ALTERA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

YEARS ENDED

(In thousands)

December 31,

2013

December 31,

2012

December 31,

2011

Cash Flows from Operating Activities:

Net income

$

440,065

$

556,807

$

770,711

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

Depreciation and amortization

47,225

36,009

30,344

Amortization of  acquisition-related intangible assets

4,824

853

1,583

Amortization of debt discount and debt issuance costs

1,457

648

—

Stock-based compensation

96,624

93,586

82,750

Net gain on sale of available-for-sale securities

(153)

—

—

Amortization of investment discount/premium

3,407

—

—

Deferred income tax expense

3,581

8,824

15,657

Tax effect of employee stock plans

7,009

9,811

16,162

Excess tax benefit from employee stock plans

(4,716)

(16,278)

(17,307)

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

Accounts receivable, net

(157,842)

(91,435)

131,341

Inventories

(7,933)

(30,442)

24,245

Other assets

(1,309)

(3,698)

54,661

Accounts payable and other liabilities

9,414

(50,566)

(32,534)

Deferred income and allowances on sales to distributors

139,002

66,117

(148,836)

Income taxes payable

14,440

8,576

31,116

Deferred compensation plan obligations

(4,887)

(1,598)

(293)

Net cash provided by operating activities

590,208

587,214

959,600

Cash Flows from Investing Activities:

Purchases of property and equipment

(42,558)

(60,913)

(31,812)

Proceeds from sales of deferred compensation plan securities, net

4,887

1,598

293

Purchases of available-for-sale securities

(1,347,626)

(921,430)

(164,408)

Proceeds from sale of available-for-sale securities

136,791

105,411

11,903

Proceeds from maturity of available-for-sale securities

178,221

115,373

13,100

Acquisitions, net of cash acquired

(145,321)

—

—

Purchases of intangible assets

(13,465)

(2,280)

—

Purchase of other investments

(7,441)

(4,935)

—

Net cash used in investing activities

(1,236,512)

(767,176)

(170,924)

Cash Flows from Financing Activities:

Proceeds from issuance of common stock through stock plans

58,220

49,665

119,989

Shares withheld for employee taxes

(28,272)

(31,472)

(32,152)

Payment of dividends to stockholders

(160,377)

(115,514)

(90,060)

Payment of debt assumed in acquisitions

(22,000)

—

—

Proceeds from issuance of long-term debt

991,786

500,000

—

Repayment of credit facility

—

(500,000)

—

Long-term debt and credit facility issuance costs

(4,143)

(5,244)

—

Repurchases of common stock

(201,095)

(229,057)

(197,023)

Excess tax benefit from employee stock plans

4,716

16,278

17,307

Net cash provided by (used in) financing activities

(315,344)

(181,939)

Net (decrease) increase in cash and cash equivalents

(7,469)

(495,306)

606,737

Cash and cash equivalents at beginning of period

2,876,627

3,371,933

2,765,196

Cash and cash equivalents at end of period

$

2,869,158

$

2,876,627

$

3,371,933

Supplemental cash flow information:

Income taxes paid, net

$

16,299

$

9,797

$

9,856

Interest paid

$

10,865

$

6,898

$

3,704