10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO             

COMMISSION FILE NUMBER: 0-19807

SYNOPSYS, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	56-1546236
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

700 EAST MIDDLEFIELD ROAD

MOUNTAIN VIEW, CA 94043

(Address of principal executive offices, including zip code)

(650) 584-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 23, 2011, there were 146,679,418 shares of the registrant’s common stock outstanding.

Explanatory Note

Synopsys, Inc. is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011 (“Form 10-Q”), which was filed with the Securities and Exchange Commission on May 27, 2011, for the sole purpose of furnishing corrected XBRL Interactive Data Files. Due to a filing error by a third party financial printer, the XBRL Interactive Data Files originally furnished with the Form 10-Q contained inaccuracies. No other changes have been made to the Form 10-Q.

Except as specifically described above, this Amendment No. 1 does not reflect events occurring after the filing of the Form 10-Q, does not update disclosures contained in the Form 10-Q and does not modify or amend the Form 10-Q.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit Number		Incorporated By Reference				Filed Herewith
	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation	10-Q	000-19807	3.1	09/15/03
3.2	Restated Bylaws	8-K	000-19807	3.2	06/03/09
4.1	Specimen Common Stock Certificate	S-1	33-45138	4.3	02/24/92 (effective date)
10.33+	2006 Employee Equity Incentive Plan, as amended	8-K	000-19807	10.33	03/25/11
31.1*	Certification of Principal Executive Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
31.2*	Certification of Principal Financial Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
32.1*	Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code
101.INS**	XBRL Instance Document					X
101.SCH**	XBRL Taxonomy Extension Schema Document					X
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document					X

+ Indicates a management contract, compensatory plan or arrangement.

* Previously filed as an exhibit to the Form 10-Q.

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYNOPSYS, INC.
Date: June 2, 2011	By:	/S/    BRIAN M. BEATTIE
		Brian M. Beattie Chief Financial Officer (Principal Financial Officer)

EXHIBIT INDEX

Exhibit Number		Incorporated By Reference				Filed Herewith
	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1	Amended and Restated Certificate of Incorporation	10-Q	000-19807	3.1	09/15/03
3.2	Restated Bylaws	8-K	000-19807	3.2	06/03/09
4.1	Specimen Common Stock Certificate	S-1	33-45138	4.3	02/24/92 (effective date)
10.33+	2006 Employee Equity Incentive Plan, as amended	8-K	000-19807	10.33	03/25/11
31.1*	Certification of Principal Executive Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
31.2*	Certification of Principal Financial Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
32.1*	Certification of Principal Executive Officer and Principal Financial Officer furnished pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code
101.INS**	XBRL Instance Document					X
101.SCH**	XBRL Taxonomy Extension Schema Document					X
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document					X

+ Indicates a management contract, compensatory plan or arrangement.

* Previously filed as an exhibit to the Form 10-Q.

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data	Apr. 30, 2011	Oct. 31, 2010
Condensed Consolidated Balance Sheets
Accounts receivable, allowances	$ 2,974	$ 2,727
Preferred Stock, par value	$ 0.01	$ 0.01
Preferred Stock, shares authorized	2,000	2,000
Preferred Stock, shares outstanding	0	0
Common Stock, par value	$ 0.01	$ 0.01
Common Stock, shares authorized	400,000	400,000
Common Stock, shares outstanding	146,485	148,479
Treasury Stock, shares	10,779	8,786

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Apr. 30, 2011	Apr. 30, 2010	Apr. 30, 2011	Apr. 30, 2010
Revenue:
Time-based license	$ 318,762	$ 288,672	$ 614,371	$ 561,147
Upfront license	25,014	12,715	51,549	33,161
Maintenance and service	49,894	36,719	92,394	73,965
Total revenue	393,670	338,106	758,314	668,273
Cost of revenue:
License	51,146	44,930	101,669	86,144
Maintenance and service	19,974	15,268	40,521	31,778
Amortization of intangible assets	14,908	8,829	28,143	16,686
Total cost of revenue	86,028	69,027	170,333	134,608
Gross margin	307,642	269,079	587,981	533,665
Operating expenses:
Research and development	123,169	113,050	243,909	214,282
Sales and marketing	99,562	79,363	178,886	158,979
General and administrative	29,470	28,713	59,335	54,566
Amortization of intangible assets	3,756	2,985	7,504	5,778
Total operating expenses	255,957	224,111	489,634	433,605
Operating income	51,685	44,968	98,347	100,060
Other income, net	5,574	8,905	11,244	11,155
Income before provision for income taxes	57,259	53,873	109,591	111,215
(Benefit) provision for income taxes	(23,855)	14,324	(19,749)	(61,120)
Net income	$ 81,114	$ 39,549	$ 129,340	$ 172,335
Net income per share:
Basic	$ 0.55	$ 0.27	$ 0.87	$ 1.17
Diluted	$ 0.53	$ 0.26	$ 0.84	$ 1.14
Shares used in computing per share amounts:
Basic	148,461	148,890	148,738	147,860
Diluted	152,593	152,482	153,198	151,635

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Document and Entity Information	6 Months Ended
	Apr. 30, 2011	May 23, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	true
Document Period End Date	Apr. 30, 2011
Entity Registrant Name	SYNOPSYS INC
Entity Central Index Key	0000883241
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--10-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		146,679,418
Trading Symbol	SNPS
Amendment Description	Synopsys, Inc. is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011 ("Form 10-Q"), which was filed with the Securities and Exchange Commission on May 27, 2011, for the sole purpose of furnishing corrected XBRL Interactive Data Files. Due to a filing error by a third party financial printer, the XBRL Interactive Data Files originally furnished with the Form 10-Q contained inaccuracies. No other changes have been made to the Form 10-Q. Except as specifically described above, this Amendment No. 1 does not reflect events occurring after the filing of the Form 10-Q, does not update disclosures contained in the Form 10-Q and does not modify or amend the Form 10-Q.

