Altera 10-Q 26 Apr 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Apr. 02, 2010	Apr. 14, 2010	Jun. 26, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	ALTERA CORP
Entity Central Index Key	0000768251
Document Type	10-Q
Document Period End Date	2010-04-02
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$4,067,455,979
Entity Common Stock, Shares Outstanding (actual number)		301,656,409

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	3 Months Ended Apr. 02, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	$1,738,375	$1,546,672
Accounts receivable, net	360,135	218,144
Inventories	87,319	69,705
Deferred income taxes - current	80,337	79,164
Deferred compensation plan - marketable securities	49,634	50,905
Deferred compensation plan - restricted cash equivalents	18,940	18,986
Other current assets	59,721	58,194
Total current assets	2,394,461	2,041,770
Property and equipment, net	169,023	174,516
Deferred income taxes - non-current	55,057	59,249
Other assets, net	18,828	17,696
Total assets	2,637,369	2,293,231
Current liabilities:
Accounts payable	66,554	50,520
Accrued liabilities	21,586	32,256
Accrued compensation and related liabilities	52,880	49,862
Deferred compensation plan obligations	68,574	69,891
Deferred income and allowances on sales to distributors	399,869	281,885
Income taxes payable	3,913	5,547
Total current liabilities	613,376	489,961
Income taxes payable - non-current	203,057	210,967
Long-term credit facility	500,000	500,000
Other non-current liabilities	7,435	6,967
Total liabilities	1,323,868	1,207,895
Commitments and contingencies (See "Note 10-Commitments and Contingencies")
Stockholders' equity:
Common stock: $.001 par value; 1,000,000 shares authorized; outstanding -- 301,173 at April 2, 2010 and 296,817 shares at December 31, 2009	301	297
Capital in excess of par value	465,307	372,098
Retained earnings	847,893	712,941
Total stockholders' equity	1,313,501	1,085,336
Total liabilities and stockholders' equity	$2,637,369	$2,293,231

1_Consolidated Balance Sheets (

Consolidated Balance Sheets (Unaudited) (Parenthetical)
Share data in Thousands	Apr. 02, 2010	Dec. 31, 2009
Stockholders' equity:
Common stock, par value	0.001	0.001
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares outstanding	301,173	296,817

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Apr. 02, 2010	3 Months Ended Mar. 27, 2009
Consolidated Statements of Income (Unaudited) [Abstract]
Net sales	$402,295	$264,602
Cost of sales	114,936	94,029
Gross margin	287,359	170,573
Research and development expense	64,340	58,190
Selling, general, and administrative expense	62,181	60,659
Compensation expense - deferred compensation plan	2,228	23
Gain on deferred compensation plan securities	(2,228)	(23)
Interest income and other	(592)	(3,378)
Interest expense	1,291	1,338
Income before income taxes	160,139	53,764
Income tax expense	6,966	9,803
Net income	$153,173	$43,961
Net income per share:
Basic	0.51	0.15
Diluted	0.5	0.15
Shares used in computing per share amounts:
Basic	298,566	293,105
Diluted	304,327	294,881
Cash dividends per common share	0.05	0.05

