The transcript below contains forward-looking statements within the
meaning of the safe harbor provisions of Section 21E of the Securities Exchange
Act of 1934, including statements regarding the expected date of closing the
acquisition; future financial and operating results; and timing and benefits of
the acquisition. These statements are based on Synopsys' and Avant!'s current
expectations and beliefs. Actual results could differ materially from the
results implied by these statements. Factors that may cause or contribute to
such differences include the successful closing of the acquisition; changes in
both companies' businesses during the period between now and the closing date;
litigation relating to the transaction or the businesses, including the outcome
of litigation between Avant! and Cadence Design Systems, Inc.; the successful
integration of Avant! into Synopsys' business subsequent to the closing of the
acquisition; timely development, production and acceptance of products and
services contemplated by the merged company after completion of the proposed
acquisition; increasing competition in the market for design implementation or
design verification software; the ability to retain key management and technical
personnel; adverse reactions to the proposed transaction by customers, suppliers
and strategic partners and other risks described in Synopsys' report on Form
10-Q filed with the Securities and Exchange Commission (SEC) on September 18,
2001 (pp. 21-23), and on Avant!'s report on Form 10-Q filed with the Securities
and Exchange Commission (SEC) on November 14, 2001 (pp. 21-27). Synopsys and
Avant! are under no obligation to (and expressly disclaim any such obligation
to) update or alter their forward-looking statements whether as a result of new
information, future events or otherwise.


           In connection with the proposed merger, Synopsys and Avant! will file
a joint proxy statement/prospectus with the SEC. INVESTORS AND SECURITY HOLDERS
Investors and security holders may obtain a free copy of the joint proxy
statement / prospectus (when available) and other related documents filed by
Synopsys and Avant! with the SEC at the SEC's website at The joint
proxy statement / prospectus (when it is available) and the other documents may
also be obtained for free by accessing Synopsys' website at or
by directing a request by mail or telephone to 700 E. Middlefield Road, Mountain
View, CA 94043, Attention: Company Secretary, (650) 584-5000, or by accessing
Avant!'s website at or by directing a request by mail or
telephone to 4671 Bayside Parkway, Fremont, CA 94538, Attention: Company
Secretary, (510) 413-8000.

           Synopsys, Avant!, and their respective directors, executive officers
and certain other members of management and employees may be soliciting proxies
from their respective stockholders in favor of the merger. Information regarding
the persons who may, under the rules of the SEC, be considered participants in
the solicitation of the Synopsys stockholders, or the Avant! stockholders, as
the case may be, in connection with the proposed merger, will be set forth in
the joint proxy statement / prospectus when it is filed with the SEC.


On December 3, 2001, Avant! Corporation and Synopsis, Inc. jointly hosted a
conference call. The communication filed herewith is a transcript of that call.

                           SYNOPSYS CONFERENCE CALL, 12.3.01

Operator:         Ladies and Gentlemen, thank you for standing by, and welcome
                  to this special conference call. At this time all participants
                  are in a listen-only mode. Later we will conduct a
                  question-and-answer session. Instructions will be given at
                  that time. If you should require assistance during the call,
                  please press "0," followed by "star." As a reminder, today's
                  conference is being recorded.

                  During the course of this conference call, Synopsys and Avant!
                  (pronounced Ah-VAHN-tee) Corporation may make forward-looking
                  statements regarding the performance of the companies before
                  the proposed merger and the combined company after the
                  proposed merger, and, in Synopsys's case, regarding the future
                  financial result. While these statements represent each
                  company's best current judgment about its future performance,
                  each company's actual performance is subject to significant
                  uncertainties that could cause actual results to differ
                  materially from those that may be projected, including the
                  risk described in the two press releases issued earlier today
                  describing the proposed merger and Synopsys' fourth quarter
                  and Fiscal Year 2001 results. In addition to any other

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 2

                  risk factors that may be highlighted during this conference
                  call, listeners should also review each company's most recent
                  10-K, 10-Q, and 8-K reports on file with the Securities and
                  Exchange Commission, as well as the [collection] materials
                  that will be filed regarding the proposed merger for important
                  factors that could cause actual results to differ materially
                  from those that may be projected.

                  At this time I would like to turn the conference over to the
                  Chairman and Chief Executive Officer of Synopsys, Dr. Aart de
                  Geus. Please go ahead, Sir.

