(1) Synopsys' fiscal year 2020 and 2019 ended on October 31, 2020 and November 2, 2019, respectively. For presentation purposes, we refer to the closest calendar month end.

SYNOPSYS, INC.

Unaudited Consolidated Statements of Cash Flows ⁽¹⁾

(in thousands)

Twelve Months Ended

October 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income attributed to Synopsys

$    664,347

$ 532,367

Adjustments to reconcile net income to net cash provided by

Amortization and depreciation

209,986

201,676

Reduction of operating lease right-of-use assets

82,895

-

Amortization of capitalized costs to obtain revenue contracts

61,185

62,750

Stock-based compensation

248,584

155,001

Allowance for doubtful accounts

20,875

11,669

(Gain) loss on sale of property and investments

(1,994)

(4,052)

Deferred income taxes

(111,526)

(82,620)

Other non-cash

5,419

(993)

Net changes in operating assets and liabilities, net of

acquired assets and liabilities:

Accounts receivable

(236,806)

(8,575)

Inventories

(55,024)

(17,396)

Prepaid and other current assets

(11,298)

(49,779)

Other long-term assets

(83,367)

(125,749)

Accounts payable and accrued liabilities

113,773

(19,280)

Operating lease liabilities

(78,578)

-

Income taxes

14,120

19,777

Deferred revenue

148,722

125,717

Net cash provided by operating activities

991,313

800,513

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sales of long-term investments

2,151

6,361

Purchases of long-term investments

(2,762)

(3,245)

Purchases of property and equipment

(154,717)

(198,129)

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

(201,045)

(36,605)

Capitalization of software development costs

(4,045)

(4,259)

Net cash used in investing activities

(360,418)

(235,877)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from credit facilities

276,489

192,897

Repayment of debt

(288,879)

(524,063)

Issuances of common stock

197,403

156,364

Payments for taxes related to net share settlement of equity awards

(82,225)

(57,143)

Purchases of treasury stock

(242,078)

(329,185)

Other

(1,316)

(762)

Net cash used in financing activities

(140,606)

(561,892)

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

17,154

2,782

Net change in cash, cash equivalents and restricted cash

507,443

5,526

Cash, cash equivalents and restricted cash, beginning of year

730,527

725,001

Cash, cash equivalents and restricted cash, end of period

$ 1,237,970

$ 730,527