Texas Instruments 2017 Annual Report

Notice of 2018 Annual Meeting and Proxy Statement OPERATING HIGHLIGHTS (Millions of dollars, except per-share amounts)

Income statements 2017 2016

Revenue $ 14,961 $ 13,370 “In 2017, we continued making Gross profit 9,614 8,257 progress on our strategic journey Operating expenses 3,202 3,098 to create a stronger TI and to deliver sustained, long-term results. Operating profit 6,083 4,855 Our revenue grew 12% and free Net income 3,682 3,595 cash flow expanded to $4.7 billion, Earnings per share (diluted) $ 3.61 $ 3.48 or 31.2% of revenue. We are investing in the best products – Cash flows statements analog and embedded processing – and the best markets – industrial Cash flow from operations (GAAP) $ 5,363 $ 4,614 and automotive – while also Capital expenditures 695 531 strengthening and leveraging our Free cash flow (non-GAAP) 4,668 4,083 unique competitive advantages that allow us to grow, generate Shareholder returns cash and return all free cash flow to our owners. While our work will Dividends paid $ 2,104 $ 1,646 never be done, we are committed Stock repurchases 2,556 2,132 to making TI stronger every day for Total cash returned $ 4,660 $ 3,778 our customers, our employees and our owners.”

Note: Free cash flow (non-GAAP) = Cash flow from operations less Capital expenditures. Rich Templeton See page 20 for reconciliation. Chairman, president and CEO

Brian Crutcher ANALOG & EMBEDDED Executive vice president and COO % 5- & 10-YEAR CAGR Driving top-line growth, now In January 2018, TI announced that 8 Mr. Crutcher will become president and 90% of TI revenue CEO, effective June 1, and Mr. Templeton will continue as chairman. FREE CASH FLOW % GROWTH 14 Reflecting the ongoing strength of our business model

RETURNED TO SHAREHOLDERS $4.7B Demonstrating our commitment to return cash to shareholders Form 10-K table of contents PART I Item 1. Business ...... 2 Item 1A. Risk Factors ...... 8 Item 1B. Unresolved Staff Comments ...... 12 Item 2. Properties ...... 13 Item 3. Legal Proceedings ...... 13 Item 4. Mine Safety Disclosures ...... 13

PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . . . 14 Item 6. Selected Financial Data ...... 15 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ...... 16 • Overview ...... 16 • Results of operations ...... 17 • Financial condition ...... 19 • Liquidity and capital resources ...... 19 • Non-GAAP financial information ...... 20 • Long-term contractual obligations ...... 21 • Critical accounting policies ...... 21 • Changes in accounting standards, Off-balance sheet arrangements, and Commitments and contingencies ...... 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ...... 22 Item 8. Financial Statements and Supplementary Data ...... 24 • Consolidated Statements of Income ...... 25 • Consolidated Statements of Comprehensive Income ...... 26 • Consolidated Balance Sheets ...... 27 • Consolidated Statements of Cash Flows ...... 28 • Consolidated Statements of Stockholders’ Equity ...... 29 Notes to financial statements ...... 30 • (1) Description of business, including segment and geographic area information ...... 30 • (2) Basis of presentation and significant accounting policies and practices ...... 31 • (3) Restructuring charges/other ...... 35 • (4) Stock compensation ...... 36 • (5) Profit sharing plans ...... 40 • (6) Income taxes ...... 40 • (7) Financial instruments and risk concentration ...... 43 • (8) Valuation of debt and equity investments and certain liabilities ...... 43 • (9) Goodwill and acquisition-related intangibles ...... 45 • (10) Postretirement benefit plans ...... 46 • (11) Debt and lines of credit ...... 51 • (12) Commitments and contingencies ...... 52 • (13) Supplemental financial information ...... 53 • (14) Quarterly financial data (unaudited) ...... 54

TEXAS INSTRUMENTS i Report of independent registered public accounting firm ...... 55 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...... 56 Item 9A. Controls and Procedures ...... 56 Item 9B. Other Information ...... 58

PART III Item 10. Directors, Executive Officers and Corporate Governance ...... 58 Item 11. Executive Compensation ...... 58 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...... 58 Item 13. Certain Relationships and Related Transactions, and Director Independence ...... 59 Item 14. Principal Accountant Fees and Services ...... 59

PART IV Item 15. Exhibits, Financial Statement Schedules ...... 60 Notice regarding forward-looking statements ...... 62 Signatures ...... 63

Proxy statement table of contents

Notice of annual meeting of stockholders ...... 1 Table of contents ...... 2 Voting procedures, quorum and attendance requirements ...... 3 Election of directors ...... 5 Board organization ...... 11 Director compensation ...... 15 Executive compensation ...... 17 Audit Committee report ...... 43 Proposal to ratify appointment of independent registered public accounting firm ...... 43 Proposal to approve the Texas Instruments 2018 Director Compensation Plan ...... 45 Equity compensation plan information ...... 47 Additional information ...... 48 Notice regarding forward-looking statements ...... 54 Directions and other annual meeting information ...... 55 Appendix A (Non-GAAP reconciliations) ...... A-1 Appendix B (Texas Instruments 2018 Director Compensation Plan) ...... B-1

Other information table of contents

Comparison of total shareholder return ...... 1 Notice regarding forward-looking statements ...... 1

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FORM 10-K PART I 2 TEXAS INSTRUMENTS • 2017 FORM 10-K ITEM 1. Business. Power Power includes products that helppower customers requirements manage across power different in voltage electroniccontrols, levels systems. point-of-load using Our products, battery broad switches management portfolio and solutions, isand interfaces, designed portable display integrated components, to products. protection manage power devices, supply high-voltage products, and mobile lighting Our Analog segment includes the following major product lines: Power, Signal Chain and High Volume. Sales of our Analog productsfor generated analog about semiconductors 66 was percent about offragmented $53 our market, billion revenue the in in leading 2017. 2017. position. Our According We Analog to believe segment’s external we revenue sources, are in the well 2017 market positioned was about to 19 increase percent our of market share this over time. Our Analog segment generated $9.90temperature, billion pressure of or revenue images, in by 2017.can conditioning Analog be them, semiconductors processed amplifying change by them real-world other and signals,power semiconductors, often such in such converting as all as them sound, electronic embedded to equipment processors. awhether Analog by stream the semiconductors converting, of equipment also distributing, digital is are storing, data plugged used discharging, that industrial, to into isolating automotive manage a and and wall measuring personal or electrical electronics. running energy, off a battery. Our Analog products are used in many markets, particularly Analog Our segments represent groups ofrequirements, similar product products characteristics, that manufacturing are combined processesmanagement and on allocates distribution the resources basis channels. and of Our measures similar segmentsour results. design also business In and reflect structure 2017, development how with we the reorganized way the our product customers lines select within and our buy segments products. to align Semiconductors are electronic components thatSemiconductors, serve generally as known the as building “chips,” blocksthousands combine inside of multiple modern products transistors electronic that to systems are form andwith used a equipment. other to complete devices, accomplish electronic managing many circuit. and different Weportfolio distributing things, have includes power, such tens products as processing of that converting data, are and canceling integral amplifying noise to signals, and almost interfacing improving all signal electronic resolution. equipment. This broad Product information The combined effect of theseEmbedded sustainable Processing competitive and advantages have is grown thatwith and over the returned time ability free we to cash have grow, flow. gained generate TI’s market cash, business share and model in return puts Analog that us and cash in to a shareholders. unique class of companies Our business model is designedunique around class four of sustainable companies. competitive These advantages,portfolio advantages that of include we differentiated (1) believe, analog a in strong and combination,and foundation embedded put longevity processing of us of manufacturing products, in our (3) and a products, the technology,resources, markets broadest (2) is and reach a on customer of broad Analog positions. market and Our channelsindustrial Embedded strategic and and Processing, focus, (4) automotive with and diversity markets, a where which particular weproducts we emphasis invest sold believe on the into represent designing majority industrial the and of and best our sellingmanufacturing, automotive growth those which markets opportunities. products we provide Analog into believe long and the offer product embeddedour stability, life processing capital profitability cycles, management and intrinsic strategy, strong diversity, which and cashimportant is generation. less for based capital-intensive This maximizing on business shareholder our model value belief isproductively over that the invested the free foundation in long cash of the term. flow business We growth,expenditures. or also especially returned believe on to that a shareholders. free per-share Free cash basis, cash flow is flow will is be cash valued flow only from if operations it less is capital We design and make semiconductorsoperations that in we 1930. sell We to are electronicsoperations incorporated designers in in and more Delaware, manufacturers than headquartered all 30 in overof countries. the Dallas, our We Texas, world. remaining have and We business two began have activities reportable design, in segments: manufacturing Other. Analog or In and sales 2017, Embedded we Processing. generated We $14.96 report billion the of results revenue.

FORM 10-K iaca ttmns hc sicue nIe ,“iaca ttmnsadSplmnayDt. ik tedn oorforeign our the to to attendant 1 Risks Note Data.” Factors.” in Supplementary “Risk contained and 1A, is Statements Item States “Financial in United 8, described the Item are outside in operations operations included our is and which segments statements, our financial to respect dispositions. Examples with asset segments. information including our expenses, Financial activities, to litigation other resources as from allocating such losses in items, and or corporate-level gains of certain and results and settlements, the charges; insurance evaluating restructuring costs, in charges; environmental used acquisition not include are items that these items of include also (ASICs). we circuits Other, integrated In application-specific as known DLP semiconductors from custom Other the revenue certain segments. meet includes and operating not and calculators other do 2017 images), with that in definition aggregated segments revenue be operating of cannot includes billion and which $1.56 segments Other, generated reportable in individually activities for business thresholds remaining our quantitative of results the report We activity. computing specific for designed Other are processors Applications data. computations digital mathematical improve perform DSPs or processors. process to applications and instantaneously (DSPs) almost processors signal digital includes Processors and log Processors connect, sense, both to incorporate equipment and electronic applications enable of for to range requirements functions wide minimal analog a data. have in integrated transfer to used with tend are communication Microcontrollers products wireless equipment. Our and electronic complexity. wired that for software peripherals tasks and and specific length memory of program core, set memory, processor a a control with to systems designed stand-alone self-contained are and are capabilities Microcontrollers wireless solutions. integrated connectivity with wireless microcontrollers microcontrollers, includes Microcontrollers Connected Processors. and Microcontrollers Microcontrollers Connected Connected lines: product major following over the share includes market segment our Processing increase Embedded to Our positioned about well was are 2017 we in believe revenue We the segment’s leaders. sources, Processing the external Embedded among to Our market, time. According 2017. fragmented 2017. in this in billion of revenue $20 percent our about 18 of was percent processors 23 embedded about for generated market customer products next. our Processing the of Embedded to length of generation the Sales product increase one to from and tends software research investment re-use own This to their products. prefer invest our customers often on many customers operates because our that relationships that software is write products to Processing (R&D) Embedded development our of characteristic important An many in used are products as Processing such automotive. Embedded applications and Our automotive (ADAS). industrial low-cost in systems particularly simple, used assistance markets, from devices driver for vary complex advanced optimized devices specialized, and Our be highly systems can application. to infotainment and the toothbrushes tasks on electric specific depending in “brains” handle cost, used the to and microcontrollers are designed power products are performance, Processing processors of Embedded Embedded combinations 2017. equipment. various in electronic revenue of of types billion many $3.50 of generated segment Processing Embedded Our systems. electronics, safety Processing personal automotive as and Embedded such screens markets touch into like sold applications primarily support are products that These products automotive. standard and and industrial analog integrated includes Volume High amplifiers, include markets, Volume end High of products. variety sensing or a and transferred serve clocks be which drives, to products, motor information Chain products, allow Signal interface to Our converters, signals control. data real-world and measure processing and further condition for sense, converted that products includes Chain Signal Chain Signal EA NTUET 07FR 0K3 10-K FORM 2017 • INSTRUMENTS TEXAS ® rdcs(rmrl sdi rjcost raehigh- create to projectors in used (primarily products

FORM 10-K Factory automation and control Building automation Medical/healthcare/fitness Grid infrastructure Test and measurement Motor drives Space/avionics/defense Appliances Power delivery Electronic point of sale Display Industrial transportation Lighting Industrial other Infotainment and cluster Passive safety Advanced driver assistance systems (ADAS) Hybrid/electric vehicle and powertrain Body electronics and lighting Mobile phones Personal and notebook computers Portable electronics Storage Tablets Printers and other peripherals Home theater and entertainment Wearables (non-medical) TV Gaming Wireless infrastructure Telecom infrastructure Enterprise switching Residential Projectors Servers Multi-function printers High-performance computing Thin client 4 TEXAS INSTRUMENTS • 2017 FORM 10-K Despite recent consolidation, the analogsignificant and global embedded competition processing from markets dozens remainsuppliers. of highly Our large fragmented. competitors and As also small a include companies, result,which emerging including we we companies, both face operate. particularly broad-based in suppliers Asia, and that niche sell products into the same markets in Competitive landscape Market characteristics Automotive (19% of TI revenue) Personal electronics (25% of TI revenue) Communications equipment (12% of TI revenue) Enterprise systems (6% of TI revenue) Other (calculators and other) (3% of TI revenue) MarketIndustrial (35% of TI revenue) Sector The table below lists themarket major represented. markets The for chart our also products lists, in in 2017 declining and order the of estimated our percentage revenue, of the our sectors 2017 within revenue each that market. the Markets for our products

FORM 10-K ilmtrwfr,wihhv bu 0pretcs datg e nakgdci vr20mliee aes 300-millimeter wafers. forward. 200-millimeter going over growth 300- chip Analog analog We unpackaged our products. advanced per of our our advantage majority of of cost the features loadings percent support the factory 40 will increasing differentiates a wafers by that about consistent advantage technology have a cost in which ensure manufacturing invest wafers, helps to competitive millimeter manufacturing us a our allows creating control also on directly and focused to customers have decision our strategic for This products in-house. of manufacturing supply our of most do We assets fixed-cost largely wafer are both and include construct These to Europe. investment and substantial operation. Japan require in Asia, facilities once weeks. America, Our 14 North facilities. to in assembly/test 6 facilities and place within manufacturing fabrication takes completed semiconductor process being operate entire products and The most own tested. with We and weeks, packaged 12 is of wafer average the an number on requires a device and fabricate Each facilities that wafer. specialized steps silicon highly processing thin in chemical a and on photolithographic devices of semiconductor sequence of a with begins manufacturing Semiconductor of range are wide sales a Manufacturing our to of directly percent sell 65 and competitors. About products our presence. our from of online products our inventory marketing sell or an enhance also sales maintain and They have distributors expand customers. We Our to online. channels. continue and distribution we distributors, and through and countries, fulfilled sales 30 direct than through more products in semiconductor offices derived our revenue sell our and of market one-third We than more with diverse, is base 100. customer largest Our our customers. outside 100,000 customers about from to products our sell We first distribution the and in sales weaker be Customers, to quarters. tends third rate and growth second the revenue with sequential compared our Historically, when quarters variation. seasonal fourth some and to subject is revenue Our demand. inventory customer consignment into Seasonality utilize insight we improved Additionally, us customers. give our of that on our group distributors resources reduces small and our diversity or customers focus market This our We customers. single with costs. diverse a programs lower and of at facilities markets performance capacity manufacturing diverse the this our serve on acquire acquire which dependence to We segments, us TI. Processing allows on Embedded usually cycle and which semiconductor Analog demand, the of of effect ahead facilities. the equipment manufacturing dampen and semiconductor to maintain strategies and several build employ semiconductor to We The required cycle. money semiconductor and the time in significant downturns the excess and by and/or upturns affected demand as be weakening to could The and/or by referred cycle inventories. demand caused typically of strengthening inventory are depleting by surplus These and caused of capacity. building supply periods manufacturing the by tight and of followed demand periods capacity, and by manufacturing supply characterized insufficient of been flow has and historically ebb market the semiconductor to refers cycle” “semiconductor The cycle Market processes manufacturing as time and over designs decline mature. product to cycles in tend life advances costs product incremental, manufacturing and generally and though prices constant, Semiconductor by processes. characterized manufacturing is market semiconductor global The products. Processing cycle customers’ Embedded Product and our products for Analog factor our competitive for a factor is competitive development process a software development manufacturing are in product addition, performance investments innovation, In of prior technological price. levels market, and differentiated to capacity provide breadth channels reliability, that the its quality, technologies including of service, factors, depth customer several and support, on strength technical depends the execution, generally line, market product semiconductor company’s the a in of performance competitive that believe We EA NTUET 07FR 0K5 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K 6 TEXAS INSTRUMENTS • 2017 FORM 10-K We often participate in industryParticipation initiatives in to these set initiatives technical may standards.non-discriminatory require Our terms. us competitors to may license participate certain in of the our same patents initiatives. to other companies on reasonable and We own many patents, andour have business. many We patent have applications developed pending,license a in agreements, strong, the which broad-based United vary patent States in portfolio andbusiness duration, and other materially involving continually countries dependent rights add in upon to patents fields any our to relating one portfolio that to patent or portfolio. or those We patent of also license. other have companies. We do not consider our Intellectual property We purchase materials, parts andsuppliers. supplies The from materials, a parts number and ofmaterials, supplies suppliers. parts essential In and to some supplies cases our will we business be purchase are available such generally in items available from the at sole foreseeable present, source future. and we believe that such Raw materials We define backlog as ofof a time. particular Our date backlog as at purchaseindustry any orders conditions particular with change, date a orders may customer-requested may not deliverydate. be be date Customer subject indicative within order to of a placement cancellation revenue specified practices or for length well continually modification any as evolve of future industry based terms period. supply on such As and customers’ as customeroccurs capacity individual pricing, requirements at considerations. business quantity and the Further, needs or same our and delivery time consignment capabilities,was as programs as $1.32 delivery, do billion i.e., not when at result December the in 31, customer backlog 2017, pulls because and the the $1.09 product order billion from at consigned December inventory. 31, Our 2016. backlog of orders Backlog Longer term, we expect tolong-lived, carry low-volume more inventory devices to than serve we industrial have customers, in a the growing past portion as we of move our towards business. higher consignment levels and more Inventory Our long-term inventory strategy isobsolescence to and maintain improve high manufacturing levels asset ofdemand utilization. customer low-volume, service To long-lived and capitalize devices stable on with lead manufacturingmaintain a times, efficiencies, product broad minimize we inventory customer inventory build in base in unfinished and advanceimproved wafer a of insight form low into to risk demand allow of and obsolescence. greaterconsignment are Additionally, flexibility inventory better in we programs able periods sometimes with to of our manage highprograms. customers our demand. Our and factory Further, strategy distributors. loadings we and About because have expected 60 over customer percent time demand of we will TI have cause revenue increased our is inventory fulfilled levels from to consignment fluctuate over time. We conduct most of ouruniversities R&D and internally. select We industry also closely consortia,technology. engage and we with collaborate a wide with range our of foundry third suppliers parties, on including semiconductor manufacturing software suppliers, Research and development Our R&D expense was $1.51and billion strengthen in our 2017, compared broad with Analogin $1.36 and R&D billion Embedded to in Processing develop 2016 portfolios differentiated and through products, $1.27 disciplined with billion allocation a in of particular 2015. R&D emphasis We resources. on continually We designing grow invest for the industrial and automotive markets. Additionally, we keep our manufacturingattractive. costs We low expect by to using continue matureneeds, to assets and maintain acquired to sufficient ahead obtain internal of manufacturing manufacturing demandour equipment capacity when manufacturing to to their capacity support meet prices and new the are maximize technology vast most commonly our majority developments known responsiveness of and as to our revenue foundries, customer production growth. and demand, Tofoundries subcontractors. we supplement and In use about 2017, the 40 we capacity percent sourced of of about outside our 20 suppliers, assembly/test percent services of from our subcontractors. total wafers from external

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FORM 10-K 8 TEXAS INSTRUMENTS • 2017 FORM 10-K We have facilities in moreUnited than States; 30 in countries. particular, About shipments 85political, of percent social products of and into our economic China revenue conditions, comes typicallypossible security from represent disruptions risks, shipments a in terrorism to large transportation, or locations portion other communications outside ofoperate, hostile and the our including acts, information revenue. the health technology We United conditions, networks are States. labor of exposedexperience, Additionally, conditions, the to increasing certain and various protectionism countries countries that where in may we whichfinancial impact operate we results. global have In trade. experienced, addition, This and our could otherthe global result countries non-U.S. operations in may currencies expose an in us adverse which to effecteffect we periods on on transact when our our business. the operations results The U.S. and of remeasurement dollar our operations of significantly and non-U.S. fluctuates financial dollar in condition. transactions relation can to have an adverse economic or other conditions. Our global operations subject us to risks associated with domestic or international political, social, Our ability to match inventoryrevenue and forecast. production In with addition, the when productbased responding mix on to needed forecasts customers’ to of requests fill customers’ for orderscustomer demands. shorter may demand, These shipment affect we forecasts lead our may are times, ability hold based we toaffect inadequate, on manufacture meet our multiple excess products a results or assumptions. quarter’s of obsolete If operations inventory we and that inaccurately financial would forecast condition. reduce our profit margins and adversely Our results of operations alsouncertainty might regarding suffer because the of stability a ofsocial, general global economic decline credit or in and other customer financial conditions; demand markets;or breaches resulting natural a of from, events customer’s customer for or inability information example: domestic to technology or access systems international credit that political, markets disrupt and customer other operations; sources of needed liquidity. Our customers include companies insectors a within wide our range end of markets endcyclical declines markets nature or and of the sectors the rate within semiconductor of thoseAdditionally, market growth markets. the may slows, If lead loss our demand or to results in significant significant of onea curtailment and operations or change of rapid may more in purchases be increases the by and adversely design one affected. decreasesinventory or or in The adjustments, manufacturing more product may sourcing of demand. adversely policies our affect or large our practices customers, results of including of these curtailments operations customers, due and or to financial the condition. timing of customer or distributor of operations. Changes in expected demand for our products could have a material adverse effect on our results We face intense technological and pricingincrease competition from in large the competitors markets and in fromAsia, which small that we competitors sell operate. serving products We niche into expect markets, theChina this and same actively competition also markets promoting will from in and continue emerging which reshaping to companies, we itsmay particularly operate. domestic restrict in For semiconductor us example, industry from we through participating may policy incompetitors face changes the possess increased and China sufficient competition investment. market financial, as These or technical a actions may andfavorably result prevent management against of us resources our from to products, competing develop and effectively and consolidationtraditional with market among intellectual Chinese products our property companies. that competitors licensors Certain may may are compete allow increasinglythat them providing compete to functionality, with compete designs our more and products. effectively. complete Themargins Additionally, hardware price and or and lost software product business solutions development opportunities pressures intechnological, that the product, result event support, from that software competition we or may are manufacturing lead unable advancements to to of reduced match our profit the competitors. price declines or cost efficiencies, or meet the We face substantial competition thatpricing requires pressures. us to respond rapidly to product development and You should read the following riskthe factors Securities in and conjunction Exchange with Commission the (SEC)intended factors and to discussed in highlight elsewhere materials certain in incorporated factors this by thatexhaustive and reference may discussion other into affect of of these our risks our filings. financial that filings These condition applysusceptible with risk and to to factors results TI, macroeconomic are of a downturns operations company in and with theperformance are broad United and not international States the meant operations. or performance to Like abroad of be other that ourgeneral an companies, may customers. market we affect Similarly, conditions, are the the actual general price financial economic of resultsour climate our that and/or and securities do the our is not investment subject meet community’s to our expectations volatility and/or for due the our to investment future fluctuations community’s results in expectations, and changes other in factors, many of which are beyond our control. ITEM 1A. Risk Factors.

FORM 10-K rcs ehooyi iey otefcie n prpit anradtepsiiiyo upir’ipsto fincreased of imposition suppliers’ of manufacturing possibility logic the advanced and including deliver manner risks, and appropriate involves develop and us. suppliers to effective, on these inability cost costs on suppliers’ timely, Reliance demand, a limited. high in contracts is of technology depend long-term suppliers periods process we have alternate in and not of capacity products, do number of We our the shortages of development. and possible testing technology suppliers, and process these assembly manufacturing of and logic all our fabrication advanced with affect wafer provide adversely our to could of parties equipment portion third manufacturing a on install subcontract or We technologies operations. as manufacturing of identify new results cannot implement we timely materials to of inability sourcing Our the our change Additionally, we conflict-free. that as demand products customers our our describe of with to more results relationships unable or conflict-free. our Our are one affect requirements. we if adversely reporting if increase could minerals affected may items conflict adversely costs these to be of subject may costs are suppliers high that and natural and materials customers materials, to contain raw access products key delayed Our certain or operations. that Limited of require available. equipment be manufacturing utilities critical and and resources or processes receivable manufacturing accounts our collect particular, supplies, In access needed to obtain unable to are unable suppliers be our may information If we suppliers’ information. liquidity, technology. our proprietary needed needed of or of access breach confidential sources a our other or Additionally, of and operate; utilities. release markets suppliers and a credit our resources in which natural result in materials, could or locations raw systems domestic the key technology markets; result in to a financial events access as and goods natural delayed operations credit needed conditions; or suppliers’ global to other limited our access of and in Our stability economic manner. disruptions the social, timely or regarding political, and suppliers uncertainty international cost-effective with excursions; a disputes quality in potential example: services by for and affected of, goods adversely with be us may supply services to and parties third on rely We risks. completed. are manufacturing they and after chain years supply that few face projects a Further, least We a assured. at realize be until not can revenue might viability significant we commercial contribute cases, before not some made may In generally viable existing demands. are commercially customer improve they are market to changing because and development meet investments manufacture to and our develop, ones research on successfully in new return selling to investments develop average ability significant and in our make products decline upon We and a part manner. technology and in timely cycles depend a life in operations product products of shortened results innovative to Our contribute products. could our products. serve of and we prices technologies markets new in change develop technological to Rapid us requires serve we markets in prolonged change a in technological condition. results financial Rapid that and disaster results as natural our such A affect occurrences operations. adversely natural disrupt may to could operations subject that our locations epidemics to in health disruption operate. operations or other we events and geological which facilities weather, in design severe locations and the data in manufacturing, have events We natural by affected be could operations of results difficulty Our the increasing our thereby affect adversely evolving, could constantly which and or of frequent them. data; any are against personal penalties, threats defending of or Cybersecurity of release or remediation reputation. the confidential protection, our in suppliers’ increased and result our results with operations; or associated operating customers’ other costs our and incur our, manufacturing to of our us release to cause technology unauthorized disruption information the a our or cause compromise terrorism, data information; access, things, lost proprietary other unauthorized or parties among access, corrupt third could, network in other events restricted result and These failures, networks; vendors error. system customers, viruses, human our computer or of as malfeasance, systems such employee the factors or by systems caused technology be information could our of disruptions of or disruptions Breaches or breaches by affected adversely be systems. could technology reputation information our and results operating Our EA NTUET 07FR 0K9 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K 10 TEXAS INSTRUMENTS • 2017 FORM 10-K We have consignment inventory programswere in to place experience for a some loss ofadversely with our affected respect largest if to customers we TI-consigned and do inventory, distributors.recovery not our If is recover results a delayed. the of customer full or operations value distributor and of financial the condition lost may inventory be from the customer, distributor or insurer, or if our Our results of operations anddistributor financial suffers condition a could loss be with adversely respect affected to if our a inventory. customer or a Our initial estimates of therefine financial our impact analysis of and the as U.S.non-cash, additional Tax operating guidance Cuts assets becomes and such available. Jobs as Act, Ifresults inventory enacted in of and in the operations. fixed December future assets, 2017, we we may repatriate might change any incur as of incremental we the non-U.S. earnings taxes, represented which by could affect our In addition, we are subjectand to when laws it and is regulations subject inOrganisation to various for taxation jurisdictions Economic in that Cooperation that determine and jurisdiction. howlocations Development’s Changes much where Base in profit we Erosion these has are and laws been deemed Profit and earned tax to Shifting regulations, liability earn recommendations, including based income, could those on which affect that our could the alignwill forecast in with change. of turn the our affect performance our for results the of year. operations. If Each that quarter performance we forecast forecast changes, our our forecasted tax liability We have facilities in moreTax than rates 30 vary countries among and the aschange jurisdictions a in in result the which are jurisdictions we subject in operate. tochanges which A taxation in our number and available profits of audit tax are factors by credits; earned could aprinciples; changes and cause number or in our taxed; of adverse applicable tax a taxing resolution tax rate change authorities. of rates; to inapplicable audits changes increase, the tax by in including mix laws taxing tariff of a and authorities. regulations profits regulations We or fromwhich or have surcharges; those could in deferred changes jurisdictions; also our tax in affect business assets accounting our performance on results could our of affect balance operations. our sheet. If ability Changes our to in tax realize rate those increases, deferred our tax results assets, of operations could be adversely affected. Our results of operations could be affected by changes in tax-related matters. We could be subject toproducts, claims manufacturing, based on services, designs, warranty, communications productsuch or liability, claims cybersecurity epidemic or that or pay could delivery damage lead failures,affected awards to or customer or significant other or settlements. expenses grounds end In as relating consumer. the we toavailable We event defend our or maintain of adequate product a to liability claim, protect we insurance,containing against may but a also all there TI incur such is part, costs claims. no for if In guaranteecause example, we addition, that us with decide it such to respect to is insurance incur to compensate possible will costs products the for be financial and used one expenses condition in of relating and automotive our to our applications customers the reputation. to or recall. handheld recall Any a electronics, of product which these may events could adversely affect our results of operations, Our results of operations andclaims, our product reputation recalls could or be legal affected proceedings. by warranty claims, product liability Some of these complex laws,– rules may and particularly regulations affect – us forthe in example, use the those of jurisdictions related abatement in to equipment which environmental,to beyond we safety or what manufacture and from we products, health our currently especially requirements current employ; ifenergy, manufacturing require such natural processes; the laws resources, or and addition or impose regulations: or materials costs, elimination require products. or fees of A gases or a substitute used reporting raw for or requirements material a emitted on or prohibited into the process the raw direct material environment or or in indirect process connection use might of with not the be manufacture available, of or our might not be available at reasonable cost. We are subject to complexthe laws, environment, rules and safety and regulations health; affectingemployment; exports our competition; and domestic market imports; and access; bribery international intellectual and operationsCompliance property corruption; relating with ownership tax; to, these and data for laws, infringement; privacy example, rules and andship and the protection; our regulations movement labor products may of and and be currency. operate oneroussubject our and to business. expensive fines, If and penalties we could or fail restrictor other to our new legal comply ability ones liability. or to enacted, Furthermore, if manufacture we we should or and could become these operate incur subject laws, our materially to rules business. greater enforcement and compliance activity, regulations costs we be or could amended restrictions be or on expanded, our ability to manufacture our products is subject. Our operations could be affected by the complex laws, rules and regulations to which our business

FORM 10-K akt) u eut foeain n iaca odto ol eavreyafce n u blt oacs h aia markets capital the access financial to the ability in our instability and to affected due restricted. adversely example, be be (for could through lines could investments liquidity credit condition our additional and financial redeem provide accounts and or and these operations and borrowings access of accounts, paper to results investment commercial unable our and support are markets), our bank that we service our lines If acquisitions, to credit loans. access strategic bank bank make continuous our short-term business, upon to the our depends access support in objectives on to invest return depend investments operations, cash may of our our portfolio fund meet a to and and ability obligations agreements, Our debt credit company. revolving the multi-year of markets. more needs financial or financing the one in accounts, bank changes maintain by We affected be could for liquidity by, funds and raise operations to of us results cause could could Our payments or interest shareholders, assets. and to selling principal returned or make or equity to operations or obligation our debt our our in new including invested addition, issuing operations, be In example, will our control. would which affecting our otherwise performance, to factors beyond that future ability other are funds our the and which divert upon have business of depends will and many we due cycles, factors, believe when industry risk we payments conditions, other While interest economic maturities. and general and principal to rates make subject interest to be various ability with our securities debt, debt this issue service we time, to time From condition. financial and we operations where countries our of laws. affect laws U.S. could The as debt bearing products. extent products Our our same counterfeit sell the of to to sale ability rights parties’ our property third impede intellectual or may our copyrighted so, cloning protect or do or not patented to copying may our right unfair operate of the of use without risk or parties’ products The misappropriation third their trademark. all example, in our prevent for secrets cannot including, trade efforts information, our our and or However, technology technology, rights. protected property our intellectual of own use our improper them protect and indemnify to enforce actively as obligation We well legal as other parties, or third contractual from a injunctions have claims. These and/or we infringement predictable. damages where from less for instances resulting or claims in damages established to customers against less us our our be expose by or may could indemnification we laws merit, for where property any claims claims intellectual of consider infringement the not we face where or terms have also and whether on that may products assertions, or entities We sell on all non-practicing companies. or rely at other including use to licenses parties, against make, have obtain actions third customers we to from enforcement that able claims pursue extent be infringement to the will face patents To we indirectly, acquired our others. that or conduct of assurance directly to rights no may, necessary property be We know-how intellectual can reasonable. or intellectual the there software necessary infringing others, technology, the from without the obtain so technology develop will do licensed we independently can jurisdictions evolves, to we all business able that in our be or portfolio as will business property that, we intellectual assurance that our no or of be rights, strength can property continued There the business. on conduct part we in where maintain depends markets to worldwide and to rights Access property intellectual our enforce to ability operation. our of on in freedom part reductions in with result. depends decline a performance not as Our do margins costs profit fixed affect manufacturing these adversely our general, can of In and much fixed. loadings, own is factory highly we costs or a Because operating demand in products. our customer operate our of we and for portion processes; addition, pricing significant In manufacturing affect a standards. our adversely capacity, or in might shipment practices changes that and accounting tariffs; environment demand existing in market customer in changes competitive in mix; changes decreases or product including our pronouncements factors, in accounting of shifts new number inventory; a our by of affected obsolescence adversely volume; be may margins profit Our our time. to harmful over or vary disruptive may be margins could Our distributors to of inability number their significant in a result of that loss difficulties the products. financial or our suffer with business. over distributors Disputes current carry products our us. distributors competing if to Our promote affected owed distributors. distributors be amounts through our could pay p EA NTUET 07FR 0K11 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K 12 TEXAS INSTRUMENTS • 2017 FORM 10-K ITEM 1B. Unresolved Staff Comments. Not applicable. We have a significant amountimpairments of of goodwill goodwill and or intangible intangible assets assets on could our adversely consolidated affect balance our sheet. financial Charges condition associated and with results of operations. Material impairments of our goodwillof or operations. intangible assets could adversely affect our results From time to time, weactions, undertake to business support and or organizational carry changes,our out including business our acquisitions, plans strategic divestitures and objectives. and operating Our restructuring to failure results. timely For to and example, successfully successfully implement we integrate may thesenot acquired not changes identify operations, realize could all product the adversely possible lines expected affect issues and benefitsexpected and technology, of growth risks and an or that our acquisition cost might pre-acquisition if savings arise due wein benefits with are diligence amount of respect unable may and business to timing and an from organizational acquisition. our changes, Further, expectations. and we restructuring may not charges achieve could or differ sustain materially the plans and results of operations. Our ability to successfully implement business and organizational changes could affect our business Our continued success depends inmarketing, part technical on and the staff retention personnel. andfor Skilled recruitment their and of talents experienced skilled is personnel personnel, intense. in includingmanagement There our engineering, and can industry management, technical be are personnel no in that assurance highdeploy that we demand, employees we require and to will to competition various execute be locations able our may business to be strategy. successfully limited retain Our by ability and immigration to recruit laws. recruit the internationally key engineering, or qualified employees in a competitive environment. Our continued success depends in part on our ability to retain and recruit a sufficient number of Federal and state health carecould reform reduce programs profitability could and increase affect ourand costs our other with results postretirement of regard plans operations to reflect medical andreturn assumptions coverage financial on that of condition. plan affect our In assets, the employees, addition, discount planned which obligationsthese rates, funding related assumptions plan and to may participant costs our affect population of pension plan demographics theseincrease funding, and plans, significantly cash changes including if flow in the our and pension actual plans’ results regulations. actual of Changes experience operations, in differs and from our these costs assumptions. and funding obligations could financial condition. Increases in health care and pension benefit costs could affect our results of operations and

FORM 10-K hnd,China Chengdu, Maine Portland, South California Clara, Santa o applicable. Not Disclosures. liquidity. Safety or Mine operations of 4. amount results ITEM the condition, that financial believe our We upon business. effect our adverse of material course a ordinary have the not in will arise any, that if proceedings liability, and our inquiries of various in involved are We Proceedings. Legal 3. ITEM our believe We years. five next purpose. the intended within their generally for dates, adequate varying and at suitable expire are facilities properties leased current facilities. occupied our currently in our space covering the Leases of all substantially occupied we 2017, at of feet end square leased. the million were At 10.0 feet approximately approximately square which contained million of States 1.5 2017, United approximately 31, the which December outside of at facilities 2017, feet Our 31, square leased. December million were 13.1 feet approximately square contained million States 0.7 leases. United land the include in may facilities This Our owned. and leased are facilities the of Portions † Leased. * Taiwan Taipei, Scotland Greenock, Philippines (Clark), Pampanga Philippines Baguio, Mexico Aguascalientes, Malaysia Melaka, Malaysia Lumpur, Kuala Japan Miho, Japan Aizu, India Bangalore, Germany Freising, China Shanghai, Arizona Tucson, Texas Sherman, Texas Houston, Texas Dallas, as Except them. of use location major general make the that segments indicates facilities. table reportable these the following own and The we operations Texas. indicated, Dallas, design otherwise Boulevard, and TI manufacturing 12500 principal at our located of are offices executive principal Our Properties. 2. ITEM ...... XX X X X ...... X X ...... † † * † * ...... X X ...... X X ...... † ...... X ...... XX X X X ...... X X ...... † ...... X ...... X X ...... XX X ...... X ...... X X ...... * † ...... XX X ...... X ...... † ...... X X ...... EA NTUET 07FR 0K13 10-K FORM 2017 • INSTRUMENTS TEXAS Analog Processing Embedded

FORM 10-K Plans or Under the Purchased May Yet Be Shares that Approximate Programs (1) Dollar Value of Quarter Part of Publicly Plans or of Shares Announced Programs (1) Total Number Purchased as 0.38 0.38 0.38 0.50 1st 2nd 3rd 4th Average 58.3748.03 63.30 56.43 71.42 61.06 74.87 67.60 72.92 76.90 76.41 89.65 per Share Price Paid $ 0.50 $ 0.50 $ 0.50 $ 0.62 $ 82.20 $ 84.34 $ 89.65 $ 104.82 Total Shares Number of Purchased 2,575,154 $ 93.497,356,198 (2) 2,560,953 $ 96.22 (2) 7,341,997 $ 9.71 billion $ 9.24 billion (3) 3,324,2281,456,816 97.71 97.63 3,324,228 1,456,816 9.39 billion 9.24 billion PART II ...... Issuer Purchases of Equity Securities. Low...... Low ...... to $7.5 billion of additionalof shares directors of authorized TI the common purchase stock of announced an September additional 17, $6.0 2015. billion On September of our 21, 2017, commonwithholding stock. our obligations board in connection with the vesting of restricted stock units. and the $6.0 billion authorized in September 2017. No expiration date has been specified for these authorizations. 2016 2017 2016 High 2017 High 14 TEXAS INSTRUMENTS • 2017 FORM 10-K Dividends paid: (1) All open-market purchases during the quarter were made under the authorization from our(2) board of directors to purchase In up addition to open-market purchases, 14,201 shares of common(3) stock were surrendered by As employees of to December satisfy 31, tax 2017, this amount consisted of the remaining portion of the $7.5 billion authorized in September 2015 Total October 1, 2017 through OctoberNovember 31, 1, 2017 2017 through November 30, 2017 Period The following table contains information regarding our purchases of our common stock during the fourth quarter of 2017. Issuer purchases of equity securities Stock prices: TI common stock is listedcommon on stock The as NASDAQ reported Global by Select Bloomberg Market. L.P. The and table the below dividends shows paid the per high common and share low in closing each prices quarter of during TI the past two years. Common stock prices and dividends December 1, 2017 through December 31, 2017 The information concerning the numberSelected of Financial stockholders Data.” of record at December 31, 2017, is contained in Item 6, “Summary of ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and

