 1,873 — — Trading securities held in NQDC trust 27,034 27,034 — — 2015 Notes Hedges 523,930 — 523,930 — Total Assets $ 1,369,905 $ 785,985 $ 583,920 $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 3,163 $ — $ 3,163 $ — 2015 Notes Embedded Conversion Derivative 523,930 — 523,930 — Total Liabilities $ 527,093 $ — $ 527,093 $ — |
Employee and Director Benefit43
Employee and Director Benefit Plans (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Contributions to defined contribution plans | Cadence’s total contributions made to these plans during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Contributions to defined contribution plans $ 22,337 $ 21,121 $ 20,055 |
Net recognized gains of trading securities | Net recognized gains (loss) of trading securities during fiscal 2015 , 2014 and 2013 were as follows: 2015 2014 2013 (In thousands) Trading securities $ (369 ) $ 3,415 $ 3,293 |
Unfunded projected benefit obligations - defined benefit retirement plans | The unfunded projected benefit obligation for these retirement plans as of January 2, 2016 , January 3, 2015 and December 28, 2013 was as follows: January 2, January 3, December 28, (In thousands) Unfunded projected benefit obligation - defined benefit retirement plans $ 6,131 $ 6,794 $ 7,160 |
Expense related to defined benefit plans | Cadence recorded total expense related to these defined benefit retirement plans during fiscal 2015 , 2014 and 2013 as follows: 2015 2014 2013 (In thousands) Expense related to defined benefit retirement plans $ 1,359 $ 1,799 $ 1,817 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income net of tax | Accumulated other comprehensive income (loss) was comprised of the following as of January 2, 2016 , and January 3, 2015 : As of January 2, January 3, (In thousands) Foreign currency translation gain (loss) $ (9,569 ) $ 15,707 Changes in defined benefit plan liabilities (3,066 ) (3,401 ) Unrealized holding gains on available-for-sale securities 210 41 Total accumulated other comprehensive income (loss) $ (12,425 ) $ 12,347 |
Changes in unrealized holding gains or losses on available-for-sale securities | Changes in unrealized holding gains or losses on available-for-sale securities includes the following for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Unrealized holding gains or losses $ 202 $ (156 ) $ (127 ) Reclassification of unrealized holding gains or losses to other income, net (33 ) (149 ) (53 ) Changes in unrealized holding gains or losses $ 169 $ (305 ) $ (180 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jan. 02, 2016 | |
Segment Reporting [Abstract] | |
Summary of revenue by geography | The following table presents a summary of revenue by geography for fiscal 2015 , 2014 and 2013 : 2015 2014 2013 (In thousands) Americas: United States $ 782,419 $ 696,608 $ 648,714 Other Americas 25,960 23,357 22,940 Total Americas 808,379 719,965 671,654 Asia 413,588 360,280 289,065 Europe, Middle East and Africa 316,684 328,724 303,593 Japan 163,440 171,963 195,804 Total $ 1,702,091 $ 1,580,932 $ 1,460,116 |
Summary of long-lived assets by geography | The following table presents a summary of long-lived assets by geography as of January 2, 2016 , January 3, 2015 and December 28, 2013 : As of January 2, January 3, December 28, (In thousands) Americas: United States $ 189,665 $ 200,760 $ 207,694 Other Americas 387 578 294 Total Americas 190,052 201,338 207,988 Asia 24,767 22,145 23,508 Europe, Middle East and Africa 12,832 5,951 6,326 Japan 948 678 893 Total $ 228,599 $ 230,112 $ 238,715 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Debt and Derivatives (Details) | 12 Months Ended |
Jan. 02, 2016 | |
Forward Contracts [Member] | |
Debt Instrument [Line Items] | |
Maturity period of forward contracts | 90 days |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Jan. 02, 2016 | |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives description | Shorter of the lease term or the estimated useful life |
Building improvements and land improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives description | Estimated useful life |
Minimum [Member] | Computer equipment and related software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Minimum [Member] | Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 25 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Minimum [Member] | Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Maximum [Member] | Computer equipment and related software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Maximum [Member] | Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 32 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Maximum [Member] | Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Summary of Significant Accoun48
Summary of Significant Accounting Policites - Long-lived Assets (Details) - Acquired Intangible Assets [Member] | 12 Months Ended |
Jan. 02, 2016 | |
Minimum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 year |
Maximum [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 14 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | |||
Maximum period for collection of receivables | 5 years | ||
Reserve for inventory | inventory in excess of 12-month demand | ||
Additions to capitalized computer software for internal use | $ 2,000 | $ 2,100 | $ 4,700 |
Depreciation and amortization, property plant and equipment | $ 48,700 | 49,200 | 49,500 |
Period for revenue recognition for perpetual licenses maintenance | 12 months | ||
Loss on reissuance of treasury stock | $ (74,711) | (66,148) | (42,657) |
Percentage of likelihood of tax benefit being realized upon effective settlement of audit | 50.00% | ||
Advertising expense | $ 7,900 | 6,600 | 7,400 |
Retained Earnings [Member] | |||
Summary of Significant Accounting Policies (Additional Textual) [Abstract] | |||
Loss on reissuance of treasury stock | $ 0 | $ 0 | $ 0 |
Software Products [Member] | |||
Pro Forma Revenue [Line Items] | |||
General Term of Software Arrangement Minimum | 2 years | ||
General Term of Software Arrangement Maximum | 3 years |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Oct. 09, 2014 | Jun. 30, 2010 |
Debt Instrument [Line Items] | ||||
Principal | $ 350,000 | $ 699,999 | ||
Unamortized Discount | (1,212) | (8,824) | ||
Carrying Value | 348,788 | 348,676 | ||
Carrying Value | 348,788 | 691,175 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 0 | 0 | ||
Unamortized Discount | 0 | 0 | ||
Carrying Value | 0 | 0 | ||
Senior Notes [Member] | Convertible Senior Notes Due 2015 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 0 | 349,999 | ||
Principal | $ 350,000 | |||
Unamortized Discount | 0 | (7,500) | ||
Carrying Value | 0 | 342,499 | ||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 350,000 | 350,000 | $ 350,000 | |
Unamortized Discount | (1,212) | (1,324) | $ (1,400) | |
Carrying Value | $ 348,788 | $ 348,676 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Oct. 09, 2014 | Jun. 30, 2010 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 |
Debt Instrument [Line Items] | |||||
