Exhibit 99.02

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     On June 17, 2010, Cadence Design Systems, Inc. (“Cadence”) completed its acquisition of Denali Software, Inc. (“Denali”) pursuant to an Agreement and Plan of Merger, dated May 12, 2010, by and among Cadence, Eagle Subsidiary Corporation, a wholly-owned subsidiary of Cadence, Denali and Mark Gogolewski (solely in his capacity as shareholder agent).

     The following unaudited pro forma condensed combined balance sheet as of April 3, 2010 and the unaudited pro forma condensed combined statements of operations for the three months ended April 3, 2010 and for the fiscal year ended January 2, 2010 are based on the historical financial statements of Cadence and Denali after giving effect to Cadence’s acquisition of Denali using the purchase method of accounting and after applying the assumptions, reclassifications and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.

     Cadence and Denali have different fiscal year ends and different fiscal quarter ends. Accordingly, the unaudited pro forma condensed combined balance sheet as of April 3, 2010 combines Cadence’s historical unaudited condensed consolidated balance sheet as of April 3, 2010 and Denali’s historical unaudited condensed consolidated balance sheet as of March 31, 2010 and is presented as if the acquisition of Denali had occurred on April 3, 2010 and includes all adjustments that give effect to events that are directly attributable to the acquisition of Denali and that are factually supportable. The unaudited pro forma condensed combined statement of operations for the three months ended April 3, 2010 combines the unaudited historical results of Cadence for the three months ended April 3, 2010 and the unaudited historical results of Denali for the three months ended March 31, 2010. The unaudited pro forma condensed combined statement of operations for the fiscal year ended January 2, 2010 combines the historical results of Cadence for the year ended January 2, 2010 and the historical results of Denali for the year ended December 31, 2009. The unaudited pro forma condensed combined statements of operations are presented as if the acquisition had occurred on January 4, 2009 and include all adjustments that give effect to events that are directly attributable to the acquisition of Denali, expected to have a continuing impact and that are factually supportable.

     The unaudited pro forma condensed combined financial statements are based on the estimates and assumptions set forth in the notes to such statements and have been made solely for purposes of developing such pro forma information. The unaudited pro forma condensed combined financial statements are not intended to represent or be indicative of the results that would have been achieved had the acquisition been consummated as of the date indicated or that may be achieved in the future.

     The acquisition has been accounted for using the purchase method of accounting. The estimated purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed. The allocation of the purchase price is based on valuations derived from estimated fair value assessments and assumptions used by management. While management believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill.

     The unaudited pro forma condensed combined financial statements do not include the effects of any possible future restructuring activities that pertain to Cadence operations. These future restructuring expenses may be material and may include costs for severance, costs of vacating facilities and costs to exit or terminate other duplicative activities. Future restructuring expenses pertaining to Cadence operations, if any, would be incurred over the remainder of fiscal 2010 and in fiscal 2011 and would be recorded in operating expenses in the period that these expenses are incurred.

     These unaudited pro forma condensed combined financial statements should be read in conjunction with Cadence’s historical consolidated financial statements and notes thereto contained in Cadence’s Annual Report

on Form 10-K for its fiscal year ended January 2, 2010 and Cadence’s historical condensed consolidated financial statements and notes thereto contained in Cadence’s Quarterly Report on Form 10-Q for its three months ended April 3, 2010 and Denali’s historical consolidated financial statements and notes thereto, which is included as Exhibit 99.01 to this Current Report on Form 8-K/A.

CADENCE DESIGN SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of April 3, 2010
(In thousands)

		Historical
		April 3,				March 31,
		2010				2010
										Pro Forma						Pro Forma
		Cadence				Denali (1)				Adjustments						Combined
ASSETS
Current Assets:
Cash and cash equivalents		$	619,303			$	12,779			$	(296,805	)		A		$	335,277
Short-term investments			3,188				14,690				—						17,878
Receivables, net			181,155				4,702				—						185,857
Inventories			19,323				—				—						19,323
Prepaid expenses and other			56,617				6,832				(5,179	)		B, C			58,270
Total current assets			879,586				39,003				(301,984	)					616,605
Property, plant and equipment, net			302,499				754				(346	)		C			302,907
Goodwill			5,605				—				152,172			D			157,777
Acquired intangibles, net			26,566				—				168,800			E			195,366
Installment contract receivables, net			41,510				—				—						41,510
Other assets			159,220				20,326				(939	)		B, C			178,607
Total Assets		$	1,414,986			$	60,083			$	17,703					$	1,492,772
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities		$	147,782			$	4,319			$	(187	)		C		$	151,914
Current portion of deferred revenue			253,947				24,686				(20,553	)		F			258,080
Total current liabilities			401,729				29,005				(20,740	)					409,994
Long-Term Liabilities:
Long-term portion of deferred revenue			85,498				9,702				(6,888	)		F			88,312
Convertible notes			441,107				—				—						441,107
Other long-term liabilities			367,617				—				—						367,617
Total long-term liabilities			894,222				9,702				(6,888	)					897,036
Stockholders’ Equity:
Common stock and capital in excess of par value			1,684,538				4,990				(4,990	)		G			1,684,538
Treasury stock, at cost			(386,433	)			—				—						(386,433	)
Notes receivable from shareholders			—				(251	)			251			G			—
Retained earnings (Accumulated deficit)			(1,224,619	)			16,323				50,384			B, G			(1,157,912	)
Accumulated other comprehensive income			45,549				314				(314	)		G			45,549
Total stockholders’ equity			119,035				21,376				45,331						185,742
Total Liabilities and Stockholders’ Equity		$	1,414,986			$	60,083			$	17,703					$	1,492,772