FORM 10-K Mlin fdlas xetsaeadprsaeamounts) per-share and share except dollars, of (Millions Mlin fdlas xetOhrdt items) data Other except dollars, of (Millions e aaeetsDsuso n nlsso iaca odto n eut fOeain n iaca ttmnsand Statements Financial and Operations of Results and Condition Financial Data. of Supplementary Analysis and Discussion Management’s See record of Stockholders Employees of: Number – data Other debt Long-term debt long-term of portion Current assets investments Total short-term and equivalents cash Cash, data: sheet Balance financial the to 2 Note See 2017-07. ASU adopted activities. having operating presentation, from 2017 flows the Cash to from conform expenditures to Capital reclassified subtracting periods by Prior derived measure non-GAAP a is (b) flow cash Free (a) share common per declared dividends Cash EPS millions Diluted in outstanding, shares diluted Average EPS diluted for shares common to allocated Income RSUs units to following: stock allocated the restricted Income using unvested to calculated is allocated (EPS) be income share to Net per income earnings Net of diluted portion equivalents, a dividend requires pay which we 260, which ASC on rule (RSUs) accounting of result a As income Net (b) profit Operating (b) charges/other Restructuring charges (b) Acquisition SG&A) and (R&D expenses Operating (b) profit Gross Revenue segment: by Revenue data: statement Income repurchases Stock paid Dividends (a) flow cash Free expenditures Capital activities operating from flows Cash data: flow Cash Data. Financial Selected 6. ITEM Other Processing Embedded Analog statements...... EA NTUET 07FR 0K15 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 4,469 $ 2.12 3.61 $ $ 3,649 $ 3,682 $ 3,682 $ 5,363 $ 14,260 17,642 14,961 29,714 0721 0521 2013 2014 2015 2016 2017 0721 0521 2013 2014 2015 2016 2017 1,012 3,202 9,900 3,577 6,083 9,614 1,563 3,498 2,556 2,104 4,668 500 318 695 (33) 11 ,9 ,1 ,4 3,829 $ 3,541 $ 3,218 $ 3,490 $ 1.07 1.91 $ $ 1.24 2.57 $ $ 1.40 2,126 2.82 $ $ $ 2,778 1.64 2,162 $ $ 3.48 $ 2,944 $ 2,821 $ $ 3,551 2,986 $ $ 2,162 3,595 $ $ 2,821 $ 2,986 $ 3,595 $ ,1 ,9 ,5 3,514 $ 4,054 $ 4,397 $ 4,614 $ 4901,6 63117,213 16,361 15,563 14,910 18,554 17,372 16,230 16,431 12,205 13,045 13,000 13,370 9852,7 10332,209 31,003 29,977 29,865 ,2 ,4 ,8 1,113 1,080 1,043 1,021 3,329 3,164 2,995 7,194 3,098 8,104 8,339 8,536 ,7 ,2 ,3 4,145 3,630 3,120 2,978 2,922 4,003 6,400 4,322 7,447 4,855 2,561 2,450 7,575 2,201 2,740 8,257 1,874 2,787 2,868 1,175 1,811 3,102 3,023 2,831 1,323 3,669 2,741 1,444 3,846 2,132 1,646 4,083 o er ne eebr31, December Ended Years For 3 ,0 ,0 1,000 1,001 1,000 631 341 330 329 319 412 385 551 531 4)(2 4)(36) (43) (42) (44) 1)(1 5)(192) (50) (71) (15) eebr31, December

FORM 10-K Our customers need multiple chips for Together, the attributes above result in diverse We invest in manufacturing technologies and do most of our Customers often begin their initial product selection process and design-in journey on of Operations. Unless otherwise noted, changes inby our fluctuations revenue in are shipment attributable volumes. toNew changes products in tend customer not demand, to whichnumber have are of a evidenced products. significant impact on our revenue in any given period because we sell such a large O O manufacturing in-house. This strategic decisionproducts to for directly our control customers our and manufacturinghave also helps focused allows ensure on us a creating to consistent a invest supplyanalog competitive in of 300-millimeter technology manufacturing wafers, that cost which advantage differentiates have by thewafers. about increasing features 300-millimeter a factory of wafers 40 loadings our will percent of products. support cost our We manufacturing the advantage advanced costs majority per low of unpackaged by our chip using Analog overBroad mature growth 200-millimeter portfolio assets going of acquired forward. differentiated ahead Additionally, analog of we and demand keep embedded when our processing their semiconductors. prices are most attractive. requirements, product characteristics, manufacturing processesresources and and distribution measures channels, results. and See how Note management 1 allocates to the financial statements for more information regarding our segments. A strong foundation of manufacturing and technology. their systems. The breadth ofus our access portfolio to means more we customers can andWe solve invest the more more opportunity of than to these $1 sell needsof billion more than products. each products our year and competitors, to generate which develop more gives Broadest new revenue reach products per of for customer market our system. channels. portfolio,our which website, includes and tens the of breadth thousands presence, of combined our with portfolio our attracts global morethat sales customers give force to us that our unique is website access also thanDiversity to greater any and about in of longevity 100,000 size our of customers than competitors. our designing those Ourand products, TI of web long-lived markets semiconductors our positions and into competitors, that customer their are positions. deliver end advantages are high products. not terminal dependent value on to any ourapplication single shareholders. or product, Because customer. and of Some because the of of breadthinvestments. our the of products breadth our generate of portfolio, revenue our we for markets decades, we which are strengthens not the dependent return on on any our single • • Our segments represent groups of similar products that are combined on the• basis of similar All design dollar and• amounts development in the When tables we are discuss stated our in results: millions of U.S. dollars. • • • 16 TEXAS INSTRUMENTS • 2017 FORM 10-K Management’s discussion and analysis ofthe financial financial condition statements and and results the ofof related operations operations: notes (MD&A) that should appear be elsewhere read in in this conjunction document. with In the following discussion of our results The combined effect of theseEmbedded sustainable Processing competitive and advantages have is grown thatto free over grow, cash time generate flow. we cash, Our have and business gained return model market that puts share cash us in to in Analog shareholders. a and unique class of companies with the ability Our strategic focus, and whereemphasis we on invest designing the and majority selling ofgrowth our those opportunities. resources, products Analog is into on and the Analog embedded industriallife and processing and cycles, Embedded products automotive intrinsic sold Processing, markets, diversity, into with which and industrial a wecash less particular and believe generation. capital-intensive automotive represent This manufacturing, markets the business which provide best model we longcash is believe product flow the offer growth, foundation stability, especially of profitability on our andbelieve a capital strong that per management free share strategy, cash basis, which flow is is will important based be for on valued maximizing our only shareholder belief if value that it over free is the productively long invested term. in We also the business or returned to shareholders. We design, make and selldesigned semiconductors around to electronics the designers following and fourof manufacturers sustainable companies: all competitive over advantages, the that world. we Our believe, business in model combination, is put us in a unique class Overview ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results

FORM 10-K e oe6t h iaca ttmnsfrarcniito fteUS tttr noetxrt oteefcietxrate. Act. tax Tax effective the the of to result rate a tax as income 2017 statutory in U.S. was made the items, adjustments of tax tax reconciliation discrete to a includes due for which was statements the rate, change financial of tax This the enactment effective 2016. to the Our in 6 to taxes. percent Note due income 27 See was before and increase income 2017 The higher in billion. extent, percent $1.34 lesser 39 with a statements. compared to financial billion and, the $2.40 Act to was Tax 13 taxes Note income See for 2016. Provision in Our million revenue. $155 of with percent compared 36.3 income or of billion, million $4.86 $75 with was compared OI&E revenue, of percent 40.7 or are billion, amounts statements. $6.08 These financial was 2016. the profit in to Operating million 3 $15 Note of See credit purposes. a reporting with segment compared for million Other $11 in of included charge statements. a financial was the charges/other to Restructuring 13 Note See non-cash. were million of $318 allocation of ongoing charges our Acquisition continued we as billion, $3.10 with compared activities. gross billion R&D revenue, $3.20 to of were resources percentage SG&A) a and As (R&D revenue. expenses higher Operating to due primarily percent. percent, 61.8 16 from Processing. or percent Embedded billion, 64.3 and $1.36 to Analog up increased from was profit revenue billion higher $9.61 to of due profit percent, Gross 12 or billion, $1.59 up was billion $14.96 of Revenue 2016 with compared 2017 – results financial non-GAAP financial a of is Details shareholders. flow to cash flow Free cash sustainability. section. a free their information through our underscoring financial shareholders of flow, Non-GAAP to all cash the return billion free See to $4.66 of measure. strategy returned percent represented our we 45 and with 2017, represented billion consistent During dividends $4.67 ago. dividends, Our from was year and flow flow a repurchases cash cash percent stock Our Free 30.5 of operations. model. from combination from business up flow our revenue, cash of of strong strength percent generate the 31.2 to underscored us billion strategy. allows $5.36 manufacturing Processing of our Embedded operations of and efficiency Analog the on of as focus margin well Our Gross as revenue. portfolio, have of product and percent our 90 applications of of represented quality emphasis Processing thousands the particular with Embedded reflected a markets and percent with diverse Analog 64.3 Processing, highly 2017, Embedded serve In and products opportunities. Analog These growth on markets. long-term focus automotive our and reflecting industrial 2017, the in on well perform to continued We operations of Results so aur ,21,w olne eonz oate srvne nta,te r eodda IE ecniu to continue We OI&E. as recorded are they instead, revenue; as royalties recognize longer no applied we We 2017, costs. 1, benefit January retiree of other As and pension certain • to related 2017-07 ASU adopted we 2017, of quarter first the In • not does which rate, tax operating annual our reduce will Act) Tax (the Act Jobs and Cuts Tax U.S. enacted recently The • eev oate rmarneet novn ies ihst u aetprflo lhuhw xetrylist continue operations. to core royalties our expect to we significance Although decreasing portfolio. of patent are our they to years, rights many details. license for more involving which for arrangements Income, statements from of financial royalties Statements the receive Consolidated to the 2 in Note presented See periods result. all a for as basis recast retrospective been full have a on after standard section new information the non-cash financial transitional Non-GAAP a the to see due rate,” section. primarily tax resources annual higher, operating capital our points “annual and 2018, percentage term Liquidity In comprehending 5 the the States. 2019, percent, of United in 23 explanation the starting about an in percent be For property 18 to expense. intellectual about expected and of is R&D rate rate manufacturing, ongoing tax having an operating to and 2017 exports in of percent benefits 31 the from items, tax discrete include O O O vrtm,w aebe loaigrsucsfo ra iemnfcuigspotadS& noRDactivities. R&D into SG&A and support manufacturing like areas from resources increases allocating to been correspond have to we other tend time, absent loadings Over and, factory output in demand. increased decreases in margins over and decreases profit spread Increases and our are increase. factory circumstances, costs margins When other fixed profit fixed. absent our our is and, increase, circumstances, cost output loadings operating reduced factory our over as of spread Conversely, portion are decrease. significant costs lower-priced a fixed or shipped. capacity, our higher-priced products manufacturing decrease, for of our loadings demand “mix” of in the much changes in own by changes we affected as Because are to refer profit gross we and which revenue products, our time, to time From EA NTUET 07FR 0K17 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K 817 40% 622 (24)% 27.0% 34.3% 40.0% 3,416 31% $ 1,811 (14)% $ 8,536 16% $ 3,023 16% 472 32.7% 30.2% 45.1% 4,468 1,143 2017 2016 Change 2017 2016 Change 2017 2016 Change $ 1,563 $ 9,900 $ 3,498 ...... products, calculators and custom ASIC products) ® ...... 18 TEXAS INSTRUMENTS • 2017 FORM 10-K OI&E was $155 million ofsettlements income related compared to with intellectual $16 million property of infringement. expense. The increase is due to income of $188 million from Operating profit was $4.86 billion, or 36.3 percent of revenue, compared with $4.32 billion, or 33.2 percent of revenue. Restructuring charges/other was a creditthat of was $15 partially million, offset which by includedincluded $25 a gains million gain on related on sales to the of restructuring salecredits. assets charges. of These of This intellectual amounts $83 compared property are million with of included that a $40 in were credit million Other partially of for offset $71 segment by million reporting $12 in purposes. million 2015, See related which Note to 3 restructuring to charges the and financial other statements. Acquisition charges associated with our$329 2011 million. acquisition These of non-cash National charges Semiconductor resulted were from $319 the million amortization compared of with intangible assets. See Note 13 to the financial statements. Operating expenses were $1.36 billionto for a R&D combination and of $1.74 our billion$14 allocation for million, of SG&A. primarily resources R&D due into expense to R&D increased higher activities $89 compensation-related and million, costs. higher or compensation-related 7 percent, costs. due SG&A expense increased Gross profit was $8.26 billion,higher an revenue. increase Gross of profit $682 margin million, was or 61.8 9 percent percent, compared due with to 58.3 lower percent. manufacturing costs and, to a lesser extent, Revenue of $13.37 billion wasand up Analog. $370 million, or 3 percent, from 2015 due to higher revenue from Embedded Processing Operating profit * Details of financial results – 2016 compared with 2015 Revenue Revenue Other (includes DLP Other revenue declined $248 millionbegan primarily in due the to first custom quarter ASIC of products 2017. and Operating the profit move decreased of $150 royalties million. from revenue to OI&E, which Operating profit Operating profit Operating profit % of revenue Embedded Processing revenue increased dueprimarily to due growth to in higher both revenue product and lines, associated led gross by profit. Processors. Operating profit increased Operating profit % of revenue * Includes Acquisition charges and Restructuring charges/other Analog (includes Power, Signal Chain and High Volume product lines) Revenue Segment results – 2017 compared with 2016 Net income was $3.68 billion compared with $3.60 billion. EPS was $3.61 compared with $3.48. Embedded Processing (includes Connected Microcontrollers and Processors product lines) Operating profit % of revenue Analog revenue increased due toprimarily Power due and to Signal higher Chain. revenue High and Volume associated also gross grew, profit. but to a lesser extent. Operating profit increased

FORM 10-K nraeo 79mlinfo 06ta a rvnb nices nIcm eoeicm taxes. income an before billion, Income $5.36 in was increase 2017 an Short- for by equivalents, activities driven cash operating was and from that Cash flows 2016 are Cash from liquidity facility. million of credit $749 sources revolving of Additional rate, increase operations. variable from a flow and cash investments is term liquidity of source primary of Our end the at inventory of resources Days 2016. capital of and end the Liquidity 2016. from of million end $167 the of at increase 126 an with 2017, compared sales of 134 Days end were 2016. 2016. the 2017 of of at end end billion the the $1.96 with at was compared 33 Inventory million with $11 compared of 31 increase were an 2017 2017, of of end end the the at at outstanding of billion increase $1.28 an were billion, receivable $4.47 Accounts was investments) Short-term plus 2016. equivalents of cash end and the (Cash from cash million total $979 2017, of end the At partially condition was decrease Financial million. This $12 calculators. decreased and profit products Operating ASIC products. custom DLP royalties, in order, growth declining by in offset to, due decreased revenue Other charges/other Restructuring and charges Acquisition Includes * revenue of % profit Operating * profit Operating Revenue associated and revenue higher Other to due primarily increased profit Processors Operating Microcontrollers. shipped. Connected products extent, of profit. lesser mix gross a the to to and, due Processors increased to revenue due increased revenue Processing Embedded revenue of % profit Operating profit Operating Revenue higher to due Processing increased Embedded profit Operating declined. costs. Volume manufacturing High lower while from Chain, benefited Signal which and profit, Power gross to due increased revenue Analog revenue of % profit Operating profit Operating Revenue Analog 2015 with benefited compared EPS 2016 $2.82. standard. – with accounting compared results $3.48 compensation Segment was stock EPS a of percent. 20 adoption or the in million, to percent $609 due 29 of 2016 and increase in 2016 an $0.13 in billion, percent $3.60 27 was were income discrete rates Net include tax not effective do Our which 2015. rates, in before tax percent income operating 29 higher annual and to Our 2016 due compensation. in 2015. primarily stock percent was for 30 increase benefit were The tax items, billion. a tax $1.23 by with offset compared partially billion taxes, $1.34 income was provision tax income Our ...... $ ...... $ ...... $ ...... 1 1 34% 611 817 ...... 6264(2)% 634 622 ...... EA NTUET 07FR 0K19 10-K FORM 2017 • INSTRUMENTS TEXAS 0621 Change 2015 2016 Change 2015 2016 0621 Change 2015 2016 ,1 ,7 (3)% 1,874 $ 1,811 8% 2,787 $ 3,023 11% 2% 3,077 8,339 $ 3,416 8,536 43 33.8% 34.3% 21.9% 27.0% 36.9% 40.0%

FORM 10-K 34.5%30.5% 33.8% 29.6% (531) (551) $ 4,083 $ 3,846 $ 13,370 $ 13,000 $ 4,614 $ 4,397 For Years Ended December 31, 35.8% 31.2% (695) 2017 2016 2015 $ 4,668 $ 14,961 $ 5,363 ...... 20 TEXAS INSTRUMENTS • 2017 FORM 10-K Cash flow from operations as a percent of revenue (GAAP) Revenue Free cash flow (non-GAAP) Cash flow from operations (GAAP) Reconciliation to the most directly comparable GAAP-based measures is provided in the table below. Free cash flow as a percent of revenue (non-GAAP) This MD&A also includes referenceseffective to tax an rate, annual a operating GAAP taxrate measure rate, more that a clearly by non-GAAP communicates definition term that does weeffective discrete not use tax tax include to rate, items discrete describe which are tax the excluded includes items. estimatedusing from discrete We annual the such tax believe term rate. items. the annual The No term operating adjustments term annual also tax are operating helps rate. made tax differentiate to the from estimated the annual effective tax rate when We believe that free cashamount flow of and cash the potentially associated available ratiosmeasures to provide are return insight supplemental to into to shareholders, our the as liquidity, comparable well our GAAP as cash-generating measures. insight capability into and our the financial performance. These non-GAAP Non-GAAP financial information This MD&A includes references toprepared free in cash accordance flow with and generally ratiosby based accepted subtracting on accounting Capital that principles expenditures measure. in from These thereferred the are United to most financial States as directly measures (GAAP). cash comparable that Free flow GAAP were cash from measure, not flow operations). Cash was flows calculated from operating activities (also In 2017, we recorded arelated provisional to tax the liability enactment of of $690on the million our Tax on liquidity. Act. indefinitely This reinvested amount earnings will of be our paid non-U.S. over subsidiaries eight years and is not expected to have a significant impact We had $1.66 billion ofU.S. Cash entities and owning cash about equivalents 80 andresources percent $2.81 and of billion operating these of plans amounts Short-term to combined investmentsother fund at as business our the of requirements working end December for capital 31, of at needs, 2017, 2017. least capital with We the expenditures, believe our next we dividend 12 have and months. the debt-related necessary payments, financial and Capital expenditures In 2017, financing activities used$1.10 $3.73 billion billion from compared the with issuance $3.81proceeds of billion of fixed-rate, in $499 long-term 2016. million debt In from and 2017,in the repaid we 2017 issuance $625 received were of million net $2.10 fixed-rate, of proceeds billion long-term maturing of per compared debt debt. share, with and In resulting $1.65 repaid 2016, in billion $1.00 we an in billion received$0.50 annualized 2016. of net from dividend During maturing $0.38 payment 2017, debt. per the of Dividends share. quarterly $2.48 paid with In per dividend 2017, $2.13 share. increased we billion During to used used 2016, $0.62 $2.56 in we fromproceeds billion 2016 increased $0.50 of to to our $483 repurchase repurchase quarterly million 30.6 35.5 dividend compared million million to shares with shares. of $472 In our million 2017, common in employee stock. 2016. exercises This of compared stock options provided cash In 2017, investing activities used$695 $1.13 million billion compared compared with with $531 $650manufacturing million million equipment. in in In 2016. 2016. 2017, Capital For we expenditures 2017, hadcompared in Capital purchases with both expenditures of $113 periods were short-term million were investments, in primarily net for 2016. of semiconductor In sales, 2017, that we used received cash $40 of million $460 from million asset sales compared with none in 2016. Our revolving credit facility is2022. with This a credit consortium facility of also investment-gradewas serves banks undrawn, as and support and allows for we us the had to issuance no borrow of commercial up commercial paper to paper. outstanding. $2 As billion of until December March 31, 2017, our credit facility

FORM 10-K eiv ecnraoal n eibyetmt loacsfrceist itiuosi ieymanner. timely We a recognized. in is distributors revenue to when credits recorded for are allowances and estimate terms reliably contractual and and reasonably data can historical we of believe analysis opportunities. on growth based maximize are pricing to Allowances special designed under include incentives distributors generally and to and issues, granted material quality be not to to are due credits allowances returns future These product of industry. arrangements, estimates semiconductor management’s the are in which common allowances, programs of net contingent recognized not scenario. is is either Revenue Recognition in locations. customers designated distributors’ occurs at the delivery store to distributors, we products with that the products arrangements inventory of our consignment consignment resale of our from upon sales For product from distributors. pulls revenue the distributor recognize to the usually delivery when we or criteria, shipment recognition upon revenue distributors the to of assessment management’s on Based our of portrayal the to recognition important Revenue most judgment. are of on that degree impact those higher material be a a to require have policies that would accounting and assumptions following condition and the financial and estimates consider estimates other We financial developing applying statements. the in that financial in inherent unlikely the reported circumstances is amounts and it the facts believes affect on management States the that based assumptions, United 2, events However, the Note future notes. in in about accompanying accepted disclosed assumptions and generally As and statements principles statements. estimates accounting financial make with consolidated to conformity the management in of requires statements 2 Note financial in consolidated described of fully preparation more are policies accounting Our policies accounting Critical funding future planned any as well as 740, ASC under liabilities tax uncertain of million $300 2017. Total are 31, table December the at from existed Excluded that liabilities certain for payments Thereafter of (f) accounted estimate contracts an under Includes gases industrial of 2021/2022 purchases and (e) equipment See and Act. facilities Tax leased the 2019/2020 for of payments enactment minimum the Includes to related earnings reinvested indefinitely (d) on 2018 tax the of amount provisional the Includes non-cancellable fixed, a (c) is there where suppliers with arrangements contractual and licenses software specifically for debt, payments long-term Includes of portion current the as (b) classified amounts and payments interest related the Includes (a) (f) Total (e) plans compensation Deferred (d) leases (c) Operating earnings reinvested indefinitely on Tax (b) commitments Purchase (a) debt Long-term Obligations Contractual obligations contractual Long-term eod21 r o rcia oetmt u oterlsafcigtxddcil otiuin n h matfo the from impact the legislation. and non-U.S. projections contributions and funding tax-deductible U.S. but affecting potential 2018, rules and in the rates million to interest $50 due performance, about authorities. estimate asset contribute taxing to plans’ to respective practical plan the not we with are the plans, settlements 2018 of cash benefit beyond because of retirement excluded timing of been the funding have of future liabilities estimates Regarding tax reliable uncertain reasonably with making associated in Amounts difficulty plans. benefit retirement to contributions leases. operating as for details. more for statements financial the to 6 Note cancellable are table the from Excluded schedule. delivery reduced a with due arrangements. payments minimum or schedule payment months. 12 within mature will that obligations ...... $ ...... 8 $ 581 $ ...... 6 45 6271 56 53 94 68 ...... 9 0 735 67 601 391 ...... 54 112227 112 51 49 15 ...... 5 1 1 1 690 415 110 110 55 ...... EA NTUET 07FR 0K21 10-K FORM 2017 • INSTRUMENTS TEXAS ,1 ,3 ,1 ,0 6,766 $ 2,003 $ 1,414 $ 2,239 $ 1,110 ,8 ,3 ,8 4,484 $ 1,385 $ 1,133 $ 1,385 amnsDeb Period by Due Payments 1,094

FORM 10-K 22 TEXAS INSTRUMENTS • 2017 FORM 10-K Foreign exchange risk The U.S. dollar is thedollars functional or currency other for currencies. financial Exchange reporting.consequently rate Our on fluctuations non-U.S. our can entities effective have own tax a assets rate. significant or impact liabilities on denominated taxable in income U.S. in those jurisdictions, and ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. See Note 12 to the financial statements for a discussion of our commitments and contingencies. As of December 31, 2017,Regulation we had S-K. no significant off-balance sheet arrangements as defined inCommitments Item 303(a)(4)(ii) and of contingencies SEC Off-balance sheet arrangements Changes in accounting standards See Note 2 to the financial statements for information on new accounting standards. Inventory is valued net ofallowances allowances are for determined unsalable quarterly or for obsoleteand raw raw obsolescence materials materials, reasons. and work-in-process For work-in-process and finished based finishedindividual goods, on goods. parts quarterly historical Statistical to statistical disposals historical allowances of shipments, are inventorybe current determined for sold. backlog by salability A and comparing specific estimated inventory allowance future levelsallowance. for sales of Examples each in are material order an type to end-of-life will identifyfor part be inventory instances or carried judged where demand if unlikely inventoried with there to costs imminent isoffs for a risk of individual of significant inventory products cancellation. event for are Allowances not salability in are capturedallowances and excess also by due obsolescence of calculated the to reasons market quarterly statistical changes may prices in differ for customer from those demand, estimates products. and customer Actual negotiations, calculations future used technology write- to shifts determine and valuation other factors. Inventory valuation allowances As part of our financiallikely, process, the we provision must for assess the taxesassets likelihood must that be that are increased our estimated by deferred not recording taxexistence to a assets of be reserve can deferred ultimately in be tax recoverable. the recovered. liabilities In form Ifused that this of recovery to can process, a is absorb be certain valuation not net used relevant allowance operating to criteria forrecoverability losses absorb are the of and deferred evaluated deferred our credit tax including tax deferred carrybacks, assets, the tax and theinternational assets taxable taxable based tax income income laws on in in and these future prior changes criteria years. yearsThese may in Our that changes, change market judgment can if due conditions regarding be any, to and future may various theirNet require factors, impact income material including on in adjustments changes our the to in assessment period the of U.S.repatriation when deferred taxable or of such tax income the determinations assets in accumulated are and future earnings made. an periods. on of Also, accompanying tax certain our reduction expense non-U.S. plans or in operations for increase future the could in years. permanent change. reinvestment Such or changes eventual could have a material effect In the ordinary course ofuncertain. global The business, calculation there of may tax bepotential liabilities many liabilities transactions involves for and dealing anticipated calculations with tax where uncertaintiesultimate audit the in resolution issues ultimate the of in tax application whether, the outcome of and United is complexreasonable, the States tax no extent and laws. assurance to other We can which, tax recognize be additional jurisdictionshistorical given taxes based income that will on tax the be an provisions final due. estimate and outcome Although of accruals. of we the these believe matters the will estimates not are be different than what is reflected in the In determining Net income fortax financial provisions statement and purposes, the we resultant mustbetween tax make the liabilities, certain tax and estimates and in and financial the judgments statement recoverability in recognition of the of deferred calculation revenue tax of and assets that expense. arise from temporary differences Income taxes

FORM 10-K r ttduigteeut ehd e oe8t h iaca ttmnsfrdtiso qiyadohrln-eminvestments. long-term other and equity of details for statements funds financial capital the venture to remaining 8 cost. the Note at in See stated Investments method. are income. equity values funds Net the fair capital in using investments’ venture expensed stated offset the some are are to in and other-than-temporary expected decrease securities be are or equity to investments increase Non-marketable deemed fund percent results. Impairments mutual 10 operating a the affect of that materially prices such not in liabilities would Changes compensation value. deferred fair in at changes stated related are funds mutual in Investments following: the include 2017 year-end at investments Long-term flows cash the affect risk not Equity would by rates debt interest long-term in our changes our of fixed, of value are value fair debt debt. fair the long-term long-term the decrease our with decrease and on associated would million rates rates $8 interest interest by Because in investments million. short-term increase $141 and point basis equivalents 100 cash of in hypothetical effect a investments the 2017, (2) 31, value and December fair loss; of the a debt. As on or our rates gain of interest a value in produce fair changes could the of which on effect investments, rates the short-term interest (1) and in rates: equivalents changes interest cash in in changes investments to our exposure of potential following the have We 2016. year-end at existed activities hedging Japanese Similar sell euros). risk to sell rate million to Interest $140 million (including $49 exposures and sheet sterling balance contracts pound net exchange British currency hedge sell our forward to to on had million million have $365 we $59 may of 2017, yen, fluctuations year-end value rate at notional exchange example, a impact For with earnings exposures. outstanding the sheet reduce balance to net contracts dollar exchange non-U.S. dollar currency U.S. million. forward the $6 these to about use relative of We rates loss exchange or currency currency gain and non-U.S. exchange balances in currency 2017 fluctuation pre-tax year-end minus a on or in non-U.S. based plus result contracts, aggregate percent would exchange the 10 currency of hypothetical most forward a by Because rates, currencies. hedged exchange dollar is non-U.S. exposure from sheet remeasured balance amounts dollar reflects also sheet balance Our • • • iblte eae odfre opnainarneet.Temta ud odavreyo etadeut investments. investments equity Equity and debt of method). variety cost a or hold funds funds capital mutual venture The in arrangements. Investments compensation deferred to related liabilities funds mutual in Investments nldsnnmreal nnpbil rdd qiysecurities. equity traded) (non-publicly non-marketable includes – nldsmta ud htwr eetdt eeaertrsta fstcagsi certain in changes offset that returns generate to selected were that funds mutual includes – EA NTUET 07FR 0K23 10-K FORM 2017 • INSTRUMENTS TEXAS nldsivsmnsi iie atesis(cone o ne ihrteequity the either under for (accounted partnerships limited in investments includes –

FORM 10-K 24 TEXAS INSTRUMENTS • 2017 FORM 10-K Schedules have been omitted becausesubmission the of required the information schedule, is or notnotes because present thereto. the or information not required present is in included amounts in sufficient the to consolidated require financial statements or the Income for each of the three years inComprehensive the income period for ended each December of 31, the 2017 three yearsBalance in sheets the at period December ended 31, December 2017 31, and 2017 2016 Cash flows for each of the three yearsStockholders’ in equity the for period each ended of December the 31, three 2017 years in the period ended December 31, 2017 List of Financial Statements (Item 15(a)) ITEM 8. Financial Statements and Supplementary Data.

FORM 10-K e copnignotes. accompanying See EPS diluted for stock common to allocated Income RSUs units to stock allocated restricted Income unvested following: to the allocated using be income calculated to Net is income EPS Net of diluted portion equivalents, a dividend requires pay which we 260, which ASC on rule (RSUs) accounting of result a As share common per declared dividends Cash (millions): outstanding shares Average (EPS): share common per Earnings income Net taxes income for Provision taxes income before Income expense debt and Interest (OI&E) net (expense), income Other profit Operating charges/other Restructuring charges Acquisition (SG&A) administrative and general Selling, (R&D) development and Research profit Gross (COR) revenue of Cost Revenue Income of Statements Consolidated Mlin fdlas xetsaeadprsaeamounts) per-share and share except dollars, of (Millions Diluted Basic Diluted Basic ...... EA NTUET 07FR 0K25 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 3,682 $ 3.68 $ 3,682 $ 3,649 $ 2.12 $ 3.61 $ 14,961 $ 0721 2015 2016 2017 2,398 6,080 6,083 1,508 9,614 1,694 1,012 5,347 o er ne eebr31, December Ended Years For 991 318 (33) 75 11 78 ,9 2,986 $ 3,595 $ 2.86 $ 3.54 $ 2,986 $ 3,595 $ ,5 2,944 $ 3,551 $ 1.40 $ 1.64 $ 2.82 $ 3.48 $ 13,000 $ 13,370 $ ,0 1,030 1,003 ,3 1,230 4,216 1,335 4,930 4,322 4,855 1,267 7,575 1,356 8,257 ,4 1,728 1,742 ,2 1,043 1,021 5,425 5,113 1 329 319 5 (16) 155 4)(42) (44) 1)(71) (15) 090 80

FORM 10-K 6— 11 (3) — 51 53 —20 (43) (74) $ 3,601 $ 2,986 $ 3,595 $ 2,986 1 (2) (5) 92 56 142 For Years Ended December 31, 2017 2016 2015 $ 3,824 $ 3,682 ...... Adjustment, net of tax effectRecognized of within ($26), $6 Net and income, $36 net of tax effect of ($27), ($25) and ($25) Adjustment, net of tax effect of $1, $0 and ($11) Recognized within Net income, net of tax effect of $1, $2 and $0 Recognized within Net income, net of tax effect of $0, $0 and ($1) Other comprehensive income (loss), net of taxes Net actuarial losses of defined benefit plans: Prior service credit of defined benefit plans: Derivative instruments: 26 TEXAS INSTRUMENTS • 2017 FORM 10-K (Millions of dollars) See accompanying notes. Total comprehensive income Net income Consolidated Statements of Comprehensive Income Other comprehensive income (loss)

FORM 10-K e copnignotes. accompanying See equity stockholders’ and liabilities Total equity: Stockholders’ liabilities Total liabilities long-term Other liabilities tax Deferred plans retirement Underfunded debt Long-term liabilities: Current equity stockholders’ and Liabilities assets Total Goodwill investments Long-term cost at equipment and plant Property, assets: Current Assets Sheets Balance Consolidated te ogtr assets long-term Other plans retirement Overfunded licenses software Capitalized assets tax Deferred intangibles Acquisition-related Mlin fdlas xetsaeamounts) share except dollars, of (Millions oa tchles equity (AOCI) stockholders’ taxes Total of net (loss), income comprehensive other Accumulated cost at stock common Treasury earnings Retained capital Paid-in shares 2,400,000,000 – Authorized value. par $1 stock, Common shares 10,000,000 – Authorized value. par $25 stock, Preferred liabilities current Total liabilities other and expenses Accrued payable taxes Income compensation Accrued payable Accounts debt long-term of portion Current equipment and plant Property, depreciation Accumulated assets current Total assets current other and expenses Prepaid Inventories ($17) and ($8) of allowances of net receivable, Accounts investments Short-term equivalents cash and Cash hrs 07–776727 06–744,831,978 – 2016 757,657,217; – 2017 Shares: 1,740,815,939 – issued Shares issued. None preferred. cumulative Participating goods Finished process in Work materials Raw ...... EA NTUET 07FR 0K27 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 17,642 $ 500 $ 17,642 $ 1,656 $ (27,458) 10,337 34,662 072016 2017 (2,125) 1,776 1,303 2,258 4,789 1,030 1,089 1,741 7,305 3,577 2,664 1,957 1,278 2,813 4,362 8,734 (384) eebr31, December 128 466 742 442 722 268 126 208 110 264 946 — 78 89 86 16,431 $ 631 $ 16,431 $ 1,154 $ (25,523) 10,473 33,107 (2,411) 1,674 2,264 4,923 1,741 5,958 2,978 2,512 1,790 1,267 2,336 4,362 7,457 1,264 (526) 396 734 554 910 954 444 710 235 102 129 374 — 83 33 79 96 52

FORM 10-K (3) (3) (6) 14 31 48 36 7 72 (142) — 110 (73) (23) (40) (85) (99)(81) 93 94 (26) 15 472 396 499 498 154 (199) 252 286 333 11 605319 766 319 (531) (551) (650) (302) (108) 77 (202) (55) 4,614 4,397 3,390 2,892 1,000 1,199 (3,503) (2,767) (1,000)(1,646) (1,000) (2,132) (1,444) (2,741) (3,810) (4,294) $ 1,154 $ 1,000 $ 3,595 $ 2,986 (7) (3) 21 40 47 76 51 — (31) (12) (16) 483 502 242 468 539 318 112 (695) (625) (167) For Years Ended December 31, 5,363 4,095 1,099 1,154 2017 2016 2015 (2,104) (2,556) (3,734) (4,555) (1,127) $ 1,656 $ 3,682 ...... Stock compensation Gains on sales of assets Inventories Income taxes payable Depreciation Amortization of acquisition-related intangibles Amortization of capitalized software Deferred taxes Accounts receivable Accrued compensation Prepaid expenses and other currentAccounts assets payable and accrued expenses Proceeds from asset sales Other Purchases of short-term investments Proceeds from short-term investments Other Repayment of debt Dividends paid Stock repurchases Proceeds from common stock transactions Proceeds from issuance of long-term debt Capital expenditures Changes in funded status ofOther retirement plans Net income Adjustments to Net income: Increase (decrease) from changes in: 28 TEXAS INSTRUMENTS • 2017 FORM 10-K See accompanying notes. Cash and cash equivalents at end of period Cash flows from financing activities Net change in Cash and cash equivalents Cash and cash equivalents at beginning of period Cash flows from investing activities Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities Cash flows from operating activities Consolidated Statements of Cash Flows (Millions of dollars)

FORM 10-K Mlin fdlas xetprsaeamounts) per-share except dollars, of (Millions e copnignotes. accompanying See 2017 31, December Balance, 2017 2016 31, December Balance, 2016 2015 31, December Balance, 2015 2014 31, December Balance, Equity Stockholders’ of Statements Consolidated iiedeuvlnspi nrsrce tc units stock Other restricted on paid taxes equivalents of Dividend net (loss), income comprehensive Other compensation Stock repurchases Stock units stock Other restricted on paid taxes equivalents of Dividend net (loss), income comprehensive compensation Other stock for benefit tax Excess compensation Stock repurchases Stock iiedeuvlnspi nrsrce tc units stock Other restricted on paid taxes equivalents of Dividend net (loss), income comprehensive Other compensation Stock repurchases awards Stock stock-based for issued share) stock per Common ($2.12 paid and declared Dividends income Net awards stock-based for issued share) stock per Common ($1.64 paid and declared Dividends income Net awards stock-based for issued share) stock per Common ($1.40 paid and declared Dividends income Net ...... 3 — — — (3) — — — ...... — 1 — ...... — — ...... — — ...... — — — ...... — — — ...... —22——— — — 252 — — ...... — — 286 — ...... $ ...... EA NTUET 07FR 0K29 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 0——— — — 90 — ...... —— — — ...... — — — ...... 6 — — — — — ...... — — — — ...... — — ...... — — ...... ,4 ,7 462$(748 (384) $ (27,458) $ 34,662 $ 1,776 $ 1,741 $ Common Stock ,4 ,7 317(553 (526) (25,523) 33,107 1,674 1,741 (532) (24,068) 31,176 1,629 1,741 (532) $ (21,840) $ 29,653 $ 1,368 $ 1,741 142 — — — — 1)—— — (17) — — — — 3,682 — — 2 6 — — — — (6) — — — (2,556) 621 (2) — — — — — 242 (2,104) — (138) — — — — — Paid-in Capital 24 7 — 677 — (204) — 513 — (116) Retained Earnings 166 — — (1,646) — — (1,444) ,9 — — 3,595 — — 2,986 1)—— — (18) — — (19) Common Treasury tc AOCI Stock 212 — (2,132) — (2,741)

