883241--12/22/2008--SYNOPSYS

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{regulation, change, law}

{product, market, service}

{property, intellectual, protect}

{acquisition, growth, future}

{loan, real, estate}

{operation, natural, condition}

{condition, economic, financial}

{stock, price, operating}

{operation, international, foreign}

{personnel, key, retain}

{control, financial, internal}

{competitive, industry, competition}

{product, liability, claim}

{investment, property, distribution}

{customer, product, revenue}

The current severe downturn and uncertainty in the global economy in general and weakness in the semiconductor and electronics industries in particular may harm our business and operating results. Customer payment defaults or related issues could harm our operating results. If we do not successfully compete in the EDA industry our business and financial condition will be harmed. Lack of growth in new IC design starts, industry consolidation and other potentially long-term trends may adversely affect the EDA industry, including demand for our products and services. Changes in, or interpretations of, accounting principles could result in unfavorable accounting charges or effects, including changes to our prior financial statements, which could cause our stock price to decline. We have received a Revenue Agent's Report from the Internal Revenue Service claiming a significant increase in our U.S. taxable income. An adverse outcome could have an adverse effect on our results of operations and financial condition. Unfavorable tax law changes, an unfavorable government review of our tax returns or changes in our geographical earnings mix or forecasts of foreign source income could adversely affect our effective tax rate and our operating results. Our revenue and earnings fluctuate and if our financial results fail to meet stockholder expectations our stock price could decline. The failure to meet the semiconductor industry's demands for advancing EDA technology and continued cost reductions may harm our financial results. We may have to invest more resources in research and development than anticipated, which could increase our operating expenses and negatively affect our operating results. We may not be able acquire businesses or technology and we may not be able to realize the potential financial or strategic benefits of the business acquisitions or strategic investments we complete, which could hurt our ability to grow our business, develop new products or sell our products. Conditions of foreign economies, foreign exchange rate fluctuations and the increasingly global nature of our operations could adversely affect our performance. Our investment portfolio may be impaired by further deterioration of the capital markets. Accounting for Certain Investments in Debt and Equity Securities From time to time we are subject to claims that our products infringe on third party intellectual property rights. If we fail to protect our proprietary technology our business will be harmed. Our business is subject to evolving corporate governance and public disclosure regulations that have increased both our costs and the risk of noncompliance, which could have an adverse effect on our stock price. There are inherent limitations on the effectiveness of our controls. If we fail to timely recruit and retain key employees our business be harmed. Product errors or defects could expose us to liability and harm reputation and we could lose market share. Catastrophic events may disrupt our business and harm our operating results.

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883241--12/22/2008--SYNOPSYS_INC