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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2010	Feb. 18, 2011	Jun. 30, 2010
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Trading Symbol	anss
Entity Registrant Name	ANSYS INC
Entity Central Index Key	0001013462
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Public Float			$ 3,324,000,000
Entity Common Stock, Shares Outstanding		91,777,773

Consolidated Balance Sheets - USD ($) $ in Thousands	12 Months Ended
Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
Current assets:
Cash and cash equivalents	$ 472,479	$ 335,878
Short-term investments	455	7,966
Accounts receivable, less allowance for doubtful accounts of $4,503 and $4,418, respectively	76,604	67,084
Other receivables and current assets	147,402	86,735
Deferred income taxes	17,693	17,827
Total current assets	714,633	515,490
Property and equipment, net	36,921	35,131
Goodwill	1,035,083	1,038,824
Other intangible assets, net	278,320	322,313
Other long-term assets	56,123	5,848
Deferred income taxes	5,796	2,576
Total assets	2,126,876	1,920,182
Current liabilities:
Current portion of long-term debt and capital lease obligations	31,962	26,758
Accounts payable	2,241	2,426
Accrued bonuses and commissions	29,719	23,162
Accrued income taxes	6,179	12,262
Deferred income taxes	216	143
Other accrued expenses and liabilities	41,247	32,740
Deferred revenue	199,805	169,275
Total current liabilities	311,369	266,766
Long-term liabilities:
Long-term debt and capital lease obligations, less current portion	127,563	198,668
Deferred income taxes	75,026	107,313
Other long-term liabilities	82,989	34,804
Total long-term liabilities	$ 285,578	$ 340,785
Commitments and contingencies	0	0
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; zero shares issued or outstanding	$ 0	$ 0
Common stock, $.01 par value; 150,000,000 shares authorized; 91,647,012 and 89,716,317 shares issued, respectively	916	897
Additional paid-in capital	856,718	801,574
Retained earnings	655,333	502,201
Treasury stock, at cost: 0 and 40,678 shares, respectively	0	(853)
Accumulated other comprehensive income	16,962	8,812
Total stockholders' equity	1,529,929	1,312,631
Total liabilities and stockholders' equity	$ 2,126,876	$ 1,920,182

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts	$ 4,503	$ 4,418
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	91,647,012	89,716,317
Treasury stock, shares	0	40,678

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Revenue:
Software licenses	$ 351,033	$ 315,633	$ 318,154
Maintenance and service	229,203	201,252	160,185
Total revenue	580,236	516,885	478,339
Cost of sales:
Software licenses	10,770	10,210	9,766
Amortization	32,757	36,011	27,803
Maintenance and service	57,352	50,021	53,845
Restructuring charges	0	994	0
Total cost of sales	100,879	97,236	91,414
Gross profit	479,357	419,649	386,925
Operating expenses:
Selling, general and administrative	155,096	137,264	134,887
Research and development	88,990	79,856	71,594
Amortization	16,003	16,326	10,713
Restructuring charges	0	2,726	0
Total operating expenses	260,089	236,172	217,194
Operating income	219,268	183,477	169,731
Interest expense	(4,488)	(10,401)	(9,342)
Interest income	1,911	1,740	5,575
Other (expense) income, net	(297)	(1,287)	727
Income before income tax provision	216,394	173,529	166,691
Income tax provision	63,262	57,138	55,020
Net income	$ 153,132	$ 116,391	$ 111,671
Earnings per share - basic:
Basic earnings per share	$ 1.69	$ 1.32	$ 1.35
Weighted average shares - basic	90,684	88,486	82,975
Earnings per share - diluted:
Diluted earnings per share	$ 1.64	$ 1.27	$ 1.29
Weighted average shares - diluted	93,209	91,785	86,768

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash flows from operating activities:
Net income	$ 153,132	$ 116,391	$ 111,671
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	60,826	64,186	50,093
Deferred income tax benefit	(26,719)	(28,146)	(13,323)
Provision for bad debts	1,757	1,610	1,184
Stock-based compensation expense	19,019	13,212	11,779
Excess tax benefits from stock options	(11,753)	(13,168)	(4,070)
Utilization of acquired net operating loss tax carryforward	78	108	1,477
Other	19	108	126
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(11,149)	(6,434)	(4,551)
Other receivables and current assets	(61,467)	10,166	(19,578)
Other long-term assets	(60,365)	1,340	(380)
Accounts payable, accrued expenses and current liabilities	16,542	(7,016)	7,007
Accrued income taxes	10,608	19,929	2,460
Deferred revenue	28,817	(606)	40,449
Other long-term liabilities	47,539	2,009	12,364
Net cash provided by operating activities	166,884	173,689	196,708
Cash flows from investing activities:
Capital expenditures	(14,260)	(8,311)	(16,639)
Ansoft acquisition payments, net of cash acquired	0	0	(320,130)
Purchases of short-term investments	(1,075)	(9,899)	(12,993)
Maturities of short-term investments	8,687	7,491	11,763
Other	0	(12)	0
Net cash used in investing activities	(6,648)	(10,731)	(337,999)
Cash flows from financing activities:
Principal payments on long-term debt	(65,630)	(53,924)	(135,499)
Principal payments on capital leases	(283)	(306)	(506)
Proceeds from long-term debt	0	0	355,000
Loan commitment fees	0	0	(4,609)
Proceeds from issuance of common stock under Employee Stock Purchase Plan	1,592	1,515	1,720
Proceeds from exercise of stock options	22,929	15,361	7,582
Purchase of treasury stock	0	(39,904)	(10,008)
Excess tax benefits from stock options	11,753	13,168	4,070
Net cash (used in) provided by financing activities	(29,639)	(64,090)	217,750
Effect of exchange rate fluctuations	6,004	8,834	(15,507)
Net increase in cash and cash equivalents	136,601	107,702	60,952
Cash and cash equivalents, beginning of year	335,878	228,176	167,224
Cash and cash equivalents, end of year	472,479	335,878	228,176
Supplemental disclosures of cash flow information:
Income taxes paid	131,861	58,859	58,259
Interest paid	2,980	8,642	8,085
Capital lease obligations incurred	0	96	364
Stock issued in acquisitions	$ 0	$ 0	$ 432,601

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Statement [Line Items]
Balance, value	$ 1,312,631	$ 1,182,899	$ 641,210
Acquisition of Ansoft Corporation, value			432,601
Treasury shares acquired, value			(10,008)
Treasury shares acquired, shares		(39,904)
Stock-based compensation activity, including tax benefit, value	54,424	$ 41,434	23,418
Issuance of common stock under Employee Stock Purchase Plan, value	1,592	1,515	1,720
Net gains (losses) on interest rate swap, net of tax	532	1,959	(2,491)
Other comprehensive loss/gain	7,618	8,337	(15,222)
Net income for the year	153,132	116,391	111,671
Balance, value	1,529,929	1,312,631	1,182,899
Common Stock [Member]
Statement [Line Items]
Balance, value	$ 897	$ 897	$ 783
Balance, shares	89,716	89,716	78,339
Acquisition of Ansoft Corporation, value			$ 103
Acquisition of Ansoft Corporation, shares			10,296
Stock-based compensation activity, including tax benefit, value	$ 19		$ 11
Stock-based compensation activity, including tax benefit, shares	1,883		1,050
Issuance of common stock under Employee Stock Purchase Plan, shares	48		31
Balance, value	$ 916	$ 897	$ 897
Balance, shares	91,647	89,716	89,716
Additional Paid-in Capital [Member]
Statement [Line Items]
Balance, value	$ 801,574	$ 806,755	$ 355,241
Acquisition of Ansoft Corporation, value			432,498
Stock-based compensation activity, including tax benefit, value	53,552	(5,118)	18,465
Issuance of common stock under Employee Stock Purchase Plan, value	1,592	(63)	551
Balance, value	856,718	801,574	806,755
Retained Earnings [Member]
Statement [Line Items]
Balance, value	502,201	385,810	274,139
Net income for the year	153,132	116,391	111,671
Balance, value	655,333	502,201	385,810
Treasury Stock [Member]
Statement [Line Items]
Balance, value	$ (853)	$ (9,079)	$ (5,182)
Balance, shares	41	337	140
Treasury shares acquired, value		$ (39,904)	$ (10,008)
Treasury shares acquired, shares		2,070	368
Stock-based compensation activity, including tax benefit, value	$ 853	$ 46,552	$ 4,942
Stock-based compensation activity, including tax benefit, shares	(41)	(2,298)	(139)
Issuance of common stock under Employee Stock Purchase Plan, value		$ 1,578	$ 1,169
Issuance of common stock under Employee Stock Purchase Plan, shares		(68)	(32)
Balance, value		$ (853)	$ (9,079)
Balance, shares		41	337
Accumulated Other Comprehensive Income (Loss) [Member]
Statement [Line Items]
Balance, value	$ 8,812	$ (1,484)	$ 16,229
Net gains (losses) on interest rate swap, net of tax	532	1,959	(2,491)
Other comprehensive loss/gain	7,618	8,337	(15,222)
Balance, value	16,962	8,812	(1,484)
Total Comprehensive Income [Member]
Statement [Line Items]
Balance, value	126,687	93,958
Net gains (losses) on interest rate swap, net of tax	532	1,959	(2,491)
Other comprehensive loss/gain	7,618	8,337	(15,222)
Net income for the year	153,132	116,391	111,671
Balance, value	$ 161,282	$ 126,687	$ 93,958

Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Stockholders' Equity
Stock-based compensation activity, tax benefit	$ 12,022	$ 12,679	$ 4,055
Losses / Net gains on interest rate swap, tax	$ 321	$ 1,217	$ 1,538

Organization	12 Months Ended
Organization	Dec. 31, 2010
Organization
Organization	1. Organization ANSYS, Inc. (hereafter the "Company" or "ANSYS") develops and globally markets engineering simulation software and technologies widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including aerospace, automotive, manufacturing, electronics, biomedical, energy and defense. As defined by accounting guidance issued for disclosures about segments of an enterprise, the Company operates as one segment. Given the integrated approach to the multi-discipline problem-solving needs of the Company's customers, a single sale of software may contain components from multiple product areas and include combined technologies. As a result, it is impracticable for the Company to provide accurate historical or current reporting among its various product lines.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2010

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

ACCOUNTING PRINCIPLES: The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States.

PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the amounts of revenue and expenses during the reported periods. Significant estimates included in these consolidated financial statements include allowances for doubtful accounts receivable, income tax accruals, uncertain tax positions and tax valuation reserves, fair value of stock-based compensation, contract revenue, useful lives for depreciation and amortization, loss contingencies and valuation of goodwill and indefinite lived intangible assets. Actual results coul d differ from these estimates. Changes in estimates are recorded in the results of operations in the period that the changes occur.

REVENUE RECOGNITION: Revenue is derived principally from the licensing of computer software products and from related maintenance contracts. Revenue from perpetual licenses is classified as license revenue and is recognized upon delivery of the licensed product and the utility that enables the customer to access authorization keys, provided that acceptance has occurred and a signed contractual obligation has been received, the price is fixed and determinable, and collectibility of the receivable is probable. The Company determines the fair value of post-contract customer support ("PCS") sold together with perpetual licenses based on the contractual renewal rate for PCS when sold on a stand-alone basis. Revenue from PCS contracts is classified as maintenance and service revenue and is recognized ratably over the term of the contrac t.

Revenue for software lease licenses is classified as license revenue and is recognized over the period of the lease contract. Typically, the Company's software leases include PCS which, due to the short term (principally one year or less) of the Company's software lease licenses, cannot be separated from lease revenue for accounting purposes. As a result, both the lease license and PCS are recognized ratably over the lease period. Due to the short-term nature of the software lease licenses and the frequency with which the Company provides major product upgrades (typically 12 – 18 months), the Company does not believe that a significant portion of the fee paid under the arrangement is attributable to the PCS component of the arrangement and, as a result, includes the revenue for the entire arrangement within software license revenue in the consolidated statem ents of income.

Revenue from training, support and other services is recognized as the services are performed. The Company applies the specific performance method to contracts in which the service consists of a single act, such as providing a training class to a customer, and the proportional performance method to other service contracts that are longer in duration and often include multiple acts (for example, both training and consulting). In applying the proportional performance method, the Company typically utilizes output-based estimates for services with contractual billing arrangements that are not based on time and materials, and estimates output based on the total tasks completed as compared to the total tasks required for each work contract. Input-based estimates are utilized for services that involve general consultations with contractual billing arrangements based on time a nd materials, utilizing direct labor as the input measure.

The Company also executes arrangements through channel partners in which the channel partners are authorized to market and distribute the Company's software products to end users of the Company's products and services in specified territories. In sales facilitated by channel partners, the channel partner bears the risk of collection from the end user customer. The Company recognizes revenue from transactions with channel partners when the channel partner submits a written purchase commitment, collectibility from the channel partner is probable, a signed license agreement is received from the end user customer and delivery has occurred, provided that all other revenue recognition criteria are satisfied. Revenue from channel partner transactions is the amount remitted to the Company by the channel partners. This amount includes a fee for PCS that is compensation for pro viding technical enhancements and the second level of technical support to the end user, which is based on the contractual renewal rate in the end user customer's license agreement and is recognized over the period that PCS is to be provided. The Company does not offer right of return, product rotation or price protection to any of its channel partners.

Non-income related taxes collected from customers and remitted to governmental authorities are recorded on the balance sheet as accounts receivable and accrued expenses. The collection and payment of these amounts are reported on a net basis in the consolidated statements of income and do not impact reported revenues or expenses.

The Company warrants to its customers that its software will substantially perform as specified in the Company's most current user manuals. The Company has not experienced significant claims related to software warranties beyond the scope of maintenance support, which the Company is already obligated to provide, and consequently the Company has not established reserves for warranty obligations.

CASH AND CASH EQUIVALENTS: Cash and cash equivalents consist primarily of highly liquid investments such as deposits held at major banks and money market mutual funds with original maturities of three months or less. Cash equivalents are carried at cost, which approximates fair value. The Company's cash and cash equivalents balances are comprised of the following:

December 31,

2010

2009

(in thousands, except percentages)

Amount

% of Total

Amount

% of Total

Money market mutual funds

273,926

58.0

170,577

50.8

Time deposits

27,788

5.9

0.0

Cash accounts

170,765

36.1

165,301

49.2

Total

472,479

335,878

The money market mutual fund balances reflected above are held in various funds of a single issuer. The time deposits balance reflected above is primarily held in a pooled investment fund which invests in a mix of third-party time deposits with durations up to three months.

SHORT-TERM INVESTMENTS: Short-term investments consist primarily of deposits held by certain foreign subsidiaries of the Company with original maturities of three months to one year. The Company considers investments backed by government agencies or financial institutions with maturities of less than one year to be highly liquid and classifies such investments as short-term investments. Short-term investments are recorded at fair value. The Company uses the specific identification method to determine the realized gain or loss upon the sale of such securities. As of the balance sheet date, there were no significant unrealized gains or losses on the investments, all of which had maturities or renewal options of less than one year.

The Company is averse to principal loss and seeks to preserve invested funds by limiting default risk, market risk and reinvestment risk by placing its investments with high-quality credit issuers.

PROPERTY AND EQUIPMENT: Property and equipment is stated at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the various classes of assets, which range from one to 40 years. Repairs and maintenance are charged to expense as incurred. Gains or losses from the sale or retirement of property and equipment are included in operating income.

RESEARCH AND DEVELOPMENT COSTS: Research and development costs, other than certain capitalized software development costs, are expensed as incurred.

CAPITALIZED SOFTWARE: Internally developed computer software costs and costs of product enhancements are capitalized subsequent to the determination of technological feasibility; such capitalization continues until the product becomes available for commercial release. Judgment is required in determining when technological feasibility of a product is established. The Company has determined that technological feasibility is reached after all high-risk development issues have been resolved through coding and testing. Generally, the time between the establishment of technological feasibility and commercial release of software is minimal, resulting in insignificant capitalization of internally developed software costs. Amortization of capitalized software costs, both for internally developed as well as for purchased software products, is computed on a product-by-product basis over the estimated economic life of the product, which is generally three years. Amortization is the greater of the amount computed using: (i) the ratio of the current year's gross revenue to the total current and anticipated future gross revenue for that product or (ii) the straight-line method over the estimated life of the product. Amortization expense related to capitalized and acquired software costs was $32.8 million, $36.0 million and $27.8 million for the years ended December 31, 2010, 2009 and 2008, respectively which is included in the total amount of expense disclosed in Note 6. These amounts include amortization expense related to capitalized costs of internally developed software of $29,000, $300,000 and $400,000 for the years ended December 31, 2010, 2009 and 2008, respectively.

The Company periodically reviews the carrying value of capitalized software. Impairments are recognized in the results of operations when the expected future undiscounted operating cash flow derived from the capitalized costs of internally developed software is less than the carrying value. No impairment charges have been required to date.

GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill represents the excess of the consideration transferred over the fair value of net identifiable assets acquired. Intangible assets consist of trademarks, non-compete agreements, customer lists, and acquired software and technology.

The Company evaluates, at least annually, the realizability of the carrying value of goodwill and indefinite lived intangible assets by comparing the carrying value of the asset (or, in the case of goodwill, the Company's reporting unit) to its estimated fair value. The Company performs its annual goodwill and indefinite lived intangible assets impairment test on January 1 of each year unless there is an indicator that would require a test during the year. No impairment charges have been required to date.

