ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six Months Ended

(In thousands)

June 28,

2013

June 29,

2012

Cash Flows from Operating Activities:

Net income

$

221,698

$

278,513

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

22,449

16,323

Amortization of acquisition-related intangible assets

1,128

426

Stock-based compensation

47,274

46,200

Deferred income tax benefit

(21,767)

(12,090)

Tax effect of employee stock plans

1,280

16,500

Excess tax benefit from employee stock plans

(1,148)

(16,434)

Changes in assets and liabilities, net of effects of acquisitions:

  Accounts receivable, net

(147,407)

(192,994)

  Inventories

21,649

(23,811)

  Other assets

29,351

6,019

  Accounts payable and other liabilities

(19,585)

(19,066)

  Deferred income and allowances on sales to distributors

50,886

94,299

  Income taxes payable

14,196

(16,658)

  Deferred compensation plan obligations

(5,961)

(1,925)

Net cash provided by operating activities

214,043

175,302

Cash Flows from Investing Activities:

  Purchases of property and equipment

(23,337)

(31,312)

  Proceeds from sales of deferred compensation plan securities, net

5,961

1,925

  Purchases of available-for-sale securities

(175,642)

(576,568)

  Proceeds from sale and maturity of available-for-sale securities

155,981

92,643

  Acquisitions, net of cash acquired

(145,313)

—

  Purchases of other investments

(176)

—

Net cash used in investing activities

(182,526)

(513,312)

Cash Flows from Financing Activities:

  Proceeds from issuance of common stock through various stock plans

27,296

26,086

  Shares withheld for employee taxes

(6,722)

(6,562)

  Payment of dividends to stockholders

(64,048)

(51,558)

  Payment of debt assumed in acquisitions

(22,000)

—

  Proceeds from issuance of long term debt

—

500,000

  Repayment of credit facility

—

(500,000)

  Long-term debt and credit facility issuance costs

—

(5,244)

  Repurchases of common stock

(54,974)

(129,016)

  Excess tax benefit from employee stock plans

1,148

16,434

Net cash used in financing activities

(119,300)

(149,860)

Net decrease in cash and cash equivalents

(87,783)

(487,870)

Cash and cash equivalents at beginning of period

2,876,627

3,371,933

Cash and cash equivalents at end of period

$

2,788,844

$

2,884,063