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MENTOR GRAPHICS CORPORATION |
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UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP |
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| EARNINGS PER SHARE | |||||||||||
| The following table reconciles management's estimates of the specific items excluded from GAAP in the calculation of estimated non-GAAP net income per share for Q4'15 and fiscal year 2015. | |||||||||||
| Estimated | Estimated | ||||||||||
| Q4'15 | FY'15 | ||||||||||
| Diluted GAAP net income per share | $ | 1.01 | $ | 1.31 | |||||||
| Non-GAAP adjustments: | |||||||||||
| Amortization of purchased technology (1) | 0.02 | 0.06 | |||||||||
| Amortization of other identified intangible assets (2) | 0.02 | 0.07 | |||||||||
| Equity plan-related compensation (3) | 0.08 | 0.31 | |||||||||
| Special charges (4) | - | 0.17 | |||||||||
| Other income (expense), net and interest expense (5) | 0.01 | 0.05 | |||||||||
| Non-GAAP income tax effects (6) | (0.07 | ) | (0.20 | ) | |||||||
| Noncontrolling interest (7) | - | (0.01 | ) | ||||||||
| Other (8) | - | (0.01 | ) | ||||||||
| Diluted non-GAAP net income per share | $ | 1.07 | $ | 1.75 | |||||||
| (1) | Excludes amortization of purchased technology resulting from acquisitions. Purchased technology is amortized over two to five years. | |
| (2) | Excludes amortization of other identified intangible assets including trade names, customer relationships, and backlog resulting from acquisition transactions. Other identified intangible assets are amortized over two to five years. | |
| (3) | Excludes equity plan-related compensation expense for the fair value of all share-based payments to employees for stock options and restricted stock units, and purchases made as a result of the employee stock purchase plans. | |
| (4) | Excludes special charges consisting primarily of costs incurred for certain litigation costs, and employee rebalances, which includes severance benefits, notice pay and outplacement services. Full year adjustment represents the impact of actual special charges for the nine months ended October 31, 2014 as we do not provide guidance for special charges. | |
| (5) | Excludes income (loss) from an investment accounted for under the equity method of accounting, and amortization of original issuance debt discount. | |
| (6) | Non-GAAP income tax expense adjustment reflects the application of our assumed normalized effective 17% tax rate, instead of our GAAP tax rate, to our non-GAAP pre-tax income. | |
| (7) | Adjustment for the impact of amortization of intangible assets, equity plan-related compensation, and income tax expense on noncontrolling interest. | |
| (8) | Excludes the adjustment to the calculated redemption value of the noncontrolling interest, recorded directly to retained earnings. Full year adjustment represents the impact of the adjustment to the redemption value as of October 31, 2014, as we do not provide guidance for this adjustment. | |
