Cadence Design Systems, Inc.

Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures

For the Three Months Ended June 28, 2014

(In thousands)

(Unaudited)

   Three Months Ended           

   June 28, 2014           

GAAP

Adjustments

Non-GAAP

Revenue:

Product and maintenance

$        354,468

$                    -

$        354,468

Services

24,320

-

24,320

Total revenue

378,788

-

378,788

Costs and expenses:

Cost of product and maintenance

37,707

(9,504)

 (A) 

28,203

Cost of services

16,706

(1,384)

 (A) 

15,322

Marketing and sales

98,611

(6,992)

 (A) 

91,619

Research and development

152,672

(21,177)

 (A) 

131,495

General and administrative

32,042

(8,824)

 (A) 

23,218

Amortization of acquired intangibles

5,579

(5,579)

 (A) 

-

Restructuring and other charges (credits)

(26)

26

-

Total costs and expenses

343,291

(53,434)

289,857

Income from operations

35,497

53,434

88,931

Interest expense

(7,369)

4,241

 (B) 

(3,128)

Other income, net

1,635

(1,480)

(C)

155

Income before provision for income taxes

29,763

56,195

85,958

Provision for income taxes

6,500

15,849

(D)

22,349

Net income 

$          23,263

$          40,346

$          63,609

Notes: 

(A) For the three months ended June 28, 2014 adjustments to GAAP are as follows for the line items specified: