SYNOPSYS, INC.

Unaudited Consolidated Statements of Cash Flows (1)

(in thousands)

 Twelve Months Ended October 31, 

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$             266,826

$             225,934

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization and depreciation

207,032

211,821

Stock compensation

97,583

86,400

Allowance for doubtful accounts 

950

1,300

(Gain) loss on sale of investments

(18)

(109)

Excess tax benefits on stock-based awards

2,718

(4,245)

Deferred income taxes

(14,037)

36,883

Net changes in operating assets and liabilities, net of acquired assets and liabilities:

Accounts receivable

(43,269)

(56,533)

Prepaid and other current assets

(37,641)

(23,106)

Other long-term assets

(3,770)

(16,259)

Accounts payable and accrued liabilities

18,977

27,568

Income taxes

4,380

(44,633)

Deferred revenue

86,904

50,139

Net cash provided by operating activities

586,635

495,160

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales and maturities of short-term investments

156,350

109,173

Purchases of short-term investments

(168,712)

(238,902)

Proceeds from sales of long-term investments

1,785

-

Purchases of long-term investments

(1,002)

-

Purchases of property and equipment

(66,909)

(86,965)

Cash paid for acquisitions and intangible assets, net of cash acquired

(60,056)

(340,153)

Capitalization of software development costs

(4,131)

(3,682)

Other

-

900

Net cash used in investing activities

(142,675)

(559,629)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from credit facility

185,000

460,000

Repayment of debt

(185,000)

(330,425)

Issuances of common stock

125,283

109,764

Payments for taxes related to net share settlement of equity awards

(26,562)

(24,860)

Purchase of equity forward contract

-

(20,000)

Purchases of treasury stock

(400,000)

(260,000)

Excess tax benefits on stock-based awards

(2,718)

4,245

Other

(2,940)

(794)

Net cash used in financing activities

(306,937)

(62,070)

Effect of exchange rate changes on cash and cash equivalents

3,409

(23,035)

Net change in cash and cash equivalents

140,432

(149,574)

Cash and cash equivalents, beginning of the year

836,188

985,762

Cash and cash equivalents, end of the period

$             976,620

$             836,188

(1)  Synopsys' fiscal year 2016 and 2015 ended on October 29, 2016 and October 31, 2015, respectively. For presentation purposes, we refer to the closest calendar month end.