Payments of convertible debt | $ 349,999 | $ 1 | $ 144,639 | ||
Cash paid for interest | (19,918) | (9,963) | (12,429) | ||
Payments for convertible notes embedded conversion derivative liability | 530,643 | 1 | 0 | ||
Proceeds from convertible notes hedges | $ 530,643 | 1 | $ 0 | ||
Issuance of common shares for settlement of warrants | 23.1 | ||||
Unamortized discount | $ 1,212 | 8,824 | |||
Senior Notes [Member] | Convertible Senior Notes Due 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 350,000 | ||||
Stated interest rate of Senior Notes | 2.625% | ||||
Payments of convertible debt | $ 350,000 | ||||
Cash paid for interest | (3,800) | ||||
Payments for convertible notes embedded conversion derivative liability | 530,600 | ||||
Proceeds from convertible notes hedges | $ 530,600 | ||||
Shares of common stock that can be purchased under warrants (in shares) | 46.4 | ||||
Warrants to purchase shares of common stock price per share (in usd per share) | $ 10.78 | ||||
Amount received in cash proceeds from the sale of warrants | $ 37,500 | ||||
Unamortized discount | $ 0 | 7,500 | |||
Senior Notes [Member] | Senior Notes Due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount issued | $ 350,000 | 350,000 | 350,000 | ||
Stated interest rate of Senior Notes | 4.375% | ||||
Proceeds from Senior Notes, net | $ 342,400 | ||||
Unamortized discount | 1,400 | $ 1,212 | $ 1,324 | ||
Debt issuance costs | $ 6,200 |
Debt Credit Facility (Details T
Debt Credit Facility (Details Textual) $ in Thousands | 12 Months Ended | |
Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, current borrowing capacity | $ 250,000 | |
Credit facility, additional borrowing capacity available | 150,000 | |
Credit cacility, maximum borrowing capacity | $ 400,000 | |
Credit facility, maturity date | Sep. 19, 2019 | |
Outstanding borrowings under Revolving Credit Facility | $ 0 | $ 0 |
Credit facility, interest rate description | Interest accrues on borrowings under the credit facility at either LIBOR plus a margin between 1.25% and 2.0% per annum or at the base rate plus a margin between 0.25% and 1.0% per annum. The interest rate applied to borrowings is determined by Cadence’s consolidated leverage ratio as specified by the credit facility agreement. Interest is payable quarterly. | |
Credit facility, covenant description | The credit facility contains customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens, make certain investments (including acquisitions), dispose of certain assets and make certain payments, including share repurchases and dividends. In addition, the credit facility contains financial covenants that require Cadence to maintain a leverage ratio not to exceed 2.75 to 1, and a minimum interest coverage ratio of 3 to 1. | |
Credit facility, covenant compliance | Cadence was in compliance with all financial covenants as of January 2, 2016 and January 3, 2015 | |
Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, commitment fee percentage | 0.35% | |
Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, commitment fee percentage | 0.20% | |
Credit facility interest LIBOR and spread [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facilty, interest rate spread | 2.00% | |
Credit facility interest LIBOR and spread [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facilty, interest rate spread | 1.25% | |
Credit facility interest base rate and spread [Member] | Maximum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facilty, interest rate spread | 1.00% | |
Credit facility interest base rate and spread [Member] | Minimum [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facilty, interest rate spread | 0.25% | |
Long-term Debt [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, covenant, interest coverage ratio | 3 | |
Credit facility, covenant, leverage ratio | 2.75 |
Cash, Cash Equivalents and In53
Cash, Cash Equivalents and Investments (Details 1) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Cash, Cash Equivalents and Investments [Abstract] | ||||
Cash and cash equivalents | $ 616,686 | $ 932,161 | $ 536,260 | $ 726,357 |
Short-term investments | 94,498 | 90,445 | ||
Cash, cash equivalents and short-term investments | $ 711,184 | $ 1,022,606 |
Cash, Cash Equivalents and In54
Cash, Cash Equivalents and Investments (Details 2) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Classified as cash and cash equivalents | ||||
Cash and interest bearing deposits | $ 255,995 | $ 203,665 | ||
Money market funds | 360,691 | 728,496 | ||
Total cash and cash equivalents | $ 616,686 | $ 932,161 | $ 536,260 | $ 726,357 |
Cash, Cash Equivalents and In55
Cash, Cash Equivalents and Investments (Details 3) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Short-term investments | ||
Amortized Cost | $ 94,287 | $ 90,404 |
Gross Unrealized Gains | 380 | 91 |
Gross Unrealized Losses | (169) | (50) |
Fair Value | 94,498 | 90,445 |
Corporate debt securities [Member] | ||
Short-term investments | ||
Amortized Cost | 34,905 | 34,919 |
Gross Unrealized Gains | 1 | 6 |
Gross Unrealized Losses | (77) | (31) |
Fair Value | 34,829 | 34,894 |
Bank certificates of deposit [Member] | ||
Short-term investments | ||
Amortized Cost | 15,049 | 21,900 |
Gross Unrealized Gains | 1 | 10 |
Gross Unrealized Losses | (4) | 0 |
Fair Value | 15,046 | 21,910 |
United States Treasury securities [Member] | ||
Short-term investments | ||
Amortized Cost | 36,372 | 19,375 |
Gross Unrealized Gains | 2 | 12 |
Gross Unrealized Losses | (88) | (13) |
Fair Value | 36,286 | 19,374 |
United States government agency securities [Member] | ||
Short-term investments | ||
Amortized Cost | 4,151 | 9,209 |
Gross Unrealized Gains | 1 | 3 |
Gross Unrealized Losses | 0 | (4) |
Fair Value | 4,152 | 9,208 |
Commercial paper [Member] | ||
Short-term investments | ||
Amortized Cost | 1,993 | 3,184 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | 0 | (2) |
Fair Value | 1,993 | 3,186 |
Marketable debt securities [Member] | ||
Short-term investments | ||
Amortized Cost | 92,470 | 88,587 |
Gross Unrealized Gains | 5 | 35 |
Gross Unrealized Losses | (169) | (50) |
Fair Value | 92,306 | 88,572 |
Marketable equity securities [Member] | ||
Short-term investments | ||
Amortized Cost | 1,817 | 1,817 |
Gross Unrealized Gains | 375 | 56 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 2,192 | $ 1,873 |
Cash, Cash Equivalents and In56
Cash, Cash Equivalents and Investments (Details 4) $ in Thousands | Jan. 02, 2016USD ($) |
Contractual maturity of marketable debt investments | |
Marketable debt securities, amortized cost, due in less than one year | $ 50,777 |
Marketable debt securities, amortized cost, due in one to three years | 41,693 |
Marketable debt securities, amortized cost, total | 92,470 |
Marketable debt securities, fair value, due in less than one year | 50,751 |
Marketable debt securities, fair value, due in one to three years | 41,555 |
Marketable debt securities, fair value, total | $ 92,306 |
Cash, Cash Equivalents and In57