The Company periodically reviews the carrying value of other intangible assets and will recognize impairments when events or circumstances indicate that such assets may be impaired. No impairment charges have been required to date.

CONCENTRATIONS OF CREDIT RISK: The Company has a concentration of credit risk with respect to trade receivables due to the use of certain significant channel partners to market and sell the Company's products. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral.

During 2010, sales by channel partners comprised 27% of the Company's total revenue, with two channel partners each individually accounting for 4% and 3% of total revenue. During 2009, sales by channel partners comprised 26% of the Company's total revenue, with two channel partners each individually accounting for 5% and 3% of total revenue. During 2008, sales by channel partners comprised 30% of the Company's total revenue, with two channel partners each individually accounting for 6% and 3% of total revenue. The Company had no individual customer account for more than 10% of revenue in the years ended December 31, 2010, 2009 or 2008.

In addition to the concentration of credit risk with respect to trade receivables, the Company's cash and cash equivalents are also exposed to concentration of credit risk. The Company maintains certain cash accounts in U.S. banks that are currently insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 per depositor. The Company had cash balances on deposit with five U.S. banks at December 31, 2010 that exceeded the $250,000 balance insured by the FDIC in the amount of $83.5 million. As a result of the Company's operations in international locations, it also had $131.4 million of uninsured cash balances held outside the U.S. The Company maintains certain cash equivalent accounts in U.S. financial institutions that are protected by the Securities Investor Protection Corporation ("SIPC") up to $500,000 per customer. The Company had cash e quivalent balances with one U.S. financial institution at December 31, 2010 that exceeded the $500,000 balance protected by the SIPC in the amount of $249.6 million. The Company's foreign subsidiaries had additional cash equivalent balances with the same U.S. financial institution at December 31, 2010 in the amount of $48.3 million.

ALLOWANCE FOR DOUBTFUL ACCOUNTS: The Company makes judgments as to its ability to collect outstanding receivables and provides allowances for a portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices from both value and delinquency perspectives. For those invoices not specifically reviewed, provisions are provided at differing rates based upon the age of the receivable and the geographical area of origin. In determining these percentages, the Company considers its historical collection experience and current economic trends in the customer's industry and geographic region. The Company recorded provisions for doubtful accounts of $1.8 million, $1.6 million and $1.2 million for the years ended December 31, 2010, 2009 and 2008, respecti vely.

INCOME TAXES: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company determines that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be recorded that would reduce the provision for income taxes.

Tax benefits related to uncertain tax positions taken or expected to be taken on a tax return are recorded when such benefits meet a more likely than not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the statute of limitation has expired or the appropriate taxing authority has completed their examination even though the statute of limitations remains open. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of income. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet.

FOREIGN CURRENCIES: Certain of the Company's sales and intercompany transactions are denominated in foreign currencies. These transactions are translated to the functional currency at the exchange rate on the transaction date. Accounts receivable and intercompany balances in foreign currencies at year end are translated at the effective exchange rate on the balance sheet date. Gains and losses resulting from foreign exchange transactions are included in other income. The Company recorded net foreign exchange losses of $400,000 and $1.4 million for the years ended December 31, 2010 and 2009, respectively, and a net foreign exchange gain of $700,000 for the year ended December 31, 2008.

The financial statements of the Company's foreign subsidiaries are translated from the functional (local) currency to U.S. Dollars. Assets and liabilities are translated at the exchange rates on the balance sheet date. Results of operations are translated at average exchange rates, which approximate rates in effect when the underlying transactions occur.

ACCUMULATED OTHER COMPREHENSIVE INCOME: The components of accumulated other comprehensive income are as follows:


	December 31,
*(in thousands)*	2010		2009
Foreign currency translation adjustment	$	16,962	$	9,344
Unrealized gains (losses) on interest rate swap, net of tax of $0 and $321, respectively		0		(532	)

Accumulated other comprehensive income	$	16,962	$	8,812

The components of comprehensive income are as follows:


	Year Ended December 31,
*(in thousands)*	2010			2009
Net income	$	153,132		$	116,391
Foreign currency translation adjustment		7,618			8,337
Unrealized loss on interest rate swap, net of tax of $4 and $300, respectively		(7	)		(483	)
Realized loss on interest rate swap reclassified into interest expense, net of tax of $325 and $1,517 respectively		539			2,442

Comprehensive income	$	161,282		$	126,687

EARNINGS PER SHARE: Basic earnings per share ("EPS") amounts are computed by dividing earnings by the average number of common shares outstanding during the period. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive equivalents outstanding. To the extent stock options are anti-dilutive, they are excluded from the calculation of diluted EPS. The details of basic and diluted EPS are as follows:


*(in thousands, except per share data)*	Year Ended December 31,
*(in thousands, except per share data)*	2010		2009		2008
Net income	$	153,132	$	116,391	$	111,671

Weighted average shares outstanding—basic		90,684		88,486		82,975

Dilutive effect of stock plans		2,525		3,299		3,793

Weighted average shares outstanding—diluted		93,209		91,785		86,768

Basic earnings per share	$	1.69	$	1.32	$	1.35
Diluted earnings per share	$	1.64	$	1.27	$	1.29
Anti-dilutive options		1,867		2,612		1,646

STOCK-BASED COMPENSATION: The Company accounts for stock-based compensation in accordance with share-based payment accounting guidance. The guidance requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide service in exchange for the award, typically the vesting period.

Stock-Based Compensation Information

The weighted average fair values of options granted during the years ended December 31, 2010, 2009 and 2008 were $19.41, $15.81 and $11.98 per share, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Company's options have characteristics significantly different from those of traded options, and changes in input assumptions can materially affect the fair value estimates. The interest rates used were determined by using the five-year Treasury Note yield at the date of grant. The volatility was determined based on the historic volatility of the Company's stock during the preceding six years for 2010 and 2009, and during the preceding fi ve years for 2008. The following assumptions were also used to determine the fair value of each option grant:


	Stock Option Compensation Expense December 31,
Assumption used in Black-Scholes option pricing model	2010	2009	2008
Risk-free interest rate	1.27% to 2.34%	1.86% to 2.69%	2.33% to 3.11%
Expected dividend yield	0%	0%	0%
Expected volatility	39%	41%	39%
Expected term	6.1 years	6.1 years	5.8 years

As stock-based compensation expense recognized in the consolidated statements of income is based on awards ultimately expected to vest, it must be reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The effect of pre-vesting forfeitures on the Company's recorded expense has historically been negligible due to the relatively low turnover of stock option holders.

In the first quarter of 2010, the Company granted 80,500 performance-based restricted stock units under the terms of the ANSYS, Inc. Long-Term Incentive Plan. Vesting of the full award or a portion thereof is based on the Company's performance as measured by total shareholder return relative to the median percentage appreciation of the NASDAQ Composite Index over a specified measurement period, subject to each participant's continued employment with the Company through the conclusion of the measurement period. The measurement period for the restricted stock units granted in the first quarter of 2010 is the three-year period from January 1, 2010 through December 31, 2012. Each restricted stock unit relates to one share of the Company's common stock. The value of the restricted stock units was estimated on the grant date to be $25.00 using a Monte Carl o lattice pricing model. The determination of the fair value of the awards was affected by the grant date and a number of variables, each of which has been identified in the chart below. Share-based compensation expense based on the fair value of the award is being recorded from the grant date through the conclusion of the three-year measurement period.


Assumption used in Monte Carlo lattice pricing model		Restricted Stock Unit Compensation Expense December 31, 2010
Risk-free interest rate		1.35%
Expected dividend yield		0%
Expected volatility—ANSYS Stock Price		40%
Expected volatility—NASDAQ Index		25%
Expected term		2.9 years
Correlation factor		0.7

In addition, the Company grants deferred stock units to non-affiliate Independent Directors, which are rights to receive shares of common stock upon termination of service as a Director. The deferred stock units are issued in arrears and vest immediately. As of December 31, 2010, 56,620 deferred stock units have been earned with the underlying shares remaining unissued until the service termination of the respective Director owners. Of this amount, 16,800 were earned during the year ended December 31, 2010.

Total stock-based compensation expense recognized for the years ended December 31, 2010, 2009 and 2008 is as follows:


	Year Ended December 31,
*(in thousands)*	2010			2009			2008
Cost of sales:
Software licenses	$	135		$	83		$	72
Maintenance and service		1,541			1,069			783
Operating expenses:
Selling, general and administrative		11,755			8,296			8,022
Research and development		5,588			3,764			2,902

Stock-based compensation expense before taxes		19,019			13,212			11,779
Related income tax benefits		(4,254	)		(2,687	)		(2,833	)

Stock-based compensation expense, net of taxes	$	14,765		$	10,525		$	8,946

The net impact of stock-based compensation expense reduced 2010 basic and diluted earnings per share each by $0.16, reduced 2009 basic and diluted earnings per share by $0.12 and $0.11, respectively, and reduced 2008 basic and diluted earnings per share by $0.11 and $0.10, respectively.

