10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED JULY 31, 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 (l) 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 August 29, 2011, there were 144,053,580 shares of the registrant’s common stock outstanding.

SYNOPSYS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDED JULY 31, 2011

TABLE OF CONTENTS

		Page
PART I.	Financial Information		3
ITEM 1.	Financial Statements		3
	Unaudited Condensed Consolidated Balance Sheets		3
	Unaudited Condensed Consolidated Statements of Operations		4
	Unaudited Condensed Consolidated Statements of Cash Flows		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		33
ITEM 4.	Controls and Procedures		33
PART II.	Other Information		33
ITEM 1.	Legal Proceedings		33
ITEM 1A.	Risk Factors		33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		40
ITEM 3.	Defaults Upon Senior Securities		40
ITEM 4.	(Removed and Reserved)		40
ITEM 5.	Other Information		40
ITEM 6.	Exhibits		41
Signatures			42

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SYNOPSYS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value amounts)

	July 31, 2011			October 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	889,886		$	775,407
Short-term investments		148,395			163,154
Total cash, cash equivalents and short-term investments		1,038,281			938,561
Accounts receivable, net of allowances of $3,060 and $2,727, respectively		175,386			181,102
Deferred income taxes		73,604			73,465
Income taxes receivable		21,477			18,425
Prepaid and other current assets		53,548			36,202
Total current assets		1,362,296			1,247,755
Property and equipment, net		159,059			148,580
Goodwill		1,258,286			1,265,843
Intangible assets, net		203,739			249,656
Long-term deferred income taxes		278,203			268,759
Other long-term assets		107,055			105,948
Total assets	$	3,368,638		$	3,286,541
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	284,463		$	312,850
Accrued income taxes		3,091			8,349
Deferred revenue		694,536			600,569
Total current liabilities		982,090			921,768
Long-term accrued income taxes		98,049			128,603
Other long-term liabilities		107,849			101,885
Long-term deferred revenue		59,143			34,103
Total liabilities		1,247,131			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; 143,666 and 148,479 shares outstanding, respectively		1,437			1,485
Capital in excess of par value		1,542,225			1,541,383
Retained earnings		931,281			770,674
Treasury stock, at cost: 13,599 and 8,786 shares, respectively		(351,896	)		(197,586	)
Accumulated other comprehensive loss		(1,540	)		(15,774	)
Total stockholders’ equity		2,121,507			2,100,182
Total liabilities and stockholders’ equity	$	3,368,638		$	3,286,541

See accompanying notes to unaudited condensed consolidated financial statements.

3

SYNOPSYS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
Revenue:
Time-based license	$	322,147		$	286,563		$	936,518		$	847,710
Upfront license		19,013			14,650			70,562			47,811
Maintenance and service		45,635			35,716			138,029			109,681
Total revenue		386,795			336,929			1,145,109			1,005,202
Cost of revenue:
License		52,089			43,996			153,758			130,140
Maintenance and service		19,275			14,697			59,796			46,475
Amortization of intangible assets		13,368			8,050			41,511			24,736
Total cost of revenue		84,732			66,743			255,065			201,351
Gross margin		302,063			270,186			890,044			803,851
Operating expenses:
Research and development		122,547			105,649			366,456			319,931
Sales and marketing		90,732			83,812			269,618			242,791
General and administrative		27,052			27,371			86,387			81,937
Amortization of intangible assets		3,553			2,561			11,057			8,339
Total operating expenses		243,884			219,393			733,518			652,998
Operating income		58,179			50,793			156,526			150,853
Other (expense) income, net		(2,212	)		(3,046	)		9,032			8,109
Income before provision for income taxes		55,967			47,747			165,558			158,962
Provision (benefit) for income taxes		3,885			8,420			(15,864	)		(52,700	)
Net income	$	52,082		$	39,327		$	181,422		$	211,662
Net income per share:
Basic	$	0.36		$	0.27		$	1.23		$	1.43
Diluted	$	0.35		$	0.26		$	1.20		$	1.40
Shares used in computing per share amounts:
Basic		144,960			148,006			147,479			147,909
Diluted		148,045			151,106			151,598			151,459

See accompanying notes to unaudited condensed consolidated financial statements.

4

SYNOPSYS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended July 31,
	2011			2010
Cash flow from operating activities:
Net income	$	181,422		$	211,662
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation		96,959			71,772
Stock compensation		41,430			45,214
Allowance for doubtful accounts		910			(851	)
Write-down of long-term investments		999			468
Gain on sale of investments		(829	)		(3,114	)
Deferred income taxes		(4,891	)		(31,297	)
Net changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable		6,780			(19,181	)
Prepaid and other current assets		(7,560	)		(7,497	)
Other long-term assets		(7,681	)		(2,470	)
Accounts payable and accrued liabilities		(17,285	)		(21,270	)
Income taxes		(38,998	)		(31,445	)
Deferred revenue		116,034			32,153
Net cash provided by operating activities		367,290			244,144
Cash flows from investing activities:
Proceeds from sales and maturities of short-term investments		104,013			352,124
Purchases of short-term investments		(92,611	)		(209,564	)
Purchases of property and equipment		(42,836	)		(27,593	)
Cash paid for acquisitions and intangible assets, net of cash acquired		(5,382	)		(137,681	)
Capitalization of software development costs		(2,269	)		(2,116	)
Net cash used in investing activities		(39,085	)		(24,830	)
Cash flows from financing activities:
Principal payments on capital leases		(4,592	)		(3,609	)
Issuances of common stock		119,826			87,241
Purchases of treasury stock		(334,985	)		(125,257	)
Net cash used in financing activities		(219,751	)		(41,625	)
Effect of exchange rate changes on cash and cash equivalents		6,025			4,139
Net change in cash and cash equivalents		114,479			181,828
Cash and cash equivalents, beginning of year		775,407			701,613
Cash and cash equivalents, end of period	$	889,886		$	883,441

See accompanying notes to unaudited condensed consolidated financial statements.

5

SYNOPSYS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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 third quarter of fiscal 2011 ended on July 30, 2011. The Company’s third quarter of fiscal 2010 ended on July 31, 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. An immaterial amount within net cash provided by operating activities in the prior period unaudited condensed consolidated statements of cash flows has been reclassified to conform to the current period presentation. This reclassification 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.

6

Note 3. Financial Assets and Liabilities

Cash, Cash Equivalents and Investments. Short-term investments include money market funds and municipal securities 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 July 31, 2011
Classified as current assets:
Non-interest bearing cash (U.S. and International)	$	165,107	$	—	$	—		$	—	$	165,107
Money market funds (U.S.)		161,703		—		—			—		161,703
Cash deposits and money market funds (International)		563,076		—		—			—		563,076
Municipal securities		147,948		457		(10	)		—		148,395
		1,037,834		457		(10	)		—		1,038,281
Classified as non-current assets:
Strategic investments		3,981		—		—			—		3,981
Total	$	1,041,815	$	457	$	(10	)	$	—	$	1,042,262
	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 securities		162,440		723		(9	)		—		163,154
		937,847		723		(9	)		—		938,561
Classified as non-current 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 July 31, 2011, the stated maturities of the Company’s short-term investments are:

	Fair Value
	(in thousands)
Due in 1 year or less	$	74,581
Due in 1–5 years		30,661
Due in 6–10 years		4,375
Due after 10 years		38,778
Total	$	148,395

7

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), or OCI. The cost of securities sold is based on the specific identification method and realized gains and losses are included in other (expense) 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 20 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 accrued 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 20 months or less. 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 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 OCI to be reclassified to the statements 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 (expense) income, net. The premium/discount component of the forward contracts is recorded to other (expense) 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 (expense) 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 (expense) 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 (expense) 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.

8

The effect on the changes in the fair values of non-designated forward contracts is summarized as follows:

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011	2010
	(in thousands)
Gain (loss) recorded in other (expense) income, net	$	(110	)	$	(3,016	)	$4,258	$	(4,502	)

Foreign currency forward contracts outstanding is as follows:

	As of July 31, 2011		As of October 31, 2010
	(In thousands)
Total gross notional amount	$	553,430	$	691,343
Net fair value	$	2,321	$	(7,500	)

The notional amounts for derivative instruments provide one measure of the transaction volume outstanding as of July 31, 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 July 31, 2011
Other current assets	$	8,853	$	—
Accrued liabilities	$	6,320	$	212
As of October 31, 2010
Other current assets	$	5,680	$	—
Accrued liabilities	$	11,626	$	1,554

9

The following table represents the unaudited condensed consolidated statements of operations location and amount of gains and losses on 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 July 31, 2011
Foreign exchange contracts	Revenue	$	(4,365	)	Revenue	$	(1,389	)
Foreign exchange contracts	Operating expenses		650		Operating expenses		3,121
Total		$	(3,715	)		$	1,732
Three months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(3,644	)	Revenue	$	703
Foreign exchange contracts	Operating expenses		(3,413	)	Operating expenses		(236	)
Total		$	(7,057	)		$	467
Nine months ended July 31, 2011
Foreign exchange contracts	Revenue	$	(2,562	)	Revenue	$	(6,284	)
Foreign exchange contracts	Operating expenses		7,653		Operating expenses		3,374
Total		$	5,091			$	(2,910	)
Nine months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(2,565	)	Revenue	$	1,601
Foreign exchange contracts	Operating expenses		(9,783	)	Operating expenses		2,615
Total		$	(12,348	)		$	4,216

The following table represents the ineffective portion and the portion excluded from effectiveness testing of the hedge gains (losses) for derivative instruments designated as hedging instruments, which are recorded in other (expense) income, net:

	Amount of gain (loss) recognized in  statement of operations on derivatives (ineffective portion) (1)		Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)(2)
	(in thousands)
Three months ended July 31, 2011
Foreign exchange contracts	$	121	$	(247	)
Three months ended July 31, 2010
Foreign exchange contracts	$	320	$	(892	)
Nine months ended July 31, 2011
Foreign exchange contracts	$	75	$	(267	)
Nine months ended July 31, 2010
Foreign exchange contracts	$	278	$	(1,051	)

(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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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 plan assets, 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 Company’s non-qualified deferred compensation plan assets 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 at the end of 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 (expense) income, net. The Company recorded a reduction of $0.4 million and $3.8 million during the three and nine months ended July 31, 2011, respectively, in research and development expenses due to the change in fair value of the liability for the contingent consideration. As of July 31, 2011, the fair value of the liability for contingent consideration was estimated at $4.2 million.

11

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 July 31, 2011:

			Fair Value Measurement Using
Description	Total as of July 31, 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 and cash equivalents:
Money market funds	$	579,702	$	579,702	$	—	$	—
Short-term investments:
Municipal securities		148,395		—		148,395		—
Prepaid and other current assets:
Foreign currency derivative contracts		8,853		—		8,853		—
Other long-term assets:
Deferred compensation plan assets		93,253		93,253		—		—
Total assets	$	830,203	$	672,955	$	157,248	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	6,532	$	—	$	6,532	$	—
Contingent consideration		2,065		—		—		2,065
Other long-term liabilities:
Contingent consideration		2,161		—		—		2,161
Total liabilities	$	10,758	$	—	$	6,532	$	4,226

12

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 and cash equivalents:
Money market funds	$	487,199	$	487,199	$	—	$	—
Short-term investments:
Municipal securities		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. During the three months ended July 31, 2011, an equity investment with a cost basis of $2.4 million was sold for $3.2 million resulting in a $0.8 million gain. As of July 31, 2011, the carrying value of equity investments was $4.0 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 (expense) income, net.

	Balance as of July 31, 2011		Significant Unobservable Inputs (Level 3)		Total (losses) during three months ended July 31, 2011		Total (losses) during nine months ended July 31, 2011
	(in thousands)
Non-marketable equity securities	$	92	$	92	$	—	$	(999	)

	Balance as of July 31, 2010		Significant Unobservable Inputs (Level 3)		Total (losses) during three months ended July 31, 2010			Total (losses) during nine months ended July 31, 2010
	(in thousands)
Non-marketable equity securities	$	452	$	452	$	(468	)	$	(468	)

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Note 5. Goodwill and Intangible Assets

Goodwill as of July 31, 2011 consisted of the following:

	(in thousands)
Balance at October 31, 2010	$	1,265,843
Adjustments(1)		(7,557	)
Balance at July 31, 2011	$	1,258,286

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

Intangible assets as of July 31, 2011 consisted of the following:

	Gross Assets(1)		Accumulated Amortization(1)		Net Assets
	(in thousands)
Core/developed technology	$	209,326	$	93,399	$	115,927
Customer relationships		78,400		28,029		50,371
Contract rights intangible		32,400		17,489		14,911
Covenants not to compete		2,200		2,033		167
Trademarks and trade names		6,200		2,306		3,894
In-process research and development (IPR&D)		15,025		—		15,025
Capitalized software development costs		11,245		7,801		3,444
Total	$	354,796	$	151,057	$	203,739

(1) Intangible assets as of July 31, 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 July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Core/developed technology	$	10,901	$	7,710	$	33,877	$	23,212
Customer relationships		3,248		2,088		9,809		6,607
Contract rights intangible		2,467		589		7,967		2,264
Covenants not to compete		50		88		150		563
Trademarks and trade names		255		136		765		429
Capitalized software development costs(1)		741		741		2,221		2,223
Total	$	17,662	$	11,352	$	54,789	$	35,298

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

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

Fiscal Year	(in thousands)
Remainder of fiscal 2011	$	16,959
2012		59,561
2013		46,621
2014		28,250
2015		17,104
2016 and thereafter		20,219
IPR&D(1)		15,025
Total	$	203,739

(1) IPR&D projects are estimated to be completed within two years as of July 31, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

Note 6. Liabilities

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

	July 31, 2011		October 31, 2010
	(in thousands)
Payroll and related benefits	$	217,484	$	216,079
Other accrued liabilities		52,099		73,230
Accounts payable		11,627		16,331
Acquisition related liabilities		3,253		7,210
Total	$	284,463	$	312,850

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

	July 31, 2011		October 31, 2010
	(in thousands)
Deferred compensation liability	$	93,253	$	83,330
Other long-term liabilities		14,596		18,555
Total	$	107,849	$	101,885

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 July 31, 2011, the Company had no outstanding borrowings under this credit facility and was in compliance with all the covenants.

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Note 8. Comprehensive Income

The following table presents the components of comprehensive income:

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Net income	$	52,082		$	39,327		$	181,422		$	211,662
Change in unrealized gains (losses) on investments, net of tax of $(9) and $104, for the three and nine months ended July 31, 2011, respectively, and of $43 and $1,102 for each of the same periods in fiscal 2010, respectively		14			(66	)		(163	)		(1,670	)
Deferred gains (losses) on cash flow hedges, net of tax of $575 and $(1,287), for the three and nine months ended July 31, 2011, respectively, and of $1,461 and $1,940 for each of the same periods in fiscal 2010, respectively		(3,646	)		(7,321	)		5,169			(12,570	)
Reclassification adjustment on deferred (gains) losses on cash flow hedges, net of tax of $401 and $(541), for the three and nine months ended July 31, 2011, respectively, and of $474 and $2,095 for each of the same periods in fiscal 2010, respectively		(1,731	)		(468	)		2,910			(4,216	)
Foreign currency translation adjustment		3,194			(126	)		6,318			(1,502	)
Total	$	49,913		$	31,346		$	195,656		$	191,704

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, and has periodically replenished the stock repurchase program to such amount. The Board most recently replenished the stock repurchase program up to $500.0 million on May 25, 2011. 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 July 31, 2011, $412.6 million remained available for further repurchases under the program. The following table summarizes stock repurchase activities as well as the reissuance of treasury stock for employee stock compensation purposes:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands, except per share price)
Shares repurchased		3,830		3,476		12,439		5,755
Average purchase price per share	$	26.11	$	21.58	$	26.93	$	21.76
Aggregate purchase price	$	100,000	$	75,000	$	334,985	$	125,257
Reissuance of treasury stock		1,010		1,211		7,626		6,353

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Note 10. Stock Compensation

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

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Cost of license	$	1,375		$	1,585		$	4,092		$	5,116
Cost of maintenance and service		361			490			993			1,531
Research and development expense		6,157			6,366			19,868			19,863
Sales and marketing expense		2,812			3,030			7,987			9,544
General and administrative expense		2,810			3,043			8,490			9,160
Stock compensation expense before taxes		13,515			14,514			41,430			45,214
Income tax benefit		(3,671	)		(3,327	)		(11,252	)		(10,363	)
Stock compensation expense after taxes	$	9,844		$	11,187		$	30,178		$	34,851

As of July 31, 2011, there was $112.2 million of unamortized share-based compensation expense which is expected to be amortized over a weighted-average period of approximately 2.8 years.

The intrinsic value of equity awards exercised during the periods below are as follow:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Intrinsic value of awards exercised	$	4,503	$	5,696	$	32,356	$	18,663

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 effect 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 July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Numerator:
Net income	$	52,082	$	39,327	$	181,422	$	211,662
Denominator:
Weighted-average common shares for basic net income per share		144,960		148,006		147,479		147,909
Dilutive effect of common share equivalents from equity-based compensation		3,085		3,100		4,119		3,550
Weighted-average common shares for diluted net income per share		148,045		151,106		151,598		151,459
Anti-dilutive employee stock-based awards excluded(1)		5,469		12,188		3,593		10,995

(1) These stock options and unvested restricted stock units and restricted stock awards were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future.

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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 of 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 July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Revenue:
United States	$	176,811	$	165,841	$	526,126	$	489,112
Europe		55,548		45,245		155,010		136,482
Japan		67,978		61,261		206,276		187,504
Asia-Pacific and other		86,458		64,582		257,697		192,104
Consolidated	$	386,795	$	336,929	$	1,145,109	$	1,005,202

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

One customer accounted for 10.5% and 10.9% of the Company’s consolidated revenue for the three months ended July 31, 2011 and 2010, respectively, and accounted for 10.5% and 10.9% of the Company’s consolidated revenue for the nine months ended July 31, 2011 and 2010, respectively.

Note 13. Other (expense) income, net

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

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Interest income	$	521		$	1,315		$	1,686		$	4,545
(Loss) gain on assets related to deferred compensation plan		(2,774	)		(2,165	)		5,845			3,662
Foreign currency exchange (loss) gain		(483	)		(1,234	)		1,732			(1,201	)
Write-down of long-term investments		—			(468	)		(999	)		(468	)
Other, net (1)		524			(494	)		768			1,571
Total	$	(2,212	)	$	(3,046	)	$	9,032		$	8,109

(1) Includes a $0.8 million gain on the sale of an equity investment during the three and nine months ended July 31, 2011, and a $2.1 million gain on the sale of an equity investment during the nine months ended July 31, 2010.

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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 July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Income before income taxes	$	55,967		$	47,747		$	165,558		$	158,962
Provision (benefit) for income tax	$	3,885		$	8,420		$	(15,864	)	$	(52,700	)
Effective tax rate		6.9	%		17.6	%		(9.6	)%		(33.2	)%

The Company’s effective tax rate for the three months ended July 31, 2011 is substantially lower than the statutory federal income tax rate of 35% primarily due to lower tax rates applicable to its non-U.S. operations partially offset by state taxes and non-deductible stock compensation. The provision for income taxes for the three and nine months ended July 31, 2011 also included the benefit of additional tax credits and deductions which were higher than those previously estimated as a result of the filing of the Company’s federal tax return for fiscal 2010. The effective tax rates for the nine months ended July 31, 2011 and 2010 are both negative primarily due to the tax impact of favorable IRS settlements. 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, the Company’s 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. The Company believes that in the coming twelve months, 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 $85 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 benefit 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, 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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Non-U.S. Examinations

The Company’s subsidiaries are being audited in a number of jurisdictions, including Taiwan (for fiscal 2008) and Hungary (for fiscal 2007 and fiscal 2008). To date, the Company has not received any notices of proposed adjustments resulting from these audits. The Company believes that it has adequately provided for potential tax adjustments in both jurisdictions.

Note 15. Contingencies

The Company is subject to routine legal proceedings, as well as demands, claims and threatened litigation that 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.

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 June 2011, the FASB issued new guidance regarding the presentation of comprehensive income in financial statements to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance eliminates the option to present the components of other comprehensive income as part of the statement of equity. The new guidance will be effective on a retrospective basis in the first quarter of fiscal 2013 and early adoption is permitted. The Company is currently assessing the impact of adoption of the guidance on its consolidated financial statements.

In May 2011, the FASB issued new guidance for fair value measurements to achieve common fair value measurement and disclosure requirements. The new requirements are effective on a prospective basis in 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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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q, and in particular the following discussion, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements can, in some cases, be identified by the use of terms such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project” or “continue,” the negatives of such terms, or other comparable terminology. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Without limiting the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements concerning the expected growth in the semiconductor industry, our positive business outlook, the ability of our prior acquisitions to drive revenue growth, the percent of revenue with which we expect to enter each quarter, our expectations with respect to organic and inorganic growth opportunities, our ability to make adjustments to our business as market conditions change, our ability to successfully execute our strategies, the sufficiency of our cash, cash equivalents and short-term investments and cash generated from operations, and our future liquidity requirements.

These statements involve certain known and unknown risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those identified below in Part II, Item 1A. Risk Factors of this Form 10-Q. The information included herein is given as of the filing date of this Form 10-Q with the Securities and Exchange Commission (SEC) and future events or circumstances could differ significantly from these forward-looking statements. Accordingly, we caution readers not to place undue reliance on these statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements. All subsequent written or oral forward-looking statements attributable to Synopsys or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Readers are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

The following summary of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes thereto contained in Part I, Item 1. of this report and with our audited consolidated financial statements and the related notes thereto contained in our 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.

Fiscal Year End. Our fiscal year ends on the Saturday nearest to October 31. Our third quarter of fiscal 2011 ended on July 30, 2011. Fiscal 2011 and fiscal 2010 are both 52-week fiscal years. For presentation purposes, this Form 10-Q, including the unaudited condensed consolidated financial statements and accompanying notes, refers to the closest calendar month end.

Overview

Business Summary

Synopsys is a world leader in providing technology solutions used to develop electronics and electronic systems. We supply the electronic design automation (EDA) software that engineers use to design, create prototypes for and test integrated circuits, also known as chips. We also supply software and hardware used to develop the systems that incorporate integrated circuits and the software that runs on those integrated circuits. Our 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, we provide technical services to support our solutions and we help our customers develop chips and electronic systems.

Our customers are generally large semiconductor and electronics manufacturers. Our solutions help them overcome the challenge of developing increasingly advanced electronics products while reducing their design and manufacturing costs. While our products are an important part of our customers’ development process, our customers’ research and development budget and spending decisions may be impacted by their business outlook and their willingness to invest in new and increasingly complex chip designs.

Despite recent global economic uncertainty, we have maintained profitability and positive cash flow on an annual basis in recent years. We achieved these results not only because of our solid execution, leading technology and strong customer relationships, but also because of our recurring revenue business model. Under this model, a substantial majority of our customers pay for their licenses over time and we typically recognize this recurring revenue over the life of the contract, which averages approximately three years. Recurring revenue generally represents more than 90% of our

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total revenue. The revenue we recognize in a particular period generally results from selling efforts in prior periods rather than the current period. We typically enter each quarter with greater than 90% of our revenue for that particular quarter already committed from our customers, providing for stability and predictability of results. Due to our business model, decreases as well as increases in customer spending do not immediately affect our revenues in a significant way.

