Cadence Reports Q3 2008 Revenue of $232 Million and Completion of Accounting Investigation

Investors are encouraged to look at the GAAP results as the best measure of financial performance. For example, amortization of intangibles or in-process technology are important to consider because they may represent initial expenditures that under GAAP are reported across future fiscal periods. Likewise, stock-based compensation expense is an obligation of the company that should be considered. Restructuring charges can be triggered by acquisitions or product adjustments, as well as overall company performance within a given business environment. Losses on extinguishment of debt can be incurred on remaining convertible notes. All of these metrics are important to financial performance generally.

Although Cadence's management finds the non-GAAP measure useful in evaluating the performance of Cadence's business, reliance on this measure is limited because items excluded from such measures often have a material effect on Cadence's earnings and earnings per share calculated in accordance with GAAP. Therefore, Cadence's management typically uses the non-GAAP earnings and earnings per share measures, in conjunction with the GAAP earnings and earnings per share measures, to address these limitations.

Cadence's management believes that presenting the non-GAAP measure of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company's business, which Cadence's management uses in its own evaluation of performance, and an additional baseline for assessing the future earnings potential of the company. While the GAAP results are more complete, Cadence's management prefers to allow investors to have this supplemental measure since it may provide additional insights into the company's financial results.

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 Web site.

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 December 19, 2008, 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 Fourth Quarter and Fiscal Year 2008 Earnings Release is published, which is currently scheduled for February 4, 2009.




                       Cadence Design Systems, Inc.
                  Condensed Consolidated Balance Sheets
                 September 27, 2008 and December 29, 2007
                              (In thousands)
                                (Unaudited)


                                                September 27, December 29,
                                                    2008          2007
                                                ------------- -------------

Current Assets:
   Cash and cash equivalents                    $     551,753 $   1,062,920
   Short-term investments                               6,068        15,193
   Receivables, net of allowances of $3,355 and
    $2,895, respectively                              278,458       326,211
   Inventories                                         25,545        31,003
   Prepaid expenses and other                          84,112        94,236
                                                ------------- -------------
      Total current assets                            945,936     1,529,563

Property, plant and equipment, net of
 accumulated depreciation of $636,305 and
 $624,680, respectively                               359,196       339,463
Goodwill                                            1,315,217     1,310,211
Acquired intangibles, net                             101,409       127,072
Installment contract receivables                      170,503       238,010
Other assets                                          356,527       326,831
                                                ------------- -------------
Total Assets                                    $   3,248,788 $   3,871,150
                                                ============= =============

Current Liabilities:
   Convertible notes                            $           - $     230,385
   Accounts payable and accrued liabilities           259,062       289,934
   Current portion of deferred revenue                  245,901              265,168
                                                                                                -------------  -------------
            Total  current  liabilities                                              504,963              785,487
                                                                                                -------------  -------------

Long-Term  Liabilities:
      Long-term  portion  of  deferred  revenue                            124,703              136,655
      Convertible  notes                                                                    500,178              500,000
      Other  long-term  liabilities                                                413,993              368,942
                                                                                                -------------  -------------
            Total  long-term  liabilities                                      1,038,874          1,005,597
                                                                                                -------------  -------------

Stockholders'  Equity                                                                1,704,951          2,080,066
                                                                                                -------------  -------------
Total  Liabilities  and  Stockholders'  Equity            $      3,248,788  $      3,871,150
                                                                                                =============  =============




                                              Cadence  Design  Systems,  Inc.
                          Condensed  Consolidated  Statements  of  Operations
                                  For  the  Quarters  and  Nine  Months  Ended
                                September  27,  2008  and  September  29,  2007
                                  (In  thousands,  except  per  share  amounts)
                                                                (Unaudited)

                                                                Quarters  Ended                Nine  Months  Ended
                                                        ----------------------    ----------------------
                                                          Sept.  27,      Sept.  29,      Sept.  27,      Sept.  29,
                                                              2008                2007                2008                2007
                                                        ----------    ----------    ----------    ----------
Revenue:
      Product                                    $    107,572    $    273,799    $    422,365    $    775,496
      Services                                          32,873            31,225            98,763            95,963
      Maintenance                                    92,043            95,900          290,151          285,611
                                                        ----------    ----------    ----------    ----------

            Total  revenue                        232,488          400,924          811,279      1,157,070
                                                        ----------    ----------    ----------    ----------