The Company recorded stock-based compensation expense of $1.1 million, $1.0 million and $1.9 million during 2010, 2009 and 2008, respectively, related to stock-based option awards granted during each respective year.

FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying values of cash, cash equivalents, accounts receivable, accounts payable, accrued expenses, other accrued liabilities and short-term obligations are deemed to be reasonable estimates of their fair values because of their short-term nature. The fair values of investments are based on quoted market prices for those or similar investments. The carrying value of long-term debt is considered a reasonable estimate of fair value due to the variable interest rate underlying the Company's credit facility. The Company's interest rate swap agreement was recorded at fair value, utilizing the value of a hypothetical derivative with the same characteristics as the swap agreement.

DERIVATIVE FINANCIAL INSTRUMENTS: As of December 31, 2009 and 2008 and through its maturity on June 30, 2010, the Company held a derivative financial instrument to manage interest rate risk. The Company accounted for this instrument as a cash flow hedge in accordance with derivative instruments and hedging activities accounting guidance, which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. This guidance also requires that changes in the Company's derivative fair value be recognized in earnings unless specific hedge accounting and documentation criteria are met. The Company recorded the effective portion of its derivative financial instrument in accumulated other comprehensive income on the consolidated balance sheets. Any ineffective portion or excluded portion of the designated cash flow hedge was recognized in earnings. The Company's cash flow hedge did not have an ineffective or excluded portion. The Company utilized the hypothetical derivative method to ensure the hedge was effective in offsetting variability in interest expense associated with its credit facility. The Company used the dollar offset method for calculating ineffectiveness by comparing the cumulative fair value of the swap to the cumulative fair value of the hypothetical derivative.

RECENTLY ADOPTED ACCOUNTING GUIDANCE:

Fair Value Measurements and Disclosures: In January 2010, new accounting guidance was issued regarding fair value measurements and disclosures. This guidance requires new disclosures for fair value measurements and provides clarification for existing disclosures requirements. More specifically, this requires (1) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers, and (2) information about purchases, sales, issuances and settlements to be presented separately (i.e. present the activity on a gross basis rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs). This update clarifies existing disclos ure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. The Company adopted the new disclosures and clarifications as of January 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for the Company beginning January 1, 2011. See Note 8 for the Company's disclosures related to the fair value of its financial instruments.

RECENTLY ISSUED ACCOUNTING GUIDANCE:

Revenue Recognition for Multiple-Deliverable Arrangements: In October 2009, new accounting guidance was issued for revenue arrangements with multiple deliverables that are outside the scope of the software revenue recognition guidance. Under the new accounting guidance, when vendor specific objective evidence or third-party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. This guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning o n or after June 15, 2010, with early adoption permitted. This guidance does not have a material impact on the Company's financial position, results of operations or cash flows.

Revenue Recognition for Certain Arrangements that Include Software Elements: In October 2009, new accounting guidance was issued for revenue arrangements that include both tangible products and software elements. This new accounting guidance affects companies that sell or lease tangible products in an arrangement that contains software that is more than incidental to the tangible product as a whole. Additionally, clarification is given regarding the guidance to be used in allocating and measuring revenue. This guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, with early adoption permitted. This guidance does not have a material impact on the Company's financial position, results of operations or cash flows. ;/p /div

Acquisitions

12 Months Ended

Dec. 31, 2010

Acquisitions

Acquisitions

3. Acquisitions

On July 31, 2008, the Company completed its acquisition of Ansoft, a global provider of simulation software for high-performance electronic design. Under the terms of the merger agreement, Ansoft stockholders received $16.25 in cash and 0.431882 shares of ANSYS common stock for each outstanding Ansoft share held on July 31, 2008. ANSYS issued an aggregate of 12.24 million shares of its common stock, including 1.95 million shares pursuant to assumed stock options, valued at approximately $432.6 million based on the average closing market price on the two days preceding and the two days following the announcement of the acquisition, and paid approximately $387.3 million in cash. The total purchase price of approximately $823.8 million includes approximately $3.9 million in transaction fees. The Company used a combination of existing ca sh and proceeds from a $355.0 million unsecured senior term loan credit facility to fund the transaction. In addition to the $3.9 million in transaction-related costs, the Company incurred financing costs of approximately $4.6 million related to the credit facility.

The operating results of Ansoft have been included in the Company's consolidated financial statements since the date of acquisition, July 31, 2008. The total purchase price was allocated to the foreign and domestic assets and liabilities of Ansoft based upon management's estimates of the fair market values of the assets acquired and the liabilities assumed. The allocation included $235.2 million to identifiable intangible assets (including $98.4 million to developed software to be amortized over ten years, $97.4 million to customer contracts and related relationships to be amortized over 13 years, and $39.4 million to trademarks to be amortized over ten years) and $599.2 million to goodwill, which is not tax deductible.

In valuing deferred revenue on the Ansoft balance sheet as of the acquisition date and applying fair value provisions for business combinations, acquired deferred revenue of $7.5 million was recorded. This amount was approximately $23.5 million lower than the historical carrying value.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition of Ansoft:


*(in thousands)*	At July 31, 2008
Cash and other net tangible assets and liabilities	$	83,533
Goodwill		599,157
Identifiable intangible assets		235,200
Net deferred tax liabilities		(94,072	)

Total purchase price allocation	$	823,818

Other Current Assets	12 Months Ended
Other Current Assets	Dec. 31, 2010
Other Current Assets
Other Current Assets	4. Other Current Assets The Company reports accounts receivable, related to the portion of annual lease licenses and software maintenance that has not yet been recognized as revenue, as a component of other receivables and current assets. These amounts totaled $89.9 million and $69.8 million as of December 31, 2010 and 2009, respectively. The Company reports taxes receivable, including amounts related to overpayments and refunds, as a component of other receivables and current assets. These amounts totaled $32.9 million and $4.3 million as of December 31, 2010 and 2009, respectively.

Property and Equipment

12 Months Ended

Dec. 31, 2010

Property and Equipment

Property and Equipment

5. Property and Equipment

Property and equipment consists of the following:

December 31,

(dollars in thousands)

Estimated Useful Lives

2010

2009

Equipment

1-10 years

41,998

33,248

Buildings

20-40 years

9,921

9,830

Computer software

1-5 years

25,896

24,718

Furniture

1-13 years

4,577

4,457

Land

1,368

1,367

Leasehold improvements

1-10 years

6,566

5,592

90,326

79,212

Less: Accumulated depreciation and amortization

(53,405

)

(44,081

)

36,921

35,131

The amounts reflected above, as of December 31, 2010 and 2009, include $660,000 and $1.1 million ($200,000 and $360,000, net of accumulated depreciation), respectively, that was acquired through capital lease commitments.

Depreciation and amortization expense related to property and equipment, including the amounts acquired through capital lease commitments, was $10.9 million, $10.6 million and $10.1 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2010

Goodwill and Intangible Assets

Goodwill and Intangible Assets

6. Goodwill and Other Intangible Assets

Goodwill represents the excess of the fair value of the consideration transferred over the value of net tangible and identifiable intangible assets of acquired businesses. Identifiable intangible assets acquired in business combinations are recorded based upon their fair values on the date of acquisition.

During the first quarter of 2010, the Company completed the annual impairment test for goodwill and intangible assets with indefinite lives and determined that these assets had not been impaired as of the test date, January 1, 2010. The Company tested the goodwill and identifiable intangible assets utilizing estimated cash flow methodologies and market comparable information. No events occurred or circumstances changed during the year ended December 31, 2010 that would indicate that the fair value of the Company's reporting unit is below its carrying amount.

Identifiable intangible assets with finite lives are amortized on either a straight-line basis over their estimated useful lives or under the proportional cash flow method and are reviewed for impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable.

The Company reconsidered the indefinite life associated with its Fluent and CFX trademarks as part of the product and naming strategy changes that occurred as a result of the July 31, 2008 acquisition of Ansoft. During the third quarter of 2008, the Company completed an impairment test for these trademarks and determined that these assets had not been impaired as of the test date, July 31, 2008, and determined that such trademarks had a remaining finite useful life of ten years. Accordingly, on July 31, 2008, the Company began amortizing these trademarks over a ten-year period.

