SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: SEPTEMBER 30, 1995
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Commission File Number: 0-18059
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PARAMETRIC TECHNOLOGY CORPORATION
---------------------------------
(Exact name of registrant as specified in its charter)

MASSACHUSETTS 04-2866152
- ------------------------------- -----------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)

128 TECHNOLOGY DRIVE, WALTHAM, MA 02154
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(Address of principal executive offices, including zip code)

(617) 398-5000
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(Registrant's telephone number, including area code)

Securities registered pursuant to Securities registered pursuant to
Section 12(b) of the Act: Section 12(g) of the Act:

None COMMON STOCK, $.01 PAR VALUE PER SHARE
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(Title of Class)

Indicate by check mark whether the registrant has (i) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.

YES X NO __________
-----------

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. [_]

The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of October 31, 1995 was $2,916,175,994.

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value per share 62,997,238
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Class Outstanding at October 31, 1995

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Stockholders for the fiscal year ended
September 30, 1995 are incorporated by reference into Parts I and II.

Portions of the definitive 1996 Proxy Statement in connection with the
Annual Meeting of Stockholders to be held February 8, 1996 are incorporated by
reference into Part III.

Exhibit Index appears on page 10

PART I

ITEM 1: Business

General

Parametric Technology Corporation (the "Company") develops, markets and supports
seven families of integrated software products which automate the design-
through-manufacturing process for the mechanical computer-aided design,
manufacturing and engineering ("CAD/CAM/CAE") industry. Mechanical CAD/CAM/CAE
is a complex, iterative process encompassing a broad spectrum of distinct
engineering disciplines which is essential to the development of virtually all
manufactured products, ranging from consumer products to jet aircraft. All
manufacturers compete on the basis of cost, time to market and product
performance criteria, which are significantly affected by the quality and length
of the design process. The Company's mechanical CAD/CAM/CAE products offer a
high-performance, fully integrated solution which enables end-users to reduce
the time to market and manufacturing costs for their products and, through the
easy evaluation of multiple design alternatives, to improve product quality.
The Company believes that its Pro/ENGINEER(R) product line offers better
price/performance, greater ease of use, and more complete integration of
multiple engineering disciplines than other available mechanical CAD/CAM/CAE
products.

The Company's Pro/ENGINEER product line is based on an innovative software
architecture that incorporates a unique parametric, feature-based solid modeling
technology. The Company's Pro/ENGINEER software uses a single data structure to
capture changes made in any stage of the design-through-manufacturing process
and to automatically update designs and all engineering deliverables. The single
data structure allows all changes to be propagated automatically throughout the
design and manufacturing process, thus enabling users to integrate multiple
engineering activities in the mechanical design process and conduct them on a
concurrent basis. In addition, as a result of the data structure of the
Company's products, engineers can create, process, modify and store designs
quickly and easily, in a highly efficient manner. The Company believes that
although certain competitors offer products which integrate the mechanical
CAD/CAM/CAE process by means of data file transfers of static geometric
expressions of a design, there are no competitive products which offer the
degree of automatic engineering change propagation provided by Pro/ENGINEER
software.

The Company's product line currently consists of its core product, Pro/ENGINEER,
first shipped in January 1988, and 50 modules for use in conjunction with it,
depending on the individual needs of each customer. The modules are grouped in
the following product families: Pro/ENGINEER, a unique, fully associative suite
of mechanical design automation software which includes application-specific
products which address the complete spectrum of product-development activities;
Pro/ACCESS(TM) which enables companies to leverage product information from a
variety of sources in the Pro/ENGINEER environment; Pro/CDRS(TM) (Conceptual
Design and Rendering System) which enables product developers to easily create,
evaluate and modify multiple concept models and supports the seamless
integration of conceptual design into the overall design-through-manufacturing
cycle; Pro/JR.(TM), the entry-level version of the Pro/ENGINEER family, which
enables the design-through-documentation of both machined and common plastic
parts and assemblies for the customer migrating from 2D CAD to the capabilities
of 3D solid modeling; Pro/MANUFACTURING(TM) which completes a single-source
solution to a company's design-through-manufacturing requirements based on
Pro/ENGINEER's associativity between the design and manufacturing disciplines;
Pro/MECHANICA(TM) which enables engineers to model product function in a single
desktop environment and to easily and repeatedly analyze and optimize a product
design throughout the development cycle; and Pro/PDM(TM) which helps users
effectively manage the concurrent engineering environment made possible by
Pro/ENGINEER. The Company offers its product families in various packages of
software modules which provide users flexibility in meeting their design
environment requirements.