Aart de Geus:     Good afternoon.  I have with me Paul Lo, President of Avant!,
                  Chi-Foon Chan, President and COO of Synopsys, and Brad Henske,
                  our CFO. We have moved our earnings conference up because we
                  have some great news to announce. Synopsys has signed a
                  definitive agreement to acquire Avant! Corporation. This is
                  exciting news for many reasons.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 3

                  First, for our customers, the merger instantly brings together
                  the best front-end and the best back-end design tools under a
                  single roof. Many top executives from the largest
                  semiconductor and system companies have personally suggested
                  to me that they would welcome such a move.

                  Second, both Avant! and Synopsys employees see the power of
                  this combination. Our employees have a tradition of strong
                  technology innovation, delivery, and support. Combining
                  expertise in our complementary areas opens the door to
                  providing a complete IC design solution that is unmatched in
                  the industry.

                  Third, our shareholders have viewed it as a very strong move.
                  At a time when customers are reducing their number of
                  suppliers, Synopsys emerges as a provider of the strongest
                  technical solution in the industry. In addition, both Synopsys
                  and Avant! have a solid track record of sound financial
                  execution and growth.

                  The bottom line is that this merger is a bold move that
                  instantly puts up in the leadership position for IT design

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 4

                  What everyone knows, is that Avant! has had significant legal
                  troubles. I want to move forward here. Some bad things
                  occurred, some people were caught, they pleaded no contest,
                  some individuals received sentences and Avant! paid the price.
                  A huge price. Not only did they make a very large restitution
                  payment upon closure of the criminal case, but they also
                  suffered for years under a cloud of doubt and distrust. This
                  is especially unfortunately in light of the outstanding new
                  technology that their engineers have produced over the years.
                  But let me be very clear, we have not condoned what happened
                  in the past. We have done our homework and we are convinced
                  that what we are acquiring today is clean. In addition, we
                  will put forth our best effort to practically seek a
                  reasonable and fair settlement with Cadence on any outstanding
                  issues effective on the closing of the merger. Cadence and
                  Synopsys leadership in resolving these issues will open a new
                  chapter to a more mature and healthier in, industry going

                  This is an important time to strengthen our industry,
                  especially in light of the economic situation around us. In
                  the last three months

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 5

                  the outlook for semiconductors and electronics in general have
                  become significantly bleaker as hopes for an earlier recovery
                  have been replaced with an almost complete lack of visibility.

                  Our customers have forced to take action. After initially
                  cutting the obvious things, they are now re-examining even
                  their key projects and, if necessary, cutting into what was
                  previously considered untouchable. Even R & D budgets are no
                  longer immune and EDA expenses are increasingly scrutinized
                  and/or delayed. I hasten to say however that compared to our
                  customers our EDA industry has so far performed remarkably
                  well and will continue to do so. For Synopsys, we completed a
                  solid quarter and met expectations. Nonetheless, good
                  management discipline clearly prescribes that we forecast more
                  conservatively, that we manage expenses aggressively, and that
                  we correct up or down as visibility returns. We will manage
                  the business in fiscal '02 to yield earnings of at least $2.00
                  a share. Brad will give detail about that in a moment.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 6

                  No matter what the economic situation looks like though,
                  Synopsys as a company is very strong. We expect to gain market
                  share through growth of the combined company as our customers
                  reduce the number of their suppliers, and we will make bold
                  moves to maximize the situation. From that perspective, the
                  acquisition of Avant! compliments our existing position in a
                  remarkable way.

                  To explain this better let me paint a picture that describes
                  the post-merger Synopsys. It is helpful to think of the IC
                  design process as having three main functions. Design
                  creation, functional verification, and design integrity.

                  Let me start with design creation. This is the process that
                  implements a high-level chip description written in a language
                  such as Verilog, VHDL, or C into a detailed layout.
                  Traditionally, this was done in two main steps. First:
                  Synthesis; and second, Place-and-Route.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 7

                  Synopsys is clearly the technical and market leader in
                  synthesis. Avant! is the strongest place-and-route solution
                  where it competes most directly with Cadence, among others.