Costs  and  Expenses:
      Cost  of  product                            11,829            13,823            39,241            42,302
      Cost  of  services                          25,677            23,364            78,083            70,421
      Cost  of  maintenance                    13,910            15,217            42,889            45,635
      Marketing  and  sales                    91,075            97,163          274,016          297,924
      Research  and  development        112,486          125,391          357,929          365,418
      General  and
        administrative                            32,937            40,747          105,608          123,166
      Amortization  of  acquired
        intangibles                                    5,626              4,739            17,206            13,661
      Restructuring  and  other
        charges  (credits)                      48,120            (7,066)          47,765            (9,584)
      Write-off  of  acquired
        in-process  technology                        -              2,678                  600              2,678
                                                        ----------    ----------    ----------    ----------

            Total  costs  and
              expenses                                341,660          316,056          963,337          951,621
                                                        ----------    ----------    ----------    ----------

                Income  (loss)  from
                  operations                      (109,172)          84,868        (152,058)        205,449

      Interest  expense                          (3,180)          (2,849)          (9,055)          (9,373)
      Other  income  (expense),
        net                                                  (7,714)          14,201            (3,701)          47,938
                                                        ----------    ----------    ----------    ----------

                Income  (loss)
                  before  provision
                  for  income  taxes          (120,066)          96,220        (164,814)        244,014

      Provision  for  income
        taxes                                              49,000            23,488            50,269            67,265
                                                        ----------    ----------    ----------    ----------

                Net  income  (loss)      $  (169,066)  $      72,732    $  (215,083)  $    176,749
                                                        ==========    ==========    ==========    ==========


Basic  net  income  (loss)  per
  share                                            $        (0.67)  $          0.27    $        (0.84)  $          0.65
                                                        ==========    ==========    ==========    ==========

Diluted  net  income  (loss)
  per  share                                    $        (0.67)  $          0.24    $        (0.84)  $          0.60
                                                        ==========    ==========    ==========    ==========

Weighted  average  common
  shares  outstanding  -  basic        252,915          272,977          256,119          272,354
                                                        ==========    ==========    ==========    ==========

Weighted  average  common
  shares  outstanding  -
  diluted                                              252,915          299,506          256,119          297,783
                                                        ==========    ==========    ==========    ==========




                                              Cadence  Design  Systems,  Inc.
                            Condensed  Consolidated  Statements  of  Cash  Flows
        For  the  Nine  Months  Ended  September  27,  2008  and  September  29,  2007
                                                            (In  thousands)
                                                                (Unaudited)


                                                                                                        Nine  Months  Ended
                                                                                              ---------------------------
                                                                                              September  27,    September  29,
                                                                                                        2008                    2007
                                                                                              ------------      ------------


Cash  and  Cash  Equivalents  at  Beginning  of
  Period                                                                                $    1,062,920      $        934,342
                                                                                              ------------      ------------
Cash  Flows  from  Operating  Activities:
      Net  income  (loss)                                                              (215,083)              176,749
      Adjustments  to  reconcile  net  income  (loss)
        to  net  cash  provided  by  operating
        activities:
            Depreciation  and  amortization                                    97,719                  96,798
            Stock-based  compensation                                              57,678                  78,828
            Equity  in  loss  from  investments,  net                            823                    2,504
            (Gain)  loss  on  investments,  net                                11,440                (16,608)
            (Gain)  loss  on  sale  and  leaseback  of  land
              and  buildings                                                                        350                (12,606)
            Write-down  of  investment  securities                        10,666                    2,550
            Write-off  of  acquired  in-process
              technology                                                                              600                    2,678
            Non-cash  restructuring  and  other  charges
              (credits)                                                                                222                  (7,106)
            Tax  benefit  of  call  options                                          7,034                    7,036
            Deferred  income  taxes                                                  (11,020)                  4,848
            Proceeds  from  the  sale  of  receivables,
              net                                                                                      48,124                163,549
            Provisions  (recoveries)  for  losses
              (gains)  on  trade  accounts  receivable  and
              sales  returns                                                                        383                      (975)
            Other  non-cash  items                                                      (1,258)                  8,525
            Changes  in  operating  assets  and
              liabilities,  net  of  effect  of  acquired
              businesses:
                  Receivables                                                                  21,489                    9,053
                  Installment  contract  receivables                        46,198              (273,301)
                  Inventories                                                                    5,486                      (681)
                  Prepaid  expenses  and  other                                    (3,421)              (23,229)
                  Other  assets                                                                (1,849)                (2,027)
                  Accounts  payable  and  accrued
                    liabilities                                                              (41,582)              (35,516)
                  Deferred  revenue                                                      (32,243)                  9,411
                  Other  long-term  liabilities                                  35,972                  18,448
                                                                                              ------------      ------------
                        Net  cash  provided  by  operating
                          activities                                                            37,728                208,928
                                                                                              ------------      ------------