Cash, Cash Equivalents and Investments (Details 5) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Cash, Cash Equivalents and Investments [Abstract] | ||
Cost method | $ 1,081 | $ 1,081 |
Equity method | 2,836 | 5,058 |
Total non-marketable investments | $ 3,917 | $ 6,139 |
Receivables and Allowances fo58
Receivables and Allowances for Doubtful Accounts (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Current and long-term receivables balances | ||
Accounts receivable | $ 107,041 | $ 79,410 |
Unbilled accounts receivable | 57,807 | 43,082 |
Long-term receivables | 4,498 | 3,644 |
Total receivables | 169,346 | 126,136 |
Less allowance for doubtful accounts | 0 | 0 |
Total receivables, net | $ 169,346 | $ 126,136 |
Receivables and Allowances fo59
Receivables and Allowances for Doubtful Accounts (Details Textual) - Customer | Jan. 02, 2016 | Jan. 03, 2015 |
Receivables and Allowances for Doubtful Accounts (Textual) [Abstract] | ||
Number of customers with receivables balance greater than ten percent of total balance | 1 | 0 |
Percent of receivables attributable to single customer | 12.00% | 10.00% |
Percentage of Cadence's total receivables, net attributable to the ten customers with largest balance | 45.00% | 43.00% |
Number of customers with largest balance of receivables | 10 | 10 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
United States | $ 47,867 | $ 12,680 | $ 20,092 |
Foreign subsidiaries | 219,729 | 168,322 | 138,904 |
Income before provision (benefit) for income taxes | $ 267,596 | $ 181,002 | $ 158,996 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Current: | |||
Federal | $ (10,265) | $ (13,754) | $ (40,494) |
State and Local | (713) | (1,159) | 2,574 |
Foreign | 24,622 | 19,100 | 28,040 |
Total current | 13,644 | 4,187 | (9,880) |
Deferred: | |||
Federal | (13,165) | 2,075 | 4,888 |
State and Local | 1,751 | 1,633 | 3,037 |
Foreign | (1,734) | 8,770 | (10,291) |
Total deferred | (13,148) | 12,478 | (2,366) |
Tax expense allocated to shareholders' equity | 14,683 | 5,439 | 6,999 |
Total provision (benefit) for income taxes | $ 15,179 | $ 22,104 | $ (5,247) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Summary of income tax reconciliation | |||
Provision computed at federal statutory income tax rate | $ 93,659 | $ 63,350 | $ 55,648 |
State and local income tax, net of federal tax effect | 3,621 | 1,168 | 4,085 |
Foreign income tax rate differential | (56,873) | (39,012) | (39,144) |
Non-deductible share-based compensation costs | 2,687 | 5,726 | 2,053 |
Change in deferred tax valuation allowance | (11,066) | 10,065 | 18,354 |
Tax credits | (19,243) | (17,331) | (18,372) |
Repatriation of foreign earnings | 50 | (2,910) | (2,116) |
Non-deductible research and development expense | 336 | 2,195 | 3,043 |
Tax effects of intra-entity transfer of assets | (7,928) | (5,397) | 270 |
Domestic production activity deduction | 0 | (1,281) | (1,088) |
Withholding taxes | 5,119 | 4,064 | 3,333 |
Interest and penalties not included in tax settlements | 331 | (382) | 1,701 |
Increase (decrease) in unrecognized tax benefits not included in tax settlements | 3,530 | 157 | (33,730) |
Other | 956 | 1,692 | 716 |
Total provision (benefit) for income taxes | $ 15,179 | $ 22,104 | $ (5,247) |
Effective tax rate | 6.00% | 12.00% | (3.00%) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Deferred Tax Assets: | ||
Tax credit carryforwards | $ 189,672 | $ 180,127 |
Reserves and accruals | 54,774 | 65,935 |
Intangible assets | 29,256 | 38,938 |
Capitalized research and development expense for income tax purposes | 26,332 | 33,552 |
Operating loss carryforwards | 25,208 | 25,285 |
Deferred income | 16,407 | 19,534 |
Capital loss carryforwards | 20,552 | 21,494 |
Share-based compensation costs | 17,612 | 20,009 |
Depreciation and amortization | 22,442 | 10,904 |
Investments | 7,113 | 6,825 |
Other | 0 | 1,332 |
Total deferred tax assets | 409,368 | 423,935 |
Valuation allowance | (91,677) | (102,742) |
Net deferred tax assets | 317,691 | 321,193 |
Deferred Tax Liabilities: | ||
Intangible assets | (45,697) | (57,040) |
Undistributed foreign earnings | (25,156) | (28,026) |
Other | (1,390) | (1,607) |
Total deferred tax liabilities | (72,243) | (86,673) |
Total net deferred tax assets | $ 245,448 | $ 234,520 |
Income Taxes (Details 4)
Income Taxes (Details 4) $ in Thousands | Jan. 02, 2016USD ($) | |
United States federal [Member] | ||
Summary of operating loss carryforward | ||
Operating loss carry forwards | $ 25,976 | [1] |
California State [Member] | ||
Summary of operating loss carryforward | ||
Operating loss carry forwards | 240,885 | [1] |
States other than California [Member] | ||
Summary of operating loss carryforward | ||
Operating loss carry forwards | 3,177 | [1] |
Foreign Tax Authority [Member] | ||
Summary of operating loss carryforward | ||
Operating loss carry forwards | $ 7,193 | |
[1] | Includes net operating losses that arose directly from tax deductions for stock compensation greater than compensation recognized for financial reporting. |
Income Taxes (Details 5)
Income Taxes (Details 5) $ in Thousands | Jan. 02, 2016USD ($) | |
United States federal [Member] | ||
Summary of tax credit carryforwards | ||
Tax credit carryforwards | $ 139,820 | [1] |
California State [Member] | ||
Summary of tax credit carryforwards | ||
Tax credit carryforwards | 30,455 | |
States other than California [Member] | ||
Summary of tax credit carryforwards | ||
Tax credit carryforwards | 6,150 | |
Foreign Jurisdiction [Member] | ||
Summary of tax credit carryforwards | ||
Tax credit carryforwards | $ 13,246 | |
[1] | Certain of Cadence’s foreign tax credits are anticipated and as a result do not yet have an expiration period. |
Income Taxes (Details 6)
Income Taxes (Details 6) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | ||
Unrecognized Tax Benefits | |||||
Unrecognized tax benefits at the beginning of the fiscal year | $ 97,224 | $ 78,279 | $ 92,378 | ||
Gross amount of the increases (decreases) in unrecognized tax benefits of tax positions taken during a prior year | [1] | (7,331) | 8,301 | 6,196 | |
Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year | 7,513 | 12,381 | 5,119 | ||
Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes | $ (1,200) | (9,571) | 0 | (15,171) | |
Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations | (119) | (86) | (11,850) | ||
Effect of foreign currency translation | 104 | (1,651) | 1,607 | ||
Unrecognized tax benefits at the end of the fiscal year | 87,820 | 97,224 | 78,279 | ||
Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence's effective tax rate | 48,335 | 57,127 | 49,458 | ||
Interest and penalties recognized in Income Statements | |||||
Interest | 110 | 255 | (12,470) | ||
Penalties | (127) | (748) | $ (7,698) | ||
Interest and penalties recognized in Balance Sheets | |||||
Interest | 1,128 | 1,155 | |||
Penalties | $ 270 | $ 446 | |||
[1] | Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Income Tax Examination [Line Items] | ||||
Impact on stockholder's equity resulting from tax deductions related to stock compensation | $ 8,100 | |||
Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes | $ 1,200 | 9,571 | $ 0 | $ 15,171 |
Net deferred tax assets | $ 317,691 | 321,193 | ||
Additional Income Taxes (Textual) [Abstract] | ||||
United States statutory federal income tax rate | 35.00% | |||
Undistributed foreign earnings that are intended by company to indefinitely reinvest | $ 594,200 | |||
Percent of revenue recurring in nature, over multiple years | 90.00% | |||
Valuation allowance | $ (91,677) | $ (102,742) | ||
Retroactive benefit of federal research and development credit | $ 10,100 | |||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 12,600 |
Commitments and Contingencies68
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Operating Leases, Rent Expense, Net [Abstract] | |||
Rent expense | $ 27,406 | $ 26,666 | $ 25,450 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating leases, future minimum payments due in 2016 | 21,669 | ||
Operating leases, committed sub-lease income due in 2016 | (671) | ||
Operating leases, future minimum payments due, net in 2016 | 20,998 | ||
Operating leases, future minimum payments, due in 2017 | 13,009 | ||
Operating leases, committed sub-lease income due in 2017 | (80) | ||
Operating leases, future minimum payments due, net in 2017 | 12,929 | ||
Operating leases, future minimum payments, due in 2018 | 8,996 | ||
Operating leases, committed sub-lease income due in 2018 | 0 | ||
Operating leases, future minimum payments due, net in 2018 | 8,996 | ||
Operating leases, future minimum payments, due in 2019 | 6,199 | ||
Operating leases, committed sub-lease income due in 2019 | 0 | ||
Operating leases, future minimum payments due, net in 2019 | 6,199 | ||
Operating leases, future minimum payments, due in 2020 | 2,600 | ||
Operating leases, committed sub-lease income due in 2020 | 0 | ||
Operating leases, future minimum payments due, net in 2020 | 2,600 | ||
Operating leases, future minimum payments, due thereafter | 2,608 | ||
Operating leases, committed sub-lease income due thereafter | 0 | ||
Operating leases, future minimum payments due, net thereafter | 2,608 | ||
Operating leases, future minimum payments due | 55,081 | ||
Operating leases, committed sub-lease income due | (751) | ||
Operating leases, future minimum payments due, net | $ 54,330 |
Commitments and Contingencies69
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Restructuring Cost and Reserve [Line Items] | ||||
Outstanding liability for restructuring plans | $ 1,137 | $ 6,210 | $ 14,224 | $ 4,343 |
Purchase Obligation | $ 48,200 | |||
General Period of Warranty on Sales of Hardware Products | 90 days | |||
Facility Closing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Outstanding liability for restructuring plans | $ 386 | $ 1,267 | $ 3,552 | $ 4,343 |
Stock Repurchase Programs (Deta
Stock Repurchase Programs (Details) - USD ($) shares in Thousands, $ in Thousands | Jul. 04, 2015 | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Jul. 02, 2015 | Aug. 31, 2008 | Feb. 29, 2008 |
Repurchase of common shares | |||||||
Remaining number of shares authorized to be repurchased | $ 959,887 | ||||||
Approved treasury stock repurchase, term | 18 months | ||||||
Treasury stock repurchase approved | $ 1,200,000 | ||||||
Share repurchased and total cost of repurchased shares | |||||||
Shares repurchased | (16,255) | (5,856) | 0 | ||||
Total cost of repurchased shares | $ 333,189 | $ 100,117 | $ 0 | ||||
February 2008 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Repurchase Program, Authorized Amount | $ 500,000 | ||||||
Repurchase of common shares | |||||||
Remaining number of shares authorized to be repurchased | 0 | ||||||
August 2008 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Repurchase Program, Authorized Amount | $ 500,000 | ||||||
Repurchase of common shares | |||||||
Remaining number of shares authorized to be repurchased | 381,083 | ||||||
July 2015 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock Repurchase Program, Authorized Amount | $ 578,804 | ||||||
Repurchase of common shares | |||||||
Remaining number of shares authorized to be repurchased | $ 578,804 | ||||||
Common Stock [Member] | |||||||
Share repurchased and total cost of repurchased shares | |||||||
Shares repurchased | (16,255) | (5,856) |
Stock Compensation Plans and 71
Stock Compensation Plans and Stock Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 92,341 | $ 83,792 | $ 66,285 |
Income tax benefit | 24,294 | 20,544 | 16,236 |
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 7,903 | 11,870 | 13,100 |
Restricted stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 78,615 | 65,894 | 49,019 |
Employee stock purchase plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 5,823 | $ 6,028 | $ 4,166 |
Stock Compensation Plans and 72
Stock Compensation Plans and Stock Based Compensation (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | $ 92,341 | $ 83,792 | $ 66,285 |
Cost of product and maintenance [Member] | |||
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | 2,436 | 2,244 | 1,596 |
Cost of services [Member] | |||
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | 3,561 | 3,280 | 2,321 |
Marketing and sales [Member] | |||
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | 21,654 | 20,580 | 15,642 |
Research and development [Member] | |||
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | 49,755 | 43,173 | 32,999 |
General and administrative [Member] | |||
Stock based compensation expense and allocation by cost | |||
Stock-based compensation | $ 14,935 | $ 14,515 | $ 13,727 |
Stock Compensation Plans and 73
Stock Compensation Plans and Stock Based Compensation (Details 2) - Stock options [Member] - $ / shares | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility | 26.80% | 29.20% | 40.00% |
Risk-free interest rate | 1.61% | 1.59% | 0.86% |
Expected term (in years) | 5 years 1 day | 4 years 9 months 29 days | 4 years 8 months 12 days |
Weighted-average fair value of options granted | $ 4.60 | $ 3.89 | $ 4.93 |
Stock Compensation Plans and 74
Stock Compensation Plans and Stock Based Compensation (Details 3) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jan. 02, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding as of January 3, 2015 | shares | 13,876 |
Granted | shares | 1,305 |
Exercised | shares | (5,948) |
Canceled and forfeited | shares | (256) |
Options outstanding as of January 2, 2016 | shares | 8,977 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted-Average Exercise Price, Options outstanding as of January 3, 2015 | $ / shares | $ 9.71 |
Weighted-Average Exercise Price Granted | $ / shares | 17.25 |
Weighted-Average Exercise Price Exercised | $ / shares | 8.79 |
Weighted-Average Exercise Price Canceled and Forfeited | $ / shares | 12.26 |
Weighted-Average Exercise Price, Options outstanding as of January 2, 2016 | $ / shares | $ 11.35 |
Summary of company stock option plans | |
Options vested as of January 2, 2016 | shares | 7,098 |
Options vested as of, and expected to vest, after January 2, 2016 | shares | 8,976 |