                  In the last two years, driven by small geometries, a new
                  discipline has emerged at the intersection between the two
                  steps. This new discipline is aptly named physical synthesis.
                  Synopsys far and away leads in this emerging area with over 75
                  percent bookings growth in fiscal '01 over last year, ending
                  the year with 103 million in orders, well over 350 tapeouts,
                  and over 150 customers. This does not include approximately 11
                  million in orders from customers who bought our design
                  compiler product and then upgraded to physical compiler within
                  the year. Those numbers will bring the tally to 114 million
                  for Physical Synthesis.

                  It was also rewarding to see that orders in aggregate for the
                  design compiler family grew approximately 50 million this year
                  as customers currently find that a mix of design compiler and
                  physical compiler meets their need.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 8

                  The quality of our customer base in this area is impressive.
                  For example, just last quarter we announced a variety of
                  physical synthesis endorsements from IBM, TSMC, NEC, and
                  Scientific Atlanta. I have no doubt whatsoever that the
                  combination of Synopsys synthesis and physical synthesis with
                  Avant!'s place and route, and database, is the best in class
                  design flow today. More than that, it is also the basis for
                  delivering leading solutions for .13 and .10 micron in a very
                  short time frame.

                  The second area is functional verification. The objective in
                  this area is simply stated as: "does my design perform the
                  function that I intended?" Meaning for example, "does my
                  multiplier actually multiply?" Since the early days of EDA,
                  this area has been anchored by simulation. With VCS, our
                  Verilog simulator, Synopsys has a star product. Around VCS we
                  have half a dozen connected products ranging from models to
                  test bench language to formal verification techniques. Avant!
                  adds a crucial piece to this picture: a leading circuit
                  simulator. This position significantly strengthens our
                  competitive position in a mixed-signal verification, which is
                  needed for chips in the wireless, automotive, and consumer

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                          Page 9

                  "The third area is design integrity" where you make sure that
                  the chips will actually work. Here you check for errors
                  ranging from signal integrity to timing, to manufacturing
                  defects. Synopsys has an extremely strong position in this
                  area. Our design for test solution is very well integrated
                  into the design flow and primetime is the de facto standard
                  timing verifier in the industry.

                  In addition, we have recently grown these capabilities with
                  leading edge signal integrity analysis.

                  The Avant! acquisition fills a major hole for us in the design
                  integrity arena, a complete physical verification, extraction,
                  and mask synthesis solution. These terms may not mean much to
                  the uninitiated but they allow customers to verify that the
                  chip can truly be fabricated and will work at the correct

                  Furthermore, in all the areas, design creation, functional
                  verification, and design integrity, the highly regarded Milky
                  Way database from Avant! will be a key asset in connecting all
                  these pieces together smoothly.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 10

                  The bottom line of this is powerful. In all three areas, but
                  especially in design creation and design integrity, Synopsys
                  and Avant! are an almost perfect complementary match. Our
                  customers have long known this and have done their best to
                  glue our products together in their own flows. But coming
                  together into one company now will provide a solution that
                  fulfills the requirements of the most demanding designers.

                  At this point I would be remiss not to mention two other
                  highlights from the past quarter. It's no secret that most
                  consulting businesses are feeling the brunt of the economic
                  downturn, ours included. However, we continue to invest in
                  this business, anticipating that the combination of tools,
                  services, and state of the art system-on-chip requirements
                  will bring good business opportunities.

                  Confirming that investment, we recently announced a very
                  significant relationship with Intel, who is entering the ASIC
                  business with our support. Together with Intel, we are
                  offering a complete concept to

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 11

                  manufactured part solutions to mutual customers. Two large
                  contracts with US systems companies have already been closed.

                  The second area that I would like to highlight is our
                  intellectual property business. We have always believed that
                  the reuse of IP is a key influencer of methodology and tools,
                  and vice versa. As you know, we have substantial designware
                  business, which up until now has consisted mainly of basic IP
                  business blocks. Last quarter we announced agreements with
                  ARM, MIPS, NEC, Infineon and Gain to distribute much of their
                  higher level IP through our DesignWare channel.

                  To conclude this portion of the call I would like to reiterate
                  my enthusiasm about the merger. And with that I would like to
                  now turn the call over to Paul Lo, President of Avant!, who is
                  here with us today as well.


                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 12

Paul:             Thank you Art. Good afternoon everyone. This is Paul,
                  president of Avant!. Today for the first time I'm joining
                  Synopsys in their conference call to talk about Synopsys's
                  purchase of Avant!.

