Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

July 29, 2017

July 30, 2016

July 29, 2017

July 30, 2016

Cash flows from operating activities:

Net income

$

165,259

$

51,305

$

271,880

$

28,626

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

20,444

26,866

41,186

53,980

Share-based compensation

22,422

37,196

46,439

61,649

Amortization and write-off of acquired intangible assets

1,065

2,946

2,136

5,892

Deferred income taxes

2,008

53

2,791

(2,423)

Excess tax benefits from share-based compensation

—

(5)

—

(5)

Gain on sale of businesses

(39,309)

—

(47,464)

—

Other

(1,551)

718

(1,886)

2,975

Changes in assets and liabilities:

Accounts receivable

(14,550)

(68,025)

(36,313)

(25,383)

Inventories

(3,170)

(6,364)

(14,712)

7,234

Prepaid expenses and other assets

2,460

6,605

8,882

(6,612)

Accounts payable

(27,455)

20,437

3,968

40,359

Accrued liabilities and other non-current liabilities

(21,793)

(7,741)

(33,418)

(30,243)

Carnegie Mellon University accrued litigation settlement (a)

—

—

—

(736,000)

Accrued employee compensation

(846)

(22,270)

(8,375)

(15,118)

Deferred income

(3,732)

17,561

1,284

16,327

Net cash provided by (used in) operating activities

101,252

59,282

236,398

(598,742)

Cash flows from investing activities:

Purchases of available-for-sale securities

(177,811)

(110,358)

(376,227)

(203,723)

Sales of available-for-sale securities

37,936

67,824

116,700

340,095

Maturities of available-for-sale securities

87,376

48,682

169,611

146,470

Purchase of time deposits

(75,000)

(75,000)

(150,000)

(125,000)

Maturities of time deposits

75,000

—

150,000

—

Return of investment from privately-held companies

2,388

—

2,388

—

Purchases of technology licenses

(608)

(3,995)

(1,701)

(8,045)

Purchases of property and equipment

(4,020)

(12,509)

(14,046)

(24,377)

Net proceeds from sale of businesses

42,000

—

72,229

—

Net cash provided by (used in) investing activities

(12,739)

(85,356)

(31,046)

125,420

Cash flows from financing activities:

Repurchases of common stock

(221,265)

—

(387,558)

—

Proceeds from employee stock plans

77,872

244

97,811

559

Minimum tax withholding paid on behalf of employees for net share settlement

(3,005)

(112)

(24,814)

(15,382)

Dividend payments to shareholders

(30,095)

(30,675)

(60,086)

(61,136)

Payments on technology license obligations

(7,481)

(4,858)

(14,296)

(10,152)

Excess tax benefits from share-based compensation

—

5

—

5

Net cash used in financing activities

(183,974)

(35,396)

(388,943)

(86,106)

Net decrease in cash and cash equivalents

(95,461)

(61,470)

(183,591)

(559,428)

Cash and cash equivalents at beginning of period

725,962

780,222

814,092

1,278,180

Cash and cash equivalents at end of period

$

630,501

$

718,752

$

630,501

$

718,752

(a)

The Company paid $750.0 million to Carnegie Mellon University in connection with a litigation settlement agreement reached in February 2016.