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Credit Facility

6 Months Ended

Apr. 30, 2011

Credit Facility

Credit Facility

Note 7. Credit Facility

On October 20, 2006, the Company entered into a five-year, $300.0 million senior unsecured revolving credit facility providing for loans to the Company and certain of its foreign subsidiaries. The facility contains financial covenants requiring the Company to maintain a minimum leverage ratio and specified levels of cash, as well as other non-financial covenants. The facility terminates on October 20, 2011. Borrowings under the facility bear interest at the greater of the administrative agent's prime rate or the federal funds rate plus 0.50%; however, the Company has the option to pay interest based on the outstanding amount at Eurodollar rates plus a spread between 0.50% and 0.70% based on a pricing grid tied to a financial covenant. In addition, commitment fees are payable on the facility at rates between 0.125% and 0.175% per year based on a pricing grid tied to a financial covenant. As of April 30, 2011, the Company had no outstanding borrowings under this credit facility and was in compliance with all the covenants.

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Segment Disclosure

6 Months Ended

Apr. 30, 2011

Segment Disclosure

Segment Disclosure

Note 12. Segment Disclosure

ASC 280, Segment Reporting, requires disclosures of certain information regarding operating segments, products and services, geographic areas of operation and major customers. Segment reporting is based upon the "management approach," i.e., how management organizes the Company's operating segments for which separate financial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance. The Company's CODMs are the Company's Chief Executive Officer and Chief Operating Officer.

The Company provides software and hardware products and consulting services. The Company operates in a single segment. In making operating decisions, the CODMs primarily consider consolidated financial information, accompanied by disaggregated information about revenues by geographic region. Specifically, the CODMs consider where individual "seats" or licenses to the Company's products are used in allocating revenue to particular geographic areas. Revenue is defined as revenues from external customers. Goodwill is not allocated since the Company operates in one reportable operating segment.

The following table presents the revenues related to operations by geographic areas:

	Three Months Ended April 30,				Six Months Ended April 30,
	2011		2010		2011		2010
	(in thousands)
Revenue:
United States	$	182,615	$	163,282	$	349,315	$	323,272
Europe		50,133		47,462		99,462		91,237
Japan		71,698		61,912		138,299		126,243
Asia-Pacific and other		89,224		65,450		171,238		127,521
Consolidated	$	393,670	$	338,106	$	758,314	$	668,273

Geographic revenue data for multi-region, multi-product transactions reflect internal allocations and is therefore subject to certain assumptions and to the Company's methodology.

One customer accounted for 10.1% and 10.7% of the Company's consolidated revenue for the three months ended April 30, 2011 and 2010, respectively, and accounted for 10.5% and 10.9% of the Company's consolidated revenue for the six months ended April 30, 2011 and 2010, respectively.

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Financial Assets and Liabilities

6 Months Ended

Apr. 30, 2011

Financial Assets and Liabilities

Financial Assets and Liabilities

Note 3. Financial Assets and Liabilities

Cash, Cash Equivalents and Investments. Short-term investments include money market funds and municipal obligations and are classified as available-for-sale securities. Cash, cash equivalents and investments are detailed as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months			Gross Unrealized Losses 12 Months or Longer		Estimated Fair Value(1)
	(in thousands)
Balance at April 30, 2011
Classified as current assets:
Non-interest bearing cash (U.S. and International)	$	181,875	$	—	$	—		$	—	$	181,875
Money market funds (U.S.)		56,540		—		—			—		56,540
Cash deposits and money market funds (International)		455,617		—		—			—		455,617
Municipal securities		146,008		431		(8	)		—		146,431
		840,040		431		(8	)		—		840,463
Classified as non-current assets:
Strategic investments		6,361		—		—			—		6,361
Total	$	846,401	$	431	$	(8	)	$	—	$	846,824
	Cost		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Months			Gross Unrealized Losses 12 Months or Longer		Estimated Fair Value(1)
	(in thousands)
Balance at October 31, 2010
Classified as current assets:
Non-interest bearing cash (U.S. and International)	$	45,687	$	—	$	—		$	—	$	45,687
Money market funds (U.S.)		68,099		—		—			—		68,099
Cash deposits and money market funds (International)		661,621		—		—			—		661,621
Municipal obligations		162,440		723		(9	)		—		163,154
		937,847		723		(9	)		—		938,561
Classified as long-term assets:
Strategic investments		7,360		—		—			—		7,360
Total	$	945,207	$	723	$	(9	)	$	—	$	945,921

(1) See Note 4 for further discussion on fair values of money market funds, municipal securities, and non-marketable equity securities.

