Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning March 16, 2018, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute Cadence’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by Cadence. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until Cadence’s first quarter 2018 earnings release is published, which is currently scheduled for April 23, 2018.

For more information, please contact:
Cadence Investor Relations
408-944-7100
investor_relations@cadence.com
Cadence Newsroom
408-944-7039
newsroom@cadence.com

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 30, 2017 and December 31, 2016
(In thousands)
(Unaudited)
		December 30, 2017			December 31, 2016
Current assets:
Cash and cash equivalents		$	688,087		$	465,232
Short-term investments			4,455			3,057
Receivables, net			190,426			157,171
Inventories			33,209			39,475
Prepaid expenses and other			63,811			37,099
Total current assets			979,988			702,034
Property, plant and equipment, net of accumulated depreciation of $658,377 and $612,961, respectively			251,342			238,607
Goodwill			666,009			572,764
Acquired intangibles, net of accumulated amortization of $297,456 and $267,723, respectively			278,835			258,814
Long-term receivables			12,239			12,949
Other assets			230,301			311,740
Total assets		$	2,418,714		$	2,096,908
Current liabilities:
Revolving credit facility		$	85,000		$	50,000
Accounts payable and accrued liabilities			221,101			239,496
Current portion of deferred revenue			336,297			296,066
Total current liabilities			642,398			585,562
Long-term liabilities:
Long-term portion of deferred revenue			61,513			66,769
Long-term debt			644,369			643,493
Other long-term liabilities			81,232			59,314
Total long-term liabilities			787,114			769,576
Stockholders' equity			989,202			741,770
Total liabilities and stockholders' equity		$	2,418,714		$	2,096,908

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Three Months and Years Ended December 30, 2017 and December 31, 2016
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended								Years Ended
		December 30, 2017				December 31, 2016				December 30, 2017				December 31, 2016
Revenue:
Product and maintenance		$	467,504			$	436,694			$	1,813,987			$	1,683,771
Services			34,218				32,286				129,045				132,312
Total revenue			501,722				468,980				1,943,032				1,816,083
Costs and expenses:
Cost of product and maintenance			39,305				57,410				156,676				183,291
Cost of services			20,979				18,638				80,714				73,201
Marketing and sales			107,654				98,091				419,161				395,194
Research and development			203,468				181,516				804,223				735,340
General and administrative			33,289				29,977				134,181				125,106
Amortization of acquired intangibles			3,571				3,889				14,716				18,095
Restructuring and other charges			12,178				26,342				9,406				40,955
Total costs and expenses			420,444				415,863				1,619,077				1,571,182
Income from operations			81,278				53,117				323,955				244,901
Interest expense			(6,712	)			(6,364	)			(25,664	)			(23,670	)
Other income, net			2,385				5,481				16,755				15,922
Income before provision for income taxes			76,951				52,234				315,046				237,153
Provision for income taxes			91,393				13,757				110,945				34,067
Net income (loss)		$	(14,442	)		$	38,477			$	204,101			$	203,086
Net income (loss) per share - basic		$	(0.05	)		$	0.14			$	0.75			$	0.71
Net income (loss) per share - diluted		$	(0.05	)		$	0.14			$	0.73			$	0.70
Weighted average common shares outstanding - basic			273,157				272,578				272,097				284,502
Weighted average common shares outstanding - diluted			273,157				278,917				280,221				291,256

