Cadence Reports Fourth Quarter and Fiscal Year 2012 Financial Results

Investors are encouraged to look at the GAAP results as the best measure of financial performance.

Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning March 15, 2013, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the business outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to any update by the company. During the Quiet Period, Cadence's representatives will not comment on Cadence's business outlook, financial results or expectations. The Quiet Period will extend until the day when Cadence's First Quarter 2013 Earnings Release is published, which is currently scheduled for April 24, 2013.

                                                                            
                        Cadence Design Systems, Inc.                        
                    Condensed Consolidated Balance Sheets                   
                   December 29, 2012 and December 31, 2011                  
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                         December 29, 2012 December 31, 2011
                                         ----------------- -----------------
                                                                            
Current assets:                                                             
  Cash and cash equivalents              $         726,357 $         601,602
  Short-term investments                           100,704             3,037
  Receivables, net of allowances of $85                                     
   and $0, respectively                             97,821           136,772
  Inventories                                       36,163            43,243
  2015 notes hedges                                303,154           215,113
  Prepaid expenses and other                       127,036            64,216
                                         ----------------- -----------------
    Total current assets                         1,391,235         1,063,983
                                                                            
Property, plant and equipment, net of                                       
 accumulated depreciation of $635,450                                       
 and $658,990, respectively                        244,439           262,517
Goodwill                                                         233,266                      192,125
Acquired  intangibles,  net  of  accumulated                                                                        
  amortization  of  $104,351  and  $91,542,                                                                            
  respectively                                                                            184,938                      173,234
Long-term  receivables                                                                7,559                        11,371
Other  assets                                                                              225,566                        58,039
                                                                                  -----------------  -----------------
Total  assets                                                          $              2,287,003  $              1,761,269
                                                                                  =================  =================
                                                                                                                                                        
Current  liabilities:                                                                                                                
    Convertible  notes                                            $                  447,011  $                  294,061
    2015  notes  embedded  conversion                                                                                        
      derivative                                                                            303,154                      215,113
    Accounts  payable  and  accrued                                                                                            
      liabilities                                                                          171,318                      165,791
    Current  portion  of  deferred  revenue                            295,787                      340,401
                                                                                  -----------------  -----------------
        Total  current  liabilities                                        1,217,270                  1,015,366
                                                                                  -----------------  -----------------
                                                                                                                                                        
Long-term  liabilities:                                                                                                            
    Long-term  portion  of  deferred  revenue                          50,529                        73,959
    Convertible  notes                                                                            -                      131,920
    Other  long-term  liabilities                                            104,033                      128,894
                                                                                  -----------------  -----------------
        Total  long-term  liabilities                                        154,562                      334,773
                                                                                  -----------------  -----------------
                                                                                                                                                        
Stockholders'  equity                                                              915,171                      411,130
                                                                                  -----------------  -----------------
Total  liabilities  and  stockholders'                                                                                  
  equity                                                                    $              2,287,003  $              1,761,269
                                                                                  =================  =================
                                                                                                                                                        
                                                Cadence  Design  Systems,  Inc.                                                
                                    Condensed  Consolidated  Income  Statements                                    
    For  the  Three  Months  and  Years  Ended  December  29,  2012  and  December  31,      
                                                                        2011                                                                        
                                    (In  thousands,  except  per  share  amounts)                                    
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                  Three  Months  Ended                            Years  Ended                
                                          --------------------------    --------------------------  
                                          December  29,    December  31,    December  29,    December  31,  
                                                  2012                    2011                    2012                    2011          
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
Revenue:                                                                                                                                        
    Product                        $        224,243    $        177,113    $        839,129    $        640,836  
    Services                                  27,072                30,308              113,995              116,692  
    Maintenance                            94,270              100,585              373,300              392,307  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
        Total  revenue                  345,585              308,006          1,326,424          1,149,835  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
Costs  and  expenses:                                                                                                                  
    Cost  of  product                    13,069                17,204                73,392                69,657  
    Cost  of  services                  19,353                20,397                72,607                81,498  
    Cost  of                                                                                                                                      
      maintenance                          11,368                11,164                45,124                44,001  
    Marketing  and                                                                                                                          
      sales                                      95,604                88,506              342,278              323,798  
    Research  and                                                                                                                            
      development                        118,382                97,024              454,085              400,745  
    General  and                                                                                                                              
      administrative                    27,712                24,143              112,076                92,863  
    Amortization  of                                                                                                                      
      acquired                                                                                                                                  
      intangibles                            3,772                  3,786                15,077                16,536  
    Restructuring  and                                                                                                                  
      other  charges                              64                        83                      113                      360  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
        Total  costs  and                                                                                                                  
          expenses                          289,324              262,307          1,114,752          1,029,458  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
            Income  from                                                                                                                      
              operations                    56,261                45,699              211,672              120,377  
                                                                                                                                                        
