TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended

September 30,

2014

2013

Cash flows from operating activities:

Net income

$

826

$

629

Adjustments to Net income:

Depreciation

213

217

Amortization of acquisition-related intangibles

80

83

Amortization of capitalized software

15

18

Stock-based compensation

62

71

Gains on sales of assets

(5)

(3)

Deferred income taxes

(27)

12

Increase (decrease) from changes in:

Accounts receivable

42

(30)

Inventories

(7)

(6)

Prepaid expenses and other current assets

96

247

Accounts payable and accrued expenses

(48)

(17)

Accrued compensation

127

96

Income taxes payable

(42)

(173)

Changes in funded status of retirement plans

32

30

Other

19

(23)

Cash flows from operating activities

1,383

1,151

Cash flows from investing activities:

Capital expenditures

(103)

(124)

Proceeds from asset sales

6

3

Purchases of short-term investments

(704)

(775)

Proceeds from short-term investments

412

681

Other

6

3

Cash flows from investing activities

(383)

(212)

Cash flows from financing activities:

Dividends paid

(319)

(308)

Stock repurchases

(670)

(734)

Proceeds from common stock transactions

68

349

Excess tax benefit from share-based payments

11

9

Cash flows from financing activities

(910)

(684)

Net change in Cash and cash equivalents

90

255

Cash and cash equivalents at beginning of period

1,216

1,180

Cash and cash equivalents at end of period

$

1,306

$

1,435