Weighted Average Exercise Price, Options vested as of January 2, 2016 | $ / shares | $ 10.35 |
Weighted-Average Exercise Price, Options vested as of, and expected to vest after, January 2, 2016 | $ / shares | $ 11.35 |
Weighted-Average Remaining Contractual Term, Options outstanding as of January 2, 2016 | 3 years 6 months |
Weighted-Average Remaining Contractual Term, Options vested as of January 2, 2016 | 3 years 1 month 5 days |
Weighted-Average Remaining Contractual Term, Options vested as of, and expected to vest after, January 2, 2016 | 3 years 6 months |
Aggregate Intrinsic Value, Options outstanding as of January 2, 2016 | $ | $ 84,954 |
Aggregate Intrinsic Value, Options vested as of January 2, 2016 | $ | 74,264 |
Aggregate Intrinsic Value, Options vested as of, and expected to vest after, January 2, 2016 | $ | $ 84,947 |
Stock Compensation Plans and 75
Stock Compensation Plans and Stock Based Compensation (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Intrinsic Value And Cash Received From Stock Options Exercised | |||
Intrinsic value of options exercised | $ 67,363 | $ 24,032 | $ 15,114 |
Cash received from options exercised | $ 52,261 | $ 46,123 | $ 27,569 |
Stock Compensation Plans and 76
Stock Compensation Plans and Stock Based Compensation (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 92,341 | $ 83,792 | $ 66,285 |
Stock-based compensation expense related to performance-based grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 5,544 | $ 5,227 | $ 4,340 |
Stock Compensation Plans and 77
Stock Compensation Plans and Stock Based Compensation (Details 6) - Restricted Stock [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jan. 02, 2016USD ($)$ / sharesshares | |
Summary of changes in restricted stock awards outstanding under Cadence's equity incentive plans | |
Unvested shares as of January 3, 2015 | shares | 10,451 |
Granted | shares | 5,849 |
Vested | shares | (5,019) |
Forfeited | shares | (704) |
Unvested shares as of January 2, 2016 | shares | 10,577 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Unvested shares as of January 3, 2015, Weighted-Average Grant Date Fair Value | $ / shares | $ 15.51 |
Granted, Weighted-Average Grant date Fair Value | $ / shares | 19.62 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 14.68 |
Forfeited, Weighted-Average Grant Date Fair Value | $ / shares | 16.34 |
Unvested shares as of January 2, 2016, Weighted-Average Grant Date Fair Value | $ / shares | $ 18.13 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Unvested shares expected to vest after January 2, 2016 | shares | 10,000 |
Unvested shares expected to vest after January 2, 2016, Weighted-Average Grant Date Fair Value | $ / shares | $ 18.08 |
Unvested shares as of January 2, 2016, Weighted-Average Remaining Vesting Terms | 1 year 1 month |
Unvested shares expected to vest after January 2, 2016, Weighted-Average Remaining Vesting Terms | 1 year 1 month |
Unvested shares as of January 2, 2016, Aggregate Intrinsic Value | $ | $ 220,103 |
Unvested shares expected to vest after January 2, 2016, Aggregate Intrinsic Value | $ | $ 208,091 |
Stock Compensation Plans and 78
Stock Compensation Plans and Stock Based Compensation (Details 7) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Restricted Stock [Member] | |||
Fair value of restricted stock awards that vested | |||
Fair value of restricted stock realized upon vesting | $ 99,564 | $ 75,283 | $ 58,091 |
Stock Compensation Plans and 79
Stock Compensation Plans and Stock Based Compensation (Details 8) - Purchase rights granted [Member] - $ / shares | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Weighted-average grant date fair value of purchase rights granted under ESPP and weighted-average assumptions used in model | |||
Expected volatility | 22.90% | 24.20% | 25.70% |
Risk-free interest rate | 0.13% | 0.06% | 0.09% |
Expected term (in years) | 6 months | 6 months | 6 months |
Weighted-average fair value of options granted | $ 4.23 | $ 3.39 | $ 3.21 |
Stock Compensation Plans and 80
Stock Compensation Plans and Stock Based Compensation (Details 9) - Employee stock purchase plans [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Shares of common stock issued under employee stock purchase plan | |||
Cadence shares purchased under the ESPP | 1,519 | 1,689 | 1,382 |
Cash received for the purchase of shares under the ESPP | $ 22,449 | $ 20,017 | $ 15,088 |
Weighted-average purchase price per share | $ 14.78 | $ 11.85 | $ 10.91 |
Stock Compensation Plans and 81
Stock Compensation Plans and Stock Based Compensation (Details 10) shares in Thousands | Jan. 02, 2016shares | |
Common stock reserved for future issuance | ||
Common stock reserved for future issuance | 30,028 | |
Employee equity incentive plans [Member] | ||
Common stock reserved for future issuance | ||
Common stock reserved for future issuance | 21,523 | [1] |
Employee stock purchase plans [Member] | ||
Common stock reserved for future issuance | ||
Common stock reserved for future issuance | 6,660 | |
Directors stock option plans [Member] | ||
Common stock reserved for future issuance | ||
Common stock reserved for future issuance | 1,845 | [1] |
[1] | Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units. |
Stock Compensation Plans and 82
Stock Compensation Plans and Stock Based Compensation (Details Textual) | 12 Months Ended |
Jan. 02, 2016USD ($)shares | |
One Thousand Nine Hundred Ninety Five Directors Stock Options Plan [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Number of shares available for issuance under equity incentive plan | shares | 3,550,000 |
Minimum vesting period | 1 year |
Term of options granted under Directors' Plan | 10 years |
Employee stock purchase plans [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Number of shares available for issuance under Employee Stock Purchase Plan | shares | 74,000,000 |
Percentage of lower of fair market value at beginning or end of applicable offering period used for calculating price of common stock to be purchased by employees | 85.00% |
Purchase period for common stock | 6 months |
Employee Stock Purchase Plan with Offering Period Commencing on August One Two Thousand Nine [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Maximum percentage of annual base earnings plus bonuses and commissions for which common stock can be purchased by employees | 5.00% |
Maximum amount for which common stock can be purchased by employees in any calendar year | $ | $ 7,058.82 |
Employee Stock Purchase Plan with Offering Period Commencing on February One Two Thousand Fourteen [Member] [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Maximum percentage of annual base earnings plus bonuses and commissions for which common stock can be purchased by employees | 7.00% |
Maximum amount for which common stock can be purchased by employees in any calendar year | $ | $ 9,411.76 |
2014 Omnibus Equity Incentive Plan [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Additional shares authorized and available for issuance under equity incentive plan | shares | 7,500,000 |
