(1) Synopsys' third quarter of fiscal year 2020 ended on August 1, 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)

Nine Months Ended

July 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$            466,892

$            371,653

Adjustments to reconcile net income to net cash provided by

Amortization and depreciation

159,156

152,133

Reduction of operating lease right-of-use assets

62,585

-

Amortization of capitalized costs to obtain revenue contracts

44,851

46,230

Stock compensation

170,155

114,826

Allowance for doubtful accounts

14,875

8,950

(Gain) loss on sale of property and investments

(1,994)

(4,052)

Deferred income taxes

(74,374)

(9,664)

Net changes in operating assets and liabilities, net of

acquired assets and liabilities:

Accounts receivable

(89,667)

89,370

Inventories

(17,040)

(39,431)

Prepaid and other current assets

(21,350)

(38,224)

Other long-term assets

(77,895)

(114,344)

Accounts payable and accrued liabilities

43,842

(45,200)

Operating lease liabilities

(57,968)

-

Income taxes

6,128

(6,963)

Deferred revenue

160,966

53,980

Net cash provided by operating activities

789,162

579,264

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of long-term investments

2,151

6,361

Purchases of long-term investments

(2,762)

-

Purchases of property and equipment

(120,234)

(122,358)

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

(201,045)

-

Capitalization of software development costs

(3,035)

(2,245)

Net cash used in investing activities

(324,925)

(118,242)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from credit facilities

276,490

192,897

Repayment of debt

(284,218)

(520,312)

Issuances of common stock

123,237

107,354

Payments for taxes related to net share settlement of equity awards

(66,985)

(52,309)

Purchase of equity forward contract

-

(20,000)

Purchases of treasury stock

(200,000)

(209,185)

Other

-

(762)

Net cash used in financing activities

(151,476)

(502,317)

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

8,700

4,975

Net change in cash, cash equivalents and restricted cash

321,461

(36,320)

Cash, cash equivalents and restricted cash, beginning of year

730,527

725,001

Cash, cash equivalents and restricted cash, end of period

$         1,051,988

$            688,681