    Interest  expense                  (8,902)            (10,441)            (34,742)            (43,025)
    Other  income                                                                                                                            
      (expense),  net                      5,369                (2,033)              11,341                18,074  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
            Income  before                                                                                                                  
              provision                                                                                                                        
              (benefit)  for                                                                                                                
              income  taxes                52,728                33,225              188,271                95,426  
                                                                                                                                                        
    Provision                                                                                                                                  
      (benefit)  for                                                                                                                        
      income  taxes                    (261,146)              22,333            (251,677)              23,197  
                                          ------------    ------------    ------------    ------------  
                                                                                                                                                        
            Net  income          $        313,874    $          10,892    $        439,948    $          72,229  
                                          ============    ============    ============    ============  
                                                                                                                                                        
                                                                                                                                                        
Net  income  per  share                                                                                                                
  -  basic                          $              1.15    $              0.04    $              1.63    $              0.27  
                                          ============    ============    ============    ============  
                                                                                                                                                        
Net  income  per  share                                                                                                                
  -  diluted                      $              1.10    $              0.04    $              1.57    $              0.27  
                                          ============    ============    ============    ============  
                                                                                                                                                        
Weighted  average                                                                                                                        
  common  shares                                                                                                                            
  outstanding  -  basic            272,884              266,120              270,479              263,892  
                                          ============    ============    ============    ============  
                                                                                                                                                        
Weighted  average                                                                                                                        
  common  shares                                                                                                                            
  outstanding  -                                                                                                                            
  diluted                                    286,289              273,057              280,667              270,816  
                                          ============    ============    ============    ============  
                                                                                                                                                        
                                                Cadence  Design  Systems,  Inc.                                                
                            Condensed  Consolidated  Statements  of  Cash  Flows                              
                For  the  Years  Ended  December  29,  2012  and  December  31,  2011                  
                                                              (In  thousands)                                                              
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                                                                                  Years  Ended                
                                                                                                  --------------------------  
                                                                                                  December  29,    December  31,  
                                                                                                          2012                    2011          
                                                                                                  ------------    ------------  
                                                                                                                                                        
Cash  and  cash  equivalents  at  beginning  of  period  $        601,602    $        557,409  
                                                                                                  ------------    ------------  
Cash  flows  from  operating  activities:                                                                              
    Net  income                                                                                    439,948                72,229  
    Adjustments  to  reconcile  net  income  to  net                                                                
      cash  provided  by  operating  activities:                                                                      
        Depreciation  and  amortization                                            89,217                91,648  
        Amortization  of  debt  discount  and  fees                          23,513                29,266  
        Stock-based  compensation                                                      47,561                43,588  
        Gain  on  investments,  net                                                      (6,320)            (15,737)
        Non-cash  restructuring  and  other  charges                            252                      240  
        Tax  impact  of  convertible  notes  interest                                -                  8,486  
        Deferred  income  taxes                                                        (240,424)              (7,811)
        Provisions  (recoveries)  for  losses  (gains)                                                            
          on  receivables,  net                                                                    215                (6,596)
        Other  non-cash  items                                                                3,063                  3,196  
        Changes  in  operating  assets  and  liabilities,                                                        
          net  of  effect  of  acquired  businesses:                                                                    
            Receivables                                                                            45,630                76,785  
            Inventories                                                                              5,245                (6,820)
            Prepaid  expenses  and  other                                            (12,426)              20,053  
            Other  assets                                                                          (4,902)              (2,220)
            Accounts  payable  and  accrued  liabilities                  17,523              (46,950)
            Deferred  revenue                                                                (69,662)            (13,408)
            Other  long-term  liabilities                                          (22,439)              (5,607)
                                                                                                  ------------    ------------  
                Net  cash  provided  by  operating                                                                            
                  activities                                                                      315,994              240,342  
                                                                                                  ------------    ------------  
                                                                                                                                                        