The Pro/ENGINEER product line runs on all major UNIX(R) and Microsoft(R)
Windows(R) NT and Windows 95 Workstation Operating System platforms, and is
hardware-independent. The product is written in C programming language, which
allows for portability from one standard workstation to another.

The Pro/ENGINEER product line primarily competes in the high-end of the
mechanical CAD/CAM/CAE market.

Acquisitions

On April 12, 1995, the Company acquired substantially all of the assets and
specified liabilities of the Conceptual Design and Rendering System ("CDRS")
software business operated by the Design Software Division of Evans & Sutherland
Computer Corporation for a net amount of approximately $33,507,000 in cash,
which was paid by the Company from its existing cash balances. The acquisition
has been accounted for as a purchase.

On August 1, 1995, the Company acquired Rasna Corporation ("Rasna"), a
developer and marketer of software products for mechanical computer-aided
engineering, by merging it into the Company pursuant to an Agreement and Plan of
Merger dated as of May 30, 1995. Based on the number of shares of Rasna common
stock outstanding at August 1, 1995, the Company issued approximately 3,793,000
shares of common stock and reserved approximately 522,000 shares of its common
stock for outstanding Rasna stock options assumed. The merger was accounted for
as a pooling of interests.

Product Development

The mechanical CAD/CAM/CAE industry is characterized by rapid technological
advances. Accordingly, the Company's future success will depend upon its
ability to enhance its current products and develop and introduce new products
and modules which keep pace with technological developments and address
increasingly sophisticated needs of its customers. The Company believes that
its technological leadership will be maintained through continued expansion of
the scope of applications of its Pro/ENGINEER product family, expansion of the
functionality set of each of the acquired technologies, and the full integration
of all of the product families. The Company's ability to develop new products
rapidly is facilitated by the modular structure of its software code, which
enables functional subroutines used in existing products to be accessed and
utilized by new software modules, thereby reducing the amount of new code
required to develop additional products. The major benefit of this approach is
rapid development of new functionality. The Company intends to focus its
ongoing product development efforts on additional products within the
Pro/ENGINEER product family, including tools for manufacturing and quality
assurance engineers, functionality for balancing the form, fit, and functional
needs of our customers' products, and tools to manage all of the resulting
engineering data. The Company intends to further accelerate these efforts to
provide a completely integrated suite of tools for our customers. There can be
no assurance, however, that the Company will be successful in developing and
marketing product enhancements or new products and modules that respond to
technological changes by others, or that its new products will adequately
address the needs of the marketplace.

The Company's practice has been to issue two major releases of its product line
per year, each of which has generally included several new modules. In
connection with each release, the Company works closely with its customers to
define improvements and enhancements, which are then integrated into the
products. Using this approach, customers become involved in the product design
process to validate feasibility and to influence functionality early in the
product's life-cycle. In addition, the Company's Cooperative Software Program
("CSP") provides the mechanisms and environment to facilitate the integration of
complementary products with the Pro/ENGINEER product line. Through the
Company's open software toolkit, the CSP members can build tightly integrated
solutions that satisfy various requirements of the Company's customers.

As of September 30, 1995, the Company's product development was performed by 340
employees at its Waltham, Massachusetts, headquarters; its San Jose, California
and Salt Lake City, Utah offices; and abroad. The development group includes
experts in mechanical engineering, advanced mathematical techniques, database
structures and operating systems technology.

