TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income

(Millions of dollars, except share and per-share amounts)

For Three Months Ended

For Years Ended

December 31,

December 31,

2015

2014

2015

2014

Revenue

$

3,189

$

3,269

$

13,000

$

13,045

Cost of revenue (COR)

1,323

1,374

5,440

5,618

Gross profit

1,866

1,895

7,560

7,427

Research and development (R&D)

306

311

1,280

1,358

Selling, general and administrative (SG&A)

405

429

1,748

1,843

Acquisition charges

81

82

329

330

Restructuring charges/other

(68)

(27)

(71)

(51)

Operating profit

1,142

1,100

4,274

3,947

Other income (expense), net (OI&E)

19

9

32

21

Interest and debt expense

22

22

90

94

Income before income taxes

1,139

1,087

4,216

3,874

Provision for income taxes

303

262

1,230

1,053

Net income

$

836

$

825

$

2,986

$

2,821

Diluted earnings per common share

$

.80

$

.76

$

2.82

$

2.57

Average diluted shares outstanding (millions)

1,027

1,063

1,043

1,080

Cash dividends declared per common share

$

.38

$

.34

$

1.40

$

1.24

As a result of accounting rule ASC 260, which requires a portion of Net income to be allocated to unvested restricted stock units (RSUs) on which we pay dividend equivalents, diluted EPS is calculated using the following:

Net income

$

836

$

825

$

2,986

$

2,821

Income allocated to RSUs

(12)

(13)

(42)

(43)

Income allocated to common stock for diluted EPS

$

824

$

812

$

2,944

$

2,778