As of April 30, 2011, the stated maturities of the Company's short-term investments are $47.3 million within one year, $52.4 million within one to five years, $7.8 million within five to ten years and $38.9 million after ten years. Actual maturities may differ from the stated maturities because borrowers may have the right to call or prepay certain obligations. These investments are classified as available-for-sale and are recorded on the balance sheet at fair market value with unrealized gains or losses, net of tax, reported as a component of accumulated other comprehensive income (loss). The cost of securities sold is based on the specific identification method and realized gains and losses are included in other income, net. Realized gains and losses on sales of short-term investments have not been material in any period presented.

Derivatives. In accordance with ASC 815, Derivatives and Hedging, the Company recognizes derivative instruments as either assets or liabilities in the unaudited condensed consolidated financial statements at fair value and provides qualitative and quantitative disclosures about such derivatives.

The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. The Company enters into hedges in the form of foreign currency forward contracts to reduce its exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month, (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies.

The duration of forward contracts ranges from one month to 19 months, the majority of which are short term. The Company does not use foreign currency forward contracts for speculative or trading purposes. The Company enters into foreign exchange forward contracts with high credit quality financial institutions that are rated 'A' or above and to date has not experienced nonperformance by counterparties. Further, the Company anticipates continued performance by all counterparties to such agreements.

The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or other current liabilities in the unaudited condensed consolidated balance sheet. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting.

Cash Flow Hedging Activities

Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of one year or less, except for forward contracts denominated in the British pound, Canadian dollar, Chinese yuan, Euro, Indian rupee, Japanese yen or Taiwanese dollar, which can have durations of up to 19 months. Certain forward contracts are rolled over periodically to capture the full length of exposure to the Company's foreign currency risk, which can be up to three years. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The effective portion of gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of accumulated other comprehensive income (loss), or OCI, in stockholders' equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. We expect a majority of the hedge balance in accumulated other comprehensive income (loss) to be reclassified to the statement of operations within the next twelve months.

Hedging effectiveness is evaluated monthly using spot rates, with any gain or loss caused by hedging ineffectiveness recorded in other income, net. The premium/discount component of the forward contracts is recorded to other income, net, and is not included in evaluating hedging effectiveness.

Non-designated Hedging Activities

The Company's foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income, net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in other income, net. The duration of the forward contracts for hedging the Company's balance sheet exposure is approximately one month.

The Company also has certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income, net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year. The overall goal of the Company's hedging program is to minimize the impact of currency fluctuations on its net income over its fiscal year.

During the three and six months ended April 30, 2011, $2.2 million and $4.4 million of gain, respectively, and during the three and six months ended April 30, 2010, $1.5 million of gain and $1.5 million of loss, respectively, were recorded in other income, net due to changes in the fair values of non-designated forward contracts. As of April 30, 2011, the Company had a total gross notional amount of $463.0 million of short-term foreign currency forward contracts outstanding with a net fair value of $10.1 million. As of October 31, 2010, the Company had a total gross notional amount of $691.3 million of short-term foreign currency forward contracts outstanding with a net fair value of $(7.5) million. The notional amounts for derivative instruments provide one measure of the transaction volume outstanding as of April 30, 2011 and October 31, 2010, respectively, and do not represent the amount of the Company's exposure to market gain or loss. The Company's exposure to market gain or loss will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.

The following represents the unaudited condensed consolidated balance sheet location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments:

	Fair Values of derivative instruments designated as  hedging instruments		Fair Values of derivative instruments not designated as hedging instruments
	(in thousands)
As of April 30, 2011
Other current assets	$	12,804	$	323
Other current liabilities	$	3,023	$	—
As of October 31, 2010
Other current assets	$	5,680	$	—
Other current liabilities	$	11,626	$	1,554

The following table represents the unaudited condensed consolidated statement of operations location and amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax:

	Location of gain (loss) recognized in OCI on derivatives	Amount of gain (loss) recognized in OCI on derivatives (effective portion)			Location of gain (loss) reclassified from OCI	Amount of gain (loss) reclassified from OCI (effective portion)
	(in thousands)
Three months ended April 30, 2011
Foreign exchange contracts	Revenue	$	361		Revenue	$	(1,969	)
Foreign exchange contracts	Operating expenses		7,505		Operating expenses		985
Total		$	7,866			$	(984	)
Three months ended April 30, 2010
Foreign exchange contracts	Revenue	$	2,366		Revenue	$	1,265
Foreign exchange contracts	Operating expenses		(3,015	)	Operating expenses		1,159
Total		$	(649	)		$	2,424
Six months ended April 30, 2011
Foreign exchange contracts	Revenue	$	1,803		Revenue	$	(4,895	)
Foreign exchange contracts	Operating expenses		7,003		Operating expenses		253
Total		$	8,806			$	(4,642	)
Six months ended April 30, 2010
Foreign exchange contracts	Revenue	$	1,078		Revenue	$	897
Foreign exchange contracts	Operating expenses		(6,369	)	Operating expenses		2,851
Total		$	(5,291	)		$	3,748

The following table represents the ineffective portion and portion excluded from effectiveness testing of the hedge gains (losses) for derivative instruments designated as hedging instruments:

	Location of gain (loss) recognized in income on derivatives (ineffective portion and excluded from effectiveness testing)		Amount of gain (loss) recognized in income statement on derivatives (ineffective portion)(1)			Amount of gain (loss) recognized in income statement on derivatives (excluded from effectiveness testing)(2)
	(in thousands)
Three months ended April 30, 2011
Foreign exchange contracts		Other income, net	$	(5	)	$	265
Three months ended April 30, 2010
Foreign exchange contracts		Other income, net	$	101		$	(85	)
Six months ended April 30, 2011
Foreign exchange contracts		Other income, net	$	(46	)	$	(19	)
Six months ended April 30, 2010
Foreign exchange contracts		Other income, net	$	(41	)	$	(160	)

(1) The ineffective portion includes forecast inaccuracies.

