Gross amount of the decreases in unrecognized tax benefits of tax positions taken during a prior year

[Table of](#i090043fcb1da400aaac214abf3d3ee98_7) [Contents](#i090043fcb1da400aaac214abf3d3ee98_7) As of January 1, 2022, Cadence’s operating loss carryforwards were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | Amount |  | Expiration Periods |
|  | (In thousands) |  |  |
| Federal | $ | 428  |  |  | from 2027 through 2033 |
| California | 27,044  |  |  | from 2025 through 2038 |
| Other states (tax effected, net of federal benefit) | 1,174  |  |  | from 2022 through 2037 |
| Foreign (tax effected) | 3,478  |  |  | from 2030 through indefinite |

As of January 1, 2022, Cadence had tax credit carryforwards of:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | Amount |  | Expiration Periods |
|  | (In thousands) |  |  |
| Federal\* | $ | 46,743  |  |  | from 2029 through 2041 |
| California | 77,651  |  |  | indefinite |
| Other states  | 14,361  |  |  | from 2025 through indefinite |
| Foreign  | 27,814  |  |  | from 2037 through indefinite |

\_\_\_\_\_\_\_\_\_\_\_\_\_ \*Certain of Cadence’s foreign tax credits have yet to be realized and as a result do not yet have an expiration period. Examinations by Tax AuthoritiesTaxing authorities regularly examine Cadence’s income tax returns. As of January 1, 2022, Cadence’s earliest tax years that remain open to examination and the assessment of additional tax include:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| Jurisdiction |  | Earliest Tax Year Open to Examination |
|  |  |  |
| United States – Federal |  | 2017 |
| United States – California |  | 2015 |
| Ireland |  | 2017 |
| Israel |  | 2016 |
| Korea |  | 2016 |

Unrecognized Tax BenefitsThe changes in Cadence’s gross amount of unrecognized tax benefits during fiscal 2021, 2020 and 2019 are as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
|  | (In thousands) |
| Unrecognized tax benefits at the beginning of the fiscal year | $ | 113,021  |  |  | $ | 106,041  |  |  | $ | 101,857  |  |
| Gross amount of the increases (decreases) in unrecognized tax benefits of tax positions taken during a prior year\* | 15,414  |  |  | 5,037  |  |  | (3,143) |  |
| Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year | 5,100  |  |  | 3,344  |  |  | 8,951  |  |
| Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes | (270) |  |  | (1,316) |  |  | (380) |  |
| Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations | (2,778) |  |  | (676) |  |  | (1,692) |  |
| Effect of foreign currency translation | 43  |  |  | 591  |  |  | 448  |  |
| Unrecognized tax benefits at the end of the fiscal year | $ | 130,530  |  |  | $ | 113,021  |  |  | $ | 106,041  |  |
|  |  |  |  |  |  |
| Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence’s effective tax rate | $ | 79,654  |  |  | $ | 66,010  |  |  | $ | 61,527  |  |

\_\_\_\_\_\_\_\_\_\_\_\_\_\* Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions69