During the years ended September 30, 1995, 1994 and 1993, the Company incurred
expenses of $25,591,000, $19,882,000 and $14,633,000, respectively, on research
and development. Software development costs of $1,132,000 (excluding $3,400,000
of purchased software from CDRS) in fiscal 1995, $912,000 in fiscal 1994 and
$619,000 in fiscal 1993 have been capitalized in accordance with Statement of
Financial Accounting Standards No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed."

Sales

The Company focuses its marketing and sales efforts primarily on the
electronics, aerospace, automotive, consumer products and telecommunications
industries. The Company believes that the broadest possible market can best be
addressed through a multi-channel distribution network. The Company derives
more than 85% of its revenue from

products distributed directly to its customers and the remainder through value-
added resellers. The Company's sales force manages the activities of all
distribution channels within a geographic area and earns commissions on revenue
from all channels. The Company believes that this mix of distribution channels
addresses the differing sales and support needs of a broad customer base.

As of September 30, 1995, the Company's sales and marketing organization
consisted of 521 people in the United States and 577 people abroad. The Company
has sales and/or support offices located in 68 cities across the United States
and in 70 cities in 23 foreign countries.

Since inception, the Company has licensed software products for approximately
49,000 seats to nearly 8,200 companies. A seat of software generally consists
of the Company's core product, Pro/ENGINEER, together with several other
software modules, configured to serve the needs of a single end-user. End-users
of the Company's products range from small companies to some of the world's
largest manufacturing organizations. No single customer accounted for more than
10% of the Company's revenue in fiscal 1995.

Information with respect to foreign and domestic operations and export sales may
be found in Note M to the Consolidated Financial Statements of the Annual Report
to Stockholders for the fiscal year ended September 30, 1995 ("1995 Annual
Report to Stockholders"), which is filed as Exhibit 13.1 to this Annual Report
on Form 10-K and incorporated herein by reference.

Competition

The mechanical CAD/CAM/CAE industry is highly competitive, and is characterized
by rapidly advancing technology. In order to maintain or improve its position
in this industry, the Company must continue to enhance its current products and
develop, in a timely fashion, new products which address the rapidly changing
needs of the marketplace.

The Company competes most directly with the CADAM(R) and CATIA(R) products
marketed by IBM(R), the CADDS(R) product marketed by Computervision Corporation,
the UNIGRAPHICS(R) product marketed by EDS, the I/EMS(TM) product marketed by
Intergraph Corporation and the I-DEAS Master Series(TM) product marketed by
Structural Dynamics Research Corporation. The Company's future success will
depend in a large part on its ability to further penetrate its installed
customer base as well as the installed customer bases of traditional mechanical
CAD/CAM/CAE suppliers. No assurance can be given that the Company will be able
to compete successfully against current and future sources of competition or
that competitive pressures faced by the Company will not adversely affect its
profitability or financial performance.

The Company believes that the principal bases for competition in its markets are
product functionality, price/performance characteristics, product portability,
ease of product use, sales and marketing strength, support services and
corporate reputation. In addition, the Company is aware of ongoing efforts by
competitors to emulate the performance and functionality of the Company's
products, and there can be no assurance that competitors will not develop
technology equivalent or superior to that of the Company.

Proprietary Rights

The Company's success is dependent upon its proprietary software technology.
The Company relies on a combination of contracts and copyright and trade secret
laws to establish and protect its proprietary rights in its technology. The
Company distributes its products under software license agreements, which grant
customers perpetual licenses to, rather than ownership of, the Company's
products and which contain various provisions protecting the Company's ownership
of and the confidentiality of the underlying technology. The Company also
limits access to and distribution of its software, documentation and other
proprietary information. The source code of the Company's products is protected
as a trade secret and as an unpublished copyright work. Despite these
precautions, it may be possible to copy or otherwise obtain and use the
Company's products or technology without authorization. In addition, effective
copyright and trade secret protection may be unavailable or limited in certain
foreign countries.