As of December 31, 2010 and 2009, the Company's intangible assets have estimated useful lives and are classified as follows:


	December 31, 2010					December 31, 2009
*(in thousands)*	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Core technology (3–10 years)	$	205,137	$	(120,633	)	$	205,212	$	(96,851	)
Trademarks (3–10 years)		100,994		(21,499	)		101,034		(12,591	)
Non-compete agreements (5 years)		575		(489	)		712		(505	)
Customer lists (5–13 years)		172,845		(58,967	)		169,184		(44,239	)

Total	$	479,551	$	(201,588	)	$	476,142	$	(154,186	)

Unamortized intangible assets:
Trademarks	$	357				$	357

Amortization expense for intangible assets reflected above was $48.7 million, $52.0 million and $38.1 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Amortization expense for the amortized intangible assets reflected above is expected to be approximately $46.0 million, $42.7 million, $37.7 million, $35.5 million and $32.7 million for the years ending December 31, 2011, 2012, 2013, 2014 and 2015, respectively.

The changes in goodwill during the years ended December 31, 2010 and 2009 are as follows:


	Year Ended December 31,
*(in thousands)*	2010			2009
Beginning balance	$	1,038,824		$	1,048,003
Ansoft stock option tax benefit		(2,151	)		(5,493	)
Currency translation and other		(1,590	)		(3,686	)

Ending balance	$	1,035,083		$	1,038,824

In conjunction with the Ansoft acquisition, Ansoft stock option holders received approximately 1.94 million fully vested ANSYS options. As these options are exercised, ANSYS may receive a tax benefit that will be treated as a reduction in goodwill. As of December 31, 2010, there are currently 367,000 shares underlying these options outstanding.

Long-Term Debt

12 Months Ended

Dec. 31, 2010

Long-Term Debt

Long-Term Debt

7. Long-Term Debt

Borrowings consist of the following:


	December 31,
*(in thousands)*	2010			2009
Term loan payable in quarterly installments with a final maturity of July 31, 2013	$	159,446		$	225,076
Capitalized lease obligations		79			350

Total		159,525			225,426
Less current portion		(31,962	)		(26,758	)

Long-term debt and capital lease obligations, net of current portion	$	127,563		$	198,668

On May 1, 2006, ANSYS borrowed $198.0 million from a syndicate of banks. The interest rate on the indebtedness was based on the Company's consolidated leverage ratio and generally ranged from the LIBOR rate + (0.50% – 1.25%) or, at the Company's election, the prime rate + (0.00% – 0.25%). On June 30, 2008, the Company paid all remaining outstanding loan balances under this term loan.

On July 31, 2008, ANSYS borrowed $355.0 million from a syndicate of banks. The interest rate on the indebtedness provides for tiered pricing with the initial rate at the prime rate + 0.50%, or the LIBOR rate + 1.50%, with step downs permitted after the initial six months under the credit agreement down to a flat prime rate or the LIBOR rate + 0.75%. Such tiered pricing is determined by the Company's consolidated leverage ratio. The Company's consolidated leverage ratio has been reduced to the lowest pricing tier in the debt agreement. During the year ended December 31, 2010, the Company made the required quarterly principal payments of $23.5 million in the aggregate. In addition, the Company made prepayments during the year ended December 31, 2010 totaling $42.2 million in the aggregate, which reduce, on a pro-rata basis, future quarterly pr incipal installments. As of December 31, 2010, required future principal payments total $31.9 million in 2011, $74.4 million in 2012 and $53.1 million in 2013.

The Company entered into an interest rate swap agreement in order to hedge a portion of each of the first eight forecasted quarterly variable rate interest payments on the Company's term loan. Under the swap agreement, the Company received the variable, three-month LIBOR rate required under its term loan and paid a fixed LIBOR interest rate of 3.32% on the notional amount. The initial notional amount of $300.0 million was amortized equally at an amount of $37.5 million per quarter over eight quarters through June 30, 2010. Because the Company paid the LIBOR rate on its underlying credit agreement, the interest rate swap agreement qualified for hedge accounting.

For the year ended December 31, 2010, the Company recorded interest expense related to the term loan at a weighted average interest rate of 1.53%. If the Company did not enter into the interest rate swap agreement, the weighted average interest rate would have been 1.08%. For the year ended December 31, 2009, the Company recorded interest expense related to the term loan at a weighted average interest rate of 3.41%. If the Company did not enter into the interest rate swap agreement, the weighted average interest rate would have been 1.88%. For the year ended December 31, 2008, the Company recorded interest expense related to the term loans at a weighted average interest rate of 4.72%. If the Company did not enter into the interest rate swap agreement, the weighted average interest rate would have been 4.73%. The interest expense on the term loans and amortization related to debt financing costs were as follows:


	Year Ended December 31,
	2010				2009				2008
*(in thousands)*	Interest Expense		Amortization		Interest Expense		Amortization		Interest Expense		Amortization
May 1, 2006 term loan	$	0	$	0	$	0	$	0	$	1,219	$	952
July 31, 2008 term loan (interest expense includes $864 loss, $3,959 loss and $3 gain, respectively, on interest rate swap)		2,960		1,107		8,824		1,229		6,524		573

Total	$	2,960	$	1,107	$	8,824	$	1,229	$	7,743	$	1,525

The interest rate on the outstanding term loan balance of $159.4 million is set for the quarter ending March 31, 2011 at 1.05%, which is based on LIBOR + 0.75%. As of December 31, 2010, the fair value of the debt approximated the recorded value.

The credit agreement includes covenants related to the consolidated leverage ratio and the consolidated fixed charge coverage ratio, as well as certain restrictions on additional investments and indebtedness. As of December 31, 2010, the Company is in compliance with all financial covenants as stated in the credit agreement.

Fair Value Measurement

12 Months Ended

Dec. 31, 2010

Fair Value Measurement

Fair Value Measurement

8. Fair Value Measurement

The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:

•

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

•

Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or

•

Level 3: unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value.

A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the assets and liabilities carried at fair value and measured on a recurring basis:


	December 31, 2010		Fair Value Measurements at Reporting Date Using:
*(in thousands)*	December 31, 2010		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	301,714	$	273,926	$	27,788	$	0

Short-term investments	$	455	$	0	$	455	$	0



	December 31, 2009			Fair Value Measurements at Reporting Date Using:
*(in thousands)*	December 31, 2009			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	170,577		$	170,577	$	0		$	0

Short-term investments	$	7,966		$	0	$	7,966		$	0

Liabilities
Interest rate swap agreement	$	(853	)	$	0	$	(853	)	$	0

The cash equivalents in the preceding tables represent money market mutual funds and time deposits.

The short-term investments in the preceding tables represent deposits held by certain foreign subsidiaries of the Company. The deposits have fixed interest rates with maturity dates ranging from three months to one year. There were no unrealized gains or losses associated with these deposits for the years ended December 31, 2010 and 2009.

The Company had no transfers of amounts in or out of Level 1 or Level 2 fair value measurements during the year ended December 31, 2010.

The interest rate swap agreement in the preceding table was recorded in other accrued expenses and liabilities on the consolidated balance sheet as of December 31, 2009 and was used to hedge a portion of each of the first eight forecasted quarterly variable rate interest payments on the Company's term loan. There was no ineffective portion of the swap agreement for the years ended December 31, 2010 and 2009. The interest rate swap agreement terminated on June 30, 2010.

The pre-tax (loss) gain on the Company's interest rate swap agreement is categorized in the table below:


	Year Ended
*(in thousands)*	Loss Recognized in Accumulated Other Comprehensive Income (Effective Portion)			(Loss) Gain Reclassified from Accumulated Other Comprehensive Income into Income Statement (Effective Portion)			Gain /(Loss) Recognized in Income Statement (Ineffective Portion)
Cash Flow Hedge
Interest rate swap agreement
December 31, 2010	$	(11	)	$	(864	)	$	0

December 31, 2009	$	(783	)	$	(3,959	)	$	0

December 31, 2008	$	(4,026	)	$	3		$	0

The carrying values of cash, accounts receivable, accounts payable, accrued expenses, other accrued liabilities and short-term obligations approximate their fair values because of their short-term nature. The carrying value of long-term debt approximates its fair value due to the variable interest rate underlying the Company's credit facility.

