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 15, 2019, 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 2019 earnings release is published, which is currently scheduled for April 22, 2019.

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 29, 2018 and December 30, 2017
(In thousands)
(Unaudited)
			December 29, 2018				December 30, 2017
Current assets:
Cash and cash equivalents			$	533,298			$	688,087
Receivables, net of allowances of $3,936 and $0, respectively				297,082				190,426
Inventories				28,162				33,209
Prepaid expenses and other				92,550				68,266
Total current assets				951,092				979,988
Property, plant and equipment, net of accumulated depreciation of $698,493 and $658,377, respectively				252,630				251,342
Goodwill				662,272				666,009
Acquired intangibles, net of accumulated amortization of
$333,687 and $297,456, respectively				225,457				278,835
Long-term receivables				5,972				12,239
Other assets				371,231				230,301
Total assets			$	2,468,654			$	2,418,714
Current liabilities:
Revolving credit facility			$	100,000			$	85,000
Accounts payable and accrued liabilities				256,526				221,101
Current portion of deferred revenue				352,456				336,297
Total current liabilities				708,982				642,398
Long-term liabilities:
Long-term portion of deferred revenue				48,718				61,513
Long-term debt				345,291				644,369
Other long-term liabilities				77,262				81,232
Total long-term liabilities				471,271				787,114
Stockholders' equity				1,288,401				989,202
Total liabilities and stockholders' equity			$	2,468,654			$	2,418,714

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Operations
For the Three Months and Years Ended December 29, 2018 and December 30, 2017
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended										Years Ended
			December 29,					December 30,					December 29,					December 30,
				2018					2017					2018					2017
Revenue:
Product and maintenance			$	534,418				$	467,504				$	1,997,887				$	1,813,987
Services				35,432					34,218					140,135					129,045
Total revenue				569,850					501,722					2,138,022					1,943,032
Costs and expenses:
Cost of product and maintenance				54,748					39,305					173,011					156,676
Cost of services				21,376					20,979					85,736					80,714
Marketing and sales				112,613					107,654					439,669					419,161
Research and development				218,271					203,468					884,816					804,223
General and administrative				31,985					33,289					133,406					134,181
Amortization of acquired intangibles				3,468					3,571					14,086					14,716
Restructuring and other charges				13,699					12,178					11,089					9,406
Total costs and expenses				456,160					420,444					1,741,813					1,619,077
Income from operations				113,690					81,278					396,209					323,955
Interest expense				(4,318	)				(6,712	)				(23,139	)				(25,664	)
Other income (expense), net				(735	)				2,385					3,320					16,755
Income before provision for income taxes				108,637					76,951					376,390					315,046
Provision for income taxes				10,212					91,393					30,613					110,945
Net income (loss)			$	98,425				$	(14,442	)			$	345,777				$	204,101
Net income (loss) per share - basic			$	0.36				$	(0.05	)			$	1.26				$	0.75
Net income (loss) per share - diluted			$	0.35				$	(0.05	)			$	1.23				$	0.73
Weighted average common shares outstanding - basic				273,680					273,157					273,729					272,097
Weighted average common shares outstanding - diluted				280,321					273,157					281,144					280,221