Number of shares available for issuance under equity incentive plan | shares | 23,000,000 |
Expiration period from date of grant for options granted | 7 years |
Restricted stock [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Maximum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 4 years |
Restricted stock [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Minimum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 3 years |
Stock options [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Total unrecognized compensation expense , net of estimates forfeitures | $ | $ 8,200,000 |
Weighted-average vesting period over which unrecognized compensation expense will be recognized | 2 years 3 months 15 days |
Stock options [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Maximum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 4 years |
Stock options [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Minimum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 3 years |
Restricted Stock [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Total unrecognized compensation expense , net of estimates forfeitures | $ | $ 143,700,000 |
Weighted-average vesting period over which unrecognized compensation expense will be recognized | 2 years |
Restricted Stock [Member] | Maximum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 4 years |
Restricted Stock [Member] | Minimum [Member] | |
Stock Compensation Plans (Textual) [Abstract] | |
Minimum vesting period | 3 years |
Acquisitions and Acquisition-83
Acquisitions and Acquisition-Related Contingent Consideration (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Jun. 13, 2014 | Apr. 22, 2013 | |
Business Acquisition [Line Items] | |||||
Transaction costs associated with acquisitions | $ 0.7 | $ 3.7 | $ 8.7 | ||
Jasper [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash acquired | $ 28.7 | ||||
Total consideration paid, net of cash acquired | $ 139.4 | ||||
Other 2014 Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash acquired | 2.1 | ||||
Total cash consideration paid, net of cash acquired | $ 27.5 | ||||
Tensilica [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash acquired | $ 26.3 | ||||
Total consideration paid, net of cash acquired | $ 319.3 |
Goodwill and Acquired Intangi84
Goodwill and Acquired Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2016 | Jan. 03, 2015 | |
Changes in the carrying amount of goodwill | ||
Balance at beginning of period | $ 553,767 | $ 456,905 |
Goodwill resulting from acquisitions | 102,025 | |
Measurement period adjustments | (3,476) | |
Effect of foreign currency translation | (1,995) | (1,687) |
Balance at end of period | $ 551,772 | $ 553,767 |
Goodwill and Acquired Intangi85
Goodwill and Acquired Intangibles (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2016 | Jan. 03, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
In-process technology transferred to existing technology | $ 1,600 | |
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year | ||
Gross carrying amount | 513,071 | $ 514,146 |
Accumulated amortization | (216,589) | (154,814) |
Acquired intangibles, net | 296,482 | 359,332 |
In-process technology | 1,600 | |
Intangible Assets, Gross (Excluding Goodwill) | 515,746 | |
Intangible Assets, Net (Excluding Goodwill) | 296,482 | 360,932 |
Existing technology [Member] | ||
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year | ||
Gross carrying amount | 329,627 | 328,325 |
Accumulated amortization | (124,097) | (84,822) |
Acquired intangibles, net | 205,530 | 243,503 |
Agreements and relationships [Member] | ||
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year | ||
Gross carrying amount | 173,325 | 175,202 |
Accumulated amortization | (86,808) | (65,512) |
Acquired intangibles, net | 86,517 | 109,690 |
Tradenames, trademarks and patents [Member] | ||
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year | ||
Gross carrying amount | 10,119 | 10,619 |
Accumulated amortization | (5,684) | (4,480) |
Acquired intangibles, net | $ 4,435 | $ 6,139 |
Goodwill and Acquired Intangi86
Goodwill and Acquired Intangibles (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Amortization of acquired intangibles | |||
Cost of product and maintenance | $ 40,532 | $ 36,907 | $ 24,023 |
Amortization of acquired intangibles | 23,716 | 24,017 | 19,416 |
Total amortization of acquired intangibles | $ 64,248 | $ 60,924 | $ 43,439 |
Goodwill and Acquired Intangi87
Goodwill and Acquired Intangibles (Details 3) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Estimated amortization expense | ||
2,016 | $ 57,450 | |
2,017 | 52,770 | |
2,018 | 49,112 | |
2,019 | 43,132 | |
2,020 | 37,944 | |
Thereafter | 56,074 | |
Acquired intangibles, net | $ 296,482 | $ 359,332 |
Restructuring and Other Charg88
Restructuring and Other Charges Restructuring and Other Charges (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Jan. 03, 2015 | Dec. 29, 2012 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 4,511 | $ 10,252 | $ 17,999 | ||
Restructuring Reserve | 1,137 | $ 6,210 | $ 14,224 | $ 6,210 | $ 4,343 |
2015 Restructuring Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 4,200 | ||||
Restructuring Reserve | 600 | ||||
2014 and 2013 Restructuring Plans [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 29,000 | ||||
Prior Restructuring Plans [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | $ 500 |
Restructuring and Other Charg89
Restructuring and Other Charges (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 1,137 | $ 6,210 | $ 14,224 | $ 4,343 |
Accounts payable and accrued liabilities [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 990 | |||
Other long-term liabilities [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 147 |
Restructuring and Other Charg90
Restructuring and Other Charges (Details 1) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | Jan. 03, 2015 | |
Cadence's Restructuring Plans | ||||
Beginning Balance | $ 6,210 | $ 14,224 | $ 4,343 | $ 4,343 |
Restructuring and other charges (credits), net | 4,511 | 10,252 | 17,999 | |
Non-cash charges | (116) | (2,450) | (309) | |
Cash payments | (9,381) | (15,285) | (7,895) | |
Effect of foreign currency translation | (87) | (531) | 86 | |
Ending Balance | 1,137 | 6,210 | 14,224 | 6,210 |
Severance and Benefits [Member] | ||||
Cadence's Restructuring Plans | ||||
Beginning Balance | 4,462 | 10,672 | 0 | 0 |
Restructuring and other charges (credits), net | 3,636 | 8,004 | 17,589 | |
Non-cash charges | 0 | 0 | 0 | |
Cash payments | (7,322) | (13,967) | (6,944) | |
Effect of foreign currency translation | (25) | (247) | 27 | |
Ending Balance | 751 | 4,462 | 10,672 | 4,462 |
Excess Facilities [Member] | ||||
Cadence's Restructuring Plans | ||||
Beginning Balance | 1,267 | 3,552 | 4,343 | 4,343 |
Restructuring and other charges (credits), net | 1,095 | (945) | 101 | |
Non-cash charges | (116) | 0 | 0 | |
Cash payments | (1,798) | (1,056) | (951) | |
Effect of foreign currency translation | (62) | (284) | 59 | |
Ending Balance | 386 | 1,267 | 3,552 | 1,267 |