FORM 10-K 817622 611 634 3,023 2,787 1,811 1,874 $ 8,536 $ 8,339 $ 13,370 $ 13,000 $ 3,416 $ 3,077 $ 4,855 $ 4,322 472 For Years Ended December 31, 3,498 1,143 1,563 2017 2016 2015 $ 9,900 $ 14,961 $ 4,468 $ 6,083 – consisting of the following product lines: Connected Microcontrollers and Processors...... products, calculators and custom ASIC products. As of January 1, 2017, we no longer recognize royalties as – consisting of the following product lines: Power, Signal Chain and High Volume...... ® ...... Analog Embedded Processing • • Other Other Analog Analog Embedded Processing Embedded Processing 30 TEXAS INSTRUMENTS • 2017 FORM 10-K Operating profit in the priorpension periods and has other been retiree recast benefit as costs. a See result Note of 2 our for early additional adoption information. of a new accounting standard related to Total operating profit Operating profit: Total revenue Revenue: Segment information With the exception of goodwill,maker we evaluate do operating not segments identify using orpolicies discrete allocate of asset assets the information. by segments We operating are have segment, the no nor same material does as intersegment the those revenue. chief described The operating below accounting decision in the summary of significant accounting policies and practices. Our centralized manufacturing and supportoperating organizations, segments, such including as those facilities, in procurementsegments Other. and on Costs logistics, a incurred provide per-unit by support basis. these tosegments’ Consequently, organizations, our results depreciation including and, expense depreciation, therefore, is are is not charged not an to provided. independently the identifiable component within the In Other, we also includeof items these that items are include not Acquisition usedsuch charges in as (see evaluating litigation Note the expenses, 13); results environmental restructuring ofdispositions. costs, charges or We insurance (see in allocate settlements, Note allocating the and 3); resources remainder and gains tospecific of certain and our methodologies, our corporate-level losses segments. such expenses from items, Examples as associated other percentage with activities, of corporate including operating activities asset expenses to or our headcount. operating segments based on revenue; instead, they are now recorded as OI&E. Prior period amounts were not material. We report the results ofquantitative our remaining thresholds business for activities individually in reportableincludes Other. segments DLP Other and includes cannot operating be segments aggregated that with do other not operating meet segments. the Other We design, make and sellwe semiconductors reorganized to the electronics product designers lines andstructure within manufacturers with all our the over reportable way the segments our world. –consolidated customers Beginning Analog financial select and January and statements Embedded 2017, buy or Processing our products. –categories reportable These to of changes segment align products amounts. had our as Our no business follows: two effect reportable on segments either are our established previously along reported major Notes to financial statements 1. Description of business, including segment and geographic area information

FORM 10-K .Bsso rsnainadsgiiatacutn oiisadpractices and policies accounting significant and presentation of Basis 2. o ae odsrbtr,pyeti u norsadr omriltrsadi o otnetuo eaeo h products. the of resale upon contingent not is assured. and reasonably terms is commercial persuasive collectability standard when when our order; and on usually sales determinable; due which the or is pass, of fixed payment loss terms are distributors, of the amounts to risk upon sales sales and depending when For title exists; distributor, when or arrangement distributors, customer an our the of to to evidence sales delivery including or products, shipment our upon of occurs sales from revenue recognize We recognition Revenue vary. may results practices final and which policies from accounting estimates Significant of use the requires statements financial of preparation The to related standard prior accounting the new in the See amounts applying costs. information. certain retrospectively benefit reclassified presentation, retiree per-share have 2017 other except We the and notes, indicated. to pension these otherwise conform in unless to tables dollars statements and U.S. financial have statements of periods’ transactions financial millions and the in balances in stated intercompany amounts are All dollar amounts, subsidiaries. All all consolidation. of in accounts eliminated the been include statements applied financial provisions consolidated certain The included the for which except compensation, stock herein, to presented related periods 2016 all in for the standard comparable prospectively. in is accounting accepted statements new generally financial a principles these of accounting of adoption with basis accordance The in (GAAP). prepared States been United have statements financial consolidated The presentation of of as Basis million $471 and million $412 million, $437 was Philippines the in sites two our at equipment and plant Property, (a) equipment and plant property, Total equipment: and plant Property, and 2016 in billion $6.0 2017, in billion $6.6 was Kong, Hong including China, into shipped products from Revenue (a) revenue Total Revenue: the around customers their to export turn in may may they who which China products, in customers end where our own locations to their the shipped of to are manufacture world. shipped products the the be our in which to of parts in tend many these area products Specifically, include geographic our products. the because their of consumed manufacture indicative ultimately customers and necessarily are our plant not products property, is our and information containing destination, revenue applications shipment The end product location. on physical based on revenue, based includes equipment, information area geographic following The information area Geographic Japan Africa and East Middle Europe, (a) Asia States United Japan Africa and East Middle Europe, (a) Asia States United eto world of Rest world of Rest eebr3,21,21 n 05 respectively. 2015, and 2016 2017, 31, December 2015. in billion $5.8 ...... EA NTUET 07FR 0K31 10-K FORM 2017 • INSTRUMENTS TEXAS hne nacutn tnad dpe tnad o urn period current for standards adopted – standards accounting in Changes 2,664 $ 1,469 $ 14,961 $ 1,901 $ 0721 2015 2016 2017 0721 2015 2016 2017 2,907 8,824 1,049 o er ne eebr31, December Ended Years For 964 118 280 97 16 eebr31, December ,1 2,596 $ 2,512 $ 1,370 $ 1,372 $ 13,000 $ 13,370 $ 1,612 $ 1,682 $ ,9 2,163 7,910 2,393 8,024 ,4 1,127 1,040 0 958 908 1 122 115 3 188 231 8130 98 916 19 o further for

FORM 10-K 2015 Net Income Shares EPS 18 13 2016 (44) (42) (45) (43) Net Income Shares EPS For Years Ended December 31, $ 3,595$ 3,551 1,021 $ 3.48 $ 2,944 $ 2,986 1,043 $ 2.82 $ 3,595$ 3,550 1,003 $ 3.54 $ 2,943 $ 2,986 1,030 $ 2.86 21 2017 (33) (34) Net Income Shares EPS $ 3,682 $ 3,649 1,012 $ 3.61 $ 3,682 $ 3,648 991 $ 3.68 ...... Net income Income allocated to RSUs diluted EPS calculation Stock compensation plans basic EPS calculation Net income Income allocated to RSUs 32 TEXAS INSTRUMENTS • 2017 FORM 10-K Diluted EPS: Income allocated to common stock for Adjustment for dilutive shares: Income allocated to common stock for Basic EPS: Computation and reconciliation of earnings per common share are as follows (shares in millions): Earnings per share (EPS) Unvested share-based payment awards thatour contain restricted non-forfeitable stock rights units to (RSUs), receivecalculating are dividends considered EPS. or Under to dividend be the equivalents, participating two-class suchis method, securities as excluded a and from portion the the of two-class calculation Net method of income is EPS is used allocated allocated for to to purposes common these of stock, participating as securities shown and, in therefore, the table below. Other assessed taxes Some transactions require us toare collect presented taxes in such our as Consolidated sales, value-added Statements and of excise Income taxes on from a our net customers. (excluded These from transactions revenue) basis. Income taxes We account for income taxescurrent using year an and asset the and deferred liabilityfinancial tax approach. statements assets We or and record tax liabilities the returns. for amounttax We future of assets record tax taxes will a consequences payable not valuation of or be allowance events refundable realized. when that for it have the is been more recognized likely in than the not that some or all of the deferred Advertising costs We expense advertising and other$46 promotional million costs in as 2015. incurred. This expense was $39 million in 2017, $44 million in 2016 and We recognize in revenue shippingmajority fees, of if our any, customers received pay from these customers. fees We directly include to shipping third and parties. handling costs in COR. The In addition, we record allowancesaccounts for receivable accounts primarily receivable through that review weon of estimate amounts the may recorded accounts not for receivable be bad aging. collected. debts When We and, collection monitor if is collectability necessary, at of will risk, record we a assess charge the in impact the period such determination is made. We recognize revenue net ofdistributors allowances, under which programs are common management’s in estimatesspecial the of pricing semiconductor future arrangements, industry. credits product These to returns allowances, beAllowances due which granted are to are to based quality not customers on issues material, or analysis and generallybelieve of incentives include we historical designed can data to reasonably and maximize and contractual growth reliably terms opportunities. estimate and allowances are for recorded credits when to revenue distributors is in recognized. a We timely manner. Revenue from sales of ourwith products distributors, that is are recognized subject in todistributor accordance inventory pulls with consignment product the agreements, from principles including consignment discussed consignment inventory above. arrangements that Delivery we occurs store when at the designated customer locations. or

FORM 10-K ercainfrec ot r eesrda h prpit al aeo xhne urnyecag an n ossfrom losses and gains exchange Currency exchange. than of OI&E. other rate to equipment accounts daily charged and expense appropriate or plant and the credited Property, Revenue at are period. rates. remeasured remeasurement reporting exchange are each historical month of at each and end valued for liabilities the are depreciation dollar current at inventories U.S. assets, effect and the other in depreciation than taxes, rates associated other deferred exchange with currencies inventories), at in (except remeasured recorded assets are Accounts Current liabilities dollar. currency. long-term U.S. functional the the is into subsidiaries remeasured non-U.S. are our for each currency for functional information. value The fair additional for the 9 compares Note which currency See units, Foreign goodwill. reporting arise. our including indicators for value, impairment 1 carrying certain October associated if of its frequently as to more test unit or impairment reporting annually goodwill impairment annual for our reviewed perform is We but market amortized available not by is determined Goodwill is intangibles value Fair indefinite-lived assets. and those Goodwill of flows. value charge cash fair impairment discounted the Any by over amounts. or amount carrying carrying applicable, the respective the if comparing their of valuations, by to excess or assets assets the equipment of those on and recoverability with based plant the associated is assess property, flows We of cash impaired. values net are carrying undiscounted assets, the projected intangible indicate that including exist assets, circumstances long-lived or other facts whether review amortization. regularly or We term depreciation the accumulated assets over against long-lived basis off of straight-line written Impairments a are the on assets over amortized amortized basis are or straight-line generally depreciated a licenses Fully on software license. term of intangibles Capitalized the lease date acquisition-related assets. of remaining the amortize the the of We of as of improvements. life shorter value the economic fair the of estimated over at lives method. method recorded useful straight-line straight-line initially estimated the were the the using that using or lives amortized combinations useful are business estimated improvements in their Leasehold acquired over assets acquisition. depreciated certain and includes cost basis at cost stated Our costs are capitalized the equipment by other and and captured plant not intangibles; Property, event acquisition-related occurs. significant equipment; disposal a and as is which plant well there in Property, as if period shipments, carried the customer be in historical will inventory activity, type off disposal material write historical each We unlikely of for allowance. considered analysis allowance statistical inventory an specific for on A provided based sales. is is future allowance allowance estimated statistical statistical A The obsolescence. sold. and be 31, salability to December for of quarterly as inventory million review $334 We and million consignment $303 at was held of inventory Inventory utilization Consigned respectively. incurred. normal inventory. 2016, as the goods and adjusted expensed on finished 2017 currently is based our a capacity is in on of cost included computed underutilization Standard is generally basis. with locations is first-out associated Cost first-in Cost value. a capacity. realizable on factory net cost installed estimated approximates or which cost basis, of cost lower standard the at stated are Inventories Inventories long-term or investments short-term equivalents, follows: cash as as detailed Sheets are Balance which Consolidated investments, our on investments present We per earnings diluted of Investments computation the their from because excluded periods were these and securities for 2016. 2017 share dilutive during in common potentially share outstanding per No common were earnings anti-dilutive. that diluted been stock of have common computation would of the effect shares from million excluded 12 were and respectively, million 2015, 6 representing securities dilutive Potentially • • • nNt .W eemn oto mrie ot saporae naseii dniiainbasis. identification described specific fully a more on are appropriate, which as method, cost, cost amortized or or method cost equity determine trading, We sale, 8. for Note available in either as investments our classify investments of Classification short- capital securities. in preserve equity them to include are and activities returns. operations investment investments current appropriate short-term Long-term in generating and maturities use while equivalent with for cash liquidity securities available our maintain debt being of and in as objectives investments investment primary consider our The We of investments. equivalents. date term cash the be from to days investment 90 our beyond of date the from less investments short-term and equivalents Cash ogtr netet oss fmta ud,vnuecptlfnsadnon-marketable and funds capital venture funds, mutual of consist investments Long-term – eedn norraosfrhligteivsmn n u wesi ecnae we percentage, ownership our and investment the holding for reasons our on Depending – EA NTUET 07FR 0K33 10-K FORM 2017 • INSTRUMENTS TEXAS ecnie netet ndb euiiswt auiiso 0dy or days 90 of maturities with securities debt in investments consider We –

FORM 10-K (16) 2015 2016 For The Years Ended December 31, 5,1308,240 $ 5,1131,370 $1,767 8,257 5,440 1,356 $ 5,425 3,380 1,742 7,560 1,280 3,416 1,748 7,575 1,267 4,799 3,048 1,728 4,855 3,077 4,274 4,322 Reported Recast Reported Recast ...... 801 817 596 611 ...... 618 622 630 634 ...... 211 155 32 Analog Embedded Processing Other 34 TEXAS INSTRUMENTS • 2017 FORM 10-K Changes in accounting standards – standards not yet adopted We plan on adopting thisan standard adjustment using to the retained cumulative-effect earnings (i.e.,2018. for modified Under the retrospective) this cumulative transition approach, effect method, we of which will applying will not this result restate guidance in the to prior contracts financial in statements process presented. as of January 1, ASU No. 2014-09, Revenue fromThis Contracts standard with provides Customers a (Topic single 606) disclosures, set which of we guidelines are for currently revenueThis evaluating. recognition standard It to permits is be early effective used adoption for across and interim all the and industries use annual and of reporting requires either periods additional the beginning retrospective January or 1, cumulative-effect 2018. transition method. Total operating profit COR...... $ Gross profit R&D...... SG&A Operating profit: OI&E Net Periodic Postretirement Benefit Cost This standard amends the incomepension statement and presentation other of postretirement the plans. componentsother This of components standard net of requires periodic net us benefit periodic to: costincome benefit (1) for as cost disaggregate defined other (the the benefit current “other current compensation components”) serviceprofit costs and cost (i.e., for present component in related it from OI&E). employees in the This and theJanuary standard (2) same 1, is present line 2018. required the items We to other on elected be components theincome, to applied outside statement Earnings adopt retrospectively of of per this and operating common standard is share as effectiveStatements or of for of Cash January interim Income flows 1, and were from 2017. annual affected: operating Adoption periods activities. of beginning The this following standard components did on not the impact Consolidated Revenue, Net ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Accounting Standards Update (ASU) No.This 2016-16, standard Income requires Taxes current (Topic and 740):recognized deferred Intra-Entity for taxes Transfers financial resulting of reporting from Assets purposes the Otherto when Than intra-entity an the Inventory transfer outside transfer of party, occurs any as rather assetscumulative-effect currently than other adjustment allowed. postpone than directly This inventory recognition to standard to until retained is be the2018. earnings required asset We and to has elected is be been to effective applied sold adopt for onwas this interim a not standard and modified material. in annual retrospective the periods basis first beginning through quarter a January of 1, 2017. The effect on our financial position and results of operations Changes in accounting standards – adopted standards for current period We do not use derivatives for speculative or trading purposes. In connection with the issuancethat of are long-term recognized debt, in we AOCI maybeen and use material. amortized financial over derivatives the such life as of treasury-rate the lock related agreements debt. The results of these derivative transactions have not Derivatives and hedging We use derivative financial instrumentsforeign to currency manage exchange exposure contracts, to which foreignfluctuations are exchange may used risk. have as These on economic instruments our hedges areforward non-U.S. to primarily foreign dollar reduce forward currency net the exchange balance earnings contracts sheet impactcurrency are exposures. that derivative credited Gains exchange instruments. or and rate charged losses to from OI&E. changes We in do the not fair apply value hedge of accounting these to our foreign

FORM 10-K .Rsrcuigcharges/other Restructuring 3. S ecito fetv Date Effective costs. exit other or estimates in changes depreciation, accelerated benefits, and severance Includes (a) charges/other Restructuring Description Other assets of sales on Gains (a) charges Restructuring components: following the of comprised is charges/other Restructuring 2017-12 No. ASU 2017-05 No. ASU 2017-01 No. ASU to plan 2016-01 We No. operations. ASU of results and position financial our ASU on dates. impact effective material their a of have as to standards standards these following adopt operations. the of expect results not and do position We financial this our of on impact impact potential standards material the Other a evaluating 1, have currently January to are beginning it We periods expect approach. before not retrospective not for do modified but effective we a application be how but using earlier will affect standard, applied permits standard that be and This standard will 2020, disclosures. the standard 1, expand within The January that provisions 2019. beginning and other periods presented, are requires annual and There which and recorded incurred. approach, interim be been loss our may having incurred assets of current financial probable the financial other is under certain of it than of impairments until losses impairments loss of measure a recognition to recognize earlier methodology Instruments to in loss Financial waiting result credit on will expected Losses methodology lifetime Credit this current of Using a Measurement assets. use 326): to (Topic entities financial operations. Losses requires our of Credit standard on results – This standard our Instruments this on Financial of impact 2016-13, impact material No. statements. potential a ASU financial the have the evaluating to in currently it basis presented are expect retrospective period We not modified comparative early. do a earliest standard we on the this but applied of adopt position, will be beginning to standard must the plan This and after, not operating liability). 2019, into do an 1, lease entered We both January the or as on beginning at, recognized interest periods existing expense and (for annual leases operating disaggregated expense and to single be interest interim a will and our as lease asset) for recognized right-of-use financing effective as be the a be classification to of for their continue Costs amortization upon will term. the lease dependent lease (for be operating the expense will an over for paid statement of basis liability be Costs income straight-line the to lease. the a with expected on financing on sheet amounts leases a of balance these or value the of operating present on costs an the recognized the either at be of measured to Recognition initially months term. asset 12 the over right-of-use over of corresponding term the a and have payments that lease leases affected all any requires over standard flows 842) This cash (Topic of Leases timing 2016-02, and No. period recognition ASU reporting the individual on any effect OI&E, in no in recognized have income position will royalty financial change recognizing and This of operations material. periods. We timing of be income. the results to royalty accelerate the expected our to on not to be change is standard will such we new standard of however, this new effect portfolios; of the the patent provisions of although our disclosure impact licensing and significant from measurement most income recognition, the royalty the believe revenue apply in to recognize required longer still no are For we shipped. inventory. 2017, recognize are consignment 1, We goods from January revenue. the pulled Beginning recognize when are we obligations goods and which performance the position in our when financial timing of revenue our or satisfaction recognize on manner upon we impact the distributors sales, material change and consignment a materially customers have to to to expected sales standard not on new is revenue the it expect as not operations, do of we results assessment, current our on Based ...... eiaie n egn Tpc85:Tree mrvmnst conigfrHedging for Accounting to Improvements Targeted Activities 815): (Topic Hedging Assets and Nonfinancial Derivatives and of Guidance Sales Derecognition Partial Assets Asset for Nonfinancial of Accounting of Scope the Derecognition the Clarifying 610-20): from Losses (Subtopic Business and a Gains of – Definition Income the Other Clarifying 805): (Topic Combinations Business of Liabilities Measurement Financial and and Recognition Assets 825-10): Financial (Subtopic Overall – Instruments Financial ...... EA NTUET 07FR 0K35 10-K FORM 2017 • INSTRUMENTS TEXAS o er ne eebr31, December Ended Years For $11 $11 0721 2015 2016 2017 — — aur ,2019 1, January 2018 1, January 2018 1, January 2018 1, January 1)$(71) $ (15) $ $14 $25 4)(83) (40) (2) —

FORM 10-K (6) — 25 14 (11) (39) $32 $57 $40 $32 (1) 11 (21) 2017 2016 2015 $40 $29 ...... 36 TEXAS INSTRUMENTS • 2017 FORM 10-K We also have an employeepercentage stock of purchase the plan employee’s under compensation, whichmarket subject options value to are on a offered the cap. to exercise Under all date. the eligible plan, employees the in option amounts price based per on share a is 85 percent of the fair We have options and RSUsfor outstanding annual to grants non-employee of directors stock undercommon options director stock and compensation upon RSUs, plans. the a The distribution one-time plans of grant generally stock of provide units RSUs credited to to each deferred new compensation non-employee accounts director established and for the such issuance directors. of TI We also have RSUs outstandingstock under on long-term the incentive vesting plans. date, Eachpayment which RSU by is represents the generally the grantee. four right Our years toequivalent RSUs after receive to continue the one the to date share dividends vest of of paid after grant. TI the on Upon common recipient our vesting, common retires. the stock. Holders shares of are RSUs issued receive without an annual cash payment We have stock options outstandingthan to the participants fair under market long-term value incentiveratably of plans. over our The four common option years. stock price Our on per options the share continue date may to of not vest the be after grant. less the The option options recipient have retires. a 10-year term and generally vest We recognized $83 million ofTexas, gains and on $34 sales million of associated assets with in the 2015. This sale of included a $48 manufacturing million facility associated in with Houston, the Texas. sale of a site in Plano, Gains on sales of assets In 2016, we recognized a gain of $40 million on the sale of intellectual property. The restructuring accrual balances arelong-term primarily liabilities reported on as our a Consolidated component Balance of Sheets, either depending Accrued expenses on and the other expected liabilities timing or of Other payment. (a) Reflects charges for impacts of accelerated depreciation and changes in exchange rates. Balance, December 31 Balance, January 1 Changes in accrued restructuring balances Restructuring charges Non-cash items (a) Payments We announced in January 2016production our from intention this to facility phase to outrestructuring more a charges, cost-effective manufacturing primarily 200-millimeter facility severance TI in and manufacturing Greenock,estimated related facilities Scotland. to benefit in We be costs Germany, are about associated Japan moving $40 with andcharges million. the Maine. were We expected Total comprised recognized reduction of charges of severance of aboutto and $8 350 be benefits million jobs, recognized costs, in are through as 2017, well 2019. $7 as million accelerated in depreciation. 2016 The and remaining $17 charges million are in expected 2015. These Restructuring charges Beginning January 2017, we reorganized$18 the million product of lines restructuring within charges ourcharges for two are severance reportable not and segments. expected benefit We to costs recognizedseverance be in a and material. 2016 related benefits. As and of an December additional 31, $3 2017, million $16 in million 2017. has Any been further paid to terminated employees for Restructuring charges/other are recognized in Other for segment reporting purposes. 4. Stock compensation

FORM 10-K custo charges Acquisition sntue odtrietefi au e hr fteeaad.Tefi au e hr ne hspa qasteaon of amount the equals plan this under share per value fair The awards. these of model share option-pricing per grant. Black-Scholes-Merton value of the fair discount. date consequently the the the and determine on plan to stock discount-purchase used common a not our is is of plan price purchase closing stock the employee on Our based determined plan is approved RSUs an of is share there per unless value included fair is The change our rate of term. dividend price near future market the a current in for the dividend assumption and No the rate grant. change dividend of to quarterly time approved the annualized at the stock on common based are a yields with dividend issues Expected government options. U.S. the zero-coupon of for life available expected currently the yield to implied equal available. the term currently using remaining 10-year patterns determined rolling exercise are a future rates using of interest optionees estimate Risk-free our best of the experience is exercise method option experience historical historical the the estimates. on believe these based We in options average. used of volatility lives expected expected market-based the determine that of We believe indicators We available rates. best volatility the implied currently available are using volatility granted implied options of all measures on volatility expected determine We used: share assumptions per average value, Weighted fair date grant average Weighted for values fair average the weighted estimate following We the value. with fair model at option-pricing plans Black-Scholes-Merton compensation assumptions: stock the various using our options under stock granted non-qualified awards all for account We assumptions and issued period. methods Options three-month Fair-value basis. a to accelerated over issued an expensed Awards on are activity. expensed plan historical are purchase on eligibility stock based retirement employee minimum forfeitures nearing our the estimated or under over for eligible basis adjusting retirement straight-line award, are a the who on of employees RSUs vesting and for options required stock period non-qualified service for expense stock compensation employee recognize our We under offered options forfeitures. stock estimated and of RSUs net options, are stock and non-qualified plan to purchase related expenses include amounts These Total SG&A R&D ...... COR ...... follows: as is recognized expense compensation stock Total xetddvdn yields dividend Expected rates interest Risk-free years) (in lives Expected volatility Expected ...... EA NTUET 07FR 0K37 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 16.49 $ 242 $ $36 o er ne eebr31, December Ended Years For 0721 2015 2016 2017 o er ne eebr31, December Ended Years For 0721 2015 2016 2017 147 2.36% 2.52% — 59 7.2 24% 5 286 $ 252 $ $47$40 00 9.49 $ 10.03 $ 5 169 152 —10 060 60 .2 1.64% 1.72% .7 2.52% 2.87% . 7.3 7.3 5 22% 25%

FORM 10-K Options Share Exercisable Grant Date Fair Value per Share Exercise Price per Weighted Average Weighted Average RSUs Options Exercisable 48.122,467 $ $ 37.34 1,484 Number (Shares) Exercisable 43,804,402 22,114,114 (Fully Vested and Expected to Vest) (a) Outstanding Stock Options Share per Share Shares Exercise Price Exercise Price per Weighted Average Weighted Average Stock Options Shares (672,908) 57.12 (291,741) 54.34 6,474,732 79.28 1,604,469 79.52 52,265,788 $ 41.8944,754,593 12,332,379 48.49 $ 44.44 9,225,643 55.40 (13,313,019) 37.13 (4,419,464) 33.65 Life (Years) Weighted Average Stock Options Outstanding Remaining Contractual ...... 6.3 4.8 20,002 9.7 88.81 — — ...... $ Number ...... (Shares) 1,230,8102,559,6139,441,3807,466,229 1.1 1.9 4.36,347,174 6.1 $ 14.97 9.1 23.86 33.02 1,230,810 44.10 2,559,613 9,441,380 $ 14.97 4,403,409 79.19 23.86 33.02 44.10 6,470 71.03 ...... Outstanding 17,689,385 7.6 53.42 4,472,432 53.61 44,754,593 6.4 48.49 22,114,114 37.34 ...... $ ...... — — — — — ...... aggregate intrinsic value of stock options outstanding was $2,504 million. 20.01 to 30.00 30.01 to 40.00 40.01 to 50.00 50.01 to 60.00 60.01 to 70.00 70.01 to 80.00 80.01 to 97.29 14.47 to 97.29 38 TEXAS INSTRUMENTS • 2017 FORM 10-K Weighted average remaining contractual lifeWeighted (in average years) exercise price perIntrinsic share value (millions of dollars) (a) Includes effects of expected forfeitures of approximately 1 million shares. ExcludingAs the of effects December of 31, expected 2017, forfeitures,Statements the the total of Income future was compensation $237 costunvested million, related RSUs. consisting to The of equity $237 $108 awards million million not2020 is related yet and expected to recognized $4 to unvested in million be stock our in recognized options Consolidated 2021. as and follows: $129 $123 million million related in to 2018, $73 million in 2019, $37 million in Number of outstanding (shares) Summarized information as of Decemberas 31, stock 2017, options about that outstanding are stock currently options exercisable, that is are as vested follows: and expected to vest, as well In 2017, 2016 and 2015,the the exercise aggregate price intrinsic paid values by (i.e., the the optionee) difference of in options the exercised closing were market $632 price million, on $424 the million date and of $290 exercise million, and respectively. Exercise Price Range $14.47 to 20.00 Summarized information about stock options outstanding as of December 31, 2017, is as follows: As of December 31, 2017, the number of shares remaining available for future issuance under these plans was 53,595,374. Outstanding grants, December 31, 2017 The weighted average grant daterespectively. fair In values 2017, per 2016 share and of$178 2015, RSUs million the granted and total in $114 grant 2017, million, date 2016 respectively. fair and values 2015 of were shares $79.52, vested $53.98 from and RSU $53.22, grants were $149 million, Granted Outstanding grants, December 31, 2016 Long-term incentive and director compensation plans Stock option and RSU transactions under our long-term incentive and director compensation plans are as follows: Stock options exercised/RSUs vested Forfeited and expired

FORM 10-K aac,Dcme 1 2017 31, December Balance, issued Total for: used Shares Repurchases 2016 31, December Balance, issued Total for: used Shares Repurchases 2015 31, December Balance, issued Total for: used Shares Repurchases 2014 31, December Balance, shares: treasury our of in distribution changes options, the stock reflects of table exercise following upon The shares RSUs. treasury of from vesting stock and common compensation of shares deferred issue director specified. to been is 2017, has practice 31, date current December expiration Our of no As and program. remain, repurchase authorizations stock repurchase board-authorized stock the of with billion connection $9.24 in acquired 35,402,636. were was shares plan Treasury this shares under treasury issuance and future outstanding for shares available on remaining Effect shares of under number exercised the options 2017, of 31, value December 2016 intrinsic respectively. of 2017, total million, As in the $12 plans 2015, and purchase and million stock 2016 $12 employee 2017, million, the In $13 under respectively. was granted $7.89, plans options and these of $9.79 share $12.99, per were values 2015 fair and date grant average weighted The 2017 31, December grants, Outstanding Exercised Granted 2016 31, December grants, Outstanding 2017. 31, December of as follows: exercisable 2018, as were 2, are none January transactions options, on plan outstanding occurred purchase total exercise of stock the automatic percent Employee Of The 85 share. exercise. to per automatic equal $89.74 of price of date exercise price the an exercise on had an stock 2017, in common 31, resulting TI December of of value as market plan fair purchase the stock employee the under outstanding Options plan purchase stock Employee ietrdfre tc units stock deferred Director taxes ESPP or exercises to applied Stock options/RSUs Stock units stock deferred Director taxes ESPP or exercises to applied Stock options/RSUs Stock units stock deferred Director taxes ESPP or exercises to applied Stock options/RSUs Stock ...... —— — ...... — — ...... — ...... EA NTUET 07FR 0K39 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 1,1,1)(4,419,464) (13,313,019) 1,7,7)(,6,6)(17,740,140) (3,361,364) (14,378,776) 1,7,0)(,0,9)(20,181,998) (4,303,190) (15,878,808) (5,639,666) (14,516,606) (16,018,408) (2,541,251) (13,477,157) (3,386,415) (11,953,455) tc pin RSUs Options Stock 10577 — (1,065,757) 13222 — (1,362,202) — (1,532,264) ,6 845,164 8,562 (4,750) — — 1,058,100 — mlyeStock Employee ucaePlan Purchase 10577 67.62 (1,065,757) 1,336,476 Sae)Eecs Price Exercise (Shares) 8,3 55.19 984,536 0,7 89.74 202,179 62.55 $ 283,400 757,657,217 744,831,978 729,547,527 694,189,127 30,570,129 35,480,036 51,384,339 Treasury Shares (13,587) (7,531)

FORM 10-K —— —— 0.6 0.2 0.30.6 0.3 0.6 (3.7)(1.5)(1.2) (4.0) (1.6) (1.3) 977 998 27.1% 29.2% 35.0% 35.0% (105) (81) 2015 $ 3,953 $ 3,218 $ 4,930 $ 4,216 $$ 472 255 $ $ 396 $ 171 150 $ 90 0.7 0.2 0.1 (91) 950 (2.5) (4.1) (1.6) (1.1) 12.7 39.4% 35.0% For Years Ended December 31, For Years Ended December 31, For Years Ended December 31, 2017 2016 2015 2017 2016 2015 2017 2016 2015 $ 5,130 $ 6,080 $$ 483 341 $ 250 2016 10 — 10 7 3 10 238 (80) 158 168 14 182 For Years Ended December 31, $ 1,289 $ (122) $ 1,167$ 1,537 $ 1,110 $ (202) $ $ (72) 1,335 $ $ 1,285 1,038 $ (55) $ 1,230 ...... 2017 12 — 12 ...... 173 61 234 ...... Current Deferred Total Current Deferred Total Current Deferred Total $ 2,101 $ 51$ 2,286 $ 2,152 $ 112 $ 2,398 ...... 40 TEXAS INSTRUMENTS • 2017 FORM 10-K U.S. excess tax benefit forNon-U.S. stock effective compensation tax rates U.S. tax benefit for manufacturing U.S. R&D tax credit Impact of changes to uncertain tax positions U.S. Tax Act U.S. non-deductible expenses Effective tax rate U.S. statutory income tax rate Total Principal reconciling items from thepercentage U.S. of statutory Income income before tax income rate taxes) to are the as effective follows: tax rate (Provision for income taxes as a U.S. federal Non-U.S. U.S. state Other Total Provision for income taxes is comprised of the following components: U.S. Income before income taxes is comprised of the following components: We recognized $355 million, $3462017, million 2016 and and $309 2015, million respectively. of profit sharing expense under the TI Employee Profit Sharing Plan in Profit sharing benefits are generallypay formulaic profit and sharing determined benefits by primarily oneto under or be the more paid company-wide subsidiary based TI or solely Employee company-wide10 on Profit financial percent TI’s Sharing metrics. operating operating Plan. We margin margin This before for planeligible any the provides payroll. profit full for The sharing calendar profit maximum is year. sharing amount paid. Underif of At this TI’s profit 10 plan, operating sharing percent TI margin available operating must is under margin, achieve at the profit a or plan sharing minimum above is threshold will 35 20 be of percent percent 2 for of percent a eligible of full payroll, calendar which year. is paid only Tax benefit realized from stockReduction compensation to deferred tax asset (a) Net of taxes paid for employee shares withheld of $83 million in 2017, $70 million in 2016 and $46 million in 2015. Excess tax benefit for stock compensation Proceeds from common stock transactions (a) The effects on cash flows are as follows: Non-U.S. 6. Income taxes 5. Profit sharing plans

FORM 10-K e eerdtxasset tax deferred Net liabilities tax deferred Total liabilities: allowance tax valuation Deferred after assets, tax deferred Total allowance allowance valuation Valuation before assets, tax deferred Total assets: tax Deferred follows: as are liabilities tax and non-U.S. assets These tax Act. deferred Tax of which the components in of primary jurisdictions enactment The the to of prior many rate expiration. in tax without operations income and our statutory nature to U.S. in applicable the statutory rates than generally tax lower are and were rates benefits which tax of U.S. most by operate, affected we have is we rate 2017, tax 31, effective that December liabilities. Our extent of tax the As deferred to liability. unrecognized earnings tax material undistributed withholding in these a result on in would taxes result that deferred to differences of for expected basis future repatriation made are no the upon been subsidiaries for incurred has these made be provision from been will A payments has jurisdictions States. dividend provision non-U.S. United tax certain the U.S. in to no taxes cash U.S. Consequently, withholding available additional States. However, any United earnings. eliminates be the these earnings to to of reinvested continue repatriation remittance will indefinitely upon inventory, on earnings tax certain these The and of assets States. taxation fixed United as the arises. such outside tax assets, reinvested the the operating permanently for which non-cash account in by will period represented We future earnings 2018. the The in in beginning expense years tax for income tax of (GILTI) component income a low-taxed as intangible GILTI global of the effects included also Act Tax The follows: as are are amounts balances provisional tax on tax deferred Details our effective operations. of our continuing to revaluation from points the expense percentage and tax tax 12.7 earnings income deferred of reinvested of existing increase indefinitely component our an on a on million, tax as Tax effects $773 the included the the of of of and 2017 effects enactment earnings in combined non-U.S. of reinvested expense The certain effects tax indefinitely rate. of tax on additional earnings the income tax in reinvested for statutory the resulted U.S. accounting indefinitely of This the our on estimates balances. reduces tax completed reasonable Act a not made Tax pay have have The to We We 2017. companies deferred. Act. 22, requires tax December and previously on were percent enacted 21 that was to subsidiaries Act) percent Tax 35 (the from Act rate Jobs tax and Cuts Tax U.S. The nentoa earnings International adjustments fair-value and intangibles Acquisition-related care health retiree and Other benefit defined for costs Retirement reserves related and Inventories compensation Stock expenses carryforwards Accrued credit tax and loss Deferred • • rvsoa mutrcre eae otermaueeto u eerdtxblnews$9million. $59 The was amounts. balance tax which tax deferred calculations, deferred our new our to refining of rise and remeasurement give Act the Tax potentially to or the related balances of recorded aspects these amount certain of provisional measurement analyzing the still affect are we potentially However, could percent. 21 U.S. assets. of specified from specified rate other deferred other tax and previously or liabilities cash E&P cash and in non-U.S. in assets held post-1986 held tax earnings of amounts Deferred those calculation the of Further, the finalize subsidiaries. amount finalize and non-U.S. the we taxes of these on when income expense for part change tax E&P in may income post-1986 based amount in total is This increase the earnings assets. an of reinvested in calculation indefinitely resulted our on and completed tax taxes, yet the income not U.S. have from We deferred million. previously $714 we that (E&P) profits and – earnings reinvested Indefinitely ...... ermaue eerdtxast n iblte ae nteUS tttr income statutory U.S. the on based liabilities and assets tax deferred remeasured We – h a nidfntl enetderig sbsdo u o-..ps-96earnings post-1986 non-U.S. our on based is earnings reinvested indefinitely on tax The EA NTUET 07FR 0K41 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 186 $ 256 $ 072016 2017 (271) (207) (165) 622 107 119 457 eebr31, December (64) 93 38 9 341 $ 214 $ (492) (460) (128) 145 961 220 219 833 (32) 81 82

FORM 10-K (33) $ 374 $ 341 411 (2) (21) (32) (17) 189 3 (78) $ 84 $ 108 $ 243 $ 84 $13$ 9 $4 $8 December 31, 2017 2016 $ 264 $ 186 (1) (1) 17 42 2017 2016 2015 $ 243 $ 300 $ (38) $ (19) ...... 42 TEXAS INSTRUMENTS • 2017 FORM 10-K Additions based on tax positionsAdditions related for to tax the positions current of year prior years In non-U.S. jurisdictions, the yearsmajor open jurisdictions to outside audit the represent United the States, years our still subsidiaries open are under no the longer statute subject of to limitations. income With tax respect audits to for years before 2007. As of December 31, 2017,Audit the statute activities of related limitations to our remainsprocedures open U.S. for federal for relief U.S. tax from federal returns double through taxthe taxation. returns 2012 years The for have 2006 procedures 2010 been through for and completed 2011. relief following except The from years. for audit double certain of taxation pending the pertain tax U.S. to treaty federal U.S. tax federal returns tax for returns 2013 for through 2015 is underway. All of the $300 millionare and comprised the of $243 positions million that, liabilities$13 if for million recognized, uncertain and would tax $12 lower positions million the astax of effective of assets existing tax December are deferred rate. 31, related tax If 2017 to assets these and refunds in liabilities 2016, from 2017 respectively, are counterparty and ultimately jurisdictions 2016, realized, resulting respectively, from would procedures also for be relief realized. from These double deferred taxation. The liability for uncertain tax positions is a component of Other long-term liabilities on our Consolidated Balance Sheets. Interest receivable (payable) as of December 31 Interest income (expense) recognized in the year ended December 31 Reductions for tax positions of prior years Balance, December 31 Balance, January 1 The changes in the total amounts of uncertain tax positions are as follows: Uncertain tax positions We operate in a numberjurisdictions of who tax may jurisdictions, challenge and any ourcomplex, item income their on tax ultimate these returns outcome tax are is returns. subjectthat uncertain. Because to it Before the examination is any matters by “more benefit challenged tax likely can by authoritiesinterest than be authorities in related not” recorded are those to that in typically uncertain a our tax tax financial positions position statements, and will we penalties be must sustained as determine components by of the OI&E. appropriate tax authorities. We recognize accrued Cash payments made for income2015, taxes, respectively. net of refunds, were $1.80 billion, $1.15 billion and $1.17 billion in 2017, 2016 and We have U.S. and non-U.S. tax loss carryforwards of approximately $6 million, none of which will expire before the year 2027. Deferred tax liabilities We make an ongoing assessmentour regarding evaluation the of realization relevant of criteria, U.S.taxable including and income the non-U.S. in existence deferred prior of tax carryback deferred assets.in years tax This 2017 and liabilities assessment and expectations is that decreased for based can by future on beto $58 taxable used Net million income. to income in Valuation absorb in 2016. allowances deferred 2016. These increased tax changes by assets, had $37 no million impact to Net income in 2017 and had a $63 million benefit Settlements with tax authorities Deferred tax assets Net deferred tax asset The deferred tax assets and liabilities based on tax jurisdictions are presented on our Consolidated Balance Sheets as follows:

FORM 10-K .Fnnilisrmnsadrs concentration risk and instruments Financial 7. .Vlaino etadeut netet n eti liabilities certain and investments equity and debt of Valuation 8. eal fteeacut eevbealwne r sfollows: as are Sheets. allowances Balance receivable Consolidated accounts our these on of their adjustments, receivable Details and disputes, accounts customers returns, from of expected deducted number for are large allowances allowances our maintain These to We collectability. due areas. and limited geographic incentives are and receivable industries accounts different to to across contracts respect dispersion derivative with financial risk and credit deposits of cash Concentrations on limit counterparties and limit securities also debt ratings. We investment-grade issuer. investment-grade and in one with investments investments any institutions short-term cash to financial equivalents, place exposure cash we credit deposits, exposure, of instruments cash risk amount Financial primarily credit the securities. are our risk debt manage of credit To issuers of receivable. and concentrations accounts customers to institutions, us subject financial from could risks that counterparty to subject the are and We value fair of description a for concentration the 8 Risk approximates Note debt See long-term inputs. our 2 of Level inputs. value are 2 payable, carrying which Level accounts The quotes, of per and instruments. broker-dealer definition value receivable such using asset accounts of measured net as maturity as or such short value value liabilities, the fair fair and to at assets due carried financial value are current fair assets deferred other approximate plan our for as postretirement values well Our carrying as value. The investments, fair share. long-term at certain carried are and investments liabilities, Japanese short-term compensation sell euros. equivalents, to sell cash million to in $140 million investments including a $49 Our exposures, had and sheet 2017, sterling balance 31, pound net December British dollar of sell not as non-U.S. to was our outstanding million which contracts hedge $59 of to exchange yen, value currency million fair $365 foreign the of forward contracts, value Our exchange 2017. notional currency 31, foreign December forward of as as such material instruments financial derivative hold We instruments Financial otmto netet r eoddi IEwe elzdo hna mareto h netetsvlei arne based warranted is value on investment’s losses the investment. and of each Gains impairment of results. an recoverability financial when the investee’s or of equity- the realized assessment These from of when our method. losses share OI&E on cost and ownership in or Gains our recorded method securities. on are equity equity based investments the non-marketable OI&E cost-method either other in using and reflected for funds are accounted capital investments are venture method but in value interests fair of at consist these measured investments of not value are fair investments the other intended in SG&A. Our investments changes in equity record liabilities We and compensation liabilities. debt deferred of compensation related variety deferred the a certain and hold in funds funds changes mutual mutual offset These that securities. returns trading generate as to funds mutual certain on classify impairments Income. We other-than-temporary of record Statements We Consolidated Sheets. our Balance in quotes. Consolidated OI&E broker our in or on securities prices AOCI available-for-sale market in on taxes, based of generally net is decrease, which value, fair as at classified stated See are are investments securities our trading of and Most Available-for-sale method. cost or method equity trading, sale, sale. for for available available as investments our classify We investments equity and Debt approximately for accounted Inc. Apple 2015, In segment. 2016. Analog or 2017 our in in primarily revenue of recognized more revenue, or of percent percent 10 11 for accounted customer end No customer Major 31 December Balance, net write-offs, and results Recoveries operating to (credited) charged Amounts 1 January Balance, arvleconsiderations Fair-value ...... eo.Uraie an n osso vial-o-aescrte r eodda nices or increase an as recorded are securities available-for-sale on losses and gains Unrealized below...... EA NTUET 07FR 0K43 10-K FORM 2017 • INSTRUMENTS TEXAS ...... $8 $17 0721 2015 2016 2017 — (9) 1 7 $ $17 $12$7 —— 0(5) 10

FORM 10-K Long-Term Investments Short-Term Investments December 31, 2016 ———25 ———9 201 107490 544 1,792943 — 2,336 — 211 201 — — $ 1,154 $ 2,336 $ 235 $ 346 $ — $ — Equivalents Cash and Cash Long-Term Investments Short-Term Investments December 31, 2017 ——26 — ———6 236 172700 698 2,115 — — 259 — — 1,397 2,813 236 $ 1,656 $ 2,813 $ 268 $ 525 $ — $ — Equivalents Cash and Cash ...... – Uses unadjusted quoted prices that are available in active– markets Uses for inputs identical other assets than or Level liabilities 1 as that of are the either directly or indirectly observable as of the reporting date through – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant Level 1 reporting date. Level 2 correlation with market data, includingin quoted markets prices that for are similar not assetsmethodologies active. and that Level liabilities do 2 in also not active includes require marketsrates assets significant and and and judgment quoted volatility liabilities since prices factors, that the are are inputLevel corroborated valued assumptions 2 by using used valuations. readily models in We observable or the verify data. other models,dealers these We pricing such based valuations utilize as on for a interest observable reasonableness third-party prices relative dataLevel for to service 3 similar unadjusted to assets quotes provide in obtained active frommanagement markets. brokers judgment. or These values areof generally market determined participant using assumptions. pricing As modelscertain of that assets December utilize held 31, management by 2017 estimates our and postretirement 2016, plans. we had no Level 3 assets or liabilities, other than ...... Treasury securities • • • Equity-method investments Corporate obligations U.S. government agency and Mutual funds Cost-method investments Cash on hand Money market funds 44 TEXAS INSTRUMENTS • 2017 FORM 10-K The three-level hierarchy discussed below indicates the extent and level of judgment used to estimate fair-value measurements. Fair-value considerations We measure and report certainthat financial would assets be and received liabilities to atthe sell fair asset an value or asset on liability or a in paid recurring an to basis. orderly transfer Fair transaction a value between liability is market (an defined participants exit as on price) the the in price the measurement date. principal or most advantageous market for Other-than-temporary declines and impairments inwere the not values material of in our 2017, debt 2016 and and equity 2015. investments, which were recognized in OI&E, In 2017, 2016 and 2015,$4.10 the billion, proceeds $3.39 from billion sales, redemptions and and $2.89 billion, maturities of respectively. short-term Gross available-for-sale realized investments gains were and losses from these sales were not material. As of December 31, 2017material. and We 2016, did unrealized not gains recognize andsecurities any losses classified credit associated as losses with available related our for to available-for-sale sale available-for-sale investments as investments were of in not December 2017, 31, 2016 2017, and have 2015. maturities All within of one our year. debt Total Other measurement basis: Total Trading securities: Measured at fair value: Available-for-sale securities: Details of our investments are as follows:

FORM 10-K .Gowl n custo-eae intangibles acquisition-related and Goodwill 9. 2021 2020 2019 2018 of amortization 2015, estimated and Remaining 2016 amortization. follows: 2017, accumulated as in is against million off intangibles $319 written acquisition-related and are million assets $319 amortized million, Fully $318 respectively. was intangibles acquisition-related of Amortization Total relationships Customer technology Developed follows: as are impairment intangibles no Acquisition-related determined of we components 2015, The and 2016 unobservable 2017, These In unit. 8. using reporting Note each judgment, in of and described reporting value estimates as indicated. our fair management measurements, was of the upon 3 each calculate based Level of to is considered value models value are fair flow fair inputs the cash of whether discounted Determination determine in value. and inputs carrying 1 its unobservable October of of excess as in test is impairment units goodwill annual our perform We Total Other Processing Embedded Analog follows: as is 2016, and 2017 31, December of as segment by Goodwill liabilities Total Liabilities: assets Total Assets: basis any or cost include historical not at do measured tables are These that basis. liabilities recurring and a assets on or value plans, value. fair postretirement fair at our than for by other accounted held were assets that hand, liabilities on and cash assets our are following The eerdcompensation Deferred obligations Corporate funds market Money uulfunds securities Mutual Treasury and agency government U.S...... 32 $ ...... 142 198 288 ...... $318 ...... $ ...... 7-10 ...... 172 ...... 8 ...... eid(Years) Period Amortization EA NTUET 07FR 0K45 10-K FORM 2017 • INSTRUMENTS TEXAS rs Carrying Gross ,4 ,9 946 $ 1,994 $ 2,940 $ ,3 ,6 769 $ 1,361 $ 2,130 $ Amount ...... 1 3 177 633 810 eebr3,2017 31, December Accumulated mriainNet Amortization 5 255 $ — $ 255 $ 4,446 $ 920 $ 3,526 $ 2 525 $ — $ 525 $ 5 255 $ — $ 255 $ ee ee oa ee ee Total 2 Level 1 Level Total 2 Level 1 Level ,6 02,815 50 2,765 3 236 — 236 7 870 870 — eebr3,2017 31, December rs Carrying Gross ,4 ,7 1,264 $ 1,676 $ 2,940 $ ,3 ,4 986 $ 1,144 $ 2,130 $ Amount 1 3 278 532 810 1 218 $ — $ 218 $ 3,480 $ 891 $ 2,589 $ 4 346 $ — $ 346 $ 1 218 $ — $ 218 $ eebr3,2016 31, December ,4 4 2,282 240 2,042 0 201 — 201 5 651 651 — Accumulated eebr3,2016 31, December mriainNet Amortization Acquisition-Related mriainof Amortization Intangibles Goodwill 4,362 4,158

FORM 10-K 46 TEXAS INSTRUMENTS • 2017 FORM 10-K As of December 31, 2017stock and valued 2016, as at a $27 result millionwere of and not employees’ $20 material. elections, million, TI’s respectively. non-U.S. Dividends defined paid contribution on these plans shares held of TI TI common common stock in 2017 and 2016 Non-U.S. retirement plans We provide retirement coverage fora non-U.S. number employees, of as defined required benefit byservice local and and laws defined compensation. or contribution Funding to plans. requirements the Retirementcountry are extent benefits practices determined we are and on deem generally market an appropriate, based circumstances. individual through on country an and employee’s plan years basis of and are subject to local U.S. retiree health care benefitU.S. plan employees who meet eligibilitythe requirements cost are of offered those medical retiree coveragefactors, medical during the benefits retirement. most for We important certain make of retirees abenefits. which and contribution The are their toward balance an dependents. of employee’s The the date contributionfull cost of rates cost is hire, are of borne date based their by of upon medical the retirement, various benefits plan’s years during participants. of retirement. service Employees and hired eligibility after January for Medicare 1, 2001, are responsible for the The defined benefit pension plansaccrue include service-related employees benefits, still but accruing instead, benefits,defined may as benefit participate well pension in as plan the employees are enhanced andcompensation. determined defined participants We using contribution who intend a plan. no to formula Benefits longer contribute based underand amounts upon the regulations, to years qualified plus this of such plan service additional to andclosed amounts meet the to as the highest new we minimum five participants. deem funding consecutive appropriate. requirements years The of of non-qualified applicable defined local benefit laws plans are unfunded and Our aggregate expense for the U.S. defined contribution plans was $61 million in 2017 and $60 million in 2016 and 2015. As of December 31, 2017common and stock 2016, totaling as a 10 result millionpaid of shares on employees’ and these elections, 11 shares TI’s million in U.S. sharesstock 2017 defined valued fund and at contribution was 2016 $1.00 plans frozen were billion held to $22 and shares new million $796 of contributions and million, TI or $20 respectively. transfers million, Dividends into respectively. the Effective fund. April 1, 2016, the TI common Both defined contribution plans offervarious an investment employer-matching choices. savings Employees option who thatmay elected allows also to employees participate continue to in accruing make the a pre-taxthe defined benefit contributions employee’s contribution in to annual plan, the eligible where qualified earnings. employer-matching definedplans, Employees contributions benefit and who are pension employees elected provided plans hired not for after to upcontribution November continue to plan. 1997 accruing 2 This and a percent plan through benefit of provides December inplus for 31, the an a 2003, defined employer-matching fixed may benefit contribution participate employer pension of contribution inDecember up the of 31, to enhanced 2 2003, 4 percent defined do percent of not of the receive the employee’s the employee’s annual fixed annual eligible employer eligible earnings, contribution earnings. of Employees 2 hired percent after of the employee’s annual eligible earnings. U.S. retirement plans Our principal retirement plans inqualified the and United non-qualified States defined are a benefitand defined pension then contribution plans. current plan; The participants an defined were enhanced benefitaccruing allowed defined plans a to contribution were benefit make closed plan; and a to and instead one-time new to election participants participate to in in continue 1997, the accruing enhanced a defined benefit contribution in plan the plans, described or below. to cease Plan descriptions We have various employee retirementFor plans, qualifying including employees, defined we contribution, offer defined deferred benefit compensation and arrangements. retiree health care benefit plans. 10. Postretirement benefit plans

FORM 10-K uddsau FP O tedo year of end at BO) – (FVPA status Funded assets plan in Change obligation benefit plan in Change follows: as are plans benefit care health retiree and benefit years. defined three for of assets period fair plan a the and over is obligations in assets benefit phased of the are value in benefit losses market-related Changes periodic and the net gains GAAP, of certain U.S. component whereby with assets accordance technique plan In smoothing on assets. a return of by expected value adjusted the market-related value plans, a care upon health based retiree is and cost pension profit. qualified Operating U.S. within the recognized For than is other cost components Service expense Income. plan of information. benefit Statements additional care Consolidated for health our 2 retiree in Note and OI&E See benefit in defined recognized all are 2017-07, cost ASU service of adoption early our With losses postretirement other including Total, losses Settlement costs benefit periodic Net loss actuarial net (credit) Recognized cost service prior of Amortization assets plan on return Expected cost Interest cost Service follows: as is plans benefit care health retiree and benefit defined to Sheets related Balance Expense and Income of Statements Consolidated our on Effects arvleo lnast tedo er(FVPA) year of end at assets plan of value Fair year: of beginning at assets plan of value Fair (BO) year of end at obligation Benefit year: of beginning at obligation Benefit Other changes rate exchange of Effects Settlements paid Benefits contributions Participant plans) (non-qualified contributions Employer plans) (qualified contributions Employer assets plan on return Actual changes rate exchange of Effects amendments Plan Settlements (gain) loss Actuarial subsidy Medicare paid Benefits contributions Participant cost Interest cost Service ...... EA NTUET 07FR 0K47 10-K FORM 2017 • INSTRUMENTS TEXAS ...... $73 $22 0721 0521 0621 0721 2015 2016 2017 2015 2016 2017 2015 2016 2017 (41) — 36 14 37 42 ..DfndBenefit Defined U.S. 6 $61 $65 $22 $22 4)(48) (41) —— 125 21 19 21 436 44 43 42 995 $ 1,034 $ 998 $ (3) $ 1,030 $ 0721 0721 072016 2017 2016 2017 2016 2017 (196) (196) eie Benefit Defined 123 109 — — — — — — — 25 42 22 18 (9) (9) U.S. 1,034 $ 1,019 $ 1,030 $ $4 1,033 $ $4 $5 ..RtreHat Care Health Retiree U.S. (17) — 17 (4) (85) (85) — — — — — — — 3 4 15 42 22 79 27 15 (9) (9) 9$13$9 5 $ $5 2)(22) (20) eie elhCare Health Retiree 394 $ 434 $ 414 $ (20) $ 434 $ —— 020 20 3 2 (3) 78 913 (39) (39) (55) (15) — — — — — — 17 44 1 5 9 3 9 U.S. 434 $ 441 $ 434 $ $— 463 $ (38) (38) (27) — — — — — — — 20 10 10 20 1 1 5 $47 $37 o-..DfndBenefit Defined Non-U.S. (62) 28 45 44 (2) 2 2,593 $ 2,309 $ 2,469 $ 124 $ 2,361 $ eie Benefit Defined 177 176 148 (90) (90) (13) (13) (52) — — — — 4 $36 $43 $35 $34 44 56 37 Non-U.S. 6 6 6)(76) (68) 524 25 134 41 253 52 2 (2) (2) 22 2,309 $ 2,134 $ 2,361 $ (52) $ 2,231 $ (133) (136) 160 227 259 (77) (77) — — — — 52 34 (8) (8) 6 6

FORM 10-K (15) Credit Prior Service Total (52) $ (48) Net Loss Non-U.S. Actuarial Defined Benefit Total Credit Prior Service U.S. Retiree Health Care Net (53) (3) (73) (129) Loss (13) — (5) (18) (48) (20) (21) (89) Non-U.S. Defined Benefit Actuarial $ 58 $ —$ (3) $ 150 $ (20) $ 208 $ 124 $ 101 Benefit U.S. Defined .... (9) — (6) Credit Prior Service Net Loss U.S. Retiree Health Care Actuarial 8 15 (2) 30 — 53 (2) ...... 28 (41) 3 (105) — (118) 3 (51)(15) (3) (29) 4 5 (29) (104) 2 2 (83) (148) 6 7 Net ...... $ 4 $ — $ Loss $ 118 $ 29 $ (6) $ 247 $ (4) $ 394 $ (10) Benefit Actuarial U.S. Defined ...... $ 66 $ 3 $ 27 $ 96 ...... $133 $58 $(11) $351...... $(6) $542 $(17) ...... income liabilities Tax effect Total change to AOCI December 31, 2017 December 31, 2016 Adjustments Recognized within Net Overfunded retirement plans Accrued expenses and other liabilities & Other long-term Underfunded retirement plans Accrued expenses and other liabilitiesUnderfunded & retirement Other plans long-term liabilities Overfunded retirement plans 48 TEXAS INSTRUMENTS • 2017 FORM 10-K The estimated amounts of netthat actuarial are loss expected and to unrecognized be priordefined amortized service benefit into credit plans; net included $2 periodic in million benefit AOCIthe and cost as non-U.S. ($3) over of defined million the December benefit for next 31, plans. the fiscal 2017, U.S. year retiree are: health $17 care million benefit and plan; none and for the $20 million U.S. and ($2) million for AOCI balance, net of taxes, AOCI balance, net of taxes, Changes in AOCI by category: The change in AOCI is as follows: Accumulated benefit obligations, which arefuture generally salary less increases, than were the $899 projectedbenefit million benefit plans, and obligations and $926 as $2.33 million they billion as excludeplans. of and the December $2.22 impact 31, billion of 2017 as and of 2016, December respectively, 31, for 2017 the and U.S. 2016, defined respectively, for the non-U.S. defined benefit Contributions to the plans meetretirement or benefit exceed plans all in minimum 2018. fundingplans, The requirements. which amounts We we shown expect do for to not underfunded contribute fund U.S. about because defined $50 contributions benefit million to plans to them our were are for not non-qualified tax pension deductible. Funded status (FVPA – BO) at end of 2016 2016 Funded status (FVPA – BO) at end of 2017 2017 Amounts recognized on our Consolidated Balance Sheets as of December 31, are as follows:

FORM 10-K ln hs netet r auduigipt rmtefn aaesaditra oes hne otefi au fthis of value redemptions. pension fair to non-U.S. the due a to are in Changes and fund models. material, property internal been diversified and not a managers have is fund 2015, presented the 31, periods from December the inputs since for using fund plans valued benefit are funds. worldwide investments equity our These U.S. in plan. plans, in asset U.S. investments 3 the on Level For returns only volatility. of The return rate volatility with discount the cover securities by reduce to income caused to growth fixed liabilities strategy asset of the collar provide proportion in option to greater changes an need a with utilize the have aligned we against world closely rate the more asset-liability discount around are detailed the plans that of in our characteristics use and changes of the assets of Most through plan impact cost. primarily the the service determined of balance future is sensitivity to concentration investments rate look of bond interest that risks the and studies mitigate match equity modeling to better of funds mix to index appropriate designed broad-market is The low-cost, policy liabilities. of investment share. consist Our per largely sectors. value plans market asset benefit within net major at our measured in funds, investments index The equity and index bond of Consists (a) Total plans: benefit defined non-U.S. of Assets Total plan: care health retiree U.S. of Assets Total plan: benefit defined U.S. of Assets share. per value asset net at measured funds, index equity and index bond of Consists (a) Total plans: benefit defined non-U.S. of Assets Total plan: care health retiree U.S. of Assets Total plan: benefit defined U.S. of Assets the in included been have but With value 8. fair Note of in assets. level described plan by inputs disclosure total fair-value to the tables of subject to The hierarchy longer reconciliation value. three-level no permit fair same are to at the assets below plans using certain tables postretirement assets 2015-07, other plan ASU and our of pension of adoption benefit value the defined fair our the of forth assets set plan below the measure and report We assets plan on Information Other securities equivalents Equity cash and securities income Fixed securities equivalents Equity cash and securities income Fixed securities equivalents Equity cash and securities income Fixed Other securities equivalents Equity cash and securities income Fixed securities equivalents Equity cash and securities income Fixed securities equivalents Equity cash and securities income Fixed ...... $2 15$3$ 3 $ $145 24 $ 434 $ ...... 251 $ $— 3 $ $180 $ ...... $— — $ — $ ...... ——3—3 — 3 — — ...... 51 2 652 629 — 207 18 207 5 — 349 ...... — 349 — — ...... — — ...... EA NTUET 07FR 0K49 10-K FORM 2017 • INSTRUMENTS TEXAS ...... $1 17$ $ $— 227 $127 $ 19 44 $ $ ...... $— 3 685 $ $ 685 $180 $ ...... $— — $ — $ ...... ee ee ee te a Total (a) Other 3 Level 2 Level 1 Level ee ee ee te a Total (a) Other 3 Level 2 Level 1 Level 3$26$1$233$2,593 $ 2,363 $ 1 1,845 $ $ 394 1,646 206 $ $ $ 260 23 — 245 $ $ $ $ 183 $ — 111 $ 995 $ 16 $ 2 $ — $ 995 $ 654 $ $ 132 2 $ — 654 $ $ $ 132 $ — $ — $ — — $ $ — $ 4 149 1 149 — 1 —— 341 — — 341 — — — — 3—77747 717 — 23 7 eebr3,2017 31, December eebr3,2016 31, December ,0 1,654 $ 1,508 ,3 2,309 $ 2,137 1,034 $ 1,034

FORM 10-K 72% 28% 1.76% 3.11% 2.41% 3.18% 3.21% 100% Non-U.S. Non-U.S. Non-U.S. Non-U.S. 71% 29% 1.84% 2.60% 2.96% 1.76% 3.11% Defined Benefit Defined Benefit Defined Benefit Defined Benefit n/a n/a 4.08% 4.40% 4.40% 52% 48% U.S. Retiree Health Care U.S. Retiree Health Care n/a n/a U.S. Retiree Health Care U.S. Retiree Health Care 62% 38% 3.63% 4.10% 4.08% 66% 34% 4.29% 3.30% 4.60% 3.30% 4.40% Benefit Benefit Benefit Benefit U.S. Defined U.S. Defined U.S. Defined 66% 34% 2017 2016 2017 2016 2017 2016 U.S. Defined 2017 2016 2017 2016 2017 2016 3.75% 3.30% 4.30% 3.30% 4.21% ...... 65% 55%–65% 60%– ...... 35% 35%–45% 0%–40% ...... 410 139 495 ...... $140...... 111...... $ 83 30 90 87 31 $ 86 31 30 30 87 89 90 94 Discount rate Long-term pay progression Discount rate Long-term rate of return onLong-term plan pay assets progression 50 TEXAS INSTRUMENTS • 2017 FORM 10-K Weighted average asset allocations as of December 31 are as follows: Equity securities We rebalance the plans’ investments when they are not within the target allocation ranges. 2019 2020 2021 2022 2023 – 2027 2018 Fixed income securities and cash equivalents Fixed income securities and cash equivalents Weighted average assumptions used to determine benefit obligations: Assumptions and investment policies Equity securities The target allocation ranges for the plans that hold a substantial majority of the defined benefit assets are as follows: Assumptions for the expected long-term ratethe of effect return of on periodic plan target assets assetplan are allocation assets. based rebalancing. We on We believe future adjust our expectations the assumptions forAssumptions results are returns used for appropriate for for the based each the payment on asset non-U.S. of the class defined reasonable investment and benefit expenses mix plans of and reflect the long-term the plan nature different from of economic the environments plans’ within investments. the various countries. Weighted average assumptions used tobenefit determine cost: net periodic We utilize a variety ofcountry methods in to which select the an benefit appropriateselected plan discount from operates. rate the In depending universe the on of United theflows actively States, depth sufficient traded we of to high-quality use the pay U.S. a corporate the corporate settlement bondselected plan’s bonds. approach market portfolio expected The whereby in of benefit selected a the bonds. payments portfolio portfolio For when is ofperformed our due. designed bonds in non-U.S. The to is which locations resulting provide the with discount cash projected a ratean cash sufficient reflects appropriate flows number the universe from of rate of the actively of high-quality defined traded returnThe corporate benefit high-quality of discount bonds plans bonds, the rate available are an selected in discounted analysis is each against is corporate the country. a bond single In yield market, equivalent this curve a rate manner, constructed government that a with bond produces present index the value adjusted same is for present developed. an value. appropriate For risk countries premium that is lack used a to sufficient establish the discount rate. The following assumed future benefitobligations. payments Almost to all plan of participants the inand payments, the not which next from may 10 company vary years assets. significantly are from used these to assumptions, measure will our be benefit made from plan assets None of the plan assets relatedstock. to As the of defined December benefit 31, pension 2017, plans we and do retiree not health expect care to benefit return plan any are of directly the invested defined in benefit TI pension common plans’ assets to TI in the next 12 months.

FORM 10-K 1 etadlnso credit of lines and Debt 11. sdtwr h eamn faprino h etta aue nAgs 05 ertrd$5 ilo fmtrn eti April in debt maturing of million $250 retired were We and 2015. discount, August issuance of in 2015. million original matured August $3 the that in incurred of debt million We net the $750 2020. million, of another in $498 portion and due were a 2015 debt offering of long-term the repayment fixed-rate, of the of proceeds toward million The used $500 costs. of related amount other principal and 2016. a issuance were May issued and in we discount, retired 2015, issuance of debt May million original maturing In $3 the of incurred of billion We net $1.0 2022. million, of in $499 portion due were a debt offering of long-term the repayment fixed-rate, of the of proceeds toward million The used $500 costs. of related amount other principal and were a issuance and issued discount, we issuance 2016, original May million the In $3 of incurred net We million, 2027. $494 in were due offering debt the purposes. long-term of corporate fixed-rate, proceeds general of The for million costs. used $500 related of other amount and principal issuance a of issued corporate we general 2017, and November debt million, In $605 maturing were of in repayment offerings due the the notes for of 2.625% used proceeds of were The million costs. and $300 premium, related of other and the issuance and discount purposes. of the issuance issuance consisted and of original offering premium million the The a $3 of debt. at incurred net long-term 2021 We fixed-rate, in discount. of due a million notes at $600 2.75% 2024 of of amount million principal $300 aggregate of 2017. an reissuance June issued in we million 2017, $375 May another In and 2017 March in debt maturing of million $250 retired We the no to had indexed we debt is and Long-term drawn, undrawn if was facility, facility credit credit this our under 2017, allows borrowings 31, that on December rate banks of outstanding. As interest investment-grade paper loans. (LIBOR). The of commercial bank Rate 2022. consortium through Offered March a liquidity from until Interbank additional facility billion London provide credit $2 applicable to revolving to and variable-rate up any, a borrow if had to borrowings, we us paper 2017, commercial 31, support December to of credit As of line a maintain We borrowings Short-term investment related the and liability the of are fair value that in fair plans changes the 8. these against in Note to hedge changes in related economic record discussed funds an We as as mutual liabilities. SG&A serve in compensation in and million deferred Sheets, $236 other Balance held our we Consolidated of and in 2017, our values deferrals recorded 31, on participant is December investments accumulated and of Long-term the million As in reflects $255 date. recorded was amount that This plans of Sheets. compensation as Balance deferred thereon the Consolidated earnings of our on participants to liabilities liability long-term our Other 2017, 31, plans. December contribution of notional participant’s defined As on the our based on in compensation based offered deferred made are their are that on plan funds return this investment a under same a earn Payments the exceed can compensation. in responsibility Participants cash investments management balance. their and of plan salary portion and base a election whose of distribution employees receipt U.S. defer allows to that level plan certain compensation deferred a have We less by decreased arrangements or compensation increased Deferred have would 2017, expense 31, plan December 2017 of or of as increased components plan have cost benefit would interest million. care periods and $1 health future cost than retiree all service U.S. over The the rates million. for trend $1 cost obligation by care benefit health postretirement in accumulated decrease the or decreased increase point percentage one A reached is rate trend ultimate which in Year year next rate for trend follows: rate Ultimate as trend are cost 31 care December health of Assumed as plan benefit care health retiree U.S. the for rates trend cost care health Assumed ...... EA NTUET 07FR 0K51 10-K FORM 2017 • INSTRUMENTS TEXAS ...... 7.50% 5.00% 072016 2017 2028 6.75% 5.00% 2024

FORM 10-K — — (16) 375 500 750 500 250 500 500 (631) 3,625 3,609 Leases $ 2,978 $ 250 Operating — (23) December 31, 500 500 750 500 550 500 500 300 (500) 4,100 4,077 2017 2016 $ 3,577 $— Purchase Commitments ...... 35 56 ...... $391...... 367...... $68 234 37 45 30 49 29 24 52 TEXAS INSTRUMENTS • 2017 FORM 10-K Notes due 2027 at 2.90% 2019 2020 2021 2022 Thereafter 2018 Indemnification guarantees We routinely sell products withminimal, an infrequent intellectual losses property associated indemnification with includedthat these in may indemnities. the result. Consequently, terms we of cannot sale. reasonably Historically, estimate we any have future had liabilities only Net unamortized discounts, premiums and debt issuance costs Current portion of long-term debt As of December 31, 2017,non-cancellable we had operating committed leases: to make the following minimum payments under our purchase commitments and Operating leases We conduct certain operations incertain leased long-term facilities supply and agreements also to leasefrequently purchase a include industrial portion purchase gases of and are our renewal accounted datalease provisions for processing expense and as and incurred operating require other was us leases. equipment. $81 to Lease In million, pay agreements addition, $86 taxes, million insurance and and $98 maintenance million costs. in Rental 2017, and 2016 and 2015, respectively. Purchase commitments Some of our purchase commitmentsthere include is payments a for fixed, software non-cancellable licenses payment and schedule contractual or agreements minimum with payments suppliers due where with a reduced delivery schedule. Interest and debt expense wasof $78 the million debt in discounts, 2017, premiums $80$88 and million million debt in in issuance 2016 2016 costs. and and Cash $90 $99 payments million million for in in interest 2015. 2015. on This Capitalized long-term was interest debt net was were of not $75 the material. million amortization in 2017, Long-term debt Total debt Total debt, including net unamortized discounts, premiums and debt issuance costs Notes due 2018 at 1.00% Notes due 2019 at 1.65% Notes due 2020 at 1.75% Notes due 2021 at 2.75% Notes due 2022 at 1.85% Notes due 2023 at 2.25% Notes due 2024 at 2.625% Notes due 2017 at 0.875% Long-term debt outstanding is as follows: Notes due 2017 at 6.60% (assumed with National acquisition) 12. Commitments and contingencies

FORM 10-K 3 upeetlfnnilinformation financial Supplemental 13. Total equipment and Machinery improvements and Buildings Land cost at equipment and plant Property, Total net profits, Other inventory intercompany on taxes Prepaid expense. and income interest tax and losses, assets and current gains other currency and and expenses investment Prepaid income, lease information. and additional interest for includes 2 information. Other Note additional See for 2017-07. 1 ASU Note (c) of See adoption OI&E. the in Reflects recorded are royalties 2017, (b) 1, January of As (a) Total (b) (c) costs Other benefit retiree infringement other property and intellectual Pension to related settlements from Income (a) income Royalty (OI&E) net information. (expense), additional income for Other how 9 with Note consistent See purposes, segments. reporting its National segment of of for performance acquisition Other the the in measures from included management resulting are assets amounts intangible These of Corporation. amortization Semiconductor ongoing the represent charges Acquisition charges Acquisition condition, financial our on effect these adverse of material outcome a the have predict not to will liquidity. possible proceedings or not these operations is of of it results results Although the proceedings. that administrative believe and we legal matters, various to subject are We the to back product stated covered Our a products. General liquidity. of our or price of operations purchase price of the the claims, results credit exceed future condition, or may any financial replace consideration of our repair, claim amount on to Product or effect us buyer. likelihood adverse obligate the material products predict a semiconductor have cannot have for we we will warranties presented, Historically, Although they periods liability. claims. believe the product product not During or on do estimated. warranty payments we reasonably product of be regarding rate can payments low and or a accruals probable experienced is material loss no a been if have claims there product-related known for accrue We liabilities costs/product Warranty ...... n/a ...... 2-10 ...... 5-40 ...... EA NTUET 07FR 0K53 10-K FORM 2017 • INSTRUMENTS TEXAS ...... ie (Years) Lives Depreciable 119 $ $75 0721 2015 2016 2017 (61) — 17 4,789 $ 127 $ o er Ended Years For eebr31, December 072016 2017 1,030 $ 768 $ 2,467 2,195 072016 2017 eebr31, December —$— $— 5 (16) $ 155 $ eebr31, December 262 8 — 188 5)(48) (56) 332 23 4,923 $ 127 $ 910 $ 566 $ 2,753 2,043 344

FORM 10-K (1) 17 554 $— $ 554 $ (542) $ (526) December 31, December 31, 10 — 668 2017 2016 2017 2016 $ 635 $ 1,303 $ (394) $ (384) of Income Line 2016 Quarters Impact to Related Statement 80 80 79 80 (20) 1 2 2 2,137 2,284 2,0071,332 1,829 1,408 1,131 984 1,047 1,018 819 711 $ 3,414 $ 3,675 $ 3,273 $ 3,008 $ 1.04$ 1.02 $ 1.00 $ 0.98 $ 0.81 $ 0.79 $ 0.70 $ 0.69 2 — Increase to Provision for income taxes — (1) Decrease to Provision for income taxes (25) (25) Decrease to Provision for income taxes $ 1 $ 2 Increase to Interest and debt expense $ 76 $ 78$ 51 Decrease to OI&E $ 53$ (5) Decrease to Net income $ —$ (3) Increase to OI&E $ — Increase to Net income $ 1 $ 1 Decrease to Net income December 31, For Years Ended 1 — (27) 2017 2016 2015 $1 $83 $56 $ (6) $ (5) $1 ...... 2017 Quarters ...... 3134 79 80 79 80 344 1,285 1,056 997 4th 3rd 2nd 1st 4th 3rd 2nd 1st 2,440 2,656 2,3741,563 2,144 1,788 1,480 1,252 ...... $ 3,750 $ 4,116 $ 3,693 $ 3,402 $ 0.35$ 0.34 $ 1.29 $ 1.26 $ 1.05 $ 1.03 $ 0.99 $ 0.97 ...... Tax effect Recognized within Net income, net of taxes Tax effect Tax effect Recognized within Net income, net of taxes Amortization of treasury-rate locks Acquisition charges Restructuring charges/other Recognized within Net income, net of taxes Amortization of prior service cost (credit) (a) Recognized net actuarial loss and Settlement losses (a) . . Net actuarial loss Prior service credit 54 TEXAS INSTRUMENTS • 2017 FORM 10-K Gross profit Operating profit Revenue (a) Detailed in Note 10. As a result of ourpresentation. early adoption See Note of 2 ASU for 2017-07, additional we have information. recast Gross profit and Operating profit for 2016 to conform to the new Derivative instruments: Included in Operating profit: Net income Prior service credit of defined benefit plans: Net actuarial losses of defined benefit plans: Our Consolidated Statements of Comprehensiveand Income 2015. include The items table that below have details been where recognized these within transactions Net are income recorded in in 2017, our 2016 Consolidated Statements of Income. Details on amounts reclassified out of Accumulated other comprehensive income (loss), net of taxes, to Net income Total Postretirement benefit plans: Other Accumulated other comprehensive income (loss), net of taxes (AOCI) Cash flow hedge derivative instruments Basic EPS Diluted EPS Total Long-term portion of tax on indefinitely reinvested earnings Other long-term liabilities 14. Quarterly financial data (unaudited)

FORM 10-K eray2,2018 22, February 1952. since auditor Texas Company’s Dallas, the as served have We opinion. the our of for presentation basis overall reasonable the a the evaluating provide evaluating as audits included well our a also as that on audits management, believe examining, Our by We included statements. made statements. procedures financial estimates financial Such the significant risks. statements, in and those financial disclosures used to the and principles respond of amounts accounting that misstatement the procedures material regarding to of performing evidence due risks and basis, the whether the fraud, test perform misstatement, assess or and material to error plan of procedures to we free performing due are that included whether statements require audits standards financial Our Those the fraud. PCAOB. whether or the about error of assurance standards reasonable the obtain with to and accordance audit rules in applicable audits the our and conducted laws We required securities PCAOB. are federal the and U.S. and PCAOB the Commission the with Exchange with accordance and the registered in Securities on firm Company the opinion accounting the of an to public regulations express respect a to are with is We independent responsibility audits. be Our our to management. on Company’s based the statements of financial responsibility Company’s the are statements financial These thereon. opinion opinion for unqualified Basis an (2013 Internal expressed Commission in 2018 Treadway established 22, the criteria February of on dated Organizations based report States) 2017, Sponsoring our (United 31, of and Board December Committee framework) Oversight of the Accounting as by Company reporting issued Public financial Framework the over Control-Integrated of control principles. standards internal each accounting the Company’s for accepted with the flows generally accordance (PCAOB), cash U.S. in its with audited, and conformity have operations in also its 2017, We of 31, the results December as consolidated ended financial to the period referred consolidated and the (collectively the 2016, in respects, notes and years material related 2017 three all the 31, the in and December of fairly, 2017, at present 31, Company December statements the ended financial of and period the position equity the opinion, shareholders’ in our income, years In comprehensive three statements”). of income, the “financial as of of Company) statements each (the consolidated for Incorporated related flows Instruments the cash Texas 2016, of and sheets 2017 balance 31, consolidated December accompanying the audited have We statements financial the Incorporated on Instruments Opinion Texas of Directors of Board the and Shareholders the To firm accounting public registered independent of Report EA NTUET 07FR 0K55 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K Financial Disclosure. 56 TEXAS INSTRUMENTS • 2017 FORM 10-K TI’s independent registered public accountinginternal firm, control Ernst over & financial Young reporting, LLP, which has immediately issued follows an this audit report. report on the effectiveness of our TI management assessed the effectivenessassessment, of we internal used control the over criteria financialframework) set reporting (the forth as COSO by of criteria) the December in Committee 31,December Internal of 2017. 31, Control Sponsoring In 2017, – Organizations making our Integrated of this internal Framework. the control Based Treadway over on Commission financial our (2013 reporting assessment, is we effective believe based that, on as the of COSO criteria. All internal control systems, noAlso, matter projections how of well any designed, evaluation havebecause of inherent of effectiveness limitations changes to and in future may conditions, periods not or are prevent that subject or the to detect degree the misstatements. of risk compliance that with controls the may become policies inadequate or procedures may deteriorate. The management of TI iscontrol responsible system for was establishing designed and to maintainingand provide effective fair reasonable internal presentation assurance control of regarding over financial the financialprinciples. statements reliability reporting. There issued of TI’s has for financial internal been external reporting no purposes andunder change in the the in accordance preparation Securities our with Exchange internal generally Act control acceptedreasonably of over accounting likely 1934) financial to that reporting materially occurred (as affect, during defined our the in internal fourth Rule control quarter 13a-15(f) over of and financial 2017 15d-15(f) reporting. that has materially affected, or is Report by management on internal control over financial reporting Internal control over financial reporting An evaluation as of theTI’s end management, of including the its period chief coveredTI’s executive by disclosure officer this controls and report and chief was procedures financial carriedBased (as out officer, upon defined under of that in the the evaluation, Rules effectiveness supervision the 13a-15(e) of andprocedures and chief the with were 15d-15(e) executive design the effective. under officer and participation the and operation of Securities chief of Exchange financial Act officer of concluded 1934). that those disclosure controls and Disclosure controls and procedures ITEM 9A. Controls and Procedures. Not applicable. ITEM 9. Changes in and Disagreements With Accountants on Accounting and