(2) The portion excluded from effectiveness includes the discount earned or premium paid for the contracts.

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Stock Repurchase Program

6 Months Ended

Apr. 30, 2011

Stock Repurchase Program

Stock Repurchase Program

Note 9. Stock Repurchase Program

The Company's Board of Directors (Board) previously approved a stock repurchase program pursuant to which the Company was authorized to purchase up to $500.0 million of its common stock. The Board has periodically replenished the stock repurchase program up to $500.0 million. The Company repurchases shares to offset dilution caused by ongoing stock issuances from existing plans for equity compensation awards, acquisitions, and when management believes it is a good use of cash. Repurchases are transacted in accordance with Rule 10b-18 of the Securities Exchange Act of 1934 (Exchange Act) and may be made through any means including, but not limited to, open market purchases, plans executed under Rule 10b5-1(c) of the Exchange Act and structured transactions. As of April 30, 2011, $80.3 million remained available for further repurchases under the program. On May 25, 2011, the Board replenished the stock repurchase program up to $500.0 million. The following table summarizes stock repurchase activities as well as the reissuance of treasury stock for employee stock compensation purposes:

	Three Months Ended April 30,				Six Months Ended April 30,
	2011		2010		2011		2010
	(in thousands, except per share price)
Shares repurchased		6,191		1,112		8,609		2,279
Average purchase price per share	$	27.46	$	22.48	$	27.29	$	22.05
Aggregate purchase price	$	169,988	$	25,000	$	234,985	$	50,257
Reissuance of treasury stock		3,430		4,377		6,616		5,142

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Taxes

6 Months Ended

Apr. 30, 2011

Taxes

Taxes

Note 14. Taxes

Effective Tax Rate

The Company estimates its annual effective tax rate at the end of each fiscal quarter. The Company's estimate takes into account estimations of annual pre-tax income, the geographic mix of pre-tax income and the Company's interpretations of tax laws and possible outcomes of audits.

The following table presents the provision (benefit) for income taxes and the effective tax rates:

	Three Months Ended April 30,						Six Months Ended April 30,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Income before income taxes	$	57,259		$	53,873		$	109,591		$	111,215
Provision (benefit) for income tax	$	(23,855	)	$	14,324		$	(19,749	)	$	(61,120	)
Effective tax rate		(41.7	)%		26.6	%		(18.0	)%		(55.0	)%

The Company's effective tax rate for the three months ended April 30, 2011 is negative and substantially lower than the statutory federal income tax rate of 35% primarily due to the tax impact of a final settlement with the IRS for fiscal years 2006 through 2009 of $32.8 million as well as lower tax rates applicable to its non-U.S. operations partially offset by state taxes and non-deductible stock compensation. The effective tax rate decreased in the three months ended April 30, 2011, as compared to the same period in fiscal 2010, primarily due to the IRS settlement. The effective tax rate for the six months ended April 30, 2011 differed from the same period in fiscal 2010 primarily due to the tax impact of an IRS settlement of fiscal years 2002 through 2004 of which a $91.6 million benefit was recorded in the first quarter of fiscal 2010. The Company files income tax returns in the U.S. and various state and local jurisdictions. Its subsidiaries file tax returns in various foreign jurisdictions, including Ireland, Hungary, Taiwan and Japan. The Company remains subject to income tax examinations in the U.S for fiscal years after 2009. In Ireland, Hungary, Taiwan and Japan, our subsidiaries remain subject to tax examinations for fiscal years after 2005. See IRS Examinations below for the status of our current federal income tax audits.

The timing of the resolution of income tax examinations is highly uncertain as well as the amounts and timing of various tax payments that are part of the settlement process. This could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. During the three months ended April 30, 2011, there were material changes to the total gross unrecognized tax benefits as a result of the IRS settlement of fiscal years 2006 through 2009. The Company believes that before the end of fiscal 2011, it is reasonably possible that the statute of limitations on certain state and foreign income and withholding taxes will expire. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, the range of the estimated potential decrease in underlying unrecognized tax benefits is between $0 and $88 million.

IRS Examinations

The Company is regularly audited by the IRS. In the second quarter of fiscal 2011, the Company reached a final settlement with the Examination Division of the IRS for its audits of fiscal years 2006 through 2009. As a result of the settlement, the Company's unrecognized tax benefits decreased by $35.9 million and the impact to other balance sheet tax accounts was not material. The net tax impact resulting from the settlement was $32.8 million.

The audit of certain returns filed by Synplicity, Inc. prior to its acquisition by the Company in May 2008 was finalized in the first quarter of fiscal 2011, which resulted in a decrease in unrecognized tax benefits of $4.0 million.

