TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended

March 31,

2016

2015

Cash flows from operating activities

Net income

$

668

$

656

Adjustments to Net income:

Depreciation

161

203

Amortization of acquisition-related intangibles

80

80

Amortization of capitalized software

8

13

Stock-based compensation

72

78

Gains on sales of assets

—

(1)

Deferred income taxes

24

1

Increase (decrease) from changes in:

Accounts receivable

(100)

(154)

Inventories

(114)

(60)

Prepaid expenses and other current assets

43

54

Accounts payable and accrued expenses

(104)

(108)

Accrued compensation

(322)

(294)

Income taxes payable

131

147

Changes in funded status of retirement plans

18

19

Other

(18)

(25)

Cash flows from operating activities

547

609

Cash flows from investing activities

Capital expenditures

(124)

(123)

Proceeds from asset sales

—

1

Purchases of short-term investments

(200)

(335)

Proceeds from short-term investments

900

615

Other

(3)

—

Cash flows from investing activities

573

158

Cash flows from financing activities

Dividends paid

(383)

(356)

Stock repurchases

(630)

(670)

Proceeds from common stock transactions

131

246

Excess tax benefit from share-based payments

43

56

Cash flows from financing activities

(839)

(724)

Net change in Cash and cash equivalents

281

43

Cash and cash equivalents at beginning of period

1,000

1,199

Cash and cash equivalents at end of period

$

1,281

$

1,242