See accompanying notes to unaudited pro forma condensed combined financial statements.

CADENCE DESIGN SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Three Months Ended April 3, 2010
(In thousands, except per share data)

		Historical
		Three Months Ended
		April 3,				March 31,
		2010				2010
										Pro Forma						Pro Forma
		Cadence				Denali (1)				Adjustments						Combined
Revenue:
Product		$	102,766			$	11,964			$	—					$	114,730
Services			25,920				—				—						25,920
Maintenance			93,252				—				—						93,252
Total revenue			221,938				11,964				—						233,902
Costs and Expenses:
Cost of product			5,292				1,060				1,926			E			8,278
Cost of services			21,925				—				—						21,925
Cost of maintenance			11,398				—				—						11,398
Marketing and sales			74,762				3,925				—						78,687
Research and development			89,430				4,349				—						93,779
General and administrative			22,834				1,509				—						24,343
Amortization of acquired intangibles			2,691				—				2,333			E			5,024
Restructuring and other charges (credits)			(1,074	)			—				—						(1,074	)
Total costs and expenses			227,258				10,843				4,259						242,360
Income (loss) from operations			(5,320	)			1,121				(4,259	)					(8,458	)
Interest expense			(7,431	)			—				—						(7,431	)
Other income, net			5,974				9				—						5,983
Income (loss) before provision for income taxes			(6,777	)			1,130				(4,259	)					(9,906	)
Provision for income taxes			5,008				376				(10	)		H			5,374
Net income (loss)		$	(11,785	)		$	754			$	(4,249	)				$	(15,280	)
Basic and diluted net loss per share		$	(0.04	)												$	(0.06	)
Weighted average common shares outstanding – basic and diluted			262,597														262,597

See accompanying notes to unaudited pro forma condensed combined financial statements.

CADENCE DESIGN SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended January 2, 2010
(In thousands, except per share data)

		Historical
		Year Ended
		January 2,				December 31,
		2010				2009
										Pro Forma						Pro Forma
		Cadence				Denali (1)				Adjustments						Combined
Revenue:
Product		$	400,773			$	41,866			$	—					$	442,639
Services			106,555				—				—						106,555
Maintenance			345,304				—				—						345,304
Total revenue			852,632				41,866				—						894,498
Costs and Expenses:
Cost of product			32,114				3,347				7,704			E			43,165
Cost of services			90,536				—				—						90,536
Cost of maintenance			46,593				—				—						46,593
Marketing and sales			286,833				10,658				—						297,491
Research and development			354,703				11,743				—						366,446
General and administrative			122,648				3,053				—						125,701
Amortization of acquired intangibles			11,420				—				9,332			E			20,752
Restructuring and other charges			31,376				—				—						31,376
Total costs and expenses			976,223				28,801				17,036						1,022,060
Income (loss) from operations			(123,591	)			13,065				(17,036	)					(127,562	)
Interest expense			(28,872	)			—				—						(28,872	)
Other expense, net			(1,042	)			(92	)			—						(1,134	)
Income (loss) before provision (benefit) for income taxes			(153,505	)			12,973				(17,036	)					(157,568	)
Provision (benefit) for income taxes			(3,634	)			4,173				(3,647	)		H			(3,108	)
Net income (loss)		$	(149,871	)		$	8,800			$	(13,389	)				$	(154,460	)
Basic and diluted net loss per share		$	(0.58	)												$	(0.60	)
Weighted average common shares outstanding – basic and diluted			257,782														257,782

See accompanying notes to unaudited pro forma condensed combined financial statements.

CADENCE DESIGN SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRO FORMA PRESENTATION

     On June 17, 2010, Cadence Design Systems, Inc. (“Cadence”) completed its acquisition of Denali Software, Inc. (“Denali”) pursuant to an Agreement and Plan of Merger, dated May 12, 2010. The aggregate initial purchase price was $296.8 million, which was paid in cash. An additional $12.6 million of payments have been deferred and will be paid in cash if certain Denali shareholders remain employees of Cadence during the periods specified in the respective agreements. These amounts will be expensed in Cadence’s Condensed Consolidated Statements of Operations over the stated retention periods. Cadence incurred costs of $1.7 million directly related to the acquisition of Denali, which were expensed as incurred.

