EZchip Semiconductor Ltd. Selected Condensed Consolidated Cash Flow Data (U.S. Dollars in thousands) (Unaudited) Three Months Ended Nine Months Ended ------------------------------- -------------------- September June September September September 30, 30, 30, 30, 30, 2011 2011 2010 2011 2010 --------- -------- --------- --------- --------- Cash flows from operating activities: Net income $ 7,650 $ 4,772 $ 4,501 $ 13,895 $ 9,617 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 162 452 712 1,064 2,191 Decrease (increase) in trade and other receivables, net (2,100) (929) (1,199) (1,734) 3,810 Increase in inventory (87) (12) 922) (1,525) (2,076) Decrease in deferred tax asset -- 2,110 2,011 3,513 5,859 Increase (decrease) in trade payables and other accrued liabilities, net (1,996) 674 403 (1,707) (3,469) Stock-based compensation 2,192 2,100 1,489 6,388 4,198 -------- -------- ------- -------- -------- Net cash provided by operating activities 5,821 9,167 6,995 19,894 20,130 -------- -------- ------- -------- -------- Cash flows from investing activities: Purchase of property and equipment (138) (51) (46) (314) (311) Cash paid for investment in affiliated Company -- -- (200) -- (200) -------- -------- ------- -------- -------- Net cash used in investing activities (138) (51) (246) (314) (511) -------- -------- ------- -------- -------- Cash flows from financing activities: Proceeds from issuance of share capital -- -- -- -- 1,072 Proceeds from exercise of options 1,466 3,432 2,795 7,371 5,098 -------- -------- ------- -------- -------- Net cash provided by financing activities 1,466 3,432 2,795 7,371 6,170 -------- -------- ------- -------- -------- Unrealized gain (loss) on marketable securities, net (542) 9 288 (624) 107 -------- -------- ------- -------- -------- Increase in cash, cash equivalents and marketable securities 6,607 12,557 9,832 26,327 25,896 Cash, cash equivalents and marketable securities at the beginning of the period 121,030 108,473 83,302 101,310 67,238 -------- -------- ------- -------- -------- Cash, cash equivalents and marketable securities at the end of the period $ 127,637 $ 121,030 $ 93,134 $ 127,637 $ 93,134 ========= ======== ======== ========= ========