v2.4.0.6

Income Taxes (Tables) | 12 Months Ended
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Oct. 31, 2012
Domestic and Foreign Components of Total Income Before Provision for Income Tax | The domestic and foreign components of the Company’s total income before provision for income taxes are as follows:
|  | Year Ended October 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
United States |  | $ | 39,855 |  |  | $ | 40,434 |  |  | $ | 57,795 |
Foreign |  |  | 161,280 |  |  |  | 178,679 |  |  |  | 140,863 |
|  | $ | 201,135 |  |  | $ | 219,113 |  |  | $ | 198,658 |
Components of (Benefit) Provision for Income Taxes | The components of the (benefit) provision for income taxes were as follows:
|  | Year Ended October 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (12,443 | ) |  | $ | (6,436 | ) |  | $ | (17,097 | )
State |  |  | (547 | ) |  |  | (2,197 | ) |  |  | 8 |
Foreign |  |  | 6,826 |  |  |  | 474 |  |  |  | 25,421 |
|  |  | (6,164 | ) |  |  | (8,159 | ) |  |  | 8,332 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 22,506 |  |  |  | (7,160 | ) |  |  | (25,156 | )
State |  |  | 14 |  |  |  | (2,456 | ) |  |  | (9,309 | )
Foreign |  |  | 2,377 |  |  |  | 15,524 |  |  |  | (12,272 | )
|  |  | 24,897 |  |  |  | 5,908 |  |  |  | (46,737 | )
Provision (Benefit) for income taxes |  | $ | 18,733 |  |  | $ | (2,251 | ) |  | $ | (38,405 | )
Rate Reconciliation Between Provision for Income Taxes and Taxes Computed at Statutory Federal Rate | The provision (benefit) for income taxes differs from the taxes computed with the statutory federal income tax rate as follows:
|  | Year Ended October 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
Statutory federal tax |  | $ | 70,397 |  |  | $ | 76,689 |  |  | $ | 69,530 |
State tax (benefit), net of federal effect |  |  | 1,078 |  |  |  | (4,988 | ) |  |  | (2,491 | )
Tax credits |  |  | (4,289 | ) |  |  | (19,042 | ) |  |  | (7,451 | )
Tax exempt income |  |  | (41 | ) |  |  | (354 | ) |  |  | (1,479 | )
Tax on foreign earnings less than U.S. statutory tax |  |  | (21,288 | ) |  |  | (28,968 | ) |  |  | (11,615 | )
Tax settlements |  |  | (36,882 | ) |  |  | (32,782 | ) |  |  | (73,045 | )
Stock based compensation |  |  | 9,016 |  |  |  | 7,817 |  |  |  | 5,336 |
Changes in valuation allowance |  |  | 10 |  |  |  | 49 |  |  |  | (21,612 | )
Other |  |  | 732 |  |  |  | (672 | ) |  |  | 4,422 |
|  | $ | 18,733 |  |  | $ | (2,251 | ) |  | $ | (38,405 | )
Components of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities were as follows:
|  | October 31, |
|  | 2012 |  |  | 2011 |
|  | (in thousands) |
Net deferred tax assets: |  |  |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |  |  |
Accruals and reserves |  | $ | 30,317 |  |  | $ | 16,274 |
Deferred revenue |  |  | 46,247 |  |  |  | 47,603 |
Deferred compensation |  |  | 39,186 |  |  |  | 36,975 |
Capitalized costs |  |  | 94,031 |  |  |  | 98,420 |
Capitalized research and development costs |  |  | 48,059 |  |  |  | 45,710 |
Stock compensation |  |  | 21,229 |  |  |  | 32,186 |
Tax loss carryovers |  |  | 73,492 |  |  |  | 36,515 |
Foreign tax credit carryovers |  |  | 10,766 |  |  |  | 23,759 |
Research and other tax credit carryovers |  |  | 88,973 |  |  |  | 74,110 |
Capital loss carryovers |  |  | — |  |  |  | 1,896 |
Other |  |  | 2,449 |  |  |  | 1,349 |
Gross deferred tax assets |  |  | 454,749 |  |  |  | 414,797 |
Valuation allowance |  |  | (26,259 | ) |  |  | (13,395 | )
Total deferred tax assets |  |  | 428,490 |  |  |  | 401,402 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  |  | 116,639 |  |  |  | 49,948 |
Undistributed earnings of foreign subsidiaries |  |  | 831 |  |  |  | 12,631 |
Total deferred tax liabilities |  |  | 117,470 |  |  |  | 62,579 |
Net deferred tax assets |  | $ | 311,020 |  |  | $ | 338,823 |
Tax Loss and Credit Carryforwards Available to Offset Future Income Tax Liabilities | The Company has the following tax loss and credit carryforwards available to offset future income tax liabilities:
Carryforward |  | Amount |  |  | Expiration Date |
|  | (in thousands) |  |  |  |
Federal net operating loss carryforward |  | $ | 177,517 |  |  |  | 2018-2031 |
Federal research credit carryforward |  |  | 93,932 |  |  |  | 2017-2032 |
Foreign tax credit carryforward |  |  | 15,598 |  |  |  | 2015-2021 |
California research credit carryforward |  |  | 95,126 |  |  |  | Indefinite |
Other state research credit carryforward |  |  | 8,021 |  |  |  | 2013-2032 |
State net operating loss carryforward |  |  | 206,203 |  |  |  | 2013-2031 |
Summary of Reconciliation of Beginning and Ending Balance of Gross Unrecognized Tax Benefit | A reconciliation of the beginning and ending balance of gross unrecognized tax benefits is summarized as follows:
|  | As of October 31, 2012 |  |  | As of October 31, 2011 |
|  | (in thousands) |
Beginning balance |  | $ | 177,893 |  |  | $ | 213,923 |
Increases in unrecognized tax benefits related to prior year tax positions |  |  | 6,053 |  |  |  | 4,188 |
Decreases in unrecognized tax benefits related to prior year tax positions |  |  | (35,010 | ) |  |  | (44,061 | )
Increases in unrecognized tax benefits related to current year tax positions |  |  | 9,431 |  |  |  | 19,922 |
Decreases in unrecognized tax benefits related to settlements with taxing authorities |  |  | (80,137 | ) |  |  | (1,258 | )
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations |  |  | (3,499 | ) |  |  | (15,200 | )
Increases in unrecognized tax benefits acquired |  |  | 35,171 |  |  |  | 350 |
Changes in unrecognized tax benefits due to foreign currency translation |  |  | (222 | ) |  |  | 29 |
|  | $ | 109,680 |  |  | $ | 177,893 |
Subsidiaries Remain Subject to Tax Examination | The Company’s subsidiaries remain subject to tax examination in the following jurisdictions:
Jurisdiction |  | Year(s) Subject to Examination
United States—Synopsys |  | Fiscal 2012
United States—Magma Design Automation |  | Fiscal years after 2008
California—Synopsys |  | Fiscal years after 2007
California—Magma Design Automation |  | Fiscal years after 2007
Hungary |  | Fiscal years after 2005
Taiwan and Japan |  | Fiscal years after 2006
Ireland |  | Fiscal years after 2007

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -Subparagraph e -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 14 -Paragraph 3 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=21917533&loc=d3e36027-109320 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (c),(d)(2)-(3) -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 + Details
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