The semiconductor industry has experienced moderate growth to date in 2011. However, our semiconductor customers remain cautious and focused on their costs due to the cyclical nature of the industry, the increasing complexity of product development and macroeconomic factors. The recent instability of global markets may create a more challenging environment for our customers to plan investment in research and development.

Nevertheless, our business outlook is positive based on growth forecasts for the semiconductor industry and our strong financials, diligent expense management, and acquisition strategy. Through our recent acquisitions, we have enhanced our technology and expanded our product portfolio and our total addressable market, especially in IP and system-level solutions, which we believe will help drive revenue growth. We expect to explore both organic and inorganic growth opportunities, including acquiring companies or technology that can contribute to the strategic, operational and financial performance of our business. We will continue to monitor worldwide economic growth rates, the considerable volatility of current global markets and other macroeconomic factors and may make adjustments to our business in the event that the semiconductor industry is unable to maintain current spending levels for our solutions. We believe that the combination of our solid financials, leading technology and strong customer relationships will help us successfully execute our strategies.

Financial Performance Summary for the Three Months Ended July 31, 2011

• We continued to derive more than 90% of our revenue from time-based licenses, maintenance and services.

• Our total revenue of $386.8 million increased by $49.9 million, or 15%, from $336.9 million in the same period of fiscal 2010. The increase was attributable to our overall growth, including sales of products associated with our prior-year acquisitions, which resulted in increased time-based license revenue, upfront license revenue and professional services revenue.

• Our cost of revenue and operating expenses increased compared to the same period in fiscal 2010 primarily due to increases in employee-related costs driven by increased headcount and other direct costs from our prior-year acquisitions.

• Our net income of $52.1 million increased by $12.8 million, or 33%, from $39.3 million in the same period of fiscal 2010. The increase was primarily due to overall revenue growth and a lower effective tax rate in fiscal 2011.

• Our net cash from operating activities of $367.3 million for the nine months ended July 31, 2011, an increase of $123.2 million, or 50%, from $244.1 million in the same period of fiscal 2010. This increase was primarily from increased customer collections due to our volume of contracts and the timing of billings to customers.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial results under the heading “Results of Operations” below are based on our unaudited condensed consolidated financial statements, which we have prepared in accordance with U.S. GAAP. In preparing these financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses and net income. On an on-going basis, we evaluate our estimates based on historical experience and various other assumptions we believe are reasonable under the circumstances. Our actual results may differ from these estimates.

The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, are:

• Revenue recognition;

• Valuation of stock compensation;

• Valuation of intangible assets; and

• Income taxes.

We describe our revenue recognition policy below. Our remaining critical accounting policies and estimates are discussed in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended October 31, 2010, filed with the SEC on December 17, 2010 and amended on February 9, 2011.

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Revenue Recognition.

Software license revenue consists of fees associated with the licensing of our software. Maintenance and service revenue consists of maintenance fees associated with perpetual and term licenses and professional services fees. Hardware revenue consists of Field Programmable Gate Array (FPGA) board-based products.

With respect to software licenses, we utilize three license types:

• Technology Subscription Licenses (TSLs). TSLs are time-based licenses for a finite term, and generally provide the customer limited rights to receive, or to exchange certain quantities of licensed software for, unspecified future technology. We bundle and do not charge separately for post-contract customer support (maintenance) for the term of the license.

• Term licenses. Term licenses are also for a finite term, but do not provide the customer any rights to receive, or to exchange licensed software for, unspecified future technology. Customers purchase maintenance separately for the first year and may renew annually for the balance of the term. The annual maintenance fee is typically calculated as a percentage of the net license fee.

• Perpetual licenses. Perpetual licenses continue as long as the customer renews maintenance plus an additional 20 years. Perpetual licenses do not provide the customer any rights to receive, or to exchange licensed software for, unspecified future technology. Customers purchase maintenance separately for the first year and may renew annually.

For the three software license types, we recognize revenue as follows:

• TSLs. We typically recognize revenue from TSL fees (which include bundled maintenance) ratably over the term of the license period, or as customer installments become due and payable, whichever is later. Revenue attributable to TSLs is reported as “time-based license revenue” in the unaudited condensed consolidated statements of operations.

• Term licenses. We recognize revenue from term licenses in full upon shipment of the software if payment terms require the customer to pay at least 75% of the license fee and 100% of the maintenance fee within one year from shipment and all other revenue recognition criteria are met. Revenue attributable to these term licenses is reported as “upfront license revenue” in the unaudited condensed consolidated statements of operations. For term licenses in which less than 75% of the license fee and 100% of the maintenance fee is payable within one year from shipment, we recognize revenue as customer payments become due and payable. Such revenue is reported as “time-based license revenue” in the unaudited condensed consolidated statements of operations.

• Perpetual licenses. We recognize revenue from perpetual licenses in full upon shipment of the software if payment terms require the customer to pay at least 75% of the license fee and 100% of the maintenance fee within one year from shipment and all other revenue recognition criteria are met. Revenue attributable to these perpetual licenses is reported as “upfront license revenue” in the unaudited condensed consolidated statements of operations. For perpetual licenses in which less than 75% of the license fee and 100% of the maintenance fee is payable within one year from shipment, we recognize revenue as customer installments become due and payable. Such revenue is reported as “time-based license revenue” in the unaudited condensed consolidated statements of operations.

We also enter into arrangements in which portions of revenue are contingent upon the occurrence of uncertain future events, for example, royalty arrangements. We refer to this revenue as “contingent revenue.” Contingent revenue is recognized if and when the applicable event occurs. It is reported as “time-based revenue” in the unaudited condensed consolidated statements of operations. Historically, these arrangements have not been material to our total revenue.

We recognize revenue from hardware sales in full upon shipment if all other revenue recognition criteria are met. Revenue attributable to these hardware sales is reported as “upfront license revenue” in the unaudited condensed consolidated statements of operations. Hardware sales have not been material to our total revenue.

We infrequently enter into multiple-element arrangements that contain both software and non-software deliverables such as hardware. On a prospective basis beginning in our first quarter of fiscal 2011, we apply recently issued accounting guidance for revenue arrangements with multiple deliverables for these contracts. The adoption of the new guidance did not have a material effect on our unaudited condensed consolidated financial statements, is not expected to have a material effect on subsequent periods and did not affect the accounting for contracts which do not contain non-software deliverables. The recent accounting 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.

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We have determined that the software and non-software deliverables in our contracts are separate units of accounting. Prior to our first quarter of fiscal 2011, all deliverables in our contracts were considered one unit of accounting unless we had vendor-specific objective evidence (VSOE) of fair value for all undelivered elements. We now allocate arrangement consideration to separate units of accounting based on estimated standalone selling prices (ESP) because we do not have objective evidence of standalone selling prices. We estimate the standalone selling prices of our separate units of accounting considering both market conditions and our own specific conditions. For hardware deliverables, we determine ESP using cost plus a margin because we have consistent pricing practices and gross margins for these products. Determining the ESP for software deliverables requires significant judgment. We determine ESP for software deliverables after considering customer geographies, market demand and competition at the time of contract negotiation, gross margin objectives, existing portfolio pricing practices, contractually stated prices and prices for similar historical transactions.

Under the recent accounting guidance we recognize revenue for our separate units of accounting when all revenue recognition criteria are met. Revenue allocated to hardware units of accounting is recognized upon delivery when all other revenue recognition criteria are met. Revenue allocated to software units of accounting is recognized according to the methods described above depending on the software license type (TSL, term license or perpetual license).

We recognize revenue from maintenance fees ratably over the maintenance period to the extent cash has been received or fees become due and payable, and recognize revenue from professional services and training fees as such services are performed and accepted by the customer. Revenue attributable to maintenance, professional services and training is reported as “maintenance and service revenue” in the unaudited condensed consolidated statements of operations.

We also enter into arrangements to deliver software products, either alone or together with other products or services that require significant modification, or customization of the software. We account for such arrangements using the percentage of completion method as we have the ability to make reasonably dependable estimates that relate to the extent of progress toward completion, contract revenues and costs. We measure the progress towards completion using the labor hours incurred to complete the project. Revenue attributable to these arrangements is reported as maintenance and service revenue in the unaudited condensed consolidated statements of operations.

We determine the fair value of each element in multiple element software arrangements based on VSOE. We limit our assessment of VSOE of fair value for each element to the price charged when such element is sold separately. We have analyzed all of the elements included in our multiple-element software arrangements and have determined that we have sufficient VSOE to allocate revenue to the maintenance components of our perpetual and term license products and to professional services. Accordingly, assuming all other revenue recognition criteria are met, we recognize license revenue from perpetual and term licenses upon delivery using the residual method, recognize revenue from maintenance ratably over the maintenance term, and recognize revenue from professional services as services are performed or as milestones are met and accepted. We recognize revenue from TSLs ratably over the term of the license, assuming all other revenue recognition criteria are met, since there is not sufficient VSOE to allocate the TSL fee between license and maintenance services.

We make significant judgments related to revenue recognition. Specifically, in connection with each transaction involving our products, we must evaluate whether: (1) persuasive evidence of an arrangement exists, (2) delivery of software or services has occurred, (3) the fee for such software or services is fixed or determinable, and (4) collectability of the full license or service fee is probable. All four of these criteria must be met in order for us to recognize revenue with respect to a particular arrangement. We apply these revenue recognition criteria as follows:

• Persuasive Evidence of an Arrangement Exists. Prior to recognizing revenue on an arrangement, our customary policy is to have a written contract, signed by both the customer and by us or a purchase order from those customers that have previously negotiated a standard end-user license arrangement or purchase agreement.

• Delivery Has Occurred. We deliver our products to our customers electronically or physically. For electronic deliveries, delivery occurs when we provide access to our customers to take immediate possession of the software through downloading it to the customer’s hardware. For physical deliveries, the standard transfer terms are typically FOB shipping point. We generally ship our products or license keys promptly after acceptance of customer orders. However, a number of factors can affect the timing of product shipments and, as a result, timing of revenue recognition, including the delivery dates requested by customers and our operational capacity to fulfill product orders at the end of a fiscal quarter.

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• The Fee is Fixed or Determinable. Our determination that an arrangement fee is fixed or determinable depends principally on the arrangement’s payment terms. Our standard payment terms for perpetual and term licenses require 75% or more of the license fee and 100% of the maintenance fee to be paid within one year. If the arrangement includes these terms, we regard the fee as fixed or determinable, and recognize all license revenue under the arrangement in full upon delivery (assuming all other revenue recognition criteria are met). If the arrangement does not include these terms, we do not consider the fee to be fixed or determinable and generally recognize revenue when customer installments are due and payable. In the case of a TSL, because of the right to exchange products or receive unspecified future technology and because VSOE for maintenance services does not exist for a TSL, we recognize revenue ratably over the term of the license, but not in advance of when customers’ installments become due and payable.

• Collectability is Probable. We judge collectability of the arrangement fees on a customer-by-customer basis pursuant to our credit review policy. We typically sell to customers with whom we have a history of successful collection. For a new customer, or when an existing customer substantially expands its commitments, we evaluate the customer’s financial position and ability to pay and typically assign a credit limit based on that review. We increase the credit limit only after we have established a successful collection history with the customer. If we determine at any time that collectability is not probable under a particular arrangement based upon our credit review process or the customer’s payment history, we recognize revenue under that arrangement as customer payments are actually received.

Results of Operations

Revenue Background

We generate our revenue from the sale of software licenses, maintenance and professional services and to a small extent, hardware products. Under current accounting rules and policies, we recognize revenue from orders we receive for software licenses, services and hardware products at varying times. In most instances, we recognize revenue on a TSL software license order over the license term and on a term or perpetual software license order in the quarter in which the license is delivered. Substantially all of our current time-based licenses are TSLs with an average license term of approximately three years. Revenue on maintenance orders is recognized ratably over the maintenance period (normally one year). Revenue on professional services orders is generally recognized upon completion and customer acceptance of contractually agreed milestones. Revenue on contracts requiring significant modification or development is accounted for using the percentage of completion method over the period of the development. Revenue on hardware product orders is generally recognized in full at the time the product is shipped.

Our revenue in any fiscal quarter is equal to the sum of our time-based license, upfront license, maintenance and professional services and hardware revenue for the period. We derive time-based license revenue in any quarter largely from TSL orders received and delivered in prior quarters and to a smaller extent due to contracts in which revenue is recognized as customer installments become due and payable and from contingent revenue arrangements. We derive upfront license revenue directly from term and perpetual license and hardware product orders mostly booked and shipped during the quarter. We derive maintenance revenue in any quarter largely from maintenance orders received in prior quarters since our maintenance orders generally yield revenue ratably over a term of one year. We also derive professional services revenue primarily from orders received in prior quarters, since we recognize revenue from professional services as those services are delivered and accepted, not when they are booked. Our license revenue is sensitive to the mix of TSLs and perpetual or term licenses delivered during a reporting period. A TSL order typically yields lower current quarter revenue but contributes to revenue in future periods. For example, a $120,000 order for a three-year TSL delivered on the last day of a quarter typically generates no revenue in that quarter, but $10,000 in each of the twelve succeeding quarters. Conversely, perpetual and term licenses with greater than 75% of the license fee due within one year from shipment typically generate current quarter revenue but no future revenue (e.g., a $120,000 order for a perpetual license generates $120,000 in revenue in the quarter the product is delivered, but no future revenue). Additionally, revenue in a particular quarter may also be impacted by perpetual and term licenses in which less than 75% of the license fees and 100% of the maintenance fees are payable within one year from shipment as the related revenue will be recognized as revenue in the period when customer payments become due and payable.

Our customer arrangements are complex, involving hundreds of products and various license rights, and our customers bargain with us over many aspects of these arrangements. For example, they often demand a broader portfolio of solutions, support and services and seek more favorable terms such as expanded license usage, future purchase rights and other unique rights at an overall lower total cost. No single factor typically drives our customers’ buying decisions, and

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we compete on all fronts to serve customers in a highly competitive EDA market. Customers generally negotiate the total value of the arrangement rather than just unit pricing or volumes.

Total Revenue

	July 31,				Dollar Change		% Change
	2011		2010
	(dollars in millions)
Three months ended	$	386.8	$	336.9	$	49.9		15	%
Nine months ended	$	1,145.1	$	1,005.2	$	139.9		14	%

Our revenues are subject to fluctuations, primarily due to customer requirements, including payment terms, the timing and value of contract renewals and the sale of products associated with prior-year acquisitions.

The increase in total revenue for the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 was due to our overall growth and the related increase in time-based revenue, upfront revenue and professional services revenue primarily driven by the timing and value of contract renewals, sales of products and professional services contracts including contracts assumed from our prior-year acquisitions.

Time-Based License Revenue

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended	$	322.1		$	286.6		$	35.5		12	%
Percentage of total revenue		83	%		85	%
Nine months ended	$	936.5		$	847.7		$	88.8		10	%
Percentage of total revenue		82	%		84	%

The increase in time-based license revenue for the three months and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 was primarily attributable to increases in TSL license revenue from arrangements booked in prior periods, higher contingent revenue and product sales from prior-year acquisitions.

Upfront License Revenue

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended	$	19.0		$	14.7		$	4.3		29	%
Percentage of total revenue		5	%		4	%
Nine months ended	$	70.6		$	47.8		$	22.8		48	%
Percentage of total revenue		6	%		5	%

Changes in upfront license revenue are generally attributable to normal fluctuations in customer requirements which can drive the amount of upfront orders and revenue in any particular period.

The increase in upfront license revenue for the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 was primarily attributable to the increase in sales of our hardware products, perpetual licenses and new products associated with prior-year acquisitions.

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Maintenance and Service Revenue

	July 31,						Dollar Change			% Change
	2011			2010
	(dollars in millions)
Three months ended
Maintenance revenue	$	18.7		$	19.9		$	(1.2	)		(6	)%
Professional services and other revenue		26.9			15.8			11.1			70	%
Total maintenance and services revenue	$	45.6		$	35.7		$	9.9			28	%
Percentage of total revenue		12	%		11	%
Nine months ended
Maintenance revenue	$	59.0		$	59.0		$	—			—	%
Professional services and other revenue		79.0			50.7			28.3			56	%
Total maintenance and services revenue	$	138.0		$	109.7		$	28.3			26	%
Percentage of total revenue		12	%		11	%

Maintenance revenue was relatively flat for the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 primarily due to the timing of renewals of maintenance contracts.

Professional services and other revenue increased substantially in the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010, primarily due to professional services contracts assumed from prior acquisitions.

Cost of Revenue

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended
Cost of license revenue	$	52.1		$	44.0		$	8.1		18	%
Cost of maintenance and service revenue		19.2			14.7			4.5		31	%
Amortization of intangible assets		13.4			8.0			5.4		68	%
Total	$	84.7		$	66.7		$	18.0		27	%
Percentage of total revenue		22	%		20	%
Nine months ended
Cost of license revenue	$	153.8		$	130.2		$	23.6		18	%
Cost of maintenance and service revenue		59.8			46.5			13.3		29	%
Amortization of intangible assets		41.5			24.7			16.8		68	%
Total	$	255.1		$	201.4		$	53.7		27	%
Percentage of total revenue		22	%		20	%

We divide cost of revenue into three categories: cost of license revenue, cost of maintenance and service revenue, and amortization of intangible assets. We segregate expenses directly associated with consulting and training services from cost of license revenue associated with internal functions providing license delivery and post-customer contract support services. We then allocate these group costs between cost of license revenue and cost of maintenance and service revenue based on license and maintenance and service revenue reported.

Cost of license revenue. Cost of license revenue includes costs related to products sold and software licensed, allocated operating costs related to product support and distribution costs, royalties paid to third party vendors, and the amortization of capitalized research and development costs associated with software products which have reached technological feasibility.

Cost of maintenance and service revenue. Cost of maintenance and service revenue includes operating costs related to maintaining the infrastructure necessary to operate our services and training organization, and costs associated with the delivery of our consulting services, such as hotline and on-site support, production services and documentation of maintenance updates.

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Amortization of intangible assets. Intangible assets are amortized to cost of revenue and operating expenses, and include the contract rights associated with certain contracts and core/developed technology, trademarks, trade names, customer relationships, covenants not to compete and other intangibles related to acquisitions.

The increase in cost of revenue in the three months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily due to an increase of $6.4 million in personnel-related costs as a result of headcount increases from our prior-year acquisitions, an increase of $5.0 million in maintenance and professional services driven by higher consulting service activities, and an increase of $5.4 million for amortization of intangible assets due to our prior-year acquisitions.

The increase in cost of revenue in the nine months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily due to an increase in $15.0 million in personnel-related costs as a result of headcount increases from our prior-year acquisitions, an increase of $15.1 million in maintenance and professional services, an increase of $3.9 million in hardware and license costs, and an increase of $16.8 million for amortization of intangible assets due to our prior-year acquisitions.

As a percentage of total revenue, cost of revenue marginally increased in the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 due to an increase in professional services contracts and an increase in amortization of intangible assets assumed in our prior-year acquisitions.

Operating Expenses

Research and Development

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended	$	122.5		$	105.6		$	16.9		16	%
Percentage of total revenue		32	%		31	%
Nine months ended	$	366.5		$	319.9		$	46.6		15	%
Percentage of total revenue		32	%		32	%

The increase in research and development expenses in the three months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily due to an increase of $13.3 million in personnel-related costs and an increase of $2.9 million in functionally allocated expenses as a result of headcount increases from our prior-year acquisitions.

The increase in research and development expenses for the nine months ended July 31, 2011 compared with the same period in fiscal 2010 was primarily due to an increase of $33.7 million in personnel-related costs, an increase of $11.1 million in functionally allocated expenses as a result of headcount increases from our prior-year acquisitions, and $3.6 million of other expenses including third party contractor services, partially offset by a decrease of $3.7 million due to change in the fair value of contingent consideration related to a prior-year acquisition.

Sales and Marketing

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended	$	90.7		$	83.8		$	6.9		8	%
Percentage of total revenue		23	%		25	%
Nine months ended	$	269.6		$	242.8		$	26.8		11	%
Percentage of total revenue		24	%		24	%

The increase in sales and marketing expenses for the three months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily attributable to higher variable compensation of $2.4 million driven by timing of shipments based on contract requirements and the increase in license revenues, and an increase of $4.3 million in other personnel-related costs due to an increase in headcount from prior-year acquisitions.

The increase in sales and marketing expenses for the nine months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily attributable to higher variable compensation of $12.8 million driven by the volume of contracts and timing of shipments based on contract requirements and the increase in license revenues, an increase of $10.0 million in other personnel-related costs due to an increase in headcount from prior-year acquisitions, and an increase of $2.3 million in travel-related costs.

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General and Administrative

	July 31,						Dollar Change			% Change
	2011			2010
	(dollars in millions)
Three months ended	$	27.1		$	27.4		$	(0.3	)		(1	)%
Percentage of total revenue		7	%		8	%
Nine months ended	$	86.4		$	81.9		$	4.5			5	%
Percentage of total revenue		8	%		8	%

General and administrative expenses for the three months ended July 31, 2011 compared to the same period in fiscal 2010 were relatively flat. The decrease of $2.3 million in functionally allocated expenses as a result of increased headcount in other functional areas was offset by an increase of $2.8 million in personnel-related costs and facility expenses as a result of headcount increases from our prior-year acquisitions.

The increase in general and administrative expenses for the nine months ended July 31, 2011 compared to the same period in fiscal 2010 was primarily due to an increase of $5.7 million in personnel-related costs, $6.7 million in facility expenses and $4.0 million in other general and administrative expenses primarily as a result of headcount increases from our prior-year acquisitions. The increases were partially offset by a decrease of $13.5 million in functionally allocated expenses as a result of increased headcount in other functional areas.

Amortization of Intangible Assets

	July 31,						Dollar Change		% Change
	2011			2010
	(dollars in millions)
Three months ended
Included in cost of revenue	$	13.4		$	8.0		$	5.4		68	%
Included in operating expenses		3.6			2.6			1.0		38	%
Total	$	17.0		$	10.6		$	6.4		60	%
Percentage of total revenue		4	%		3	%
Nine months ended
Included in cost of revenue	$	41.5		$	24.7		$	16.8		68	%
Included in operating expenses		11.1			8.3			2.8		34	%
Total	$	52.6		$	33.0		$	19.6		59	%
Percentage of total revenue		5	%		3	%

The increase in amortization of intangible assets for the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 was due to the amortization of intangible assets from our prior-year acquisitions, partially offset by certain intangible assets becoming fully amortized. See Note 5 to Notes to Unaudited Condensed Consolidated Financial Statements for a schedule of future amortization amounts.