     The following table summarizes the allocation of the purchase price for Denali as of June 17, 2010:

	(In thousands)
Current assets		$	59,398
Property, plant and equipment			347
Other assets			283
Acquired intangibles:
Existing technology (six to nine-year useful lives)			65,700
Agreements and relationships (three to twelve-year useful lives)			98,800
Tradenames / trademarks / patents (ten-year useful life)			4,300
Goodwill			152,172
Total assets acquired			381,000
Current liabilities and long-term deferred revenue			(17,042	)
Long-term deferred tax liabilities			(67,153	)
Net assets acquired		$	296,805

     Denali’s current assets, property, plant and equipment and other assets were reviewed and adjusted to their fair value on the date of acquisition, as necessary. Among the current assets acquired, $46.7 million was cash and cash equivalents and $11.1 million was trade receivables.

     The fair values of Denali’s intangible assets were determined using the income approach with significant inputs that are not observable in the market. Key assumptions include the expected future cash flows, the timing of the expected future cash flows and the discount rates consistent with the level of risk.

     Denali’s current liabilities and long-term deferred revenue were reviewed and adjusted to their fair value on the date of acquisition, as necessary. Included in net current liabilities and long-term deferred revenue is deferred revenue, which represents advance payments from customers. Cadence estimated its obligation related to the deferred revenue using the cost build-up approach. The cost build-up approach determines fair value by estimating the costs relating to supporting the obligation plus an assumed profit. The sum of the costs and assumed profit approximates the amount that Cadence would be required to pay a third party to assume the obligation. The estimated costs to fulfill the obligation were based on the projected cost structure to provide the contractual deliverables. As a result, Cadence recorded deferred revenue of $11.3 million, representing Cadence’s estimate of the fair value of the contractual obligations assumed.

NOTE 2. RECLASSIFICATIONS

     Certain reclassification adjustments have been made to conform Denali’s historical amounts to Cadence’s presentation. The adjustments primarily relate to reclassifying current deferred income taxes to prepaid expenses and other, reclassifying long-term investments to other assets, reclassifying long-term deferred income taxes to other assets and reclassifying income taxes payable to accounts payable and accrued liabilities.

NOTE 3. PRO FORMA ADJUSTMENTS

     The pro forma adjustments included in the unaudited pro forma condensed combined financial statements are as follows:

	(A)		To record the cash paid for the acquisition of Denali.
	(B)		To record adjustments to deferred tax assets and deferred tax liabilities, primarily related to the fair values of intangible assets acquired. The adjustments to Retained earnings (Accumulated deficit) included in the pro forma condensed combined balance sheet as of March 31, 2010 includes the effects of releasing $66.7 million of Cadence’s deferred tax asset valuation allowance as noted in Note 4 below.
	(C)		To record other immaterial adjustments to state the related assets and liabilities at fair value.
	(D)		To record goodwill for the acquisition of Denali.
	(E)		To record intangible assets and the resulting change in amortization expense. The pro forma adjustment to the unaudited pro forma condensed combined balance sheet is presented as if the acquisition of Denali had occurred on April 3, 2010, while the pro forma adjustments to the unaudited pro forma condensed combined statements of operations are presented as if the acquisition had occurred on January 4, 2009.
	(F)		To record the difference between the historical amount and the fair value of deferred revenue of Denali. See Note 1 above for the valuation techniques to determine the fair value of deferred revenue.
	(G)		To eliminate Denali’s historical stockholders’ equity.
	(H)		The pro forma adjustments eliminate the Denali United States income tax provision and were calculated considering Cadence’s valuation allowance position on its United States losses and tax credits. The pro forma combined provision for income taxes does not reflect the amounts that would have resulted had Cadence and Denali filed consolidated income tax returns during the periods presented.

NOTE 4. NON-RECURRING EFFECTS OF THE ACQUISITION

     Income Taxes

     Because the increase in deferred tax liabilities from the intangible assets acquired with Denali provided a source of taxable income, Cadence released a corresponding amount of its deferred tax asset valuation allowance subsequent to the acquisition. The $66.7 million release of the valuation allowance was immediately recognized as a Benefit for income taxes. The pro forma condensed combined statements of operations presented above do not include this non-recurring benefit for income taxes.

     Deferred Revenue

      As noted in Note 1 above, the deferred revenue balance of Denali was adjusted to fair value as of the acquisition date. This adjustment reduces the amount of revenue that will be recognized in future periods, the majority of which will be recognized within 12 months.

     Deferred Payment Expense

     As noted in Note 1 above, $12.6 million of payments have been deferred and will be paid in cash if certain Denali shareholders remain employees of Cadence during the periods specified in the respective agreements. These amounts will be expensed in Cadence’s Condensed Consolidated Statements of Operations over the stated retention periods, the majority of which will be expensed within 12 months.

     Acquisition Costs

     Cadence incurred costs of $1.7 million directly related to the acquisition of Denali, which were expensed as incurred.