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	3 Months Ended Apr. 02, 2010	3 Months Ended Mar. 27, 2009
Cash Flows from Operating Activities:
Net income	$153,173	$43,961
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,066	7,516
Stock-based compensation	14,062	15,842
Deferred income tax expense	909	1,838
Tax effect of employee stock plans	3,105	(1,026)
Excess tax benefit from employee stock plans	(1,828)	(45)
Gain on substantive termination of retiree medical plan		(6,488)
Changes in assets and liabilities:
Accounts receivable, net	(141,991)	(98,690)
Inventories	(17,614)	21,304
Other assets	(2,694)	19,385
Accounts payable and other liabilities	11,477	(10,399)
Deferred income and allowances on sales to distributors	117,984	39,908
Income taxes payable	(7,434)	7,551
Deferred compensation plan obligations	(3,545)	3,327
Net cash provided by operating activities	132,670	43,984
Cash Flows from Investing Activities:
Purchases of property and equipment	(1,538)	(4,553)
Sales (purchases) of deferred compensation plan securities, net	3,545	(3,327)
Purchases of intangible assets		(438)
Net cash provided by (used in) investing activities	2,007	(8,318)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock through various stock plans	77,482	2,305
Shares withheld for employee taxes	(4,784)	(3,783)
Payment of dividends to stockholders	(14,873)	(14,663)
Excess tax benefit from stock-based compensation	1,828	45
Principal payments on capital lease obligations	(2,627)	(2,022)
Net cash provided by (used in) financing activities	57,026	(18,118)
Net increase in cash and cash equivalents	191,703	17,548
Cash and cash equivalents at beginning of period	1,546,672	1,216,743
Cash and cash equivalents at end of period	$1,738,375	$1,234,291

Organization and Basis of Prese

Organization and Basis of Presentation
	3 Months Ended Apr. 02, 2010
Organization and Basis of Presentation [Abstract]
Organization and Basis of Presentation	Note 1 Organization and Basis of Presentation The accompanying unaudited consolidated financial statements of Altera Corporation and its subsidiaries, collectively referred to herein as Altera, we, us, or our, have been prepared by us in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information. This financial information reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The December31, 2009 consolidated balance sheet data was derived from our audited consolidated financial statements included in our 2009 Annual Report on Form 10-K, but does not include all disclosures required by U.S. GAAP. The consolidated financial statements include our accounts as well as those of our wholly-owned subsidiaries after elimination of all significant inter-company balances and transactions. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December31, 2009 included in our Annual Report on Form 10-K, as filed on February17, 2010 with the Securities and Exchange Commission (SEC). The consolidated operating results for the three months ended April2, 2010 are not necessarily indicative of the results to be expected for any future period.

Recent Accounting Pronouncement

Recent Accounting Pronouncements
	3 Months Ended Apr. 02, 2010
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	Note 2 Recent Accounting Pronouncements Accounting Standards Adopted in the Three Months Ended April2, 2010 Fair Value Measurements and Disclosures In January2010, the Financial Accounting Standards Board (FASB) issued amended guidance on fair value measurements and disclosures. The new guidance requires additional disclosures regarding fair value measurements, amends disclosures about postretirement benefit plan assets, and provides clarification regarding the level of disaggregation of fair value disclosures by investment class. This guidance is effective for interim and annual reporting periods beginning after December15, 2009, except for certain Level 3 activity disclosure requirements that will be effective for reporting periods beginning after December15, 2010. Accordingly, we adopted this amendment in the quarter ended April2, 2010, except for the additional Level 3 requirements which will be adopted in 2011. See Note 15 Fair Value of Financial Instruments to our consolidated financial statements. Subsequent Events In February2010, the FASB issued amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and we adopted this new guidance in the quarter ended April2, 2010. See Note 16 Subsequent Event to our consolidated financial statements.

