Press Releases

Synopsys Posts Financial Results for Fourth Quarter and Full-Year Fiscal 2005
PRNewswire-FirstCall
MOUNTAIN VIEW, Calif.

Synopsys, Inc. (NASDAQ: SNPS), a world leader in semiconductor design software, today reported results for its fourth quarter and fiscal year ended October 31, 2005.

For the fourth quarter of fiscal 2005, Synopsys reported revenue of $254.8 million, an 11 percent increase compared to $230.6 million for the fourth quarter of fiscal 2004. Revenue for fiscal year 2005 was $991.9 million, a decrease of 9 percent from the $1.09 billion in fiscal 2004. Lower revenue in fiscal 2005 reflects the company's shift to an almost fully ratable license model initiated in the fourth quarter of fiscal 2004, under which more than 90 percent of the company's license revenue is recognized over time rather than upfront in the quarter shipped. As a result, in the fourth quarter approximately 92 percent of revenue came from backlog.

"We had an excellent quarter to complete our fiscal year, with business above target in all product areas, technology indicators consistently strong and sound financial execution. We have a solid foundation for continued growth in fiscal 2006," said Aart de Geus, chairman and chief executive officer of Synopsys.

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net loss for the fourth quarter of fiscal 2005 was ($11.1) million, or ($0.08) per share, compared to net loss of ($28.4) million, or ($0.19) per share, for the fourth quarter of fiscal 2004.

GAAP net loss for the fiscal year ended October 31, 2005 was ($13.1) million, or ($0.09) per share, compared to net income of $74.3 million, or $0.46 per share, for fiscal 2004.

Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2005 was $14.9 million, or $0.10 per share, compared to non-GAAP net income of $1.8 million, or $0.01 per share, for the fourth quarter of fiscal 2004.

Non-GAAP net income for the fiscal year ended October 31, 2005 was $57.5 million, or $0.39 per share, compared to $166.4 million, or $1.04 per share, for fiscal year 2004. Non-GAAP net income consists of GAAP net income excluding, to the extent incurred in a particular quarter or period, amortization of intangible assets and deferred stock compensation, in-process research and development charges, integration and other acquisition-related expenses, facilities and workforce realignment charges, and other significant items which, in the opinion of management are extraordinary. See "GAAP Reconciliation - Reconciliation of Fourth Quarter and Full-Fiscal Year End Results" table below. Fourth quarter and fiscal 2005 non-GAAP net income excludes approximately $11 million incremental tax expense related to the Company's repatriation of $360 million in cash from its international subsidiaries. The decreases in GAAP and non-GAAP net income in fiscal year 2005 were due primarily to lower revenues as a result of Synopsys' shift to a more than 90 percent ratable license model.

Financial Targets

Synopsys also announced its operating model targets for the first quarter and full fiscal year 2006. These targets constitute forward-looking information and are based on current expectations. The non-GAAP targets exclude the impact of option expensing required by SFAS 123R, which the Company is required to adopt beginning in the first quarter of fiscal 2006. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.

  First Quarter of Fiscal 2006 Targets:

  * Revenue: $254 million - $262 million
  * GAAP expenses: $257 million - $270 million
  * Non-GAAP expenses: $225 million - $235 million
  * Other income and expense: $0 million - $4 million
  * Fully diluted outstanding shares: 144 million - 150 million
  * Tax rate applied in non-GAAP net income calculations: 31 percent
  * GAAP (loss) earnings: $(0.04) - $0.02 per share
  * Non-GAAP earnings: $0.13 - $0.17 per share
  * Revenue from backlog:  more than 95 percent

  Full-Year Fiscal Year 2006 Targets

  * Revenue: $1,055 million - $1,085 million
  * Fully diluted outstanding shares: 144 million - 150 million
  * Tax rate applied in non-GAAP net income calculations: 31 percent
  * GAAP earnings: $0.08 - $0.21 per share
  * Non-GAAP earnings: $0.65 - $0.73 per share
  * GAAP cash flow from operations:  greater than $175 million

  GAAP Reconciliation

Synopsys management evaluates and makes operating decisions about the Company's business operations primarily based on the bookings, revenue and direct, ongoing and recurring costs of those operations. Management does not believe amortization of intangible assets and deferred stock compensation, in- process research and development charges, integration and other acquisition- related expenses, equity plan-related compensation expenses, facilities and workforce realignment charges and other significant extraordinary items are ongoing and recurring operating costs of its core software, intellectual property and service business operations. Therefore, management adjusts the following GAAP financial measures included in this earnings release to exclude such costs, to the extent incurred in a particular quarter: total cost of revenue, gross margin, total operating expenses, operating (loss) income, (loss) income before (benefit from) provision for income taxes, (benefit from) provision for income taxes, net (loss) income and net (loss) income per share.