Cash  flows  from  investing  activities:                                                                              
    Purchases  of  available-for-sale  securities                  (121,154)                        -  
    Proceeds  from  the  sale  of  available-for-sale                                                            
      securities                                                                                    18,338                  9,793  
    Proceeds  from  the  maturity  of  available-for-                                                            
      sale  securities                                                                            4,150                          -  
    Proceeds  from  the  sale  of  long-term                                                                              
      investments                                                                                          74                  9,791  
    Purchases  of  property,  plant  and  equipment                    (35,966)            (31,421)
    Investment  in  venture  capital  partnerships  and                                                        
      equity  investments                                                                        (250)                  (608)
    Cash  paid  in  business  combinations  and  asset                                                            
      acquisitions,  net  of  cash  acquired                                  (66,432)            (44,052)
                                                                                                  ------------    ------------  
                Net  cash  used  for  investing  activities              (201,240)            (56,497)
                                                                                                  ------------    ------------  
                                                                                                                                                        
Cash  flows  from  financing  activities:                                                                              
    Principal  payments  on  receivable  sale                                                                          
      financing                                                                                      (5,776)              (5,842)
    Payment  of  2011  notes                                                                          -            (150,000)
    Payment  of  debt  issuance  costs                                              (1,372)                        -  
    Payment  of  acquisition-related  contingent                                                                  
      consideration                                                                                    (39)                        -  
    Tax  effect  related  to  employee  stock                                                                            
      transactions  allocated  to  equity                                          6,061                  5,549  
    Proceeds  from  issuance  of  common  stock                              32,687                19,714  
    Stock  received  for  payment  of  employee  taxes                                                            
      on  vesting  of  restricted  stock                                          (15,728)            (14,225)
                                                                                                  ------------    ------------  
                Net  cash  provided  by  (used  for)                                                                          
                  financing  activities                                                    15,833            (144,804)
                                                                                                  ------------    ------------  
                                                                                                                                                        
Effect  of  exchange  rate  changes  on  cash  and  cash                                                        
  equivalents                                                                                      (5,832)                5,152  
                                                                                                  ------------    ------------  
                                                                                                                                                        
Increase  in  cash  and  cash  equivalents                                  124,755                44,193  
                                                                                                  ------------    ------------  
                                                                                                                                                        
Cash  and  cash  equivalents  at  end  of  period              $        726,357    $        601,602  
                                                                                                  ============    ============  
                                                                                                                                                        
                                                Cadence  Design  Systems,  Inc.                                                
                                                      As  of  January  30,  2013                                                      
    Impact  of  Non-GAAP  Adjustments  on  Forward  Looking  Diluted  Net  Income  Per    
                                                                        Share                                                                      
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                                                          Three  Months  Ending          Year  Ending        
                                                                                March  30,  2013        December  28,  2013  
                                                                          -------------------  -------------------
                                                                                      Forecast                        Forecast          
                                                                          -------------------  -------------------
                                                                                                                                                        
Diluted  net  income  per  share  on  a                                                                                      
  GAAP  basis                                                          $0.23  to  $0.24            $0.58  to  $0.68    
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                                              0.03                                0.09              
    Stock-based  compensation  expense                      0.05                                0.22              
    Integration  and  acquisition-                                                                                            
      related  costs                                                          0.01                                0.03              
    Amortization  of  debt  discount                            0.02                                0.08              
    Income  tax  effect  of  non-GAAP                                                                                          
      adjustments                                                            (0.15)                            (0.18)            
                                                                                                                                                        