Cash  Flows  from  Investing  Activities:
      Proceeds  from  the  sale  of  available-for-sale
        securities                                                                              53,783                    6,468
      Purchases  of  available-for-sale  securities              (62,447)                          -
      Proceeds  from  the  sale  of  long-term
        investments                                                                              3,250                    6,323
      Proceeds  from  the  sale  of  property,  plant
        and  equipment                                                                                  -                  46,500
      Purchases  of  property,  plant  and  equipment              (81,112)              (57,405)
      Purchases  of  software  licenses                                        (1,199)                          -
      Investment  in  venture  capital  partnerships
        and  equity  investments                                                      (4,053)                (3,214)
      Cash  paid  in  business  combinations  and  asset
        acquisitions,  net  of  cash  acquired,  and
        acquisition  of  intangibles                                            (20,621)              (74,117)
                                                                                              ------------      ------------
                        Net  cash  used  for  investing
                          activities                                                        (112,399)              (75,445)
                                                                                              ------------      ------------

Cash  Flows  from  Financing  Activities:
      Proceeds  from  receivable  sale  financing                      17,970                            -
      Principal  payments  on  term  loan                                                -                (28,000)
      Payment  of  convertible  notes  due  2023                      (230,207)                          -
      Tax  benefit  from  employee  stock  transactions                  427                  20,727
      Proceeds  from  issuance  of  common  stock                        48,116                249,006
      Stock  received  for  payment  of  employee  taxes
        on  vesting  of  restricted  stock                                      (3,693)              (11,735)
      Purchases  of  treasury  stock                                          (273,950)            (372,416)
      Other                                                                                                    -                    8,558
                                                                                              ------------      ------------
                        Net  cash  used  for  financing
                          activities                                                        (441,337)            (133,860)
                                                                                              ------------      ------------

Effect  of  exchange  rate  changes  on  cash  and
  cash  equivalents                                                                          4,841                    1,622
                                                                                              ------------      ------------

Increase  (decrease)  in  cash  and  cash
  equivalents                                                                              (511,167)                  1,245
                                                                                              ------------      ------------

Cash  and  Cash  Equivalents  at  End  of  Period          $        551,753      $        935,587
                                                                                              ============      ============




                                              Cadence  Design  Systems,  Inc.
                                                  As  of  December  10,  2008
        Impact  of  Non-GAAP  Adjustments  on  Forward  Looking  Diluted  Net  Loss
                                                                  Per  Share
                                                                (Unaudited)


                                                                          Quarter  Ended                  Year  Ended
                                                                        January  3,  2009            January  3,  2009
                                                                      -----------------        -----------------
                                                                                Forecast                          Forecast
                                                                      -----------------        -----------------

Diluted  net  loss  per  share  on  a
  GAAP  basis                                                $(0.29)  to  $(0.27)      $(1.13)  to  $(1.11)

      Amortization  of  acquired
        intangibles                                                      0.04                                  0.17
      Stock-based  compensation
        expense                                                              0.11                                  0.34
      Non-qualified  deferred
        compensation  expenses
        (credits)                                                                -                                (0.01)
      Costs  related  to  Cadence's
        withdrawn  proposal  to  acquire
        Mentor  Graphics  Corporation                            -                                  0.01
      Restructuring  and  other
        charges                                                              0.07                                  0.25
      Write-off  of  acquired
        in-process  technology                                        -                                        -
      Integration  and
        acquisition-related  costs                                -                                        -
      Equity  in  losses  from
        investments,  write-down  of
        investments,  gains  and  losses
        on  non-qualified  deferred
        compensation  plan  assets                                  -                                  0.06
      Loss  on  sale  of  Mentor
        Graphics  Corporation  shares                            -                                  0.04
      Foreign  currency  charge
        related  to  liquidation  of
        subsidiary                                                        0.04                                  0.04
      Income  tax  related  to
        repatriation  of  foreign
        earnings                                                                  -                                  0.28
      Income  tax  effect  of  non-GAAP
        adjustments                                                    (0.03)                              (0.11)