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Other (expense) income, net

	July 31,						Dollar Change			% Change
	2011			2010
	(dollars in millions)
Three months ended
Interest income	$	0.5		$	1.3		$	(0.8	)		(62	)%
Loss on assets related to deferred compensation plan		(2.8	)		(2.2	)		(0.6	)		27	%
Foreign currency exchange (loss) gain		(0.4	)		(1.2	)		0.8			(67	)%
Write-down of long-term investments		—			(0.5	)		0.5			(100	)%
Other, net		0.5			(0.4	)		0.9			(225	)%
Total	$	(2.2	)	$	(3.0	)	$	0.8			(27	)%
Nine months ended
Interest income	$	1.7		$	4.5		$	(2.8	)		(62	)%
Gain on assets related to deferred compensation plan		5.8			3.7			2.1			57	%
Foreign currency exchange (loss) gain		1.7			(1.2	)		2.9			(242	)%
Write-down of long-term investments		(1.0	)		(0.5	)		(0.5	)		100	%
Other, net		0.8			1.6			(0.8	)		(50	)%
Total	$	9.0		$	8.1		$	0.9			11	%

Other (expense) income, net, increased during the three and nine months ended July 31, 2011 compared to the same periods in fiscal 2010 due to the changes described above.

Taxes

Our effective tax rate for the three months ended July 31, 2011 as compared to the three months ended July 31, 2010 is lower principally due to the benefit of additional tax credits and deductions which were higher than those previously estimated as a result of the filing of the Company’s federal tax return for the fiscal 2010, the impact of an entire year of federal research and development tax credit in fiscal 2011 versus only two months in fiscal 2010 and the reversal of valuation allowance for capital losses in the third quarter of fiscal 2011. Our effective tax rates for the nine months ended July 31, 2011 and 2010 are negative, primarily due to the tax impact of a final settlement with the IRS for fiscal years 2006 through 2009 of $32.8 million in fiscal 2011 and the final settlement with the IRS for fiscal years 2002 through 2004 of $94.3 million in fiscal 2010. Without the impact of the settlements, the tax rate for the nine months ended July 31, 2011 and 2010 would have been 10.2% and 26.2%, respectively.

For further discussion of the effective tax rate and the IRS settlement, see Note 14 of the Notes to Unaudited Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

Our sources of cash, cash equivalents and short-term investments are funds generated from our business operations and funds that may be drawn down under our credit facility.

As of July 31, 2011, we held an aggregate of $337.7 million in cash, cash equivalents and short-term investments in the U.S. and an aggregate of $700.6 million in our foreign subsidiaries. Funds held in our foreign subsidiaries are generated from revenue outside North America. At present, such foreign funds are considered to be indefinitely reinvested in foreign countries to the extent of indefinitely reinvested foreign earnings. However, in the event funds from foreign operations were needed to fund cash needs in the U.S. and if U.S. taxes have not already been previously accrued, we would be required to accrue and pay additional U.S. taxes in order to repatriate these funds.

The following sections discuss changes in our balance sheet and cash flows, and other commitments on our liquidity and capital resources during fiscal 2011.

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Cash and Cash Equivalents and Short-Term Investments

	July 31, 2011		October 31, 2010		Dollar Change			% Change
	(dollars in millions)
Cash and cash equivalents	$	889.9	$	775.4	$	114.5			15	%
Short-term investments		148.4		163.2		(14.8	)		(9	)%
Total	$	1,038.3	$	938.6	$	99.7			11	%

During the nine months ended July 31, 2011, our primary sources and uses of cash consisted of (1) cash provided by operating activities of $367.3 million, (2) proceeds from sales and maturities of short-term investments of $104.0 million, (3) purchases of investments of $92.6 million, (4) cash paid for purchases of property and equipment of $42.8 million, (5) proceeds from the issuance of common stock of $119.8 million for stock awards and (6) repurchases of common stock of $335.0 million.

Cash Flows

	July 31,						Dollar Change			% Change
	2011			2010
	(dollars in millions)
Nine months ended
Cash provided by operating activities	$	367.3		$	244.1		$	123.2			50	%
Cash used in investing activities		(39.1	)		(24.8	)		(14.3	)		58	%
Cash used in financing activities		(219.8	)		(41.6	)		(178.2	)		428	%

We expect cash from our operating activities to fluctuate in future periods as a result of a number of factors, including the timing of our billings and collections, our operating results, the timing and amount of tax and other liability payments. Cash provided by our operations is dependent primarily upon the payment terms of our license agreements. We generally receive cash from upfront license revenue much sooner than from time-based license revenue. In contrast, payment terms for TSLs are generally extended and the license fee is typically paid either quarterly or annually over the term of the license.

Cash provided by operating activities. Cash provided by operations is dependent primarily upon the payment terms of our license agreements. To be classified as upfront revenue, we require that 75% of a term or perpetual license fee be paid within the first year. Conversely, terms for TSLs are generally extended and the license fee is typically paid either quarterly or annually over the term of the license. Accordingly, we generally receive cash from upfront license revenue much sooner than from time-based license revenue.

Cash provided by operating activities increased in the nine months ended July 31, 2011 compared to the same period in fiscal 2010, primarily due to fluctuation in operating assets and liabilities resulting from changes in deferred revenue balances based on timing of release, an increase in collections from customers, offset by higher payments to vendors, and an increase in inventory balances.

Cash used in investing activities. The decrease in cash used in investing activities in the nine months ended July 31, 2011 compared to the same period in fiscal 2010 is due to higher cash used for capital expenditures in fiscal 2011 and higher net proceeds from short-term investments activity in fiscal 2010, offset by lower cash payments for acquisitions in 2011.

Cash used in financing activities. The increase in cash used in financing activities in the nine months ended July 31, 2011 compared to the same period in fiscal 2010 primarily relates to common stock repurchases under our stock repurchase program, partially offset by issuances of our common stock under our stock compensation plans. See Note 9 of Notes to Unaudited Condensed Consolidated Financial Statements for details of our stock repurchase program.

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Accounts Receivable, net

July 31, 2011	October 31, 2010	Dollar Change	% Change
(dollars in millions)
$ 175.4	$181.1	$(5.7)	(3)%

Our accounts receivable and Days Sales Outstanding (DSO) are primarily driven by our billing and collections activities. Our DSO was 41 days at July 31, 2011, and 44 days at October 31, 2010. The decrease in DSO and in net accounts receivable primarily relates to the timing of billings to customers during fiscal 2011.

Working Capital. Working capital is comprised of current assets less current liabilities, as shown on our consolidated balance sheets:

	July 31, 2011		October 31, 2010		Dollar Change		% Change
	(dollars in millions)
Current assets	$	1,362.3	$	1,247.8	$	114.5		9	%
Current liabilities		982.1		921.8		60.3		7	%
Working capital	$	380.2	$	326.0	$	54.2		17	%

Changes in our working capital were primarily due to (1) a $99.7 million increase in cash, cash equivalents and short-term investments, (2) a decrease of $28.4 million in accounts payable and accrued liabilities, (3) a $94.0 million increase in deferred revenue due to timing of our billings and (4) a net $14.8 million increase in accounts receivable and other current assets balances primarily related to movements in foreign exchange contract fair values, timing of inventory purchases, income tax balances and increased receivables from the sale of strategic investments during the first 3 quarters of our fiscal year.

Other Commitments—Revolving Credit Facility. On October 20, 2006, we entered into a five-year, $300.0 million senior unsecured revolving credit facility providing for loans to us and certain of our foreign subsidiaries. The facility contains financial covenants requiring us 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, we have 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 July 31, 2011, we had no outstanding borrowings under this credit facility and were in compliance with all covenants.

Other

Our cash equivalent and short-term investment portfolio as of July 31, 2011, consists of investment grade municipal securities, tax-exempt money market mutual funds and taxable money market mutual funds. We follow an established investment policy and set of guidelines to monitor, manage and limit our exposure to interest rate and credit risk. The policy sets forth credit quality standards and limits our exposure to any one issuer. As of July 31, 2011, we had no direct holdings in structured investment vehicles, sub-prime mortgage-backed securities or collateralized debt obligations and no exposure to these financial instruments through our indirect holdings in money market mutual funds. During the three and nine months ended July 31, 2011 and 2010, we had no impairment charge associated with our short-term investment portfolio. While we cannot predict future market conditions or market liquidity, we regularly review our investments and associated risk profiles, which we believe will allow us to effectively manage the risks of our investment portfolio.

As a result of the challenging conditions in the financial markets, we proactively manage our cash and cash equivalents and investments balances and closely monitor our capital and stock repurchase expenditures to ensure ample liquidity. Additionally, we believe the overall credit quality of our portfolio is strong, with our global excess cash, and our cash equivalents and fixed income portfolio invested in banks and securities with a weighted-average credit rating exceeding AA. After the recent downgrade of the U.S. long-term sovereign credit rating by Standard & Poor’s, our portfolio maintained its weighted average credit rating above AA. The majority of our investments are classified as Level 1 or Level 2 investments, as measured under fair value guidance. See Notes 3 and 4 of the Notes to Unaudited Condensed Consolidated Financial Statements.

We believe that our current cash, cash equivalents, short-term investments, and cash generated from operations will satisfy our business requirements for at least the next twelve months.

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Effect of New Accounting Pronouncements

See Note 16 of the Notes to Unaudited Condensed Consolidated Financial Statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of July 31, 2011, our exposure to market risk has not changed materially since October 31, 2010. The average yield at purchase for our short-term investment portfolio remains approximately the same as of October 31, 2010. For more information on financial market risks related to changes in interest rates and foreign currency exchange rates, reference is made to Item 7A. Quantitative and Qualitative Disclosure About Market Risk contained in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2010, filed with the SEC on December 17, 2010 and amended on February 9, 2011.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. As of July 31, 2011 (the Evaluation Date), Synopsys carried out an evaluation under the supervision and with the participation of Synopsys’ management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Synopsys’ disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Our Chief Executive Officer and Chief Financial Officer have concluded that, as of July 31, 2011, (1) Synopsys’ disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, and (2) Synopsys’ disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports Synopsys files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required, and that such information is accumulated and communicated to Synopsys’ management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding its required disclosure.

(b) Changes in Internal Control Over Financial Reporting. There were no changes in Synopsys’ internal control over financial reporting during the three months ended July 31, 2011, that have materially affected, or are reasonably likely to materially affect, Synopsys’ internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate outcome of any litigation is uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. Regardless of outcome, litigation can have an adverse impact on Synopsys because of the defense costs, diversion of management resources and other factors.

ITEM 1A. RISK FACTORS

We describe our risk factors below.

The continued uncertainty in the global economy, and its potential impact on the semiconductor and electronics industries in particular, may negatively affect our business, operating results and financial condition.

As a result of the recent global recession, the global economy experienced significant uncertainty, stock market volatility, tightened credit markets, concerns about both deflation and inflation, reduced demand for products, lower consumer confidence, reduced capital spending, liquidity concerns and business insolvencies. Further declines, and uncertainty about future economic conditions, could negatively impact our customers’ businesses, reducing demand for our products and adversely affecting our business.

The recent global recession adversely affected the semiconductor industry. Semiconductor companies generally remain cautious and focused on their costs, including their research and development budgets which capture spending on EDA products and services. These factors could among other things limit our ability to maintain or increase our sales or recognize revenue from committed contracts and in turn adversely affect our business, operating results and financial condition.

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Under our business model, we generally expect more than 90% of our total revenue to be recurring revenue, as a substantial majority of our customers pay for licenses over a three-year period. However, the turmoil and uncertainty caused by recent economic conditions caused some of our customers to postpone their decision-making, decrease their spending and/or delay their payments to us. Future periods of decreased committed average annual revenue, customer bankruptcies, or consolidation among our customers, could adversely affect our year-over-year revenue growth.

The recent global recession also adversely affected the banking and financial industry. If the global economy continues to experience uncertainty, our ability to obtain credit on favorable terms could be jeopardized. Furthermore, we rely on several large financial institutions to act as counterparties under our foreign currency forward contracts, provide credit and banking transactions and deposit services worldwide. Should any of our banking partners declare bankruptcy or otherwise default on their obligations, it could adversely affect our financial results and our business.

We cannot predict if or when global economic confidence will be restored. Accordingly, our future business and financial results are subject to considerable uncertainty, and our stock price is at risk of volatile change. If economic conditions fail to significantly improve for any extended period of time or deteriorate in the future, or, in particular, if semiconductor industry revenues do not continue to grow, our future revenues and financial results could be adversely affected. Conversely, in the event of future improvements in economic conditions for our customers, the positive impact on our revenues and financial results may be deferred due to our business model.

Our operating results may fluctuate in the future, which may adversely affect our stock price.

Our operating results are subject to quarterly and annual fluctuations, which may adversely affect our stock price. Our historical results should not be viewed as indicative of our future performance due to these periodic fluctuations. Many factors may cause our revenue or earnings to fluctuate, including:

• Changes in demand for our products due to fluctuations in demand for our customers’ products and due to constraints in our customers’ budgets for research and development and EDA products and services;

• Product competition in the EDA industry, which can change rapidly due to industry or customer consolidation and technological innovation;

• Our ability to innovate and introduce new products and services or effectively integrate products and technologies that we acquire;

• Failures or delays in completing sales due to our lengthy sales cycle;

• Cancellations or changes to levels of license orders or the mix between upfront and time-based license revenue;

• Our ability to implement effective cost control measures;

• Delay of one or more orders for a particular period, particularly orders generating upfront revenue;

• Our dependence on a relatively small number of large customers for a large portion of our revenue;

• Changes in or challenges to our revenue recognition model;

• Amendments or renewals of customer contracts which provide discounts or require the deferral of revenue to later periods;

• Delays, increased costs or quality issues resulting from our reliance on third parties to manufacture our hardware products; and

• General economic and political conditions that affect the semiconductor and electronics industries.

These factors, or any other factors or risks discussed herein, could negatively impact our revenue or earnings and cause our stock price to decline.

The growth of our business depends on the semiconductor and electronics industries.

The growth of the EDA industry as a whole, and our business in particular, is dependent on the semiconductor and electronics industries. A substantial portion of our business and revenue depends upon the commencement of new design projects by semiconductor manufacturers and their customers. The increasing complexity of designs of SoCs and ICs, and customers’ concerns about managing costs, have in recent periods led to a decrease in design starts and design activity in general, with some customers focusing more on one discrete phase of the design process. Demand for our products and services could fall and our financial condition and results of operations could be adversely affected if the semiconductor and electronics industries do not continue to grow, or grow at a slower rate. Additionally, as the EDA industry matures, consolidation has caused increased levels of competition for a greater share of our customers’ EDA spending. This increased competition may cause our revenue growth rate to decline and exert downward pressure on our operating margins, which may have an adverse effect on our business and financial condition.

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If we do not successfully compete in the industries in which we operate, our business and financial condition will be harmed.

We compete against EDA vendors that offer a variety of products and services, primarily Cadence Design Systems, Inc., Mentor Graphics Corporation and Magma Design Automation, Inc. We also compete with other EDA vendors, including frequent new entrants to the marketplace, that offer products focused on one or more discrete phases of the IC design process, as well as vendors of IP products and system-level solutions. Moreover, our customers internally develop design tools and capabilities that compete with our products.

These industries are highly competitive and the demand for our products and services is dynamic and depends on a number of factors, including demand for our customers’ products, design starts and our customers’ budgetary constraints. In addition, our customers continue to demand an overall lower total cost of design, which can lead to the consolidation of their purchases with one vendor. We compete principally on the basis of technology, product quality and features (including ease-of-use), license or usage terms, post-contract customer support, interoperability among products, and price and payment terms. Specifically, we believe the following competitive factors affect our success:

• Our ability to anticipate and lead critical development cycles, innovate rapidly and efficiently, improve our existing products, and successfully develop or acquire new products;

• Our ability to offer products that provide both a high level of integration into a comprehensive platform and a high level of individual product performance;

• Our ability to enhance the value of our offering through more favorable terms such as expanded license usage, future purchase rights, price discounts and other unique rights, such as multiple tool copies, post-contract customer support, and the ability to purchase pools of technology; and

• Our ability to compete on the basis of payment terms which continue to lengthen over time.

If we fail to successfully manage these competitive factors, or if we fail to address new competitive forces, our business will be adversely affected.

We may not be able to acquire businesses and technology and we may not be able to realize the potential financial or strategic benefits of the acquisitions we complete, which could hurt our ability to grow our business, develop new products or sell our products.

Acquisitions are an important part of our growth strategy. We have completed a significant number of acquisitions in recent years, including the acquisitions of CoWare, Inc., VaST Systems Technology Corporation, and Virage Logic Corporation. We expect to make additional acquisitions in the future, but we may not find suitable acquisition targets or we may not be able to consummate desired acquisitions due to unfavorable credit markets or other risks, which could harm our operating results. Acquisitions are difficult, time consuming, and pose a number of risks, including:

• Potential negative impact on our earnings per share;

• Failure of acquired products to achieve projected sales;

• Problems in integrating the acquired products with our products;

• Potential downward pressure on operating margins due to lower operating margins of acquired businesses, increased headcount costs and other expenses associated with adding and supporting new products;

• Difficulties in retaining and integrating key employees;

• Failure to realize expected synergies or cost savings;

• Dilution of our current stockholders through the issuance of common stock, a substantial reduction of our cash resources and/or the incurrence of debt;

• Assumption of unknown liabilities, including tax and litigation, and the related expenses and diversion of resources;

• Potential negative impact on our relationships with customers, distributors and business partners; and

• Negative impact on our earnings resulting from the application of ASC 805, Business Combinations, which became applicable to us in the first quarter of fiscal 2010.

If we do not manage these risks, the acquisitions that we complete may have an adverse effect on our business and financial condition. For instance, if we are unable to successfully integrate the products and technology from our acquisition of Virage Logic, we may not be able to achieve the anticipated revenue growth from this transaction. Additionally, if we determine we cannot use or sell the acquired products or technology, we will be required to write down the associated intangible assets, which would negatively impact our operating results.

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Consolidation among our customers, as well as within the industries in which we operate, may negatively impact our operating results.

A number of business combinations, including mergers, asset acquisitions and strategic partnerships, among our customers and in the semiconductor and electronics industries have occurred recently, and more could occur in the future. Consolidation among our customers could lead to fewer customers or the loss of customers, increased customer bargaining power, or reduced customer spending on software and services. Moreover, business combinations within the industries in which we compete may result in stronger competition from companies that are better able to compete as sole source vendors to customers. The loss of customers or reduced customer spending could adversely affect our business and financial condition.

If we fail to protect our proprietary technology our business will be harmed.

Our success depends in part upon protecting our proprietary technology. We rely on agreements with customers, employees and others and on intellectual property laws worldwide to protect our proprietary technology. These agreements may be breached, and we may not have adequate remedies for any breach. Additionally, some foreign countries do not currently provide effective legal protection for intellectual property and our ability to prevent the unauthorized use of our products in those countries is therefore limited. Our trade secrets may also otherwise become known or be independently developed by competitors.

We may need to commence litigation or other legal proceedings in order to:

• Assert claims of infringement of our intellectual property;

• Protect our trade secrets or know-how; or

• Determine the enforceability, scope and validity of the propriety rights of others.

If we do not obtain or maintain appropriate patent, copyright or trade secret protection, for any reason, or cannot fully defend our intellectual property rights in some jurisdictions, our business and operating results would be harmed. In addition, intellectual property litigation is lengthy, expensive and uncertain and legal fees related to such litigation will increase our operating expenses and may reduce our net income.

Changes in accounting principles or standards, or in the way they are applied, could result in unfavorable accounting charges or effects and unexpected financial reporting fluctuations, and could adversely affect our reported operating results.

We prepare our consolidated financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles and guidance. A change in these principles or guidance can have a significant effect on our reported results and may retroactively affect previously reported results. Additionally, proposed accounting standards could have a significant impact on our operational processes, revenues and expenses, and could cause unexpected financial reporting fluctuations.

We may have to invest more resources in research and development than anticipated, which could increase our operating expenses and negatively affect our operating results.

We devote substantial resources to research and development. New competitors, technological advances by existing competitors, our acquisitions, our entry into new markets, or other competitive factors may require us to invest significantly greater resources than we anticipate. If we are required to invest significantly greater resources than anticipated without a corresponding increase in revenue, our operating results could decline. Additionally, our research and development expenses are likely to fluctuate from time to time to the extent we make periodic incremental investments in research and development. These investments may be independent of our level of revenue which could negatively impact our financial results.

Unfavorable tax law changes, an unfavorable government review of our tax returns or changes in our geographical earnings mix or forecasts of foreign source income could adversely affect our effective tax rate and our operating results.

Our operations are subject to income and transaction taxes in the United States and in multiple foreign jurisdictions. A change in the tax law in the jurisdictions in which we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in our tax expense. Currently, a substantial portion of our revenue is generated from customers located outside the United States, and a substantial portion of our assets, including employees, are located outside the United States. United States income taxes and foreign withholding taxes have not been provided on undistributed earnings for certain non-United States subsidiaries to the extent such earnings are considered to be indefinitely reinvested in the operations of those subsidiaries. On August 10,

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2010, the Education Jobs and Medicaid Assistance Act of 2010 (P.L. 111-226) was enacted, which may limit our ability to use foreign tax credits, effective for transactions entered into after our fiscal year 2010. Additionally, on February 14, 2011, the President of the United States and the U.S. Treasury Department proposed changes to the U.S. tax rules for U.S. corporations doing business outside the United States. Specific legislation regarding such changes has not yet been enacted, but it is possible that these or other changes in the U.S. tax laws could increase our U.S. income tax liability in the future. A number of proposals for broad reform of the corporate tax system in the U.S. are under evaluation by various legislative and administrative bodies, but it is not possible to determine accurately the overall impact of such proposals on our effective tax rate at this time.

Our tax filings are subject to review or audit by the IRS and state, local and foreign taxing authorities. We exercise judgment in determining our worldwide provision for income taxes and, in the ordinary course of our business, there may be transactions and calculations where the ultimate tax determination is uncertain. The IRS examinations of our federal tax returns for the years 2000 through 2001 and 2002 through 2004 resulted in significant proposed adjustments which were subsequently settled without a material financial statement impact. In addition, we are currently being audited in jurisdictions outside the U.S. Although we believe our tax estimates are reasonable, we can provide no assurance that any final determination in an audit will not be materially different than the treatment reflected in our historical income tax provisions and accruals. An assessment of additional taxes as a result of an audit could adversely affect our income tax provision and net income in the period or periods for which that determination is made.

We have operations both in the United States and in multiple foreign jurisdictions with a wide range of statutory tax rates. Therefore, any changes in our geographical earnings mix in various tax jurisdictions, including those resulting from transfer pricing adjustments, could materially increase our effective tax rate. Furthermore, we maintain deferred tax assets related to federal foreign tax credits and certain state tax credits. Our ability to use these credits is dependent upon having sufficient future foreign source income in the United States, as well as sufficient taxable income in certain states. Changes in our forecasts of future income could result in an adjustment to the deferred tax asset and a related charge to earnings which could materially affect our financial results.

The global nature of our operations exposes us to increased risks and compliance obligations which may adversely affect our business.