FORM 10-K eray2,2018 22, February Texas Dallas, deteriorate. may procedures or inadequate policies become the may with controls compliance that of risk degree the the Also, to that misstatements. subject or detect are conditions, or periods in prevent future changes not to of may effectiveness because reporting of financial evaluation over any control of internal projections limitations, inherent its of company’s statements. Because the financial of provide the (3) disposition on and or effect use, company; material the acquisition, a of unauthorized have directors of could and detection that the management timely assets of of or expenditures of authorizations prevention and preparation with regarding receipts permit accordance assurance that to in reasonable of and necessary only dispositions principles, as made and accounting recorded being transactions accepted are are the transactions generally company reflect that with fairly assurance accordance and reasonable in accurately statements provide that detail, (2) financial procedures reasonable company; and in the policies that, of generally those records assets with includes of the accordance reporting maintenance in financial the purposes over to the external control pertain for regarding internal (1) statements assurance company’s financial reasonable A of provide principles. to preparation accounting the designed accepted process and a reporting is financial reporting of financial reliability over control internal company’s A reporting financial over control internal a of provides limitations audit and our Definition that believe risk, We assessed circumstances. the the on in opinion. based necessary our material control considered for a internal we basis that of as reasonable risk effectiveness procedures the operating other assessing and such reporting, design performing financial the and over evaluating control and internal testing of exists, understanding weakness an obtaining all included in audit maintained Our was perform and reporting plan financial we over that control require internal standards effective Those whether PCAOB. about respects. the assurance material of reasonable standards obtain the to with audit accordance the the in of audit regulations our with and conducted independent rules We be applicable to the required and are laws PCAOB. and securities the PCAOB federal and the U.S. Commission financial with the Exchange over registered with and control firm accordance Securities internal accounting in Company’s public Company internal the a the on on are to management opinion We respect by an audit. report express our accompanying to on assessment the is based its in responsibility reporting for included Our and reporting reporting. reporting financial financial financial over over over control control control internal internal of effective effectiveness maintaining the for of responsible is management Company’s The unqualified an expressed opinion 2018 for 22, Basis February dated in report years our three and the notes, of related related each the for the and thereon. 2016, flows 2017, opinion cash and 31, 2017 and December States) 31, equity ended (United December shareholders’ period Board of income, the Oversight as comprehensive Accounting Incorporated income, Company Instruments of Public Texas statements the of consolidated of sheets standards balance the consolidated criteria. with the COSO accordance (PCAOB), the in on audited, based have 2017, also 31, all We December in of maintained, as Company) reporting (the Treadway financial Incorporated the over Instruments of control Texas Organizations internal opinion, Sponsoring effective our of on respects, In Committee based material criteria). the 2017, COSO by 31, (the issued December framework) Framework of (2013 Integrated as Commission – reporting Control financial Internal over in control established internal criteria Incorporated’s Instruments Texas audited have We reporting financial over control internal Incorporated on Instruments Opinion Texas of Directors of Board reporting the financial and over Shareholders the control To internal on firm accounting public registered independent of Report EA NTUET 07FR 0K57 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K PART III Related Stockholder Matters. 58 TEXAS INSTRUMENTS • 2017 FORM 10-K ITEM 10. Directors, Executive Officers and Corporate Governance. Security ownership of certain beneficial owners and management The information that is containedof under directors the and captions management” “Security in ownershipreference our of to proxy certain such statement beneficial proxy for owners” statement. the and 2018 “Security annual ownership meeting of stockholders is incorporated herein by The information contained under themeeting caption of “Equity stockholders compensation is plan incorporated information” herein in by our reference proxy to statement such for proxy the statement. 2018 annual Equity compensation plan information ITEM 12. Security Ownership of Certain Beneficial Owners and Management and The information contained under thefor caption the “Compensation 2018 committee annual interlocks meeting and of insider stockholders participation” is in incorporated our herein proxy by statement reference to such proxy statement. The information contained under thefor captions the “Director 2018 compensation” annual and meeting “ExecutiveCompensation of compensation” Committee stockholders in report is our shall incorporated proxy not herein statement be by deemed reference filed to with such this proxy Form statement, 10-K. provided that the ITEM 11. Executive Compensation. The information contained under thecommittee caption financial “Committees expert of in the our board”to proxy with such statement respect proxy for to statement. the the 2018 audit annual committee meeting and of the stockholders audit is incorporated herein by reference Audit Committee We have adopted the Codeon of our Ethics website for at TI www.ti.com/corporategovernance. Chiefamendments We Executive to, intend Officer or to and waivers satisfy Senior from, the Finance the disclosure Officers. Code requirements A by of copy posting the of such SEC the information regarding Code on can the be same found website. Code of Ethics A list of our executive officers and their biographical information appears in Part I, Item 1 of this report. The information with respect tosame Section name 16(a) in beneficial our ownership proxy reportingproxy statement compliance statement. for contained the under 2018 the annual caption meeting of of the stockholders is incorporated herein by reference to such The information with respect toin directors’ our business proxy experience, statement which for is the contained 2018 under annual the meeting caption of “Diversity stockholders, and is qualifications” incorporated herein by reference to such proxy statement. The information with respect tothe directors’ caption names, “Election ages, of positions, directors” termreference in of to our office such proxy and proxy statement periods statement. for of the service, 2018 which annual is meeting contained of under stockholders, is incorporated herein by Not applicable. ITEM 9B. Other Information.

FORM 10-K fidpnetrgsee ulcacutn im norpoysaeetfrte21 nulmeigo tchlesis stockholders of meeting annual appointment 2018 statement. ratify the proxy to for such “Proposal statement to caption proxy reference the our by under in herein contained firm” incorporated services accounting and public fees registered accountant independent principal of to respect with information The Services. and Fees Accountant Principal 14. ITEM statement. proxy such to reference statement by proxy herein our incorporated in is independence” stockholders “Director of and meeting transactions” annual person 2018 “Related the captions for the under contained information The Director and Transactions, Related and Relationships Certain 13. ITEM Independence. EA NTUET 07FR 0K59 10-K FORM 2017 • INSTRUMENTS TEXAS

FORM 10-K Filed or Herewith Furnished Exhibit Number Incorporated by Reference File Number Date of Filing Form 10-K 001-3761 February 24, 201610-K 10(b) 001-3761 February 24,10-K 2012 001-3761 February 10(c) 24,10-K 2015 001-3761 February 10(e) 24,10-K 2015 001-3761 February 10(f) 24, 201510-K 001-3761 10(g) February 24,10-K 2012 001-3761 February 10(h) 24, 201210-K 001-3761 10(i) February 24,10-K 2015 001-3761 February 10(j) 23, 2017 10(k) 10-K 001-3761 February 24, 2015 3(a) PART IV TI Employees Non-Qualified Pension Plan II *Texas Instruments Long-Term Incentive Plan, adopted April 15, 1993 * 10-KTexas Instruments 2000 001-3761 Long-Term Incentive Plan as amended October February 16, 24, 2008 2016 * Texas Instruments 2003 Long-Term Incentive Plan as amended October 10(c) 16, 2008 Texas Instruments Executive Officer Performance Plan as amended September2009 17, * Texas Instruments Restricted Stock UnitDirectors, Plan as for amended, dated April 16, 1998 Texas Instruments Directors Deferred Compensation Plan, as amended, dated April 16, 1998 Texas Instruments 2003 Director Compensation Plan as amended January 19, 2012 Form of Non-Qualified Stock Optionfor Agreement Executive Officers under theInstruments Texas 2009 Long-Term Incentive Plan * By-Laws of the RegistrantIndentureOfficer’s CertificateOfficer’s CertificateOfficer’s CertificateOfficer’s CertificateOfficer’s Certificate 8-KOfficer’s Certificate 001-3761Officer’s December Certificate 12, 2016The Registrant has omitted certain 8-Kand instruments its defining subsidiaries 3 the pursuant rights to ofcopy Regulation holders 001-3761 of S-K, of 8-K such 8-K Item long-term instruments 601(b)(4)(iii)(A). debt to The of the Registrant the Securities undertakes Registrant TI and 001-3761 to Deferred 001-3761 Exchange 8-K furnish Compensation Commission a May Plan, upon 23, as request. 2011 amended *TI 001-3761 Employees 8-K Non-Qualified Pension May May Plan, 23,effective 8, 2011 January 2013 1, 001-3761 10-K 2009, March 8-K as 12, amended 2014 * 001-3761 4.3 001-3761 8-K May February 6, 24, 2015 2016 001-3761 4.2 8-K 4.2 4.2 May 6, 2016 001-3761 10(a) May 4, 2017 November 3, 2017 4.1 4.1 4.1 4.1 Restated Certificate of Incorporation ofRegistrant, the dated April 18, 1985, as amended of Exhibit Description of Exhibit 10(d) 10(c) 10(e) 10(f) 10(g) 10(h) 10(i) 10(j) 10(k) 4(a) 4(b) 4(c) 4(d) 4(e) 4(f) 4(g) 4(h) 4(i) 10(a) 10(b) 3(b) 3(a) Designation 60 TEXAS INSTRUMENTS • 2017 FORM 10-K ITEM 15. Exhibits, Financial Statement Schedules. The financial statements are listed in the index included in Item 8, “Financial Statements and Supplementary Data.”

FORM 10-K aaeetcmesto ln n arrangements and plans compensation Management * Designation 10(m) 10(l) 101.pre 101.lab 101.Def 101.cal 101.sch 101.ins 32(b) 32(a) 31(b) 31(a) 23 21 12 10(n) fEhbtDsrpino Exhibit of Description Exhibit of lna mne pi 1 06* 2016 21, April amended as Plan Incentive Long-Term 2009 Instruments Texas * Plan Incentive Long-Term 2009 Texas Instruments the under Officers Agreement Executive Award for Unit Stock Restricted of Form BLTxnm aesLnbs X X X X X X X Linkbase Presentation Taxonomy XBRL Linkbase Labels Taxonomy XBRL Document Definitions Taxonomy XBRL Linkbase Calculation Taxonomy XBRL Schema Taxonomy XBRL Document Instance Financial Officer Chief of Certification 1350 Section Executive Officer Chief of Certification 1350 Section Officer Financial Chief of Certification 13a-14(a)/15(d)-14(a) Rule Officer Executive Chief of Certification 13a-14(a)/15(d)-14(a) Rule Firm Accounting Public Registered Independent of Consent Registrant the of Subsidiaries of List Charges Fixed to Earnings of Ratio 2012 19, January amended as Plan Compensation Director 2009 Instruments Texas EA NTUET 07FR 0K61 10-K FORM 2017 • INSTRUMENTS TEXAS 0K0136 eray2,21 10(l) 2017 23, February 001-3761 10-K 0K0136 eray2,21 10(n) 2017 23, February 001-3761 10-K Form DEF 14A 0-71Mrh9 06Appendix 2016 9, March 001-3761 ubrDt fFiling of Date Number File noprtdb Reference by Incorporated Number Exhibit B Furnished Herewith ie or Filed X X X X X X

FORM 10-K results from demand that differs from projections; security risks; global trade policies;communications political and and information social technology instability; networks; health and conditions; fluctuations possible in disruptions foreign in currency transportation, exchange rates; or our suppliers operate; obtain needed third-party foundry and assembly/test subcontract services; manufacturing technology; of enforcement authorities, that restrictus our to ability fines, to penalties manufacture or or other ship legal our liability; products or operatemanufacturing, our services, business, design or or subject communications, or recalls by our customersare for determined a to product be containing earned onedeferred and of tax taxed, our assets; adverse parts; resolution of tax audits, increases in tariff rates, and the ability tosignificant realize number of distributors; inventory adjustments; levels to cover our fixedregulatory operating environment; costs, in an intensely competitive and cyclical industry andjurisdictions despite where changes we in conduct the business; or our exposure to infringementbusiness, claims; make strategic acquisitions, or make principal and interest payments on our debt; expectations regarding the amount and timing of restructuring charges and associated cost savings; and • Market demand• for semiconductors, particularly Our in ability our• to end compete markets; in Customer products demand and that prices differs in from an forecasts intensely and competitive• the industry; financial impact Economic, of social inadequate and or political excess conditions company in inventory the that countries in which we, our• customers or our Evolving suppliers cybersecurity operate,• threats including to our Natural information events technology such systems as or severe those weather, of geological our• events customers or or health suppliers; Our epidemics ability in• to the develop, locations manufacture in Timely and which implementation market we, of innovative our new products customers manufacturing in technologies a and rapidly• installation changing of technological manufacturing environment; Availability equipment, and and cost the of ability raw to materials, utilities,• manufacturing equipment, third-party Compliance manufacturing with services or and changes in the complex laws, rules and regulations to• which we are Product or liability may or become warranty subject, claims, or claims actions based• on epidemic or Changes delivery in failure, tax or law other and claims accounting relating standards to that our can products, impact the tax• rate applicable to A us, loss• the suffered jurisdictions by in one which Financial of profits difficulties our customers of or our distributors distributors with or respect their• to promotion TI-consigned of inventory; competing Losses product or lines curtailments to of our purchases detriment, from or key• the customers loss or of the a Our timing ability and to amount maintain of or distributor improve and profit other margins, customer including our ability to• utilize our manufacturing Our facilities ability at to sufficient maintain and enforce a• strong intellectual property Instability portfolio in and the maintain global freedom credit of and operation financial• in markets all that affects Increases our in ability• health to care fund and our Our pension daily ability benefit• operations, to costs; invest recruit in and the Our retain ability skilled to engineering, successfully management integrate and and technical realize personnel; • opportunities for growth Impairments from of acquisitions, our or non-financial our assets. ability to realize our 62 TEXAS INSTRUMENTS • 2017 FORM 10-K For a more detailed discussionstatements of included these in factors this see report theforward-looking are Risk statements made Factors to discussion only reflect in as subsequent of Item the events 1A of or date circumstances. this of report. this The report, forward-looking and we undertake no obligation to update the We urge you to carefullyexpectations consider of the TI following or important our factors management: that could cause actual results to differ materially from the This report includes forward-looking statementsSecurities intended Litigation to Reform qualify Act for of theits 1995. safe management These harbor “believes,” forward-looking from “expects,” statements liability “anticipates,” generally establishedimport. “foresees,” can by Similarly, “forecasts,” be the “estimates” statements identified Private or herein by other that phrasesforward-looking words describe such or statements. TI’s as phrases All business TI of such strategy, or similar forward-looking outlook,actual statements objectives, results are plans, to subject intentions differ to or materially certain goals from risks also those and are in uncertainties forward-looking that statements. could cause Notice regarding forward-looking statements

FORM 10-K nbhl fteRgsrn n ntecpcte niae so h 2ddyo eray2018. February persons of following day the 22nd by the below of as signed been indicated has capacities Report the this in 1934, and of Registrant Act the hereof. Exchange of attorneys-in-fact virtue Securities behalf said by the on to that done of fully all be requirements as confirming to the premises, and cause to the ratifying or Pursuant about hereby do and person, lawfully in in may done do substitute, be could or to or substitutes necessary might their and she or and requisite or agents, with power thing he and full therewith, and as alone, connection act purposes all acting in every and and each documents and intents any agents, other each all sign and and perform to attorneys-in-fact thereto, and 2017, said exhibits do connection 31, unto all to in December with granting authority capacities ended same, Commission, all year the Exchange of and the file and power any for to Securities full in Incorporated and the with stead, Instruments 10-K, agents, and Texas Form and place of the attorneys-in-fact name, 10-K to lawful her Form amendments and or on his true report and in her annual Lizardi, or and the R. his person with Rafael alone, such Templeton, for acting K. each resubstitution, Richard them, and of of substitution each any appoints or and Trochu, constitutes Hoff below Cynthia appears signature whose person Each 2018 22, February Date: this caused duly has authorized. Registrant duly the thereunto 1934, of undersigned, Act the Exchange by Securities behalf the its of on 15(d) signed or be 13 to Section Report of requirements the to Pursuant s ap .Bb,Jr. Babb, W. Ralph /s/ s odM Bluedorn M. Todd /s/ s ra .Crutcher T. Brian /s/ ap .Bb,Jr. Babb, W. Ralph odM Bluedorn M. Todd ra .Crutcher T. Brian s enM Hobby M. Jean /s/ s ailA Carp A. Daniel /s/ s ae .Clark F. Janet /s/ s akA Blinn A. Mark /s/ s areS Cox S. Carrie /s/ enM Hobby M. Jean ailA Carp A. Daniel ae .Clark F. Janet s oadKirk Ronald /s/ akA Blinn A. Mark areS Cox S. Carrie oadKirk Ronald Signature EA NTUET 07FR 0K63 10-K FORM 2017 • INSTRUMENTS TEXAS SIGNATURES y s aalR Lizardi R. Rafael /s/ By: INCORPORATED INSTRUMENTS TEXAS ietr xctv iePeietand President Vice Executive Director, n he conigOfficer Accounting Chief and he iaca Officer Financial Chief eirVc President, Vice Senior he prtn Officer Operating Chief aalR Lizardi R. Rafael Director Director Director Director Director Director Director Director Title

FORM 10-K Title Director Director Director Chief Executive Officer Chief Accounting Officer Director, Chairman of the Board, President and Senior Vice President, Chief Financial Officer and Signature Rafael R. Lizardi Pamela H. Patsley Wayne R. Sanders Robert E. Sanchez /s/ Rafael R. Lizardi /s/ Pamela H. Patsley /s/ Wayne R. Sanders /s/ Robert E. Sanchez Richard K. Templeton /s/ Richard K. Templeton 64 TEXAS INSTRUMENTS • 2017 FORM 10-K

FORM 10-K ac 3 2018 13, March Texas Dallas, toll-free the calling (2) website, internet the proxy. accessing enclosed (1) the by: mailing possible and meeting. as dating annual promptly signing, the as (3) at shares or vote your number to vote entitled to are you 2018, urge 26, We February on business of close the at record of Stockholders matters: following the upon act and our consider important on will for auditorium we requirements” the meeting “Attendance in the See 2018, At time). 26, meeting. (Central April annual a.m. Thursday, the 8:30 on at attending stockholders Texas, about of Dallas, information meeting Boulevard, annual TI 2018 12500 the at attend property to invited cordially are You Stockholder: Dear uhohrmtesa a rprycm eoetemeeting. the before firm come accounting properly public may registered as independent matters company’s other the such as LLP Young • & Ernst of Plan, appointment Compensation the Director of 2018 ratification Instruments Texas the • compensation, of executive approval company’s the year, of • next approval the advisory for directors of • election the • o 08 and 2018, for OIEO NULMEIGO STOCKHOLDERS OF MEETING ANNUAL OF NOTICE EA NTUET 08POYSAEET1 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS pi 6 2018 26, April eea Counsel General and Secretary President, Vice Senior Trochu Hoff Cynthia Sincerely,

PROXY STATEMENT .... 48 ..... 55 ...... 33 ...... 54 ...... 53 ...... 38 ...... 47 ...... A-1 ...... 35 ...... 30 ...... 43 ...... 53 ...... 30 ...... 32 ...... 50 ...... 45 ...... 43 ...... 48 ...... B-1 ...... 52 ...... 52 ...... 48 ...... 53 ...... 35 ...... 52 ...... 53 ...... 39 ...... 43 participation compliance our Form 10-K control Voting securities Security ownership of certain beneficialSecurity owners ownership of directors andRelated management person . transactions . .Compensation committee interlocks and insider 48 Cost of solicitation Stockholder proposals and nominations forBenefit 2019 plan voting . . .Section 16(a) beneficial ownership reporting 52 Telephone and internet voting Stockholders sharing the same address Electronic delivery of proxy materials and copies of Compensation Plan) Compensation Committee report Summary compensation table Grants of plan-based awards Outstanding equity awards at fiscalOption year-end exercises and stock vested Pension benefits Non-qualified deferred compensation Potential payments upon termination or change in Pay ratio registered public accounting firm Director Compensation Plan Equity compensation plan information Additional information Notice regarding forward-looking statements Directions and other annual meetingAppendix information A (Non-GAAP reconciliations) Appendix B (Texas Instruments 2018 Director Audit Committee report Proposal to ratify appointment of independent Proposal to approve the Texas Instruments 2018 ..... 21 ...... 19 TABLE OF CONTENTS ...... 18 ...... 29 ...... 17 ...... 6 ...... 7 ...... 28 ...... 10 ...... 11 ...... 27 ...... 6 ...... 10 ...... 14 ...... 5 ...... 7 ...... 14 ...... 11 ...... 27 ...... 29 ...... 20 ...... 10 ...... 10 ...... 18 ...... 19 ...... 17 ...... 15 ...... 27 ...... 7 ...... 5 ...... 11 ...... 29 ...... 3 ...... 28 executive compensation termination or change in control hedging of compensation Compensation philosophy and elements Comparator group Equity dilution Process for equity grants Analysis of compensation determinations Recoupment policy Most recent stockholder advisory vote on Benefits Compensation following employment Stock ownership guidelines and policy against Consideration of tax and accounting treatment company’s executive compensation Executive summary Detailed discussion Board leadership structure Nominees for directorship Director nomination process Stockholder nomination of directors Director nominees Diversity and qualifications Communications with the board Corporate governance Annual meeting attendance Committees of the board Risk oversight by the board Proposal regarding advisory approval of the Compensation Discussion and Analysis Board and committee meetings requirements Director candidate recommendations Director independence 2 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Board organization Executive compensation Voting procedures, quorum and attendance Election of directors Director compensation

PROXY STATEMENT hw eo sals ftemtest ecniee ttemeig(aho hc sdsusdesweei hsproxy this in elsewhere discussed be. is may which case of the (each as meeting approval, the or at election considered for be required to to vote permitted matters the not the and is of statement), broker list the a which is on below matter Shown any company to holds as instruction. are who instructions specific non-votes owner voting without broker beneficial with vote and a issued broker and Abstentions stock when the discretion exist. common occur provide its will TI non-votes not exercise quorum of Broker does a shares quorum. broker proxy, the a a by of establishing through or majority of stock person a purposes in least for present at present are If as vote meeting. counted to valid entitled a and hold time to outstanding any necessary and at is authorization stockholders shares your of the revoke quorum instructions, can A voting You give directors. not of meeting. instructions, do board the voting meeting, but the at internet the proxy by voted or to your recommended are come telephone return as shares not the and voted the do followed sign be before you or you will If proxy If proxy person. proxy. signed that in properly enclosed by being vote a the represented are can on returned proxy you have found related meeting, you be and and the if can you statement to only which represent proxy come voted to This you be proxy the meeting. If can the return annual 2018. shares in and of 13, your named sign notice March persons you the about the If in or 2018. authorize on mentioned 26, you purposes distributed April internet, the on the for stockholders on shares of or your meeting telephone vote annual by the vote for or proxy proxy, your enclosed requests directors of board TI’s requirements attendance and quorum procedures, Voting 75266-0199 TX DALLAS, 660199, BOX P.O. ADDRESS: 75243 MAILING TX DALLAS, BOULEVARD, TI 12500 OFFICES EXECUTIVE umte ttemeeting. the be at properly submitted may that matter other Any firm. accounting public registered independent of appointment ratify to Proposal Requ Plan. Compensation Director Instruments 2018 Texas the approve or to person Proposal in present votes of Majority compensation. officer executive named approve to vote Advisory directors. of Election Matter RX TTMN AC 3 2018 13, MARCH – STATEMENT PROXY EA NTUET 08POYSAEET3 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ypoya h etn utb cast proposal. be the must for meeting the at or proxy person by in present votes of Majority cast proposal. be the must for meeting the at or proxy person by in present votes of Majority cast proposal. be the must for meeting the at or proxy person by in present votes of Majority cast proposal. be the must for meeting the at or proxy person by in present votes of Majority that for nominee. cast be to must respect nominee with a election the to in entitled cast and be meeting the at proxy by i e oefrElect for Vote red i no prvlIpc fAbstent of Impact Approval or on aetesm feta votes against. as effect same the have non-votes broker and Abstentions non-votes.) broker no are there Accordingly, matter. this on instruction specific without vote and discretion their exercise to permitted are (Brokers against. as votes effect same the have Abstentions votes against. as effect same the have non-votes broker and Abstentions votes against. as effect same the have non-votes broker and Abstentions against. or for votes as counted not are non-votes Broker against. as votes effect same the have Abstentions i n rBoe Non-Votes Broker or ons

PROXY STATEMENT and following the instructions provided.voting You instruction will form. need You the must 16-digit request control your number advance included registration on form yourfree) by notice, at 11:59 proxy 1-844-318-0137 p.m. card or April or (international 25, toll 2018. call) at 1-925-331-6070 forpassport, assistance. with your advance registrationpresented. form. You may be denied entrance if the required identification and form are not • Advance registration forms can be printed by clicking on the “Register for• Meeting” button found If at you www.proxyvote.com are unable to print your• advance registration form, On please the call day Stockholder of Meeting the Registration meeting, Phone you Support will (toll be required to present valid government-issued photo ID, such as a driver’s license or 4 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Additionally, if you plan torecord attend to as you. proxy If for you astockholder plan stockholder of to of record attend record, (i.e., as you the proxy mustlegal bank, for present proxy broker a a from or street valid the other name legal street holder stockholder, proxy name of you from stockholder record) must the to to present stockholder you. the a of Stockholders valid street may name legal appoint stockholder proxy only that from one the is proxy assignable holder and to a attend valid on their behalf. Guest advance registration forms areto not facilitate available. their Exceptions own may attendance be granted (for example, to due stockholders to who a require physical a disability) companion by in contacting order Investor Relations. If you plan to attendto the gain annual access. meeting in person, you must print your own advance registration form and bring it to the meeting Attendance at the meeting isphoto limited ID to and stockholders an or advance their registration legal form. proxy holders. Each attendee must present a government-issued Attendance requirements

PROXY STATEMENT etn,teprosnmda rxe a oefrasbttt rtenme fdrcoswl erdcdaccordingly. reduced be will directors of the number before the serve a or as to substitute Directors serve unable a to becomes for qualifications nominee vote nominee’s any may each If proxies of qualifications.” as discussion nominee named a and persons For diversity the company. “Board meeting, the see of company, directors the are of directorship director for nominees the of All nominees. the of each FOR voted be directorship will for shares Nominees your marked, otherwise not is that PAMELA proxy KIRK, a RONALD return HOBBY, you M. If TODD JEAN BLINN, CRUTCHER, TEMPLETON. A. T. K. and MARK BRIAN RICHARD elected JR., COX, and are BABB, S. SANCHEZ successors W. CARRIE E. their RALPH CLARK, ROBERT until nominees: F. PATSLEY, and as JANET H. meeting persons CARP, annual following A. next the DANIEL the designated BLUEDORN, until has M. office directors hold of to board meeting The annual qualified. the at elected are Directors directors of Election Committee Compensation Member, 1997 since Director 69 Age A DANIEL Committee Audit Member, 2017 since Director 54 Age M TODD Committee Audit Chair, 2013 since Director 56 Age A MARK Committee Relations Stockholder and Governance Member, 2010 since Director 69 Age W RALPH . . BLUEDORN . BLINN . AB JR BABB, CARP EA NTUET 08POYSAEET5 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS . Committee Member 2015 since Director 63 Age F JANET Committee Audit Member, 2016 since Director 57 Age M JEAN 2017 since Director 45 Age T BRIAN Committee Relations Stockholder and Governance Member, 2004 since Director 60 Age S CARRIE . , . . HOBBY Audit . CRUTCHER CLARK COX eain Committee Relations Stockholder and Governance Member, 2013 since Director 63 Age KIRK RONALD n ietrsne2003 since director and 2008 since Chairman 59 Age K RICHARD Committee Compensation Chair, 2011 since Director 52 Age E ROBERT Committee Compensation Member, 2004 since Director 61 Age H PAMELA . . . SANCHEZ PATSLEY TEMPLETON

PROXY STATEMENT SANDERS . WAYNE R Age 70 Lead Director; Chair, Governance and Stockholder Relations Committee represent the interests of any particular group). boards of more than three other public companies. • Outstanding achievement• in the individual’s Relevant personal commercial career. • expertise. International operations• experience. Financial acumen. • Government experience. • Soundness of• judgment. Ability to• make independent, analytical Ability inquiries. to represent the total corporate interests• of TI (a Board director diversity will• (viewpoints, not gender, be ethnicity). selected Willingness to, and nor ability will to he devote or the she time be required expected to to, perform board activities adequately. Directors should not serve on the 6 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT The board is sensitive toregard, the the fact board that reviewed a Mr. director’sdetermined Bluedorn’s service that in outside they an directorships enhance executive at the role Lennoxbrings breadth at International, to and another Inc. the depth company and company can of Eaton a be experience Corporation,the unique time on plc, company combination consuming. the and has of In board. publicly specialized this Because disclosed knowledge of its and these intent experience directorships, to in Mr. focus the Bluedorn R&D industrial investments. market, He an also area brings in a which familiarity with the challenges posed by In evaluating prospective nominees, thedirector, GSR and Committee in will particular consider the thecompanies. board’s number policy of that other directors boards should on not which serve the on individual the serves boards as of more than three other public Outside board memberships In evaluating prospective nominees, the GSR Committee looks for the following minimum qualifications, qualities and skills: Criteria It is a long-standing policywho of wishes the to board recommend to a considerGSR prospective prospective Committee, board board Texas nominee nominees Instruments for recommended Incorporated, the byevaluate P.O. GSR stockholders. the Box Committee’s A stockholder’s 655936, consideration stockholder MS prospective can 8658, board write Dallas, nominee to TX in the 75265-5936. the Secretary The same of GSR manner the Committee as will it evaluates other nominees. Director candidate recommendations Director nomination process The board is responsible forstanding approving committee, nominees the for Governance election and asreviewing Stockholder directors. and Relations To recommending Committee assist nominees in (the to this GSRby the task, Committee), the board. the which rules The board is of GSR responsible has the Committee designated for adopted NASDAQ is a Stock a comprised Market written solely (NASDAQ) charter of and for independent the the directors board’s GSR as corporate Committee. defined governance It can guidelines. be Our found board on of our directors website has at www.ti.com/corporategovernance. Director not standing for re-election Mr. Sanders, a highly valuedby-laws director to since stand 1997, for has re-election attainedhave at the been the age duly 2018 of elected annual 70 as meeting. andmeeting new Subject is of lead to therefore stockholders. director their ineligible and re-election under new by the GSR stockholders, company’s chair, Mr. respectively, Blinn to and take Mr. effect Kirk immediately following the 2018 annual

PROXY STATEMENT oprto,adoehssre nhg oiia fie l fwihpoie diinlrlvn xeineo hc ahnominee each which on major other experience one relevant least additional at provides of which directors of of all judge board office, to the political ability on high draw. the serving in can developed in served has experience has and and have one personnel leaders nominees and performance, effective director corporation, financial to the the exposure of managing at had Ten and whether has qualities. career, direction Each leadership been her strategic organizations. has or the complex each his setting large, positions, in to of these success relating processes In of challenges organizations. level the governmental high in significant extremely involved or an directly enterprises achieved corporate has nominees multinational director dollar, our multi-billion of each industrial, below, into described world As the over markets. of all systems context semiconductors enterprise the of and in sale equipment arise and communications and issues manufacture electronics, acquisitions These the personal major decisions. involve automotive, risks; investment primarily its capital which of and operations, considers management (R&D) company’s it financial the development the issues company’s including and important the enterprise, research most positions; complex significant the executive large, and that senior a divestitures; mind for running in planning of kept succession challenges board direction; the the strategic performance; meeting, company’s annual the 2018 to the relate for typically nominees director considered it As and board at assessment occurs that Nominee meetings. decisions deliberation those composition respectful, for board yet agendas to robust, the approach and shaping which board’s insightful in to the the and pursuant of in meetings, policy, effectiveness participation committee bring retirement The directors’ directors mandatory 70. the newer a age by while has reaching evidenced years, company after is the the election over balance, for with faced this stand experience has maintain cannot a valuable it help directors Maintaining bring challenges To company. directors operational ideas. the Longer-serving and and at consideration. strategic perspectives service board’s the fresh backgrounds, board the with whose of of familiarity nominees standards part and not identify high is company does to the directors the board to judgment the The its contribute among members. uses will tenure its it whole, of among Rather, a balance experience mix. as and appropriate taken background the experiences, of determine and mix to attributes a formula prefers or board ratio the any above, follow criteria the by indicated As guidelines. governance corporate board’s the in qualifications stated as and range Diversity desired the the within by is election size for current standing its is believes who board stockholders effective The of board meeting the annual to 2018 elected the was at time. who first nominee Crutcher, director the Mr. for only including stockholders the company, is the He of 2017. directors 19, currently July are directorship for nominees All by-laws, the in forth nominees set Director requirements www.ti.com/corporategovernance. the at with the website comply including must our or stockholders on Committee so, found GSR do be the To can involving materials. which without proxy directors company’s nominate the the to in that stockholders nominee provided allow directors, also by-laws of company’s board by-laws. The the the of in materials percent specified company’s proxy 20 requirements the company’s or the of the individuals satisfy percent in two nominee(s) 3 include of the least and greater and at nominate the stockholder(s) owning may to stockholders, years, up 20 three constituting to least nominees up at director of for group continuously a stock or common stockholder, outstanding a by-laws, company’s the Under to directors commitment of his indicate nomination and company, Stockholder area, the Texas at Dallas, as two the well Also, in as duties. board. other Eaton, board the each and to on of Lennox time service roles miles both sufficient his his ten at devoting to with within record time familiarity located attendance his his are exemplary shareholders. of so TI) Bluedorn’s its balance respectively, and Mr. and 2010, the (Lennox company and devote directorships the 2007 to Bluedorn’s perform to since him Mr. to duties Eaton enables of required his and organizations time with Lennox those the interfere of at devote not boards responsibilities to will the and able Eaton on and and served willing Lennox has is with Bluedorn Bluedorn service Mr. Mr. his that that directors and the activities, among board industrial consensus the strong on a perspective is important There with board the provide that business, Technologies, (HVAC) United Carrier at and positions Elevator market. ma EA NTUET 08POYSAEET7 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT of Global Pharmaceuticals at Schering-PloughGlobal Corporation Prescription (2003-2009) Business and at executive Pharmacia vicemultinational Corporation president organizations (1997-2003), and has focused president gained on of first-hand medical-relatedperformance experience markets, and with in significant managing responsibility capital large, for and thoseCelgene R&D organizations’ Corporation investments. financial (2009-present). Is also a director of Cardinal Health, Inc. (2009-present) and a keen appreciation for audit- and financial control-related matters. and EOG Resources, Inc. (2014-present)Universal and Compression as Holdings, a Inc.) former director (2003-2011)operations and of of Dell Exterran other Inc. Holdings, large, (2011-2013), Inc. has multinational (and helped corporations, its oversee predecessor including the company, one strategy with and a focus on technology. hand experience in managing amanagement large, responsibility multinational for corporation the focused corporation’s on financial worldwide performance electronics and markets, its with significant ultimate director investments of in Liz capital Claiborne, and Inc. R&D. corporations (2006-2009), in has various helped industries, oversee including the some strategy that and are operations capital-intensive. of major multinational experience in managing a large,responsibility multinational for corporation the operating corporation’s in financial globaldirector performance industrial of and markets, Eaton its with Corporation significant ultimate plc investments management (2010-present). in capital and R&D. Is also a multinational corporation operating in globalorganization’s industrial financial markets, performance with and ultimate significant management capital responsibility and for R&D the investments. 2009), chief financial officer ofCentex FedEx Corporation Kinko’s (2000-2002), Office has and developed Printa a Services director keen Inc. of appreciation (2003-2004) Kraton and for Corporation vice audit- (2017-present). president and and financial controller control-related of matters. Is also has gained first-hand experience in managing large, complex institutions, asComerica well Bank as (1995-2002), insight controller into and financialauditor later markets. and chief later financial audit officer manager ofaudit at Mercantile knowledge the Bancorporation and accounting (1978-1995), experience firm and in of audit- Peat and Marwick financial Mitchell control-related & Co. matters. (1971-1978), has gained extensive • As chairman (2013-present), CEO and a director (2010-present) of Humacyte, Inc., executive vice president and president • As executive vice president (2007-2013) and chief• financial officer (2004-2013) As of a Marathon director Oil of Corporation, Goldman has Sachs developed Private Middle Market Credit LLC (2016-present), Goldman Sachs BDC, Inc. (2015-present) • As chairman and CEO (2000-2005) and president (1997-2001, 2002-2003) of Eastman Kodak• Company, has gained As first- a director of Delta Air Lines, Inc. (2007-present), a director of Norfolk Southern Corporation (2006-present) and a • As chairman (2012-present) and CEO and a director (2007-present) of Lennox International Inc., has gained first-hand • As CEO and a director of Flowserve Corporation (2009-2017), has gained first-hand• experience in managing As a Audit large, Committee chair at the company (April 21, 2017-present), chief financial officer of Flowserve Corporation (2004- • As chairman and CEO of Comerica Incorporated• and Comerica Bank As (2002-present) Audit and Committee through chair a at long the career company in (2013-April banking, 20, 2017), chief financial officer of Comerica Incorporated and 8 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Ms. Cox Ms. Clark Mr. Carp Mr. Bluedorn Mr. Blinn Mr. Babb In concluding that each nomineeand should on serve the as direct a personal director,deliberations knowledge, the as born board well of relied as previous on a service the willingness on specific to the experiences ask board, and challenging that attributes questions. each listed of below the nominees brings insight to board