                                                                      -----------------        -----------------
Diluted  net  loss  per  share  on  a
  non-GAAP  basis                                        $(0.06)  to  $(0.04)      $(0.06)  to  $(0.04)
                                                                      =================        =================




                                              Cadence  Design  Systems,  Inc.
                                                  As  of  December  10,  2008
              Impact  of  Non-GAAP  Adjustments  on  Forward  Looking  Net  Loss
                                                              (Unaudited)


                                                                          Quarter  Ended                  Year  Ended
                                                                        January  3,  2009            January  3,  2009
                                                                      -----------------        -----------------
($  in  Millions)                                                  Forecast                          Forecast
                                                                      -----------------        -----------------

Net  loss  on  a  GAAP  basis                      $  (74)    to    $  (68)      $  (289)  to  $  (283)

      Amortization  of  acquired
        intangibles                                                          10                                      44
      Stock-based  compensation
        expense                                                                  28                                      86
      Non-qualified  deferred
        compensation  expenses
        (credits)                                                                -                                      (3)
      Costs  related  to  Cadence's
        withdrawn  proposal  to  acquire
        Mentor  Graphics  Corporation                            -                                        3
      Restructuring  and  other
        charges                                                                  17                                      65
      Write-off  of  acquired
        in-process  technology                                        -                                        1
      Integration  and
        acquisition-related  costs                                -                                        1
      Equity  in  losses  from
        investments,  write-down  of
        investments,  gains  and  losses
        on  non-qualified  deferred
        compensation  plan  assets                                  -                                      16
      Loss  on  sale  of  Mentor
        Graphics  Corporation  shares                            -                                        9
      Foreign  currency  charge
        related  to  liquidation  of
        subsidiary                                                            10                                      10
      Income  tax  related  to
        repatriation  of  foreign
        earnings                                                                  -                                      71
      Income  tax  effect  of  non-GAAP
        adjustments                                                          (7)                                  (29)

                                                                      -----------------        -----------------
Net  loss  on  a  non-GAAP  basis              $  (16)    to    $  (10)      $  (15)    to      $  (9)
                                                                      =================        =================




                                              Cadence  Design  Systems,  Inc.
                                                                (Unaudited)


Revenue  Mix  by  Geography  (%  of  Total  Revenue)

                                                                    2006                                            2007
                                                ========================    ========================
GEOGRAPHY                              Q1      Q2      Q3      Q4      Year    Q1      Q2      Q3      Q4      Year
                                                ===    ===    ===    ===    ====    ===    ===    ===    ===    ====

      Americas                            51%    48%    54%    60%      54%    48%    52%    41%    50%      49%
      Europe                                19%    18%    22%    19%      19%    15%    17%    25%    17%      18%
      Japan                                  21%    24%    13%    10%      17%    27%    14%    22%    22%      21%
      Asia                                      9%    10%    11%    11%      10%    10%    17%    12%    11%      12%
Total                                      100%  100%  100%  100%    100%  100%  100%  100%  100%    100%


                                                                      2008
                                                =========================
GEOGRAPHY                                    Q1                Q2              Q3
                                                ========    ========    =====
                                              (Restated)(Restated)

      Americas                                43%              48%            43%
      Europe                                    24%              21%            23%
      Japan                                      21%              19%            20%
      Asia                                        12%              12%            14%
Total                                          100%            100%          100%



Revenue  Mix  by  Product  Group  (%  of  Total  Revenue)

                                                                    2006                                            2007
                                                ========================    ========================
PRODUCT  GROUP                      Q1      Q2      Q3      Q4      Year    Q1      Q2      Q3      Q4      Year
                                                ===    ===    ===    ===    ====    ===    ===    ===    ===    ====

      Functional
        Verification                  26%    22%    24%    23%      24%    24%    24%    20%    26%      24%
      Digital  IC  Design          20%    26%    19%    26%      24%    26%    29%    27%    27%      27%
      Custom  IC  Design            27%    27%    30%    26%      27%    24%    24%    32%    25%      27%
      Design  for
        Manufacturing                  8%      8%      8%      6%        7%      7%      7%      6%      6%        6%
      System  Interconnect        9%      8%    10%    11%        9%    10%      8%      7%      9%        8%
      Services  &  Other            10%      9%      9%      8%        9%      9%      8%      8%      7%        8%
Total                                      100%  100%  100%  100%    100%  100%  100%  100%  100%    100%