For each such measure, excluding these costs provides management with more consistent, comparable information about the Company's core profitability. For example, since the Company does not acquire businesses on a predictable cycle, management would have difficulty evaluating the Company's profitability as measured by gross margin, operating margin, income before taxes and net income on a period-to-period basis unless it excluded acquisition-related charges. Similarly, the Company does not undertake significant restructuring or realignments on a regular basis, and, as a result, excludes associated charges in order to enable better and more consistent evaluations of the Company's operating expenses before and after such actions are taken. Management also uses these measures to help it make budgeting decisions, for example, as between product development expenses (which affect cost of revenue and gross margin) and research and development, sales and marketing and general and administrative expenses (which affect operating expenses and operating margin). Finally, the availability of such information helps management track performance to both internal and externally communicated financial targets and to its competitors' operating results.

Management recognizes that the use of these non-GAAP measures has certain limitations, including the fact that management must exercise judgment in determining whether certain types of charges, such as those relating to workforce reductions executed in the ordinary course, should be excluded from non-GAAP results. However, management believes that, although it is important for investors to understand GAAP measures, providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in a way management assesses, Synopsys' current and future continuing operations.

Reconciliation of Fourth Quarter and Full-Fiscal Year End Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP earnings per share and non-GAAP expenses for the fourth quarter and fiscal year 2005.

GAAP to Non-GAAP Reconciliation of Fourth Quarter and Fiscal Year Results

  Income Statement Reconciliation    Three Months Ended Twelve Months Ended
  (in thousands)                        October 31,         October 31,
                                       2005      2004      2005      2004

  GAAP net (loss) income             $(11,141) $(28,382) $(13,144)  $74,337
  Amortization of intangible assets
   and deferred stock compensation     16,948    34,536   115,278   137,463
  Merger termination fee                   --        --        --    10,000
  In-process research and development      --     1,638     5,700     1,638
  Work force realignment charges
   at a lower cost than estimated          --        (3)       --       510
  Litigation settlement                    --        --   (33,000)       --
  Tax effect (1)                        9,138    (5,992)  (17,291)  (57,517)
  Non-GAAP net income                 $14,945    $1,797   $57,543  $166,431

(1) The Company's fourth quarter and fiscal year 2005 GAAP results include $11 million in incremental tax expense related to the repatriation of $360 million in cash from its international subsidiaries. This incremental tax expense has been excluded from non-GAAP results.

                                            Three Months     Twelve Months
  Earnings Per Share Reconciliation             Ended            Ended
                                             October 31,      October 31,
                                            2005    2004     2005     2004

  GAAP earnings (loss) per share          $(0.08)  $(0.19)  $(0.09)   $0.46
  Amortization of intangible assets and
   deferred stock compensation              0.12     0.23     0.79     0.86
  Merger termination fee                      --       --       --     0.06
  In-process research and development         --     0.01     0.04     0.01
  Work force realignment charges
   at a lower cost than estimated             --       --       --     0.01
  Litigation settlement                       --       --    (0.23)      --
  Tax effect (1)                            0.06    (0.04)   (0.12)   (0.36)
  Non-GAAP earnings (loss) per share       $0.10    $0.01    $0.39    $1.04

  Shares used in non-GAAP calculation    146,681  151,727  146,258  159,991

(1) The Company's fourth quarter and fiscal year 2005 GAAP results include $11 million in incremental tax expense related to the repatriation of $360 million in cash from its international subsidiaries. This incremental tax expense has been excluded from non-GAAP results.

Reconciliation of Estimated Target Operating Results

The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below:

 GAAP to non-GAAP Reconciliation of Target First Quarter Fiscal Year 2006
                                 Targets
                  (in thousands, except per share data)

                                                 Range for Three Months
                                                 Ending January 31, 2006
                                                  Low               High
  Target GAAP expenses                          $257,000          $270,000
  Adjustment:
    Estimated impact of amortization of
     intangible assets                           (15,000)          (16,000)
    Estimated impact of stock compensation
     expense                                     (17,000)          (19,000)
  Target non-GAAP expenses                      $225,000          $235,000


                                                   Range for Three Months
                                                   Ending January 31, 2006
                                                    Low               High
  Target GAAP earnings (loss) per share           $(0.04)            $0.02
  Adjustment:
     Estimated impact of amortization of
      intangible assets per share                   0.11              0.10
     Estimated impact of stock compensation
      expense per share                             0.13              0.12
     Net non-GAAP tax effect                       (0.07)            (0.07)
  Target non-GAAP earnings per share               $0.13             $0.17

  Shares used in non-GAAP calculation (midpoint
   of target range)                              147,000           147,000


    GAAP to Non-GAAP Reconciliation of Target Fiscal Year 2006 Targets

                                                   Range for Fiscal Year
                                                   Ending October 31, 2006
                                                    Low               High
  Target GAAP earnings per share                   $0.08             $0.21
  Adjustment:
     Estimated impact of amortization of
      intangible assets per share                   0.37              0.36
     Estimated impact of stock compensation
      expense per share                             0.46              0.44
     Net non-GAAP tax effect                       (0.26)            (0.28)
  Target non-GAAP earnings per share               $0.65              0.73

  Shares used in non-GAAP calculation (midpoint
   of target range)                              147,000           147,000


  Additional Financial Information Available on Synopsys Website

In connection with this earnings release, Synopsys is making available to investors supplemental financial information which can be found on Synopsys' website at http://www.synopsys.com/corporate/invest/finsupp/q405.pdf . Synopsys currently intends to provide this information on a quarterly basis.

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m., Pacific Time. A live webcast of the call will be available at Synopsys' corporate website at http://www.synopsys.com/corporate/invest/invest.html . A recording of the call will be available by calling 1-800-475-6701 (320-365-3844 for international callers), access code 801529, beginning at 5:30 p.m. Pacific Time today. A webcast replay will also be available at http://www.synopsys.com/corporate/invest/invest.html from approximately 5:30 p.m. Pacific Time today through the time of the announcement of Synopsys' results for the first quarter of fiscal 2006 in February 2006. In addition, Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Rex Jackson, acting chief financial officer, senior vice president and general counsel, on its website at http://www.synopsys.com/corporate/invest/invest.html following the call.

Effectiveness of Information

The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement represent Synopsys' expectations and beliefs as of the date of this release only. Although this press release, copies of the prepared remarks of the chief executive officer and acting chief financial officer made during the call and the financial supplement will remain available on Synopsys' website through the date of the first quarter earnings call in February 2006, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys does not currently intend to report on its progress during the first quarter of fiscal 2006 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release until it releases such results in February 2006. Furthermore, Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the financial supplement whether as a result of new information, future events or unless otherwise required by law.

Availability of Final Financial Statements

Synopsys will include final financial statements for the full year fiscal 2005 with its Annual Report on Form 10-K to be filed in January 2006.

About Synopsys

Synopsys, Inc. is a world leader in electronic design automation (EDA) software for semiconductor design. The company delivers technology-leading semiconductor design and verification platforms and IC manufacturing software products to the global electronics market, enabling the development and production of complex systems-on-chips. Synopsys also provides intellectual property and design services to simplify the design process and accelerate time-to-market for its customers. Synopsys is headquartered in Mountain View, California and has offices in more than 60 locations throughout North America, Europe, Japan and Asia. Visit Synopsys online at http://www.synopsys.com/ .

Forward-Looking Statements

The statements made in this press release regarding projected financial results in the sections entitled "Financial Targets," and "GAAP Reconciliation - Reconciliation of Estimated Target Operating Results" and certain statements made in the earnings conference call are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those described by these statements due to a number of uncertainties, including but not limited to the risk of:

  * weakness or continued budgetary caution in the semiconductor or
    electronic systems industries;
  * lower-than-expected research and development spending by semiconductor
    and electronic systems companies;
  * lower-than-anticipated purchases or delays in purchases of software or
    consulting services by Synopsys' customers, including delays in the
    renewal, or non-renewal, of Synopsys' license arrangements with major
    customers;
  * unexpected changes in the mix of time-based licenses and upfront
    licenses;
  * lower-than-expected bookings of licenses on which revenue is recognized
    upfront;
  * lower-than-anticipated new IC design starts;
  * competition in the market for Synopsys' products and services;
  * failure to continue to improve Synopsys' existing products;
  * failure to successfully develop additional intellectual property blocks
    for Synopsys' IP business or to develop and integrate its design for
    manufacturing products;
  * difficulties in the ongoing integration of the products and operations
    of acquired companies or assets into Synopsys' products and operations;
    and
  * continued downward pressure on maintenance orders, adversely affecting
    Synopsys' future level of service revenue.