Accounts Receivable, Net and Si

Accounts Receivable, Net and Significant Customers
	3 Months Ended Apr. 02, 2010
Accounts Receivable, Net and Significant Customers [Abstract]
Accounts Receivable, Net and Significant Customers	Note 3 Accounts Receivable, Net and Significant Customers Accounts receivable, net was comprised of the following: April 2, December 31, (In thousands) 2010 2009 Gross accounts receivable $ 361,109 $ 218,647 Allowance for doubtful accounts (500 ) (500 ) Allowance for sales returns (474 ) (3 ) Accounts receivable, net $ 360,135 $ 218,144 We sell our products to original equipment manufacturers, or OEMs, and to electronic components distributors who resell these products to OEMs, or their subcontract manufacturers. Net sales by customer type and net sales to significant customers were as follows: Three Months Ended April 2, March 27, (Percentage of Net Sales) 2010 2009 Sales to distributors 78 % 80 % Sales to OEMs 22 % 20 % 100 % 100 % Significant Distributors(1): Arrow Electronics, Inc. ( Arrow) 41 % 41 % Macnica, Inc. (Macnica) 17 % 14 % (1) Except as presented above, no other distributor accounted for greater than 10% of our net sales for the three months ended April2, 2010 and March27, 2009. No individual OEM accounted for more than 10% of our net sales for the three months ended April2, 2010, while Huawei Technologies Co., Ltd., an OEM, individually accounted for 12% of our net sales for the three months ended March27, 2009. No other individual OEM accounted for more than 10% of our net sales for the three months ended March27, 2009. As of April2, 2010, accounts receivable from Arrow, Macnica and Avnet, Inc. including its affiliates (Avnet) individually accounted for approximately 34%, 35% and 11%, respectively, of our total accounts receivable. As of December31, 2009, accounts receivable from Arrow, Macnica and Avnet, individually accounted for approximately 36%, 21% and 14%, respectively, of our total accounts receivable. No other distributor or OEM accounted for more than 10% of our accounts receivable as of April2, 2010 or December31, 2009.

Inventories

Inventories
	3 Months Ended Apr. 02, 2010
Inventories [Abstract]
Inventories	Note 4 Inventories Inventories were comprised of the following: April 2, December 31, (In thousands) 2010 2009 Raw materials $ 8,281 $ 7,158 Work in process 50,985 39,652 Finished goods 28,053 22,895 Total inventories $ 87,319 $ 69,705

Property and Equipment

Property and Equipment
	3 Months Ended Apr. 02, 2010
Property and Equipment [Abstract]
Property and Equipment	Note 5 Property and Equipment Property and equipment, net was comprised of the following: April 2, December 31, (In thousands) 2010 2009 Land and land rights $ 23,108 $ 23,108 Buildings 146,868 152,557 Equipment and software 216,068 213,187 Office furniture and fixtures 23,989 20,798 Leasehold improvements 6,930 6,930 Construction in progress 1,690 1,464 Property and equipment, at cost 418,653 418,044 Accumulated depreciation and amortization (249,630 ) (243,528 ) Property and equipment, net $ 169,023 $ 174,516 Depreciation expense includes the amortization of assets recorded under capital leases. Depreciation expense was $7.0million and $7.5million for the three months ended April2, 2010 and March27, 2009, respectively. Depreciation and amortization expense as presented in our consolidated statements of cash flows includes the above amounts, together with amortization expense on our intangible assets. Intangible asset amortization expense was not significant for any period presented in our consolidated statements of income. Assets held under capital leases, included in Equipment and software as presented above, totaled $7.5million (net of accumulated amortization of $8.0million) as of April2, 2010 and $8.6 million (net of accumulated amortization of $6.9million) as of December31, 2009.

