Mentor Graphics Reports Fiscal First Quarter Results

MENTOR GRAPHICS CORPORATION
UNAUDITED RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages)


	Three Months Ended April 30,
	2011			2010
GAAP gross margin	$	189,496		$	150,734
Reconciling items to non-GAAP gross margin:
Equity plan-related compensation		267			212
Amortization of purchased technology		3,357			3,569
Non-GAAP gross margin	$	193,120		$	154,515


	Three Months Ended April 30,
	2011			2010
GAAP gross margin as a percent of total revenues		82	%		83	%
Non-GAAP adjustments detailed above		2	%		3	%
Non-GAAP gross margin as a percent of total revenues		84	%		86	%


	Three Months Ended April 30,
	2011			2010
GAAP operating expenses	$	173,323		$	165,728
Reconciling items to non-GAAP operating expenses:
Equity plan-related compensation		(5,413	)		(6,369	)
Amortization of other identified intangible assets		(1,610	)		(2,361	)
Amortization of Frontline purchased technology and other identified intangible assets		(1,242	)		(621	)
Special charges		(4,547	)		(3,268	)
Non-GAAP operating expenses	$	160,511		$	153,109


	Three Months Ended April 30,
	2011			2010
GAAP operating income (loss)	$	16,173		$	(14,994	)
Reconciling items to non-GAAP operating income:
Equity plan-related compensation		5,680			6,581
Amortization of purchased intangible assets:
Cost of revenues		3,357			3,569
Amortization of intangible assets		1,610			2,361
Amortization of Frontline purchased technology and other identified intangible assets		1,242			621
Special Charges		4,547			3,268
Non-GAAP operating income	$	32,609		$	1,406


	Three Months Ended April 30,
	2011			2010
GAAP operating income (loss) as a percent of total revenues		7	%		-8	%
Non-GAAP adjustments detailed above		7	%		9	%
Non-GAAP operating income as a percent of total revenues		14	%		1	%


	Three Months Ended April 30,
	2011			2010
GAAP other expense, net and interest expense	$	(17,915	)	$	(5,468	)
Reconciling items to non-GAAP other expense, net and interest expense:
Equity in losses of unconsolidated entities		-			270
Amortization of debt discount and retirement costs		12,679			729
Non-GAAP other expense, net and interest expense	$	(5,236	)	$	(4,469	)

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