We derive more than half of our revenue from sales outside the United States, and we expect our orders and revenue to continue to depend on sales to customers outside the United States. In addition, we have expanded our non-U.S. operations significantly in the past several years. This strategy requires us to recruit and retain qualified technical and managerial employees, manage multiple, remote locations performing complex software development projects and ensure intellectual property protection outside of the United States. Our international operations and sales subject us to a number of increased risks, including:

• International economic and political conditions, such as political tensions between countries in which we do business;

• Difficulties in adapting to cultural differences in the conduct of business;

• Ineffective legal protection of intellectual property rights;

• Financial risks such as longer payment cycles and difficulty in collecting accounts receivable;

• Inadequate local infrastructure that could result in business disruptions;

• Additional taxes and penalties; and

• Other factors beyond our control such as natural disasters, terrorism, civil unrest, war and infectious diseases.

If any of the foreign economies in which we do business deteriorate or if we fail to effectively manage our global operations, our business and results of operations will be harmed.

In addition, our global operations are subject to numerous U.S. and foreign laws and regulations, including those related to anti-corruption, tax, corporate governance, imports and exports, financial and other disclosures, privacy and labor relations. These laws and regulations are complex and may have differing or conflicting legal standards, making compliance difficult and costly. If we violate these laws and regulations we could be subject to fines, penalties or criminal sanctions, and may be prohibited from conducting business in one or more countries. Although we have implemented policies and procedures to ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors or agents will not violate these laws and regulations. Any violation individually or in the aggregate could have a material adverse effect on our operations and financial condition.

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Our operating results are affected by foreign currency exchange rate fluctuations.

Our operating results are affected by fluctuations in foreign currency exchange rates. Our results of operations can be adversely affected when the U.S. dollar weakens relative to other currencies, as a result of the translation of expenses of our foreign operations denominated in foreign currencies into the U.S. dollar. Exchange rates are subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchange rate fluctuations on our business, results of operations and financial condition. Although we engage in foreign currency hedging activity, we may be unable to hedge all of our foreign currency risk. If foreign currency exchange rates deteriorate our operating results would be adversely affected by reducing the amount of revenue derived from outside of the United States.

From time to time we are subject to claims that our products infringe on third party intellectual property rights.

Under our customer agreements and other license agreements, we agree in many cases to indemnify our customers if our products infringe a third party’s intellectual property rights. As a result, we are from time to time subject to claims that our products infringe on these third party rights. For example, we have recently defended some of our customers against claims that their use of one of our products infringes on a patent held by a Japanese electronics company. Although we were successful in that case, there can be no assurances that we will prevail in defending against any future claims of infringement. In addition, these types of claims can result in costly and time-consuming litigation, require us to enter into royalty arrangements, subject us to damages or injunctions restricting our sale of products, invalidate a patent or family of patents, require us to refund license fees to our customers or to forgo future payments or require us to redesign certain of our products, any one of which could harm our business and operating results.

Product errors or defects could expose us to liability and harm our reputation and we could lose market share.

Software products frequently contain errors or defects, especially when first introduced, when new versions are released or when integrated with technologies developed by acquired companies. Product errors could affect the performance or interoperability of our products, could delay the development or release of new products or new versions of products and could adversely affect market acceptance or perception of our products. In addition, allegations of IC manufacturability issues resulting from use of our IP products could, even if untrue, adversely affect our reputation and our customers’ willingness to license IP products from us. Any such errors or delays in releasing new products or new versions of products or allegations of unsatisfactory performance could cause us to lose customers, increase our service costs, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business and operating results.

Customer payment defaults or related issues could harm our operating results.

The majority of our revenue backlog consists of customer payment obligations not yet due that are attributable to software we have already delivered. A significant portion of the revenue we recognize in any period comes from backlog and is dependent upon our receipt of cash from customers. We will not achieve expected revenue and cash flow if customers default, declare bankruptcy, or otherwise fail to pay amounts owed. Moreover, existing customers may seek to renegotiate pre-existing contractual commitments due to adverse changes in their own businesses. Our customers’ financial condition, and in turn their ability or willingness to fulfill their contractual and financial obligations, could be adversely affected by current economic conditions. If payment defaults by our customers significantly increase or we experience significant reductions in existing contractual commitments, our operating results would be harmed.

We may be subject to litigation proceedings that could harm our business.

We may be subject to legal claims or regulatory matters involving stockholder, consumer, competition, and other issues on a global basis. Litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages or, in cases for which injunctive relief is sought, an injunction prohibiting us from manufacturing or selling one or more products. If we were to receive an unfavorable ruling on a matter, our business and results of operations could be materially harmed.

If we fail to timely recruit and retain senior management and key employees our business may be harmed.

We depend in large part upon the services of key members of our senior management team to drive our future success. If we were to lose the services of any member of our senior management team, our business could be adversely affected.

To be successful, we must also attract and retain key technical, sales and managerial employees, including those who join Synopsys in connection with acquisitions. There are a limited number of qualified EDA and IC design engineers, and competition for these individuals is intense and has increased. Our employees are often recruited aggressively by our competitors and our customers. Any failure to recruit and retain key technical, sales and managerial employees would harm our business, results of operations and financial condition. Additionally, efforts to recruit and retain qualified employees could negatively impact our operating expenses.

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We issue stock options and restricted stock units and maintain employee stock purchase plans as a key component of our overall compensation. We face pressure to limit the use of such equity-based compensation due to its dilutive effect on stockholders. In addition, we are required under U.S. GAAP to recognize compensation expense in our results from operations for employee share-based equity compensation under our equity grants and our employee stock purchase plan, which has increased the pressure to limit share-based compensation. These factors may make it more difficult for us to grant attractive share-based packages in the future, which could adversely impact and limit our ability to attract and retain key employees.

Our business is subject to evolving corporate governance and public disclosure regulations that have increased both our compliance costs and the risk of noncompliance, which could have an adverse effect on our stock price.

We are subject to changing rules and regulations promulgated by a number of governmental and self-regulated organizations, including the SEC, the NASDAQ Global Market, and the Financial Accounting Standards Board. These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by Congress, making compliance more difficult and uncertain. For example, Congress recently passed the Dodd-Frank Wall Street Reform and Protection Act. Our efforts to comply with the Dodd-Frank Act and other new regulations have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

There are inherent limitations on the effectiveness of our controls.

Regardless of how well designed and operated it is, a control system can provide only reasonable assurance that its objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could have a material adverse impact on our business.

Our investment portfolio may be impaired by deterioration of the capital markets.

Our cash equivalent and short-term investment portfolio as of July 31, 2011 consists of investment grade municipal bonds, tax-exempt money market mutual funds, taxable money market mutual funds and bank deposits. Our investment portfolio carries both interest rate risk and credit risk. Fixed rate debt securities may have their market value adversely impacted due to a credit downgrade or a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall or a credit downgrade occurs. As a result of current adverse financial market conditions, including the recent downgrade by Standard and Poor’s (S&P) of the U.S. long-term sovereign credit rating, capital pressures on certain banks, especially in Europe, and the continuing low interest rate environment, some of our financial instruments may become impaired. Our future investment income may fall short of expectations due to changes in interest rates or if the decline in fair value of our publicly traded debt or equity investments is judged to be other-than-temporary. In addition, we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in the issuer’s credit quality or changes in interest rates.

Catastrophic events may disrupt our business and harm our operating results.

Due to the global nature of our business, our operating results may be negatively impacted by catastrophic events throughout the world, including such events as the recent earthquake and tsunami in Japan. We rely on a global network of infrastructure applications, enterprise applications and technology systems for our development, marketing, operational, support and sales activities. A disruption or failure of these systems in the event of a major earthquake, fire, telecommunications failure, cyber-attack, terrorist attack, or other catastrophic event could cause system interruptions, delays in our product development and loss of critical data and could prevent us from fulfilling our customers’ orders. Moreover, our corporate headquarters, a significant portion of our research and development activities, our data centers, and certain other critical business operations are located in California, near major earthquake faults. A catastrophic event that results in the destruction or disruption of any of our data centers or our critical business or information technology systems would severely affect our ability to conduct normal business operations and, as a result, our operating results would be adversely affected.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth information regarding repurchases of Synopsys’ common stock by Synopsys during the three months ended July 31, 2011.

Period (1)	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Approximate dollar value of shares that may yet be purchased under the program
Month #1
May 1, 2011 through June 4, 2011		1,034,900	$	26.8583		1,034,900	$	484,767,595
Month #2
June 5, 2011 through July 2, 2011		2,794,660	$	25.8365		2,794,660	$	412,563,351
Month #3
July 3, 2011 through July 30, 2011		—		—		—	$	412,563,351
Total		3,829,560	$	21.1126		3,829,560	$	412,563,351

(1) All months shown are Synopsys’ fiscal months.

Our Board of Directors previously approved a stock repurchase program pursuant to which we were authorized to purchase up to $500.0 million of our common stock, and has periodically replenished the stock repurchase program to such amount. Our Board most recently replenished the stock repurchase program up to $500.0 million on May 25, 2011. Funds are available until expended or until the program is suspended by our Chief Financial Officer or Board of Directors. As of July 31, 2011, $412.6 million remained available for future repurchases under the program. See Note 9 of Notes to Unaudited Condensed Consolidated Financial Statements for further information regarding our stock repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

Not applicable.

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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)
10.1	Form of Indemnification Agreement for directors and executive officers	8-K	000-19807	99.2	07/14/11
10.34+	Form of Notice of Grant of Stock Options and Option Agreement under the 2006 Employee Equity Incentive Plan					X
10.37+	Form of Restricted Stock Unit Grant Notice and Award Agreement under the 2006 Employee Equity Incentive Plan					X
31.1	Certification of Principal Executive Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act					X
31.2	Certification of Principal Financial Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act					X
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					X
101.INS*	XBRL Instance Document					X
101.SCH*	XBRL Taxonomy Extension Schema Document					X
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF*	XBRL Taxonomy Extension Definition 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.

* 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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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: September 2, 2011	By:	/S/    BRIAN M. BEATTIE
		Brian M. Beattie Chief Financial Officer (Principal Financial Officer)

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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)
10.1	Form of Indemnification Agreement for directors and executive officers	8-K	000-19807	99.2	07/14/11
10.34+	Form of Notice of Grant of Stock Options and Option Agreement under the 2006 Employee Equity Incentive Plan					X
10.37+	Form of Restricted Stock Unit Grant Notice and Award Agreement under the 2006 Employee Equity Incentive Plan					X
31.1	Certification of Principal Executive Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act					X
31.2	Certification of Principal Financial Officer furnished pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act					X
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					X
101.INS*	XBRL Instance Document					X
101.SCH*	XBRL Taxonomy Extension Schema Document					X
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF*	XBRL Taxonomy Extension Definition 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.

* 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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EX-10.34

Exhibit 10.34

2006 Employee Equity Incentive Plan Notice of Grant of Stock Options and Option Agreement	Synopsys, Inc. ID: 56-1546236 700 East Middlefield Road Mountain View, CA 94043
<<Name>> <<Address Line>> <<City, State Zip Country>>	Option Number: <<number>> ID: <<ID>>

Effective <<Grant Date>>, Synopsys, Inc. (the “Company”) has granted you a Nonstatutory Stock Option (the “Option”) under the 2006 Employee Equity Incentive Plan (the “Plan”) to buy <<# of Shares>> shares of the common stock of the Company (the “Common Stock”) at an exercise price of <<price>> per share. This Option is subject to all of the terms and conditions set forth in this Notice of Grant of Stock Options and Option Agreement (including any appendices hereto, the “Agreement”) and the Plan, which is incorporated by reference herein in its entirety. This Option is also subject to the Compensation Recovery Policy applicable to corporate staff, adopted by the Company in December 2008, as amended from time to time (the “Compensation Recovery Policy”) and any required compensation recovery provisions under applicable laws or regulations. Capitalized terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.

This Option will vest, and may be exercised, in whole or in part, in accordance with the following vesting schedule, subject to your Continuous Service with the Company or any Affiliate.

Shares	Vest Type	Full Vest	Expiration
	On Vest Date	date	expiration
	Quarterly	date	expiration

1. Exercise, Including upon Termination of Employment. Payment of the exercise price is due in full upon exercise of all or any part of the Option. Payment of the exercise price may be made in cash or by check or in any other manner permitted in the Plan (except as provided in Appendix A). In the event of termination of your Continuous Service for any reason other than Cause, you will be permitted to exercise the Option to the extent vested at the time of termination for ninety (90) days following your date of termination (except as provided in Appendix A); provided, however, that if your termination is due to death or disability, or if you die within ninety (90) days following your termination without “Cause”, the post-termination exercise period is twelve (12) months (except as provided in Appendix A); provided further that if your termination is for “Cause” as defined in the Plan, you shall not be permitted to exercise the Option in any respect. In addition, if your Option is not exercisable during the applicable post-termination exercise period solely because the shares of Common Stock issuable upon such exercise are not then registered under the Securities Act and are not otherwise issuable under an exemption from the registration requirements of the Securities Act, this Option shall not expire until the earlier of the expiration date set forth above or until it shall have been exercisable for an aggregate period of at least ninety (90) days after the termination of your Continuous Service.

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2. Responsibility for Taxes. Except as otherwise provided in the Appendix, the provisions of this Section 2 shall apply. Regardless of any action the Company or your employer (if different from the Company) (the Company or your employer, referred to hereinafter as the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Employer (1) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting or exercise of the Option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (2) does not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items.

Prior to exercise of the Option, you shall pay or make adequate arrangements satisfactory to the Employer to satisfy all withholding and payment on account obligations of the Employer. In this regard, you authorize the Employer to withhold all applicable Tax-Related Items from your wages or other cash compensation paid to you by the Employer and/or from proceeds of the sale of the shares. Alternatively, or in addition, if permissible under local law, the Employer may (1) sell or arrange for the sale of shares (including permitting you to enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority) that you acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold in shares, provided that the Employer only withholds the amount of shares necessary to satisfy the minimum withholding amount. Finally, you shall pay to the Employer any amount of Tax-Related Items that the Employer may be required to withhold as a result of your receipt or exercise of the Option and your sale of the shares obtained pursuant to any exercise of the Option that cannot be satisfied by the means previously described. The Employer may refuse to honor the exercise and refuse to deliver the shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section. Regardless of any action the Employer takes with respect to Tax-Related Items, you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Employer (x) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting or exercise of the Option, and the subsequent sale of shares delivered pursuant thereto; and (y) does not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items. In particular, you acknowledge that this Option is exempt from Section 409A of the Code only if the exercise price per share is at least equal to the “fair market value” per share of the Common Stock on the grant date and there is no other impermissible deferral of compensation associated with the Option.

3. Nature of Grant. In accepting the grant of the Option, you acknowledge that:

(a) the Plan is established voluntarily by the Employer, is discretionary in nature, and may be modified, amended, suspended or terminated by the Company as provided in the Plan;

2

(b) the grant of the Option and any other options or Awards under the Plan is voluntary and occasional and does not create any contractual or other right to receive future grants of options, shares, Awards or any other benefit or compensation in lieu of future options, even if options have been granted repeatedly in the past;

(c) all decisions with respect to future Awards, if any, will be at the sole discretion of the Company;

(d) your participation in the Plan shall not create a right to further employment or service with the Employer and shall not interfere with the ability of the Employer to terminate your employment or service relationship at any time with or without cause;

(e) you are voluntarily participating in the Plan;

(f) the Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Employer, and that is outside the scope of your employment or service contract, if any;

(g) the Option and any income derived therefrom is a potential bonus payment not paid in lieu of any normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement benefits or similar payments;

(h) in the event of the termination of your employment or service relationship, the Option will not be interpreted to form an employment or service contract or relationship with the Employer; and furthermore, the Option will not be interpreted to form an employment or service contract with the Employer or any Affiliate;

(i) in the event of the termination of your employment or service relationship, your eligibility to receive shares of common stock or payments under the Option or the Plan, if any, will terminate as of the date expressly provided in the Option, regardless of any reasonable notice period mandated by local law;

(j) the future value of the shares underlying the Option is unknown and cannot be predicted with certainty;

(k) if the value of the underlying shares does not exceed the exercise price upon exercise, the Option will have no value and if you exercise the Option, the value of the shares acquired upon exercise may increase or decrease in value, even below the exercise price;

(l) you understand that should you die owning shares of Common Stock or the Option, such shares or the Option may subject your estate to United States federal estate taxes. You understand that you should seek your own tax advice regarding this potential tax;

(m) you disclaim any entitlement to compensation or damages arising from the termination of the Option or diminution in value of the shares of Common Stock and you hereby irrevocably release the Company and the Employer from any such claim that may arise; and

3

(n) the Plan and the Agreement set forth the entire understanding between you, the Company, the Employer, and any Affiliate thereof regarding the acquisition of the shares of Common Stock and supersedes all prior oral and written agreements pertaining to the Option.

4. Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as applicable, the Employer and its Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Employer holds certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in Employer, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor (the “Personal Data”), for the purpose of implementing, administering and managing the Plan. You understand that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Personal Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon exercise of the Option. You understand that Personal Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view the Personal Data, request additional information about the storage and processing of the Personal Data, require any necessary amendments to the Personal Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to hold the Option and participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

5. Governing Law. The Option is governed by, and subject to, the laws of the State of California without resort to that State’s conflict of laws rules. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of Santa Clara, California, or the federal courts for the United States for the Northern District of California.

6. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Option granted hereunder or to participation in the Plan (or future options or other equity awards that may be granted under the Plan) by electronic means

4

(including by filing documents publicly at www.sec.gov (or any successor website thereto) or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

7. Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

8. Restrictive Legends. The Common Stock issued under this Option shall be endorsed with appropriate legends, if any, determined by the Company.

9. Unsecured Obligation. The Option is unfunded, and even as to any vested portion, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Common Stock pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the Common Stock acquired pursuant to this Agreement until such Common Stock is issued. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company with respect to the Common Stock so issued and held by you. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

10. Notices. Any notices provided for herein or in the Plan shall be given in writing to each of the other parties hereto and shall be deemed effectively given on the earlier of (i) the date of personal delivery, including delivery by express courier, (ii) the date that electronic notice is sent by you or Shareholder Services (as applicable), in the case of notices provided by electronic means, or (iii) the date that is five (5) days after deposit in the United States Post Office (whether or not actually received by the addressee), by registered or certified mail with postage and fees prepaid, addressed at the following addresses, or at such other address(es) as a party may designate by ten (10) days’ advance written notice to each of the other parties hereto:

COMPANY:	Synopsys, Inc.
	Shareholder Services 700 East Middlefield Road Mountain View, CA 94043
PARTICIPANT:	Your address as on file with the Company at the time notice is given

11. Amendment. This Agreement may be amended solely by the Company by a writing (including in electronic form) which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment impairing your rights hereunder may be made without your written consent. Without limiting the foregoing, the Company reserves the right to change, by written notice (including in electronic form), the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

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12. Governing Plan Document. This Option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of this Agreement, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall control. The Company shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Board shall be final and binding upon you, the Company, and all other interested persons. No member of the Board shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Agreement.

13. Miscellaneous.

(a) The rights and obligations of the Company under this Agreement shall be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(c) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of this Option.

(d) You acknowledge and agree that you have reviewed this Agreement in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting this Option and fully understand all provisions of this Option.

(e) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(f) If you have received this or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

(g) Notwithstanding any provisions in this Agreement, the Option shall be subject to any special terms and conditions set forth in any Appendix to this Agreement for your country. Moreover, if you relocate to one of the countries included in the Appendix, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.

6

(h) The Company reserves the right to impose other requirements on your participation in the Plan, on the Option and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

* * * * * * * * * * * * * * *

Your signature below (or online acceptance, if applicable) indicates that you have read this Notice of Grant of Stock Options and Option Agreement and agree to be bound by the terms and conditions of the Plan and this Agreement. You acknowledge receipt of, and understand and agree to, this Agreement, the Plan, the related Plan prospectus, the Compensation Recovery Policy (if applicable to you) and the Company’s Insider Trading Policy. You further acknowledge that as of the grant date, the Agreement and the Plan set forth the entire understanding between the Company and you regarding the award of the Option and the underlying Common Stock and supersede all prior oral and written agreements on that subject with the exception of (i) Awards previously granted and delivered to you under the Plan, and (ii) if applicable to you (A) the terms of any written offer letter or employment agreement entered into between the Company and you that specifically provides for accelerated vesting of compensatory equity awards, (B) the terms of any applicable Company change of control severance plan and (C) the Compensation Recovery Policy.

* * * * *

Your signature below or online acceptance (where permitted) indicates that you have read this Agreement (including any appendices hereto) and agree to be bound by the terms and conditions of the Plan and this Agreement.

SYNOPSYS, INC.			PARTICIPANT
By:	/s/ Brian E. Cabrera
	Brian E. Cabrera			<<Name>>
	Title:	VP Legal, General Counsel & Corporate Secretary		Date:
	Date:	<<Grant Date>>

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Appendix

Synopsys, Inc. Notice of Grant of Stock Options and Option Agreement

This Appendix, which is part of the Notice of Grant of Stock Options and Option Agreement, contains the additional terms and conditions of the Option that will apply to Participants in the countries listed below. Finally, if you are a citizen or resident of a country other than the one in which the you are currently working, you transfer employment and/or residency to another country after the Award is granted or you are considered a resident of another country for local law purposes, the Company shall, in its sole discretion, determine to what extent the terms and conditions included herein will apply under these circumstances. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and/or the Agreement.

All Non-US Jurisdictions

Exercise, Including Upon Termination of Employment. The following provision supplements Section 1 of the Agreement:

Paying the exercise price by means of the surrender of other shares of Common Stock is prohibited and not an available method of exercise.

India

Exercise, Including Upon Termination of Employment. The following provision supplements Section 1 of the Agreement:

Upon the exercise of the Option, any shares to be issued to you will be immediately sold in a same-day sale transaction. In no case may you exercise and hold Common Stock following the exercise of the Option. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such shares (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such shares. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the shares at any particular price. Upon the sale of the shares, the Company agrees to pay you the cash proceeds from the sale, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Israel

Exercise, Including Upon Termination of Employment. The following provision supplements Section 1 of the Agreement:

Due to local requirements, upon the exercise of the Option, any shares to be issued to you will be immediately sold in a same-day sale transaction. In no case may you exercise and hold Common Stock following the exercise of the Option. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such shares (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such shares. You acknowledge that the Company’s designated broker is under no

8

obligation to arrange for the sale of the shares at any particular price. Upon the sale of the shares, the Company agrees to pay you the cash proceeds from the sale, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

People’s Republic of China

Exercise, Including Upon Termination of Employment. The following provision supplements Section 1 of the Agreement:

Notwithstanding the specified twelve (12) month period for exercising the Option following death or disability, in no event may the Option be exercised more than six (6) months following termination of your Continuous Service.

Due to local requirements, upon the exercise of the Option, any shares to be issued to you will be immediately sold in a same-day sale transaction. In no case may you exercise and hold Common Stock following the exercise of the Option. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such shares (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such shares. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the shares at any particular price. Upon the sale of the shares, the Company agrees to pay you the cash proceeds from the sale, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

In addition, you understand and agree that, pursuant to local exchange control requirements, you will be required to repatriate the cash proceeds from the immediate sale of the shares issued upon the exercise of the Option to the PRC if you are a PRC national. You further understand that, under local law, the sale proceeds will need to be repatriated through a special exchange control account established by an Affiliate in the PRC and you hereby consent and agree that any proceeds from the sale may be transferred to such special account prior to being delivered to you. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in the PRC.