Deferred Income and Allowances

Deferred Income and Allowances on Sales to Distributors
	3 Months Ended Apr. 02, 2010
Deferred Income and Allowances on Sales to Distributors [Abstract]
Deferred Income and Allowances on Sales to Distributors	Note 6 Deferred Income and Allowances on Sales to Distributors Deferred income and allowances on sales to distributors was comprised of the following: April 2, December 31, (In thousands) 2010 2009 Deferred revenue on shipment to distributors $ 489,849 $ 363,448 Deferred cost of sales on shipment to distributors (35,694 ) (28,971 ) Deferred income on shipment to distributors 454,155 334,477 Advances to distributors (62,776 ) (60,877 ) Other deferred revenue (1) 8,490 8,285 Total $ 399,869 $ 281,885 (1) Principally represents revenue deferred on our software and intellectual property licenses. The Deferred income and allowances on sales to distributor activity for the three months ended April2, 2010 and March27, 2009 was as follows: Three Months Ended April 2, March 27, (In thousands) 2010 2009 Balance at beginning of period $ 281,885 $ 205,674 Deferred revenue recognized upon shipment to distributors 1,846,658 968,215 Deferred costs of sales recognized upon shipment to distributors (99,028 ) (73,536 ) Decrease (increase)in advances to distributors (1,899 ) 48,103 Revenue recognized upon sell-through to end customers (305,489 ) (203,426 ) Costs of sales recognized upon sell-through to end customers 84,689 64,871 Earned distributor price concessions (1) (1,388,277 ) (706,867 ) Returns (18,875 ) (57,712 ) Increase in other deferred revenue 205 260 Balance at end of period $ 399,869 $ 245,582 (1) Average aggregate price concessions typically range from 65% to 80% of our list price on an annual basis, depending upon the composition of our sales, volumes, and factors associated with timing of shipments to distributors. Distributor advances, included in Deferred income and allowances on sales to distributors in our consolidated balance sheets, totaled $62.8million as of April2, 2010 and $60.9million as of December31, 2009. We sell the majority of our products to distributors worldwide at a list price. However, distributors resell our products to end customers at a very broad range of individually negotiated prices based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. The majority of our distributors sales to their customers are priced at a discount from our list price. Under these circumstances, we remit back to the distributor a portion of its original purchase price after the resale transaction is completed and we validate the distributors resale information, including end customer, device, quantity and price, against the distributor price concession that we have approved in advance. To receive price concessions, distributors must submit the price concession claims to us for approval within 60days of the resale of the product to an end customer. It is our practice to ap

Comprehensive Income

Comprehensive Income
	3 Months Ended Apr. 02, 2010
Comprehensive Income [Abstract]
Comprehensive Income	Note 7 Comprehensive Income The components of comprehensive income were as follows: Three Months Ended April 2, March 27, (In thousands) 2010 2009 Net income $ 153,173 $ 43,961 Reversal of accumulated unrecognized loss on retiree medical plan, net of tax effect 1,118 Comprehensive income $ 153,173 $ 45,079

Income Per Share

Income Per Share
	3 Months Ended Apr. 02, 2010
Income Per Share [Abstract]
Income Per Share	Note 8 Income Per Share A reconciliation of basic and diluted income per share is presented below: Three Months Ended April 2, March 27, (In thousands, except per share amounts) 2010 2009 Basic: Net income $ 153,173 $ 43,961 Basic weighted shares outstanding 298,566 293,105 Net income per share $ 0.51 $ 0.15 Diluted: Net income $ 153,173 $ 43,961 Weighted shares outstanding 298,566 293,105 Effect of dilutive securities: Stock options, ESPP, and restricted stock unit shares 5,761 1,776 Diluted weighted shares outstanding 304,327 294,881 Net income per share $ 0.50 $ 0.15 In applying the treasury stock method, we excluded 10.6million and 33.9million stock option shares for the three months ended April2, 2010 and March27, 2009, respectively, because their effect was anti-dilutive. While these stock option shares are currently anti-dilutive, they could be dilutive in the future. All restricted stock units outstanding as of April2, 2010 and March27, 2009 were included in our treasury stock method calculation.