                  This merger opens a new chapter in the history of EDA
                  industry. Two acknowledged industry leaders are now joining
                  forces to form what we believe will soon be the pre-eminent
                  supplier in the EDA business. I'm happy and proud to be a part
                  of it and I have high hopes for the future.

                  Although Synopsys and Avant! have built their business
                  independently over the past several years, we have some of the
                  same basic values. Both Synopsys and Avant! have always
                  focused on technology development, and have pride in the
                  technologists who created it.

                  I know what it takes to create the most competitive chip
                  design systems in the world. I have also observed Synopsys
                  technology and product development over the years as well. I
                  have great respect for Synopsys and I have come to know
                  Synopsys as a

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 13

                  company that knows what the customer wants and is persistent
                  in delivering it. I think that Synopsys and Avant! are soul
                  mates when it comes to technology development.

                  I believe that this merger creates great value for the
                  customers. Semiconductor manufacturing technology has
                  continued to advance and customers have come to depend on both
                  Synopsys and Avant! to deliver ever more advanced chip design
                  solutions. Products from both Synopsys and Avant! are now used
                  in the world's most advanced chip design flow. For years our
                  customers have asked us to work more closely with Synopsys and
                  now their wish has come true. In this combination our
                  customers will get the best technology available today along
                  with the best engine of innovation in the business.

                  I want to take a moment to reflect on the accomplishments of
                  Avant! as an independent company. Avant! began in 1991 as a
                  supplier of standard sale systems. Even today customers
                  recognize Avant! as the leader in this large and growing
                  product category, but we have become much more since our
                  humble beginning. We

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 14

                  initiated and nurtured a company culture based on customers,
                  technology, and people. Avant! had grown to offer over 45
                  different products including the powerful single path SOC
                  design flow and Milky Way database which offers customers the
                  most productive chip design process in the world.

                  Avant! has also had its big challenges, but thanks to the
                  fighting spirit of hundreds of Avant! employees we not only
                  survived, but flourished. I think that the last six years of
                  Avant!'s history illustrates the tough character supreme
                  determination of Avant!. I'm convinced that this will not be
                  lost as we join forces with Synopsys.

                  I have personally visited over 30 customers in the recent
                  month. In all these visits not a single customer has told me
                  that they are abandoning us. Instead they have high hopes for
                  new products that we recently introduced. Over 90 percent of
                  our top customers are actually engaged in the evaluation of
                  one or more of our new products. We have strong tradition of
                  loyalty to our R and D engineers. As a result our turnover
                  rate among this group has been

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 15

                  very low. We bet that our team of technologists will be happy
                  and proud to join Synopsys because of their passion for great

                  Overall I think that this combination creates a great new
                  team, a team that I know I will be proud of. In my opinion
                  this merger teams the best with the best. It is great for
                  customers and great for the industry overall. I think that
                  creates the very best company in the EDA business.

                  Thank you. Now I turn the call to Brad.

Brad Henske:      Thanks Paul.  Aart and Paul have described some of the
                  benefits of the transaction and the terrific fit between the
                  two companies. Let me briefly talk about some of the details
                  of the transaction and then I'll review our quarter and

                  The deal itself is pretty vanilla. It's a straight stock for
                  stock deal in which each Avant! share will be exchanged for
                  .371 shares of Synopsys stocks at closing. There are no caps
                  or collars. At

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 16

                  today's closing price of Synopsys of 55.39, the aggregate
                  consideration based on Avant!'s fully diluted shares is
                  approximately 830 million dollars. We expect to effect a
                  tax-free reorganization. Outstanding Avant! options will be
                  converted into Synopsys options at closing, based on the
                  exchange ratio.

                  From an operational point of view, Avant! will be integrated
                  into Synopsys after closing. No Avant! board members will join
                  the Synopsys board, and Gerry Hsu will resign all positions
                  with the company effective on the closing date. We expect the
                  fees and expenses at closing will be approximately 420 million
                  dollars, including 335 million for insurance--which I will
                  talk about in a minute--55 million to pay pre-existing
                  employment agreements, and 30 million dollars in investment
                  banking, brokerage and other fees and expenses. We expect
                  additional severance and facility consolidation expenses in
                  the first operating quarter.