In fiscal 2010, the Company reached a settlement with the IRS that resolved certain disputes related to the Company's acquisition of Avant! Corporation in 2002 that arose in the audit of its fiscal years 2002 through 2004. This settlement resulted in a decrease in the Company's tax expense for fiscal 2010 of approximately $94.3 million, which is primarily due to the release of previously established tax liabilities of $67.8 million, principally related to the acquisition of Avant! Corporation in 2002, as well as a release of a valuation allowance of $21.6 million for foreign tax credits which were utilized in connection with the settlement.

As a result of the IRS settlement of fiscal years 2002 through 2004, the Company's net deferred tax assets increased by $55.4 million. The change is due primarily to increases in its deferred tax assets of $72.3 million for certain costs that have been capitalized for tax purposes and will be amortized in future periods, partially offset by a decrease to deferred tax assets of $25.2 million, due to the use of the Company's foreign tax credit carryover, net of the reversal of a valuation allowance.

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Stock Compensation

6 Months Ended

Apr. 30, 2011

Stock Compensation

Stock Compensation

Note 10. Stock Compensation

As of April 30, 2011, there was $96.0 million of unamortized share-based compensation expense which is expected to be amortized over a weighted-average period of approximately 2.6 years. The intrinsic values of options exercised during the three and six months ended April 30, 2011 were $12.8 million and $27.9 million, respectively. The intrinsic values of options exercised during the three and six months ended April 30, 2010 were $10.4 million and $13.0 million, respectively.

The compensation cost recognized in the unaudited condensed consolidated statements of operations for these stock compensation arrangements was as follows:

	Three Months Ended April  30,						Six Months Ended April  30,
	2011			2010			2011			2010
	(in thousands)
Cost of license	$	1,225		$	1,514		$	2,718		$	3,531
Cost of maintenance and service		277			427			631			1,041
Research and development expense		5,867			5,835			13,710			13,497
Sales and marketing expense		2,537			2,815			5,175			6,514
General and administrative expense		2,760			2,875			5,680			6.117
Stock compensation expense before taxes		12,666			13,466			27,914			30,700
Income tax benefit		(3,400	)		(3,043	)		(7,492	)		(6,938	)
Stock compensation expense after taxes	$	9,266		$	10,423		$	20,422		$	23,762

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Comprehensive Income

6 Months Ended

Apr. 30, 2011

Comprehensive Income

Comprehensive Income

Note 8. Comprehensive Income

The following table presents the components of comprehensive income:

	Three Months Ended April 30,						Six Months Ended April 30,
	2011			2010			2011			2010
	(in thousands)
Net income	$	81,114		$	39,549		$	129,340		$	172,335
Change in unrealized (losses) gains on investments, net of tax of $(54) and $114, for the three and six months ended April 30, 2011, respectively, and of $1,221 and $1,059 for each of the same periods in fiscal 2010, respectively		(24	)		(1,850	)		(177	)		(1,605	)
Deferred gains (losses) on cash flow hedges, net of tax of $(1,941) and $(1,862), for the three and six months ended April 30, 2011, respectively, and of ($145) and $479 for each of the same periods in fiscal 2010, respectively		7,776			(776	)		8,815			(5,248	)
Reclassification adjustment on deferred (gains) losses on cash flow hedges, net of tax of $(81) and $(942), for the three and six months ended April 30, 2011, respectively, and of $1,083 and $1,621 for each of the same periods in fiscal 2010, respectively		984			(2,425	)		4,642			(3,748	)
Foreign currency translation adjustment		5,082			(908	)		3,123			(1,629	)
Total	$	94,932		$	33,590		$	145,743		$	160,105

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Description of Business

6 Months Ended

Apr. 30, 2011

Description of Business

Description of Business

Note 1. Description of Business

Synopsys, Inc. (Synopsys or the Company) is a world leader in providing technology solutions used to develop electronics and electronic systems. The Company supplies the electronic design automation (EDA) software that engineers use to design, create prototypes for and test integrated circuits, also known as chips. The Company also supplies software and hardware used to develop the systems that incorporate integrated circuits and the software that runs on those integrated circuits. The Company's intellectual property (IP) products are pre-designed circuits that engineers use as components of larger chip designs rather than redesigning those circuits themselves. To complement these product offerings, the Company provides technical services and helps customers develop chips and electronic systems.

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Fair Value Measures

6 Months Ended

Apr. 30, 2011

Fair Value Measures

Fair Value Measures

Note 4. Fair Value Measures

ASC 820-10, Fair Value Measurements and Disclosures, defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements.

The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets;

Level 2—Observable inputs other than quoted prices included in Level 1 for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3—Unobservable inputs to the valuation derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

On a recurring basis, the Company measures the fair value of certain of its assets and liabilities, which include cash equivalents, short-term investments, non-qualified deferred compensation plans, foreign currency derivative contracts and contingent consideration associated with business combinations.

The Company's cash equivalents and short-term investments are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs.

The assets of the Company's non-qualified deferred compensation plans consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1.

The Company's foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments.