                                                                      2008
                                                =========================
PRODUCT  GROUP                            Q1                Q2              Q3
                                                ========    ========    =====
                                              (Restated)(Restated)

      Functional
        Verification                      22%              25%            22%
      Digital  IC  Design              24%              24%            20%
      Custom  IC  Design                26%              23%            26%
      Design  for
        Manufacturing                      5%                7%              7%
      System  Interconnect          11%              10%            11%
      Services  &  Other                12%              11%            14%
Total                                          100%            100%          100%


Note:  Product  Group  total  revenue  includes  Product  +  Maintenance




                                              Cadence  Design  Systems,  Inc.
        Impact  of  Restatement  Adjustments  on  Previously  Reported  Condensed
                                    Consolidated  Statements  of  Operations
                              For  the  Quarter  Ended  March  29,  2008  and  the
                                Quarter  and  Six  Months  Ended  June  28,  2008
                                (In  thousands,  except  per  share  amounts)
                                                            (Unaudited)



                                                                                    Quarter        Quarter        Six  Months
                                                                                      Ended            Ended              Ended
                                                                                  March  29,      June  28,        June  28,
                                                                                      2008                2008                2008
                                                                                ----------    ----------    ----------

Total  revenue  as  previously  reported        $    287,189    $    329,478    $    616,667
Restatement  adjustments  (A),(B),(C)                (16,439)        (21,437)        (37,876)
                                                                                ----------    ----------    ----------
Total  revenue  as  restated                              $    270,750    $    308,041    $    578,791
                                                                                ==========    ==========    ==========


Total  costs  and  expenses  as  previously
  reported                                                              $    314,192    $    310,092    $    624,284
Restatement  adjustments  (B),(D)                                    -            (2,607)          (2,607)
                                                                                ----------    ----------    ----------
Total  costs  and  expenses  as  restated        $    314,192    $    307,485    $    621,677
                                                                                ==========    ==========    ==========


Provision  (benefit)  for  income  taxes  as
  previously  reported                                        $      (5,488)  $        9,760    $        4,272
Restatement  adjustments  (E)                                  (5,963)            2,960            (3,003)
                                                                                ----------    ----------    ----------
Provision  (benefit)  for  income  taxes  as
  restated                                                              $    (11,451)  $      12,720    $        1,269
                                                                                ==========    ==========    ==========


Net  income  (loss)  as  previously
  reported                                                              $    (18,747)  $        4,996    $    (13,751)
Restatement  adjustments                                        (10,476)        (21,790)        (32,266)
                                                                                ----------    ----------    ----------
Net  loss  as  restated                                        $    (29,223)  $    (16,794)  $    (46,017)
                                                                                ==========    ==========    ==========


Basic  net  income  (loss)  per  share  as
  previously  reported                                        $        (0.07)  $          0.02    $        (0.05)
Restatement  adjustments                                            (0.04)            (0.09)            (0.13)
                                                                                ----------    ----------    ----------
Basic  net  loss  per  share  as  restated        $        (0.11)  $        (0.07)  $        (0.18)
                                                                                ==========    ==========    ==========


Diluted  net  income  (loss)  per  share  as
  previously  reported                                        $        (0.07)  $          0.02    $        (0.05)
Restatement  adjustments                                            (0.04)            (0.09)            (0.13)
                                                                                ----------    ----------    ----------
Diluted  net  loss  per  share  as  restated    $        (0.11)  $        (0.07)  $        (0.18)
                                                                                ==========    ==========    ==========


Notes:

(A)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  under  which  $24.8  million  of  Product  revenue  was  recognized
        during  the  first  quarter  of  2008  and  $1.0  million  of  Maintenance
        revenue  was  recognized  during  the  second  quarter  of  2008,  but  should
        be  recognized  during  the  term  of  the  arrangement,  beginning  in  the
        fourth  quarter  of  2008.

(B)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  identified  during  Cadence's  remediation  efforts  under  which
        $12.0  million  of  Product  revenue  was  recognized  during  the  second
        quarter  of  2008,  but  should  be  recognized  during  the  term  of  the
        arrangement,  beginning  in  the  third  quarter  of  2008.    As  a  result  of
        reversing  this  $12.0  million  of  Product  revenue  that  was  previously
        recognized,  Cadence  also  decreased  Cost  of  product  by  $0.1  million  for
        the  second  quarter  of  2008.

