TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended Mar. 31,

2014

2013

Cash flows from operating activities:

    Net income

$             487

$              362

    Adjustments to net income:

      Depreciation

213

228

      Amortization of acquisition-related intangibles

81

85

      Amortization of capitalized software

16

32

      Stock-based compensation

78

75

      Gain on sales of assets

(37)

(3)

      Deferred income taxes

--

26

    Increase (decrease) from changes in:

      Accounts receivable

(149)

(112)

      Inventories

17

57

      Prepaid expenses and other current assets

(29)

10

      Accounts payable and accrued expenses

(117)

(244)

      Accrued compensation

(189)

(154)

      Income taxes payable

80

29

    Changes in funded status of retirement plans

22

29

    Other

(11)

(60)

Cash flows from operating activities

462

360

Cash flows from investing activities:

    Capital expenditures

(77)

(84)

    Proceeds from asset sales

37

18

    Purchases of short-term investments

(1,051)

(536)

    Proceeds from short-term investments

785

615

    Other

1

9

Cash flows from investing activities

(305)

22

Cash flows from financing activities:

    Proceeds from issuance of long-term debt

498

--

    Dividends paid

(325)

(232)

    Stock repurchases

(720)

(679)

    Proceeds from common stock transactions

283

454

    Excess tax benefit from share-based payments

49

52

    Other

(4)

--

Cash flows from financing activities

(219)

(405)

Net change in Cash and cash equivalents

(62)

(23)

Cash and cash equivalents, beginning of period

1,627

1,416

Cash and cash equivalents, end of period

$          1,565

$           1,393