SYNOPSYS,INC. (NASDAQ:SNPS) Files An 8-K Results of Operations and Financial Condition

Item2.02 Results of Operations and Financial Condition.

On May17, 2017, Synopsys, Inc.
(Synopsys) issued a press release
announcing the financial results of its second fiscal quarter
ended April30, 2017. A copy of this press release is furnished
and attached hereto as Exhibit99.1 and is incorporated herein by
reference.

The information in this Current Report, including the exhibit
hereto, shall not be deemed to be filed for purposes of Section18
of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section or Sections 11 and
12(a)(2)of the Securities Act of 1933, as amended. The
information contained herein and in the accompanying exhibit
shall not be incorporated by reference into any registration
statement or other document filed with the Securities and
Exchange Commission by Synopsys whether made before or after the
date hereof, regardless of any general incorporation language in
such filing, except as shall be expressly set forth by specific
reference in such filing.

The attached press release includes measures that are not in
accordance with, or an alternative for, U.S. generally accepted
accounting principles (GAAP). The
attached press release includes non-GAAP earnings per share,
non-GAAP net income, targeted non-GAAP expenses, and targeted
non-GAAP earnings per share.

These non-GAAP measures are not in accordance with, or an
alternative for, GAAP measures and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting
rulesor principles, and management exercises judgment in
determining which items should be excluded in the calculation of
non-GAAP measures. While we believe that non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with GAAP, we believe that non-GAAP measures are
valuable in analyzing our core operations.Management analyzes
current and future results on a GAAP basis as well as a non-GAAP
basis and also provides GAAP and non-GAAP measures in our
earnings release.The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures
prepared in accordance with GAAP.The non-GAAP financial measures
are meant to supplement, and be viewed in conjunction with, GAAP
financial measures. We believe that the presentation of
non-GAAP measures,
when shown in conjunction with the corresponding GAAP measures,
provides useful information to investors and management regarding
financial and business trends relating to our financial condition
and results of operations.

Synopsys
management evaluates and makes decisions about our business
operations primarily based on the income and costs that
management believes are directly related to Synopsys core
operations. For our internal budgeting and resource allocation
process, and in reviewing our financial results, we use non-GAAP
financial measures that exclude: (i)the amortization of acquired
intangible assets; (ii)the impact of stock compensation;
(iii)acquisition-related costs; (iv)restructuring charges; (v)the
effects of certain settlements, final judgments and loss
contingencies related to legal proceedings; and (vi)the income
tax effect of non-GAAP pre-tax adjustments; and the non-GAAP
measures that exclude such information in order to assess the
performance of Synopsys business and for planning and forecasting
in subsequent periods. In fiscal 2016, we began utilizing a
normalized annual non-GAAP tax rate in calculating non-GAAP
financial measures in order to provide better consistency across
interim reporting periods by eliminating the effects of
non-recurring and period-specific items, which can vary in size
and frequency and not necessarily reflect our normal operations,
and to more clearly align our tax rate with our expected
geographic earnings mix. The normalized annual non-GAAP tax rate
is 19% and is based on our projected annual tax rate through
fiscal 2018. We re-evaluate this rate on an annual basis for any
significant events that may materially affect our projections,
such as significant changes in our geographic earnings mix or
significant tax law changes in major jurisdictions where we
operate.

We use these
non-GAAP financial measures in making operating decisions because
we believe the measures provide meaningful supplemental
information regarding our core operational performance and give
us a better understanding of how we should invest in research and
development, fund infrastructure as well as product and market
strategies.We use these measures to help us make budgeting
decisions, for example, among product development expenses and
research and development,

sales and
marketing and general and administrative expenses.In addition,
these non-GAAP financial measures facilitate our internal
comparisons to our historical operating results, forecasted
targets and comparisons to competitors operating results.

As described
above, we exclude the following items from one or more of our
non-GAAP measures:

(i)Amortization of
acquired intangible assets.We incur expenses from
amortization of acquired intangible assets, which include
contract rights, core/developed technology, trademarks, trade
names, customer relationships, covenants not to compete, and
other intangibles related to acquisitions. We amortize the
intangible assets over their economic lives. We exclude this item
because the expense is non-cash in nature and because we believe
the non-GAAP
financial measures excluding this item provide meaningful
supplemental information regarding (a)our core operational
performance and liquidity, and (b)our ability to invest in
research and development and fund acquisitions and capital
expenditures.