During fiscal 2010, the Company recorded a liability for contingent consideration of $7.8 million arising from a business combination which is payable over three years upon achievement of certain milestones. The fair value of the contingent consideration was determined at the acquisition date using the income approach based on the net present value of estimated payments and is re-measured in each reporting period. The contingent consideration was classified within Level 3 as management assumptions for the valuation included discount rates and estimated probabilities of achievement of certain technical milestones which are unobservable in the market. Changes in fair value of the contingent consideration due to revisions to the estimated probabilities of achievement of technical milestones are recorded as operating expenses while changes due to time value are recorded in other income, net. The Company recorded a reduction of $3.2 million and $3.4 million during three and six months ended April 30, 2011, respectively, in research and development expenses due to the change in fair value of the liability for contingent consideration. As of April 30, 2011, the fair value of the liability for contingent consideration was estimated at $4.7 million.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below as of April 30, 2011:

			Fair Value Measurement Using
Description	Total as of April 30, 2011		Quoted Prices in Active Markets for Identical Assets (Level  1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	386,130	$	386,130	$	—	$	—
Short-term investments:
Municipal securities		146,431		—		146,431		—
Prepaid and other current assets:
Foreign currency derivative contracts		13,127		—		13,127		—
Other long-term assets:
Deferred compensation plan assets		95,144		95,144		—		—
Total assets	$	640,832	$	481,274	$	159,558	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	3,023	$	—	$	3,023	$	—
Contingent consideration		2,289		—		—		2,289
Other long-term liabilities:
Contingent consideration		2,365		—		—		2,365
Total liabilities	$	7,677	$	—	$	3,023	$	4,654

Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2010:

			Fair Value Measurement Using
Description	Total as of October 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	487,199	$	487,199	$	—	$	—
Short-term investments:
Municipal obligations		163,154		—		163,154		—
Prepaid and other current assets:
Foreign currency derivative contracts		5,680		—		5,680		—
Other long-term assets:
Deferred compensation plan assets		83,330		83,330		—		—
Total assets	$	739,363	$	570,529	$	168,834	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	13,180	$	—	$	13,180	$	—
Contingent consideration		3,121		—		—		3,121
Other long-term liabilities:
Contingent consideration		4,935		—		—		4,935
Total liabilities	$	21,236	$	—	$	13,180	$	8,056

Equity investments in privately-held companies are accounted for under the cost method of accounting. These equity investments (also called non-marketable equity securities) are classified within Level 3 as they are valued using significant unobservable inputs or data in an inactive market, and the valuation requires management judgment due to the absence of market price and inherent lack of liquidity. The non-marketable equity securities are measured and recorded at fair value when an event or circumstance which impacts the fair value of these securities indicates an other-than-temporary decline in value has occurred. As of April 30, 2011, the carrying value of these investments was $6.4 million.

The following non-marketable equity securities were measured and recorded at fair value within other long-term assets on a non-recurring basis. The losses on these securities were recorded in other income, net.

	Balance as of April 30, 2011		Significant Unobservable Inputs (Level 3)		Total (losses) during three  months ended April 30, 2011			Total (losses) during six  months ended April 30, 2011
	(in thousands)
Non-marketable equity securities	$	92	$	92	$	(92	)	$	(999	)

The Company did not recognize any impairment during the six months ended April 30, 2010.

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Goodwill and Intangible Assets

6 Months Ended

Apr. 30, 2011

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

Goodwill as of April 30, 2011 consisted of the following:

	(in thousands)
Balance at October 31, 2010	$	1,265,843
Adjustments(1)		(9,358	)
Balance at April 30, 2011	$	1,256,485

(1) Adjustments relate to the changes in estimates for acquisitions that closed in the prior fiscal year for which the purchase price allocation is still preliminary and, to a lesser extent, achievement of certain milestones for an acquisition that closed prior to fiscal 2010.

Intangible assets as of April 30, 2011 consisted of the following:

	Gross Assets		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	207,726	$	82,498	$	125,228
Customer relationships		78,400		24,781		53,619
Contract rights intangible		32,400		15,022		17,378
Covenants not to compete		2,200		1,983		217
Trademarks and trade names		6,200		2,051		4,149
In-process research and development (IPR&D)		16,625		—		16,625
Capitalized software development costs		10,454		7,060		3,394
Total(1)	$	354,005	$	133,395	$	220,610

(1) Total intangible assets as of April 30, 2011 decreased as compared to October 31, 2010 primarily due to the retirement of fully amortized assets.

Intangible assets as of October 31, 2010 consisted of the following:

	Gross Assets		Accumulated Amortization		Net Assets
	(in thousands)
Core/developed technology	$	263,592	$	118,587	$	145,005
Customer relationships		113,020		55,040		57,980
Contract rights intangible		30,400		9,522		20,878
Covenants not to compete		2,200		1,884		316
Trademarks and trade names		6,200		1,541		4,659
In-process research and development (IPR&D)		17,525		—		17,525
Capitalized software development costs		8,873		5,580		3,293
Total	$	441,810	$	192,154	$	249,656

Amortization expense related to intangible assets consisted of the following:

	Three Months Ended April 30,				Six Months Ended April 30,
	2011		2010		2011		2010
	(in thousands)
Core/developed technology	$	11,658	$	8,170	$	22,976	$	15,503
Customer relationships		3,368		2,351		6,561		4,518
Contract rights intangible		3,333		908		5,500		1,675
Covenants not to compete		50		238		100		475
Trademarks and trade names		255		147		510		293
Capitalized software development costs(1)		741		741		1,480		1,481
Total	$	19,405	$	12,555	$	37,127	$	23,945

(1) Amortization of capitalized software development costs is included in cost of license revenue in the unaudited condensed consolidated statements of operations.