The Company believes that, due to the rapid pace of innovation within its
industry, factors such as the technological and creative skills of its personnel
are more important to establishing and maintaining a technology leadership
position within the industry than are the various legal protections surrounding
its technology. The Company believes that its products and technology do not
infringe any existing proprietary rights of others, although there can be no
assurance that third parties will not assert infringement claims in the future.

Pro/ENGINEER, the PTC logo and the "Pro/" family of marks are registered
trademarks or trademarks of the Company in the United States and in foreign
countries.

Backlog

The Company generally ships its products within 30 days after acceptance of a
customer purchase order and execution of a software license agreement.
Accordingly, the Company does not believe that its backlog at any particular
point in time is indicative of future sales levels.

Employees

The Company's success depends upon its ability to attract and retain highly
skilled technical, managerial and sales personnel. Competition for such
personnel in the computer industry in general, and the mechanical CAD/CAM/CAE
industry in particular, is intense. Although the Company has not experienced
any significant difficulty to date in attracting and retaining skilled
personnel, there can be no assurance that the Company will be successful in
attracting and retaining the personnel it requires to continue to grow and
operate profitably, both domestically and internationally.

As of September 30, 1995, the Company had 1,960 employees, including 1,098 in
sales, marketing and support activities; 338 in customer support, training and
consulting; 184 in management, finance and administration; and 340 in product
development. Of these employees, 1,151 were located in the United States and
809 were located in foreign countries.

ITEM 2: Properties

The Company's executive offices are located in approximately 251,000 square feet
of office space in Waltham, Massachusetts. This space, which is also used for
sales and research and development, is leased for an annual rent of
approximately $4,960,000. The Company also leases 139 additional sales and/or
support offices and development offices in the United States and, through its
wholly-owned subsidiaries, abroad. The Company believes that its facilities are
adequate for its present needs, but will continue to evaluate the need for
additional space as the growth of the business requires.

ITEM 3: Legal Proceedings

Not applicable.

ITEM 4: Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the last quarter
of fiscal 1995.

EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the Company as of December 22, 1995 were as
follows:

Name Age Position
---- --- --------

Steven C. Walske 43 Chairman of the Board of Directors and Chief Executive Officer
C. Richard Harrison 40 President and Chief Operating Officer
Edwin J. Gillis 47 Senior Vice President of Finance and Administration, Chief
Financial Officer and Treasurer
Marc J.L. Dulude 35 Senior Vice President of Marketing
Thomas W. Jensen, Ph.D. 42 Senior Vice President of Research and Development
David M. Lear 38 Senior Vice President of Quality and Customer Service
Michael E. McGuinness 35 Senior Vice President of Sales and Distribution
Martha L. Durcan 36 Vice President of Administration, Corporate Counsel and Clerk
James F. Kelliher 36 Vice President of Finance and Assistant Treasurer
John G. Mokas 36 Controller

Mr. Walske has been Chairman of the Board of Directors since August 1994 and
Chief Executive Officer and a director of the Company since he joined the
Company in December 1986. Mr. Walske was President of the Company from December
1986 to August 1994 and Clerk of the Company from December 1986 to February
1993.

Mr. Harrison has been President and Chief Operating Officer since August 1994.
Prior to that, Mr. Harrison served as Senior Vice President of Sales and
Distribution from September 1991 until August 1994 and as Vice President of
Sales and Distribution from May 1987 until September 1991.

Mr. Gillis has been Senior Vice President of Finance and Administration, Chief
Financial Officer and Treasurer since October 1995. Prior to joining the
Company, Mr. Gillis was Senior Vice President of Finance and Operations and
Chief Financial Officer at Lotus Development Corporation from August 1991 until
September 1995, and a partner at Coopers & Lybrand L.L.P. from August 1984 to
August 1991.

Mr. Dulude has been Senior Vice President of Marketing since October 1995.
Prior to that, Mr. Dulude served as Vice President of Technical Marketing from
May 1994 to October 1995, Director of Technical Marketing from April 1993 to May
1994, and Director of Customer Engineering Support from December 1991 to April
1993. Prior to joining the Company, Mr. Dulude held various positions at Bell
Northern Research from September 1987 until November 1991.

