EZchip Semiconductor Ltd. Selected Condensed Consolidated Cash Flow Data on a Non-GAAP basis (U.S. Dollars in thousands) (Unaudited) Three Months Ended Nine Months Ended --------------------------------------- ------------------------- September September September September 30, June 30, 30, 30, 30, 2012 2012 2011 2012 2011 ----------- ----------- ----------- ----------- ----------- Cash flows from operating activities: Net income $ 127 $ 5,553 $ 7,650 $ 10,812 $ 13,895 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 178 157 162 478 1,064 Decrease (increase) in trade and other receivables, net 2,991 76 (2,100) 3,748 (1,734) Decrease (increase) in inventory 521 974 (87) 317 (1,525) Decrease in deferred tax asset - - - - 3,513 Decrease in trade payables and other accrued liabilities, net (585) (490) (1,996) (1,538) (1,707) Stock-based compensation 2,879 2,835 2,192 8,296 6,388 ----------- ----------- ----------- ----------- ----------- Net cash provided by operating activities 6,111 9,105 5,821 22,113 19,894 ----------- ----------- ----------- ----------- ----------- Cash flows from investing activities: Purchase of property and equipment (95) (338) (138) (769) (314) Purchase of technology - (500) - (500) - ----------- ----------- ----------- ----------- ----------- Net cash used in investing activities (95) (838) (138) (1,269) (314) ----------- ----------- ----------- ----------- ----------- Cash flows from financing activities: Proceeds from exercise of options 96 352 1,466 11,863 7,371 ----------- ----------- ----------- ----------- ----------- Net cash provided by financing activities 96 352 1,466 11,863 7,371 ----------- ----------- ----------- ----------- ----------- Unrealized gain (loss) on marketable securities, net 205 (79) (542) 604 (624) ----------- ----------- ----------- ----------- ----------- Increase in cash, cash equivalents, marketable securities and deposits 6,317 8,540 6,607 33,311 26,327 Cash, cash equivalents, marketable securities and deposits at the beginning of the period 153,764 145,224 121,030 126,770 101,310 ----------- ----------- ----------- ----------- ----------- Cash, cash equivalents, marketable securities and deposits at the end of the period $ 160,081 $ 153,764 $ 127,637 $ 160,081 $ 127,637 =========== =========== =========== =========== ===========