Other [Member] | ||||
Cadence's Restructuring Plans | ||||
Beginning Balance | 481 | 0 | 0 | 0 |
Restructuring and other charges (credits), net | (220) | 3,193 | 309 | |
Non-cash charges | 0 | (2,450) | (309) | |
Cash payments | (261) | (262) | 0 | |
Effect of foreign currency translation | 0 | 0 | 0 | |
Ending Balance | $ 0 | $ 481 | $ 0 | $ 481 |
Other Income, Net (Details)
Other Income, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Other Income (Expense), Net | |||
Interest income | $ 2,667 | $ 1,827 | $ 1,706 |
Gains on sale of marketable debt and equity securities, net | 21 | 722 | 1,364 |
Gains on sale of non-marketable equity investments | 2,348 | 2,524 | 1,098 |
Gains (losses) on securities in NQDC trust | (369) | 3,415 | 3,293 |
Gains on foreign exchange | 5,606 | 1,742 | 285 |
Write-down of non-marketable investments | 0 | (1,956) | (464) |
Other income, net | 204 | 205 | 288 |
Total other income, net | $ 10,477 | $ 8,479 | $ 7,570 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Earnings Per Share [Abstract] | |||
Issuance of common shares for settlement of warrants | 23,100 | ||
Earnings Per Share, Basic and Diluted [Abstract] | |||
Net income | $ 252,417 | $ 158,898 | $ 164,243 |
Weighted average common shares used to calculate basic net income per share | 288,018 | 283,349 | 277,796 |
Convertible notes | 0 | 0 | 8 |
2015 Warrants | 16,434 | 15,930 | 10,549 |
Stock-based compensation | 7,850 | 7,496 | 6,211 |
Weighted average common shares used to calculate diluted net income per share | 312,302 | 306,775 | 294,564 |
Net income per share - basic (in usd per share) | $ 0.88 | $ 0.56 | $ 0.59 |
Net income per share - diluted (in usd per share) | $ 0.81 | $ 0.52 | $ 0.56 |
Net Income Per Share (Details 1
Net Income Per Share (Details 1) - shares shares in Thousands | 12 Months Ended | |||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | ||
Potential shares of Cadence's common stock excluded | ||||
Total potential common shares excluded | 1,089 | 2,791 | 13,649 | |
2013 Warrants | ||||
Potential shares of Cadence's common stock excluded | ||||
Total potential common shares excluded | 0 | 0 | 6,830 | [1] |
Options to purchase shares of common stock | ||||
Potential shares of Cadence's common stock excluded | ||||
Total potential common shares excluded | 1,029 | 2,773 | 5,973 | |
Non-vested shares of restricted stock | ||||
Potential shares of Cadence's common stock excluded | ||||
Total potential common shares excluded | 60 | 18 | 846 | |
[1] | These warrants expired on various dates from February 2014 through April 2014. |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 |
Inventories: | |||
Raw materials | $ 40,499 | $ 42,428 | |
Finished goods | 16,263 | 13,966 | |
Inventories | 56,762 | 56,394 | |
Prepaid expenses and other: | |||
Prepaid expenses and other current assets | 31,967 | 31,856 | |
Deferred income taxes | 0 | 94,457 | |
Prepaid expenses and other | 31,967 | 126,313 | |
Property, plant and equipment: | |||
Computer equipment and related software | 471,842 | 445,536 | |
Buildings | 126,156 | 126,382 | |
Land | 55,898 | 55,926 | |
Leasehold, building and land improvements | 90,400 | 91,128 | |
Furniture and fixtures | 21,847 | 22,424 | |
Equipment | 42,274 | 40,637 | |
In-process capital assets | 1,527 | 630 | |
Total cost | 809,944 | 782,663 | |
Less: Accumulated depreciation and amortization | (581,345) | (552,551) | |
Property, plant and equipment, net | 228,599 | 230,112 | $ 238,715 |
Other assets: | |||
Deferred income taxes | 245,651 | 140,969 | |
Other long-term assets | 59,252 | 68,397 | |
Other assets | 304,903 | 209,366 | |
Accounts payable and accrued liabilities: | |||
Payroll and payroll-related accruals | 155,592 | 151,526 | |
Accounts payable | 25,152 | 12,102 | |
Income taxes payable - current | 11,024 | 9,118 | |
Accrued operating liabilities | 46,254 | 52,629 | |
Accounts payable and accrued liabilities | $ 238,022 | $ 225,375 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Short-term investments: | ||
Available-for-sale securities | $ 94,498 | $ 90,445 |
Trading securities held in Non-Qualified Deferred Compensation Plan, or NQDC | 24,905 | 27,034 |
2015 Notes Hedges | 523,930 | |
Total Assets | 480,094 | 1,369,905 |
Liabilities | ||
2015 Notes Embedded Conversion Derivative | 523,930 | |
Foreign currency exchange contracts | 362 | 3,163 |
Total Liabilities | 362 | 527,093 |
Money market funds [Member] | ||
Assets | ||
Cash equivalents | 360,691 | 728,496 |
Corporate debt securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 34,829 | 34,894 |
Bank certificates of deposit [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 15,046 | 21,910 |
United States Treasury securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 36,286 | 19,374 |
United States government agency securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 4,152 | 9,208 |
Commercial paper [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 1,993 | 3,186 |
Marketable equity securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 2,192 | 1,873 |
Fair Value Measurements, Level 1 [Member] | ||
Short-term investments: | ||
Trading securities held in Non-Qualified Deferred Compensation Plan, or NQDC | 24,905 | 27,034 |
2015 Notes Hedges | 0 | |
Total Assets | 428,226 | 785,985 |
Liabilities | ||
2015 Notes Embedded Conversion Derivative | 0 | |
Foreign currency exchange contracts | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value Measurements, Level 1 [Member] | Money market funds [Member] | ||
Assets | ||
Cash equivalents | 360,691 | 728,496 |
Fair Value Measurements, Level 1 [Member] | Corporate debt securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 1 [Member] | Bank certificates of deposit [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 1 [Member] | United States Treasury securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 36,286 | 19,374 |
Fair Value Measurements, Level 1 [Member] | United States government agency securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 4,152 | 9,208 |
Fair Value Measurements, Level 1 [Member] | Commercial paper [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 1 [Member] | Marketable equity securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 2,192 | 1,873 |
Fair Value Measurements, Level 2 [Member] | ||
Short-term investments: | ||
Trading securities held in Non-Qualified Deferred Compensation Plan, or NQDC | 0 | 0 |
2015 Notes Hedges | 523,930 | |
Total Assets | 51,868 | 583,920 |
Liabilities | ||
2015 Notes Embedded Conversion Derivative | 523,930 | |
Foreign currency exchange contracts | 362 | 3,163 |
Total Liabilities | 362 | 527,093 |
Fair Value Measurements, Level 2 [Member] | Money market funds [Member] | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value Measurements, Level 2 [Member] | Corporate debt securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 34,829 | 34,894 |
Fair Value Measurements, Level 2 [Member] | Bank certificates of deposit [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 15,046 | 21,910 |