The following table presents the estimated future amortization of intangible assets:

Fiscal Year	(in thousands)
Remainder of fiscal 2011	$	34,356
2012		58,776
2013		45,935
2014		27,860
2015		16,859
2016 and thereafter		20,199
In-process research and development (IPR&D)(1)		16,625
Total	$	220,610

(1) IPR&D projects are estimated to be completed within three years as of April 30, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

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Other Income, net

6 Months Ended

Apr. 30, 2011

Other Income, net

Other Income, net

Note 13. Other Income, net

The following table presents the components of other income, net:

	Three Months Ended April 30,					Six Months Ended April 30,
	2011			2010		2011			2010
	(in thousands)
Interest income	$	552		$	1,502	$	1,165		$	3,230
Gain on assets related to deferred compensation plan assets		5,381			4,242		8,619			5,826
Foreign currency exchange gain (loss)		(396	)		1,297		2,215			33
Impairment of long-term investment		(92	)		—		(999	)		—
Other, net(1)		129			1,864		244			2,066
Total	$	5,574		$	8,905	$	11,244		$	11,155

(1) Includes $2.1 million gain on the sale of an investment during the three and six months ended April 30, 2010, respectively.

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Liabilities

6 Months Ended

Apr. 30, 2011

Liabilities

Liabilities

Note 6. Liabilities

Accounts Payable and Accrued Liabilities. Accounts payable and accrued liabilities consist of:

	April 30, 2011		October 31, 2010
	(in thousands)
Payroll and related benefits	$	151,124	$	216,079
Other accrued liabilities		53,691		73,230
Accounts payable		15,899		16,331
Acquisition related liabilities		6,070		7,210
Total	$	226,784	$	312,850

Other Long-term Liabilities. Other long-term liabilities consist of:

	April 30, 2011		October 31, 2010
	(in thousands)
Deferred compensation liability	$	95,144	$	83,330
Other long-term liabilities		16,454		18,555
Total	$	111,598	$	101,885

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Effect of New Accounting Pronouncements

6 Months Ended

Apr. 30, 2011

Effect of New Accounting Pronouncements

Effect of New Accounting Pronouncements

Note 16. Effect of New Accounting Pronouncements

Beginning in the first quarter of fiscal 2011, the Company adopted recent accounting guidance for revenue arrangements with multiple deliverables on a prospective basis. This guidance addresses whether to treat individual deliverables or groups of deliverables in a multiple-element arrangement as separate units of accounting and how to allocate the arrangement consideration to the separate units of accounting. The guidance also requires that arrangement consideration be allocated to software deliverables (as a group) and to non-software deliverables (individually) based on relative standalone selling prices and provides guidance for estimating standalone selling prices for purposes of allocating arrangement consideration. The guidance does not affect the accounting for contracts which do not contain non-software deliverables.

The Company infrequently enters into multiple-element arrangements that contain both software and non-software deliverables such as hardware which are impacted by the new guidance. Such contracts are not material either individually or in the aggregate to the unaudited condensed consolidated financial statements. Accordingly, the adoption of the new guidance was not material to the Company's unaudited condensed consolidated financial statements and is not expected to have a material effect on subsequent periods.

In May 2011, the FASB issued new guidance for fair value measurements to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. Among other matters, this new guidance provides clarifications limiting the application of the highest and best use concept to only non-financial assets, clarifies the guidance on measuring the fair value of an entity's own equity instruments, as well as new guidance related to portfolio fair value measurement approaches and the use of premiums and discounts in a fair value measurement. Additionally, this guidance requires new disclosures to be made for Level 3 fair value measurements, as well as transfers between Level 1 and 2 fair value measurements. The new requirements are effective for the Company in the first quarter of fiscal 2013. The Company will adopt the guidance on a prospective basis effective the first quarter of fiscal 2013. The Company is currently assessing the impact of adoption of the guidance on its consolidated financial statements.

With the exception of the discussion above, the effect of recent accounting pronouncements has not changed from the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2010.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Apr. 30, 2011	Apr. 30, 2010
Cash flow from operating activities:
Net income	$ 129,340	$ 172,335
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	64,998	50,218
Stock compensation	27,914	30,700
Allowance for doubtful accounts	723	(742)
Write-down of long-term investments	999
Gain on sale of investments	(50)	(2,420)
Deferred income taxes	(939)	(38,549)
Net changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	(28,904)	(20,626)
Prepaid and other current assets	(8,848)	(7,139)
Other long-term assets	(11,658)	(3,997)
Accounts payable and accrued liabilities	(69,320)	(68,672)
Income taxes	(40,890)	(29,645)
Deferred revenue	(6,510)	(45,235)
Net cash provided by operating activities	56,855	36,228
Cash flows from investing activities:
Proceeds from sales and maturities of short-term investments	63,648	188,650
Purchases of short-term investments	(49,435)	(131,748)
Purchases of property and equipment	(20,600)	(13,793)
Cash paid for acquisitions and intangible assets, net of cash acquired	(3,520)	(130,872)
Capitalization of software development costs	(1,512)	(1,410)
Net cash used in investing activities	(11,419)	(89,173)
Cash flows from financing activities:
Principal payments on capital leases	(1,310)	(1,346)
Issuances of common stock	108,843	73,210
Purchases of treasury stock	(234,985)	(50,257)
Net cash (used in) provided by financing activities	(127,452)	21,607
Effect of exchange rate changes on cash and cash equivalents	641	(844)
Net change in cash and cash equivalents	(81,375)	(32,182)
Cash and cash equivalents, beginning of year	775,407	701,613
Cash and cash equivalents, end of period	$ 694,032	$ 669,431