Dr. Jensen has been Senior Vice President of Research and Development since he
joined the Company in April 1995. Prior to joining the Company, Dr. Jensen was
Vice President and General Manager from May 1993 until April 1995 and Director
of Research and Development from July 1986 until May 1993 of the Industrial
Design Product/Business Group at Evans & Sutherland Computer Corporation.

Mr. Lear has been Senior Vice President of Quality and Customer Service since
December 1994. Prior to that, Mr. Lear had served as Vice President of Customer
Support Services from May 1994 to December 1994, Director of Customer
Support/Quality Control from April 1992 to May 1994, and Manager of Quality
Control from October 1989 to April 1992.

Mr. McGuinness has been Senior Vice President of Sales and Distribution since
September 1994. Prior to that, Mr. McGuinness had served as Vice President of
North American Sales Operations from October 1991 to September 1994 and Director
of Eastern Sales from March 1989 to October 1991.

Ms. Durcan has served as Vice President of Administration since October 1993,
Corporate Counsel since joining the Company in March 1992 and as Clerk since
February 1993. Prior to joining the Company, Ms. Durcan was an associate with
the law firm of Goodwin, Procter & Hoar from September 1989 to March 1992.

Mr. Kelliher has been Vice President of Finance since December 1994. Prior to
that, Mr. Kelliher had served as Director of Corporate Finance from November
1994 to December 1994, Chief Financial Officer of Europe from May 1993 to
November 1994, Manager of Finance and Assistant International Controller from
February 1992 to May 1993, and Manager of Budget and Analysis from October 1991
to February 1992. Prior to joining the Company, Mr. Kelliher was Corporate
Controller at Groundwater Technology Inc. from October 1989 to September 1991.

Mr. Mokas has been Controller since he joined the Company in August 1993. Prior
to joining the Company, Mr. Mokas was a manager at Coopers & Lybrand L.L.P. from
May 1988 to July 1993.

PART II

ITEM 5: Market for Registrant's Common Equity and Related Stockholder Matters

Information with respect to this item may be found in the sections captioned
"Quarterly Financial Information" and "Supplemental Financial Information"
appearing in the 1995 Annual Report to Stockholders. Such information is
incorporated herein by reference.

ITEM 6: Selected Financial Data

Information with respect to this item may be found in the section captioned
"Five Year Summary of Selected Financial Data" appearing in the 1995 Annual
Report to Stockholders. Such information is incorporated herein by reference.

ITEM 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations

Information with respect to this item may be found in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing in the 1995 Annual Report to Stockholders. Such
information is incorporated herein by reference.

ITEM 8: Financial Statements and Supplementary Data

Information with respect to this item may be found on pages 24 through 35 and in
the section entitled "Quarterly Financial Information" appearing in the 1995
Annual Report to Stockholders. Such information is incorporated herein by
reference.

ITEM 9: Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

On November 17, 1995, the Board of Directors of the Company, upon recommendation
of its Audit Committee, approved a change in the Company's independent
accountants from Price Waterhouse LLP to Coopers & Lybrand L.L.P. effective for
the fiscal year ending September 30, 1996.

Price Waterhouse LLP has served as the Company's independent accountants for the
four most recent fiscal years. During these periods, the Company did not have
any disagreements with Price Waterhouse LLP on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, nor did any reports issued by Price Waterhouse LLP contain an adverse
opinion or a disclaimer of opinion, nor were such reports qualified or modified
as to uncertainty, audit scope or accounting principles.

PART III

ITEM 10: Directors and Executive Officers of the Registrant

Information with respect to directors of the Company may be found in the
sections captioned "Election of Directors" and "Section 16(a) Reporting
Delinquency" appearing in the 1996 Proxy Statement. Such information is
incorporated herein by reference. Information with respect to Executive
Officers of the Company may be found under the section captioned "Executive
Officers of the Registrant" in Part I of this Annual Report on Form 10-K.