Fair Value Measurements, Level 2 [Member] | United States Treasury securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 2 [Member] | United States government agency securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 2 [Member] | Commercial paper [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 1,993 | 3,186 |
Fair Value Measurements, Level 2 [Member] | Marketable equity securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | ||
Short-term investments: | ||
Trading securities held in Non-Qualified Deferred Compensation Plan, or NQDC | 0 | 0 |
2015 Notes Hedges | 0 | |
Total Assets | 0 | 0 |
Liabilities | ||
2015 Notes Embedded Conversion Derivative | 0 | |
Foreign currency exchange contracts | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | Money market funds [Member] | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | Corporate debt securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | Bank certificates of deposit [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | United States Treasury securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | United States government agency securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | Commercial paper [Member] | ||
Short-term investments: | ||
Available-for-sale securities | 0 | 0 |
Fair Value Measurements, Level 3 [Member] | Marketable equity securities [Member] | ||
Short-term investments: | ||
Available-for-sale securities | $ 0 | $ 0 |
Employee and Director Benefit96
Employee and Director Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Contributions to plan | |||
Contributions to defined contribution plans | $ 22,337 | $ 21,121 | $ 20,055 |
Net recognized gains (losses) of trading securities | |||
Trading securities | (369) | 3,415 | 3,293 |
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets [Abstract] | |||
Unfunded projected benefit obligation - defined benefit retirement plans | 6,131 | 6,794 | 7,160 |
Expense related to defined benefit plans | |||
Expense related to defined benefit plans | $ 1,359 | $ 1,799 | $ 1,817 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 |
Accumulated other comprehensive income | ||
Foreign currency translation gain | $ (9,569) | $ 15,707 |
Changes in defined benefit plan liabilities | (3,066) | (3,401) |
Unrealized holding gains on available-for-sale securities | 210 | 41 |
Total accumulated other comprehensive income | $ (12,425) | $ 12,347 |
Other Comprehensive Income (D98
Other Comprehensive Income (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Changes in unrealized holding gains or losses on available-for-sale securities | |||
Unrealized holding gains or losses | $ 202 | $ (156) | $ (127) |
Reclassification of unrealized holding gains or losses to other income, net | (33) | (149) | (53) |
Changes in unrealized holding gains or losses | $ 169 | $ (305) | $ (180) |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 | |
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Total revenue | $ 1,702,091 | $ 1,580,932 | $ 1,460,116 |
Americas: | |||
Total Americas | 808,379 | 719,965 | 671,654 |
UNITED STATES | |||
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Geographic Areas, revenue from External Customers attributed to Individual Foreign Countries | 782,419 | 696,608 | 648,714 |
Other Americas [Member] | |||
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Geographic Areas, revenue from External Customers attributed to Individual Foreign Countries | 25,960 | 23,357 | 22,940 |
Asia [Member] | |||
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Geographic Areas, revenue from External Customers attributed to Individual Foreign Countries | 413,588 | 360,280 | 289,065 |
Europe, Middle East and Africa [Member] | |||
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Geographic Areas, revenue from External Customers attributed to Individual Foreign Countries | 316,684 | 328,724 | 303,593 |
Japan [Member] | |||
Entity Wide Disclosure on Geographic Areas Revenue from External Customers | |||
Geographic Areas, revenue from External Customers attributed to Individual Foreign Countries | $ 163,440 | $ 171,963 | $ 195,804 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) $ in Thousands | Jan. 02, 2016 | Jan. 03, 2015 | Dec. 28, 2013 |
Summary of long-lived assets by geography | |||
Total long-lived assets | $ 228,599 | $ 230,112 | $ 238,715 |
Americas: | |||
Total Americas | 190,052 | 201,338 | 207,988 |
UNITED STATES | |||
Summary of long-lived assets by geography | |||
Long-Lived Assets in Individual Foreign Countries | 189,665 | 200,760 | 207,694 |
Other Americas [Member] | |||
Summary of long-lived assets by geography | |||
Long-Lived Assets in Individual Foreign Countries | 387 | 578 | 294 |
Asia [Member] | |||
Summary of long-lived assets by geography | |||
Long-Lived Assets in Individual Foreign Countries | 24,767 | 22,145 | 23,508 |
EMEA [Member] | |||
Summary of long-lived assets by geography | |||
Long-Lived Assets in Individual Foreign Countries | 12,832 | 5,951 | 6,326 |
JAPAN | |||
Summary of long-lived assets by geography | |||
Long-Lived Assets in Individual Foreign Countries | $ 948 | $ 678 | $ 893 |
Subsequent Event (Details)
Subsequent Event (Details) - Long-term Debt [Member] - Term Loan Due Twenty-Nineteen [Member] - Subsequent Event [Member] $ in Millions | Jan. 28, 2016USD ($) |
Subsequent Event [Line Items] | |
Debt Instrument, Interest Rate Terms | Interest accrues on the term loan at a rate equal to LIBOR plus a margin of 1.125% per annum, which may increase to a rate equal to LIBOR plus a margin of up to 1.875% per annum, depending on Cadence’s leverage ratio. |
Principal | $ 300 |
Debt instrument, term | 3 years |
Debt to EBITDA ratio | 3 |
Debt Instrument, Covenant Description | The term loan includes customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens and make certain investments, asset dispositions and restricted payments. In addition, the term loan agreement contains certain financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 2.75 to 1, with a step-up to 3.25 to 1 for one year following an acquisition by Cadence of at least $250.0 million that results in a pro forma leverage ratio between 2.50 to 1 and 3.00 to 1. The term loan agreement also requires Cadence to maintain an EBITDA to interest charges ratio of at least 3.00 to 1. |
London Interbank Offered Rate (LIBOR) [Member] | |
Subsequent Event [Line Items] | |
Interest rate spread | 1.125% |
Scenario 1 [Member] | |
Subsequent Event [Line Items] | |
Debt to EBITDA ratio | 2.75 |
Scenario 2 [Member] | |
Subsequent Event [Line Items] | |
Debt to EBITDA ratio | 3.25 |
Debt to EBITDA ratio, term | 1 year |
Required business acquisition consideration | $ 250 |
Scenario 2 [Member] | Minimum [Member] | |
Subsequent Event [Line Items] | |
Pro forma leverage ratio | 2.50 |
Scenario 2 [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Pro forma leverage ratio | 3 |
Scenario 2 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Subsequent Event [Line Items] | |
Interest rate spread | 1.875% |