(C)  Because  Cadence  is  restating  its  financial  results  for  the  first  and
        second  quarters  of  2008  for  the  revenue  arrangements  described  in
        Notes  (A)  and  (B),  Cadence  has  also  recorded  two  other  Product  revenue
        adjustments,  in  the  aggregate  amount  of  $8.4  million,  that  were
        previously  disclosed  in  Cadence's  Quarterly  Report  on  Form  10-Q  for
        the  quarter  ended  June  28,  2008,  initially  filed  with  the  SEC  on
        July  29,  2008.  Cadence  determined  that  Product  revenue  for  these  two
        contracts  totaling  $8.4  million  recognized  during  the  second  quarter
        of  2008  should  have  been  recognized  during  the  first  quarter  of  2008.

(D)  This  restatement  adjustment  reduces  Cost  of  product  for  a  hardware
        arrangement  during  the  second  quarter  of  2008  by  $2.5  million.

(E)  This  restatement  adjustment  represents  the  tax  effect  of  the
        restatement  adjustments  noted  above.




                                              Cadence  Design  Systems,  Inc.
        Impact  of  Restatement  Adjustments  on  Previously  Reported  Condensed
                                    Consolidated  Statements  of  Operations
                                      For  the  Quarter  Ended  March  29,  2008
                                  (In  thousands,  except  per  share  amounts)
                                                            (Unaudited)


                                                                                            Quarter  Ended
                                                                                            March  29,  2008
                                                                ------------------------------------------
                                                                        As
                                                                Previously    Restatement                          As
                                                                  Reported      Adjustments                    Restated
                                                                ----------    -----------                    ---------
Revenue
      Product                                            $    156,193    $      (16,439)  (A),(B)  $  139,754
      Services                                                  32,196                        -                          32,196
      Maintenance                                            98,800                        -                          98,800
                                                                ----------    -----------                    ---------

            Total  revenue                                287,189            (16,439)                      270,750
                                                                ----------    -----------                    ---------

Costs  and  Expenses
      Cost  of  product                                    12,001                        -                          12,001
      Cost  of  services                                  25,193                        -                          25,193
      Cost  of  maintenance                            14,540                        -                          14,540
      Marketing  and  sales                            93,034                        -                          93,034
      Research  and  development                125,356                        -                        125,356
      General  and  administrative              37,708                        -                          37,708
      Amortization  of  acquired
        intangibles                                            5,760                        -                            5,760
      Write-off  of  acquired
        in-process  technology                            600                        -                                600
                                                                ----------    -----------                    ---------

            Total  costs  and  expenses          314,192                        -                        314,192
                                                                ----------    -----------                    ---------

                  Loss  from  operations            (27,003)          (16,439)                      (43,442)

      Interest  expense                                  (2,995)                      -                          (2,995)
      Other  income,  net                                  5,763                        -                            5,763
                                                                ----------    -----------                    ---------

                  Loss  before  benefit
                    for  income  taxes                  (24,235)          (16,439)                      (40,674)

      Benefit  for  income  taxes                  (5,488)            (5,963)  (C)              (11,451)
                                                                ----------    -----------                    ---------

                  Net  loss                              $    (18,747)  $      (10,476)                  $  (29,223)
                                                                ==========    ===========                    =========


Basic  net  loss  per  share                $        (0.07)                                            $      (0.11)
                                                                ==========                                              =========

Diluted  net  loss  per  share            $        (0.07)                                            $      (0.11)
                                                                ==========                                              =========

Weighted  average  common  shares
  outstanding  -  basic                              262,825                                                  262,825
                                                                ==========                                              =========

Weighted  average  common  shares
  outstanding  -  diluted                          262,825                                                  262,825
                                                                ==========                                              =========


Notes:

(A)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  under  which  $24.8  million  of  Product  revenue  was  recognized
        during  the  first  quarter  of  2008,  but  should  be  recognized  during  the
        term  of  the  arrangement,  beginning  in  the  fourth  quarter  of  2008.

(B)  Because  Cadence  is  restating  its  financial  results  for  the  first
        quarter  of  2008  for  the  revenue  arrangement  described  in  Note  (A),
        Cadence  has  also  recorded  two  other  Product  revenue  adjustments,  in  the
        aggregate  amount  of  $8.4  million,  that  were  previously  disclosed  in
        Cadence's  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  June  28,
        2008,  initially  filed  with  the  SEC  on  July  29,  2008.  Cadence  determined
        that  Product  revenue  for  these  two  contracts  totaling  $8.4  million
        recognized  during  the  second  quarter  of  2008  should  have  been
        recognized  during  the  first  quarter  of  2008.