ITEM 11: Executive Compensation

Information with respect to this item may be found in the sections captioned
"Director Compensation" and "Compensation of Executive Officers" appearing in
the 1996 Proxy Statement. Such information is incorporated herein by reference.

ITEM 12: Security Ownership of Certain Beneficial Owners and Management

Information with respect to this item may be found in the section captioned
"Principal Stockholders" appearing in the 1996 Proxy Statement. Such
information is incorporated herein by reference.

ITEM 13: Certain Relationships and Related Transactions

Not applicable.

PART IV

ITEM 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) Documents Filed as Part of Form 10-K
1. Financial Statements
-Consolidated Balance Sheet as of September 30, 1995 and 1994*
-Consolidated Statement of Income for the years ended September 30,
1995, 1994 and 1993*
-Consolidated Statement of Stockholders' Equity for the years ended
September 30, 1995, 1994 and 1993*
-Consolidated Statement of Cash Flows for the years ended September
30, 1995, 1994 and 1993*
-Notes to Consolidated Financial Statements*
-Report of Independent Accountants for the years ended September 30,
1995, 1994 and 1993*
-Independent Auditors' Report for Rasna Corporation as of December 31,
1994 and for the years ended December 31, 1994 and 1993
2. Financial Statement Schedules
-Report of Independent Accountants for the years ended September 30,
1995, 1994 and 1993
-Schedule II - Valuation and Qualifying Accounts
-Schedules other than the one listed above have been omitted since
they are either not required, not applicable, or the information is
otherwise included.
3. Listing of Exhibits
The Exhibits filed as part of this Annual Report on Form 10-K are
listed in the Exhibit Index immediately preceding such Exhibits, and
are incorporated herein by reference.

(b) Reports on Form 8-K
None.

(c) Exhibits
The Company hereby files as part of this Annual Report on Form 10-K the
Exhibits listed in the attached Exhibit Index.

(d) Financial Statement Schedules
The Company hereby files as part of this Annual Report on Form 10-K the
financial statement schedule listed in Item 14(a)2 as set forth above.

______
*Referenced information is contained in the 1995 Annual Report to Stockholders,
filed as Exhibit 13.1 hereto.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the 27th day of
December, 1995.

PARAMETRIC TECHNOLOGY CORPORATION

By /S/ Steven C. Walske
-----------------------------------
Steven C. Walske, Chairman and Chief
Executive Officer

POWER OF ATTORNEY
-----------------

We, the undersigned officers and directors of Parametric Technology Corporation,
hereby severally constitute Edwin J. Gillis and Martha L. Durcan, Esq., and each
of them singly, our true and lawful attorneys with full power to them, and each
of them singly, to sign for us and in our names in the capacities indicated
below any and all subsequent amendments to this report, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated below on the 27th day of December, 1995.

Signature Title
- --------- -----

/S/ Steven C. Walske Chief Executive Officer and Chairman of the Board
- --------------------
Steven C. Walske (Principal Executive Officer)

/S/ C. Richard Harrison President, Chief Operating Officer and Director
- -----------------------
C. Richard Harrison

/S/ Edwin J. Gillis Senior Vice President of Finance and Administration,
- -------------------
Edwin J. Gillis Chief Financial Officer and Treasurer
(Principal Financial Officer and Principal Accounting Officer)

/S/ Robert N. Goldman Director
- ---------------------
Robert N. Goldman

/S/ Donald K. Grierson Director
- ----------------------
Donald K. Grierson

/S/ Oscar B. Marx, III Director
- ----------------------
Oscar B. Marx, III

/S/ Michael E. Porter Director
- ---------------------
Michael E. Porter

/S/ Noel G. Posternak Director
- ---------------------
Noel G. Posternak

EXHIBIT INDEX
-------------

EXHIBIT
NUMBER
- ------

2.1 - Asset Purchase Agreement dated as of March 1, 1995 among
Parametric Technology Corporation, a Massachusetts
corporation, PTC Acquisition Corporation, a Massachusetts
corporation and wholly owned subsidiary of Parametric
Technology Corporation, and Evans & Sutherland Computer
Corporation, a Utah corporation with Amendment No. 1 thereto
(filed as Exhibit 2.1 to the Current Report on Form 8-K
dated April 12, 1995 and incorporated herein by reference).