Income Taxes

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Taxes

9. Income Taxes

Income before income taxes includes the following components:


	Year Ended December 31,
*(in thousands)*	2010		2009		2008
Domestic	$	162,921	$	128,173	$	116,786
Foreign		53,473		45,356		49,905

Total	$	216,394	$	173,529	$	166,691

The provision for income taxes is comprised of the following:


	Year Ended December 31,
*(in thousands)*	2010			2009			2008
Current:
Federal	$	62,350		$	57,077		$	42,562
State		5,589			6,379			5,629
Foreign		21,964			21,720			20,152
Deferred:
Federal		(15,173	)		(18,287	)		(6,750	)
State		(2,102	)		(2,277	)		(2,115	)
Foreign		(9,366	)		(7,474	)		(4,458	)

Total	$	63,262		$	57,138		$	55,020

The reconciliation of the U.S. federal statutory tax rate to the consolidated effective tax rate is as follows:


	Year Ended December 31,
	2010			2009			2008
Federal statutory tax rate		35.0	%		35.0	%		35.0	%
Stock-based compensation		1.4			1.3			1.0
State income taxes, net of federal benefit		0.7			1.3			1.1
Uncertain tax positions		(0.8	)		(1.0	)		1.1
Domestic production activity benefit		(2.8	)		(2.4	)		(1.6	)
Research and experimentation credits		(0.7	)		(1.2	)		(2.0	)
Net tax (benefit) on repatriated earnings		(1.3	)		0			0
Adjustments of prior year taxes		(1.1	)		0			(1.0	)
Foreign rate differential		(0.7	)		(0.9	)		(0.7	)
Other		(0.5	)		0.8			0.1

		29.2	%		32.9	%		33.0	%

In general, it is the practice and intention of the Company to repatriate previously taxed earnings and to reinvest all other earnings of its non-U.S. subsidiaries. As of December 31, 2010, the Company has recorded a deferred tax liability of $171,000 related to the tax impact of foreign exchange differences on previously taxed earnings not yet repatriated. The Company has not made a provision for U.S. taxes on approximately $102.9 million, representing the excess of the amount for financial reporting over the tax bases of investments in foreign subsidiaries that are essentially permanent in duration. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these subsidiaries. < /p>

The components of deferred tax assets and liabilities are as follows:


	December 31,
*(in thousands)*	2010			2009
Deferred tax assets:
Employee benefits	$	14,788		$	11,907
Net operating loss carryforwards		12,402			4,736
Stock-based compensation		8,916			6,197
Other accruals not currently deductible		8,386			4,083
Deferred revenue		5,089			4,104
Foreign tax credits		4,398			0
Uncertain tax positions		3,084			2,974
Allowance for doubtful accounts		1,587			1,429
Research and development credits		1,429			1,122
Investments		229			2,082
Interest rate swap		0			321
Other		588			602
Valuation allowance		(977	)		(2,082	)

		59,919			37,475
Deferred tax liabilities:
Other intangible assets		(108,071	)		(120,453	)
Property and equipment		(3,430	)		(2,837	)
Unremitted foreign earnings		(171	)		(1,238	)

		(111,672	)		(124,528	)

Net deferred tax liabilities	$	(51,753	)	$	(87,053	)

The deferred tax assets labeled investments in the table above relate primarily losses generated on the disposition of investments, the deduction for which may only be utilized to offset future capital gains. Based on the nature of the Company's investments, it has been determined that it is unlikely that it will experience these capital gains and, therefore, the Company has established a full valuation allowance against the related tax assets. In addition, a valuation allowance exists against certain acquired net operating losses of Ansoft for which realization is not assured. Based upon the Company's current and historical taxable income, and the anticipated level of future taxable income, management believes it is more likely than not that the remaining deferred tax assets will be realized. Accordingly, no valuation allowance has been established against those asset s.

The Company has domestic net operating loss carryforwards available to offset state taxable income of $199,000. In addition, the Company has a foreign net operating loss carryforward of $5.6 million that has no expiration date and $25.7 million that expires between 2017—2020. Included in the losses without an expiration date are $4.6 million of losses on which realization is not assured. A valuation allowance has been established against these assets.

The following is a reconciliation of the total amounts of unrecognized tax benefits:


	Year Ended December 31,
*(in thousands)*	2010			2009			2008
Unrecognized tax benefit as of January 1	$	10,041		$	12,416		$	7,928
Ansoft unrecognized tax benefit—acquired July 31, 2008		0			0			3,525
Gross increases—tax positions in prior period		177			427			2,454
Gross decreases—tax positions in prior period		(2,415	)		(3,259	)		(1,572	)
Gross increases—tax positions in current period		13,001			1,562			2,255
Reductions due to a lapse of the applicable statute of limitations		(674	)		(887	)		(1,598	)
Changes due to currency fluctuation		(84	)		65			(259	)
Settlements		(53	)		(283	)		(317	)

Unrecognized tax benefit as of December 31	$	19,993		$	10,041		$	12,416

The Company does not expect any uncertain tax positions to be resolved within the next twelve months.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. Related to the uncertain tax benefits noted above, the Company accrued additional penalties and interest of $479,000 during 2010. In total, as of December 31, 2010, the Company has recognized a liability for penalties of $455,000 and interest of $2.0 million.

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. The Company's 2007 through 2009 tax years are open to examination by the Internal Revenue Service. The 2007 and 2008 federal returns are currently under examination. The Company also has various foreign and state tax filings subject to examination for various years.

Pension and Profit-Sharing Plans	12 Months Ended
Pension and Profit-Sharing Plans	Dec. 31, 2010
Pension and Profit-Sharing Plans
Pension and Profit-Sharing Plans	10. Pension and Profit-Sharing Plans The Company has a 401(k)/profit-sharing plan for all qualifying full-time domestic employees that permit participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. The Company makes matching contributions on behalf of each eligible participant in an amount equal to 100% of the first 3% and an additional 25% of the next 5%, for a maximum total of 4.25% of the employee's compensation. The Company may make a discretionary contribution based on the participant's eligible compensation, provided the employee is employed at the end of the year and has worked at least 1,000 hours. The qualifying domestic employees of the Company's former Ansoft subsidiary, acquired on July 31, 2008, also participated in a 401(k) plan, which was merged into the ANSYS 401(k) plan in 2010. There is no matching employer contrib ution for employees associated with the former Ansoft 401(k) plan. The Company also maintains various defined contribution pension arrangements for its international employees. Expenses related to the Company's retirement programs were $3.9 million in 2010, $3.4 million in 2009 and $3.7 million in 2008.

Non-Compete and Employment Agreements	12 Months Ended
Non-Compete and Employment Agreements	Dec. 31, 2010
Non-Compete and Employment Agreements
Non-Compete and Employment Agreements	11. Non-Compete and Employment Agreements Employees of the Company have signed agreements under which they have agreed not to disclose trade secrets or confidential information and, where legally permitted, that restrict engagement in or connection with any business that is competitive with the Company anywhere in the world while employed by the Company (and, in some cases, for specified periods thereafter), and that any products or technology created by them during their term of employment are the property of the Company. In addition, the Company requires all channel partners to enter into agreements not to disclose the Company's trade secrets and other proprietary information. The Company has an employment agreement with the Chairman of its Board of Directors. In the event the Chairman is terminated without cause, his employment agreement provides for severance at the annual rate of $300,000 for the earlier of a period of one year after termination or when he accepts other employment. The Chairman is subject to a one-year restriction on competition following termination of employment under the circumstances described in the contract. The Company has an employment agreement with the Chief Executive Officer. This agreement provides for, among other things, minimum severance payments equal to his base salary, target bonus and then-existing benefits, through the earlier of the second anniversary of the termination date if the Chief Executive Officer is terminated without cause or when he accepts other employment. The Chief Executive Officer is subject to a two-year restriction on competition following termination of employment under the circumstances described in the contract. The Company also has employment agreements with several other employees, primarily in foreign jurisdictions. The terms of these employment agreements generally include annual compensation, severance payment provisions and non-compete clauses.

Stock Option and Grant Plan

12 Months Ended

Dec. 31, 2010

Stock Option and Grant Plan

Stock Option and Grant Plan

12. Stock Option and Grant Plan

The Company has one stock option and grant plan—the Third Amended and Restated 1996 Stock Option and Grant Plan ("Stock Plan"). The Stock Plan, as amended, authorizes the grant of up to 25,400,000 shares of the Company's common stock in the form of: (i) incentive stock options ("ISOs"), (ii) nonqualified stock options or (iii) the issuance or sale of common stock with or without vesting or other restrictions. Additionally, the Stock Plan permits (a) the grant of common stock upon the attainment of specified performance goals, (b) the grant of the right to receive cash dividends with the holders of the common stock as if the recipient held a specified number of shares of the common stock and (c) the grant of deferred stock awards. In addition to the authorized shares of the Stock Plan, the Company also has 194,982 shares available for stock option issuance that remain under the former Ansoft plan as of December 31, 2010.

