TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended

For Years Ended

December 31,

December 31,

2017

2016

2017

2016

Cash flows from operating activities

Net income

$

344

$

1,047

$

3,682

$

3,595

Adjustments to Net income:

Depreciation

133

139

539

605

Amortization of acquisition-related intangibles

79

80

318

319

Amortization of capitalized software

12

8

47

31

Stock-based compensation

45

48

242

252

Gains on sales of assets

—

(40)

—

(40)

Deferred taxes

159

(42)

112

(202)

Increase (decrease) from changes in:

Accounts receivable

299

166

(7)

(108)

Inventories

(49)

18

(167)

(99)

Prepaid expenses and other current assets

33

(211)

76

(81)

Accounts payable and accrued expenses

70

59

51

72

Accrued compensation

82

62

(3)

36

Income taxes payable

694

180

468

333

Changes in funded status of retirement plans

(15)

(129)

21

(73)

Other

43

2

(16)

(26)

Cash flows from operating activities

1,929

1,387

5,363

4,614

Cash flows from investing activities

Capital expenditures

(231)

(110)

(695)

(531)

Proceeds from asset sales

—

—

40

—

Purchases of short-term investments

(1,450)

(1,332)

(4,555)

(3,503)

Proceeds from short-term investments

790

765

4,095

3,390

Other

(7)

(8)

(12)

(6)

Cash flows from investing activities

(898)

(685)

(1,127)

(650)

Cash flows from financing activities

Proceeds from issuance of debt

494

—

1,099

499

Repayment of debt

—

—

(625)

(1,000)

Dividends paid

(611)

(499)

(2,104)

(1,646)

Stock repurchases

(706)

(475)

(2,556)

(2,132)

Proceeds from common stock transactions

162

57

483

472

Other

(10)

—

(31)

(3)

Cash flows from financing activities

(671)

(917)

(3,734)

(3,810)

Net change in Cash and cash equivalents

360

(215)

502

154

Cash and cash equivalents at beginning of period

1,296

1,369

1,154

1,000

Cash and cash equivalents at end of period

$

1,656

$

1,154

$

1,656

$

1,154