ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six Months Ended

 (In thousands)

June 26, 
 2015

June 27, 
 2014

Cash Flows from Operating Activities:

Net income

$

165,191

$

243,518

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

Depreciation and amortization

27,981

28,731

Amortization of acquisition-related intangible assets

4,891

4,929

Amortization of debt discount and debt issuance costs

1,558

1,558

Stock-based compensation

42,342

48,068

Net gain on sale of available-for-sale securities

(3,969)

(91)

Amortization of investment discount/premium

5,243

1,300

Deferred income tax expense

1,770

1,573

Tax effect of employee stock plans

2,776

121

Excess tax benefit from employee stock plans

(2,881)

(612)

Changes in assets and liabilities:

Accounts receivable, net

(46,463)

30,473

Inventories

(24,267)

(12,848)

Other assets

(9,990)

(2,751)

Accounts payable and other liabilities

6,558

5,703

Deferred income and allowances on sales to distributors

50,753

(72,547)

Income taxes payable and receivable, net

11,036

30,592

Deferred compensation plan obligations

(6,676)

(6,329)

Net cash provided by operating activities

225,853

301,388

Cash Flows from Investing Activities:

Purchases of property and equipment

(43,339)

(21,614)

Sales of deferred compensation plan securities, net

6,676

6,329

Purchases of available-for-sale securities

(1,298,609)

(204,810)

Proceeds from sale of available-for-sale securities

634,838

58,015

Proceeds from maturity of available-for-sale securities

69,711

134,212

Purchases of intangible assets

(5,257)

(535)

Purchases of other investments

(2,000)

(8,224)

Net cash used in investing activities

(637,980)

(36,627)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock through stock plans

18,709

22,696

Shares withheld for employee taxes

(17,125)

(11,240)

Payment of dividends to stockholders

(108,445)

(94,179)

Holdback payment for prior acquisition

—

(3,353)

Long-term debt and credit facility issuance costs

—

(1,321)

Repurchases of common stock

(57,507)

(358,808)

Excess tax benefit from employee stock plans

2,881

612

Net cash used in financing activities

(161,487)

(445,593)

Net decrease in cash and cash equivalents

(573,614)

(180,832)

Cash and cash equivalents at beginning of period

2,426,367

2,869,158

Cash and cash equivalents at end of period

$

1,852,753

$

2,688,326