In addition, Synopsys' target operating expenses and earnings per share on a GAAP basis for the fiscal quarter ending January 31, 2006 and earnings per share and estimated operating cash flow on a GAAP basis for fiscal year 2006 could differ materially from the targets stated under "Financial Targets" above for a number of reasons, including (i) a determination by Synopsys that any portion of its intangible assets have become impaired, (ii) changes in deferred stock compensation expenses caused by employee terminations, (iii) application of the actual consolidated GAAP tax rate for such periods, and (iv) integration and other acquisition-related expenses, amortization of additional intangible assets and deferred stock compensation associated with future acquisitions, if any, and (v) increases or decreases in equity plan- related compensation expenses.

For further discussion of these and other factors that may cause results to differ from those projected in this release, readers are referred to the reports which Synopsys has filed with the Securities and Exchange Commission (SEC), and which are available at www.sec.gov, particularly the information contained in Part I, Item 2 of Synopsys' Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2005 filed with the SEC on September 6, 2005 under the caption entitled "Factors That May Affect Future Results." Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter these forward-looking statements whether as a result of new information, future events or otherwise.

NOTE: Synopsys is a registered trademark of Synopsys, Inc. Any other trademarks mentioned in this release are the intellectual property of their respective owners.

  INVESTOR CONTACT:
  Lisa L. Ewbank
  Synopsys, Inc.
  650-584-1901

  EDITORIAL CONTACT:
  Yvette Huygen
  Synopsys, Inc.
  650-584-4547


                              SYNOPSYS, INC.
      Unaudited Condensed Consolidated Statements of Operations (1)
                  (in thousands, except per share data)

                         Three Months Ended           Three Months Ended
                          October 31, 2005             October 31, 2004
                       GAAP             Non-GAAP   GAAP             Non-GAAP
                       Basis  Adjustments Basis    Basis Adjustments Basis
  Revenue:
   Time-based
    license          $192,916        -- $192,916 $165,302       -- $165,302
   Upfront license     16,314        --   16,314   18,301       --   18,301
   Service             45,608        --   45,608   46,952       --   46,952
    Total revenue     254,838        --  254,838  230,555       --  230,555
  Cost of revenue:
   License             28,294        --   28,294   23,587       --   23,587
   Maintenance and
    services           17,209        --   17,209   17,079       --   17,079
   Amortization of
    intangible assets
    and deferred stock
    compensation        9,303    (9,303)      --   26,055  (26,055)      --
    Total cost of
     revenue           54,806    (9,303)  45,503   66,721  (26,055)  40,666
  Gross margin        200,032     9,303  209,335  163,834   26,055  189,889
  Operating expenses:
   Research and
    development        80,840        --   80,840   76,337       --   76,337
   Sales and marketing 82,608        --   82,608   86,346       --   86,346
   General and
    administrative     27,384        --   27,384   25,742        3   25,745
   In-process research
    and development        --        --       --    1,638   (1,638)      --
   Amortization of
    intangible assets
    and deferred stock
    compensation        7,645    (7,645)      --    8,481   (8,481)      --
    Total operating
     expenses         198,477    (7,645) 190,832  198,544  (10,116) 188,428
  Operating (loss)
   income               1,555    16,948   18,503  (34,710)   36,171   1,461
  Other income, net     2,779        --    2,779    1,143        --   1,143
  Income before
   provision for
   income taxes         4,334    16,948   21,282  (33,567)   36,171   2,604
  Provision for
   income taxes (2)    15,475    (9,138)   6,337   (5,185)    5,992     807
  Net (loss) income  $(11,141)  $26,086  $14,945 $(28,382)  $30,179  $1,797
  Basic earnings
   per share:
    Net (loss) income
     per share         $(0.08)             $0.10   $(0.19)            $0.01
    Weighted-average
     common shares    145,190            145,190  151,124           151,124
  Diluted earnings
   per share:
    Net (loss) income
     per share         $(0.08)             $0.10   $(0.19)            $0.01
    Weighted-average
     common shares
     and equivalents  145,190            146,681  151,124           151,727

(1) The Company's fiscal year and fourth quarter ends on the Saturday nearest to October 31. For presentation purposes, the unaudited condensed consolidated financial statements refer to a calendar month end.