2.2 - Agreement and Plan of Merger dated as of May 30, 1995 among
Parametric Technology Corporation, Rasna Corporation and
certain shareholders of Rasna Corporation (filed as Exhibit
2.1 to the Quarterly Report on Form 10-Q for the fiscal
quarter ended July 1, 1995 and incorporated herein by
reference).

3.1 - Restated Articles of Organization of the Company (filed as
Exhibit 3.4 to the Annual Report on Form 10-K for the fiscal
year ended September 30, 1993 and incorporated herein by
reference).

3.2 - By-Laws, as amended and restated, of the Company (filed as
Exhibit 3.2 to the Annual Report on Form 10-K for the fiscal
year ended September 30, 1990 and incorporated herein by
reference).

10.1 - Registration Rights Agreement dated March 26, 1987, as
amended, among the Company and certain investors of the
Company (filed as Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (File No. 33-31620) and incorporated
herein by reference).

10.2* - 1987 Incentive Stock Option Plan of the Company, as amended;
filed herewith.

10.3* - Parametric Technology Corporation 401(k) Savings Plan (filed
as Exhibit 10.3 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1992 and incorporated herein
by reference).

10.4 - Lease dated May 22, 1987 by and between the Company and the
Trustees of 128 Technology Trust (filed as Exhibit 10.4 to
the Company's Registration Statement on Form S-1 (File No.
33-31620) and incorporated herein by reference).

10.5 - Form of the Company's Distributorship Agreement (filed as
Exhibit 10.8 to the Company's Registration Statement on Form
S-1 (File No. 33-31620) and incorporated herein by
reference).

10.6 - Form of the Company's Agreement for Licensed Products (filed
as Exhibit 10.11 to the Company's Registration Statement on
Form S-1 (File No. 33-31620) and incorporated herein by
reference).

10.7* - Employment Letter with Steven C. Walske dated October 17,
1986 (filed as Exhibit 10.12 to the Company's Registration
Statement on Form S-1 (File No. 33-31620) and incorporated
herein by reference).

10.8* - Severance Agreement with Steven C. Walske dated June 30,
1990 (filed as Exhibit 10.14 to the Annual Report on Form
10-K for the fiscal year ended September 30, 1990 and
incorporated herein by reference).

__________
*Identifies a management contract or compensatory plan or arrangement in which
an executive officer or director of the Company participates.

10.9 - Lease Amendment dated November 8, 1989 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.19 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1990 and incorporated herein
by reference).

10.10 - Lease Amendment dated January 21, 1991 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.20 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1991 and incorporated herein
by reference).

10.11* - Parametric Technology Corporation 1991 Employee Stock
Purchase Plan; filed herewith.

10.12* - Parametric Technology Corporation 1992 Director Stock Option
Plan (filed as Exhibit 10.17 to the Annual Report on Form
10-K for the fiscal year ended September 30, 1992 and
incorporated herein by reference).

10.13 - Lease Amendment dated March 6, 1992 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.18 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1992 and incorporated herein
by reference).

10.14 - Lease Amendment dated November 18, 1992 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.19 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1992 and incorporated herein
by reference).

10.15 - Form of the Company's Sales Representative Agreement (filed
as Exhibit 10.10 to the Company's Registration Statement on
Form S-1 (File No. 33-31620) and incorporated herein by
reference).

10.16 - Lease Amendment dated June 8, 1993 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.21 to the Annual Report on Form 10-K for the
fiscal year ended September 30, 1993 and incorporated herein
by reference).

10.17* - First Amendment to Severance Agreement with Steven C. Walske
dated June 15, 1993 (filed as Exhibit 10.2 to the Quarterly
Report on Form 10-Q for the fiscal quarter ended July 3,
1993 and incorporated herein by reference).

