EZchip Semiconductor Ltd. Selected Condensed Consolidated Cash Flow Data on a Non-GAAP basis (U.S. Dollars in thousands) (Unaudited) Three Months Ended ------------------------------------ March 31, December 31, March 31, 2012 2011 2011 --------- ----------- --------- Cash flows from operating activities: Net income (loss) $ 5,132 $(5,953) $ 1,473 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Repayment of OCS grants* -- 9,938 -- Depreciation and amortization 143 163 450 Decrease in trade and other receivables, net 681 1,113 1,295 Decrease (increase) in inventory (1,178) 259 (1,426) Decrease in deferred tax asset -- -- 1,403 Increase (decrease) in trade payables and other accrued liabilities, net (463) 1,213 (385) Stock-based compensation 2,582 2,218 2,096 -------- ------- ------- Net cash provided by operating activities 6,897 8,951 4,906 -------- ------- ------- Cash flows from investing activities: Purchase of property and equipment (336) (97) (125) Purchase of technology -- (500) -- -------- ------- ------- Net cash used in investing activities (336) (597) (125) -------- ------- ------- Cash flows from financing activities: Proceeds from exercise of options 11,415 711 2,473 -------- ------- ------- Net cash provided by financing activities 11,415 711 2,473 -------- ------- ------- Repayment of OCS grants* -- (9,938) -- Unrealized gain (loss) on marketable securities, net 478 6 (91) -------- ------- ------- Increase (decrease) in cash, cash equivalents and marketable securities 18,454 (867) 7,163 Cash, cash equivalents and marketable securities at the beginning of the period 126,770 127,637 101,310 -------- ------- ------- Cash, cash equivalents and marketable securities at the end of the period $ 145,224 $126,770 $ 108,473 ======== ======== ========