                                                                          -------------------  -------------------
Diluted  net  income  per  share  on  a                                                                                      
  non-GAAP  basis                                                  $0.19  to  $0.20            $0.82  to  $0.92    
                                                                          ===================  ===================
                                                                                                                                                        
                                                Cadence  Design  Systems,  Inc.                                                
                                                      As  of  January  30,  2013                                                      
                Impact  of  Non-GAAP  Adjustments  on  Forward  Looking  Net  Income                
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                                                          Three  Months  Ending          Year  Ending        
                                                                                March  30,  2013        December  28,  2013  
                                                                          -------------------  -------------------
($  in  millions)                                                        Forecast                        Forecast          
                                                                          -------------------  -------------------
                                                                                                                                                        
Net  income  on  a  GAAP  basis                                $66  to  $71                  $168  to  $198      
                                                                                                                                                        
    Amortization  of  acquired                                                                                                    
      intangibles                                                                8                                      28                
    Stock-based  compensation  expense                        14                                    64                
    Integration  and  acquisition-                                                                                            
      related  costs                                                            2                                      8                  
    Amortization  of  debt  discount                              6                                      22                
    Income  tax  effect  of  non-GAAP                                                                                          
      adjustments                                                              (42)                                (51)              
                                                                                                                                                        
                                                                          -------------------  -------------------
Net  income  on  a  non-GAAP  basis                        $54  to  $59                  $239  to  $269      
                                                                          ===================  ===================
                                                                                                                                                        
                                                Cadence  Design  Systems,  Inc.                                                
                                                                  (Unaudited)                                                                
                                                                                                                                                        
Revenue  Mix  by  Geography  (%  of  Total  Revenue)                                                              
                                                                                                                                                        
                                                                        2011                                            2012                    
                                                  -------------------------  -------------------------
                GEOGRAPHY                    Q1      Q2      Q3      Q4    Year      Q1      Q2      Q3      Q4    Year
------------------------  -------------------------  -------------------------
                                                                                                                                                        
    Americas                                  44%    47%    44%    44%    45%      44%    46%    43%    45%    45%
    EMEA                                          21%    20%    21%    20%    20%      19%    20%    20%    21%    20%
    Japan                                        19%    17%    18%    17%    18%      18%    16%    17%    14%    16%
    Asia                                          16%    16%    17%    19%    17%      19%    18%    20%    20%    19%
Total                                          100%  100%  100%  100%  100%    100%  100%  100%  100%  100%
                                                                                                                                                        
Revenue  Mix  by  Product  Group  (%  of  Total  Revenue)                                                      
                                                                                                                                                        
                                                                        2011                                            2012                    
                                                  -------------------------  -------------------------
            PRODUCT  GROUP                Q1      Q2      Q3      Q4    Year      Q1      Q2      Q3      Q4    Year
------------------------  -------------------------  -------------------------
                                                                                                                                                        
    Functional                                                                                                                                
      Verification  and                                                                                                                  
      Design  IP                              28%    33%    30%    32%    30%      30%    33%    30%    30%    30%
    Digital  IC  Design                24%    21%    22%    21%    22%      23%    22%    23%    23%    23%
    Custom  IC  Design                  20%    22%    23%    23%    22%      23%    22%    24%    24%    23%
    Design  for                                                                                                                                
      Manufacturing                        8%      6%      6%      6%      7%        7%      6%      6%      6%      6%
    System  Interconnect            10%      8%      9%      8%      9%        8%      8%      9%      9%      9%
    Services  &  Other                  10%    10%    10%    10%    10%        9%      9%      8%      8%      9%
Total                                          100%  100%  100%  100%  100%    100%  100%  100%  100%  100%
                                                                                                                                                        
                                                                                                                                                        
Note:  Product  Group  total  revenue  includes  Product  and  Maintenance  revenue    
                                                                                                                                                        
 

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