TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

For Three Months Ended June 30,

2014

2013

Cash flows from operating activities:

   Net income

$             683

$              660

   Adjustments to net income:

      Depreciation

213

221

      Amortization of acquisition-related intangibles

80

85

      Amortization of capitalized software

14

15

      Stock-based compensation

77

75

      Gain on sales of assets

(2)

--

      Deferred income taxes

(57)

(40)

   Increase (decrease) from changes in:

      Accounts receivable

(165)

(160)

      Inventories

(30)

(20)

      Prepaid expenses and other current assets

14

(318)

      Accounts payable and accrued expenses

(59)

(36)

      Accrued compensation

113

95

      Income taxes payable

(128)

115

   Changes in funded status of retirement plans

19

23

   Other

3

(41)

Cash flows from operating activities

775

674

Cash flows from investing activities:

   Capital expenditures

(80)

(97)

   Proceeds from asset sales

3

--

   Purchases of short-term investments

(415)

(1,866)

   Proceeds from short-term investments

1,294

2,268

   Other

--

5

Cash flows from investing activities

802

310

Cash flows from financing activities:

   Proceeds from issuance of long-term debt

--

986

   Repayment of debt

(1,000)

(1,500)

   Dividends paid

(323)

(309)

   Stock repurchases

(743)

(721)

   Proceeds from common stock transactions

125

343

   Excess tax benefit from share-based payments

15

11

   Other

--

(7)

Cash flows from financing activities

(1,926)

(1,197)

Net change in Cash and cash equivalents

(349)

(213)

Cash and cash equivalents, beginning of period

1,565

1,393

Cash and cash equivalents, end of period

$          1,216

$           1,180