EZchip Semiconductor Ltd.

Selected Condensed Consolidated Cash Flow Data on a Non-GAAP Basis

(U.S. Dollars in thousands)

(Unaudited)

Three Months Ended

Twelve Months Ended

Dec. 31,

Sept. 30,

Dec. 31,

Dec. 31,

Dec. 31,

2014

2014

2013

2014

2013

Cash flows from operating activities:

Net income (loss)

$     (7,341)

$     4,199

$     6,513

$     9,158

$     21,698

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

Depreciation and Amortization

2,752

175

161

3,261

603

Decrease (increase) in trade and other receivables, net

(5,321)

5,315

1,026

(1,574)

(1,198)

Decrease (increase) in inventory

(152)

1,645

(678)

1,488

(1,446)

Increase (decrease) in trade payables and other accrued liabilities, net

(992)

(1,233)

2,199

(2,655)

3,990

Stock-based compensation

6,934

4,025

3,633

19,033

13,920

Net cash provided by (used in) operating activities

(4,120)

14,126

12,854

28,711

37,567

Cash flows from investing activities:

Purchase of property and equipment

(160)

(318)

(151)

(698)

(1,597)

Purchase of technology

(2,641)

--

(533)

(5,056)

(1,827)

Long term Investment and others

(31,580)

(10,000)

--

(41,580)

--

Net cash used in investing activities

(34,381)

(10,318)

(684)

(47,334)

(3,424)

Cash flows from financing activities:

Proceeds from exercise of options

1,117

498

79

2,019

1,363

Net cash provided by financing activities

1,117

498

79

2,019

1,363

Cash adjustment of marketable securities, net*

(299)

(85)

(14)

(504)

(609)

Increase (decrease) in cash, cash equivalents, marketable securities and deposits

(37,683)

4,221

12,235

(17,108)

34,897

Cash, cash equivalents, marketable securities and deposits at the beginning of the period

223,440

219,219

190,630

202,865

167,968

Cash, cash equivalents, marketable securities and deposits at the end of the period

$   185,757

$   223,440

$   202,865

$   185,757

$   202,865

* Including unrealized gain (loss) on marketable securities, accumulated interest accretion and amortization of discount and premium on marketable securities.