ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Nine Months Ended

 (In thousands)

September 25, 
2015

September 26, 
2014

Cash Flows from Operating Activities:

Net income

$

226,709

$

361,527

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

Depreciation and amortization

42,804

42,426

Amortization of acquisition-related intangible assets

7,382

7,394

Amortization of debt discount and debt issuance costs

2,337

2,337

Stock-based compensation

63,560

70,518

Net gain on sale of available-for-sale securities

(5,613)

(150)

Amortization of investment discount/premium

9,025

1,900

Deferred income tax expense

1,065

3,582

Tax effect of employee stock plans

3,352

7,434

Excess tax benefit from employee stock plans

(3,704)

(4,719)

Changes in assets and liabilities, net of the effects of acquisition:

Accounts receivable, net

(66,143)

76,324

Inventories

(5,923)

(22,458)

Other assets

(5,796)

(3,002)

Accounts payable and other liabilities

9,401

32,581

Deferred income and allowances on sales to distributors

95,336

(90,744)

Income taxes payable and receivable, net

26,202

36,345

Deferred compensation plan obligations

(7,123)

(5,858)

Net cash provided by operating activities

392,871

515,437

Cash Flows from Investing Activities:

Purchases of property and equipment

(52,243)

(34,946)

Sales of deferred compensation plan securities, net

7,123

5,858

Purchases of available-for-sale securities

(1,520,789)

(276,867)

Proceeds from sale of available-for-sale securities

804,163

79,424

Proceeds from maturity of available-for-sale securities

111,439

175,280

Acquisition, net of cash acquired

(4,000)

—

Purchases of intangible assets

(5,359)

(1,269)

Purchases of other investments

(2,000)

(8,224)

Net cash used in investing activities

(661,666)

(60,744)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock through stock plans

19,080

29,871

Shares withheld for employee taxes

(25,052)

(20,852)

Payment of dividends to stockholders

(162,947)

(149,844)

Holdback payment for prior acquisition

—

(3,353)

Long-term debt and credit facility issuance costs

—

(1,321)

Repurchases of common stock

(57,507)

(502,986)

Excess tax benefit from employee stock plans

3,704

4,719

Net cash used in financing activities

(222,722)

(643,766)

Net decrease in cash and cash equivalents

(491,517)

(189,073)

Cash and cash equivalents at beginning of period

2,426,367

2,869,158

Cash and cash equivalents at end of period

$

1,934,850

$

2,680,085