                  In connection with the merger agreement, by December 31st
                  Avant!'s Japanese distributor, Main Gate, will become a wholly
                  owned subsidiary of Avant! with no remaining individual

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 17

                  shareholders at approximately no net cost to Avant!. Avant!'s
                  other principal distributor agreements have been modified to
                  remove the distributor's right to receive large lump sum
                  payments upon a change of control. Avant! will file an 8K with
                  the SEC which will provide the details regarding these

                  As I mentioned, we have obtained a binder of insurance,
                  effective after the closing with a triple A rated insurer to
                  pay all damages, penalties, and costs arising out of the
                  litigation with Cadence. The total premium will be 335 million
                  dollars. The policy coverage limit is 500 million dollars plus
                  accrued interest on the first 250 million dollars of the
                  premium. In the event that amounts paid out on the policy are
                  less than 250 million plus accrued interest, Synopsys will be
                  entitled to a refund of the difference. While we cannot
                  guarantee the outcome of the case, based on our assessment of
                  the probabilities which was developed with the assistance of
                  two outside law firms, we believe that we have more than
                  adequately provided for the liability. For financial reporting
                  purposes, 250 million dollars of the premium will be held on
                  the Synopsys balance sheet as a long-term restricted asset and
                  the interest from that

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 18

                  amount will be included in other income. The remaining 85
                  million dollars will be expensed when the policy takes effect.
                  The transaction is subject to approval by both company
                  shareholders, regulatory approval, and other customary closing
                  conditions. While always hard to predict, we expect the deal
                  will close within three to six months.

                  Let me now give you the details on what was, given the
                  environment, a successful fourth quarter for fiscal 2001,
                  followed by some commentary on our outlook going forward and
                  the impact of the proposed merger.

                  For Q4 our revenue came in at the middle of our guidance
                  range. We outperformed on expenses, and earnings before
                  goodwill per share was 39 cents, at the top of our target
                  range. We also built considerable backlog, deferred revenue,
                  and cash. Q4 was the highest orders quarter in Synopsys
                  history. Orders in aggregate grew approximately 14 percent in
                  fiscal 2001 over fiscal 2000. Q4 product orders divided
                  between approximately 86 percent, technology subscription
                  licenses or TSLs, and 14 percent perpetuals

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 19

                  which we believe is an abnormally low level and was driven by
                  the large number of aggregate orders in the quarter. The
                  average duration of TSLs in Q4 continued to be between three
                  and half and four years.

                  Orders linearity for Q4 was consistent with the prior quarter
                  and while not as good as we would have liked, was still better
                  than that experience prior to our license change. Q4 revenue
                  was 183.6 million dollars, which represent 38 percent growth
                  from the same quarter a year ago and is in the middle of our
                  guidance range. Product revenue, which is primarily comprised
                  of our perpetual licenses, was 47 million dollars. Ratable
                  license revenue was 55 million dollars this quarter. TSL
                  revenue continues to grow as our backlog flywheel continues to
                  build. Services revenue totaled 82 million dollars this
                  quarter, down six percent from the same period a year ago and
                  flat when compared to last quarter. We continue to see the
                  migration of the old TBL maintenance into the TSL revenue

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 20

                  Overall growth margin was 81 percent of revenue, flat when
                  compared to the prior quarter. Product gross margin was 91
                  percent for Q4-01 compared to 85 percent for the prior
                  quarter. Ratable license gross margins equaled 82 percent for
                  Q4 as compared to 87 percent for Q3.

                  We have started this quarter to allocate product cost-of-goods
                  based on product order mix rather than product revenue mix as
                  we had in prior quarters. This will be effective for all of
                  fiscal 2001. The aggregate cost-of-goods is unchanged. The
                  change in margins from Q3 to Q4 was driven by the large
                  increase in TSL orders in proportion to revenue in our
                  seasonally strongest quarter of the year. Service gross
                  margins came in at 76 percent, flat as compared to the prior

                  Our aggregate EBG operating expenses, including cost-of-goods,
                  were 166 million dollars, at the bottom of our guidance range.
                  Operating earnings were 17.6 million, up 198 percent
                  sequentially. Other income was 17 million, and investment
                  gains were 13.5 million, in line with expectations. Earnings
                  before good will

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 21

                  amounted to 39 cents per share, at the upper end of our
                  guidance based on lower expenses. Diluted share count was 62
                  and a half million, slightly below expectations, as our stock
                  price was somewhat lower throughout the quarter than we