(C)  This  restatement  adjustment  represents  the  tax  effect  of  the
        restatement  adjustments  noted  above.




                                              Cadence  Design  Systems,  Inc.
        Impact  of  Restatement  Adjustments  on  Previously  Reported  Condensed
                                    Consolidated  Statements  of  Operations
                                        For  the  Quarter  Ended  June  28,  2008
                                  (In  thousands,  except  per  share  amounts)
                                                                (Unaudited)


                                                                                            Quarter  Ended
                                                                                            June  28,  2008
                                                                ------------------------------------------
                                                                        As
                                                                Previously    Restatement                          As
                                                                  Reported      Adjustments                    Restated
                                                                ----------    -----------                    ---------
Revenue
      Product                                            $    195,444    $(20,405)  (A),(B),(C)  $175,039
      Services                                                  33,694                  -                                33,694
      Maintenance                                          100,340        (1,032)  (A)                      99,308
                                                                ----------    --------                            --------

            Total  revenue                                329,478      (21,437)                            308,041
                                                                ----------    --------                            --------

Costs  and  Expenses
      Cost  of  product                                    18,018        (2,607)  (B),(D)              15,411
      Cost  of  services                                  27,213                  -                                27,213
      Cost  of  maintenance                            14,439                  -                                14,439
      Marketing  and  sales                            89,907                  -                                89,907
      Research  and  development                120,087                  -                              120,087
      General  and  administrative              34,963                  -                                34,963
      Amortization  of  acquired
        intangibles                                            5,820                  -                                  5,820
      Restructuring  and  other
        charges  (credits)                                  (355)                -                                    (355)
                                                                ----------    --------                            --------

            Total  costs  and  expenses          310,092        (2,607)                            307,485
                                                                ----------    --------                            --------

                  Income  from  operations          19,386      (18,830)                                    556

      Interest  expense                                  (2,880)                -                                (2,880)
      Other  expense,  net                              (1,750)                -                                (1,750)
                                                                ----------    --------                            --------

                  Income  (loss)  before
                    provision  for  income
                    taxes                                          14,756      (18,830)                              (4,074)

      Provision  for  income  taxes                9,760          2,960    (E)                      12,720
                                                                ----------    --------                            --------

                  Net  income  (loss)            $        4,996    $(21,790)                          $(16,794)
                                                                ==========    ========                            ========

Basic  net  income  (loss)  per
  share                                                    $          0.02                                                $    (0.07)
                                                                ==========                                                ========

Diluted  net  income  (loss)  per
  share                                                    $          0.02                                                $    (0.07)
                                                                ==========                                                ========

Weighted  average  common  shares
  outstanding  -  basic                              252,629                                                  252,629
                                                                ==========                                                ========

Weighted  average  common  shares
  outstanding  -  diluted                          269,060                                                  252,629
                                                                ==========                                                ========

Notes:

(A)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  under  which  $24.8  million  of  Product  revenue  was  recognized
        during  the  first  quarter  of  2008  and  $1.0  million  of  Maintenance
        revenue  was  recognized  during  the  second  quarter  of  2008,  but  should
        be  recognized  during  the  term  of  the  arrangement,  beginning  in  the
        fourth  quarter  of  2008.

(B)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  identified  during  Cadence's  remediation  efforts  under  which
        $12.0  million  of  Product  revenue  was  recognized  during  the  second
        quarter  of  2008,  but  should  be  recognized  during  the  term  of  the
        arrangement,  beginning  in  the  third  quarter  of  2008.    As  a  result  of
        reversing  this  $12.0  million  of  Product  revenue  that  was  previously
        recognized,  Cadence  also  decreased  Cost  of  product  by  $0.1  million  for
        the  second  quarter  of  2008.

(C)  Because  Cadence  is  restating  its  financial  results  for  the  second
        quarter  of  2008  for  the  revenue  arrangements  described  in  Notes  (A)  and
        (B),  Cadence  has  also  recorded  two  other  Product  revenue  adjustments,
        in  the  aggregate  amount  of  $8.4  million,  that  were  previously  disclosed
        in  Cadence's  Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  June
        28,  2008,  initially  filed  with  the  SEC  on  July  29,  2008.  Cadence
        determined  that  Product  revenue  for  these  two  contracts  totaling  $8.4
        million  recognized  during  the  second  quarter  of  2008  should  have  been
        recognized  during  first  quarter  of  2008.