PROXY STATEMENT r Templeton Mr. Sanchez Mr. Patsley Ms. Kirk Mr. Hobby Ms. Crutcher Mr. sa3-ervtrno h eiodco nuty evn h at2 er tasno ee ttecmay including company, the at level senior a at years 22 last the serving industry, semiconductor the of veteran 37-year a As • officer information chief and president vice senior as and (2007-2010) officer financial chief and president vice executive As • and Inc. System, Ryder of (2012) officer operating chief and (2012-2014) president (2013-present), CEO and chairman As • a and 2017-present) (January Inc. Vacations, Grand Hilton (2008-present), Inc. Group, Snapple Pepper Inc., Dr Group, of Snapple director Pepper a Dr As at committee audit • the of member a (2006-2013), company the at chair Committee Audit As • Inc., International, MoneyGram of (2009-2015) CEO and chairman and 2018) 2, (2016-February chairman executive As • Infrastructure Macquarie and (1997-2009), (2005- Company LLP Foods Elkins, Dean & (1997-2009), Vinson Inc. of International, partner Brinker a of as director and a (2013-present), As LLP Crutcher & • Dunn Gibson, of Counsel Of Senior As that organization complex • a managing in experience first-hand gained has (2009-2013), Representative Trade U.S. As • Inc. CA, and (2015-present), Inc.) Greatbatch, company, predecessor its (and Corporation Holdings Integer of director a officer As financial chief and • (2008-2013) leader sector telecom and media technology, (2013-2015), officer strategy global As • vice senior including company, the at level senior a at years seven last the serving years, 20 over for employee TI a As • scara ic 08 E ic 04addrco ic 03 a eeoe epkoldeo l set fthe of aspects all of knowledge deep a developed has industry. 2003, since semiconductor director the of and 2004 and since company CEO 2008, since chairman as on focused corporation and multinational issues large, control-related a financial of and logistics. functions audit- and technology-related for transportation all appreciation with keen experience a first-hand developed gained has Inc., System, Ryder of (2003-2005) financial organization’s in the experience investments. for first-hand capital responsibility gained significant with has and organization, (2010-2012), performance segment transportation-related business multinational, Solutions large, Management a Fleet managing Global its of president as major other of operations and strategy the oversee helped has (2005-2009), corporations. Company multinational before Brewing matters. years Coors control-related six Molson financial almost of and for director audit- Marwick for Peat KPMG appreciation at keen auditor a an developed and has (1987-1994) USA, Inc. First USA, joining First of officer financial chief and performance financial for responsibility of management application ultimate investments. the (1991- with capital including Inc. sector, significant organizations, Paymentech, services of multinational financial CEO large, the and managing in president in technology and experience (2000-2007) first-hand Corporation gained Data has First 2000), of president vice executive senior corporations. large other of operations and strategy the oversee helped has companies. (2016-present), multinational Corporation numerous to advisor an as experience first-hand gained trade has international 2009), activity, economic governments. global foreign on of bearing workings issues the into and insight strategies developed and and policies scale international an on operates corporations. multinational other of operations and strategy the oversee helped has 2018-present), 1, (February financial and audit- in experience and knowledge technology. audit and extensive matters gained control-related has LLP, PricewaterhouseCoopers at (2005-2008) into insight industry. keen semiconductor and the operations of semiconductor state complex future and large, and 2017-present) leading current 19, experience the (January has officer 2017-present), operating 19, chief (July (2014-present), director president vice executive (2010-2014), president EA NTUET 08POYSAEET9 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT or other executive officer, provided the interim employment did not(a) last compensation longer for than board one or year); than board one committee year service, as (b) an compensationunder interim received a chairman for tax-qualified of former retirement the service plan, board, lasting or chief no non-discretionary executive longer compensation); officer or other executive officer and (c) benefits by the company’s independent auditors and personally works on thein company’s or audit; a controlling shareholder,the an past executive three officer fiscal or years an(b) (a) employee extended made of loans payments an to, to organization or or thatan received received in amount payments loans the or from, from, current amounts the the year which, company company, orrecipient’s in for or any consolidated the property (c) of gross received aggregate or revenues charitable services, in for contributions sucharising that fiscal from solely year year, the from (for exceeded company, investments purposes the in in of greatercontribution the this of matching company’s standard, $200,000 securities programs); “payments” or and or excludes 2 payments payments percent under of non-discretionary the charitable determination, a partner in oror a any controlling of shareholder the or past anservices, three executive (b) fiscal officer extended years of loans (a) an to made organizationcompany, or payments that in received to, in an loans or the amount from received current or the payments year 2 amounts company, from, percent which, or the of (c) in company the received the for recipient’s charitable property aggregateexcludes consolidated contributions or in payments gross from such arising revenues the fiscal solely for year, from that exceededcharitable investments year the contribution in (for greater the matching purposes of company’s programs). of $200,000 securities this or and standard, payments “payments” under non-discretionary 1. He or she was employed2. by the company (except in He the or capacity she of received interim more chairman than of $120,000 the during board, any chief twelve-month executive period officer in compensation from the3. company (other than A family member of the director was employed as an executive officer by the company; 1.2. He or she is a current A family partner member of of or the is3. director employed is by (a) the a company’s current independent Within partner auditors; the of current the or company’s preceding independent three auditors fiscal or years (b) he currently or employed she was, and remains at the time of the determination, a partner 4. Within the current or preceding three fiscal years a family member of the director was, and remains at the time of the 10 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT B. In no event will a director be considered independent if, within the preceding three years: A. In no event will a director be considered independent if: The board has determined thatthis each determination, of information our was directors reviewed ismembers regarding independent and directors’ except their business for employers, and Mr. and charitable Templetonboard any affiliations, and has transactions directors’ Mr. adopted or immediate Crutcher. the arrangements family In following between connection standards the with for company determining and such independence. persons or entities. The Director independence It is a policy ofinteraction the between board to stockholders encourage and directors boardTI’s to members. annual attend In meeting 2017, each of all annual stockholders. directors meeting then of in stockholders. office Such and attendance standing allows for for re-election direct attended Annual meeting attendance The board has a long-standinggovernance commitment reviews to and responsible engage and in effectivecorporate investor corporate governance outreach governance. guidelines specific We (which to annually include governance conductcommittees, the and extensive TI’s director executive code independence compensation of standards), matters. conduct, The thewebsite our board’s charters at code of www.ti.com/corporategovernance. of each ethics Stockholders of for may theTexas our request board’s Instruments CEO copies Incorporated, and of P.O. senior these Box financial documents 660199, officers free MS and of 8657, our charge Dallas, by-laws by TX are writing 75266-0199, available to Attn: on Investor our Relations. Corporate governance Stockholders and others who wishthem to at: communicate P.O. with Box the 655936, board,board, MS a 8658, committee board Dallas, or committee TX individual or 75265-5936. director an All as individual communications applicable. director sent may to write this to address will be shared with the Communications with the board

PROXY STATEMENT ebr aebe r ln car,M.Budr,M.CakadM.Hby h ui omte sgnrlyrsosbefor: responsible generally committee is the Committee 2017, Audit 21, The April Hobby. Since Ms. 2017. and 1, Clark March (chair), Ms. committee Babb Bluedorn, the Mr. Mr. were joining (chair), the members Bluedorn Blinn and committee Mr. Mr. rules the with been NASDAQ 2017, Hobby, have under 20, Ms. members independent April and are to Clark Committee 2016, Ms. the 20, Audit Blinn, of July the Mr. 3(a)(58)(A) From of Section members guidelines. with All governance accordance amended. corporate in as board’s established 1934, committee of standing Act designated Exchange separately Securities a is Committee Audit The Committee Audit committee board relevant the and percent. of board 96 the approximately Committees of was the percent meetings of 86 committee committees least and The at board below. attended at described director attendance committees Each Overall standing 2017. combined. three in meetings has meetings board 18 The held meetings. collectively nine board held board the 2017, During meetings committee and Board organization Board under as meaning same the have will member” “family and “company” rules. determinations, NASDAQ independence these independent of of purposes exercise For director’s the with interfere would it whether of determination the relationship, other any For E. to relevant deems it that factors all consider will board the Committee, Compensation the on service to respect With D. from fee compensatory other or advisory consulting, any indirectly or directly accept may Committee Audit the of member No C. eiwn eoeisac Isnw eessrgrigana n nei iaca eut n icsigwith discussing and results financial interim and annual regarding releases news TI’s issuance before “Management’s Reviewing the and plans. statements audit • financial TI’s the Reviewing control. including quality SEC, to the related • to firm reports accounting quarterly public and registered annual independent TI’s firm. TI’s Reviewing accounting of public report registered annual • independent the TI’s Reviewing overseeing and retaining • compensating, Appointing, • ugeti arigothso e epniiiis n osqetywehrtedrco novdi needn,wl be section. will this independent, in is forth involved set director criteria the independence whether the consequently satisfy and who responsibilities, directors her by the or made of his subsidiary out a carrying of in affiliate judgment an or company the of subsidiary a company, the the by with paid affiliated fee is compensatory director or the advisory Whether consulting, any including director, to: the limited 2. of independent not compensation be but of to including source ability member, The director’s Committee that Compensation to a material of is duties that the 1. company with the connection director. to in a relationship management as a from capacity has her director or a his whether in determining except addition, company In the service). of continued person on affiliated way an not any be prior do in may for fees contingent Committee compensation) Compensatory not Audit deferred committee. is the (including board compensation of plan any such member retirement or that no a board (provided under the company compensation of the member of with a amounts service as fixed capacity of her receipt or the his include current in company’s than the other of company, any the which at entity time another any of at officer officers executive executive an current was company’s director the the of of any member which family at A auditors entity independent another company’s of the officer of executive 8. employee an or was partner she a or the longer) He on no worked is and (but auditors was independent director 7. company’s the the of of member employee family or A partner a longer) from no compensation is 6. in (but period was twelve-month she any or during He $120,000 than more received director 5. the of member family A 4. aaeetayrltderig udneta a epoie oaayt n aigagencies. rating and analysts to provided be may that guidance earnings related any management board. the to action appropriate recommending and reports, those of portion Analysis” and Discussion company. and director; the to company committee. compensation entity’s that on served years three past the during time any at or officers committee; executive compensation entity’s that on served years three past the during time; that within audit company’s the on worked and time; that within company); audit the company’s of employee officer non-executive a as compensation (excluding company the EA NTUET 08POYSAEET11 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT Reservation of company stock foremployee use benefit as awards plan. of grants under plans or as contributions or sales to any trustee of any Institution and termination of, revisionsofficers in of and the actions company under or employeeof disproportionately benefit the increase plans company, benefits that (ii) for (i) require officers increase or of benefits permit the only the company for issuance more of than the other company’s employees stock or (iii) require board approval. O plans that are not required to be approved by theother board. advisor. O including a discussion with therequirements. firm regarding the matters required to be reviewed under applicable legal or regulatory financial reports with management and with the independent registered public accounting firm. of interest policy. • Taking action as appropriate regarding the institution• and termination of, Appointing, revisions setting in the and compensation actions of, under overseeing employee and benefit considering the independence of any compensation consultant or • Reviewing the• performance of the Setting CEO the and• compensation determining of his the compensation. Overseeing company’s administration other• of executive employee officers. benefit Making plans. recommendations to the board regarding: • Discussing TI’s audited financial statements with management and the independent registered• public accounting firm, Reviewing relationships• between the independent Reviewing registered and public discussing accounting the firm adequacy and of TI. TI’s• internal accounting controls Creating and and other• periodically factors reviewing affecting TI’s the Reviewing whistleblower integrity TI’s policy. • of risk TI’s assessment and Reviewing risk TI’s management• compliance policies. and ethics Reviewing program. a report of compliance of management• and operating personnel Reviewing with TI’s TI’s• non-employee-related code insurance of programs. conduct, Reviewing including changes,• TI’s if conflict any, in Reviewing major trends accounting• in policies accounting of policy the Reviewing changes company. the that company’s are policy relevant regarding to investments the and company. financial derivative products. 12 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT In performing its functions, thethe committee authority is to supported retain by any thePartners advisors company’s as it Human its deems Resources compensation appropriate organization. consultant to Thedirectly for carry committee on the out has executive 2017 its compensation compensation responsibilities. philosophy, cycle. Thescope The strategies, committee of pay committee retained the levels, instructed Pearl committee’s decision-making the Meyer charter. processes consultant & organization Additionally, and to in the other advise its committee matters it support instructed within of the the compensation the consultant market, committee to and in assist compensation these the recommendations. matters company’s with Human such Resources items as peer-group assessment, analysis of the executive The Compensation Committee met sixits times activities in to 2017. the The board, Compensationthe and Committee committee. consults holds with regularly the scheduled board meetings, before reports setting annual executive compensation. See page 30 for a report of All members of the Compensationwere Committee Mr. are Sanchez independent. (chair), From Mr. AprilApril Carp, 21, 21, Ms. 2016, 2017, Patsley to the and April committee Christine 20,for: members Todd 2017, have Whitman the been (who committee Mr. retired members Sanchez from (Chair), the Mr. board Carp in and April Ms. 2017). Patsley. Since The committee is responsible Compensation Committee The Audit Committee met sixthe times board. in The 2017. committee The also Auditaudit continued Committee plan its holds and long-standing regularly to scheduled practice allow of meetingsof for meeting and the direct directly reports committee. interaction with its between activities our Audit to internal Committee audit members staff and to our discuss internal the auditors. See page 43 for a report The board has determined thatqualifications all in members its of business the judgment. Auditdefined In Committee in addition, are the financially the Securities board sophisticated, Exchange has as Act designated the of board Mr. 1934, Blinn has as interpreted as amended. the such audit committee financial expert as

PROXY STATEMENT r adr car,M.CxadM.Kr.SneArl2,21,tecmitemmeshv enM.Snes(hi) r Babb, Mr. (Chair), Sanders Mr. for: been responsible have were members generally members committee is committee the Committee the 2017, GSR 2017, 21, The 20, April Kirk. April Since Mr. to Kirk. and 2016, Mr. Cox 21, and Ms. April Cox From Ms. independent. (chair), are Sanders Committee Mr. GSR the of members All Committee Relations Stockholder activity all and reviews Governance to Committee authority Compensation no The has officers. committee executive company’s special TI’s the The for committee. under Templeton. compensation special (RSUs) Mr. of the units is form of stock committee any restricted special terminate the and the or board options of amend the stock member grant, by of sole established number The committee limited plans. special a incentive a grant long-term to things, delegated other has among Committee to, made Compensation authority be the may authority, delegation that such to no Pursuant established that board except officers. the employees executive of of company’s committees committees the more or of long-term or employees compensation TI’s one (ii) to to (i) or respect respect to purpose; with with plans that rights benefit for and employee authority authority and delegated power, plan or its purchase delegate stock may employee it plans, that incentive provides charter the Committee’s reviews Compensation and compensation. The of her preparation for regarding the than recommendations in other just makes assists committee year and Resources the the committee Human to during the for made performance with responsible recommendations own officers president compensation his executive vice interact of other senior and assessment the The year an of compensation. the board performance their the during the the of company and reviews members the committee also As of the He No officer. performance gives ended. compensation. executive the CEO his other concerning The on any information management. vote of receive our or compensation committee with to deliberations the the invited any or of regularly during compensation members are meeting own the officer, the her board, executive from or an excused his is is determines who CEO officer Resources, The executive Human committee. for the responsible of president meetings vice attend senior the their and on CEO have The would scenarios, other various executive under the termination of or benefits retirement, benefits. and their and in compensation that compensation determinations total impact annual the the the reviews considers to committee and market leading the officers of meetings compensation, review several executive the over setting involves levels Before that compensation January. process possible multistep and a data in performance compensation information, executive interest. considers of Committee conflict Compensation that no The compensation determined had on committee and policy the company a 2017, the has During of committee www.ti.com/corporategovernance. independent the on was belief, found consultant this be compensation of may its by support which compromised In of be management. copy not its a objectivity or consultants, consultant’s company compensation the its with that engagements important other it considers Committee Compensation The vreiga nuleauto ftebadadtecommittee. the and board the officers. of executive evaluation the annual than an other Overseeing company the of • officers Electing • Reviewing: • regarding: board the to recommendations Making • O O O O O O O O O O O O O O O eiin oT’ oeo conduct. of committee. code action TI’s political to company’s Revisions the Foundation. of TI activities the of and Scope company the of policies Contribution stockholders. by submitted proposals company. to the Responses affect stockholders. to and likely policy. company issues interest the Public of between conflict relationship TI’s the under company. affecting raised the Topics member of board officers a executive involving of interest Election of conflicts potential of Issues company. the by planning committees. Succession board of responsibilities and Organization members. directors. board as of election Compensation for designated be to committees. Nominees board positions. and board board fill the to of Candidates functioning principles. and governance composition corporate size, our The of revision and development The EA NTUET 08POYSAEET13 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT directors; • Preside at all meetings of the board• at which the Serve chairman as is• liaison not between present, the including Approve chairman executive information and sessions• sent the of to independent the the directors; independent Approve board; meeting• agendas for the Approve board; meeting• schedules to assure If that requested there by is major sufficient shareholders, time ensure for that discussion he of or all she agenda is items; available and for consultation and direct communication. 14 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT The Audit Committee oversees themanagement company’s process approach at to least risk annually management by as means a of whole. a It presentation reviews by the the company’s CFO. risk TI’s Audit Committee has oversightOversight responsibility responsibility for for financial compliance risk risk (suchcompliance is as with shared accounting, the by finance, company’s the internal code board controlscompliance of committees. and program conduct For tax itself; and example, strategy). the the finance- Compensation Audit andand Committee Committee accounting-related related oversees oversees laws laws compliance and and with policies, policies; the asthe and company’s well company’s the executive as corporate GSR compensation the governance Committee plans company’s guidelines. oversees compliance with governance-related laws and policies, including Management generally views the riskscompliance. TI The faces board as as falling a intoinitiatives, whole the competitive has following markets oversight categories: and responsibility strategic, products, for operational,with sales the financial the and company’s and board marketing, strategic during and and strategy R&D). operationalprovides reviews Throughout risks a that the (e.g., formal focus year major report on the on a CEO the particular discusses top business these strategic or risks and function. operational In risks. addition, at the end of the year, the CEO Risk oversight by the board It is management’s responsibility tomanagement assess in and this manage effort. the In variousretained exercising risks areas TI its of oversight, faces. focus It the for is board itself, the has as board’s allocated more responsibility some fully to areas described oversee of below. focus to its committees and has The board continues to believevarying that board there leadership is models no over uniformthe its solution two, history, for and at a now times board utilizing separating leadership the a structure. lead positions Indeed, director. of the chairman company and has CEO had and at times combining The board, led by itstwo GSR questions: Committee, would regularly stockholders reviews be theviews better board’s are leadership served informed and structure. by would The a the board’sgathered review board consideration from of be is face-to-face the more guided dialogue practices effective by of and withinteractions other review a would companies of different change and published structure. if insight guidelines. The its into The board’s the leadership the board board’s structure preferences also actions changed. of considers and The top how equal board’s stockholders, board accountability goal as roles to is and the for corporation each and director its to stockholders. have an equal stake in The lead director is electedlead by director the until independent April directors 26, annually.duties 2018, The of on independent the which directors lead date have director Mr. elected are Blinn Mr. to: will Sanders become to lead serve director as subject to his re-election by stockholders. The In addition, the lead director has authority to call meetings of the independent directors. Board leadership structure The board’s current leadership structureexecutive combines sessions the and positions performs of the chairman(such duties and as listed CEO, (a) below. and including The includes on board aproposed each believes lead strategic board that director agenda agenda this who for an structure, presides future opportunity combined at meeting), meetings for with allows and the its it (b) independent other to holding practices directors maintain an to the executive comment active session on engagement of and of the influence independent independent the directors directors and at appropriate each oversight board of management. The GSR Committee met sixthe times board. in 2017. See The “Director candidate GSRnominations Committee recommendations” and holds and recommendations regularly “Stockholder and scheduled nomination “Communications meetings of with and directors” the reports for board” its a for activities discussion details to of on stockholder how to contact the board.

PROXY STATEMENT qiaet r ado hs tc nt.Drcosmyas ee eteeto h etitdsokuiste receive. they units Dividend stock period. restricted deferral the the of after Stock settlement issued percent. defer be 3.44 also will was may which rate Directors stock, that units. common 2017, stock TI For accounts these of Bonds. Cash on shares Corporate account. paid underlying Aaa unit are the Seasoned stock board equivalents with Moody’s or the value on account leave in based cash they fluctuate currently a until accounts rate either compensation unit a to cash at credited their TI were of from amounts part interest deferred or earn These all times). defer specified to other events. chosen certain have designated (or directors other some and Plan, meetings Director these the In from Under events. related and designated and to other lodging aircraft and travel, company meetings their on stockholders for travel directors and may committee non-employee directors reimburse board, non-employee we attending addition, but with attendance, connection meeting in for incurred fee expenses of a timing paid the not regarding are discussion Directors a for equity grants” such equity Accordingly, for process. “Process when review See occur compensation January. grants. to annual in compensation timed the made equity be with are will connection directors directors in non-employee non-employee employees to to U.S. grants compensation our equity to of made grants are annual grants that determined has board The directors. were: non-employee directors of non-employee compensation the the for on 2017 board, in the arrangements recommendations of compensation the member The review a Secretary as the votes, and also Resources Resources CEO Human Human The TI’s for committee. by responsible the its supported president to delegate is vice made to it senior authority responsibility, the no this CEO, has out The for committee carrying organization. compensation The In on determination. compensation. board final director the the regarding to making responsibility recommendations board making the and with reviewing directors, for non-employee responsibility has Committee GSR The compensation Director and thorough a for providing it board, which the in with industry insights the those company, shares the faces about strategic it review knowledgeable challenges process. most CEO other efficient director and and various the chairman competition Allocating that the the directors. ensures Having and independent board engagement. operates the the similar the engaging for with above, fully risks provides discussed in committees operational As effective the and oversight. are among risk practices oversight in and risk roles structure of committees’ current aspects and its board that the found with has consistent board is structure leadership board’s The n-iegato ,0 etitdsokuisuo ietrsiiileeto oteboard. the to election initial director’s a upon units stock chairman. restricted the 2,000 by of designated grant activities one-time other A for compensation day • per $1,000 • the to (subject $100,000 of value date grant a with Plan Director the to pursuant units stock restricted of grant Annual • 2009 Instruments Texas the of terms the to pursuant stock the common of TI chair purchase as to service option for 10-year $20,000 a Committee; of Audit grant the Annual of chair as • service director. for lead $30,000 of the as retainer service annual for Additional $25,000 service. of committee retainer • and annual board Additional for $85,000 of • retainer Annual • ahrsrce tc nt iiedeuvlnsaepi ntersrce tc nt ttesm aea iied nTI on dividends as rate same for stock the equivalents. common at dividend TI units of of stock receipt share restricted defer one the may receive on director the will paid The of director are stock. settlement the equivalents common defer settlement, Dividend death, may Upon unit. to director election. stock due The her restricted was by-laws. or each fourth if company’s termination his the date the director’s at on anniversary under the units board such or re-election stock the on for termination restricted of issue) stand to member will to prior a shares service ineligibility not the of or grant is (i.e., years disability of director settle eight date a nonetheless completed their If will has of Plan. units director anniversary Director stock the fourth the restricted the in grant, on defined the vest as of units control anniversary stock in restricted change The a downward). upon date termination. grant and the of the after date adjust days the to 30 on ability for exercisable board’s exercisable were service be options director’s shall such a director extent If the the terms. by to their outstanding held only with all options but stand accordance then outstanding termination, to service, in all of ineligibility of exercisable reason, or years become other disability eight to any death, completed continue for in to has shall terminates change due director director a terminates the the following service after by service director’s or held of a by-laws, options termination If company’s of TI. the event of under the Plan) re-election in Director for first exercisable the the fully in on become defined beginning will (as installments grant also control the annual and adjust equal grant is to four the value ability in of date board’s exercisable anniversary grant the become The to options 2009. (subject non-qualified April model These in option-pricing downward). stockholders Black-Scholes by a approved using was determined which $100,000, Plan), (Director Plan Committee. Compensation GSR Director the of chair as service for $15,000 and Committee; Compensation EA NTUET 08POYSAEET15 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT ts i cted i on 7,271 5,150 3,261 7,271 9,271 2,000 9,271 i 16,871 20,100 34,960 28,296 18,296 n Shares) i Restr ( Stock Un ($) (6) Total ($) All Other Compensat on i ed n i i f i on i ngs (5) i Pens Deferred Value and Change Earn Nonqual Compensat on i ty i ve Plan i ($) Non-Equ Incent Compensat on i ($) (4) Opt Awards Stock ($) (3) Awards n i d i 95,000 $ 99,94785,000 $99,98885,000 $ 99,94785,000 $ 99,94785,000 — $99,988 $ 99,94785,000 $99,988 $ 99,94785,000 $99,988 $ 99,947 — $99,988 $ 99,947 — $99,988 — $99,988 — — — $ — — $ 5,520 — 40 $ — $ $ 294,975 $20,040 893 — 40 — $ $ $ 304,975 285,828 $ $ 290,495 40 $ 40 $ 40 284,975 $ 284,975 $ 284,975 70,833 $ 156,300 — —28,335 $ 99,947 $99,988 — — $ 40 $ 227,173 — $ 40 $ 228,310 105,000 $ 99,947 $99,988 —113,333116,667 $ 99,947 $ 99,947 $99,988 — $99,988 $ — — 40 $ 304,975 — — $10,040 $ $ 893 323,308 $ 317,495 or Pa Cash ($) (2) Fees Earned ...... $ ...... $ ...... $ $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ W. R. Sanders C. T. Whitman J. F. Clark C.S.Cox...... J. M. Hobby R. Kirk P. H. Patsley R. E. Sanchez D. A. Carp M. A. Blinn T. M. Bluedorn Name R. W. Babb, Jr...... $ by the date of thethe 2017 meeting. annual meeting and therefore was ineligible under the company’s by-laws to stand for re-election at Accounting Standards Board Accounting StandardsThe Codification™ discussion Topic of 718, the Compensation-Stock assumptions Compensationstatements used (ASC contained for 718). in purposes Item of 8 calculatingDecember (“Note the 31, 4 grant 2017. to date Each the fair restricted financial valuestock stock statements”) appears units unit in in granted represents TI’s Note prior the annual 4 to right report toearlier 2007, to on the of shares receive Form financial termination are one 10-K of issued share for service at of theregarding from the TI year share the time common ended issuances board of stock. under after mandatory For restricted completing retirement restricted below stock eight from shows units the years the granted of board aggregate after service (age number 2006, or 70)of of see death or December shares the or upon 31, underlying discussion disability. the 2017. outstanding on For The pages restricted information upon value 34-35. stock his shown The units initial for table held election Mr. by Bluedorn to the the represents named the board. individuals one-time as restricted stock unit grant he received 16 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Name (1) R. W. Babb, Jr. The following table shows theservices compensation in of all all capacities persons to who TI were in non-employee 2017. members of the board during 2017 for M. A. Blinn J. F...... Clark C.S.Cox $ J. M. Hobby R. Kirk P. H. Patsley R. E. Sanchez 2017 director compensation Non-employee directors are not eligible to participate in any TI-sponsored pension plan. T. M. Bluedorn W. R. Sanders C. T. Whitman We have arrangements with certaincomponents customers at whereby discounted our pricing. employees In mayboth purchase addition, cases, consumer the directors products TI are containing Foundation entitled TI has to an participate educational on and the cultural same matching terms gift and program. conditions In available to employees. D. A. Carp (1) Mr. Bluedorn was elected to the board effective March 1, 2017. Ms. Whitman,(2) an independent director, reached the Includes age amounts of deferred 70 (3) at the director’s election. Shown is the aggregate grant date fair value of restricted stock units granted in 2017 calculated in accordance with Financial

PROXY STATEMENT 6 ossso a h nulcs $0prdrco)o rmusfrtae n cietisrneplce,()contributions (b) policies, insurance accident and travel for premiums of director) per ($40 cost annual the (a) of Consists (6) specified a exceeds rate interest the that extent the to compensation deferred on earnings of disclosure the require rules SEC (5) opnainrcie ytenmdeeuieofcr scmesrt ihtepromneadsrtgcpsto of the position that strategic and and shareholders performance our the of with interests commensurate the is named serve officers company. the programs executive the to and named relating policies the decisions the by follows. compensation that received which the believe compensation statement, explains We proxy and 2017. the programs for of and officers section policies executive Analysis compensation and executive Discussion our Compensation discusses the It review to shareholders encourage We 30-42. pages resolution: on following 2017 tables the during compensation approve officer the to financial in shareholders chief named ask the as We as officers, served executive who compensated person highly each most officer, other executive three chief the the and are officers” compensation executive “named executive The company’s the of approval by advisory required regarding as Proposal compensation officer executive named Act. on Exchange votes Securities advisory the cast of to 14A opportunity Section the shareholders providing are We compensation Executive The 718. ASC with accordance in calculated 2017 in granted options of value fair date grant aggregate the is Shown (4) oec fMsr.Cr n adr o hi atcpto nti rga a $853. was attributable program cost this The in the participate. participation included who their have directors for we the Sanders rules, of and SEC Compensation Carp with Other Messrs. benefit accordance All of financial In in each no company. program to the receive the the by Directors to under recommended death. belong costs institutions director’s deductions annual the educational charitable company’s which three following all under as made and program many are program, donation as contributions the to charitable The from a director us. Program, eligible by Award per approved Director $500,000 and Messrs. commenced the of director for service in total (c) whose participate a and director to contribute Sanchez Each eligible will Mr. Program. is we for Award 2002, $10,000 Director 20, and the June Clark for to Ms. fees prior for administration $20,000 third-party of Sanders, program and gift Carp matching Foundation interest Rate. TI of Federal the amount the under the of is excess Shown in Corporate points. was Aaa percentage that Seasoned 1.18 accounts Moody’s by compensation on Rate deferred terms based Federal directors’ the rate the the Under a exceeded on compounding. at rate earned with interest interest rate earn this interest amounts 2017, long-term cash For federal compensation Bonds. applicable deferred the Plan, of Director percent the 120 of is which Rate), (Federal rate icsinadAayi,cmesto alsadnraiedsuso npgs1-2o hspoysaeet shereby is statement, proxy this of 18-42 pages on Compensation discussion the statement narrative proxy including and approved. this rules, tables in disclosure compensation disclosed compensation Analysis, as Commission’s and officers, Exchange Discussion executive and named Securities company’s the the to to pursuant paid compensation the that RESOLVED, I h al eo hw h grgt ubro hrsudryn usadn tc pin edb h ae individuals named of the control by in held change options set a stock as upon outstanding are exercisable underlying options fully shares 2017. these becomes of 31, of grant number December terms the aggregate of financial The 2010, the as the 2017. before shows to 31, granted below 4 December options table Note ended for The in year that TI. appears the except value for 34 fair 10-K page date Form on grant on forth the report calculating annual of TI’s purposes in for statements used assumptions the of discussion .T Whitman T. C. Sanders R. W. Sanchez E. R. .H Patsley H. P. Kirk R. Hobby M. J. C.S.Cox ...... Clark F. J. .A Carp A. D. Bluedorn M. T. Blinn A. M. Jr. Babb, W. R. Name ...... — ...... EA NTUET 08POYSAEET17 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ( i Shares) n Opt 89,800 38,893 38,893 89,800 38,893 82,800 16,055 53,642 21,903 53,642 6,065 i ons

PROXY STATEMENT * on for i ves to i ed to the al and i i st i nanc i cer i ve off able cash i i ty of total compensat Var i . or j on i The ma . 5% change cers accountable for the f ver rewards that encourage execut i i ng the named execut ty compensat i i ed to the long-term performance of the i ve off i st i ty i on approv i 2017 Absolute Performance 2017 Relative Performance . able cash and equ i nterests of our shareholders i : on program holds our execut i s proxy statement i n the form of var i f Revenue (PFO %) 40.7% Above median nth i . s structured to pay for performance and del i ons for the CEO i s i sclosed i Year-on-Year Change in CEO Bonus (2017 bonus compared with 2016) eve our compensat on dec i i on program i n both the short- and long-term i ves each year comes i We bel ve performance of TI . i rectors recommends a vote FOR the annual resolut t i i on for 2017, as d i Executive officers do not haveawards employment of contracts equity and compensation. are notWe guaranteed have salary never increases, repriced bonus stock amountstrigger options. or change-in-control We do terms, which not accelerate grantinvoluntarily the reload within vesting options. a of We limited grants grant time only equity after if compensation a the with change grantee double- in has control been of terminated the company. certain competitors’ financial results. Seeperformance” “Analysis for of details compensation of determinations the –the Compensation Bonus median Committee’s – growth assessment Assessment rate of of of TI’s 2017 organic.) competitor performance. companies (It includes is important the to effect note of that acquisitions, whereas TI’s growth rate is entirely Base salary was increased byThe 2.1 grant percent date over 2016. fair valueeffort of to equity align compensation with awarded the inThe projected 2017 bonus market increased decision range by was for 12 based similarly percent primarily situated from on CEOs 2016, the in reflecting following our an performance comparator results group. in 2017: Total Shareholder Return (TSR) 46.8% Above median Revenue Growth: Total TIProfit from Operations as a % o 11.9% Median nk and act s compensat i ’ th our execut short-term performance of the company, and the value of equ company compet O O * Relative to semiconductor competitors as outlined under “Comparator group;” includes estimates and projections of interests of the company andfoundation shareholders, of and sound not corporate to governance promote and excessive risk-taking includes: by our executives. It is built on a O O O • 2017 compensat • Our executive compensation program is designed to encourage executive officers to pursue strategies that serve the •TI • The elements• of the 2017 How compensation we program, determined why the we amount selected of them compensation and for how 2017. they relate to one another; and 18 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Executive summary This section describes TI’s compensation program for executive officers. It will provide insight into the following: The executive officers of TIaccountable have for the the broadest company’s job performance responsibilitiesboth and and individuals for policy-making who maintaining authority served a in as culture the(collectively CFO of company. called during strong We the 2017 ethics. hold “named and Details them executive the of officers”) three compensation can other for be highest our found paid CEO, in individuals the who tables were following executive the officers Compensation in Committee 2017 report. Compensation Discussion and Analysis The board of d Although the outcome of thiswill annual consider vote it is when not setting binding future on compensation the for company the or executive the officers. board, the Compensation Committee of the board compensat

PROXY STATEMENT em aal nasnl ahpyetsotyatrteedo h efrac year performance the of end the after shortly payment cash single a in Payable behavior. affect will that Terms level a at and goal, company a on employees focuses that formula a to according Pay and profitability company’s the to contributes employee each that emphasize to designed program Strategy Broad-based monthly twice Paid Purpose retain and attract to tenure, and scope Prof job to consideration appropriate giving income median, of market source target Terms stable Generally, a provide to designed compensation, of form variable least Basic, Strategy Purpose Salary Base cash in paid compensation, follows: Near-term as are program compensation meetings. executive board our at of actions elements setting committee primary before on The The Partners, reports officers. & regularly executive Meyer chair TI Pearl committee all consultant, The of compensation executives. compensation its the the and for setting directors compensation for independent annual responsible other is the directors with of consults board committee TI’s of Committee Compensation The elements and philosophy Compensation discussion Detailed i Shar t O O O O i ng eso eeisaecluae nslr n ou ny h rcesere neut rohrpromneawards performance other or equity on earned calculation. deferred. proceeds pension been the the has only; of that bonus part compensation and not on salary are returns on above-market calculated perquisites.provide are or for benefits gross-ups return Pension below. tax a policy” no guarantee “Recoupment provide not under We do described perquisites. We as excessive clawback provide to not subject do are We awards compensation equity and Bonus n21,T eiee agno 07.A eut l lgbeepoes nldn xctv fies received officers, executive including employees, eligible salary. all base result, of a 20% As of 40.7%. sharing of profit Margin delivered TI 2017, In was: 2017 for formula the years, recent in As formula. the under earned amounts adjust formula to The not margin. been profit has operating practice annual committee’s company-level The on board. based TI been the has by formula set the was years, year. 13 the last for the awarded For bonus performance any to addition in paid is sharing Profit it in share can executives qualified highly tMri bv 0:poi hrn nrae y05 fbs aayfrec ecnaepito Margin of point percentage each for salary base of 0.5% by increases sharing salary profit base 10%: of above 2% Margin = At sharing profit no Margin: • (“Margin”): 10% revenue At of percentage a • as profit operating annual company-level 10% Below • ewe 0 n 4,ad1 fbs aayfrec ecnaepito agnaoe2% The 24%. above Margin of point salary. percentage base each of for 20% salary is base sharing of profit 1% maximum and 24%, and 10% between sharing profit EA NTUET 08POYSAEET19 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT ) as compared with competitors and on 1 Honeywell International Inc. Intel Corporation Medtronic Public Limited Company Motorola Solutions, Inc. QUALCOMM Incorporated TE Connectivity Ltd. Thermo Fisher Scientific Inc. Western Digital Corporation ts i cted Stock Un i median level of equity compensation awarded to executives in similar positions within the Comparator Group. awards at fiscal year-end 2017.”grants.” The committee’s grant procedures are described under “Process for equity our strategic progress in keyterm markets financial and performance with as customers. well These as factors our have progress been in chosen building toThe long-term reflect committee shareholder our aims near- value. to paymedian total if cash company compensation performance (base is salary,below above profit the that sharing median of and if competitors, bonus) company and appropriately performance pay above is total below cash competitors. compensation appropriately The committee does not relybased on on formulas its or assessment performance of targets the or factors thresholds. described Instead, above. it uses its judgment executive’s individual performance (revenue growth percent, operating margin and total shareholder return ons and Restr i * formerly Computer Sciences Corporation 3M Company Accenture PLC Analog Devices, Inc. Applied Materials, Inc. Broadcom Limited Cisco Systems, Inc. Corning Incorporated DXC Technology Company * Emerson Electric Co. relevant time period, as determinednotes by to dividends the paid Performance and summary the table change under in “Analysis the of company’s compensation share determinations price – during Bonus.” the period. See 20 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT 1 Total shareholder return refers to the percentage change in the value of a shareholder’s investment in a company over the Shown in the table below is the Comparator Group used for the compensation decisions for 2017. Strategy We grant a combination of non-qualified stock options and restricted stock units, generally targeted at the The committee sets the Comparatorbased, Group (2) and engage reviews in it the annually.manufacturing semiconductor In processes, business, general, (3) other the have electronics Comparator executive or Groupcompensation positions information companies comparable comparable technology (1) to in activities are TI’s. complexity or U.S.- to use those sophisticated of TI and (4) use forms of executive Purpose Alignment with shareholders; long-term focus; retention, particularly with respect to restrictedTerms stock units The terms andComparator conditions group of stock options and restricted stockThe units Compensation are Committee summarized considers under the “Outstandingcompensation market equity of level the of executive compensation officers. whencompensation To setting consultant estimate the and the salary, TI’s market bonuses Compensation level andpositions and of equity at pay, Benefits a the organization peer committee about group uses compensation of information paid companies provided to (the by executives “Comparator its in Group”). similar Long-term compensation, awarded in equity Stock Opt Terms Determined by the committee and paid in a single payment after the performance year Purpose ToStrategy motivate executives and reward them according to the company’s relative and absolute performance and Determined the primarily on the basis of one-year and three-year company performance on certain measures Performance Bonus

