TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Millions of dollars)

Cash flows from operating activities

Net income

$

1,285

$

1,018

Adjustments to Net income:

Depreciation

133

150

Amortization of acquisition-related intangibles

80

80

Amortization of capitalized software

12

7

Stock compensation

54

56

Deferred income taxes

(2)

(125)

Increase (decrease) from changes in:

Accounts receivable

(106)

(98)

Inventories

39

68

Prepaid expenses and other current assets

31

95

Accounts payable and accrued expenses

47

14

Accrued compensation

140

149

Income taxes payable

10

47

Changes in funded status of retirement plans

31

24

Other

(32)

(20)

Cash flows from operating activities

1,722

1,465

Cash flows from investing activities

Capital expenditures

(186)

(139)

Purchases of short-term investments

(1,218)

(978)

Proceeds from short-term investments

920

515

Other

(4)

(1)

Cash flows from investing activities

(488)

(603)

Cash flows from financing activities

Dividends paid

(495)

(382)

Stock repurchases

(650)

(500)

Proceeds from common stock transactions

76

154

Other

(9)

—

Cash flows from financing activities

(1,078)

(728)

Net change in Cash and cash equivalents

156

134

Cash and cash equivalents at beginning of period

1,140

1,235

Cash and cash equivalents at end of period

$

1,296

$

1,369

Certain amounts in the prior period have been recast to conform to the current presentation.