Long-term Credit Facility

Long-term Credit Facility
	3 Months Ended Apr. 02, 2010
Long-term Credit Facility [Abstract]
Long-term Credit Facility	Note 9 Long-term Credit Facility Our total borrowings under our $750million unsecured revolving credit facility (the Facility) as of April2, 2010 and December31, 2009 were $500million. Borrowings under the Facility bear interest at either a Eurodollar rate (LIBOR) or a Prime rate, at our option, plus an applicable margin based upon certain financial ratios, determined and payable quarterly. The interest rate as of April2, 2010 was LIBOR plus 0.425%. In addition, we pay a facility fee on the entire Facility. This facility fee varies with certain financial ratios and was 0.125% as of April 2, 2010. The principal amount of borrowings, together with accrued interest, is due on the maturity date in August2012. As of April2, 2010, $250million was available under the Facility. The terms of the Facility require compliance with certain financial covenants that require us to maintain specified financial ratios related to interest coverage and financial leverage. As of April2, 2010, we were in compliance with all such covenants.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Apr. 02, 2010
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 10 Commitments and Contingencies Indemnification and Product Warranty We indemnify certain customers, distributors, suppliers, and subcontractors for attorneys fees and damages and costs awarded against these parties in certain circumstances in which our products are alleged to infringe third party intellectual property rights including patents, trade secrets, trademarks, or copyrights. We cannot estimate the amount of potential future payments, if any, that we might be required to make as a result of these agreements. To date, we have not paid any claim or been required to defend any action related to our indemnification obligations, and accordingly, we have not accrued any amounts for such indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations. We generally warrant our devices for one year, against defects in materials, workmanship and material non-conformance to our specifications. We accrue for known warranty issues if a loss is probable and can be reasonably estimated, and accrue for estimated but unidentified issues based on historical activity. If there is a material increase in customer claims compared with our historical experience or if the costs of servicing warranty claims are greater than expected, we may record a charge against cost of sales. Purchase Obligations We depend entirely upon subcontractors to manufacture our silicon wafers and provide assembly and test services. Due to lengthy subcontractor lead times, we must order these materials and services from these subcontractors well in advance, and we are obligated to pay for the materials and services once they are completed. As of April2, 2010, we had approximately $180.0million of outstanding purchase commitments to such subcontractors. We expect to receive and pay for these materials and services over the next six months. Legal Proceedings We are named as a party to a lawsuit concerning our historical stock option practices and related accounting and reporting. In May and July2006, we were notified that three shareholder derivative lawsuits had been filed in the Superior Court of the State of California, County of Santa Clara, by persons identifying themselves as Altera shareholders and purporting to act on behalf of Altera, naming Altera Corporation as a nominal defendant and naming some of our current and former officers and directors as defendants. On July12, 2006, one of these derivative actions was voluntarily dismissed by the plaintiff shareholder. The remaining two derivative lawsuits pending in Santa Clara Superior Court were consolidated into a single action on September5, 2006. Plaintiffs filed a second amended consolidated complaint on December15, 2006. On January30, 2007, Altera and the defendants filed a motion to stay this action pending resolution of the federal derivative action (discussed below). On February11, 2009, one of the remaining derivative plaintiffs voluntarily dismissed his derivative claims and, on March20, 2009, the other remaining derivative plaintiff filed a third amended complaint. In June2009, Altera and the defendants demurred to