PROXY STATEMENT opnnso r iad’ opnainwr eiwdwt h opnaincmitebtwr e ymngmn and, process. management committee’s by the set of these were analysis 2017, but following January committee the he in compensation in Because made the included 2017. were with not 1, determinations reviewed are February compensation were therefore, effective equity compensation officer and Lizardi’s executive salary Mr. an base of became when components officer, officer financial executive chief an current not our was compensation is of who level Lizardi, the Rafael that Mr. total determined the committee whether the assessing review, in this or judgment on compensation its Based total used program. of it the appropriate. level Instead, of was earnings specific elements. objectives total a various the the target the with on not among consistent have did compensation was would committee allocate decisions the to to its information, formula committee impact the a the what assessing use enabled and In review another executives. The one the a scenarios. to of and termination relate opportunity pension, various elements as under compensation equity such receive various of elements would how value compensation executives see fair other the date on that grant have benefits the would of The bonus), compensation summary compensation. projected proposed of and that elements sharing impact all profit the reviewed (salary, compensation, committee compensation the cash officers, total executive included the information of compensation the finalizing Before compensation 2018. Total 3, January on Reuters determinations Thomson compensation by of reported Analysis as is capitalization market and revenue four-quarter Trailing * Incorporated Instruments Texas Median Inc. Devices, Analog Inc. Solutions, Motorola Incorporated Corning Ltd. Connectivity TE Inc. Materials, Applied Co. Electric Emerson Company Technology DXC Limited Broadcom Corporation Digital Western Inc. Scientific Fisher Thermo Corporation QUALCOMM Company Limited Public Medtronic Company 3M PLC Accenture Inc. International Honeywell Inc. Systems, Cisco Corporation Intel revenue of terms in TI Company to used Group it Comparator as the performance compares 2017 below to table relating The 2018 2017. group. January January capitalization. the in in market to decisions compensation and change market bonus equity no and the and make revenue for salary to industry, Group set decided of Comparator to committee terms same the in the Group consultant, used Comparator compensation it the its Accordingly, of of review advice regular the its With please conducted capitalization. 2016, committee July the in 2017, Group statement. July Comparator proxy In in the 2017 made setting company’s it in the decisions committee of compensation the 21-22 equity by pages and considered on salary factors group” base the “Comparator the of see for discussion 2016 a July For in 2017. Group January Comparator the set committee The ...... 5.1 ...... 6.3 ...... EA NTUET 08POYSAEET21 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS $B ($ Revenue 46104.0 14.6 28.3 56.0 45.4 10.0 14.5 24.0 15.3 77.0 96.1 19.6 111.3 19.8 94.6 22.3 29.6 116.3 35.9 219.3 39.7 62.1 9785.8 19.7 33.5 27.1 13.1 108.9 15.9 17.6 140.3 31.0 192.1 47.8 i ll i n * on) aktCap Market $B ($ 33.3 14.7 i ll i n * on)

PROXY STATEMENT ts i cted i Restr (In Shares) Stock Un Change from 2016 Annual Rate ons i (In Shares) Stock Opt 682,000875,000704,000700,000 2.1% 6.1% 2.0% 2.2% 1,190,000 2.1% 2017 Annual Rate r Value * i Grant Date Fa Year 20172016 $ 11,000,0142015 $ 9,800,055 333,615 $ 9,800,0232017 489,5572016 $ 69,392 516,440 2,700,0482015 $ 92,576 2,700,035 $ 90,842 2,700,0172017 81,888 134,8782016 $ 142,285 7,500,0342015 17,033 $ 25,506 5,500,031 $ 227,465 25,028 5,500,0292017 274,7512016 $ 289,839 47,313 4,000,0562015 $ 51,956 4,000,014 $ 121,315 50,983 4,000,0452017 199,819 $ 210,792 25,234 3,600,090 37,786 109,184 37,079 22,711 percentile of the three-year average of equity compensation (including an th to 60 th ...... $ ...... $ ...... $ ...... $ $ cer cer i i 22 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT In assessing the market level,(prepared the using committee data considered provided information by presentedgranted the by to committee’s TI’s similarly compensation Compensation situated consultant) and executives on Benefitsvalue (considering the organization was job estimated estimated scope value using and of the tenure) the same of awards methodology companies expected used within to for the be financial Comparator accounting. Group. The award estimate of amounts for 2017) granted by the Comparator Group. In January 2017, the committeecommittee’s awarded general equity objective compensation was to to eachthe award of median to the market those named level, officers executive in equity officers this compensation listed case that above. the had The 40 a grant date fair value at approximately K. P. March B. T. Crutcher K. J. Ritchie R. G. Delagi * See notes 2 and 3 to the summary compensation table for information on how grant date fair value was calculated. Off R. K. Templeton Equity compensation In 2017, the committee awardedshown equity in compensation the to table each under ofand “Grants the in of named the plan-based executive “Stock awards officers Awards” in listedto and 2017.” below. assist “Option The The the Awards” grant grants reader columns date are in of faircompensation comparing the value table. the 2017 of grant summary the compensation date awards fair table. is values The reflected and table in number below that of is table shares provided for each of the years shown in the summary K. P. March R. K. Templeton Off Base salary The committee set the 2017 rate of base salary for the following named executive officers as follows: The salary differences between thenot named the executive application officers of were a driven formula primarily designed by to the maintain market a rate differential of pay between for the each officers. officer and B. T. Crutcher K. J. Ritchie R. G. Delagi The committee set the 2017with base-salary its rate strategy, for the each committee ofbe targeted the paid the named to annual executive similarly officers base-salary situated listed rates2017. executives to above (considering be in job at January scope the 2017. and In estimated tenure) keeping median of level companies of within salaries the expected Comparator to Group in January

PROXY STATEMENT rmtels fe en curdb te opne.Tecmitemd oohrcagst h ito opttrcompanies competitor of list the to changes other no removed made were committee Corporation The Technology companies. and Linear other capitalization and by 2017. our market Corporation acquired in with revenue, Intersil being competes of 2017, after that terms In list technology in companies. the offer appropriate the from or still of markets is activities key list business our the in in whether changes operate annually that considers suppliers committee its niche The based and products. committee broad-based the both quarter, includes recent 2017. list most for This the results or financial year companies’ the the for of results projections financial and released estimates not on had evaluation companies the extent the To companies”): “competitor (the companies following the used committee the performance, relative of the comparison of the interests In long-term most the to serve insight that the strategies it pursue committee gives to shareholders. The year-end, executives its year-end. after encourages and by hindsight and company irrelevant in results prove performance judge could relative critically year quickly company’s and a can the effectively of conditions assesses market beginning which Because the approach, at multiples. its or established believes thresholds thresholds formulas, industry, use our not in did change committee the and performance, products assessing core In with customers. markets with key relationships in of competitiveness strength TI the reviewing as by well progress as strategic technologies, considered committee the addition, In company: the assess 2017 to of measures assessment performance its on following based the officers used executive committee for the compensation bonuses, bonus the 2017 setting the In set performance. committee the 2018, January In between differentials maintain Bonus to designed level formula market any estimated of applicable application equity the the the in not in differences and officers. differences of positions, the The result their 2017.” the for year-end primarily compensation fiscal were equity at officers of awards executive equity named “Outstanding the under between described awards terms company Long- the 2009 the 2016. have Instruments after in grants Texas day amended All the trading and under second 2009 made the April were 2017, in 26, grants approved All January shareholders 2016. on which for stock Plan, results TI Incentive of financial Term price fourth-quarter closing and the annual was its options released or the threshold awards. of formula, the price any of exercise apply decrease The not or assess did increase to and an officers judgment in the its result by used not held committee did compensation the review equity assessment, This unvested this maximum. of making amount In the value. reviewed retention committee its his the aligning grants, and the executive approving the Before restricted motivating between retention, equally promoting value to the emphasis allocate equal shareholders. to give of decided to those committee officer, with The each interests value. for grant options desired and the units set stock committee the officer, each For h boueoeya n he-erpromneo Io h bv measures. above the on TI of performance three-year and one-year absolute The • by measured as companies, competitor with compared as TI of performance three-year and one-year relative The • irci ehooyIncorporated Technology Microchip Inc. Products, Integrated Maxim Ltd. Group Technology Marvell Corporation Intel AG Technologies Infineon Limited Broadcom Inc. Devices, Analog Inc. Devices, Micro Advanced O O O oa hrhle eun and return, revenue, shareholder of total percentage a as profit operating growth, revenue EA NTUET 08POYSAEET23 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS iix Inc. Xilinx, N.V. STMicroelectronics Inc. Solutions, Skyworks Incorporated QUALCOMM Corporation Semiconductor ON N.V. Semiconductors NXP Corporation NVIDIA

PROXY STATEMENT Approximately 2 increase in the last 14 years). Share th Assessment of 2017 performance We believe the industrial andfor automotive the markets foreseeable represent future the because bestapproximately of growth 54 the opportunity percent increasing for of semiconductor the TI’s content industry approximately revenue in 51 came these percent from markets. in industrial In 2016. and 2017, automotive markets, up from TI’s broad analog and embeddedmore processing products product added portfolio each includes year, tensrevenue offering of came strong thousands from differentiation of Analog and products, and longevity. with Embedded In Processing 2017, semiconductors, 90 up percent from of 86 TI’s percent in 2016. Compound annual revenue growth forcomparison. 2015-2017 was 4.7 percent, whichAverage was operating below profit the for median 2015-2017 competitor comparison. was 36.9 percent, which was above the median competitor TI’s revenue growth rate ofcompanies, 11.9 TI’s percent growth was rate higher was incompetitor below 2017 companies the than includes median. in the (It the effect is priorRevenues of important year. for acquisitions, to Compared the whereas note with company’s TI’s that competitor core growth the15.7 businesses rate median percent, of is growth respectively. Analog entirely rate and organic. of EmbeddedOperating Processing profit were margin up was 16.0 40.7 percentcomparison percent, and with which competitors. was above both the prior year’s margin and the median O O repurchases and dividend increases are important elements of TI’s capital management strategy. comparison. put us in a uniqueof class differentiated of product companies. These portfolio, advantages (3)product, channel include market reach (1) and of manufacturing customer sales and positions. force technology,advantages. In and (2) 2017, TI.com breadth the and company (4) continued diversity to and strengthen longevity and of leverage these and selling those products intogrowth the opportunities. industrial Focused and investments automotive in markets,in these which the areas we near continue believe and to represent long provide the terms. the best foundation for strong results Three-year performance O O O O O Annual performance 100 percent of free cashShare flow repurchases was of returned $2.6 to billion shareholdersyear). reduced in The outstanding 2017 quarterly through shares dividend by share rate 1.3 repurchases increased percent and 24.0 (net dividends. percent of (the stock 16 issuances during the • The balance• sheet remained robust, The ending three-year the compound year annual with growth cash rate and for short-term TSR investments was of 28.3 $4.5 percent, billion. which was above the median competitor • The company’s business model is designed around four sustainable competitive advantages that in combination • The company’s strategic focus is on analog and embedded processing, with a particular emphasis on designing • • TSR was• 46.8 percent, better The than company the again median generated TSR strong as cash, compared with with free competitor cash companies. flow at 31.2 percent of revenue. • Strategic progress Total shareholder return (TSR) The committee spent extensive timeIn in setting December bonuses, and the January committee assessingbasis considered TI’s and quantitative results made and and certain strategic qualitative that progress measuresabsolute resulting for on and decisions 2017. both relative were an basis founded absolute all on andcompetitors measures both relative most were solid measures positive data were and and better improved sound2017 than from judgment. was the the On stronger median. prior both than In year, an in aggregate, and2017 2016, the in for both committee relative named on determined comparisons executive an that with officers absolute performanceroles by and in assumed 5 relative by percent basis. these except Therefore, individuals for the in two committee 2017. individuals increased Details whose bonuses on bonuses for Revenue the increased and committee’s to margin assessment reflect are the below. new Free cash flow was calculatedFor by a subtracting reconciliation Capital to expenditures GAAP, from see the Appendix GAAP-based A Cash to flows this from proxy operating statement. activities. 24 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT 2

PROXY STATEMENT h oprtrGop h ou fec ae xctv fie a adudrteEeuieOfcrPerformance Officer table. Executive compensation the summary within under 2017 companies paid the at was to officers officer 3 situated executive footnote the similarly named in and to each described responsibility paid of Plan of be bonus to level to The awarded officers’ expected Group. amounts the compensation Comparator the in cash the in differences total differences of of The result level below. the market table primarily applicable the were in officers shown executive are named performance the 2017 for awarded the bonuses noted The committee The lines. lines. product product these custom of and position processing strategic embedded and company’s performance the financial for responsible is Delagi Mr. management. the inventory noted and committee cost-competitiveness The their operations. including manufacturing operations, semiconductor those company’s of responsible. the performance is for he responsible which is the for Ritchie noted activities Mr. committee and The lines product manufacturing. the and of operations position business company’s strategic the and of performance all financial financial for chief responsible the is became Crutcher Lizardi Mr. Mr. company. time the of which at management 2017, financial 1, the February noted until committee officer The financial officer. chief the was March targets. Mr. this performance making or other In formula the performance. any For individual apply company. assessing not the in did of below committee performance described the the factors assessment, individual to the officers’ according considered the judged committee considered was the committee Templeton officers, the Mr. officers, of executive performance named The the performance. for bonuses the setting Before nttl h omte eemndta Issrtgcpsto a teghndb aaeetsdcsosand decisions management’s by strengthened was position strategic TI’s that determined committee the total, In a remains wafers • 300-millimeter on semiconductors Analog strategy of intentional volumes an high is produce This to applications. capability of in-house thousands TI’s of base diverse • a from come to continues revenue TI’s • eeu rwh oa TI total growth: Revenue generation. cash 2017. and in margins actions improving thereby which wafer, wafers, per 300-millimeter produced on be production to increased chips again more company enabled the 2017, In advantage. competitive product. or customer market, single a on dependence prevents that evc oEulr neeuiecmesto n oprt oennedt firm. data subscription governance a corporate using and generated compensation report executive a an from Equilar, obtained to are service percentages TSR three-year and One-year margin Operating recs lwa frevenue of % as flow cash Free ffe ahfo eundt shareholders to returned flow cash free of % nraei urel iiedrate dividend quarterly in Increase AR(opudana rwhrt)i acltduigtefrua(nigValue/Beginning (Ending formula the using calculated is Value) rate) growth annual (compound CAGR (TSR) return shareholder Total /ubro years of 1/number ...... iu 1. minus ...... EA NTUET 08POYSAEET25 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ...... efrac summary Performance ...... 19 .%CAGR 4.7% 11.9% 07 69 average 36.9% 40.7% 12 05 average 30.5% 31.2% 98 0.%average 100.2% 99.8% 68 28.3% 82.4% 46.8% 24.0% -er3-Year 1-Year

PROXY STATEMENT on i ty i r Value) Total i Equ Fa (Grant Date Compensat t i ng Bonus i Prof Shar Salary (Annual Rate) 20172016 $ 1,190,0002015 $ 1,166,000 $ 237,601 $ 1,143,000 $ 232,8172017 $ 3,625,000 $ 203,877 $ $ 3,450,000 $ 11,000,0142017 500,000 $ 3,450,000 $2016 $ 9,800,055 $ 16,052,615 $ $ 97,6672015 682,000 9,800,023 $ $ 14,648,872 668,000 $ $ $ $ 113,950 14,596,900 850,0002017 649,000 $ 133,283 $2016 $ $ $ 115,758 $ 3,000,060 1,110,0002015 875,000 $ $ 1,110,000 825,000 $ $ $ $ 174,167 4,447,727 0 2,700,0352017 800,000 $ $ 164,583 $ 2,700,017 2,350,0002016 $ $ $ $ 142,668 2,700,048 4,611,318 $ 2,000,0002015 704,000 $ $ $ 4,574,775 $ 7,500,034 $ 1,750,000 690,000 $ $ $ 3,495,998 140,567 5,500,0312017 670,000 $ $ 10,899,201 $ 137,667 $ 5,500,029 1,325,000 $ $ $ 119,498 8,489,614 $ 1,265,000 700,000 $ $ 8,192,697 $ 4,000,056 1,265,000 $ $ 139,750 4,000,014 $ $ 6,169,623 $ 4,000,045 1,100,000 $ 6,092,681 $ $ 6,054,543 3,600,090 $ 5,539,840 ...... cer Year i 26 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Off R. K. Templeton Results of the compensation decisions Results of the compensation decisionsthe made compensation by decisions the made committee by relatingfollowing management to table. and the This reviewed named table by executive is the officers,to provided committee as see as for well the a Mr. as data supplement Lizardi the presented to for resultsinformation in the 2017 of similar this summary are to form. compensation summarized that Although table in in the the for the committee investors table does who to not may ensure target find that a it the specific useful sum level of of these total elements compensation, is, it in considers its judgment, in a reasonable range. For Mr. Templeton and Mr.2017, Crutcher, reflecting the an “Total” effort for to 20172017 align was decrease with higher in the than “Total” projected for compensation 2016 marketfor for primarily range 2016 Mr. due for primarily March to similarly due reflects situated the to his higher executives the retirement. in equity higher For our awards bonus Mr. comparator in Ritchie, award. group. the The “Total” for 2017 was higher than R. R. Lizardi K. P. March B. T. Crutcher K. J. Ritchie R. G. Delagi This table shows the annualcolumn rate shows of the base actual salary salary forcompensation paid each table, in named profit the executive sharing year. officer. and This Inaccordance table bonus the with are has summary SEC aggregated separate compensation requirements. columns in table, Please for the thedate see profit column “Salary” fair notes sharing for value 2 and “Non-Equity was and bonus. Incentive calculated. 3 In Plan to the Compensation,” the summary in summary compensation table for information about how grant

PROXY STATEMENT eidudreut opnainaad.Aldtriain ytecmitewt epc oti oiyaefnladbnigon binding and final restated are policy the this after to months financial respect 12 the the with had committee during paid the officer been by such parties. have by determinations interested would received All all committee, profits awards. any the recover compensation of of to equity reimbursement judgment seeking under seeking the (b) period (a) in and fraud include that, reported whose may amount properly officer action the been and executive Such exceeding results facts any restatement. officer the of such such review compensation for to will the need paid committee to the bonus the respect to misconduct, with contributed to appropriate misconduct policy, due considers willful the results it or Under financial actions compensation. TI’s the equity of take and restatement and bonuses material circumstances executive a of of (“clawback”) event recoupment the concerning in policy a has committee The the is options In stock later. of if price day exercise grant. policy meeting The the Recoupment the action. of on committee date (ii) of effective or day the is released the on practice been on stock committee’s have effective TI the results them of results, the make price financial after to closing company’s day is the trading practice of second its release the months, the on other as (i) month effective plans same grants to the make due in to information falls of meeting release committee the the delay If or accelerate not do We units. stock grants. restricted equity or making options for retention. For stock of January. back-date purposes than not for other do and times We promotions at job executives with to units connection stock in restricted so year. or done and options has quarter stock it previous grant example, committee the may the for committee and results the board financial occasion, the our On of announce meetings we on January before dates The two The advance. or year. in week each years the meeting three in January set occur its generally generally at are compensation occur equity meetings for these decisions which grant makes Committee Compensation The in resulted grants 2017 equity in for award granted Process of awards (net Equity employees stock. all common to outstanding year company’s dilution. each the annual annual committee of net “Net the shares percent percent. by the 0.7 2 granted of under awards percentage compensation equity a equity under as from shares forfeitures) dilution of annual number net the keep means to dilution” is goal Committee’s Compensation The dilution Equity officers: executive named the for mix compensation 2017 following the in resulted above shown decisions compensation The AveragedataforthenamedexecutiveofficersotherthanMr.Templeton * aeSlr qiyCmesto rftSaigBonus ProfitSharing EquityCompensation Base Salary 1% 23% EA NTUET 08POYSAEET27 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS CEO 7% 69% 2% 19% Other NEOs* 68% 11%

PROXY STATEMENT 28 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT The executive officers’ deferred compensationoperating account assets. balances The are value unsecured of andThese the all alternatives deferred amounts are amounts remain identical tracks part to the ofdoes those performance the not offered of company’s guarantee to investment any participants alternatives minimum in selectedcompensation return the by are on defined the shown the contribution participant. in amounts plans the deferred. describedamounts summary In above. in compensation accordance The that table with company year. for SEC 2017 rules, because no no earnings “above on market” deferred rates were earned on deferred Deferred compensation Any U.S. employee whose basehis salary or and her management salary, responsibility bonus exceedof and a management profit certain or sharing. level highly Rules may compensated of defertax-efficient employees. the the manner. The U.S. receipt Eligible plan Department of employees allows of a include, Labor employees portionwith but to require of the are defer that benefits not the this packages limited receipt plan offered to, of be by the their limited other executive compensation to companies. officers. in a We a select have group the plan to be competitive Because benefits under the qualifiedearnings and (salary non-qualified and defined bonus), benefit an pensionincreases increase plans for in are Mr. salary calculated Templeton or on and bonus thepension Mr. may basis plans Crutcher result of because do in eligible their not an benefits result increasedefined under in in benefit greater those benefits pension plans benefits under plans. were for the The frozen them plans.salary committee under in Salary and considers 1997. the or performance the Mr. company’s bonus bonus potential Lizardi defined levels. effect does benefit on not the participate executives’ in retirement the benefits company’s when it sets In general, if an employeeabove) who dies participates after in having the met pensionthe the plan lump-sum requirements (including amount for an that normal employee the or whoseage participant early benefits of would retirement, are 55 his have frozen and or received as at her if described the least beneficiary he pension 20 will or plans. years she receive of had a employment, benefit retired Mr. before equal Templeton, death. to Mr. Having Delagi already and reached Mr. the Ritchie are eligible for early retirement under Employees accruing benefits in thequalified qualified defined pension contribution plan, plan including that Mr.which provides Delagi Mr. employer and Templeton, matching Mr. Mr. contributions. Ritchie, Crutcher The alsomatching and enhanced are contribution. Mr. eligible defined Lizardi to contribution participate, participate plan, provides in in for a a fixed employer contribution plus an employer The Internal Revenue Code (IRC)maintain imposes the certain desired limits level on of theplan. benefits, retirement Under we benefits the have that non-qualified non-qualified may plans, defined befor participants provided benefit the receive under pension limitations benefits a plans under that qualified for the would plan. participants IRC. ordinarily To in For be the additional paid qualified information under pension about the the qualified defined pension benefit plan plans, but please see “2017 pension benefits.” Like other established U.S. manufacturers,the we plan have was had designed a to U.S.at be qualified the consistent defined time with benefit included those pension consumer offered plancost and by for of defense other many the electronics, employers years. plan, as in At we well the itsremain closed as diverse origin, in the semiconductors markets the plan and in plan, to materials which or new products. weeligible to participants In operated, earnings) have in order which and their 1997. to begin plan We limit participating benefits gave the remain frozen in U.S. in (i.e., an employees the no enhanced as defined benefit of defined benefit November increase contributionenhanced plan. 1997 attributable plan. defined As the to Mr. contribution a choice years Templeton plan. result, to of and their Mr. service Mr.contribution Lizardi, benefits or Crutcher plan. who under change chose The joined that in not other plan the to named company were executive in frozen officers 2001, in have also 1997, continued participates and their in they participation the participate in enhanced in the defined the defined benefit pension plan. Retirement plans The executive officers participate inthese our plans retirement to plans have under a the competitive same benefits rules program that and apply for to retention. other U.S. employees. We maintain Benefits Most recent stockholder advisory vote on executiveIn compensation April 2017, our shareholdersdisclosed cast in an the advisory proxy vote statement onmatter issued the were by company’s cast the executive in company compensation support in decisionsdetermined of March and that the 2017. policies it compensation Approximately as was decisions 95 not and percentpractices necessary policies of in at as the response this disclosed. shares to time The voted the to committee on advisory make considered the vote. any this material result changes and to the company’s compensation policies and

PROXY STATEMENT ned ogat t osdrto ftecs fgat aei 07i icse ne Aayi fcmesto determination compensation of “Analysis under discussed is 2017 it in compensation made equity grants compensation.” of of Equity purposes cost – reporting the 2017 financial of for for consideration cost Its the grant. considers to our committee intends to the paid compensation, compensation equity deduct setting longer When no may to company million. expanded the $1 been 2018, of Recent has in excess compensation. deductibility beginning in of on result, officers forms limitation a executive and the As named amounts and officers. of exception, executive determination “performance-based” named its the all in eliminated include the factor laws than considered one tax (other past, only the compensation the as in officer’s in although changes the has, limit, corporation’s that Committee deductibility held extent Compensation this publicly the The of any to million. impact to CFO, $1 paid the exceeded compensation excluding compensation) annual officers performance-based of compensated qualified deductibility highest tax other the three limited and historically CEO IRC the of 162(m) hedging Section or compensation options of other treatment or accounting buy), and to tax executive options of an (similar Consideration including “calls” employee, price), any fixed for a policy at TI sell to against stock is (options TI It “puts” on in prohibited. techniques trading are in officers executive engage our to by officer, Directly stock targets. TI these of reach sales guidelines. 25,000 to Short or the officers salary satisfying executive base toward as times count election three units their times is stock from four officers years restricted is executive five and CEO other have shares the for officers owned for guideline Executive guideline less. The The is less. officers. is whichever executive shares, whichever for shares, guidelines 125,000 ownership or stock salary established base has directors of board Our hedging while against transaction policy a event. and a such through guidelines after any company ownership months to the Stock 24 up with within remain leading terminated to period involuntarily employees the is encourage in stock grantee to distraction restricted the intended and if under are uncertainty IRC) issued terms employee are the These reducing shares of TI. and 409A of exercisable Section control by fully in become permitted change options extent grants terms, the for those (to terms Under awards change-in-control years. unit double-trigger later establishes and generally 2010 Plan in Incentive made review. Long-Term this 2009 executive on Instruments named based Texas the 2017 The for for compensation compensation annual lower retirement. the or following finalizing raise period before not receive transition programs did officers a these committee executive for of The the provided impact officers. that under is potential benefits described counseling the are additional financial reviews programs few that committee current other the except The as The of employment, terms company. None of same the control.” termination the of in after on control change continue benefits in or for change termination eligible a upon are or payments officers employment “Potential Executive of contract. termination employment upon an employees has U.S. officers executive the of None control in officers. change executive or the termination for of employment Perquisites” any following – summary to Compensation Termination the perquisites – of for control 6 gross-ups in footnote tax the change see no in or Please provides is termination travel. company it air upon The reasons, company- personal payments details. security a for “Potential further for for aircraft and that eligible company 2017 determined are use for has They to table directors employees. Templeton compensation of U.S. Mr. board other require the all to to addition, interest In available company’s not counseling. are financial that and benefits physical few paid a only receive officers Executive industry. life semiconductor and the disability in vision, benefits offered dental, Other benefits medical, with for employees competitive U.S. be other to all intended as are plans benefits same These the insurance. under eligible are officers Executive are officers benefits executive Health-related programs, thereby benefit and to company is approach the plan general in our The interest with discount. participate. equity Consistent percent to an 15 shareholders. eligible certain acquire a of also and to at those U.S. opportunity stock with the an common interests in population company’s their employees employee the align all of broad-based approved, shares the shareholders of offer our number to which limited designed plan, a the purchase Under may plan. countries purchase other stock employee an have We plan purchase stock Employee . EA NTUET 08POYSAEET29 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT on i ($) (6) Total ($) All Other Compensat on i ed n i i f i on Value and i ngs ($) (5) i Deferred Change Nonqual Pens Compensat Earn on i ty i ve Plan i ($) (4) Non-Equ Incent Compensat on i ($) (3) Opt Awards Stock ($) (2) Awards ($) Salary 2017 $ 1,188,004 $ 5,500,010 $ 5,500,004 $ 3,862,601 $ 166,278 $ 329,825 $ 16,546,722 2017 $ 488,333 $ 2,000,047 $ 1,000,013 $ 947,6672017 $ 569,750 $ 1,350,036 $ 1,350,0122015 $ $ — 647,417 113,950 $ $ 1,350,010 $ 60,814 1,350,007 $ $ 1,225,758 $ 4,496,874 872,191 $ — 23,837 $ 148,487 $ $ 5,469,220 3,532,235 2017 $ 870,833 $ 3,750,028 $ 3,750,006 $ 2,524,167 $2017 $ 1,173 702,833 $ $ 160,804 2,000,047 $ 2,000,0092015 $ $ $ 11,057,011 1,465,567 $ 668,333 2,082,760 $ 2,000,041 $ $ 2,000,004 $ 1,384,498 5,400 $ 1,370,848 $ $ 8,256,616 5,300 $ 7,429,024 2017 $ 698,750 $ 1,800,074 $ 1,800,016 $ 1,239,750 $ 1,491,494 $ 16,492 $ 7,046,576 ...... pal i nc i Robert E. Sanchez, Chair Daniel A. Carp Pamela H. Patsley on February 1, 2017. Mr.Mr. Templeton Crutcher will will be become the the company’sas company’s president the president and company’s and chief chairman. chief executive executive officer officer through on May June 31, 1, 2018. 2018. Mr. Templeton willThe continue discussion of the assumptionsfinancial used statements for in purposes TI’s of annual theterms, report valuation see on of the Form the discussion 10-K awards following for grantedassumptions the the in used Outstanding year 2017 for equity ended appears purposes awards December in of at 31, Notestatements the 2017. fiscal 4 in valuation For year-end to TI’s of a 2017 the annual the description table. report awards of Theannual on granted the discussion report Form in grant of on 10-K 2016 the Form for and 10-K the 2015 for year appears the ended in year December Note ended 31, 4 December 2016, to 31, and the 2015, the financial respectively. financial statements in TI’s on (1) Year i t i Chairman, President &Chief Executive Officer 2016 $ 1,164,083 $ 4,900,048 2015 $ $ 4,900,007 1,140,250 $ $ 4,900,017 3,682,817 $ 4,900,006 $ $ 3,653,877 107,604 $ $ 325,510 13,950 $ 15,080,069 $ 317,702 $ 14,925,802 Senior Vice President & Chief Financial Officer Senior Vice President 2016 $ 666,417 $ 1,350,033 $ 1,350,002 $ 1,243,283 $ 1,079,121 $ 5,300 $ 5,694,156 Executive Vice President &Chief 2016 Operating Officer $ 822,917 $ 2,750,031 $ 2015 2,750,000 $ $ 2,164,583Senior $ 797,917 Vice President $ 2,750,023 $ 2,750,006 $ 1,892,668 577 2016 $ $ 155,079 688,333 $ $ 2,000,013 $ 8,643,187 2,000,001 $ — 1,402,667 $ 1,468,531 $ 125,744 $ $ 8,316,358 5,300 $ 7,564,845 Senior Vice President 30 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Richard K. Templeton Rafael R. Lizardi Name and Pr Pos The table below shows theother compensation three of most the highly company’s compensated CEO,executive individuals each officers” who person (NEOs)) were who for executive served services officers as in during the all 2017 CFO capacities (collectively during to called 2017 the the and company “named each in of 2017. the 2017 summary compensation table Kevin P. March Brian T. Crutcher The committee has reviewed andBased discussed on the that Compensation review Discussion and andcompany’s discussion, Analysis annual the (CD&A) report committee with on has the Form recommended company’s 10-K to management. for the 2017 board and of the directors company’s that proxy the statement CD&A for be the included 2018 in annual the meeting of stockholders. The Compensation Committee of the board of directors has furnished the following report: Compensation Committee report Kevin J. Ritchie R. Gregory Delagi (1) Mr. March was the company’s chief financial officer through January 31, 2017. Mr. Lizardi became chief financial officer (2) Shown is the aggregate grant date fair value of restricted stock unit (RSU) awards calculated in accordance with ASC 718.

PROXY STATEMENT 6 ossso i h mut ntetbeblw hc eutfo rgasaalbet l lgbeUS mlye,and employees, U.S. eligible all to available programs from result which below, table the in amounts the (i) of Consists (6) this in reported are amounts no Therefore, compensation. deferred on earnings above-market pay not does company The (5) for sharing profit and Plan Performance Officer Executive Instruments Texas the under paid bonuses performance of Consists (4) the of discussion The 718. ASC with accordance in calculated options of value fair date grant aggregate the is Shown (3) vial oteohrnmdeeuieofcr,btteaonsatiual otoeofcr eeblwtedisclosure the below were officers those to made attributable were amounts physical Delagi, the executive Mr. but an for officers, and $11,092 executive thresholds. counseling and named Financial Lizardi other physical. Mr. the an executive for to counseling, an $10,494 available financial and and of ($39,950), counseling consisting aircraft financial Templeton, company of Mr. of consisting for use $52,273 personal follows: and as physical forward. are executive carried benefits be personal not and could perquisites that The time vacation unused for payments Represents (b) an (ii) and $5,400 of plan retirement contribution defined enhanced company’s the under contributions (i) of Consists (a) Delagi G. R. Ritchie J. K. Crutcher T. B. March P. K. Lizardi R. R. Templeton K. R. Name the in detailed are and SEC the by established thresholds disclosure the meet below. 2017 that paragraph the benefits See personal IRC. and the perquisites of (ii) 409A Section 1, by December required on as benefit 2018, 1, pension March June total information. Mr. on his additional plans. of distributed for pension be distribution table benefit will partial benefits defined a benefit pension frozen company’s his received were the He of plans of 2017. remainder pension any 1, The company’s in November 2017. the participate on that under not company assuming benefits does the officer, Crutcher’s from Lizardi executive Mr. Mr. retired named and 1997. 2016 the Templeton’s 31, the by Mr. December between year-end 65. of of difference age as as the until accumulated is paid value” benefit not from actuarial pension is II) the the benefit Plan in of Pension “change value Non-Qualified This present non-qualified Employees 2017. 2017 the TI 31, and and and December Plan) named Plan through Pension the Pension 2016, Employees of Non-Qualified 31, (TI value Employees December plan actuarial (TI pension the plans in benefit pension change defined benefit the qualified defined represent the column under this benefits in officers’ amounts executive The compensation. 2017. deferred for for to officers the column decided executive for committee named decisions” The the compensation so. of the do each of to to Results appropriate paid – is 2017 sharing it for profit decides determinations and Compensation it bonus compensation the if of of However, level “Analysis amounts plan). cash lower See the a a 2017. receive in at for to defined bonuses so (as eligible set do is income to officer consolidated discretion executive company’s the named the has each of Committee Plan, percent Performance 0.5 Officer to Executive equal the bonus of 10-K terms Form the on Under report 2017. annual annual TI’s TI’s in in statements statements financial financial the the respectively. to and 2015, 4 2016, 31, Note 31, December in December ended for the appears ended year used see 2015 year the assumptions terms, and the for the grant 2016 for of the in 10-K discussion of granted Form The description awards on table. a the report statements 2017 For of financial year-end 2017. valuation the fiscal 31, the to at December of 4 awards ended purposes Note equity year in Outstanding the appears for the 2017 10-K following in Form discussion granted on options report of annual valuation TI’s the in of purposes for used assumptions It fstIClmttoso mut htcudb otiue oteehne eie otiuinrtrmn plan, retirement table. contribution compensation defined deferred enhanced non-qualified by the 2017 to accrued the Lizardi contributed in Mr. be shown for could also $34,120 that is and amounts amount Crutcher, on which Mr. limitations for IRC $144,604 offset Templeton, to Mr. TI for $261,352 of amount additional ...... $ $ ...... $ ...... $ ...... $ ...... $ ...... EA NTUET 08POYSAEET31 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS Contr 401(k) 080$1004— 150,004 $ 10,800 080$3,2 — — 39,520 $ 266,752 $ 10,800 10,800 ,0 / — — N/A N/A 143,087 $ N/A 5,400 5,400 5,400 i but i on Contr Ret ln(a) Plan Def i rement i i but ned i on Vacat T Unused i e(b) me i on

PROXY STATEMENT on i r Value i of Stock Fa Grant Date and Opt Awards (5) se i on i ce of i Opt or Base Pr Awards Exerc ($/Sh) (4) : ng es i i t i ons (#) (3) on Awards i i All Other Secur Number of Underly Opt Opt : ts (#) (2) i Stock or All Other Shares of Number of Un Stock Awards ttee i on i Act Date of Comm Date Grant 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 69,392 333,615 $ 79.26 $ 5,500,004 $ 5,500,010 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 25,234 60,658 $ 79.26 $ 1,000,013 $ 2,000,047 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 17,033 81,888 $ 79.26 $ 1,350,012 $ 1,350,036 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 47,313 227,465 $ 79.26 $ 3,750,006 $ 3,750,028 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 25,234 121,315 $ 79.26 $ 2,000,009 $ 2,000,047 1/26/17 (1)1/26/17 (1) 1/19/17 1/19/17 22,711 109,184 $ 79.26 $ 1,800,016 $ 1,800,074 ...... grants”), the grants became effectivequarter on and the year second 2016. trading The day company after released the these company results released on its January financial 24, results 2017. forcompany’s the 2009 fourth- Long-Term Incentive Plan.discussion For following information the on Outstanding the equity terms and awards conditions at fiscal of year-end these 2017 RSU table. awards, see the of these options, see the discussion following the Outstanding equity awards at fiscal year-end 2017 table. discussion of the assumptions usedreport for on purposes Form of 10-K the for valuation the appears year in ended Note December 4 31, to 2017. the financial statements in TI’s annual 32 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Name R. K. Templeton R. R. Lizardi The following table shows the grants of plan-based awards to the named executive officers in 2017. Grants of plan-based awards in 2017 K. P. March B. T. Crutcher K. J. Ritchie R. G. Delagi For additional information regarding TI’s equity compensation grant practices, see the Compensation Discussion and Analysis. (1) In accordance with the grant policy of the Compensation Committee of the board(2) (described under “Process for equity The stock awards granted to the named executive officers in 2017 were RSU awards.(3) These awards were made The under options the were granted under the company’s 2009 Long-Term(4) Incentive Plan. For information The on exercise the price terms of(5) and the conditions options is the Shown closing is price the of aggregate TI grant common date stock fair on value January computed 26, in 2017. accordance with ASC 718 for stockNone and of option the awards options in or 2017. other The equity awards granted to the named executive officers was repriced or modified by the company.

