Summary
This 8-K filing from Synopsys Inc. (SNPS) on November 19, 2002, primarily discloses a significant settlement agreement reached on November 13, 2002. The agreement resolves ongoing litigation involving Synopsys, Cadence Design Systems, Inc., and Avant! Corporation LLC. As part of the settlement, Synopsys will pay $265 million to Cadence, which will be funded by an insurance policy purchased by Synopsys when it acquired Avant!. This settlement will result in Synopsys recording an expense of approximately $240 million in its fourth fiscal quarter of 2002. This expense represents the contingently refundable portion of the insurance premium previously recorded as a long-term restricted asset, plus accrued interest. Investors should note that this settlement resolves significant legal entanglements and will impact Synopsys's reported financial results for the quarter.
Key Highlights
- 1Synopsys, Inc. entered into a settlement agreement on November 13, 2002, to resolve litigation with Cadence Design Systems, Inc. and Avant! Corporation LLC.
- 2The settlement involves a payment of $265 million from Synopsys to Cadence Design Systems, Inc.
- 3The payment will be funded by an insurance policy obtained by Synopsys in connection with its acquisition of Avant! Corporation LLC.
- 4Synopsys will record an expense of approximately $240 million in its fourth fiscal quarter of 2002 related to this settlement.
- 5This expense reflects the reversal of a previously recorded long-term restricted asset (contingently refundable insurance premium) plus interest.
- 6The settlement includes reciprocal intellectual property licenses granted between Synopsys, Cadence, and Avant!.
- 7The financial impact of the settlement and asset reversal will be reflected in Synopsys's Q4 2002 financial statements and its annual report on Form 10-K.