Stock-Based Compensation

Stock-Based Compensation
	3 Months Ended Apr. 02, 2010
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note 11 Stock-Based Compensation Our stock-based compensation plans include the 2005 Equity Incentive Plan (the 2005 Plan) and the 1987 Employee Stock Purchase Plan (ESPP). 2005 EQUITY INCENTIVE PLAN Our equity incentive program is a broad-based, long-term retention program intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. The 2005 Plan provides stock-based incentive compensation (awards) to both our eligible employees and non-employee directors. Awards that may be granted under the 2005 Plan include non-qualified and incentive stock options, restricted stock units (RSUs), performance-based restricted stock units (PRSUs), restricted stock awards, stock appreciation rights, and stock bonus awards. To date, awards granted under the 2005 Plan consist of stock options, RSUs and PRSUs. The majority of stock-based awards granted under the 2005 Plan vest over four years. Stock options, RSUs and PRSUs granted under the 2005 Plan have a maximum contractual term of ten years. As of April2, 2010, the 2005 Plan had a total of 27.8million shares reserved for future issuance, of which 17.4million shares were available for future grants. A summary of activity for our RSUs and PRSUs for the three months ended April, 2, 2010 and information regarding RSUs and PRSUs outstanding and expected to vest as of April2, 2010 is as follows: Weighted-Average Grant-Date Weighted-Average Aggregate (In thousands, except per share Number of Fair Market Value Remaining Contractual Intrinsic amounts and terms) Shares Per Share Term (in Years) Value (1) Outstanding, December31, 2009 6,952 $ 19.36 Grants 615 $ 23.39 Vested (688 ) $ 19.25 Forfeited (114 ) $ 19.83 Outstanding, April2, 2010 6,765 $ 19.73 1.6 $ 158,774 Vested and expected to vest, April2, 2010 5,957 $ 19.73 1.5 $ 139,821 (1) Aggregate intrinsic value represents the closing price per share of our stock on April2, 2010, multiplied by the number of RSUs and PRSUs outstanding or vested and expected to vest as of April2, 2010. A summary of stock option activity for the three months ended April, 2, 2010 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of April2, 2010 is as follows: Weighted-Average Weighted-Average Aggregate (In thousands, except per share Number of Exercise Price Remaining Contractual Intrinsic amounts and terms) Shares Per Share Term (in Years) Value (1) Outstanding, December31, 2009 30,834 $ 21.89 Grants 75 $ 21.88 Exercises (3,893 ) $ 19.90 Forfeited/Cancelled/Expired (219 ) $ 26.06 Outstanding, April2, 2010 26,797 $

Income Taxes

Income Taxes
	3 Months Ended Apr. 02, 2010
Income Taxes [Abstract]
Income Taxes	Note 12 Income Taxes Our effective tax rate reflects the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. Our effective tax rate for the three months ended April2, 2010 was 4.3%, compared with 18.2% for the three months ended March27, 2009. The significant net decrease in our effective tax rate in the quarter ended April2, 2010 was primarily due to the impact of certain discrete tax adjustments. We reversed $11.7million of liabilities for uncertain tax positions during the three month period ended April2, 2010 as a result of a court ruling issued on March22, 2010 which held that stock-based compensation was not required to be included in certain transfer pricing arrangements between a U.S. company and its foreign subsidiary. In addition, we reversed $3.4million of liabilities for uncertain tax positions due to the expiration of the statute of limitations for certain foreign jurisdictions. The decrease in our effective tax rate in the quarter was also due to the impact of proportionately higher earnings in foreign jurisdictions taxed at rates below the U.S. statutory tax rate, partially offset by the increase in the effective tax rate due to the expiration of the U.S. Federal Research and Development Tax Credit. We file income tax returns with the Internal Revenue Service (IRS) and in various states and foreign jurisdictions. The IRS has completed field examinations of our tax returns for 2002 through 2004 and has issued a notice of proposed adjustment seeking additional taxes of approximately $34.5 million (excluding interest) for those years. We paid $18.0million to the IRS in 2008, representing a payment on bond for items associated with the IRS field examinations for 2002 through 2004. We are contesting through the administrative process the IRS claims regarding our 2002 through 2004 tax years. In addition, the IRS has completed field examinations of our tax returns for 2005 through 2007 and has issued a notice of proposed adjustment seeking additional taxes of approximately $34.3million (excluding interest) for those years. We are contesting through the administrative process the IRS claims regarding our 2005 through 2007 tax years. Other significant jurisdictions in which we may be subject to examination for fiscal years 2002 forward include China (including Hong Kong), Ireland, Japan, and the state of California. As mentioned below, we believe we have made adequate tax payments and/or accrued adequate amounts such that the outcome of these audits will have no material adverse effect on our consolidated operating results. Due to the potential resolution of federal, state and foreign examinations, and the expiration of various statutes of limitations, it is possible that our gross unrecognized tax benefits may change within the next twelve months. We maintain liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. We a