(D)  This  restatement  adjustment  reduces  Cost  of  product  for  a  hardware
        arrangement  during  the  second  quarter  of  2008  by  $2.5  million.

(E)  This  restatement  adjustment  represents  the  tax  effect  of  the
        restatement  adjustments  noted  above.




                                              Cadence  Design  Systems,  Inc.
        Impact  of  Restatement  Adjustments  on  Previously  Reported  Condensed
                                    Consolidated  Statements  of  Operations
                                    For  the  Six  Months  Ended  June  28,  2008
                                  (In  thousands,  except  per  share  amounts)
                                                            (Unaudited)


                                                                                          Six  Months  Ended
                                                                                            June  28,  2008
                                                                ------------------------------------------
                                                                        As
                                                                Previously    Restatement                          As
                                                                  Reported      Adjustments                    Restated
                                                                ----------    -----------                    ---------
Revenue
      Product                                            $    351,637    $      (36,844)  (A),(B)  $  314,793
      Services                                                  65,890                        -                          65,890
      Maintenance                                          199,140              (1,032)  (A)              198,108
                                                                ----------    -----------                    ---------

            Total  revenue                                616,667            (37,876)                      578,791
                                                                ----------    -----------                    ---------

Costs  and  Expenses
      Cost  of  product                                    30,019              (2,607)  (B),(C)        27,412
      Cost  of  services                                  52,406                        -                          52,406
      Cost  of  maintenance                            28,979                        -                          28,979
      Marketing  and  sales                          182,941                        -                        182,941
      Research  and  development                245,443                        -                        245,443
      General  and  administrative              72,671                        -                          72,671
      Amortization  of  acquired
        intangibles                                          11,580                        -                          11,580
      Restructuring  and  other
        charges  (credits)                                  (355)                      -                              (355)
      Write-off  of  acquired
        in-process  technology                            600                        -                                600
                                                                ----------    -----------                    ---------

            Total  costs  and  expenses          624,284              (2,607)                      621,677
                                                                ----------    -----------                    ---------

                  Loss  from  operations              (7,617)          (35,269)                      (42,886)

      Interest  expense                                  (5,875)                      -                          (5,875)
      Other  income,  net                                  4,013                        -                            4,013
                                                                ----------    -----------                    ---------

                  Loss  before  provision
                    for  income  taxes                    (9,479)          (35,269)                      (44,748)

      Provision  for  income  taxes                4,272              (3,003)  (D)                  1,269
                                                                ----------    -----------                    ---------

                  Net  loss                              $    (13,751)  $      (32,266)                  $  (46,017)
                                                                ==========    ===========                    =========


Basic  net  loss  per  share                $        (0.05)                                            $      (0.18)
                                                                ==========                                              =========

Diluted  net  loss  per  share            $        (0.05)                                            $      (0.18)
                                                                ==========                                              =========

Weighted  average  common  shares
  outstanding  -  basic                              257,724                                                  257,724
                                                                ==========                                              =========

Weighted  average  common  shares
  outstanding  -  diluted                          257,724                                                  257,724
                                                                ==========                                              =========


Notes:

(A)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  under  which  $24.8  million  of  Product  revenue  and  $1.0
        million  of  Maintenance  revenue  was  recognized  during  the  six  months
        ended  June  28,  2008,  but  should  be  recognized  during  the  term  of
        the  arrangement,  beginning  in  the  fourth  quarter  of  2008.

(B)  This  restatement  adjustment  corrects  revenue  recognition  for  one
        arrangement  identified  during  Cadence's  remediation  efforts  under  which
        $12.0  million  of  Product  revenue  was  recognized  during  the  six  months
        ended  June  28,  2008,  but  should  be  recognized  during  the  term  of
        the  arrangement,  beginning  in  the  third  quarter  of  2008.    As  a  result
        of  reversing  this  $12.0  million  of  Product  revenue  that  was  previously
        recognized,  Cadence  also  decreased  Cost  of  product  by  $0.1  million  for
        the  six  months  ended  June  28,  2008.

(C)  This  restatement  adjustment  reduces  Cost  of  product  for  a  hardware
        arrangement  during  the  six  months  ended  June  28,  2008  by  $2.5  million.

(D)  This  restatement  adjustment  represents  the  tax  effect  of  the
        restatement  adjustments  noted  above.

 

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