Mentor Graphics Reports Fiscal Fourth Quarter Results


MENTOR GRAPHICS CORPORATION
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP
EARNINGS PER SHARE

The following table reconciles management's estimates of the specific items excluded from GAAP in the calculation of estimated non-GAAP net income per share for Q1'17 and fiscal year 2017.



		Estimated			Estimated
		Q1'17			FY'17
Diluted GAAP net income (loss) per share		$	(0.12	)	$	1.22
Non-GAAP adjustments:
Amortization of purchased technology (1)			0.02			0.06
Amortization of other identified intangible assets (2)			0.01			0.05
Equity plan-related compensation (3)			0.09			0.38
Other income (expense), net and interest expense (4)			0.02			0.06
Non-GAAP income tax effects (5)			(0.02	)		(0.09	)

Diluted non-GAAP net income per share		$	-		$	1.68


(1)	Excludes amortization of purchased technology resulting from acquisitions. Purchased technology is generally amortized over two to five years.
(2)	Excludes amortization of other identified intangible assets including trade names, customer relationships, and backlog resulting from acquisition transactions. Other identified intangible assets are generally amortized over two to five years.
(3)	Excludes equity plan-related compensation expense for the fair value of all share-based payments to employees for stock options and restricted stock units, and purchases made as a result of the employee stock purchase plans.
(4)	Excludes amortization of original issuance debt discount, and income (loss) from an investment accounted for under the equity method of accounting.
(5)	Non-GAAP income tax expense adjustment reflects the application of our assumed normalized effective 19% tax rate, instead of our GAAP tax rate, to our non-GAAP pre-tax income.

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