Income Taxes Income Taxes

9 Months Ended

Sep. 28, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

During the nine months ended September 28, 2013, Cadence recognized a provision for income taxes of approximately $3.0 million primarily because of:

• Federal, state and foreign tax expense on anticipated fiscal 2013 income; and

• Tax expense related to integrating the acquisitions;

which were partially offset by:

• A tax benefit of $33.7 million from the release of an uncertain tax position recorded in a previous business combination and the release of related interest and penalties; and

• A tax benefit of $5.9 million for the fiscal 2012 federal research tax credit that was retroactively enacted.

Unrecognized Tax Benefits

During the nine months ended September 28, 2013, Cadence determined that the State of California Franchise Tax Board examination of the 2004 through 2006 tax years was effectively settled and, separately, released an unrecognized tax benefit recorded in a prior business combination.

The changes in Cadence's gross amount of unrecognized tax benefits during the nine months ended September 28, 2013 are as follows:

	Unrecognized tax benefits
	(In thousands)
Unrecognized tax benefits as of December 29, 2012	$	92,378
Gross amount of the increases in unrecognized tax benefits of tax positions taken during a prior year	6,476
Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year	13,088
Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes	(13,821		)
Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations	(12,044		)
Effect of foreign currency translation	497
Unrecognized tax benefits as of September 28, 2013	$	86,574
Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence's effective tax rate as of September 28, 2013	$	49,914

The total amounts of interest and penalties recognized in the condensed consolidated income statements as provision (benefit) for income taxes for the three and nine months ended September 28, 2013 and September 29, 2012 were as follows:

	Three Months Ended						Nine Months Ended
	September 28, 2013			September 29, 2012			September 28, 2013			September 29, 2012
	(In thousands)
Interest	$	728		$	820		$	(12,731	)	$	2,584
Penalties	(708		)	(36		)	(7,666		)	(1,012		)

The total amounts of gross accrued interest and penalties recognized in the condensed consolidated balance sheets as of September 28, 2013 and December 29, 2012 were as follows:

	As of
	September 28, 2013		December 29, 2012
	(In thousands)
Interest	$	52	$	24,427
Penalties	1,255		8,953