©
2011 Mentor Graphics Corp.
www.mentor.com
Mentor Graphics Investor Presentation, April 2011
49
Non-GAAP Financial Measures (cont.)
(1)
Equity plan-related compensation expense.
(2)
Amount represents the write-off of prepaid royalty amounts
associated with the closure of our Intellectual Property division.
(3)
Amount represents amortization of purchased technology resulting
from acquisitions. Purchased intangible assets are amortized over two
to five years.
(4)
Other identified intangible assets are amortized to other operating
expense over two to five years. Other identified intangible assets include trade names,
employment agreements, customer relationships, and deferred
compensation which are the result of acquisition transactions.
(5)
Amount represents amortization of purchased technology and other
identified intangible assets identified as part of the fair value of
the Frontline P.C.B. Solutions Limited
Partnership (Frontline)
investment. Mentor Graphics acquired a 50% joint venture in Frontline as a result of the Valor Computerized Systems, Ltd. acquisition in the first
quarter of fiscal 2011. The purchased technology will be amortized over
three years, other identified intangible assets will be amortized over three to four years, and are
reflected in the income statement in the equity in earnings of
Frontline results. This expense is the same type as being adjusted for in notes (3) and (4) above.
(6)
Amount represents write-off of fixed assets and purchased
technology associated with our
Emulation division.
(7)
Twelve months ended January 31, 2009
:
Write-off of $8,090 for in-process research and development
related to the Ponte and Flomerics acquisitions and
$13,985
related to the acquisition of technology which has not yet reached technological feasibility and provided no alternative
future uses.
(8)
Twelve months ended January 31, 2011:
Special charges consist of (i) $6,114 of costs incurred for employee
rebalances which includes severance benefits,
notice pay, and
outplacement services, (ii) $2,083 in advisory fees, (iii) $1,432 in lease restoration costs, (iv) $900 related to the abandonment of excess leased facility space,
(v) $(566) related to a casualty loss, (vi) $360 related to an asset
abandonment, (vii) $(231) in acquisition costs, and (viii) $165 in other costs.
Twelve months ended January 31, 2010:
Special charges consist of (i) $10,713 of costs incurred for employee
rebalances which includes severance benefits,
notice pay, and
outplacement services, (ii) $4,700 in advisory fees, (iii) $2,530 related to the abandonment of excess leased facility space, (iv) $2,067 in acquisition costs, (v)
$566 related to a casualty loss, (vi) $405 related to an asset
abandonment, (vii) $302 in lease restoration costs, and (viii) $51 in other costs.
Twelve months ended January 31, 2009:
Special charges consist of (i) $9,793 of costs incurred for employee
rebalances which includes severance benefits,
notice pay, and
outplacement services, (ii) $4,535 in advisory fees, (iii) $2,547 related to the abandonment of excess leased facility space, and (iv) $13 in fixed asset write-offs
related to the closure of our Intellectual Property Division.
(9)
Twelve months ended January 31, 2011
:
Loss of $938 on investment accounted for under the equity method
of accounting.
Twelve months ended January 31, 2010
:
Other income (expense), net consists of: (i) loss of $995 on
investment accounted for under the equity method of
accounting
and (ii) an impairment of $113 for an investment accounted for under the cost method.
Twelve months ended January 31, 2009
:
Other income (expense), net consists of: (i) loss of $1,432 on
investment accounted for under the equity method of
accounting
and (ii) an impairment of $3,488 for investments accounted for under the cost method.
(10)
Twelve months ended January 31, 2011
:
$2,981 in amortization of original issuance debt discount and premiums
and $345 in premium on partial redemption
of the $110.0M
convertible debt.
Twelve months ended January 31, 2010
:
$2,764 in amortization of original issuance debt discount and $(354)
in discounts and unamortized debt costs
relate to a
partial redemption of the $110.0M convertible debt.
Twelve months
ended January 31, 2009
:
$2,540 in amortization of original issuance debt discount.
(11)
Non-GAAP income tax expense adjustment reflects the application of
our assumed normalized effective 17% tax rate, instead of our GAAP tax rate, to our non-GAAP pre-tax
income.
a Diluted non-GAAP net income per share for the
twelve months ended January 31, 2010 includes $633 of convertible debt interest, net of tax, added back to non-GAAP net income and
1,415 of corresponding dilutive shares added to the diluted weighted
average number of shares outstanding.
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