(2) The Company's fourth quarter and fiscal year 2005 GAAP results include $11 million in incremental tax expense related to the repatriation of $360 million in cash from its international subsidiaries. This incremental tax expense has been excluded from non-GAAP results.

                              SYNOPSYS, INC.
      Unaudited Condensed Consolidated Statements of Operations (1)
                  (in thousands, except per share data)

                         Twelve Months Ended           Twelve Months Ended
                           October 31, 2005             October 31, 2004
                      GAAP             Non-GAAP   GAAP              Non-GAAP
                      Basis  Adjustments Basis    Basis  Adjustments  Basis
  Revenue:
   Time-based
    license          $743,723        -- $743,723  $663,244      --  $663,244
   Upfront license     60,466        --   60,466   215,955      --   215,955
   Service            187,742        --  187,742   212,905      --   212,905
    Total revenue     991,931        --  991,931 1,092,104      -- 1,092,104
  Cost of revenue:
   License            101,610        --  101,610    66,782     111    66,893
   Maintenance and
    services           70,473        --   70,473    87,705     197    87,902
   Amortization of
    intangible assets
    and deferred
    stock
    compensation       81,786   (81,786)      --   102,572(102,572)       --
     Total cost of
      revenue         253,869   (81,786) 172,083   257,059(102,264)  154,795
  Gross margin        738,062    81,786  819,848   835,045 102,264   937,309
  Operating expenses:
   Research and
    development       315,730        --  315,730   285,281     754   286,035
   Sales and
    marketing         330,537        --  330,537   302,372     580   302,952
   General and
    administrative    102,040        --  102,040   121,547 (12,152)  109,395
   In-process research
    and development     5,700    (5,700)      --     1,638  (1,638)       --
   Amortization of
    intangible assets
    and deferred stock
    compensation       33,492   (33,492)      --    34,891 (34,891)       --
     Total operating
      expenses        787,499   (39,192) 748,307   745,729 (47,347)  698,382
  Operating (loss)
   income             (49,437)  120,978   71,541    89,316 149,611   238,927
  Other income
   (expense), net      45,195   (33,000)  12,195     2,276      --     2,276
  (Loss) income before
   (benefit from)
   provision for income
   taxes               (4,242)   87,978   83,736    91,592 149,611   241,203
  (Benefit from)
   provision for
   income taxes (2)     8,902    17,291   26,193    17,255  57,517    74,772
  Net (loss) income  $(13,144)  $70,687  $57,543   $74,337 $92,094  $166,431
  Basic earnings
   per share:
    Net (loss) income
     per share         $(0.09)             $0.40     $0.48             $1.08
    Weighted-average
     common shares    144,970            144,970   154,439           154,439
  Diluted earnings
   per share:
    Net (loss) income
     per share         $(0.09)             $0.39     $0.46             $1.04
    Weighted-average
     common shares
     and equivalents  144,970            146,258   159,991           159,991

(1) The Company's fiscal year and fourth quarter ends on the Saturday nearest to October 31. For presentation purposes, the unaudited condensed consolidated financial statements refer to a calendar month end.

(2) The Company's fourth quarter and fiscal year 2005 GAAP results include $11 million in incremental tax expense related to the repatriation of $360 million in cash from its international subsidiaries. This incremental tax expense has been excluded from non-GAAP results.

                              SYNOPSYS, INC.
           Unaudited Condensed Consolidated Balance Sheets (1)
                              (in thousands)

                                        October 31, 2005  October 31, 2004
  ASSETS:
  Current assets:
    Cash and cash equivalents                   $404,436          $346,709
    Short-term investments                       182,070           232,320
    Total cash, cash equivalents and
     short-term investments                      586,506           579,029
    Accounts receivable, net of
     allowances of $4,003 and $7,113,
     respectively                                100,178           132,258
    Deferred taxes                               194,288           125,601
    Income taxes receivable                       48,370            46,583
    Prepaid expenses and other current
     assets                                       16,924            29,562
            Total current assets                 946,266           913,033
  Property and equipment, net                    170,195           178,155
  Long-term investments                            8,092            12,831
  Goodwill                                       728,979           593,706
  Intangible assets, net                         142,519           198,069
  Long-term deferred taxes                        82,384           146,360
  Other assets                                    61,828            50,033
             Total assets                     $2,140,263        $2,092,187