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Summary of Significant Accounting Policies

6 Months Ended

Apr. 30, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). In management's opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its unaudited condensed consolidated balance sheets, results of operations and cash flows. The Company's interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in Synopsys' Annual Report on Form 10-K for the fiscal year ended October 31, 2010 as filed with the SEC on December 17, 2010 and amended on February 9, 2011.

To prepare financial statements in conformity with GAAP, management must make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and may result in material effects on the Company's operating results and financial position.

Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Fiscal Year End. The Company's fiscal year ends on the Saturday nearest to October 31. The Company's second quarter of fiscal 2011 ended on April 30, 2011. The Company's second quarter of fiscal 2010 ended on May 1, 2010. Fiscal 2011 and 2010 are both 52-week years. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end.

Basis of Presentation. Certain immaterial amounts within net cash provided by operating activities in the prior period unaudited condensed consolidated statement of cash flows have been reclassified to conform to the current period presentation. These reclassifications had no impact on net cash provided by operating activities.

Subsequent Events. The Company has evaluated subsequent events through the date that these unaudited condensed consolidated financial statements were issued.

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Net Income per Share

6 Months Ended

Apr. 30, 2011

Net Income per Share

Net Income per Share

Note 11. Net Income per Share

The Company computes basic net income per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the dilution of potential common shares outstanding such as stock options and unvested restricted stock units and awards during the period using the treasury stock method.

The table below reconciles the weighted-average common shares used to calculate basic net income per share with the weighted-average common shares used to calculate diluted net income per share.

	Three Months Ended April 30,				Six Months Ended April 30,
	2011		2010		2011		2010
	(in thousands)
Numerator:
Net income	$	81,114	$	39,549	$	129,340	$	172,335
Denominator:
Weighted-average common shares for basic net income per share		148,461		148,890		148,738		147,860
Dilutive effect of common share equivalents from equity-based compensation		4,132		3,592		4,460		3,775
Weighted-average common shares for diluted net income per share		152,593		152,482		153,198		151,635
Net income per share:
Basic	$	0.55	$	0.27	$	0.87	$	1.17
Diluted	$	0.53	$	0.26	$	0.84	$	1.14

Diluted net income per share excludes 2.5 million and 3.3 million of anti-dilutive stock options and unvested restricted stock units and awards for the three and six months ended April 30, 2011, respectively and 10.7 million of anti-dilutive stock options and unvested restricted stock units and awards for the three and six months ended April 30, 2010, respectively. While these stock options and unvested restricted stock units and awards were anti-dilutive for the respective periods, they could be dilutive in the future.

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Contingencies

6 Months Ended

Apr. 30, 2011

Contingencies

Contingencies

Note 15. Contingencies

The Company is subject to routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of its business. The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on the Company's financial position and results of operations.

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Apr. 30, 2011	Oct. 31, 2010
ASSETS
Cash and cash equivalents	$ 694,032	$ 775,407
Short-term investments	146,431	163,154
Total cash, cash equivalents and short-term investments	840,463	938,561
Accounts receivable, net of allowances of $2,974 and $2,727, respectively	210,068	181,102
Deferred income taxes	72,930	73,465
Income taxes receivable	28,696	18,425
Prepaid and other current assets	54,465	36,202
Total current assets	1,206,622	1,247,755
Property and equipment, net	150,370	148,580
Goodwill	1,256,485	1,265,843
Intangible assets, net	220,610	249,656
Long-term deferred income taxes	262,173	268,759
Other long-term assets	113,209	105,948
Total assets	3,209,469	3,286,541
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities	226,784	312,850
Accrued income taxes	2,476	8,349
Deferred revenue	578,576	600,569
Total current liabilities	807,836	921,768
Long-term accrued income taxes	95,706	128,603
Other long-term liabilities	111,598	101,885
Long-term deferred revenue	46,931	34,103
Total liabilities	1,062,071	1,186,359
Stockholders' equity:
Preferred Stock, $0.01 par value: 2,000 shares authorized; none outstanding
Common Stock, $0.01 par value: 400,000 shares authorized; 146,485 and 148,479 shares outstanding, respectively	1,465	1,485
Capital in excess of par value	1,539,833	1,541,383
Retained earnings	883,487	770,674
Treasury stock, at cost: 10,779 and 8,786 shares, respectively	(278,016)	(197,586)
Accumulated other comprehensive income (loss)	629	(15,774)
Total stockholders' equity	2,147,398	2,100,182
Total liabilities and stockholders' equity	$ 3,209,469	$ 3,286,541