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

SYNOPSYS, INC.

Unaudited Consolidated Statements of Cash Flows ⁽¹⁾

(in thousands)

Six Months Ended

April 30,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$   213,981

$   271,724

Adjustments to reconcile net income to net cash provided by

operating activities:

Amortization and depreciation

105,078

102,841

Reduction of operating lease right-of-use assets

39,513

-

Amortization of capitalized costs to obtain revenue contracts

28,279

28,425

Stock compensation

108,318

75,374

Allowance for doubtful accounts

9,982

3,950

(Gain) loss on sale of property and investments

-

(3,744)

Deferred income taxes

(37,681)

(23,486)

Net changes in operating assets and liabilities, net of

acquired assets and liabilities:

Accounts receivable

(84,533)

23,478

Inventories

(24,096)

(50,358)

Prepaid and other current assets

(5,889)

(18,547)

Other long-term assets

(39,422)

(91,271)

Accounts payable and accrued liabilities

(78,989)

(160,492)

Operating lease liabilities

(32,432)

-

Income taxes

1,270

(32,059)

Deferred revenue

186,360

82,966

Net cash provided by operating activities

389,739

208,801

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of long-term investments

-

4,176

Purchases of long-term investments

(2,762)

-

Purchases of property and equipment

(80,663)

(68,962)

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

(151,178)

-

Capitalization of software development costs

(2,130)

(1,491)

Net cash used in investing activities

(236,733)

(66,277)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from credit facilities

276,490

188,760

Repayment of debt

(178,437)

(366,562)

Issuances of common stock

98,361

83,352

Payments for taxes related to net share settlement of equity awards

(17,105)

(13,173)

Purchase of equity forward contract

(20,000)

(20,000)

Purchases of treasury stock

(180,000)

(109,185)

Other

-

(762)

Net cash used in financing activities

(20,691)

(237,570)

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

(4,424)

3,093

Net change in cash, cash equivalents and restricted cash

127,891

(91,953)

Cash, cash equivalents and restricted cash, beginning of year

730,527

725,001

Cash, cash equivalents and restricted cash, end of period

$   858,418

$   633,048