                  Synopsys's balance sheet is strengthening. Cash and short-term
                  investments grew substantially, with our Q4 balance ending at
                  476 million dollars, up 167 million dollars from the from the
                  prior quarter. Q4 cash per diluted share amounted to seven
                  dollars and 63 cents. Q4 accounts receivable totaled 146
                  million dollars. For the quarter, DSO was 73 days, up from 68
                  days in Q3. During the quarter we factored no receivables.
                  Deferred revenue at the end of the quarter was 380 million
                  dollars, up 129 million dollars or 51 percent from the prior
                  quarter. During the quarter we repurchased no shares under our
                  stock buyback program.

                  As a result of our discussions with Avant!, we closed the
                  trading window for both the buyback and company management.
                  We'll resume stock purchases in this quarter to the extent
                  that we find market conditions attractive, while at the same
                  time planning for

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 22

                  funding the payments at closing of the Avant! acquisition.
                  Head count totaled 3,308 employees for the quarter, up 106
                  from the prior quarter.

                  Now I'd like to spend a minute discussing the current economic
                  environment and the impact it's having on our business. As
                  Aart mentioned, we completed our quarter against the backdrop
                  of a steadily deteriorating economic environment. The
                  semiconductor industry continues to be mired in a downturn
                  that if measured by peak-to-trough of shipments is almost
                  twice as bad as any downturn in the last 15 years. As revenue
                  has fallen semiconductor R and D spending as a percentage of
                  revenue has increased. It has now reached levels not seen in
                  recent history. Perhaps most striking, very few of our
                  customers will say they have much visibility into the next few
                  quarters. As a result, in the last quarter customers hit the
                  brakes, hard. Therefore both visibility and predictability of
                  business has abruptly gotten a lot poorer for us, and we
                  believe in reality for the rest of the EDA industry.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 23

                  For us on the positive side we have continued to book
                  significant contracts with both large and small customers,
                  including in this quarter the largest single contract in
                  Synopsys history. Our transition to a ratable model has been
                  largely successful. And we end our fiscal year 2001 with 432
                  million dollars in deferred revenue and backlog that will turn
                  into revenue this year.

                  We're seeing customers starting to pare down their list of
                  suppliers and we are clearly on the A list. But not even
                  players on the A list are going to get through this recession
                  unscathed. During the quarter we saw a number of trends in the
                  business relating to the recession that caused us to take a
                  more cautious outlook going forward. First, our consulting and
                  training business continues to struggle, reflecting the

                  Orders, although strong in Q3, were relatively weak in Q4,
                  causing us to move our expectations for the consulting
                  business's revenue down by more than 24 million dollars in
                  fiscal 2002. During Q4 the average duration of TSLs was longer
                  than we expected. On the positive side, the customers are
                  willing to commit to our technology

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 24

                  for longer terms. It also builds long-term backlog, which is
                  now ahead where we assumed it would be. For the short term,
                  however, the TSLs booked in Q4 will deliver less revenue in
                  the next 12 months than we originally expected. As the
                  realities of the market became more apparent, we began to
                  focus on a more conservative plan to tighten our own spending,
                  to curtail hiring and other expenses, thus bringing our
                  operating expenses in at the bottom of our range.

                  Let me come now to future guidance. In light of the changes in
                  the economic environment and with the potential impact of the
                  merger with Avant! we do not believe that we have enough
                  visibility to confidently give complete guidance for 2002.

                  However, for the first fiscal quarter of 2002 we expect
                  revenue of 174 to 178 million, total expenses of 162 to 166
                  million, other income and expense of ten to 11 million
                  including approximately seven million dollars of investment
                  gains, outstanding shares of 63 to 65 million, and earnings
                  before goodwill of 24 to 28 cents per share.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
                                                                         Page 25

                  We expect revenue to consist of approximately 20 percent
                  perpetuals, 40 percent ratable revenue, and 40 percent
                  services. Total revenue will be down sequentially from Q4 as
                  we expect approximately 11 million dollars less product
                  revenue from perpetuals in Q1 than in Q4. At this stage in our
                  transition of ratable revenue, orders for perpetuals still
                  have a disproportionate impact on total revenue. And Q1 is
                  historically our lowest bookings quarter. In addition, we
                  expect other I and E to be down by approximately seven million
                  dollars based on the planned lower gain on sales and
                  investments. The impact of these changes, offset by lower
                  expenses, will produce the sequentially lower earnings.