  LIABILITIES AND STOCKHOLDERS' EQUITY:
  Current liabilities:
    Accounts payable and accrued
     liabilities                                $231,077          $184,146
    Current portion of long-term debt                282               -
    Accrued income taxes                         169,632           188,096
    Deferred revenue                             415,689           368,913
             Total current liabilities           816,680           741,155
  Deferred compensation and other
   liabilities                                    63,841            51,794
  Long-term deferred revenue                      42,019            34,189
  Stockholders' equity:
    Common stock,  $0.01 par value per
     share; 400,000 shares authorized;
        145,897 and 147,378 shares
         outstanding, respectively                 1,459             1,474
    Additional paid-in capital                 1,260,405         1,240,568
    Retained earnings                            173,442           202,146
    Treasury stock, at cost; 11,259 and
     9,759 shares, respectively                 (199,482)         (175,762)
    Deferred stock compensation                   (2,100)           (2,732)
    Accumulated other comprehensive
     loss                                        (16,001)             (645)
           Total stockholders' equity          1,217,723         1,265,049
           Total liabilities and
            stockholders' equity              $2,140,263        $2,092,187

  (1)  The Company's fiscal year and fourth quarter ends on the Saturday
  nearest to October 31.
         For presentation purposes, the unaudited condensed consolidated
         financial statements refer to a calendar month end.




                              SYNOPSYS, INC.
      Unaudited Condensed Consolidated Statements of Cash Flows (1)
                              (in thousands)


                                             Twelve Months Ended October 31,
                                                  2005              2004
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                            $(13,144)           $74,337
  Adjustments to reconcile net income
   to net cash provided
     by operating activities:
  Amortization and depreciation                 171,510            192,774
  Deferred taxes                                (13,611)           (50,855)
  In-process research and development             5,700              1,638
  Write-down of long-term investments             3,582              3,658
  Tax benefit associated with stock
   options                                        6,175             30,532
  Provision for doubtful accounts                (4,094)              (927)
  Net change in unrecognized gains and
   losses on
      foreign exchange contracts                (15,982)           (14,019)
  Loss (gain) on sale of short- and
   long-term investments                            502               (833)
  Net changes in operating assets and
   liabilities:
  Accounts receivable                            56,842             70,511
  Income taxes receivable                        (1,787)            25,541
  Prepaid expenses and other current
   assets                                        13,055            (10,260)
  Other assets                                  (11,616)           (11,318)
  Accounts payable and accrued
   liabilities                                   22,513            (26,906)
  Accrued income taxes                           (7,851)           (13,829)
  Deferred revenue                               45,125            (17,721)
  Deferred compensation and other
   liabilities                                   12,271             11,714
  Net cash provided by operating
   activities                                   269,190            264,037
  CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales and maturities of
   short-term
      investments                               422,523            992,300
  Purchases of short-term investments          (372,984)        (1,050,524)
  Proceeds from sale of long-term
   investments                                      -                  412
  Purchases of long-term investments                -               (6,339)
  Purchases of property and equipment,
   net                                          (43,563)           (45,005)
  Cash paid for acquisitions, net of
   cash received                               (174,498)           (60,138)
  Capitalization of software
   development costs                             (2,953)            (2,739)
  Net cash used in investing activities        (171,475)          (172,033)
  CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from credit facility                  75,000            200,000
  Payments on credit facility                   (75,000)          (200,000)
  Issuances of common stock                      48,616            156,719
  Purchases of treasury stock                   (88,385)          (423,305)
  Net cash used in financing activities         (39,769)          (266,586)
  Effect of exchange rate changes on
   cash                                            (219)            (3,017)
  Net decrease in cash and cash
   equivalents                                   57,727           (177,599)
  Cash and cash equivalents, beginning
   of period                                    346,709            524,308
  Cash and cash equivalents, end of
   period                                      $404,436           $346,709

  (1)  The Company's fiscal year and fourth quarter ends on the Saturday
  nearest to October 31.
         For presentation purposes, the unaudited condensed consolidated
         financial statements refer to a calendar month end.

SOURCE: Synopsys, Inc.

CONTACT: investors, Lisa L. Ewbank, +1-650-584-1901, or media, Yvette
Huygen, +1-650-584-4547, both of Synopsys, Inc.

Web site: http://www.synopsys.com/