SYNOPSYS, INC.

Unaudited Consolidated Statements of Cash Flows ⁽¹⁾

(in thousands)

Three Months Ended

January 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$ 104,061

$ 153,514

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

Amortization and depreciation

52,232

51,830

Reduction of operating lease right-of-use assets

23,201

-

Amortization of capitalized costs to obtain revenue contracts

13,762

12,793

Stock compensation

51,883

38,460

Allowance for doubtful accounts

4,861

1,500

Deferred income taxes

(17,694)

(6,215)

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

Accounts receivable

(246,364)

(209,049)

Inventories

(5,302)

(15,827)

Prepaid and other current assets

8,697

(10,027)

Other long-term assets

(27,732)

(49,403)

Accounts payable and accrued liabilities

(132,814)

(219,099)

Operating lease liabilities

(20,979)

-

Income taxes

5,039

(41,985)

Deferred revenue

196,969

149,489

Net cash provided by (used in) operating activities

9,820

(144,019)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of long-term investments

(2,500)

-

Purchases of property and equipment

(54,605)

(29,007)

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

(75,388)

-

Capitalization of software development costs

(1,065)

(737)

Net cash used in investing activities

(133,558)

(29,744)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from credit facilities

196,490

185,080

Repayment of debt

(3,750)

(112,812)

Issuances of common stock

14,982

6,358

Payments for taxes related to net share settlement of equity awards

(14,242)

(10,593)

Purchase of equity forward contract

(20,000)

-

Purchases of treasury stock

(80,000)

(29,185)

Other

-

(762)

Net cash provided by financing activities

93,480

38,086

Effect of exchange rate changes on cash, cash equivalents and restricted cash

2,013

4,882

Net change in cash, cash equivalents and restricted cash

(28,245)

(130,795)

Cash, cash equivalents and restricted cash, beginning of year

730,527

725,001

Cash, cash equivalents and restricted cash, end of period

$ 702,282

$ 594,206

⁽¹⁾ Synopsys' first quarter of fiscal year 2020 and 2019 ended on February 1, 2020 and February 2, 2019, respectively. For presentation purposes, we refer to the closest calendar month end.