Voluntary retirement program, liability

[Table of](#i090043fcb1da400aaac214abf3d3ee98_7) [Contents](#i090043fcb1da400aaac214abf3d3ee98_7)The fair value for acquired agreements and relationships was determined by using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated from existing customers, less charges representing the contribution of other assets to those cash flows. Projected income from existing customer relationships considered customer retention rates ranging between 85% and 95%. The present value of operating cash flows from existing customers was determined using discount rates 10% and 11.5%.Cadence also assumed obligations related to deferred revenue of $6.9 million during fiscal 2020 with its acquisition of AWR. The fair value of these obligations was estimated using the cost build-up approach. The cost build-up approach determines fair value using estimates of the costs required to fulfill the contracted obligations plus an assumed profit margin, which approximates the amount that AWR would be required to pay a third party to assume the obligation.Cadence believes that its estimates and assumptions related to the fair value of its acquired intangible assets and assumed liabilities are reasonable, but significant judgment is involved.NOTE 16. RESTRUCTURING AND OTHER CHARGESCadence has initiated restructuring plans, most recently in fiscal 2020, in an effort to better align its resources with its business strategy. The charges associated with these restructuring plans have primarily been comprised of severance payments and termination benefits related to headcount reductions and charges related to impacted facilities and are included in restructuring and other charges on Cadence’s consolidated income statements.The following table presents activity for Cadence’s restructuring plans during fiscal 2021, 2020 and 2019:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | SeveranceandBenefits |  | ExcessFacilities |  | Total |
|  | (In thousands) |
| Balance, December 29, 2018 | $ | 11,176  |  |  | $ | 848  |  |  | $ | 12,024  |  |
| Restructuring | 8,649  |  |  | (28) |  |  | 8,621  |  |
| Cash payments | (10,714) |  |  | (420) |  |  | (11,134) |  |
| Effect of foreign currency translation | 118  |  |  | 9  |  |  | 127  |  |
| Balance, December 28, 2019 | $ | 9,229  |  |  | $ | 409  |  |  | $ | 9,638  |  |
| Restructuring  | 7,476  |  |  | 1,739  |  |  | 9,215  |  |
| Cash payments | (9,424) |  |  | (773) |  |  | (10,197) |  |
| Effect of foreign currency translation | 40  |  |  | (3) |  |  | 37  |  |
| Balance, January 2, 2021 | $ | 7,321  |  |  | $ | 1,372  |  |  | $ | 8,693  |  |
| Restructuring  | (1,480) |  |  | 432  |  |  | (1,048) |  |
| Cash payments | (5,774) |  |  | (1,761) |  |  | (7,535) |  |
| Effect of foreign currency translation | (67) |  |  | —  |  |  | (67) |  |
| Balance, January 1, 2022 | $ | —  |  |  | $ | 43  |  |  | $ | 43  |  |

All remaining liabilities for Cadence’s restructuring plans represent liabilities from vacated facilities and are included in accounts payable and accrued liabilities on Cadence’s consolidated balance sheet as of January 1, 2022. Restructuring liabilities included in other long-term liabilities represent liabilities from vacated facilities, and Cadence expects to make cash payments to settle these liabilities through fiscal 2022.Other Termination BenefitsDuring the second quarter of fiscal 2021, Cadence offered a voluntary retirement program to eligible employees in the United States. This program resulted in a one-time charge of $26.8 million for voluntary termination and post-employment benefits. These charges are included in each category of costs and expenses on Cadence’s consolidated income statements. As of January 1, 2022, liabilities related to the voluntary retirement program were $17.5 million and were included in accounts payable and accrued liabilities and other long-term liabilities on Cadence’s consolidated balance sheet. Cadence expects to make cash payments to settle these liabilities through fiscal 2023, including $17.0 million that is expected to be paid within the next twelve months.79