10.18* - Severance Agreement with Samuel P. Geisberg dated August 19,
1994 (filed as Exhibit 10.18 to the Annual Report on Form
10-K for the fiscal year ended September 30, 1994 and
incorporated herein by reference).

10.19* - Severance Agreement with C. Richard Harrison dated August
19, 1994 (filed as Exhibit 10.19 to the Annual Report on
Form 10-K for the fiscal year ended September 30, 1994 and
incorporated herein by reference).

10.20* - Employment Agreement with Louis C. Volpe dated December 16,
1994 (filed as Exhibit 10.21 to the Annual Report on Form
10-K for the fiscal year ended September 30, 1994 and
incorporated herein by reference).

10.21 - Lease Amendment dated April 14, 1994 by and between the
Company and the Trustees of 128 Technology Trust (filed as
Exhibit 10.22 to the Annual Report on form 10-K for the
fiscal year ended September 30, 1994 and incorporated herein
by reference).

__________
*Identifies a management contract or compensatory plan or arrangement in which
an executive officer or director of the Company participates.

10.22 - Employment Agreement with Mark J. Gallagher dated as of June
30, 1995 (filed as Exhibit 10.23 to the Quarterly Report on
Form 10-Q for the fiscal quarter ended July 1, 1995 and
incorporated herein by reference).

10.23 - Lease Amendment dated January 19, 1995 by and between the
Company and the Trustees of 128 Technology Trust; filed
herewith.

10.24 - Severance Agreement with Edwin J. Gillis dated October 2,
1995; filed herewith.

13.1 - Annual Report to Stockholders for the fiscal year ended
September 30, 1995 (which is not deemed to be "filed" except
to the extent that portions thereof are expressly
incorporated by reference in this Annual Report on Form
10-K); filed herewith.

16.1 - Letter from Price Waterhouse LLP (filed as Exhibit 16.1 to
the Current Report on Form 8-K dated November 17, 1995 and
incorporated herein by reference).

21.1 - Subsidiaries of the Company; filed herewith.

23.1 - Consent of Price Waterhouse LLP; filed herewith.

23.2 - Report of Deloitte & Touche LLP; filed herewith.

23.3 - Consent of Deloitte & Touche LLP; filed herewith.

__________
*Identifies a management contract or compensatory plan or arrangement in which
an executive officer or director of the Company participates.

Report of Independent Accountants on Financial Statement Schedule
-----------------------------------------------------------------

To the Board of Directors of Parametric Technology Corporation:

Our audits of the consolidated financial statements referred to in our report
dated October 19, 1995, except as to Notes F and G which are as of November 17,
1995, appearing on page 35 of the 1995 Annual Report to Stockholders of
Parametric Technology Corporation and its subsidiaries (which report and
consolidated financial statements are incorporated by reference in this Annual
Report on Form 10-K) also included an audit of the Financial Statement Schedule
listed in Item 14(a) of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements.

/S/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP

Boston, Massachusetts
October 19, 1995

SCHEDULE II

PARAMETRIC TECHNOLOGY CORPORATION

Valuation and Qualifying Accounts

(in thousands)
==============================================================================================================================
Column A Column B Column C Column D Column E
- ------------------------------------------------------------------------------------------------------------------------------

Additions
--------------------------------
Balance Charged to Balance
at beginning costs and Charged to at end
Description of period expenses other accounts Deductions (1) of period
- ------------------------------------------------------------------------------------------------------------------------------

YEAR ENDED SEPTEMBER 30, 1995
Allowance for Doubtful Accounts........ $2,694 1,110 - (1,071) $2,733

YEAR ENDED SEPTEMBER 30, 1994
Allowance for Doubtful Accounts........ $1,546 1,388 - (240) $2,694

YEAR ENDED SEPTEMBER 30, 1993
Allowance for Doubtful Accounts........ $1,269 830 - (553) $1,546

___________________________________________

(1) Uncollectible accounts written off, net of recoveries.