Note: Our subscription offering is new and we are still learning about customer adoption. We believe that approximately 10% to 20% of our L&SS bookings will come in as subscription solutions bookings. For planning purposes, we are assuming 15%. Fluctuation below or above 15% will impact revenue positively or negatively, respectively
⁽¹⁾ FX Assumptions: USD/EURO = 1.14; YEN/USD = 118
Impact of currency fluctuation vs. Q2’14 on Q2’15 non-GAAP revenue guidance is ~$20 million and on non-GAAP EPS is ~$0.07
Impact of currency fluctuation vs. FY’14 on FY’15 non-GAAP revenue guidance is ~$80 million and on non-GAAP EPS is ~$0.25
⁽²⁾ Described below table

The Q2 guidance adjusts for the impact of the following items and their income tax effects, as well as any additional discrete tax items or restructuring costs: approximately $1 million of the effect of acquisition accounting on the fair value of acquired deferred revenue; approximately $14 million of stock-based compensation expense; approximately $14 million of intangible asset amortization expense; and approximately $4 million of other charges, net (primarily acquisition-related and pension plan termination related expenses).

The FY’15 guidance adjusts for the impact of the following items and their income tax effects, as well as any additional discrete tax items or restructuring costs: approximately $4 million for the effect of acquisition accounting on the fair value of acquired deferred revenue; approximately $55 million of stock-based compensation expense; approximately $55 million of intangible asset amortization expense; and approximately $13 million of other charges, net (primarily acquisition-related and pension plan termination related expenses).

FY’15 non-GAAP guidance also excludes settlement losses related to the termination of our U.S. pension plan. While we expect to complete the termination process by September 30, 2015, the amount of the losses and timing of the charges is subject to the timing of regulatory approvals and the projected benefit obligations and assets in the plan measured as of the dates the settlements occur. We currently estimate the pre-tax settlement losses to be approximately $65 million.

New Chief Financial Officer (CFO)
As previously announced, Mr. Andrew Miller will assume the position of Executive Vice President and CFO in February 2015. Mr. Miller will replace Mr. Glidden, who announced his intention to retire in August 2014. Mr. Glidden will serve as a consultant to PTC for a transition period following Mr. Miller’s commencement of employment with the company.

Glidden remarked, “I’m pleased that during my tenure as CFO, and under the leadership of our CEO Jim Heppelmann, PTC experienced significant improvement in both operating margin and free cash flow growth, while repositioning our solutions portfolio to focus on smart, connected products. I expect the focus on delivering value to our shareholders via improving financials and strategic growth will continue under the leadership of Jim and the rest of PTC’s management team.”

Q1 FY’15 Earnings Conference Call and Webcast
Prepared remarks for the conference call (which include supplemental financial and statistical information) have been posted to the Investor Relations section of our website.

The prepared remarks will not be read live; the call will be primarily Q&A.

What:		PTC Fiscal Q1’15 Conference Call and Webcast
When:		Thursday, January 29, 2015 at 8:30am (ET)
Dial-in:		1-800-857-5592 or 1-773-799-3757 Call Leader: James Heppelmann Passcode: PTC
Webcast:		www.ptc.com/for/investors.htm
Replay:		The audio replay of this event will be archived for public replay until 5:00 pm (CT) on February 9, 2015. Dial-in: 800-879-7617 Passcode: 4906 To access the replay via webcast, please visit www.ptc.com/for/investors.htm .

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