You further understand and agree that the Company may distribute the proceeds of the sale of shares either in U.S. dollars or in local currency. If the proceeds are distributed in local currency, the Company is under no obligation to secure any particular exchange conversion rate and there will be delays in converting the cash proceeds to local currency due to exchange control restrictions. You agree to bear any currency fluctuation risk between the time the shares are sold and the time the cash proceeds are distributed to you through the special account described above.

United Kingdom

Responsibility for Taxes. The following provision supplements Section 2 of the Agreement:

If you do not pay or the Company or the Employer does not withhold from you the full amount of any income tax that you owe within ninety (90) days of the event giving rise to the Tax-Related Items (the “Due Date”) or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the amount of any uncollected income tax will

9

constitute a loan owed by you to the Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current official rate of Her Majesty’s Revenue and Customs (“HMRC”), it will be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the means referred to in Section 2 of the Agreement. Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), you will not be eligible for such a loan to cover the income tax. In the event that you are a director or executive officer and the income tax is not collected from or paid by you by the Due Date, the amount of any uncollected income tax will constitute a benefit to you on which additional income tax and national insurance contributions (including the Employer’s Liability, as defined below) will be payable. You will be responsible for reporting and paying any income tax and national insurance contributions (including the Employer’s Liability, as defined below) due on this additional benefit directly to HMRC under the self-assessment regime.

As a condition of participation in the Plan, you agree to accept any liability for secondary Class 1 national insurance contributions (the “Employer’s Liability”) which may be payable by the Company and/or the Employer in connection with the Option and any event giving rise to Tax-Related Items. Without prejudice to the foregoing, you agree to execute a joint election with the Company (the “Joint Election”), the form of such Joint Election being formally approved by HMRC and attached hereto as Exhibit A, and any other consent or elections required to accomplish the transfer of the Employer’s Liability to you. You further agree to execute such other joint elections as may be required between yourself and any successor to the Company and/or the Employer. You further agree that the Company and/or the Employer may collect the Employer’s Liability by any of the means set forth in Section 2 of the Agreement.

If you do not enter into a Joint Election, if approval of the Joint Election has been withdrawn by HMRC or if such Joint Election is jointly revoked by you and the Company or the Employer, as applicable, this Option shall, at the discretion of the Company, without any liability to the Company or the Employer, not be exercisable and/or the Company may choose not to issue or deliver any shares upon exercise of the Option.

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Exhibit A

PLEASE READ THE FOLLOWING IN ITS ENTIRETY

BEFORE ACCEPTING YOUR AWARD

SYNOPSYS, INC.

2006 EMPLOYEE EQUITY INCENTIVE PLAN

Important Note on the Joint Election to Transfer

Employer National Insurance Contributions

As a condition of your participation in the 2006 Employee Equity Incentive Plan, you are required to enter into a joint election to transfer to you any liability for employer’s national insurance contributions (the “Employer’s Liability”) that may arise in connection with your award of stock options and/or restricted stock units (together, the “Awards”), or in connection with future Awards that may be granted to you by Synopsys, Inc. (the “Company”) under its 2006 Employee Equity Incentive Plan (the “Joint Election”).

If you do not agree to enter into the Joint Election, the Awards will be worthless, you will not be able to exercise the options or vest in the restricted stock units, or receive any benefit in connection with the Awards, as set forth in your Award Agreement.

By entering into the Joint Election:

• you agree that any Employer’s Liability that may arise in connection with or pursuant to the exercise or vesting of the Award, as applicable (and the acquisition of shares of the Company’s common stock) or other taxable events in connection with the Award will be transferred to you; and

• you authorise the Company and/or your employer to recover an amount sufficient to cover this liability by any method set forth in the relevant Award Agreement and/or the Joint Election.

Indicating your acceptance of the Stock Option Agreement and/or Restricted Stock Unit Award Agreement, as applicable, indicates your agreement to be bound by the terms of the Joint Election.

Please read the terms of the Joint Election carefully before accepting the Stock Option

Award Agreement and/or the Restricted Stock Unit Award Agreement and the Joint Election.

PLEASE PRINT AND KEEP A COPY OF THIS ELECTION FOR YOUR RECORDS

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SYNOPSYS , INC.

2006 EMPLOYEE EQUITY INCENTIVE PLAN

(UK Participants)

FORM OF ELECTION TO TRANSFER THE EMPLOYER’S SECONDARY

CLASS 1 NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE

1. Parties

This Election is between:

(A) You, the individual who has obtained access to this Election (the “Participant”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive stock options (“Options”) and/or restricted stock units (“RSUs”) (each an “Award” and together, the “Awards”) pursuant to the terms and conditions of the Synopsys, Inc. 2006 Employee Equity Incentive Plan (the “Plan”), and

(B) Synopsys, Inc. of 700 East Middlefield Road, Mountain View, California 94043, United States (the “Company”), which may grant Awards under the Plan and is entering this Election on behalf of the Employer.

2. Purpose of Election

2.1. This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise on the occurrence of a “Taxable Event” which gives rise to relevant employment income within section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the Social Security Contributions and Benefits Act 1992 (“SSCBA”), including but not limited to:

(i) the acquisition of securities pursuant to the Awards (pursuant to section 477(3)(a) ITEPA); and/or

(ii) the assignment or release of the Awards in return for consideration (pursuant to section 477(3)(b) ITEPA); and/or

(iii) the receipt of any other benefit in connection with the Awards other than a benefit within (i) or (ii) above (pursuant to section 477(3)(c) ITEPA); and/or

(iv) post-acquisition events relating to the Awards or the securities acquired pursuant to the Awards (within section 426 ITEPA); and/or

(v) post-acquisition events relating to the Awards or the securities acquired pursuant to the Awards (within section 438 ITEPA).

In this Election, ITEPA means the Income Tax (Earnings and Pensions) Act 2003.

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2.2. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.

2.3. This Election applies to all Awards granted to the Participant under the Plan on or after May 22, 2009 up to the termination date of the Plan.

2.4. This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

2.5. This Election will not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part 7 of ITEPA (employment income: securities with artificially depressed market value).

3. The Election

The Participant and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability on the Taxable Event is hereby transferred to the Participant. The Participant understands that by electronically accepting this Election, he or she will become personally liable for the Employer’s Liability covered by this Election.

4. Payment of the Employer’s Liability

4.1. The Participant and the Company acknowledge that the Employer is under a duty to remit the Employer’s Liability to HM Revenue and Customs on behalf of the Participant within 14 days after the end of the UK tax month during which the Taxable Event occurs, or such other period of time, as prescribed. The Participant agrees to pay to the Company and/or the Employer the Employer’s Liability on demand, at any time on or after the Taxable Event and hereby authorises the Company and/or the Employer to account for the Employer’s Liability to HM Revenue and Customs.

4.2. Without limitation to Clause 4.1 above, the Participant hereby authorises the Company and/or the Employer to collect the Employer’s Liability from the Participant at any time after the Taxable Event:

(i) by deduction from salary or any other payment payable to the Participant at any time on or after the date of the Taxable Event; and/or

(ii) directly from the Participant by payment in cash or cleared funds; and/or

(iii) by arranging, on behalf of the Participant, for the sale of some of the securities which the Participant is entitled to receive in respect of the Awards; and/or

(iv) through any other method as set forth in the relevant Award agreement entered into between the Participant and the Company.

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4.3. The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities to the Participant until full payment of the Employer’s Liability is collected from the Participant.

5. Duration of Election

5.1. The Participant and the Company agree to be bound by the terms of this Election regardless of whether the Participant is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due. Any reference to the Company, the Employer and/or the Participant shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and Award agreement.

5.2. This Election will continue in effect until the earliest of the following:

(i) such time as both the Participant and the Company agree in writing that it should cease to have effect;

(ii) on the date the Company serves written notice on the Participant terminating its effect;

(iii) on the date HM Revenue and Customs withdraws approval of this Election; or

(iv) on the date the Election ceases to have effect in accordance with its terms in respect of any outstanding Awards granted under the Plan.

Acceptance by THE PARTICIPANT

The Participant acknowledges that by clicking on the “I accept” button where indicated and from that date, the Participant agrees to be bound by the terms of this Election as stated above.

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Acceptance by THE COMPANY

The Company acknowledges that by arranging for the scanned signature of an authorised representative to appear on this Election, the Company agrees to be bound by the terms of this Election as stated above.

/s/ Brian E. Cabrera

Synopsys, Inc.

Brian E. Cabrera, VP Legal, General Counsel & Corporate Secretary

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SCHEDULE TO FORM OF ELECTION – EMPLOYING COMPANIES

The employing companies to which this Election relates are:

(1) Synopsys (Northern Europe) Limited

Registered Office:	100 Brook Drive Green Park, Reading RG2 6UJ United Kingdom
Company Registration Number:	2642054
Corporation Tax District:	Oxon and Bucks Area
Corporation Tax Reference:	402 56090 10710
PAYE District:	East Hampshire and Wight Area
PAYE Reference:	581/S3033

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EX-10.37

Exhibit 10.37

SYNOPSYS, INC.

RESTRICTED STOCK UNIT GRANT NOTICE AND AWARD AGREEMENT

(2006 EMPLOYEE EQUITY INCENTIVE PLAN)

Synopsys, Inc. (the “Company”), pursuant to Section 7(b) of the Company’s 2006 Employee Equity Incentive Plan (the “Plan”), hereby awards to Participant a Restricted Stock Unit Award covering the number of restricted stock units (the “Restricted Stock Units”) set forth below (the “Award”). This Award is subject to all of the terms and conditions as set forth in this Restricted Stock Unit Grant Notice and Award Agreement (such agreement, together with any appendices thereto, the “Agreement”) and the Plan, which is incorporated by reference herein in its entirety.

Participant:	<<Name>>
ID:	<<ID>>
Award Number:	<<Grant Number>>
Date of Grant:	<<Grant Date>>
Vesting Commencement Date:	<<Vest Base Date>>
Number of Restricted Stock Units:	<<# of Units>>
Payment for Common Stock:	Participant’s future services

Vesting Schedule: The Restricted Stock Units shall vest in accordance with the following vesting schedule; provided, however, that the Participant’s Continuous Service has not terminated prior to each such vesting date.

Units	Vest Type	Full Vest
<<# of Units>>	<<Annually>>	<<date>>

Delivery Schedule: The Company shall deliver one share of Common Stock for each Restricted Stock Unit that vests on an applicable vesting date, subject to the provisions of Section 3 below. Each installment of Restricted Stock Units that vests hereunder is intended to constitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).

Compensation Recovery: The Restricted Stock Units granted herein are subject to the Compensation Recovery Policy applicable to corporate staff, adopted by the Company in December 2008, as amended from time to time (the “Compensation Recovery Policy”) and any required compensation recovery provisions under applicable laws or regulations.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Agreement, the Plan, the related Plan prospectus, the Company’s Insider Trading Policy, and the Compensation Recovery Policy (if applicable). Participant further acknowledges that as of the Date of Grant, the Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the award of the Restricted Stock Units and the underlying Common Stock and supersede all prior oral and written agreements on that subject with the exception of (i) Awards previously granted and delivered to Participant

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under the Plan, and (ii) if applicable, (A) the terms of any written offer letter or employment agreement entered into between the Company and Participant that specifically provides for accelerated vesting of compensatory equity awards, (B) the terms of any change of control severance plan that is in effect and applicable at the time of a qualifying termination or event and (C) the Compensation Recovery Policy (if applicable).

ATTACHMENTS: Appendix

The Company has awarded you a Restricted Stock Unit Award (the “Award”) pursuant to Section 7(b) of the Company’s 2006 Employee Equity Incentive Plan (the “Plan”) for the number of Restricted Stock Units as indicated on the first page of this Agreement. Defined terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan. Subject to adjustment and the terms and conditions as provided herein and in the Plan, each Restricted Stock Unit shall represent the right to receive one (1) share of Common Stock.

The details of your Award, in addition to those set forth above, are as follows.

1. NUMBER OF RESTRICTED STOCK UNITS AND SHARES OF COMMON STOCK.

(a) The number of Restricted Stock Units subject to your Award and the number of shares of Common Stock deliverable with respect to such Restricted Stock Units may be adjusted from time to time for Capitalization Adjustments as described in Section 9(a) of the Plan. You shall receive no benefit or adjustment to your Award with respect to any cash dividend or other distribution that does not result in a Capitalization Adjustment pursuant to Section 9(a) of the Plan; provided, however, that this sentence shall not apply with respect to any shares of Common Stock that are delivered to you in connection with your Award after such shares have been delivered to you.

(b) Any additional Restricted Stock Units, shares of Common Stock, cash or other property that becomes subject to the Award pursuant to this Section 1 shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Restricted Stock Units and Common Stock covered by your Award.

(c) Notwithstanding the provisions of this Section 1, no fractional Restricted Stock Units or rights for fractional shares of Common Stock shall be created pursuant to this Section 1. The Board shall, in its discretion, determine an equivalent benefit for any fractional Restricted Stock Units or fractional shares that might be created by the adjustments referred to in this Section 1.

2. VESTING.

Subject to the limitations contained in this Agreement and the Plan, the Restricted Stock Units shall vest as provided in the vesting schedule set forth above, provided that vesting shall cease upon the termination of your Continuous Service. Any Restricted Stock Units that have not yet vested shall be forfeited upon the termination of your Continuous Service.

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3. DISTRIBUTION OF SHARES OF COMMON STOCK.

(a) Subject to the provisions of this Agreement and the Plan, in the event one or more Restricted Stock Units vests, the Company shall deliver to you one (1) share of Common Stock for each Restricted Stock Unit that vests. Except as set forth below, the delivery to you of the appropriate number of vested shares of Common Stock shall be made on the applicable vesting date. The issuance date determined by this paragraph is referred to as the “Issuance Date.” If the Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following business day. The form of such delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.

(b) Notwithstanding the foregoing, if (i) the Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to sell shares of Common Stock on an established stock exchange or stock market, and (ii) the Company elects, prior to the Issuance Date, (1) not to satisfy the tax withholding obligations described in Section 10 by withholding shares of Common Stock from the shares otherwise due, on the Issuance Date, to you under this Agreement, and (2) not to permit or require you to enter into an immediate sale commitment with a broker-dealer pursuant to Section 10 of this Agreement (including but not limited to a commitment under a previously established Company-approved 10b5-1 trading plan), then such shares shall not be delivered on such Issuance Date and shall instead be delivered on the first business day of the next occurring open window period applicable to you or the next business day when you are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in no event later than December 31 of the calendar year in which the Issuance Date occurs (that is, the last day of your taxable year in which the Issuance Date occurs), or, if permitted in a manner that complies with Treasury Regulation Section 1.409A-1(b)(4), in no event later than the date that is the 15th day of the third calendar month of the year following the year in which the shares of Common Stock under this Agreement are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulation Section 1.409A-1(d).

4. PAYMENT BY YOU. This Award was granted in consideration of your services to the Company or an Affiliate. Subject to Section 10 below, except as otherwise provided herein or under applicable law, you will not be required to make any payment to the Company (other than your-future services with the Company) with respect to your receipt of the Award, vesting of the Restricted Stock Units, or the delivery of the shares of Common Stock underlying the Restricted Stock Units.

5. SECURITIES LAW COMPLIANCE. You may not be issued any Common Stock under your Award unless the shares of Common Stock are either (i) then registered under the Securities Act of 1933, as amended (the “Securities Act”), or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and you shall not receive such Common Stock if the Company determines that such receipt would not be in material compliance with such laws and regulations.

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6. RESTRICTIVE LEGENDS. The Common Stock issued under your Award shall be endorsed with appropriate legends, if any, determined by the Company.

7. TRANSFER RESTRICTIONS. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of the shares in respect of your Award. For example, you may not use shares that may be issued in respect of your Restricted Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares. This restriction on transfer will lapse upon delivery to you of shares in respect of your vested Restricted Stock Units. Your Award is not transferable, except by will or by the laws of descent and distribution. In the event of divorce, you are encouraged to discuss the proposed treatment of the Restricted Stock Units with the Company prior to finalizing any domestic relations order.

8. AWARD NOT A SERVICE CONTRACT. Your Award is not an employment or service contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation on your part to continue in the service of the Company or any Affiliate, or on the part of the Company or any Affiliate to continue such service. In addition, nothing in your Award shall obligate the Company or any Affiliate, their respective stockholders, boards of directors or employees to continue any relationship that you might have as an Employee or Consultant of the Company or any Affiliate. Finally, your participation in the Plan shall not create a right to further employment or service with the Employer and shall not interfere with the ability of the Employer to terminate your employment or service relationship at any time with or without cause.

9. UNSECURED OBLIGATION. Your Award is unfunded, and even as to any Restricted Stock Units which vest, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Common Stock pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the Common Stock acquired pursuant to this Agreement until such Common Stock is issued to you pursuant to Section 3 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company with respect to the Common Stock so issued and held by you. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

10. WITHHOLDING OBLIGATIONS.

(a) On or before the time you receive a distribution of Common Stock pursuant to your Award, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from the Common Stock issuable to you and otherwise agree to make adequate provision for any sums required to satisfy any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding which arise and are legally due by you (“Tax-Related Items”) which arise in connection with your Award. In addition, you authorize the Company, or your employer, if different from the Company (whether current or former, the “Employer”), or their respective agents, to withhold all applicable Tax-Related Items from your wages or other cash compensation paid to you by the Employer. Alternatively, or in addition, to the greatest extent permissible under local law, the Employer

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may (1) sell or arrange for the sale of shares (including permitting or requiring you to enter into an immediate sale commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority) that you would otherwise receive (on your behalf pursuant to this authorization) to meet the necessary withholding obligation for Tax-Related Items, and/or (2) withhold in shares the amount of shares necessary to satisfy applicable Tax-Related Items, the number of which shall be determined to comply with appropriate tax laws and as would be otherwise necessary or desirable. If the obligation for the Tax-Related Items is satisfied by withholding in shares of Common Stock, then you will have no further rights, title or interests in or to the number of shares of Common Stock that are held back solely for the purpose of paying the Tax-Related Items. Finally, you shall pay to the Employer any amount of Tax-Related Items that the Employer may be required to withhold as a result of your receipt of the Award and/or the shares issuable pursuant thereto that cannot be satisfied by the means previously described. The Employer may refuse to deliver the shares issuable pursuant to this Award if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to deliver to you any Common Stock or the proceeds from any sale of the shares of Common Stock.

(c) In the event the Company’s obligation to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

(d) Regardless of any action Employer takes with respect to Tax-Related Items, you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Employer (1) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or settlement of the Award and/or the subsequent sale of shares delivered pursuant thereto; and (2) does not commit to structure the terms of the grant or any aspect of the Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are or become subject to tax in more than one jurisdiction, you acknowledge that the Employer may be required to withhold, account for, and/or otherwise cause you to tender a payment to the Employer in the amount of the Tax-Related Items arising in each jurisdiction.

11. NATURE OF GRANT.

(a) In accepting this Award, you acknowledge that:

(i) the Plan is established voluntarily by the Employer, is discretionary in nature, and may be modified, amended, suspended or terminated by the Company as provided in the Plan;

(ii) the grant of the Award and any other awards under the Plan is voluntary and occasional and does not create any contractual or other right to receive Awards, shares or any other benefit or compensation in lieu of future Awards, even if awards have been granted repeatedly in the past;

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(iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(iv) you are voluntarily participating in the Plan;

(v) the Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Employer or the Company, as applicable, and is outside the scope of your employment or service contract, if any;

(vi) the Award and the shares deliverable thereunder is a potential bonus payment not paid in lieu of any normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement benefits or similar payments;

(vii) in the event of the termination of your employment or service relationship, your eligibility to receive shares of common stock or payments under the Award or the Plan, if any, will terminate as of the date expressly provided in the Award, regardless of any reasonable notice period mandated by local law;

(viii) the future value of the shares underlying the Award is unknown and cannot be predicted;

(ix) you understand that should you die owning shares of Company common stock or the Award, such shares or the Award may subject your estate to United States federal estate taxes. You understand that you should seek your own tax advice regarding this potential tax;

(x) you disclaim any entitlement to compensation or damages arising from the termination of the Award or diminution in value of the shares of Common Stock and you hereby irrevocably release the Company and the Employer from any such claim that may arise; and

(xi) the Plan and this Agreement set forth the entire understanding between you, the Company, the Employer, and any Affiliate thereof regarding the acquisition of the shares of Common Stock and supersede all prior oral and written agreements pertaining to the Award.

12. DATA PRIVACY.

(a) You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, the Employer and its Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

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(b) You understand that the Employer holds certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in Employer, details of all awards or any other entitlement to shares of stock awarded, canceled, settled, vested, unvested or outstanding in your favor (the “Personal Data”), for the purpose of implementing, administering and managing the Plan. You understand that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Personal Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom you may elect to deposit any shares of stock acquired upon exercise of the Award. You understand that Personal Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view the Personal Data, request additional information about the storage and processing of the Personal Data, request any necessary amendments to the Personal Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to hold the Award and participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

13. NOTICES. Any notices provided for in your Award or the Plan shall be given in writing to each of the other parties hereto and shall be deemed effectively given on the earlier of (i) the date of personal delivery, including delivery by express courier, (ii) the date that electronic notice is sent by you or Shareholder Services (as applicable), in the case of notices provided by electronic means, or (iii) the date that is five (5) days after deposit in the United States Post Office (whether or not actually received by the addressee), by registered or certified mail with postage and fees prepaid, addressed at the following addresses, or at such other address(es) as a party may designate by ten (10) days’ advance written notice to each of the other parties hereto:

COMPANY:	Synopsys, Inc.
	Shareholder Services
	700 East Middlefield Road
	Mountain View, CA 94043
PARTICIPANT:	Your address as on file with the Company at the time notice is given

14. HEADINGS. The headings of the Sections in this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement or to affect the meaning of this Agreement.

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15. AMENDMENT. This Agreement may be amended solely by the Company by a writing (including an electronic writing) which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment impairing your rights hereunder may be made without your written consent. Without limiting the foregoing, the Company reserves the right to change, by written notice (including via electronic delivery) to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

16. MISCELLANEOUS.

(a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(c) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(d) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.

(e) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

17. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control; provided, however, that Section 3 of this Agreement shall govern the timing of any distribution of Common Stock under your Award. The Company shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Board shall be final and binding upon you, the Company, and all other interested persons. No member of the Board shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Agreement.

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18. APPENDIX. Notwithstanding any provisions in this Agreement, the Award shall be subject to the special terms and conditions set forth in the Appendix to this Agreement for jurisdictions in which you are subject to the applicable laws. Moreover, if you relocate to one of the countries included in the Appendix or otherwise become subject to the laws of such jurisdiction, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of this Agreement.

19. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating benefits under any employee benefit plan (other than the Plan) sponsored by the Company or any Affiliate except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any or all of the employee benefit plans of the Company or any Affiliate.

20. CHOICE OF LAW. The interpretation, performance and enforcement of this Agreement shall be governed by the law of the state of California without regard to such state’s conflicts of laws rules. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Award or the Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of Santa Clara, California, or the federal courts for the United States for the Northern District of California.

21. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

22. OTHER DOCUMENTS. You hereby acknowledge receipt or the right to receive a document providing the information (such as public filings) required by Rule 428(b)(1) promulgated under the Securities Act.

23. ELECTRONIC DELIVERY. The Company may, in its sole discretion, decide to deliver any documents related to the Award granted hereunder or to participation in the Plan (or future restricted stock units or other equity awards that may be granted under the Plan) by electronic means (including by filing documents publicly with at www.sec.gov (or any successor website thereto) or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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* * * * *

Your signature below or online acceptance (where permitted) indicates that you have read this Agreement (including any appendices hereto) and agree to be bound by the terms and conditions of the Plan and this Agreement.

SYNOPSYS, INC.			PARTICIPANT
By:	/s/ Brian E. Cabrera
	Brian E. Cabrera			<<Name>>
	Title:	VP Legal, General Counsel & Corporate Secretary		Date:
	Date:	<<Grant Date>>

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Appendix

Synopsys, Inc. Restricted Stock Unit Grant Notice and Award Agreement

This Appendix, which is part of the Restricted Stock Unit Grant Notice and Award Agreement, contains the additional terms and conditions of the Restricted Stock Units that will apply to Participants in the countries listed below. Finally, if you are a citizen or resident of a country other than the one in which you currently are working, you transfer employment and/or residency to another country after the Award is granted or you are considered a resident of another country for local law purposes, the Company shall, in its sole discretion, determine to what extent the terms and conditions included herein will apply under these circumstances. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and/or the Agreement.

Canada

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

Finland

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

France

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

Germany

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

11

India

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

The Employer will withhold any Tax-Related Items from your wages when your Award vests.

Ireland

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

Israel

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

Due to local requirements, upon the vesting of your Restricted Stock Units, any shares of Common Stock to be issued to you upon vesting and settlement of the Restricted Stock Units will be immediately sold. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such shares (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such shares. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the shares at any particular price. Upon the sale of the shares, the Company agrees to pay you the cash proceeds from the sale, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Italy

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

Netherlands

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

12

People’s Republic of China

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

Due to local regulatory requirements, upon the vesting of your Restricted Stock Units, any shares of Common Stock to be issued to you upon vesting and settlement of the Restricted Stock Units will be immediately sold. You agree that the Company is authorized to instruct its designated broker to assist with the mandatory sale of such shares (on your behalf pursuant to this authorization) and you expressly authorize the Company’s designated broker to complete the sale of such shares. You acknowledge that the Company’s designated broker is under no obligation to arrange for the sale of the shares at any particular price. Upon the sale of the shares, the Company agrees to pay you the cash proceeds from the sale, less any brokerage fees or commissions and subject to any obligation to satisfy Tax-Related Items.

Exchange Control Requirements. You understand and agree that, pursuant to local exchange control requirements, you will be required to repatriate the cash proceeds from the immediate sale of the shares issued upon the vesting of the Restricted Stock Units to the PRC if you are a PRC national. You further understand that, under local law, the sale proceeds will need to be repatriated through a special exchange control account established by an Affiliate in the PRC and you hereby consent and agree that any proceeds from the sale of any Restricted Stock Units you acquire may be transferred to such special account prior to being delivered to you. You further agree to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in the PRC.

You further understand and agree that the Company may distribute the proceeds of the sale of shares either in U.S. dollars or in local currency. If the proceeds are distributed in local currency, the Company is under no obligation to secure any particular exchange conversion rate and there will be delays in converting the cash proceeds to local currency due to exchange control restrictions. You agree to bear any currency fluctuation risk between the time the shares are sold and the time the cash proceeds are distributed to you through the special account described above.

Sweden

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

A number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

Switzerland

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

For all Permit B holders and any cross border employees subject to withholding at source, a number of shares of Common Stock sufficient to cover any Tax-Related Items that the Company or the Employer is required to withhold will automatically be sold (on your behalf pursuant to this authorization) when your Award vests. You will receive the net shares remaining after such withholding obligations and any broker fees and commissions have been satisfied.

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United Kingdom

Vesting. The following provision supplements Section 1 of the Agreement:

Notwithstanding any discretion or anything to the contrary in the Plan and/or the Agreement, the grant of the Restricted Stock Units does not provide any right for you to receive a cash payment and the vested Restricted Stock Units will be settled in shares only.

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

If you do not pay or the Company or the Employer does not withhold from you the full amount of income tax that you owe within ninety (90) days of the event giving rise to the Tax-Related Items (the “Due Date”) or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the amount of any uncollected Tax-Related Items will constitute a loan owed by you to the Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current official rate of Her Majesty’s Revenue and Customs (“HMRC”), it will be immediately due and repayable, and the Company or the Employer may recover it at any time thereafter by any of the means referred to in Section 10 of the Agreement. Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), you will not be eligible for such a loan to cover the Tax-Related Items. In the event that you are a director or executive officer and the Tax-Related Items are not collected from or paid by you by the Due Date, the amount of any uncollected Tax-Related Items will constitute a benefit to you on which additional income tax and national insurance contributions (including the Employer’s Liability, as defined below) will be payable. You will be responsible for reporting and paying any income tax and national insurance contributions (including the Employer’s Liability, as defined below) due on this additional benefit directly to HMRC under the self-assessment regime.

Joint Election. As a condition of your participation in the Plan, you agree to accept any liability for secondary Class 1 national insurance contributions (the “Employer’s Liability”) which may be payable by the Company and/or the Employer in connection with the Restricted Stock Units and any event giving rise to Tax-Related Items. Without prejudice to the foregoing, you agree to execute a joint election with the Company (the “Joint Election”), the form of such Joint Election being formally approved by HMRC and attached hereto as Exhibit A, and any other consent or elections required to accomplish the transfer of the Employer’s Liability to you. You further agree to execute such other joint elections as may be required between yourself and any successor to the Company and/or the Employer. You further agree that the Company and/or the Employer may collect the Employer’s Liability by any of the means set forth in Section 10 of the Agreement.

If you do not enter into a Joint Election, if approval of the Joint Election has been withdrawn by HMRC or if such Joint Election is jointly revoked by you and the Company or the Employer, as applicable, the Company, in its sole discretion and without any liability to the Company or the Employer, may choose not to issue or deliver any shares to you upon vesting of the Restricted Stock Units.

United States

Withholding Obligations. The following provision supplements Section 10 of the Agreement:

Upon vesting of Restricted Stock Units, the Company will issue to you the number of shares covered by the vested Restricted Stock Units, less the number of shares sufficient to cover any Tax-Related Items that the Company is required to withhold.

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Exhibit A

PLEASE READ THE FOLLOWING IN ITS ENTIRETY

BEFORE ACCEPTING YOUR AWARD

SYNOPSYS, INC.

2006 EMPLOYEE EQUITY INCENTIVE PLAN

Important Note on the Joint Election to Transfer

Employer National Insurance Contributions

As a condition of your participation in the 2006 Employee Equity Incentive Plan, you are required to enter into a joint election to transfer to you any liability for employer’s national insurance contributions (the “Employer’s Liability”) that may arise in connection with your award of stock options and/or restricted stock units (together, the “Awards”), or in connection with future Awards that may be granted to you by Synopsys, Inc. (the “Company”) under its 2006 Employee Equity Incentive Plan (the “Joint Election”).

If you do not agree to enter into the Joint Election, the Awards will be worthless, you will not be able to exercise the options or vest in the restricted stock units, or receive any benefit in connection with the Awards, as set forth in your Award Agreement.

By entering into the Joint Election:

I. you agree that any Employer’s Liability that may arise in connection with or pursuant to the exercise or vesting of the Award, as applicable (and the acquisition of shares of the Company’s common stock) or other taxable events in connection with the Award will be transferred to you; and

II. you authorise the Company and/or your employer to recover an amount sufficient to cover this liability by any method set forth in the relevant Award Agreement and/or the Joint Election.

Indicating your acceptance of the Stock Option Agreement and/or Restricted Stock Unit Award Agreement, as applicable, indicates your agreement to be bound by the terms of the Joint Election.

Please read the terms of the Joint Election carefully before accepting the Stock Option

Award Agreement and/or the Restricted Stock Unit Award Agreement and the Joint Election.

PLEASE PRINT AND KEEP A COPY OF THIS ELECTION FOR YOUR RECORDS

15

SYNOPSYS, INC.

2006 EMPLOYEE EQUITY INCENTIVE PLAN

(UK Participants)

FORM OF ELECTION TO TRANSFER THE EMPLOYER’S SECONDARY

CLASS 1 NATIONAL INSURANCE LIABILITY TO THE EMPLOYEE

1. Parties

This Election is between:

(A) You, the individual who has obtained access to this Election (the “Participant”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive stock options (“Options”) and/or restricted stock units (“RSUs”) (each an “Award” and together, the “Awards”) pursuant to the terms and conditions of the Synopsys, Inc. 2006 Employee Equity Incentive Plan (the “Plan”), and

(B) Synopsys, Inc. of 700 East Middlefield Road, Mountain View, California 94043, United States (the “Company”), which may grant Awards under the Plan and is entering this Election on behalf of the Employer.

2. Purpose of Election

2.1 This Election relates to the Employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise on the occurrence of a “Taxable Event” which gives rise to relevant employment income within section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the Social Security Contributions and Benefits Act 1992 (“SSCBA”), including but not limited to:

(i) the acquisition of securities pursuant to the Awards (pursuant to section 477(3)(a) ITEPA); and/or

(ii) the assignment or release of the Awards in return for consideration (pursuant to section 477(3)(b) ITEPA); and/or

(iii) the receipt of any other benefit in connection with the Awards other than a benefit within (i) or (ii) above (pursuant to section 477(3)(c) ITEPA); and/or

(iv) post-acquisition events relating to the Awards or the securities acquired pursuant to the Awards (within section 426 ITEPA); and/or

(v) post-acquisition events relating to the Awards or the securities acquired pursuant to the Awards (within section 438 ITEPA).

In this Election, ITEPA means the Income Tax (Earnings and Pensions) Act 2003.

16

2.2 This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA.

2.3 This Election applies to all Awards granted to the Participant under the Plan on or after May 22, 2009 up to the termination date of the Plan.

2.4 This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

2.5 This Election will not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part 7 of ITEPA (employment income: securities with artificially depressed market value).

3 The Election

The Participant and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability on the Taxable Event is hereby transferred to the Participant. The Participant understands that by electronically accepting this Election, he or she will become personally liable for the Employer’s Liability covered by this Election.

4 Payment of the Employer’s Liability

4.1 The Participant and the Company acknowledge that the Employer is under a duty to remit the Employer’s Liability to HM Revenue and Customs on behalf of the Participant within 14 days after the end of the UK tax month during which the Taxable Event occurs, or such other period of time, as prescribed. The Participant agrees to pay to the Company and/or the Employer the Employer’s Liability on demand, at any time on or after the Taxable Event and hereby authorises the Company and/or the Employer to account for the Employer’s Liability to HM Revenue and Customs.

4.2 Without limitation to Clause 4.1 above, the Participant hereby authorises the Company and/or the Employer to collect the Employer’s Liability from the Participant at any time after the Taxable Event:

(i) by deduction from salary or any other payment payable to the Participant at any time on or after the date of the Taxable Event; and/or

(ii) directly from the Participant by payment in cash or cleared funds; and/or

(iii) by arranging, on behalf of the Participant, for the sale of some of the securities which the Participant is entitled to receive in respect of the Awards; and/or

(iv) through any other method as set forth in the relevant Award agreement entered into between the Participant and the Company.

4.3 The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities to the Participant until full payment of the Employer’s Liability is collected from the Participant.

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5 Duration of Election

5.1 The Participant and the Company agree to be bound by the terms of this Election regardless of whether the Participant is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due. Any reference to the Company, the Employer and/or the Participant shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and Award agreement.

5.2 This Election will continue in effect until the earliest of the following:

(i) such time as both the Participant and the Company agree in writing that it should cease to have effect;

(ii) on the date the Company serves written notice on the Participant terminating its effect;

(iii) on the date HM Revenue and Customs withdraws approval of this Election; or

(iv) on the date the Election ceases to have effect in accordance with its terms in respect of any outstanding Awards granted under the Plan.

Acceptance by THE PARTICIPANT

The Participant acknowledges that by clicking on the “I accept” button where indicated and from that date, the Participant agrees to be bound by the terms of this Election as stated above.

Acceptance by THE COMPANY

The Company acknowledges that by arranging for the scanned signature of an authorised representative to appear on this Election, the Company agrees to be bound by the terms of this Election as stated above.

SYNOPSYS, INC.
By:	/s/ Brian E. Cabrera
	Brian E. Cabrera VP Legal, General Counsel & Corporate Secretary

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SCHEDULE TO FORM OF ELECTION – EMPLOYING COMPANIES

The employing companies to which this Election relates are:

(1) Synopsys (Northern Europe) Limited

Registered Office:	100 Brook Drive Green Park, Reading RG2 6UJ United Kingdom
Company Registration Number:	2642054
Corporation Tax District:	Oxon and Bucks Area
Corporation Tax Reference:	402 56090 10710
PAYE District:	East Hampshire and Wight Area
PAYE Reference:	581/S3033

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Aart J. de Geus, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Synopsys, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 2, 2011	/s/ Aart J. de Geus
	Aart J. de Geus Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Brian M. Beattie, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Synopsys, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 2, 2011	/s/ Brian M. Beattie
	Brian M. Beattie Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350,

Chapter 63 of Title 18, United States Code)

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 1350, Chapter 63 of Title 18 of the United States Code (18 U.S.C-§1350), each of Aart J. de Geus, Chief Executive Officer of Synopsys, Inc., a Delaware corporation (the “Company”), and Brian M. Beattie, Chief Financial Officer of the Company, does hereby certify, to such officer’s knowledge that:

The Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2011 (the “Form 10-Q”) to which this Certification is attached as Exhibit 32.1 fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act. The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 2nd day of September, 2011.

/s/ Aart J. de Geus

Aart J. de Geus

Chief Executive Officer

/s/ Brian M. Beattie

Brian M. Beattie

Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not deemed filed with the Securities and Exchange Commission as part of the Form 10-Q or as a separate disclosure document and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML



Liabilities (Other Long-Term Liabilities) (Details) (USD $) In Thousands	Jul. 31, 2011	Oct. 31, 2010
Liabilities
Deferred compensation liability	$ 93,253	$ 83,330
Other long-term liabilities	14,596	18,555
Total	$ 107,849	$ 101,885

XML



Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data	Jul. 31, 2011	Oct. 31, 2010
Condensed Consolidated Balance Sheets
Accounts receivable, allowances	$ 3,060	$ 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	143,666	148,479
Treasury Stock, shares	13,599	8,786

XML



Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Revenue:
Time-based license	$ 322,147	$ 286,563	$ 936,518	$ 847,710
Upfront license	19,013	14,650	70,562	47,811
Maintenance and service	45,635	35,716	138,029	109,681
Total revenue	386,795	336,929	1,145,109	1,005,202
Cost of revenue:
License	52,089	43,996	153,758	130,140
Maintenance and service	19,275	14,697	59,796	46,475
Amortization of intangible assets	13,368	8,050	41,511	24,736
Total cost of revenue	84,732	66,743	255,065	201,351
Gross margin	302,063	270,186	890,044	803,851
Operating expenses:
Research and development	122,547	105,649	366,456	319,931
Sales and marketing	90,732	83,812	269,618	242,791
General and administrative	27,052	27,371	86,387	81,937
Amortization of intangible assets	3,553	2,561	11,057	8,339
Total operating expenses	243,884	219,393	733,518	652,998
Operating income	58,179	50,793	156,526	150,853
Other (expense) income, net	(2,212)	(3,046)	9,032	8,109
Income before provision for income taxes	55,967	47,747	165,558	158,962
Provision (benefit) for income taxes	3,885	8,420	(15,864)	(52,700)
Net income	$ 52,082	$ 39,327	$ 181,422	$ 211,662
Net income per share:
Basic	$ 0.36	$ 0.27	$ 1.23	$ 1.43
Diluted	$ 0.35	$ 0.26	$ 1.20	$ 1.40
Shares used in computing per share amounts:
Basic	144,960	148,006	147,479	147,909
Diluted	148,045	151,106	151,598	151,459

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Stock Repurchase Program (Narrative) (Details) (USD $) In Millions	3 Months Ended	9 Months Ended
	Jul. 31, 2011	Jul. 31, 2011
Stock Repurchase Program
Stock repurchase program authorized amount	$ 500.0	$ 500.0
Stock repurchase program remaining authorized repurchase amount		$ 412.6

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Financial Assets and Liabilities (Tables)

9 Months Ended

Jul. 31, 2011

Financial Assets and Liabilities

Summary of Cash, Cash Equivalents and Investments

	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 July 31, 2011
Classified as current assets:
Non-interest bearing cash (U.S. and International)	$	165,107	$	—	$	—		$	—	$	165,107
Money market funds (U.S.)		161,703		—		—			—		161,703
Cash deposits and money market funds (International)		563,076		—		—			—		563,076
Municipal securities		147,948		457		(10	)		—		148,395
		1,037,834		457		(10	)		—		1,038,281
Classified as non-current assets:
Strategic investments		3,981		—		—			—		3,981
Total	$	1,041,815	$	457	$	(10	)	$	—	$	1,042,262

	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 securities		162,440		723		(9	)		—		163,154
		937,847		723		(9	)		—		938,561
Classified as non-current 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.

Schedule of Stated Maturities of Short-Term Investments

	Fair Value
	(in thousands)
Due in 1 year or less	$	74,581
Due in 1–5 years		30,661
Due in 6–10 years		4,375
Due after 10 years		38,778
Total	$	148,395

Summary of Effect on Changes in Fair Values of Non-Designated Forward Contracts

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011	2010
	(in thousands)
Gain (loss) recorded in other (expense) income, net	$	(110	)	$	(3,016	)	$4,258	$	(4,502	)

Summary of Outstanding Foreign Currency Forward Contracts

	As of July 31, 2011		As of October 31, 2010
	(In thousands)
Total gross notional amount	$	553,430	$	691,343
Net fair value	$	2,321	$	(7,500	)

Fair Values of Derivative Instrument Designated and Non-Designated as Hedging Instruments

	Fair Values of derivative instruments designated as  hedging instruments		Fair Values of derivative instruments not designated as hedging instruments
	(in thousands)
As of July 31, 2011
Other current assets	$	8,853	$	—
Accrued liabilities	$	6,320	$	212
As of October 31, 2010
Other current assets	$	5,680	$	—
Accrued liabilities	$	11,626	$	1,554

Gains and Losses on Derivative Instrument Recognized in Statement of Operations

	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 July 31, 2011
Foreign exchange contracts	Revenue	$	(4,365	)	Revenue	$	(1,389	)
Foreign exchange contracts	Operating expenses		650		Operating expenses		3,121
Total		$	(3,715	)		$	1,732
Three months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(3,644	)	Revenue	$	703
Foreign exchange contracts	Operating expenses		(3,413	)	Operating expenses		(236	)
Total		$	(7,057	)		$	467
Nine months ended July 31, 2011
Foreign exchange contracts	Revenue	$	(2,562	)	Revenue	$	(6,284	)
Foreign exchange contracts	Operating expenses		7,653		Operating expenses		3,374
Total		$	5,091			$	(2,910	)
Nine months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(2,565	)	Revenue	$	1,601
Foreign exchange contracts	Operating expenses		(9,783	)	Operating expenses		2,615
Total		$	(12,348	)		$	4,216

Ineffective Portion and Portion Excluded from Effectiveness Testing of Derivative Hedge Gains (Losses)

	Amount of gain (loss) recognized in  statement of operations on derivatives (ineffective portion) (1)		Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)(2)
		(in thousands)
Three months ended July 31, 2011
Foreign exchange contracts	$	121	$	(247	)
Three months ended July 31, 2010
Foreign exchange contracts	$	320	$	(892	)
Nine months ended July 31, 2011
Foreign exchange contracts	$	75	$	(267	)
Nine months ended July 31, 2010
Foreign exchange contracts	$	278	$	(1,051	)

(1) The ineffective portion includes forecast inaccuracies.

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

XML



Document and Entity Information	9 Months Ended
	Jul. 31, 2011	Aug. 29, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2011
Entity Registrant Name	SYNOPSYS INC
Entity Central Index Key	0000883241
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--10-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		144,053,580
Trading Symbol	SNPS

XML



Goodwill and Intangible Assets (Estimated Future Amortization of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jul. 31, 2011 years
Goodwill and Intangible Assets
Remainder of fiscal 2011	$ 16,959
2012	59,561
2013	46,621
2014	28,250
2015	17,104
2016 and thereafter	20,219
IPR&D	15,025	[1]
Total	$ 203,739
Estimated completion period of IPR&D projects	2

[1] IPR&D projects are estimated to be completed within two years as of July 31, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

XML



Liabilities (Tables)

9 Months Ended

Jul. 31, 2011

Liabilities

Accounts Payable and Accrued Liabilities

	July 31, 2011		October 31, 2010
	(in thousands)
Payroll and related benefits	$	217,484	$	216,079
Other accrued liabilities		52,099		73,230
Accounts payable		11,627		16,331
Acquisition related liabilities		3,253		7,210
Total	$	284,463	$	312,850

Other Long-Term Liabilities

	July 31, 2011		October 31, 2010
	(in thousands)
Deferred compensation liability	$	93,253	$	83,330
Other long-term liabilities		14,596		18,555
Total	$	107,849	$	101,885

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Goodwill and Intangible Assets (Amortization Expenses of Intangible Assets) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Jul. 31, 2011		Jul. 31, 2010		Jul. 31, 2011		Jul. 31, 2010
Amortization expense of intangible assets	$ 17,662		$ 11,352		$ 54,789		$ 35,298
Core/Developed Technology [Member]
Amortization expense of intangible assets	10,901		7,710		33,877		23,212
Customer Relationships [Member]
Amortization expense of intangible assets	3,248		2,088		9,809		6,607
Contract Rights Intangible [Member]
Amortization expense of intangible assets	2,467		589		7,967		2,264
Trademarks and Trade Names [Member]
Amortization expense of intangible assets	255		136		765		429
Capitalized Software Development Costs [Member]
Amortization expense of intangible assets	741	[1]	741	[1]	2,221	[1]	2,223	[1]
Covenants not to Compete [Member]
Amortization expense of intangible assets	$ 50		$ 88		$ 150		$ 563

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

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Credit Facility

9 Months Ended

Jul. 31, 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 July 31, 2011, the Company had no outstanding borrowings under this credit facility and was in compliance with all the covenants.

