TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended

For Years Ended

December 31,

December 31,

2014

2013

2014

2013

Cash flows from operating activities:

Net income

$

825

$

511

$

2,821

$

2,162

Adjustments to Net income:

Depreciation

211

213

850

879

Amortization of acquisition-related intangibles

80

82

321

336

Amortization of capitalized software

14

17

59

82

Stock-based compensation

60

66

277

287

Gains on sales of assets

(29)

—

(73)

(6)

Deferred income taxes

23

52

(61)

50

Increase (decrease) from changes in:

Accounts receivable

223

318

(49)

16

Inventories

(33)

(5)

(53)

26

Prepaid expenses and other current assets

(16)

(75)

65

(136)

Accounts payable and accrued expenses

30

13

(194)

(284)

Accrued compensation

38

(19)

89

18

Income taxes payable

9

107

(81)

78

Changes in funded status of retirement plans

(131)

(54)

(58)

28

Other

(32)

(27)

(21)

(152)

Cash flows from operating activities

1,272

1,199

3,892

3,384

Cash flows from investing activities:

Capital expenditures

(125)

(107)

(385)

(412)

Proceeds from asset sales

96

—

142

21

Purchases of short-term investments

(937)

(730)

(3,107)

(3,907)

Proceeds from short-term investments

475

685

2,966

4,249

Other

—

29

7

46

Cash flows from investing activities

(491)

(123)

(377)

(3)

Cash flows from financing activities:

Proceeds from issuance of debt

—

—

498

986

Repayment of debt

—

—

(1,000)

(1,500)

Dividends paid

(356)

(326)

(1,323)

(1,175)

Stock repurchases

(698)

(734)

(2,831)

(2,868)

Proceeds from common stock transactions

140

168

616

1,314

Excess tax benefit from share-based payments

25

8

100

80

Other

1

—

(3)

(7)

Cash flows from financing activities

(888)

(884)

(3,943)

(3,170)

Net change in Cash and cash equivalents

(107)

192

(428)

211

Cash and cash equivalents at beginning of period

1,306

1,435

1,627

1,416

Cash and cash equivalents at end of period

$

1,199

$

1,627

$

1,199

$

1,627