Non-Qualified Deferred Compensa

Non-Qualified Deferred Compensation Plan
	3 Months Ended Apr. 02, 2010
Non-Qualified Deferred Compensation Plan [Abstract]
Non-Qualified Deferred Compensation Plan	Note 13 Non-Qualified Deferred Compensation Plan We allow our U.S.-based officers and director-level employees to defer a portion of their compensation under the Altera Corporation Non-Qualified Deferred Compensation Plan (NQDC Plan). Our Retirement Plans Committee administers the NQDC Plan. As of April2, 2010, there were approximately 122 participants in the NQDC Plan who self-direct their investments, subject to certain limitations. In the event we become insolvent, the NQDC Plan assets are subject to the claims of our general creditors. Since the inception of the NQDC Plan, we have not made any contributions to the NQDC Plan and we have no commitments to do so in the future. There are no NQDC Plan provisions that provide for any guarantees or minimum return on investments. NQDC Plan participants are prohibited from investing NQDC Plan contributions in Altera common stock. The balance of the NQDC Plan assets and related obligations was $68.6million and $69.9million as of April2, 2010 and December31, 2009, respectively. Investment income or loss earned by the NQDC Plan is recorded as (Gain) loss on deferred compensation plan securities in our consolidated statements of income. The investment (gain)loss also represents a (increase)decrease in the future payout to participants and is recorded as Compensation expense (benefit) deferred compensation plan in our consolidated statements of income. Compensation expense (benefit)associated with our NQDC Plan obligations is offset by (gain)loss from related securities. The net effect of investment income or loss and related compensation expense or benefit has no impact on our income before income taxes, net income, or cash balances.

Restructuring Charges

Restructuring Charges
	3 Months Ended Apr. 02, 2010
Restructuring Charges [Abstract]
Restructuring Charges	Note 14 Restructuring Charges During the three months ended March27, 2009, we announced a net reduction of approximately 33 positions which represented 1.2% of our workforce. We incurred restructuring-related charges of approximately $5.2million in the three months ended March27, 2009. The charges were comprised of employee severance costs of approximately $2.9million and charges related to the termination of certain external sales representatives of approximately $2.3million. No significant restructuring activities were initiated in the first quarter of 2010. We anticipate that the remaining restructuring obligations of $0.7million as of April2, 2010 will be substantially paid prior to December31, 2010.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Apr. 02, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 15 Fair Value Measurements We define fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This is sometimes referred to as an exit price. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability, also taking into consideration the principal or most advantageous market in which market participants would transact and the market based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk and credit risk. We apply the following fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Observable inputs such as quoted prices in active markets Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly Level 3 Unobservable inputs in which there is little or no market data, which require us to develop our own assumptions This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, which consist of our cash equivalents and marketable securities. The following table summarizes the valuation of our financial instruments which was determined by using the following inputs as of April2, 2010 and December31, 2009: Fair Value Measurements as of April 2, 2010 Significant Quoted Prices in Active Significant Other Unobservable Markets for Identical Observable Inputs Inputs (In thousands) Total Assets (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents(1) Money market funds $ 1,659,859 $ 1,659,859 $ $ Deferred compensation plan assets:(2) Restricted cash equivalents 18,940 18,940 Equity securities 20,651 20,651 Fixed income securities 5,265 5,265 Mutual funds 23,718 22,839 879 Total $ 1,728,433 $ 1,722,289 $ 6,144 $ Fair Value Measurements as of December 31, 2009 Significant Quoted Prices in Active Significant Other Unobservable Markets for Identical Observable Inputs Inputs (In thousands) Total Assets (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents(1) Money market funds $ 1,450,112 $ 1,450,112 $ $ Deferred compensation plan assets:(2) Restricted cash equivalents 18,986 18,986

Subsequent Event

Subsequent Event
	3 Months Ended Apr. 02, 2010
Subsequent Event [Abstract]
Subsequent Event	Note 16 Subsequent Event On April19, 2010, our Board of Directors declared a quarterly cash dividend of $0.05 per common share, which is payable on June1, 2010 to stockholders of record on May10, 2010.