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Comprehensive Income (Tables)

9 Months Ended

Jul. 31, 2011

Comprehensive Income

Components of Comprehensive Income

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Net income	$	52,082		$	39,327		$	181,422		$	211,662
Change in unrealized gains (losses) on investments, net of tax of $(9) and $104, for the three and nine months ended July 31, 2011, respectively, and of $43 and $1,102 for each of the same periods in fiscal 2010, respectively		14			(66	)		(163	)		(1,670	)
Deferred gains (losses) on cash flow hedges, net of tax of $575 and $(1,287), for the three and nine months ended July 31, 2011, respectively, and of $1,461 and $1,940 for each of the same periods in fiscal 2010, respectively		(3,646	)		(7,321	)		5,169			(12,570	)
Reclassification adjustment on deferred (gains) losses on cash flow hedges, net of tax of $401 and $(541), for the three and nine months ended July 31, 2011, respectively, and of $474 and $2,095 for each of the same periods in fiscal 2010, respectively		(1,731	)		(468	)		2,910			(4,216	)
Foreign currency translation adjustment		3,194			(126	)		6,318			(1,502	)
Total	$	49,913		$	31,346		$	195,656		$	191,704

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Fair Value Measures (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands	Jul. 31, 2011	Oct. 31, 2010
Total assets	$ 830,203	$ 739,363
Total liabilities	10,758	21,236
Contingent Consideration [Member]
Accounts payable and accrued liabilities	2,065	3,121
Other long-term liabilities	2,161	4,935
Contingent Consideration [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Accounts payable and accrued liabilities
Other long-term liabilities
Contingent Consideration [Member] | Significant Other Observable Inputs (Level 2) [Member]
Accounts payable and accrued liabilities
Other long-term liabilities
Contingent Consideration [Member] | Significant Unobservable Inputs (Level 3) [Member]
Accounts payable and accrued liabilities	2,065	3,121
Other long-term liabilities	2,161	4,935
Deferred Compensation Plan Assets [Member]
Other long-term assets	93,253	83,330
Deferred Compensation Plan Assets [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Other long-term assets	93,253	83,330
Deferred Compensation Plan Assets [Member] | Significant Other Observable Inputs (Level 2) [Member]
Other long-term assets
Deferred Compensation Plan Assets [Member] | Significant Unobservable Inputs (Level 3) [Member]
Other long-term assets
Forward Currency Derivative Contracts [Member]
Prepaid and other current assets	8,853	5,680
Accounts payable and accrued liabilities	6,532	13,180
Forward Currency Derivative Contracts [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Prepaid and other current assets
Accounts payable and accrued liabilities
Forward Currency Derivative Contracts [Member] | Significant Other Observable Inputs (Level 2) [Member]
Prepaid and other current assets	8,853	5,680
Accounts payable and accrued liabilities	6,532	13,180
Forward Currency Derivative Contracts [Member] | Significant Unobservable Inputs (Level 3) [Member]
Prepaid and other current assets
Accounts payable and accrued liabilities
Money Market Funds (U.S.) [Member]
Cash and cash equivalents	579,702	487,199
Money Market Funds (U.S.) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Cash and cash equivalents	579,702	487,199
Money Market Funds (U.S.) [Member] | Significant Other Observable Inputs (Level 2) [Member]
Cash and cash equivalents
Money Market Funds (U.S.) [Member] | Significant Unobservable Inputs (Level 3) [Member]
Cash and cash equivalents
Municipal Securities [Member]
Short-term investments	148,395	163,154
Municipal Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Short-term investments
Municipal Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Short-term investments	148,395	163,154
Municipal Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Short-term investments
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Total assets	672,955	570,529
Total liabilities
Significant Other Observable Inputs (Level 2) [Member]
Total assets	157,248	168,834
Total liabilities	6,532	13,180
Significant Unobservable Inputs (Level 3) [Member]
Total assets
Total liabilities	$ 4,226	$ 8,056

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Financial Assets and Liabilities (Schedule of Foreign Currency Forward Contracts Outstanding) (Details) (USD $) In Thousands	Jul. 31, 2011	Oct. 31, 2010
Financial Assets and Liabilities
Total gross notional amount	$ 553,430	$ 691,343
Net fair value	$ 2,321	$ (7,500)

XML



Goodwill and Intangible Assets (Tables)

9 Months Ended

Jul. 31, 2011

Goodwill and Intangible Assets

Summary of Goodwill

	(in thousands)
Balance at October 31, 2010	$	1,265,843
Adjustments(1)		(7,557	)
Balance at July 31, 2011	$	1,258,286

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

Summary of Intangible Assets

Intangible assets as of July 31, 2011 consisted of the following:

	Gross Assets(1)		Accumulated Amortization(1)		Net Assets
	(in thousands)
Core/developed technology	$	209,326	$	93,399	$	115,927
Customer relationships		78,400		28,029		50,371
Contract rights intangible		32,400		17,489		14,911
Covenants not to compete		2,200		2,033		167
Trademarks and trade names		6,200		2,306		3,894
In-process research and development (IPR&D)		15,025		—		15,025
Capitalized software development costs		11,245		7,801		3,444
Total	$	354,796	$	151,057	$	203,739

(1) Intangible assets as of July 31, 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 of Intangible Assets

Three Months Ended July 31,					Nine Months Ended July 31,
	2011		2010			2011		2010
	(in thousands)
Core/developed technology	$	10,901	$	7,710		$	33,877	$	23,212
Customer relationships		3,248		2,088			9,809		6,607
Contract rights intangible		2,467		589			7,967		2,264
Covenants not to compete		50		88			150		563
Trademarks and trade names		255		136			765		429
Capitalized software development costs(1)		741		741			2,221		2,223
Total	$	17,662	$	11,352		$	54,789	$	35,298

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

Estimated Future Amortization of Intangible Assets

Fiscal Year	(in thousands)
Remainder of fiscal 2011	$	16,959
2012		59,561
2013		46,621
2014		28,250
2015		17,104
2016 and thereafter		20,219
IPR&D(1)		15,025
Total	$	203,739

(1) IPR&D projects are estimated to be completed within two years as of July 31, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

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Segment Disclosure

9 Months Ended

Jul. 31, 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 of 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 July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Revenue:
United States	$	176,811	$	165,841	$	526,126	$	489,112
Europe		55,548		45,245		155,010		136,482
Japan		67,978		61,261		206,276		187,504
Asia-Pacific and other		86,458		64,582		257,697		192,104
Consolidated	$	386,795	$	336,929	$	1,145,109	$	1,005,202

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

One customer accounted for 10.5% and 10.9% of the Company's consolidated revenue for the three months ended July 31, 2011 and 2010, respectively, and accounted for 10.5% and 10.9% of the Company's consolidated revenue for the nine months ended July 31, 2011 and 2010, respectively.

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Financial Assets and Liabilities

9 Months Ended

Jul. 31, 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 securities 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 July 31, 2011
Classified as current assets:
Non-interest bearing cash (U.S. and International)	$	165,107	$	—	$	—		$	—	$	165,107
Money market funds (U.S.)		161,703		—		—			—		161,703
Cash deposits and money market funds (International)		563,076		—		—			—		563,076
Municipal securities		147,948		457		(10	)		—		148,395
		1,037,834		457		(10	)		—		1,038,281
Classified as non-current assets:
Strategic investments		3,981		—		—			—		3,981
Total	$	1,041,815	$	457	$	(10	)	$	—	$	1,042,262

	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 securities		162,440		723		(9	)		—		163,154
		937,847		723		(9	)		—		938,561
Classified as non-current 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 July 31, 2011, the stated maturities of the Company's short-term investments are:

	Fair Value
	(in thousands)
Due in 1 year or less	$	74,581
Due in 1–5 years		30,661
Due in 6–10 years		4,375
Due after 10 years		38,778
Total	$	148,395

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), or OCI. The cost of securities sold is based on the specific identification method and realized gains and losses are included in other (expense) 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 20 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 accrued 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 20 months or less. 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 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 OCI to be reclassified to the statements 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 (expense) income, net. The premium/discount component of the forward contracts is recorded to other (expense) 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 (expense) 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 (expense) 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 (expense) 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.

The effect on the changes in the fair values of non-designated forward contracts is summarized as follows:

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011	2010
	(in thousands)
Gain (loss) recorded in other (expense) income, net	$	(110	)	$	(3,016	)	$4,258	$	(4,502	)

Foreign currency forward contracts outstanding is as follows:

	As of July 31, 2011		As of October 31, 2010
	(In thousands)
Total gross notional amount	$	553,430	$	691,343
Net fair value	$	2,321	$	(7,500	)

The notional amounts for derivative instruments provide one measure of the transaction volume outstanding as of July 31, 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 July 31, 2011
Other current assets	$	8,853	$	—
Accrued liabilities	$	6,320	$	212
As of October 31, 2010
Other current assets	$	5,680	$	—
Accrued liabilities	$	11,626	$	1,554

The following table represents the unaudited condensed consolidated statements of operations location and amount of gains and losses on 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 July 31, 2011
Foreign exchange contracts	Revenue	$	(4,365	)	Revenue	$	(1,389	)
Foreign exchange contracts	Operating expenses		650		Operating expenses		3,121
Total		$	(3,715	)		$	1,732
Three months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(3,644	)	Revenue	$	703
Foreign exchange contracts	Operating expenses		(3,413	)	Operating expenses		(236	)
Total		$	(7,057	)		$	467
Nine months ended July 31, 2011
Foreign exchange contracts	Revenue	$	(2,562	)	Revenue	$	(6,284	)
Foreign exchange contracts	Operating expenses		7,653		Operating expenses		3,374
Total		$	5,091			$	(2,910	)
Nine months ended July 31, 2010
Foreign exchange contracts	Revenue	$	(2,565	)	Revenue	$	1,601
Foreign exchange contracts	Operating expenses		(9,783	)	Operating expenses		2,615
Total		$	(12,348	)		$	4,216

The following table represents the ineffective portion and the portion excluded from effectiveness testing of the hedge gains (losses) for derivative instruments designated as hedging instruments, which are recorded in other (expense) income, net:

	Amount of gain (loss) recognized in  statement of operations on derivatives (ineffective portion) (1)		Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)(2)
		(in thousands)
Three months ended July 31, 2011
Foreign exchange contracts	$	121	$	(247	)
Three months ended July 31, 2010
Foreign exchange contracts	$	320	$	(892	)
Nine months ended July 31, 2011
Foreign exchange contracts	$	75	$	(267	)
Nine months ended July 31, 2010
Foreign exchange contracts	$	278	$	(1,051	)

(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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Financial Assets and Liabilities (Summary of Cash, Cash Equivalents and Investments) (Details) (USD $) In Thousands	Jul. 31, 2011		Oct. 31, 2010
Cost	$ 1,041,815		$ 945,207
Gross Unrealized Gains	457		723
Gross Unrealized Losses Less Than 12 Months	(10)		(9)
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	1,042,262	[1]	945,921	[1]
Classified As Current Assets Total [Member]
Cost	1,037,834		937,847
Gross Unrealized Gains	457		723
Gross Unrealized Losses Less Than 12 Months	(10)		(9)
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	1,038,281	[1]	938,561	[1]
Non-Interest Bearing Cash (U.S. and International) [Member]
Cost	165,107		45,687
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	165,107	[1]	45,687	[1]
Money Market Funds (U.S.) [Member]
Cost	161,703		68,099
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	161,703	[1]	68,099	[1]
Cash Deposits and Money Market Funds (International) [Member]
Cost	563,076		661,621
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	563,076	[1]	661,621	[1]
Strategic Investments [Member]
Cost	3,981		7,360
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	3,981	[1]	7,360	[1]
Municipal Securities [Member]
Cost	147,948		162,440
Gross Unrealized Gains	457		723
Gross Unrealized Losses Less Than 12 Months	(10)		(9)
Gross Unrealized Losses 12 Months or Longer
Estimated Fair Value	$ 148,395	[1]	$ 163,154	[1]

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

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Stock Repurchase Program

9 Months Ended

Jul. 31, 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, and has periodically replenished the stock repurchase program to such amount. The Board most recently replenished the stock repurchase program up to $500.0 million on May 25, 2011. 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 July 31, 2011, $412.6 million remained available for further repurchases under the program. The following table summarizes stock repurchase activities as well as the reissuance of treasury stock for employee stock compensation purposes:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands, except per share price)
Shares repurchased		3,830		3,476		12,439		5,755
Average purchase price per share	$	26.11	$	21.58	$	26.93	$	21.76
Aggregate purchase price	$	100,000	$	75,000	$	334,985	$	125,257
Reissuance of treasury stock		1,010		1,211		7,626		6,353

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Taxes

9 Months Ended

Jul. 31, 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 July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Income before income taxes	$	55,967		$	47,747		$	165,558		$	158,962
Provision (benefit) for income tax	$	3,885		$	8,420		$	(15,864	)	$	(52,700	)
Effective tax rate		6.9	%		17.6	%		(9.6	)%		(33.2	)%

The Company's effective tax rate for the three months ended July 31, 2011 is substantially lower than the statutory federal income tax rate of 35% primarily due to lower tax rates applicable to its non-U.S. operations partially offset by state taxes and non-deductible stock compensation. The provision for income taxes for the three and nine months ended July 31, 2011 also included the benefit of additional tax credits and deductions which were higher than those previously estimated as a result of the filing of the Company's federal tax return for fiscal 2010. The effective tax rates for the nine months ended July 31, 2011 and 2010 are both negative primarily due to the tax impact of favorable IRS settlements. 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, the Company's 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. The Company believes that in the coming twelve months, 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 $85 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 benefit 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, 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.

Non-U.S. Examinations

The Company's subsidiaries are being audited in a number of jurisdictions, including Taiwan (for fiscal 2008) and Hungary (for fiscal 2007 and fiscal 2008). To date, the Company has not received any notices of proposed adjustments resulting from these audits. The Company believes that it has adequately provided for potential tax adjustments in both jurisdictions.

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Stock Compensation

9 Months Ended

Jul. 31, 2011

Stock Compensation

Stock Compensation

Note 10. Stock Compensation

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

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Cost of license	$	1,375		$	1,585		$	4,092		$	5,116
Cost of maintenance and service		361			490			993			1,531
Research and development expense		6,157			6,366			19,868			19,863
Sales and marketing expense		2,812			3,030			7,987			9,544
General and administrative expense		2,810			3,043			8,490			9,160
Stock compensation expense before taxes		13,515			14,514			41,430			45,214
Income tax benefit		(3,671	)		(3,327	)		(11,252	)		(10,363	)
Stock compensation expense after taxes	$	9,844		$	11,187		$	30,178		$	34,851

As of July 31, 2011, there was $112.2 million of unamortized share-based compensation expense which is expected to be amortized over a weighted-average period of approximately 2.8 years.

The intrinsic value of equity awards exercised during the periods below are as follow:

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Intrinsic value of awards exercised	$	4,503	$	5,696	$	32,356	$	18,663

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Other (Expense) Income, Net (Tables)

9 Months Ended

Jul. 31, 2011

Other (Expense) Income, Net

Components of Other (Expense) Income, Net

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Interest income	$	521		$	1,315		$	1,686		$	4,545
(Loss) gain on assets related to deferred compensation plan		(2,774	)		(2,165	)		5,845			3,662
Foreign currency exchange (loss) gain		(483	)		(1,234	)		1,732			(1,201	)
Write-down of long-term investments		—			(468	)		(999	)		(468	)
Other, net (1)		524			(494	)		768			1,571
Total	$	(2,212	)	$	(3,046	)	$	9,032		$	8,109

(1) Includes a $0.8 million gain on the sale of an equity investment during the three and nine months ended July 31, 2011, and a $2.1 million gain on the sale of an equity investment during the nine months ended July 31, 2010.

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Comprehensive Income

9 Months Ended

Jul. 31, 2011

Comprehensive Income

Comprehensive Income

Note 8. Comprehensive Income

The following table presents the components of comprehensive income:

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Net income	$	52,082		$	39,327		$	181,422		$	211,662
Change in unrealized gains (losses) on investments, net of tax of $(9) and $104, for the three and nine months ended July 31, 2011, respectively, and of $43 and $1,102 for each of the same periods in fiscal 2010, respectively		14			(66	)		(163	)		(1,670	)
Deferred gains (losses) on cash flow hedges, net of tax of $575 and $(1,287), for the three and nine months ended July 31, 2011, respectively, and of $1,461 and $1,940 for each of the same periods in fiscal 2010, respectively		(3,646	)		(7,321	)		5,169			(12,570	)
Reclassification adjustment on deferred (gains) losses on cash flow hedges, net of tax of $401 and $(541), for the three and nine months ended July 31, 2011, respectively, and of $474 and $2,095 for each of the same periods in fiscal 2010, respectively		(1,731	)		(468	)		2,910			(4,216	)
Foreign currency translation adjustment		3,194			(126	)		6,318			(1,502	)
Total	$	49,913		$	31,346		$	195,656		$	191,704

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Comprehensive Income (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Comprehensive Income
Net income	$ 52,082	$ 39,327	$ 181,422	$ 211,662
Change in unrealized gains (losses) on investments, net of tax of $(9) and $104, for the three and nine months ended July 31, 2011, respectively, and of $43 and $1,102 for each of the same periods in fiscal 2010, respectively	14	(66)	(163)	(1,670)
Deferred gains (losses) on cash flow hedges, net of tax of $575 and $(1,287), for the three and nine months ended July 31, 2011, respectively, and of $1,461 and $1,940 for each of the same periods in fiscal 2010, respectively	(3,646)	(7,321)	5,169	(12,570)
Reclassification adjustment on deferred (gains) losses on cash flow hedges, net of tax of $401 and $(541), for the three and nine months ended July 31, 2011, respectively, and of $474 and $2,095 for each of the same periods in fiscal 2010, respectively	(1,731)	(468)	2,910	(4,216)
Foreign currency translation adjustment	3,194	(126)	6,318	(1,502)
Total	49,913	31,346	195,656	191,704
Change in unrealized gains (losses) on investments, tax	(9)	43	104	1,102
Deferred gains (losses) on cash flow hedges, tax	575	1,461	(1,287)	1,940
Reclassification adjustment on deferred (gains) losses on cash flow hedges, tax	$ 401	$ 474	$ (541)	$ 2,095

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Description of Business

9 Months Ended

Jul. 31, 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

9 Months Ended

Jul. 31, 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 plan assets, 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 Company's non-qualified deferred compensation plan assets 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 at the end of 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 (expense) income, net. The Company recorded a reduction of $0.4 million and $3.8 million during the three and nine months ended July 31, 2011, respectively, in research and development expenses due to the change in fair value of the liability for the contingent consideration. As of July 31, 2011, the fair value of the liability for contingent consideration was estimated at $4.2 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 July 31, 2011:

			Fair Value Measurement Using
Description	Total as of July 31, 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 and cash equivalents:
Money market funds	$	579,702	$	579,702	$	—	$	—
Short-term investments:
Municipal securities		148,395		—		148,395		—
Prepaid and other current assets:
Foreign currency derivative contracts		8,853		—		8,853		—
Other long-term assets:
Deferred compensation plan assets		93,253		93,253		—		—
Total assets	$	830,203	$	672,955	$	157,248	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	6,532	$	—	$	6,532	$	—
Contingent consideration		2,065		—		—		2,065
Other long-term liabilities:
Contingent consideration		2,161		—		—		2,161
Total liabilities	$	10,758	$	—	$	6,532	$	4,226

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 and cash equivalents:
Money market funds	$	487,199	$	487,199	$	—	$	—
Short-term investments:
Municipal securities		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. During the three months ended July 31, 2011, an equity investment with a cost basis of $2.4 million was sold for $3.2 million resulting in a $0.8 million gain. As of July 31, 2011, the carrying value of equity investments was $4.0 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 (expense) income, net.

Balance as of July 31, 2011			Significant Unobservable Inputs (Level 3)			Total (losses) during three months ended July 31, 2011			Total (losses) during nine months ended July 31, 2011
	(in thousands)
Non-marketable equity securities	$	92		$	92		$	0		$	(999	)

	Balance as of July 31, 2010		Significant Unobservable Inputs (Level 3)		Total (losses) during three months ended July 31, 2010			Total (losses) during nine months ended July 31, 2010
	(in thousands)
Non-marketable equity securities	$	452	$	452	$	(468	)	$	(468	)

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Financial Assets and Liabilities (Gains and Losses on Derivative Instrument Recognized in Statement of Operations) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Amount of gain (loss) recognized in OCI on derivatives (effective portion)	$ (3,715)	$ (7,057)	$ 5,091	$ (12,348)
Amount of gain (loss) reclassified from OCI (effective portion)	1,732	467	(2,910)	4,216
Foreign Exchange Contracts [Member] | Revenue [Member]
Amount of gain (loss) recognized in OCI on derivatives (effective portion)	(4,365)	(3,644)	(2,562)	(2,565)
Amount of gain (loss) reclassified from OCI (effective portion)	(1,389)	703	(6,284)	1,601
Foreign Exchange Contracts [Member] | Operating Expenses [Member]
Amount of gain (loss) recognized in OCI on derivatives (effective portion)	650	(3,413)	7,653	(9,783)
Amount of gain (loss) reclassified from OCI (effective portion)	$ 3,121	$ (236)	$ 3,374	$ 2,615

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Segment Disclosure (Tables)

9 Months Ended

Jul. 31, 2011

Segment Disclosure

Revenues Related to Operations by Geographic Areas

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Revenue:
United States	$	176,811	$	165,841	$	526,126	$	489,112
Europe		55,548		45,245		155,010		136,482
Japan		67,978		61,261		206,276		187,504
Asia-Pacific and other		86,458		64,582		257,697		192,104
Consolidated	$	386,795	$	336,929	$	1,145,109	$	1,005,202

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Net Income per Share (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Jul. 31, 2011		Jul. 31, 2010		Jul. 31, 2011		Jul. 31, 2010
Net Income per Share
Net income	$ 52,082		$ 39,327		$ 181,422		$ 211,662
Weighted-average common shares for basic net income per share	144,960		148,006		147,479		147,909
Dilutive effect of common share equivalents from equity-based compensation	3,085		3,100		4,119		3,550
Weighted-average common shares for diluted net income per share	148,045		151,106		151,598		151,459
Anti-dilutive employee stock-based awards excluded	5,469	[1]	12,188	[1]	3,593	[1]	10,995	[1]

[1] These stock options and unvested restricted stock units and restricted stock awards were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future.