The Stock Plan provides that: (i) the exercise price of an ISO must be no less than the fair value of the stock at the date of grant and (ii) the exercise price of an ISO held by an optionee who possesses more than 10% of the total combined voting power of all classes of stock must be no less than 110% of the fair market value of the stock at the time of grant. The Compensation Committee of the Board of Directors has the authority to set expiration dates no later than ten years from the date of grant (or five years for an optionee who meets the 10% criteria), payment terms and other provisions for each grant. The majority of options granted have a four year vesting period. Shares associated with unexercised options or reacquired shares of common stock become available for options or issuances under the Stock Plan. The Compensation Committee of the Bo ard of Directors may, at its sole discretion, accelerate or extend the date or dates on which all or any particular award or awards granted under the Stock Plans may vest or be exercised. In the event of a merger, liquidation or sale of substantially all of the assets of the Company, the Board of Directors has the discretion to accelerate the vesting of the options granted under the Stock Plan, except that options granted to Independent Directors and certain key executives vest automatically. Under certain scenarios, other optionees may also automatically vest upon the occurrence of such an event. The Stock Plan also provides that, in the event of a sale in which the Company's stockholders receive cash consideration, the Company may make or provide for a cash payment to participants holding options equal to the difference between the per share cash consideration and the exercise price of the option. In addition, the Stock Plan and the grants issued thereunder terminate upon the effectiveness of any such tran saction or event, unless a provision is made in connection with such transaction for the assumption of grants theretofore made. Under the Stock Plan, at the discretion of the Compensation Committee, any option may include a "reload" feature. Such feature allows an optionee exercising an option to receive, in addition to the number of shares of common stock due on the exercise, an additional option with an exercise price equal to the fair market value of the common stock on the date such additional option is granted.

In addition, the Stock Plan provides that the Chairman of the Board of Directors, provided he or she is not an officer of the Company, and the non-affiliate Independent Directors, will receive, at their option, a quarterly grant of (i) 1,400 deferred stock units, which are rights to receive shares of common stock upon termination of service as a Director, or (ii) options to purchase 4,000 shares of common stock. The stock options have a vesting period of four years and expire after seven years, and the deferred stock units are issued in arrears and vest immediately. The exercisability of unvested stock options will be accelerated upon the occurrence of a merger, liquidation or sale of substantially all of the assets of the Company. As of December 31, 2010, 56,620 deferred stock units have been earned with the underlying shares remaining unis sued until the service termination of the respective Director owners. Of this amount, 16,800 were earned during the year ended December 31, 2010.

The Company currently issues shares related to exercised stock options from its existing pool of treasury shares and has no specific policy to repurchase treasury shares as stock options are exercised. If the treasury pool is depleted, as it was at December 31, 2010, the Company will issue new shares.

Information regarding stock option transactions is summarized below:


	Year Ended December 31,
	2010					2009					2008
*(options in thousands)*	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding, beginning of year		8,110		$	22.94		9,216		$	16.91		7,479		$	15.30
Granted		1,204		$	48.35		1,317		$	37.13		1,039		$	29.37
Assumed Pursuant to Ansoft Acquisition		0		$	0.00		0		$	0.0		1,946		$	10.38
Exercised		(1,924	)	$	11.92		(2,299	)	$	6.68		(1,190	)	$	6.37
Forfeited		(71	)	$	32.40		(124	)	$	27.08		(58	)	$	29.91
Outstanding, end of year		7,319		$	29.92		8,110		$	22.94		9,216		$	16.91
Vested and Exercisable, end of year		4,214		$	23.11		4,914		$	16.74		6,214		$	11.18


	2010		2009		2008
Weighted Average Remaining Contractual Term (in years)
Outstanding		6.54		6.16		5.61
Vested and Exercisable		5.16		4.72		4.26
Aggregate Intrinsic Value (in thousands)
Outstanding	$	162,099	$	166,531	$	115,528
Vested and Exercisable	$	122,022	$	131,334	$	108,247

Historical and future expected forfeitures have not been significant and, as a result, the outstanding option amounts reflected in the tables above approximate the options expected to vest.

The Company's determination of fair value of share-based payment awards on the date of grant using an option pricing model is affected by the Company's stock price as well as assumptions regarding a number of variables. The total estimated grant date fair values of stock options that vested during the years ended December 31, 2010, 2009 and 2008 were $16.7 million, $12.4 million and $10.5 million, respectively. At December 31, 2010, total unrecognized estimated compensation cost related to unvested stock options granted prior to that date was $44.4 million, which is expected to be recognized over a weighted average period of 2.0 years. The total intrinsic values of stock options exercised during the years ended December 31, 2010, 2009 and 2008 were $88.0 million, $82.9 million and $41.2 million, respectively. At Dec ember 31, 2010, 3.1 million unvested options with an aggregate intrinsic value of $40.1 million are expected to vest and have a weighted average exercise price of $39.14 and a weighted average remaining contractual term of 8.4 years. The Company recorded cash received from the exercise of stock options of $22.9 million and related tax benefits of $16.3 million (including an excess tax benefit of $11.8 million) for the year ended December 31, 2010.

Information regarding stock options outstanding as of December 31, 2010 is summarized below:


*(options in thousands)*	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
$ 2.98 - $16.45		1,264		2.46	$	8.75		1,264	$	8.75
$ 16.88 - $24.01		1,660		5.52	$	21.10		1,333	$	21.85
$ 24.58 - $38.56		1,221		7.08	$	29.35		675	$	29.62
$ 38.75 - $40.89		1,923		7.83	$	39.91		907	$	39.36
$ 41.33 - $52.07		1,251		9.51	$	48.23		35	$	43.79

In the first quarter of 2010, the Company granted 80,500 performance-based restricted stock units under the terms of the ANSYS, Inc. Long-Term Incentive Plan. Vesting of the full award or a portion thereof is based on the Company's performance as measured by total shareholder return relative to the median percentage appreciation of the NASDAQ Composite Index over a specified measurement period, subject to the participant's continued employment with the Company through the conclusion of the measurement period. The measurement period for the restricted stock units is the three-year period from January 1, 2010 through December 31, 2012. Each restricted stock unit relates to one share of the Company's common stock. The value of the restricted stock units was estimated on the grant date to be $25.00 using a Monte Carlo lattice pricing model. Share-based c ompensation expense based on the fair value of the award will be recorded from the grant date through the conclusion of the three year measurement period. Total compensation expense associated with the awards is $2.0 million, of which $590,000 was recorded in 2010 and $710,000 will be recorded in each year during both 2011 and 2012.

Stock Repurchase Program	12 Months Ended
Stock Repurchase Program	Dec. 31, 2010
Stock Repurchase Program
Stock Repurchase Program	13. Stock Repurchase Program In October 2001, the Company announced that its Board of Directors had amended its common stock repurchase program to acquire up to an additional four million shares, or 16 million shares in total, under a program that was initially announced in February 2000. Under this program, the Company repurchased 2,069,763 and 368,406 shares in 2009 and 2008, respectively. The Company repurchased no shares under this program during 2010. As of December 31, 2010, 1.3 million shares remained authorized for repurchase under the program.

Employee Stock Purchase Plan	12 Months Ended
Employee Stock Purchase Plan	Dec. 31, 2010
Employee Stock Purchase Plan
Employee Stock Purchase Plan	14. Employee Stock Purchase Plan The Company's 1996 Employee Stock Purchase Plan (the "Purchase Plan") was adopted by the Board of Directors on April 19, 1996 and was subsequently approved by the Company's stockholders. The stockholders approved an amendment to the Purchase Plan on May 6, 2004 to increase the number of shares available for offerings to 1.6 million shares. The Purchase Plan was amended and restated in 2007. The Purchase Plan is administered by the Compensation Committee. Offerings under the Purchase Plan commence on each February 1 and August 1, and have a duration of six months. An employee who owns or is deemed to own shares of stock representing in excess of 5% of the combined voting power of all classes of stock of the Company may not participate in the Purchase Plan. During each offering, an eligible employee may purchase shares under the Purchase Plan by authorizing payroll deductions of up to 10% of his cash compensation during the offering period. The maximum number of shares that may be purchased by any participating employee during any offering period is limited to 3,840 shares (as adjusted by the Compensation Committee from time to time). Unless the employee has previously withdrawn from the offering, his accumulated payroll deductions will be used to purchase common stock on the last business day of the period at a price equal to 90% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Under applicable tax rules, an employee may purchase no more than $25,000 worth of common stock in any calendar year. At December 31, 2010, 1,134,377 shares of common stock had been issued under the Purchase Plan, of which 1,086,986 were issued as of December 31, 2009. The total compensation expense recorded under the Purchase Plan during the years ended December 31, 2010, 2009 and 2008 was $500,000, $410,000 and $350,000, respectively.

