ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six Months Ended

 (In thousands)

June 27, 2014

June 28, 2013

Cash Flows from Operating Activities:

Net income

$

243,518

$

221,698

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

Depreciation and amortization

28,731

22,449

Amortization of acquisition-related intangible assets

4,929

1,128

Amortization of debt discount and debt issuance costs

1,558

563

Stock-based compensation

48,068

47,274

Net gain on sale of available-for-sale securities

(91)

—

Amortization of investment discount/premium

1,300

—

Deferred income tax expense/(benefit)

12,469

(21,767)

Tax effect of employee stock plans

121

1,280

Excess tax benefit from employee stock plans

(612)

(1,148)

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

Accounts receivable, net

30,473

(147,407)

Inventories

(12,848)

21,649

Other assets

11,078

28,788

Accounts payable and other liabilities

5,703

(19,585)

Deferred income and allowances on sales to distributors

(72,547)

50,886

Income taxes payable

5,867

14,196

Deferred compensation plan obligations

(6,329)

(5,961)

Net cash provided by operating activities

301,388

214,043

Cash Flows from Investing Activities:

Purchases of property and equipment

(21,614)

(23,337)

Sales of deferred compensation plan securities, net

6,329

5,961

Purchases of available-for-sale securities

(204,810)

(175,642)

Proceeds from sale of available-for-sale securities

58,015

72,126

Proceeds from maturity of available-for-sale securities

134,212

83,855

Acquisitions, net of cash acquired

—

(145,313)

Holdback payment for prior acquisition

(3,353)

—

Purchases of intangible assets

(535)

—

Purchases of other investments

(8,224)

(176)

Net cash used in investing activities

(39,980)

(182,526)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock through stock plans

22,696

27,296

Shares withheld for employee taxes

(11,240)

(6,722)

Payment of dividends to stockholders

(94,179)

(64,048)

Payment of debt assumed in acquisitions

—

(22,000)

Long-term debt and credit facility issuance costs

(1,321)

—

Repurchases of common stock

(358,808)

(54,974)

Excess tax benefit from employee stock plans

612

1,148

Net cash used in financing activities

(442,240)

(119,300)

Net decrease in cash and cash equivalents

(180,832)

(87,783)

Cash and cash equivalents at beginning of period

2,869,158

2,876,627

Cash and cash equivalents at end of period

$

2,688,326

$

2,788,844