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Segment Disclosure (Revenues Related to Operations by Geographic Areas) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Consolidated	$ 386,795	$ 336,929	$ 1,145,109	$ 1,005,202
United States [Member]
Consolidated	176,811	165,841	526,126	489,112
Europe [Member]
Consolidated	55,548	45,245	155,010	136,482
Japan [Member]
Consolidated	67,978	61,261	206,276	187,504
Asia-Pacific and Other [Member]
Consolidated	$ 86,458	$ 64,582	$ 257,697	$ 192,104

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Credit Facility (Details) (USD $)	9 Months Ended
	Jul. 31, 2011
Senior unsecured revolving credit facility maximum borrowing capacity	$ 300,000,000
Senior unsecured revolving credit facility financial covenants	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.
Senior unsecured revolving credit facility termination date	October 20, 2011
Spread over federal fund rate	0.50%
Outstanding borrowing under credit facility	$ 0
Debt maturity date	Oct. 20, 2011
Maximum [Member]
Spread over Eurodollar rate	0.70%
Commitment fee percentage	0.175%
Minimum [Member]
Spread over Eurodollar rate	0.50%
Commitment fee percentage	0.125%

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Goodwill and Intangible Assets

9 Months Ended

Jul. 31, 2011

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

Goodwill as of July 31, 2011 consisted of the following:

	(in thousands)
Balance at October 31, 2010	$	1,265,843
Adjustments(1)		(7,557	)
Balance at July 31, 2011	$	1,258,286

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

Intangible assets as of July 31, 2011 consisted of the following:

	Gross Assets(1)		Accumulated Amortization(1)		Net Assets
	(in thousands)
Core/developed technology	$	209,326	$	93,399	$	115,927
Customer relationships		78,400		28,029		50,371
Contract rights intangible		32,400		17,489		14,911
Covenants not to compete		2,200		2,033		167
Trademarks and trade names		6,200		2,306		3,894
In-process research and development (IPR&D)		15,025		—		15,025
Capitalized software development costs		11,245		7,801		3,444
Total	$	354,796	$	151,057	$	203,739

(1) Intangible assets as of July 31, 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 July 31,					Nine Months Ended July 31,
	2011		2010			2011		2010
	(in thousands)
Core/developed technology	$	10,901	$	7,710		$	33,877	$	23,212
Customer relationships		3,248		2,088			9,809		6,607
Contract rights intangible		2,467		589			7,967		2,264
Covenants not to compete		50		88			150		563
Trademarks and trade names		255		136			765		429
Capitalized software development costs(1)		741		741			2,221		2,223
Total	$	17,662	$	11,352		$	54,789	$	35,298

(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	$	16,959
2012		59,561
2013		46,621
2014		28,250
2015		17,104
2016 and thereafter		20,219
IPR&D(1)		15,025
Total	$	203,739

(1) IPR&D projects are estimated to be completed within two years as of July 31, 2011. Amortization will begin upon project completion or the asset will be written off upon abandonment.

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Fair Value Measures (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended	12 Months Ended
	Jul. 31, 2011	Jul. 31, 2011	Oct. 31, 2010 years
Fair Value Measures
Contingent consideration	$ 4.2	$ 4.2
Contingent consideration payable period (years)			3
Changes in Research and Development Expenses	0.4	3.8
Non-marketable equity securities, cost	2.4	2.4
Non-marketable equity securities, sold	3.2
Non-marketable equity securities, gain	0.8
Non-marketable equity securities, carrying value	4.0	4.0
Business Acquisition, Contingent Consideration, at Fair Value			$ 7.8

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Stock Repurchase Program (Tables)

9 Months Ended

Jul. 31, 2011

Stock Repurchase Program

Stock Repurchase Program

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands, except per share price)
Shares repurchased		3,830		3,476		12,439		5,755
Average purchase price per share	$	26.11	$	21.58	$	26.93	$	21.76
Aggregate purchase price	$	100,000	$	75,000	$	334,985	$	125,257
Reissuance of treasury stock		1,010		1,211		7,626		6,353

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Taxes (Narrative) (Details) (USD $)	3 Months Ended			9 Months Ended	3 Months Ended
	Jul. 31, 2011	Apr. 30, 2011	Jan. 31, 2010	Jul. 31, 2011	Jan. 31, 2010 Increase Net [Member]	Jan. 31, 2010 Avant! Corporation [Member]	Jan. 31, 2011 Synplicity, Inc. [Member]
Statutory federal income tax rate	35.00%
Tax impact of final settlement with IRS		$ 32,800,000				$ 94,300,000
Estimated potential decrease in underlying unrecognized tax benefits, minimum	0			0
Estimated potential decrease in underlying unrecognized tax benefits, maximum	85,000,000			85,000,000
Decrease in unrecognized tax benefits resulting from settlement with the IRS		35,900,000				67,800,000	4,000,000
Valuation allowance						21,600,000
Decrease in deferred tax assets due to foreign tax credit carryover			(25,200,000)
Income tax examination years		IRS for its audits of fiscal years 2006 through 2009	audit of its fiscal years 2002 through 2004	IRS for its audits of fiscal years 2006 through 2009	audit of its fiscal years 2002 through 2004	audit of its fiscal years 2002 through 2004
Non-US Examinations	0			0
Tax adjustments settlements and unusual provisions			$ 72,300,000		$ 55,400,000

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Taxes (Tables)

9 Months Ended

Jul. 31, 2011

Taxes

Provision (Benefit) for Income Taxes and Effective Tax Rates

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Income before income taxes	$	55,967		$	47,747		$	165,558		$	158,962
Provision (benefit) for income tax	$	3,885		$	8,420		$	(15,864	)	$	(52,700	)
Effective tax rate		6.9	%		17.6	%		(9.6	)%		(33.2	)%

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Financial Assets and Liabilities (Ineffective Portion and Portion Excluded from Effectiveness Testing of Derivative Hedge Gains (Losses)) (Details) (Foreign Exchange Contracts [Member], USD $) In Thousands	3 Months Ended				9 Months Ended
	Jul. 31, 2011		Jul. 31, 2010		Jul. 31, 2011		Jul. 31, 2010
Foreign Exchange Contracts [Member]
Amount of gain recognized in statement of operations on derivatives (ineffective portion)	$ 121	[1]	$ 320	[1]	$ 75	[1]	$ 278	[1]
Amount of (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)	$ (247)	[2]	$ (892)	[2]	$ (267)	[2]	$ (1,051)	[2]

[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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Net Income per Share (Tables)

9 Months Ended

Jul. 31, 2011

Net Income per Share

Reconciliation of Weighted-Average Common Shares Used to Calculate Net Income per Share

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Numerator:
Net income	$	52,082	$	39,327	$	181,422	$	211,662
Denominator:
Weighted-average common shares for basic net income per share		144,960		148,006		147,479		147,909
Dilutive effect of common share equivalents from equity-based compensation		3,085		3,100		4,119		3,550
Weighted-average common shares for diluted net income per share		148,045		151,106		151,598		151,459
Anti-dilutive employee stock-based awards excluded(1)		5,469		12,188		3,593		10,995

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Other (Expense) Income, Net

9 Months Ended

Jul. 31, 2011

Other (Expense) Income, Net

Other (Expense) Income, Net

Note 13. Other (expense) income, net

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

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Interest income	$	521		$	1,315		$	1,686		$	4,545
(Loss) gain on assets related to deferred compensation plan		(2,774	)		(2,165	)		5,845			3,662
Foreign currency exchange (loss) gain		(483	)		(1,234	)		1,732			(1,201	)
Write-down of long-term investments		—			(468	)		(999	)		(468	)
Other, net (1)		524			(494	)		768			1,571
Total	$	(2,212	)	$	(3,046	)	$	9,032		$	8,109

(1) Includes a $0.8 million gain on the sale of an equity investment during the three and nine months ended July 31, 2011, and a $2.1 million gain on the sale of an equity investment during the nine months ended July 31, 2010.

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Stock Compensation (Stock Compensation Arrangements) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Stock compensation expense before taxes	$ 13,515	$ 14,514	$ 41,430	$ 45,214
Income tax benefit	(3,671)	(3,327)	(11,252)	(10,363)
Stock compensation expense after taxes	9,844	11,187	30,178	34,851
Cost of License [Member]
Stock compensation expense before taxes	1,375	1,585	4,092	5,116
Cost of Maintenance and Service [Member]
Stock compensation expense before taxes	361	490	993	1,531
Research and Development Expense [Member]
Stock compensation expense before taxes	6,157	6,366	19,868	19,863
Sales and Marketing Expense [Member]
Stock compensation expense before taxes	2,812	3,030	7,987	9,544
General and Administrative Expense [Member]
Stock compensation expense before taxes	$ 2,810	$ 3,043	$ 8,490	$ 9,160

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Other (Expense) Income, Net (Details) (USD $)	3 Months Ended				9 Months Ended
	Jul. 31, 2011		Jul. 31, 2010		Jul. 31, 2011		Jul. 31, 2010
Other (Expense) Income, Net
Interest income	$ 521,000		$ 1,315,000		$ 1,686,000		$ 4,545,000
(Loss) gain on assets related to deferred compensation plan	(2,774,000)		(2,165,000)		5,845,000		3,662,000
Foreign currency exchange (loss) gain	(483,000)		(1,234,000)		1,732,000		(1,201,000)
Write-down of long-term investments	0		(468,000)		(999,000)		(468,000)
Other, net	524,000	[1]	(494,000)	[1]	768,000	[1]	1,571,000	[1]
Total	(2,212,000)		(3,046,000)		9,032,000		8,109,000
Gain on sale of investments	$ 800,000				$ 800,000		$ 2,100,000

[1] Includes a $0.8 million gain on the sale of an equity investment during the three and nine months ended July 31, 2011, and a $2.1 million gain on the sale of an equity investment during the nine months ended July 31, 2010.

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Liabilities

9 Months Ended

Jul. 31, 2011

Liabilities

Liabilities

Note 6. Liabilities

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

	July 31, 2011		October 31, 2010
	(in thousands)
Payroll and related benefits	$	217,484	$	216,079
Other accrued liabilities		52,099		73,230
Accounts payable		11,627		16,331
Acquisition related liabilities		3,253		7,210
Total	$	284,463	$	312,850

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

	July 31, 2011		October 31, 2010
	(in thousands)
Deferred compensation liability	$	93,253	$	83,330
Other long-term liabilities		14,596		18,555
Total	$	107,849	$	101,885

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Effect of New Accounting Pronouncements

9 Months Ended

Jul. 31, 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 June 2011, the FASB issued new guidance regarding the presentation of comprehensive income in financial statements to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance eliminates the option to present the components of other comprehensive income as part of the statement of equity. The new guidance will be effective on a retrospective basis in the first quarter of fiscal 2013 and early adoption is permitted. The Company is currently assessing the impact of adoption of the guidance on its consolidated financial statements.

In May 2011, the FASB issued new guidance for fair value measurements to achieve common fair value measurement and disclosure requirements. The new requirements are effective on a prospective basis in 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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Taxes (Provision (Benefit) for Income Taxes and Effective Tax Rates) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Taxes
Income before income taxes	$ 55,967	$ 47,747	$ 165,558	$ 158,962
Provision (benefit) for income tax	$ 3,885	$ 8,420	$ (15,864)	$ (52,700)
Effective tax rate	6.90%	17.60%	(9.60%)	(33.20%)

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Financial Assets and Liabilities (Fair Values of Derivative Instrument Designated and Non-designated as Hedging Instruments) (Details) (USD $) In Thousands	Jul. 31, 2011	Oct. 31, 2010
Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Fair values of derivative instruments designated as hedging instruments	$ 8,853	$ 5,680
Designated as Hedging Instrument [Member] | Accrued Liabilities [Member]
Fair values of derivative instruments designated as hedging instruments	6,320	11,626
Non-Designated Hedging Contracts [Member] | Accrued Liabilities [Member]
Fair values of derivative instruments designated as hedging instruments	$ 212	$ 1,554

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Stock Compensation (Tables)

9 Months Ended

Jul. 31, 2011

Stock Compensation

Stock Compensation Arrangements

	Three Months Ended July 31,						Nine Months Ended July 31,
	2011			2010			2011			2010
	(in thousands)
Cost of license	$	1,375		$	1,585		$	4,092		$	5,116
Cost of maintenance and service		361			490			993			1,531
Research and development expense		6,157			6,366			19,868			19,863
Sales and marketing expense		2,812			3,030			7,987			9,544
General and administrative expense		2,810			3,043			8,490			9,160
Stock compensation expense before taxes		13,515			14,514			41,430			45,214
Income tax benefit		(3,671	)		(3,327	)		(11,252	)		(10,363	)
Stock compensation expense after taxes	$	9,844		$	11,187		$	30,178		$	34,851

Schedule of Intrinsic Values of Equity Awards Exercised

	Three Months Ended July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Intrinsic value of awards exercised	$	4,503	$	5,696	$	32,356	$	18,663

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010
Cash flow from operating activities:
Net income	$ 181,422	$ 211,662
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	96,959	71,772
Stock compensation	41,430	45,214
Allowance for doubtful accounts	910	(851)
Write-down of long-term investments	999	468
Gain on sale of investments	(829)	(3,114)
Deferred income taxes	(4,891)	(31,297)
Net changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	6,780	(19,181)
Prepaid and other current assets	(7,560)	(7,497)
Other long-term assets	(7,681)	(2,470)
Accounts payable and accrued liabilities	(17,285)	(21,270)
Income taxes	(38,998)	(31,445)
Deferred revenue	116,034	32,153
Net cash provided by operating activities	367,290	244,144
Cash flows from investing activities:
Proceeds from sales and maturities of short-term investments	104,013	352,124
Purchases of short-term investments	(92,611)	(209,564)
Purchases of property and equipment	(42,836)	(27,593)
Cash paid for acquisitions and intangible assets, net of cash acquired	(5,382)	(137,681)
Capitalization of software development costs	(2,269)	(2,116)
Net cash used in investing activities	(39,085)	(24,830)
Cash flows from financing activities:
Principal payments on capital leases	(4,592)	(3,609)
Issuances of common stock	119,826	87,241
Purchases of treasury stock	(334,985)	(125,257)
Net cash used in financing activities	(219,751)	(41,625)
Effect of exchange rate changes on cash and cash equivalents	6,025	4,139
Net change in cash and cash equivalents	114,479	181,828
Cash and cash equivalents, beginning of year	775,407	701,613
Cash and cash equivalents, end of period	$ 889,886	$ 883,441

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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Jul. 31, 2011

Summary of Significant Accounting Policies

Principles of Consolidation

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

Fiscal Year End. The Company's fiscal year ends on the Saturday nearest to October 31. The Company's third quarter of fiscal 2011 ended on July 30, 2011. The Company's third quarter of fiscal 2010 ended on July 31, 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

Basis of Presentation. An immaterial amount within net cash provided by operating activities in the prior period unaudited condensed consolidated statements of cash flows has been reclassified to conform to the current period presentation. This reclassification had no impact on net cash provided by operating activities.

Subsequent Events

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

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Fair Value Measures (Non-marketable Equity Securities) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Non-marketable equity securities	$ 92	$ 452	$ 92	$ 452
Write-down of long-term investments	0	(468)	(999)	(468)
Significant Unobservable Inputs (Level 3) [Member]
Non-marketable equity securities	$ 92	$ 452	$ 92	$ 452

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Fair Value Measures (Tables)

9 Months Ended

Jul. 31, 2011

Fair Value Measures

Assets and Liabilities Measured at Fair Value on Recurring Basis

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 July 31, 2011:

			Fair Value Measurement Using
Description	Total as of July 31, 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 and cash equivalents:
Money market funds	$	579,702	$	579,702	$	—	$	—
Short-term investments:
Municipal securities		148,395		—		148,395		—
Prepaid and other current assets:
Foreign currency derivative contracts		8,853		—		8,853		—
Other long-term assets:
Deferred compensation plan assets		93,253		93,253		—		—
Total assets	$	830,203	$	672,955	$	157,248	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	6,532	$	—	$	6,532	$	—
Contingent consideration		2,065		—		—		2,065
Other long-term liabilities:
Contingent consideration		2,161		—		—		2,161
Total liabilities	$	10,758	$	—	$	6,532	$	4,226

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 and cash equivalents:
Money market funds	$	487,199	$	487,199	$	—	$	—
Short-term investments:
Municipal securities		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

Non-marketable Equity Securities

Balance as of July 31, 2011			Significant Unobservable Inputs (Level 3)			Total (losses) during three months ended July 31, 2011			Total (losses) during nine months ended July 31, 2011
	(in thousands)
Non-marketable equity securities	$	92		$	92		$	0		$	(999	)

	Balance as of July 31, 2010		Significant Unobservable Inputs (Level 3)		Total (losses) during three months ended July 31, 2010			Total (losses) during nine months ended July 31, 2010
	(in thousands)
Non-marketable equity securities	$	452	$	452	$	(468	)	$	(468	)

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Summary of Significant Accounting Policies

9 Months Ended

Jul. 31, 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 third quarter of fiscal 2011 ended on July 30, 2011. The Company's third quarter of fiscal 2010 ended on July 31, 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. An immaterial amount within net cash provided by operating activities in the prior period unaudited condensed consolidated statements of cash flows has been reclassified to conform to the current period presentation. This reclassification 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

9 Months Ended

Jul. 31, 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 effect 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 July 31,				Nine Months Ended July 31,
	2011		2010		2011		2010
	(in thousands)
Numerator:
Net income	$	52,082	$	39,327	$	181,422	$	211,662
Denominator:
Weighted-average common shares for basic net income per share		144,960		148,006		147,479		147,909
Dilutive effect of common share equivalents from equity-based compensation		3,085		3,100		4,119		3,550
Weighted-average common shares for diluted net income per share		148,045		151,106		151,598		151,459
Anti-dilutive employee stock-based awards excluded(1)		5,469		12,188		3,593		10,995

(1)	These stock options and unvested restricted stock units and restricted stock awards were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future.

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Stock Compensation (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Jul. 31, 2011 years
Stock Compensation
Unamortized share-based compensation expense	$ 112.2
Weighted-average period of total compensation costs to be recognized in years	2.8

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Segment Disclosure (Narrative) (Details)	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Segment Disclosure
Number of reportable operating segments	1	1	1	1
Number of major customers	1	1	1	1
Percentage of revenues contributed by major customers	10.50%	10.90%	10.50%	10.90%

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Financial Assets and Liabilities (Narrative) (Details)	9 Months Ended
	Jul. 31, 2011
Average remaining maturity of foreign currency derivatives (in months)	twelve
Shipments period using hedges (in months)	one
Maximum [Member]
Derivative Maturity Period (in months)	20
Maximum [Member] | Foreign Exchange Contracts [Member]
Forward contracts terms (in months)	36
Minimum [Member]
Derivative Maturity Period (in months)	1
Foreign Exchange Contracts Denominated in Other Currency [Member] | Non-Designated Hedging Contracts [Member]
Forward contracts terms (in months)	12
Foreign Exchange Contracts [Member]
Forward contracts terms (in months)	20
Non-Designated Hedging Contracts [Member]
Forward contracts terms (in months)	one

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Contingencies

9 Months Ended

Jul. 31, 2011

Contingencies

Contingencies

Note 15. Contingencies

The Company is subject to routine legal proceedings, as well as demands, claims and threatened litigation that 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	Jul. 31, 2011	Oct. 31, 2010
ASSETS
Cash and cash equivalents	$ 889,886	$ 775,407
Short-term investments	148,395	163,154
Total cash, cash equivalents and short-term investments	1,038,281	938,561
Accounts receivable, net of allowances of $3,060 and $2,727, respectively	175,386	181,102
Deferred income taxes	73,604	73,465
Income taxes receivable	21,477	18,425
Prepaid and other current assets	53,548	36,202
Total current assets	1,362,296	1,247,755
Property and equipment, net	159,059	148,580
Goodwill	1,258,286	1,265,843
Intangible assets, net	203,739	249,656
Long-term deferred income taxes	278,203	268,759
Other long-term assets	107,055	105,948
Total assets	3,368,638	3,286,541
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities	284,463	312,850
Accrued income taxes	3,091	8,349
Deferred revenue	694,536	600,569
Total current liabilities	982,090	921,768
Long-term accrued income taxes	98,049	128,603
Other long-term liabilities	107,849	101,885
Long-term deferred revenue	59,143	34,103
Total liabilities	1,247,131	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; 143,666 and 148,479 shares outstanding, respectively	1,437	1,485
Capital in excess of par value	1,542,225	1,541,383
Retained earnings	931,281	770,674
Treasury stock, at cost: 13,599 and 8,786 shares, respectively	(351,896)	(197,586)
Accumulated other comprehensive loss	(1,540)	(15,774)
Total stockholders' equity	2,121,507	2,100,182
Total liabilities and stockholders' equity	$ 3,368,638	$ 3,286,541

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Financial Assets and Liabilities (Schedule of Stated Maturities of Short-Term Investments) (Details) (USD $) In Thousands	Jul. 31, 2011
Financial Assets and Liabilities
Due in 1 year or less	$ 74,581
Due in 1-5 years	30,661
Due in 6-10 years	4,375
Due after 10 years	38,778
Total Fair Value	$ 148,395

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Liabilities (Accounts Payable and Accrued Liabilities) (Details) (USD $) In Thousands	Jul. 31, 2011	Oct. 31, 2010
Liabilities
Payroll and related benefits	$ 217,484	$ 216,079
Other accrued liabilities	52,099	73,230
Accounts payable	11,627	16,331
Acquisition related liabilities	3,253	7,210
Total	$ 284,463	$ 312,850

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Stock Compensation (Schedule of Intrinsic Values of Equity Awards Exercised) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Stock Compensation
Intrinsic value of awards exercised	$ 4,503	$ 5,696	$ 32,356	$ 18,663

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Goodwill and Intangible Assets (Summary of Goodwill) (Details) (USD $) In Thousands	9 Months Ended
	Jul. 31, 2011
Goodwill and Intangible Assets
Balance at October 31, 2010	$ 1,265,843
Adjustments	(7,557)	[1]
Balance at July 31, 2011	$ 1,258,286

[1] Adjustments relate to changes in estimates for acquisitions that closed in the prior fiscal year for which the purchase price allocation is still preliminary and achievement of certain milestones for an acquisition that closed prior to fiscal 2010.

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Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) (USD $) In Thousands	Jul. 31, 2011		Oct. 31, 2010
Gross Assets	$ 354,796	[1]	$ 441,810
Accumulated Amortization	151,057	[1]	192,154
Net Assets	203,739		249,656
Core/Developed Technology [Member]
Gross Assets	209,326	[1]	263,592
Accumulated Amortization	93,399	[1]	118,587
Net Assets	115,927		145,005
Customer Relationships [Member]
Gross Assets	78,400	[1]	113,020
Accumulated Amortization	28,029	[1]	55,040
Net Assets	50,371		57,980
Contract Rights Intangible [Member]
Gross Assets	32,400	[1]	30,400
Accumulated Amortization	17,489	[1]	9,522
Net Assets	14,911		20,878
Trademarks and Trade Names [Member]
Gross Assets	6,200	[1]	6,200
Accumulated Amortization	2,306	[1]	1,541
Net Assets	3,894		4,659
In-Process Research and Development (IPR&D) [Member]
Gross Assets	15,025	[1]	17,525
Net Assets	15,025		17,525
Capitalized Software Development Costs [Member]
Gross Assets	11,245	[1]	8,873
Accumulated Amortization	7,801	[1]	5,580
Net Assets	3,444		3,293
Covenants not to Compete [Member]
Gross Assets	2,200	[1]	2,200
Accumulated Amortization	2,033	[1]	1,884
Net Assets	$ 167		$ 316

[1] Intangible assets as of July 31, 2011 decreased as compared to October 31, 2010 primarily due to the retirement of fully amortized assets.

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Stock Repurchase Program (Stock Repurchase Activities) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Stock Repurchase Program
Shares repurchased	3,830	3,476	12,439	5,755
Average purchase price per share	$ 26.11	$ 21.58	$ 26.93	$ 21.76
Aggregate purchase price	$ 100,000	$ 75,000	$ 334,985	$ 125,257
Reissuance of treasury stock	1,010	1,211	7,626	6,353

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Financial Assets and Liabilities (Summary of Effect on Changes in Fair Values of Non-Designated Forward Contracts) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2011	Jul. 31, 2010	Jul. 31, 2011	Jul. 31, 2010
Financial Assets and Liabilities
Gain (loss) recorded in other (expense) income, net	$ (110)	$ (3,016)	$ 4,258	$ (4,502)