Leases	12 Months Ended
Leases	Dec. 31, 2010
Leases
Leases	15. Leases In January 1996, the Company entered into a lease agreement with an unrelated third party for a new corporate office facility, in Canonsburg, Pennsylvania, which the Company occupied in February 1997. In May 2004, the Company entered into the first amendment to this lease agreement, effective January 1, 2004. The lease was extended from an original period of ten years, with an option for five additional years, to a period of 18 years from the inception date, with an option for five additional years. The Company incurred lease rental expense related to this facility of $1.3 million in 2010, 2009 and 2008. The future minimum lease payments are $1.4 million per annum from January 1, 2011 through December 31, 2014. The future minimum lease payments from January 1, 2015 through December 31, 2019 will be determined based on prevai ling market rental rates at the time of the extension, if elected. The amended lease also provided for the lessor to reimburse the Company for up to $550,000 in building refurbishments completed through March 31, 2006. These amounts have been recorded as a reduction of lease expense over the remaining term of the lease. In August 2009, the Company's Ansoft U.S. subsidiary extended the executive office space lease agreement in Pittsburgh, Pennsylvania for a period of approximately three years and ten months, commencing February 15, 2011 and expiring December 31, 2014. Total required minimum payments under the operating lease will be $570,000 for each of the years 2011 through 2014. The Company has also entered into various noncancellable operating leases for equipment and office space, including the locations referenced above. Office space lease expense totaled $11.5 million, $12.4 million and $9.3 million for the years ended December 31, 2010, 2009 and 2008, respectively. Future minimum lease payments under noncancellable operating leases for office space in effect at December 31, 2010 are $10.0 million in 2011, $7.2 million in 2012, $4.5 million in 2013, $4.2 million in 2014 and $1.5 million in 2015.

Royalty Agreements	12 Months Ended
Royalty Agreements	Dec. 31, 2010
Royalty Agreements
Royalty Agreements	16. Royalty Agreements The Company has entered into various renewable, nonexclusive license agreements under which the Company has been granted access to the licensor's technology and the right to sell the technology in the Company's product line. Royalties are payable to developers of the software at various rates and amounts, which generally are based upon unit sales or revenue. Royalty fees are reported in cost of goods sold and were $6.8 million, $6.9 million and $6.3 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Geographic Information - Revenue

12 Months Ended

Dec. 31, 2010

Geographic Information - Revenue

Geographic Information - Revenue

17. Geographic Information—Revenue

Revenue to external customers is attributed to individual countries based upon the location of the customer. Revenue by geographic area is as follows:


	Year Ended December 31,
*(in thousands)*	2010		2009		2008
United States	$	188,649	$	172,275	$	151,688
Japan		95,498		75,207		66,960
Germany		60,399		55,652		68,390
Canada		9,875		8,068		8,033
Other European		138,157		134,869		127,246
Other International		87,658		70,814		56,022

Total revenue	$	580,236	$	516,885	$	478,339

Geographic Information - Long-Lived Assets

12 Months Ended

Dec. 31, 2010

Geographic Information - Long-Lived Assets

Geographic Information - Long-Lived Assets

18. Geographic Information—Long-Lived Assets

Property and equipment by geographic area is as follows:


	December 31,
*(in thousands)*	2010		2009
United States	$	25,156	$	24,565
India		2,846		2,882
Japan		1,493		1,814
United Kingdom		2,316		1,708
Germany		1,709		1,648
Canada		1,014		577
Other European		1,959		1,631
Other international		428		306

Total property and equipment	$	36,921	$	35,131

Unconditional Purchase Obligations	12 Months Ended
Unconditional Purchase Obligations	Dec. 31, 2010
Unconditional Purchase Obligations
Unconditional Purchase Obligations	div p style="margin-top: 18px; margin-bottom: 0px;"font style="font-family: Times New Roman;" class="_mt" size="2"b19.nbsp;nbsp;nbsp;nbsp;Unconditional Purchase Obligations /b/font/p p style="margin-top: 6px; text-indent: 4%; margin-bottom: 0px;"font style="font-family: Times New Roman;" class="_mt" size="2"The Company has entered into various unconditional purchase obligations which primarily include software licenses and long term purchase contracts for network, communication and office maintenance services. The Company expended $2.9 million, $3.4 million, and $4.5 million related to unconditional purchase obligations that existed as of the beginning of each year for the years ended December 31, 2010, 2009 and 2008, respectively. Future expenditures under these obligations in effect at December 31, 2010 are $5.0 million in 2011, $2.5 million in 2012, $2.1 million in 2013 and $547,000 each in 2014 and 2015./font/p /div

Contingencies and Commitments	12 Months Ended
Contingencies and Commitments	Dec. 31, 2010
Contingencies and Commitments
Contingencies and Commitments	20. Contingencies and Commitments The Company is subject to various investigations, claims and legal proceedings that arise in the ordinary course of business, including alleged infringement of intellectual property rights, commercial disputes, labor and employment matters, tax audits and other matters. In the opinion of the Company, the resolution of pending matters is not expected to have a material, adverse effect on the Company's consolidated results of operations, cash flows or financial position. However, each of these matters is subject to various uncertainties and it is possible that an unfavorable resolution of one or more of these proceedings could in the future materially affect the Company's results of operations, cash flows or financial position. The Company sells software licenses and services to its customers under proprietary software license agreements. Each license agreement contains the relevant terms of the contractual arrangement with the customer, and generally includes certain provisions for indemnifying the customer against losses, expenses and liabilities from damages that are incurred by or awarded against the customer in the event the Company's software or services are found to infringe upon a patent, copyright, or other proprietary right of a third party. To date, the Company has not had to reimburse any of its customers for any losses related to these indemnification provisions and no material claims asserted under these indemnification provisions are outstanding as of December 31, 2010. For several reasons, including the lack of prior material indemnificatio n claims, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

Restructuring Charges: Workforce Reduction Activities	12 Months Ended
Restructuring Charges: Workforce Reduction Activities	Dec. 31, 2010
Restructuring Charges: Workforce Reduction Activities
Restructuring Charges: Workforce Reduction Activities	21. Restructuring Charges: Workforce Reduction Activities On May 7, 2009, the Company announced actions it had taken or would be taking as part of an ongoing effort to manage expenses and cost structure. These actions included a reduction of approximately 6% of the Company's global workforce. During the year ended December 31, 2009, the planned restructuring activities were completed and the Company recorded related restructuring charges of approximately $3.7 million.

Subsidiary Merger Activities	12 Months Ended
Subsidiary Merger Activities	Dec. 31, 2010
Subsidiary Merger Activities
Subsidiary Merger Activities	div p style="margin-top: 18px; margin-bottom: 0px;"font style="font-family: Times New Roman;" class="_mt" size="2"b22.nbsp;nbsp;nbsp;nbsp;Subsidiary Merger Activities /b/font/p p style="margin-top: 6px; text-indent: 4%; margin-bottom: 0px;"font style="font-family: Times New Roman;" class="_mt" size="2"To improve the effectiveness of the Company's operations in Japan, the Company completed the merger of its Japan subsidiaries during the third quarter of 2010. For tax purposes in Japan, this transaction resulted in a step-up in the tax basis of certain assets and liabilities of the merged subsidiary to fair value as of the date of the merger and gave rise to a taxable gain in Japan, resulting in a liability of approximately $77.3 million which was paid during the fourth quarter of 2010. The unamortized portion of the corresponding prepaid tax, which is deductible over the succeeding five-year period in Japan for the stepped-up tax basis of the assets and liabilities, is included on the consolidated balance sheet as of Decembernbsp;31, 2010. /font/p p style="margin-top: 12px; text-indent: 4%; margin-bottom: 0px;"font style="font-family: Times New Roman;" class="_mt" size="2"For U.S. tax purposes, this taxable gain in Japan gives rise to a foreign tax credit that reduces the current U.S. tax on foreign income. The Company's U.S. tax payments were reduced by approximately $22.2 million in 2010 as a result of this credit. The excess credit will be either carried back to previous U.S. federal tax years as a refund of taxes previously paid or applied to reduce tax payments in future periods. The Company currently expects that a refund of approximately $24.8 million will be requested for a portion of this foreign tax credit which can be carried back to reduce the tax obligation of previous years. The remaining portion of this foreign tax credit (approximately $4.8 million) will be used to reduce the amount of taxes to be paid in the U.S. in 2011 or future periods. Recognition of this foreign tax credit resulted in a deferred tax credit that wi ll be recognized as a reduction to the Company's U.S. taxes over the same five-year period that the prepaid tax in Japan is recognized. /font/p /div

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2010

Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

ANSYS, INC.

Valuation and Qualifying Accounts


*(in thousands)* Description	Balance at Beginning of Year		Additions– Charges to Costs and Expenses			Deductions– Returns and Write-Offs		Balance at End of Year
Year ended December 31, 2010 Allowance for doubtful accounts	$	4,418	$	1,757		$	1,672	$	4,503
Year ended December 31, 2009 Allowance for doubtful accounts	$	4,422	$	1,610		$	1,614	$	4,418
Year ended December 31, 2008 Allowance for doubtful accounts	$	3,399	$	2,637	(1)	$	1,614	$	4,422

(1)	Amount includes $1,453 related to the acquisition date balance sheet of Ansoft.