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 30, 2017 and December 31, 2016
(In thousands)
(Unaudited)
		Years Ended
		December 30,				December 31,
			2017				2016
Cash and cash equivalents at beginning of year		$	465,232			$	616,686
Cash flows from operating activities:
Net income			204,101				203,086
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			115,524				119,588
Amortization of debt discount and fees			1,211				1,069
Stock-based compensation			130,023				109,217
Gain on investments, net			(13,869	)			(4,725	)
Gain on sale of property, plant and equipment			-				(923	)
Deferred income taxes			79,934				(4,869	)
Other non-cash items			5,068				4,027
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables			(28,409	)			(3,299	)
Inventories			5,034				4,934
Prepaid expenses and other			(25,793	)			(6,903	)
Other assets			(22,336	)			(6,566	)
Accounts payable and accrued liabilities			(25,987	)			2,655
Deferred revenue			33,614				30,742
Other long-term liabilities			12,625				(3,154	)
Net cash provided by operating activities			470,740				444,879
Cash flows from investing activities:
Purchases of available-for-sale securities			-				(20,525	)
Proceeds from the sale of available-for-sale securities			833				55,619
Proceeds from the maturity of available-for-sale securities			-				57,762
Proceeds from the sale of long-term investments			9,108				2,917
Proceeds from the sale of property, plant and equipment			-				923
Purchases of property, plant and equipment			(57,901	)			(53,712	)
Cash paid in business combinations and asset acquisitions, net of cash acquired			(143,249	)			(41,627	)
Net cash provided by (used for) investing activities			(191,209	)			1,357
Cash flows from financing activities:
Proceeds from term loan			-				300,000
Proceeds from revolving credit facility			135,000				115,000
Payment on revolving credit facility			(100,000	)			(65,000	)
Payment of debt issuance costs			(793	)			(622	)
Proceeds from issuance of common stock			48,965				55,440
Stock received for payment of employee taxes on vesting of restricted stock			(57,161	)			(37,226	)
Payments for repurchases of common stock			(100,025	)			(960,289	)
Change in book overdraft			3,867				-
Net cash used for financing activities			(70,147	)			(592,697	)
Effect of exchange rate changes on cash and cash equivalents			13,471				(4,993	)
Increase (decrease) in cash and cash equivalents			222,855				(151,454	)
Cash and cash equivalents at end of year		$	688,087			$	465,232

Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
		2016										2017
GEOGRAPHY		Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Americas		49%		47%		46%		48%		48%		45%		45%		45%		44%		44%
Asia		22%		24%		27%		25%		24%		26%		28%		27%		28%		27%
Europe, Middle East and Africa		19%		20%		19%		19%		19%		20%		19%		19%		20%		20%
Japan		10%		9%		8%		8%		9%		9%		8%		9%		8%		9%
Total		100%		100%		100%		100%		100%		100%		100%		100%		100%		100%
Revenue Mix by Product Group (% of Total Revenue)
		2016										2017
PRODUCT GROUP		Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Functional Verification, including Emulation and Prototyping Hardware		26%		27%		24%		25%		25%		23%		23%		21%		23%		22%
Digital IC Design and Signoff		30%		27%		28%		30%		29%		29%		30%		30%		29%		29%
Custom IC Design		25%		26%		27%		25%		25%		26%		26%		28%		26%		27%
System Interconnect and Analysis		9%		10%		10%		9%		10%		10%		10%		10%		10%		10%
IP		10%		10%		11%		11%		11%		12%		11%		11%		12%		12%
Total		100%		100%		100%		100%		100%		100%		100%		100%		100%		100%

Cadence Design Systems, Inc.
As of January 31, 2018
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
(Unaudited)
	Three Months Ending		Year Ending
	March 31, 2018		December 29, 2018
	Forecast		Forecast
Diluted net income per share on a GAAP basis	$0.20 to $0.22		$0.80 to $0.90
Amortization of acquired intangibles	0.05		0.19
Stock-based compensation expense	0.14		0.59
Restructuring and other charges	-		-
Acquisition and integration-related costs	0.03		0.09
Income tax effect of non-GAAP adjustments	(0.06)		(0.17)
Diluted net income per share on a non-GAAP basis�nbsp;	$0.36 to $0.38		$1.50 to $1.60
Cadence Design Systems, Inc.
As of January 31, 2018
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
	Three Months Ending		Year Ending
	March 31, 2018		December 29, 2018
($ in millions)	Forecast		Forecast
Net income on a GAAP basis	$58 to $64		$226 to $254
Amortization of acquired intangibles	14		54
Stock-based compensation expense	39		167
Restructuring and other charges	1		1
Acquisition and integration-related costs	7		26
Income tax effect of non-GAAP adjustments	(16)		(48)
Net income on a non-GAAP basis�nbsp;	$103 to $109		$426 to $454
�nbsp;The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

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