                  On the positive side, however, our forecast for Q1 is slightly
                  higher than the forecast that we held three months ago at the
                  end of Q3 2001. Without sufficient visibility for the full
                  year at this stage, we are modifying our full year 2002
                  guidance that we gave at the end of Q3 in a number of
                  significant respects. In light of the current environment, we
                  have decided to manage our business to deliver

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
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                  specific earnings for the year, namely at least two dollars
                  per share on an EBG basis.

                  Revenue will be lower than the guidance we provided at the end
                  of Q3. But at this time we are not providing updated revenue
                  guidance for the year and are withdrawing our previous
                  guidance. We are acting immediately to reduce our expected
                  expenses in 2002 by 30 million dollars versus the guidance
                  given before, and will reduce expenses further if necessary to
                  meet our earnings target. While it's possible for one to infer
                  a revenue number from the guidance we've provided, any such
                  calculations should not be construed as guidance from us.

                  We'll reconsider this decision at the end of each quarter and
                  should conditions change sufficiently we will issue revenue
                  guidance. We expect other I and E, at the tax rate and
                  outstanding shares to be consistent with prior guidance.
                  Although we appreciate that our guidance is lower and less
                  certain than the guidance we issued three month ago, we feel
                  it reflects reality in the EDA markets today. For the year, we
                  expect orders to grow modestly, on the rough order of

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
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                  ten percent depending on changes in the economy, and assuming
                  a three-year average TSL duration. We expect perpetuals to be
                  15 to 25 percent of orders in any given quarter. We are
                  broadening the range a bit from last quarter's guidance in
                  view of the volatility of the market.

                  None of the foregoing discussion reflects the proposed
                  acquisition of Avant!. Highly dependent on the timing of the
                  closing, we expect that the acquisition will be modestly
                  dilutive in fiscal 2001, on the rough order of 30 cents. This
                  is primarily driven by the conversion of their business to our
                  license mix and the accounting difficulty in recognizing in
                  the future the deferred revenue and backlog that Avant! will
                  have closing. But for these effects we expect the acquisition
                  of Avant! would be significantly accretive in the short term.

                  As we have previously announced Avant! today books
                  approximately 50 percent of its orders as perpetual licenses
                  and 50 percent as subscriptions. We expect that the customer
                  dynamics of an integrated company will rapidly move that to
                  the Synopsys mix.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
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                  Similar to the effect of our business change a year ago, the
                  mix change will depress reported earnings from the "Avant!
                  orders" in the short term. In addition, the rules of purchase
                  accounting for software companies make it difficult to bring
                  across the deferred revenue and backlog for ratable licenses,
                  since the future direct "cost to perform" is not clear. This
                  is an issue that we're currently discussing with the Emerging
                  Issues Task Force of the FASB and the SEC. It does not impact
                  the economic substance of this deal since we will still get
                  the cash payments and still provide the appropriate services.
                  However, we may not be able to recognize revenue for this
                  backlog which will affect both reported revenue and earnings.
                  Based on the forecast we have today, the net impact of both of
                  these things is on the rough order of a dollar per share of
                  EBG, which would make the deal significantly accretive in the
                  short term. In any case, it will be significantly accretive in
                  the long term. As has been our practice, we will give more
                  quantitative specifics around the closing. And again as a
                  reminder, none of these forecasts include the effect of the
                  closing of the IKOS acquisition, which is expected to occur
                  sometime in Q4 of 2002.

                                               SYNOPSYS CONFERENCE CALL, 12.3.01
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                  Thank you for your attention. I'll now turn it back to Aart
                  for his closing comments.

Aart de Geus:     Thank you Brad and Paul.

                  In conclusion let me just review the basis for my excitement
                  about our acquisition of Avant! which is threefold. First, it
                  brings together the best front-end technology with the best
                  back-end technology, resulting in the strongest design
                  solution today. Second, it fulfills a request that our
                  customers have made for years and they are thrilled that we
                  are finally merging. And last, in a tough economic climate
                  winners make bold moves and we believe that we just made such
                  a winning move.

                  The question and answer period followed, the transcript of
                  which is being prepared and once available will be filed as a
                  subsequent communication under Rule 425.