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 29, 2018 and December 30, 2017
(In thousands)
(Unaudited)
			Years Ended
			December 29,					December 30,
			2018					2017
Cash and cash equivalents at beginning of year			$	688,087				$	465,232
Cash flows from operating activities:
Net income				345,777					204,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization				118,721					115,524
Amortization of debt discount and fees				1,196					1,211
Stock-based compensation				167,715					130,023
Gain on investments, net				(1,261	)				(13,869	)
Deferred income taxes				(11,676	)				79,934
Provisions for losses on receivables				5,102					2,623
Other non-cash items				1,136					5,068
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables				(87,083	)				(31,032	)
Inventories				752					5,034
Prepaid expenses and other				(19,622	)				(25,793	)
Other assets				(16,077	)				(22,336	)
Accounts payable and accrued liabilities				1,553					(25,987	)
Deferred revenue				100,696					33,614
Other long-term liabilities				(2,178	)				12,625
Net cash provided by operating activities				604,751					470,740
Cash flows from investing activities:
Proceeds from the sale of available-for-sale securities				-					833
Purchases of non-marketable investments				(115,839	)				-
Proceeds from the sale of non-marketable investments				3,497					9,108
Purchases of property, plant and equipment				(61,503	)				(57,901	)
Cash paid in business combinations and asset acquisitions, net of cash acquired				-					(143,249	)
Net cash used for investing activities				(173,845	)				(191,209	)
Cash flows from financing activities:
Proceeds from revolving credit facility				100,000					135,000
Payment on revolving credit facility				(85,000	)				(100,000	)
Principal payments on term loan				(300,000	)				-
Payment of debt issuance costs				-					(793	)
Proceeds from issuance of common stock				40,908					48,965
Stock received for payment of employee taxes on vesting of restricted stock				(69,921	)				(57,161	)
Payments for repurchases of common stock				(250,059	)				(100,025	)
Change in book overdraft				(3,867	)				3,867
Net cash used for financing activities				(567,939	)				(70,147	)
Effect of exchange rate changes on cash and cash equivalents				(17,756	)				13,471
Increase (decrease) in cash and cash equivalents				(154,789	)				222,855
Cash and cash equivalents at end of year			$	533,298				$	688,087

Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)			ASC 605															ASC 605															ASC 606
			2017															2018															2018
GEOGRAPHY			Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year
Americas			45%			45%			45%			44%			44%			45%			45%			43%			46%			44%			45%			46%			44%			44%			45%
Asia			26%			28%			27%			28%			27%			26%			26%			30%			29%			28%			27%			26%			29%			31%			28%
Europe, Middle East and Africa			20%			19%			19%			20%			20%			21%			21%			19%			17%			20%			20%			20%			19%			17%			19%
Japan			9%			8%			9%			8%			9%			8%			8%			8%			8%			8%			8%			8%			8%			8%			8%
Total			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%
Revenue Mix by Product Group (% of Total Revenue)			ASC 605															ASC 605															ASC 606
			2017															2018															2018
PRODUCT GROUP			Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year			Q1			Q2			Q3			Q4			Year
Functional Verification, including Emulation and Prototyping Hardware			23%			23%			21%			23%			22%			26%			23%			21%			26%			24%			26%			23%			22%			25%			24%
Digital IC Design and Signoff			29%			30%			30%			29%			29%			29%			29%			30%			27%			29%			30%			30%			30%			28%			29%
Custom IC Design and Simulation			26%			26%			28%			26%			27%			26%			26%			27%			24%			26%			26%			26%			26%			25%			26%
System Interconnect and Analysis			10%			10%			10%			10%			10%			9%			10%			10%			9%			9%			9%			9%			9%			9%			9%
IP			12%			11%			11%			12%			12%			10%			12%			12%			14%			12%			9%			12%			13%			13%			12%
Total			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%			100%

Cadence Design Systems, Inc.
As of February 19, 2019
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
(Unaudited)
			Three Months Ending			Year Ending
			March 30, 2019			December 28, 2019
			Forecast			Forecast
Diluted net income per share on a GAAP basis			$0.36 to $0.38			$1.33 to $1.43
Amortization of acquired intangibles			0.05			0.19
Stock-based compensation expense			0.15			0.65
Acquisition and integration-related costs			0.01			0.03
Income tax effect of non-GAAP adjustments			(0.09)			(0.23)
Diluted net income per share on a non-GAAP basis�nbsp;			$0.48 to $0.50			$1.97 to $2.07
Cadence Design Systems, Inc.
As of February 19, 2019
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
			Three Months Ending			Year Ending
			March 30, 2019			December 28, 2019
($ in millions)			Forecast			Forecast
Net income on a GAAP basis			$101 to $107			$371 to $399
Amortization of acquired intangibles			13			53
Stock-based compensation expense			42			182
Acquisition and integration-related costs			3			8
Income tax effect of non-GAAP adjustments			(24)			(63)
Net income on a non-GAAP basis�nbsp;			$135 to $141			$551 to $579

�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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