PROXY STATEMENT 9 etdo aur 1 2018. 31, January on Vested 2019. 31, (9) January is date Vesting 2020. 31, (8) January is date Vesting 2021. 1, (7) February is date Vesting 2018. 23, January on (6) on exercisable exercisable become fully one-half Became remaining the and 2018, (5) 28, January on exercisable exercisable became become shares shares the remaining of the One-half of one-half and 2018, (4) 29, January on exercisable became become shares shares the remaining of the One-third of ($104.44). one-third 2017 and 29, 2018, December (3) 26, on January stock on common exercisable TI became of shares price the closing of the One-quarter by RSUs of number (2) the multiplying by Calculated (1) Delagi G. R. Ritchie J. K. Crutcher T. B. March P. K. Lizardi R. R. Templeton K. R. Name 2017. 31, December of as officers executive named the of each for awards equity outstanding the shows table following The 2017 year-end fiscal at awards equity Outstanding aur 8 2019. 28, January 2020. 29, January and 2019, 29, January of each 2021. on 26, January and 2020, 26, January 2019, 26, January of each on exercisable ...... — ...... — ...... — ...... — ...... — ...... — ...... EA NTUET 08POYSAEET33 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS Unexerc Exerc 6,0 46 /722 — — — — — — 1/27/2021 1/26/2022 34.63 4,263,867 $ $ 1/25/2023 32.36 $ (9) 40,826 32.80 — $ — 1/23/2024 — 44.09 $ 162,500 (5) 55,350 175,000 200,000 166,047 2,3 152()$4.912/043,2 9 3,197,953 $ (9) 30,620 — — 1/23/2024 44.09 $ (5) 41,512 — — 124,536 1/26/2022 1/25/2023 32.36 $ 11,607,148 9,487,538 $ 32.80 $ $ (9) 9,668,637 111,137 (8) — $ 90,842 (7) — 92,576 1/23/2024 1/28/2025 44.09 $ 1/29/2026 53.94 (5) $ 150,673 475,000 52.93 (4) $ 258,220 525,000 (3) 367,168 452,019 258,220 122,389 Opt Underly ubrof Number Secur 4869,5 4 39 /822 331()$3,485,267 $ 3,551,796 (8) 33,371 $ (7) 34,008 1/28/2025 53.94 1/29/2026 $ (4) 94,857 52.93 $ (3) 134,879 94,856 44,959 1127,4 4 39 /822 508()$2,613,924 $ 2,663,847 (8) 25,028 $ 533,062 (7) 25,506 $ 435,724 1/28/2025 (9) 5,104 $ 53.94 1/29/2026 $ (8) 4,172 (4) 71,143 52.93 $ 1/23/2024 (3) 101,159 44.09 1/28/2025 $ 71,142 (5) 6,919 53.94 $ 33,719 (4) 11,858 20,756 11,857 ,9 240()$5.312/06568()$591,966 $ (7) 5,668 1/29/2026 52.93 $ (3) 22,480 7,493 i n (#) ons i sable i 150()$4.912/044,6 9 4,737,607 $ 3,872,531 (9) 45,362 $ 3,946,370 (8) $ 37,079 1/23/2024 (7) 37,786 5,329,782 44.09 $ 1/28/2025 $ (9) 5,324,665 (5) 1/29/2026 51,032 61,500 53.94 $ $ 5,426,285 (8) 52.93 $ (4) 50,983 $ 105,396 1/23/2024 (7) (3) 51,956 149,865 — 44.09 1/28/2025 $ — (5) 1/29/2026 69,187 53.94 — $ 52.93 (4) $ 144,920 (3) 206,064 — — — t i i i sed es ng Unexerc Unexerc Opt Underly 0,8 2 92 /622 271()$2,371,937 $ (6) 22,711 1/26/2027 2,635,439 79.26 $ $ (6) (2) 25,234 109,184 1/26/2027 4,941,370 79.26 $ $ (6) (2) 47,313 121,315 1/26/2027 79.26 $ (2) 227,465 7,247,300 $ (6) 69,392 1/26/2027 79.26 $ (2) 333,615 ubrof Number Secur 188()$7.612/071,3 6 1,778,927 $ (6) 17,033 1/26/2027 2,635,439 79.26 $ $ (6) (2) 25,234 81,888 1/26/2027 79.26 $ (2) 60,658 i n (#) ons Opt i i t sable i i i sed es ng i nAwards on Exerc Pr Opt i e($) ce i on i se Exp Opt Date i rat i on i on htHv Not Have That Un ubrof Number etd(#) Vested hrsor Shares i so Stock of ts tc Awards Stock htHv Not Have That Un aktValue Market fSae or Shares of i so Stock of ts Vested $ (1) ($)

PROXY STATEMENT on i on i nat i nat i Other rcumstances Term i C of Employment exercisable for 30 days rcumstances of i on i Other C Employment Term nat Grant cancels; no shares are issued i for Cause Term Employment Option cancels Option remains on i nat i For Cause on i ted i rement nat i i Employment Term ble** i Grant cancels; no shares are issued g i El ce, but Not Ret i th 20 Years of Cred i Employment Term w on ble i Serv i g (at Least 6 Months after Grant) i nat i Option remains in effect toterm; end vesting of does not continueemployment after termination rement El i Employment Term When Ret rement i ble* i on (at Least (at Least 6 Months after Grant) i g i Vesting continues; shares are paid at the scheduled vesting date El nat i Employment When Ret ty i Term Vesting continues; option remains in effect to end of term 6 Months after Grant) l i sab i on i nat i ty i l i on Due to i sab i nat i D Employment Employment Term Term Death or Permanent For awards made before 2013,“2017 the pension definition benefits”). of normal or early retirement eligibility in the relevant pension plan applies (see Due to Death or Permanent D 34 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Vesting continues; shares are paid at the scheduled vesting date The table below shows the termination provisions of RSUs outstanding as of December 31, 2017. The “Stock Awards” column inrepresents the the table right of to outstanding receive equityearlier one awards under share at terms of fiscal summarized TI year-end below. common 2017includes In stock are the general, on RSU right the a awards. to stated vesting Each receive date date RSU stockholders dividend (the is in equivalents, approximately “vesting dividends. which date”) four are unless years after paid the the award annually grant is in terminated date. cash Each at a RSU rate equal to the amount paid to Options granted after 2009 becomecause) fully within vested 24 if months the after granteeLong-Term a is Incentive change involuntarily Plan in terminated and control from occurs of employmentassets upon TI. with of (1) “Change TI TI acquisition in (other or of control” than (2) more is for changeoffice than defined endorsed of 50 as a the percent provided majority appointment of in of or the theuncertainty the election voting Texas and board of stock Instruments distraction of the or 2009 in directors new at the in directors leastbefore period a (“Plan 80 2010, 12-month leading definition”). percent the period up These of stock unless to terms the option a a arethen terms majority change intended outstanding; provide of in to that and the control, reduce upon if directors if employee employment a then suchchange termination change in an in (except in event control for control were is cause) of to deemed has TI, occur.20 to occurred the For percent have within option options of occurred 30 becomes granted TI first. days fully common “Change before vestedthe stock in the to board other control” change the of than is in extent directors through defined control, it in a in the is directors a transaction these (together, 24-month approved pre-2010 the period by options “pre-2010 unless the as definition”). a board (1) majority of acquisition of directors, of the or directors (2) then change in of office a have majority elected of or nominated the new Vesting continues; option remains in effect to end of term Options may be cancelled if,employees during to the work two for years another aftergrantee company, employment was or termination, an if the executive the grantee officer, grantee competessuch the discloses with conduct. company TI TI These may trade or provisions reclaim secrets. solicits are (or In TI solicitation intended “claw addition, of back”) to for our profits strengthen options employees earned retention received or under and while disclosure grants provide the of if a our the reasonable confidential officer remedy information. engages to in TI in case of competition, * Defined for purposes of equity awards made after 2012 as at least age 55 with** 10 This or provision more is years not of applicable TI to service grants or made at after least 2012. age 65. The “Option Awards” shown inshares the of table TI above common are stock non-qualifieddate. at stock the The options, stated term each of exercise of each price. whichbelow The option represents and exercise is the in price 10 right the is years to the unless paragraph purchase on the closing following the option price the first of is chart. anniversary TI terminated Options of common earlier vestoutstanding the stock pursuant (become as date on to exercisable) of of the provisions in December the grant summarized increments 31, grant. in ofprovisions 2017. The the 25 to The chart percent chart promote Compensation below per employee Committee shows year retention of the beginning while the termination offering board provisions competitive of relating terms. directors to established stock these options termination

PROXY STATEMENT 1 r iad osntpriiaei n ftecmaysdfndbnftpninpasbcueh ondT fe hs plans these after TI joined he because plans pension benefit defined company’s the of any in participate not does Lizardi Mr. (1) Delagi Name G. Plan R. Ritchie J. K. (2) Crutcher T. B. March P. K. (2) Templeton K. R. (1) Name officer’s executive named any the reflect from not result do may table that 2017. the benefits 31, in in December shown increase after (which amounts any employment II the or continued Plan requirements, eligibility Pension SEC retirement Non-Qualified with officer’s Employees our Employees accordance executive (TI under TI In named plans officers and 2004)). pension executive 2005) after benefit named before earned defined the earned amounts non-qualified of amounts governs and benefit governs Plan) the (which Pension of Plan Employees 2017, Pension (TI 31, Non-Qualified plan December of pension as benefit value defined present qualified the shows table following The benefits pension 2017 Delagi G. R. Ritchie J. K. Crutcher T. B. March P. K. Lizardi R. R. Templeton K. R. Name price market the by vested that RSUs stock of common number TI the of by multiplying date. price calculated by vesting market is calculated the the realized is on and value realized stock price the value common named exercise exercises, the TI the the option RSUs, of by between For For exercises 2017. difference date. option in the exercise of vested by the result that acquired on a RSUs shares as any of realized of number value value the the the multiplying and and acquired 2017 shares in of officers number executive the lists table following The vested stock table. fully compensation be and deferred to exercises non-qualified likely were 2017 option was terms the it These 2017 in until reason. reflected expense any is compensation for terms, award related employment award this the of the requirements, postponing termination Under SEC by his 2000. with company after in accordance the year vested In to the stock, deductible. benefit of common an tax March TI holds a in of Templeton provide Templeton shares Mr. to Mr. 120,000 table, designed to for 2017 issued award, year-end be The fiscal will 1995. at shares in options. awards the granted stock equity was of outstanding that discussion the RSUs in the of shown in award Awards” above “Stock described the objectives to stock the addition Plan of achieve In the those to is with and control terms IRC) in award RSU the the conform Change by IRC, to control. permitted the in intended extent of are change the 409A terms a (to Section after change-in-control options by months and permitted 24 clawback extent within cancellation, like the employment These provisions to TI definition. clawback that, of and provide termination cancellation terms involuntary contain The upon awards options. vests RSU stock All for retention. above promote described to those intended are provisions termination These eecoe onwparticipants. new to closed were ...... TI ...... TI ...... TI ...... TI ...... TI ...... IEpoesNnQaiidPninPa I3 5 ,2,3 6 — — — — (6) (6) 6,021,538 335,334 $ $ (5) 32 (6) (4) 259,758 667,115 19 (6) $10,465,884 $ $ — (5) — 38 II Plan (4) Pension 25 Non-Qualified — Employees TI Plan — Pension Non-Qualified Employees TI (7) 9,453,650 $ II Plan Pension Non-Qualified Employees TI (6) Plan 230,434 Pension Non-Qualified (5) (6) (4) Employees 31.8 373,837 19 TI $ $ (5) 16 II Plan (3) Pension 16 Non-Qualified Employees TI Plan Pension Non-Qualified Employees TI II Plan Pension Non-Qualified Employees TI Plan Pension Non-Qualified Employees TI mlye eso ln3 3 ,6,9 6 — — — (6) 1,167,992 $ (3) 32 (6) 1,787,262 (6) 5,809 $ $1,559,211 $ (3) — 38 — (3) 0.9 (6) 820,318 Plan (3) Pension 31.8 Employees $ (3) 16 Plan Pension Employees Plan Pension Employees Plan Pension Employees Plan Pension Employees EA NTUET 08POYSAEET35 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS hrsAcqu Shares nExerc on ubrof Number 3,5 826566,6 5,193,359 5,193,359 $ $ 5,842,500 $ 66,667 3,895,000 66,667 $ 75,000 18,206,506 $ 13,632,500 50,000 $ 9,480,310 $ 14,093,292 $ 238,750 175,000 16,750,191 $ 266,849 339,043 57,796,600 $ 300,000 990,000 ,2 5,4 ,0 584,250 $ 7,500 257,047 $ 5,625 i e(#) se Opt i red i nAwards on er Cred Years Serv ubrof Number nExerc on au Real Value i e(#) ce i ted i e($) se i zed rsn au of Value Present Accumulated hrsAcqu Shares Benef nVest on ubrof Number i ($) t i g(#) ng tc Awards Stock i red F i Dur clYa ($) Year scal au Real Value Payments nVest on i gLast ng i g($) ng i zed

PROXY STATEMENT in the form of annuity required 2 / 1 or participating in a newin enhanced the defined defined contribution contribution retirement plan. plan.were Accordingly, Messrs. frozen their Templeton (i.e., accrued and they pension Crutcher will benefits choseDecember experience under to 31, no the participate 1997. increase qualified Contributions attributable and to to non-qualifiedincluded the years plans in defined of the contribution service 2017 plan or summary change for compensation Mr. in table. Templeton’s eligible and earnings) Mr. as Crutcher’s of benefits are the plan. For Mr. Crutcher,employment. eligibility For to each participate of began the onemployment, other the or named first January executive day 1 officers, of following eligibility theofficers the to month has completion participate following been of began completion employed one on of by year the one TI of earlier year for employment. of of longer Accordingly, 18 than each months the of of years the of named credited executive Plan service as shown described above. in note 3 above and ceased at December 31, 2004. Plan as described in note 3 above. are the same as thosecontained used by in TI Item for 8 financial inofficer’s TI’s reporting retirement annual purposes is report and assumed on are (in Form describedassumption accordance 10-K in for with for Note termination SEC the 10 prior rules) year to to for ended theis that purposes December financial determined date of 31, statements using this is 2017, either used. table except (i) The to thatPension the amount occur a Protection Pension at of named Act Benefit age the executive of Guaranty 65 lump-sum 2006 Corporation and benefitPlan (PPA) (PBGC) no earned and corporate interest as 3.77 bond assumption of percent yield of December for interest 1.00 31,amount. the assumption percent 2017, A TI of or discount Employees 3.75 (ii) rate Non-Qualified percent the assumption Pension forpension of Plans, the plans 3.75 whichever TI was percent rate Employees used for produces Pension to the the determine TI higher the Employees lump-sum present Pension value Plan of and each 3.77 lump percent sum. forpaid the to non-qualified him on Junein 1, effect 2018, on as December required 1, by 2017. Section 409A of the IRC. The benefit is calculated using the Plan’s assumptions 36 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT A participant may request paymentlump-sum of payment his or accrued one benefit of at(i) six termination single forms or life of any annuity. annuity, time In (ii) thereafter.annuity, 5-year order Participants (v) certain of may joint and largest choose and life to a 75 smallest annuity,payment, percent periodic (iii) he survivor payment, 10-year will annuity, certain the begin and and forms to (vi) of life receive joint annuity annuity, his and are: (iv) benefit 100 joint in percent and April survivor 50 of annuity. percent the If survivor year the after participant he does reaches not the request age of 70 If an individual takes earlyreduced retirement by and an chooses early to retirement begin factor. receiving As his a annual result, retirement the benefit annual at benefit that is time, lower such than benefit the is one he would have received at age 65. A plan participant is eligiblecredited for service. normal A retirement participant under is theyears eligible terms of for of age early the with retirement plan five if ifnormal years he he retirement. of is is employment. at at As least least of 55 65 December years years 31, of of 2017, age age Mr. with with Templeton 20 one and years year Mr. of of Ritchie employment were or eligible 60 for early or The pension formula for the1.5 qualified percent plan multiplied is by intended the tohis product provide base of a salary (i) participant plus years with bonus of anand up credited annual his to service retirement years a and benefit of limit (ii) equal service imposed the to with by average TI) the of of IRS, the the less five amount a highest of percentage consecutive compensation (based years on on of which his his year Social of Security birth, benefit when is he based. elects to retire The TI Employees Pension Planthe is origin a and qualified purpose defined of benefitin the pension this plan. plan. plan. Employees See who “Benefits joined – the Retirement U.S. plans” payroll for after a November discussion 30, of 1997, are not eligible to participate under the IRC. TI Employees Pension Plan (2) In 1997, TI’s U.S. employees were given the choice between continuing to participate in the defined benefit pension plans (3) For each of the named executive officers, credited service began on the date the officer became eligible to participate in (4) Credited service began on the date the named executive(5) officer became eligible to Credited participate service in began the on TI the Employees date Pension the named executive(6) officer became eligible to The participate assumptions in and the valuation TI methods Employees used Pension to calculate the present value of the accumulated pension benefits shown (7) Mr. March retired from the company on November 1, 2017. His TI Employees Non-Qualified Pension Plan II benefit will be

PROXY STATEMENT eeiire ol eeiil o eeisudrtesrio eei lni hywr odie. to their 2017, were in they if retirement early plan the for benefit to to eligible survivor entitled added were the been when Ritchie under have that, and benefits would sum for Templeton lump employee Messrs. eligible a the Because be beneficiary benefit died. would pension the the of beneficiaries the pays equals instead under that plans, retired entitled plan pension he been benefit the had have survivor under receive would a receives employee have beneficiary the We the employee’s which died. amounts the to of reduced employee, benefit instead retirement-eligible the retired a of he of half had death to plans the equal upon payment that a provide receives plans beneficiary pension non-qualified and qualified TI’s Perquisites.” – a Termination For Plan – plans. control Benefit pension in Survivor non-qualified change Employees the or TI under termination service upon of payments control. years “Potential in to see change credited absence, a are of by retirement, leaves triggered to of reasonably is bridge discussion as benefits a soon of of including as assets distribution absence, sum the no of lump of II, Leaves a all Plan in substantially under distributed of amounts be sale For a would assets. if benefit of equity plan, individual’s sale control Outstanding this the the in the under of following change following accrued value practicable the discussion amounts present which the the all the in control, (see For occurred, month in control applies. company the change in table) the following a change 2017 month of a year-end the event of fiscal the than definition at in later pre-2010 awards I, not the Plan paid amounts, under be such amounts would For following For benefit occurred. month company. individual’s calendar the the second of of the obligations value of unsecured present of day are time first plans the the the at is in age payment Balances and of service date credited earliest of The years sum. bonus, lump and a death. salary of of on form month based the the is in plans be both will under and the payment death and 65. death, IRC, age of the to event of prior the 409A benefit In benefit Section the participant’s by of the governed payment of is the payment distribution reflect when II, to distributed Plan reduced be under is will amounts benefit I For disability Plan commences. employment. under plan of amounts qualified termination receive disability, the not following to under they month due that seventh terminates requires the participant IRC of a executive the day If named first of the 409A the Because Section before IRC. company, II the the Plan of of under commences. 409A officers payment plan Section compensated distribution pension of highly lump-sum qualified requirements most any the the 50 under to the benefit subject among participant’s distributed are the be officers of will payment II when Plan distributed under benefit be Amounts lump-sum will the I of Plan amount under the Amounts obtain to plans. factor benefit plans. age-based non-qualified these qualified an the to individual’s by under apply the multiplied individual not above, is an does described difference to does receive formula resulting payable may calculated the The be participant using it. may the determined from Employees benefit benefit been subtracted TI pension qualified has is the qualified of amount for a amount benefit above which the non-qualified described on on this as compensation limit Once formula of IRS same amount the the the Additionally, using on apply. calculated limit not are IRS plan II the qualified Plan However, the and Plan. under I Pension as Plan same under the benefits is participant’s plans to A these eligible under sum. not retirement lump are early a with 1997, and in As 30, normal paid plans. November for are the after Eligibility Benefits of payroll II. above). purpose U.S. a Plan (see the is the or of Each joined I discussion 2004. who Plan a after employees in for earned plan, participate plans” amounts pension Retirement governs benefit earned – which defined amounts “Benefits II), qualified governs See (Plan the which plan. II I), pension Plan (Plan Pension benefit Plan Non-Qualified defined Pension Employees non-qualified Non-Qualified TI Employees the TI and the 2005; plans: before pension non-qualified two has TI Perquisites.” – the Termination See plans – plan. control pension pension in non-qualified qualified change employees the or TI under termination service upon the of payments of years “Potential day to under first credited absence the are of is retirement, leaves payment to of and of bridge discussion death, date a of earliest including time The absence, the beneficiary. of at the Leaves age of and election service death. the credited of at of month annuity years the or bonus, following sum and lump month salary a calendar on of second based form is the death in participant of be EA NTUET 08POYSAEET37 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT Aggregate FYE ($) (5) Balance at Last ons ($) i but i thdrawals/ i Aggregate str i W D ngs i n Last FY ($) i Aggregate Earn ons i but strant i i Reg Contr n Last FY ($) (2) i ons i ve i but i 48,833 $ 34,120 $ 60,827 — $ 368,475 120,000 $ 144,604 $ 225,479 — $ 1,932,834 173,640 $ 261,352 $ 4,211,140 (3) $ 254,400 (4) $ 14,576,748 (6) Execut Contr n Last FY ($) (1) i ...... $ ...... $ ...... — — — — — — — — — — ...... — — — — — ...... of his salary and bonus paid in 2017; and for Mr. Lizardi includesCompensation a column portion of of the his 2017 salary summary paid compensation in table. 2017. settlement of which has beenRSU deferred award until (calculated after by termination subtracting of(in the employment; both value (b) cases, of a the the $3,776,400 number award increaseand of at in (c) RSUs year-end the a is 2016 value $180,340 multiplied from of gain by the the same in the value rate Mr. closing of as Templeton’s price the dividends deferred of award on compensation TI at TI account common year-end common in stock 2017 stock. on 2017. Dividend the last equivalents trading are date paid of at the the year)); Compensation Table in previously filedpurposes proxy of statements the in SEC’s the executive year compensation earned disclosure. to the extent he was a namedremainder executive is the officer balance for of his deferred compensation account. 38 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT A participant may request distributionemergency from withdrawal, the a plan participant in must theis meet case paid the of pursuant requirements an to of unforeseeable his Section emergency. distribution 409A To election of obtain and the an is IRC. unforeseeable subject Otherwise, to a applicable participant’s IRC balance limitations. During 2017, participants could choosefollowing to mutual have funds, their each deferred of compensationsame which mirror as is the those managed performance offered by of to a oneFund participants third or F in party more and the (these of BlackRock defined alternatives, the MSCI contribution whichAggregate ACWI plans): may Bond ex-U.S. BlackRock be Index IMI MSCI changed Fund-Lending, Index ACWI at Lendable Northern ex-U.S. anyIndex Fund Trust IMI time, Fund-Lending, Russell F, Index are Northern 1000 Northern Non-Lendable the Trust Value Trust Russell Index ShortPuritan 2000 Fund-Lending, Term Fund, Index Investment Northern BlackRock Fund-Lending, Fund, Trust Equity Northern Northern Russell Index Trust Trust 1000Lifepath Fund MidCap Growth Index F, 400 2020 BlackRock Index Fund (EAFE) Fund-Lending, F, (Europe, Fidelity Index BlackRock Australia, 2050 Lifepath Far Fund Index East) F 2030 Equity and Fund Indexparticipants BlackRock F, Fund may Lifepath BlackRock F, change Index Lifepath BlackRock their Retirement Index instructions Fund 2040determined relating F. Fund solely to From F, by their among BlackRock the deferred the Lifepath performance compensation availablenot of daily. investment guarantee the Earnings alternatives, any investments on minimum that a return the participant’s on participant balance investments. has are A chosen third for party his administers plan the balance. company’s The deferred company compensation does program. R. G. Delagi (1) Amount shown for Mr. Templeton includes a portion of his salary and bonus paid in 2017; for Mr. Crutcher includes a portion Participants in the deferred compensationperformance plan bonus, may and choose (iii) to 90 deferto percent up the of to year profit (i) in sharing. 25 which Elections percent the to of compensation defer their will compensation base be must salary, earned. be (ii) made 90 percent in the of their calendar year prior K. J. Ritchie (2) Company matching contributions pursuant to the defined contribution(3) plan. These amounts are Consists included of: in (a) the $254,400 All in Other dividend equivalents paid under the 120,000-share 1995 RSU award previously discussed, (4) Consists of dividend(5) equivalents paid on the RSU All award amounts discussed contributed in by note a 3. named executive officer and by the company in(6) prior years have been reported Of in this amount, the Summary $12,532,800 is attributable to Mr. Templeton’s 1995 RSUSee award, “Benefits calculated – as Retirement described plans”contains in for note eligible a 3. compensation discussion The of the the employeelimits purpose has on of elected (i) the to contributions plan. defer the An andcompany company employee’s contributions may may deferred by make make compensation the related to account company to the that compensation enhanced are the defined in executive contribution excess officer plan of deferred and the into (ii) IRS his matching deferred contributions compensation the account. B. T. Crutcher K. P. March R. K. Templeton R. R. Lizardi Name The following table shows contributionsaggregate to amount each of named his executive deferred officer’s compensation deferred as compensation of account December in 31, 2017 2017. and the 2017 non-qualified deferred compensation

PROXY STATEMENT qiaet r adanal ytecmayi igecs amn fe h atdvdn amn fteyear. the of payment dividend last dividend the The after equivalents. payment dividend cash receive single to a the right in following a company discussion include the the awards by in RSU annually described table. paid as 2017 are exercise awards year-end equivalents to RSU fiscal right outstanding at the under awards retain shares equity may receive Outstanding terminates and employment options whose stock grantees granted termination, previously of circumstances the on Depending the to compensation discussed according Equity is made company. payments are the of payments by timing death, paid The of are balance. case distributed depend the plan Amounts program his in election. this for except distribution under chosen and participant’s payable has compensation” amounts participant deferred The the non-qualified Compensation.” that “2017 Deferred investments under – of “Benefits performance under the described on is solely plan this of purpose The of by plan timing paid compensation the are Deferred and distributed benefit Amounts of Plan.” form Benefit the Survivor Trust. benefit, Employees Benefit of TI Health amount – Employees the benefits TI determining pension the for “2017 formula under the described with are along payments, plan, this of purpose The and company. qualified the plan the and benefit under Trust Survivor of disbursed Pension forms amounts Employees the The TI benefits, benefits.” the determining pension by for “2017 respectively, formula under paid, The described are plans.” are plans Retirement payments non-qualified – of “Benefits timing under the described and are benefit plans these of purposes The company. plans the pension of by benefit circumstances paid defined and are non-qualified facts bonuses and the awarded, Qualified on If depend discretion. would Committee’s Whether amount Compensation elements.” what the and in to philosophy and subject “Compensation circumstances is under other and described under termination are awarded payments be of would timing bonus the a and bonus concerning policies Our these of Most Bonus terminates. employment whose officer executive named above. a discussed to been payments have in programs result may programs following The of “Analysis Termination in see change 2017, or for termination termination decisions employment to compensation following relating the payments “Compensation on of programs and result these compensation” reimburse a of Total control.” not as impact – does executive the 2017 TI the of for company. by discussion determinations the the a payable compensation generally of For are on control control. that benefits in taxes in for change excise change eligible or or or are employment income They of any company. termination for the officers upon with executive employees contract U.S. employment other an as has terms officers same executive named the definition. of Plan None control the is in control change in or the Change of control. termination 409A in upon Section change payments by a distribution permitted after Potential a extent months trigger the 24 not to within does occurs, terminated control distribution involuntarily in 2009, is change after participant a deferred the 2010, and if to earned IRC, unsecured prior amounts are deferred For balances and plan. compensation earned the deferred amounts under plans, For pension company. benefit the day defined of first non-qualified obligations the the is employment, under of payment balances of termination the date in election. Like earliest resulting distribution the circumstance valid and other participant’s sum any the lump For with a death. accordance of of in form month distributed the the are in following payments be month will calendar payment second ten death, the or of participant’s of five date the of the of from period event years a the three over In out distributed paid be be will to file installments on is annual or election Participants sum distribution salary. lump valid (ii) a no deferral. and of which sharing form for profit the Amounts separate and in years. elect bonus be consecutive may distribution (i) distributions participants valid participant’s these a Annually a that is election. to elect there participant’s attributable may which the compensation for with deferred participant accordance for the in dates by distributed distribution deferred be and will earned file, amounts on and election company, the by contributed Amounts EA NTUET 08POYSAEET39 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT 40 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Upon a change in controlinvoluntary there termination is (not no for acceleration cause) ofRSUs within vesting accelerate. 24 of See months stock the after options discussion a andconcerning following change RSUs change the in granted in Outstanding control after control equity of 2009. provisions awards TI Only relating at will upon to fiscal the an stock year-end vesting options 2017 of and table such RSUs. for stock further options information and Our only program, plan orPension arrangement Plan. providing A benefits change triggered in by“2017 control a pension at change benefits December in – 31, control TI 2017, isprovisions employees would the of non-qualified have TI that pension accelerated Employees plan plans” payment Non-Qualified as for of well a the as discussion balance the of under circumstances the that and purpose plan. the of See timing change of in payment. control Change in control In the case of aof separation employment arrangement with in the which company theseparation on executive arrangement his officer will or will typically her be include last atthe day an least executive of unpaid 50 officer active leave years has employment of old reached before absence, andaccrue age beginning to have under 55 the commence at the (bridge at paid least qualified to the leave 15 and retirement). end of years and non-qualified During of absence, RSUs the pension the the will bridge plans paid remain to described leave in retirement, above. and effect. years Stock end of options when service will will continue continue to to become exercisable In the case of agrade resignation level) pursuant will to typically a be separationnon-solicitation offered arrangement, commitment a an and 12-month executive a paid officer release leave (likeunder of of other the claims absence employees pension against before above plans the termination, a described company. in certainexercisable above. The exchange job and During leave for his the period a RSUs leave, will non-compete will the be and when continue executive credited calculating to officer’s to benefits vest. stock years Amounts under options of paid the will service to qualified continue an and to individual non-qualified become during pension a plans. paid leave of absence are not counted Perquisites Financial counseling is provided tocontinue executive after officers termination for of a employment. transition period following retirement. Otherwise, no perquisites

PROXY STATEMENT K R K R Compensat of Form officers. executive named the of each for control in change or termination upon payments potential the shows below table The B R ...... tc Options Stock RSUs tc Options Stock RSUs Compensation Deferred uvvrBnftPlan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified uvvrBnftPlan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified tc Options Stock RSUs Compensation Deferred Plan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified o-ul eie Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified eerdCompensation Deferred Plan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified Options Stock RSUs Compensation Deferred Plan Benefit Survivor tc Options Stock RSUs Compensation Deferred o-ul eie Benefit Defined Non-Qual. Benefit Defined Non-Qual. Pension Benefit Defined Qualified tc Options Stock RSUs Compensation Deferred Plan Benefit Survivor J P G K T R ...... R Crutcher B K eso lnII Plan Pension Plan Pension Plan eso lnII Plan Pension Plan Pension Plan R II Plan Pension Plan Pension Plan eso lnII Plan Pension Plan Pension Plan eso lnII Plan Pension Plan Pension Plan K R R eso lnII Plan Pension Plan Pension Plan ac (13) March epeo (1) Templeton Delag L i i ...... tch zard J P T R K G ...... $ ...... $ ...... $ ...... — — — — — — ...... $ ...... $ ...... R ...... Total Crutcher ...... i ac Total March epeo Total Templeton L Delag (1) e i i i i tch zard i Total e i ...... $ ...... $ ...... — — — — — — ...... $ ...... $ ...... i Total Total ...... i ...... nD on ...... $ — ...... $ — ...... — — — — — — — — — — ...... — — ...... — — — — — — ...... — — — — — — ...... $ — ...... — — — $ — — ...... — — ...... — — — — — — ...... $ — ...... 88944$5,9,3 ,0 ,0 — — 4,509 $ 4,509 $ 50,792,936 $ 48,869,414 $ 04515$4,4,4 1,4,1 92187$4,4,4 749,469 $ 49,241,847 $ 49,241,847 $ $14,241,619 49,241,847 $ 50,485,135 $ 2,4 5 1,9 3 4,6 4 4,6 4 4,6 4 4,6 (4) 749,469 $ (4) — 749,469 $ (4) 749,469 $ (4) 1,993,953 $ (4) 749,469 $ (4) 1,993,953 $ (3) 513,892 (4) 1,993,953 $ $ (5) (3) 926,549 1,371,524 $ $ (2) 2,238,116 $ 23022()$79053()$14817()$1,9,9 4 14817()— (4) 11,498,197 $ (4) 11,498,197 $ (4) $11,498,197 (3) 7,910,563 $ (5) 12,320,242 $ 2,4 5 5,6 3 0,2 4 0,2 4 0,2 (4) 303,025 $ — — — (4) 303,025 $ (4) 303,025 (4) 1,051,311 $ $ (3) 153,560 (4) 1,051,311 $ $ (3) 530,261 (5) 522,241 $ $ (2) 2,190,303 $ ,2,4 5 ,4,0 3 ,4,7 4 ,4,7 4 — — (4) 5,441,373 $ (4) 5,441,373 $ (3) 2,743,800 $ (5) 8,624,747 $ 01521$1,0,3 ,3,6 — — 2,237,368 $ — 10,503,736 $ — $12,968,175 10,135,261 $ (4) 435,375 $220,128,751 — $ (11) $167,919,189 (11) $220,128,751 $167,919,189 (4) 435,375 $ $14,198,937 — (4) 962,396 (4) 435,375 $ $222,172,699 $ (4) 962,396 (4) 435,375 (11) $167,919,189 $220,307,824 $ $ (11) $167,919,189 (4) (3) 962,396 220,490 $ $ (3) 487,120 (5) 609,677 $ $ (2) 1,011,331 $ 2,0 5 3,1 3 6,6 4 6,6 4 6,6 4 — (4) 268,366 $ (4) 268,366 $ (4) 268,366 $ (3) 135,713 $ (5) 224,202 $ 142()$210()$459()$459()—— — (4) 4,509 $ (4) 4,509 $ (3) 2,180 $ (2) 11,492 $ 82087$9,4,3 ,9,0 22887—$303,025 $ — 62,208,837 $ 6,795,709 $ 90,341,137 $ 98,250,807 $ 78581(1 78581(1 — — — — (11) 27,835,821 $ (11) 27,835,821 10211()$2,2,0 8 — — — — (8) 21,022,101 $ (8) 21,022,101 98821(1 98821(1 98821(1 98821(1 — (11) 19,808,281 $ (11) 19,808,281 $ — (11) 19,808,281 $ (11) 19,808,281 51197()$1,9,4 8 51197(0 51197(0 — (10) 15,191,947 $ (10) 15,191,947 $ — (8) 15,191,947 $ (8) 15,191,947 05345()$5,4,2 8 1,3,0 9 05345(0 05345(0 1,3,0 (9) $12,532,800 (10) 50,543,425 $ (10) 50,543,425 $ (9) $12,532,800 (8) 50,543,425 $ (8) 50,543,425 32069(1 32069(1 — (11) 73,240,649 $ (11) 73,240,649 36287()$1,7,6 8 — — — — (8) 13,672,867 $ (8) 13,672,867 i ,9,9 8 ,9,9 8 — — — — (8) 4,196,190 $ (8) 4,196,190 ,3,7 1)$59901(1 ,3,6 1)—— — (12) 2,237,368 $ — (11) 5,939,071 $ (11) 5,939,071 sab i EA NTUET 08POYSAEET41 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS l i yDeath ty 5,5 1)— — (14) 259,758 $ (14) 1,559,211 $ — — — — — — — — ,5,5 1)— (15) 9,453,650 $ — — — — —————— 12269— 11,272,619 $ — — —————— — — —————— —————— —————— ,3,3 7 — — — — (7) 1,932,834 ,4,4 6 — — — — (6) 4,445,640 ,4,4 7 — — — — (7) 2,043,948 2,1 6 — — — — (6) 822,814 6,7 7 — — — — (7) 368,475 Term Involuntary o Cause for i nat i on $ Res Term Involuntary 54318(2 — — (12) 55,413,128 ntfor (not as)Ret Cause) i gnat i nat i i on; on i rement —— i Control n Change

PROXY STATEMENT terms of their equity compensation awards as of December 31, 2017. of December 31, 2017, duebenefit to until disability, age assuming the 65. The namedused assumptions executive for used officer financial in does reporting calculating not purposes request thesethe for payment amounts 2017 the of are pension company’s his the benefits audited disability same table. financial as statements the for age-65 2017 lump-sum and assumptions are described in noteplan 6 assuming to the earliest possible50 payment percent date. of The the plan participant’s provides accrued that benefit, in reduced the by event the of age-applicable death, joint the and beneficiarythe 50 receives earliest percent possible survivor payment factor. date. or separation from service in the case of Plan II. The assumptions used are the same as those described inbalances note are 2 distributed above. in accordance with the participant’s distribution election. ($104.44). In the event ofterms. termination See due the to first disability table orDecember under death, 31, “Outstanding all 2017, equity outstanding and awards awards the at willMr. related fiscal continue Templeton. discussion year-end to following 2017” vest that for according table the to of number their an of additional unvested RSUs outstanding as RSU of award held by December 29, 2017 ($104.44). price of TI common stockvesting as schedule. of December 29, 2017 ($104.44). RSU awards stay in effect and paycommon out stock shares as according of to December the December 29, 2017 31, ($104.44), 2017. multiplied by the number of shares under such options ascommon of stock as of DecemberDecember 29, 2017 31, ($104.44), 2017. multiplied by the number of shares under such options as of Section 409A of the IRC. 42 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (1) Messrs. Templeton and Ritchie were retirement eligible for purposes of TI’s defined benefit pension plans and under the (2) The amount shown is the lump-sum benefit payable at age 65 to the named executive officer in the event of termination as (3) Value of the benefit payable in a lump sum to the executive officer’s beneficiary(4) calculated as required by Lump-sum the value terms of of the the accrued benefit as of December(5) 31, 2017, calculated as The required amount by shown the is terms the of lump-sum the benefit plans payable assuming at(6) age 65, in the Calculated case as of required the by(7) Non-Qualified the Defined terms Benefit of Pension the Balance Plan, plan as assuming of the December earliest 31, possible 2017, payment under date. the non-qualified(8) deferred compensation plan. For Calculated all by other multiplying termination the events, number of outstanding RSUs by the closing price of TI common stock as of December 29, 2017 (9) Calculated by multiplying the previously discussed 120,000 vested RSUs(10) by the Due closing to price retirement of eligibility, TI calculated common by stock multiplying as the of number of outstanding RSUs held at such(11) termination by the Calculated closing as the difference between the grant price of all outstanding in-the-money options and the(12) closing price of Calculated TI as the difference between the grant price of all exercisable in-the-money options and the(13) closing price of Mr. TI March retired from the company(14) on November Benefit 1, paid 2017. to Mr. March on(15) December 1, Calculated 2017. using the Plan’s assumptions in effect on December 1, 2017. Amount will be paid on June 1, 2018, as required by

PROXY STATEMENT ftewr fT’ needn eitrdpbi conigfr.TeAdtCmitehsapitdEnt&YugLPt eTI’s be to LLP Young & Ernst appointed has oversight Committee and Audit retention The compensation, firm. appointment, accounting the public for registered responsibility independent and TI’s authority of the work has the board of the firm of accounting Committee Audit public The registered independent of appointment ratify to Proposal SEC. the with filing audited for the 2017 that for directors 10-K of Form on board report the to annual recommended company’s committee the the in above, included to be referred statements discussions financial and review the the on Young Based & Ernst with discussed public has registered and independent independence, required the concerning firm regarding Committee independence. accounting Board, Audit firm’s public Oversight the registered Accounting with independent Company communications the Public firm’s from the accounting letter of the requirements and applicable disclosures the written by Act. the Sarbanes-Oxley received the has communications and committee required SEC The the the Young, by & established Ernst guidelines firm, with accounting together public standards registered auditing independent by the specified with discussed has committee independent The the and reporting the financial (1) over appropriate, control as internal opinions. firm, on related accounting report firm’s independent management’s accounting the (2) and and management statements with financial the discussed audited of and quality reviewed the has of committee evaluation The professional provide firm. a not accounting involve does public it role registered does committee’s nor independent The statements, the responsibilities. financial by the traditional TI’s performed of those to audits activities alter regard The or with statements. supersede assurances financial The to special the statements. designed any auditing financial way for company’s no the responsible in is preparing are firm for committee accounting responsible is public registered management TI independent charter, company’s committee’s the report: in following noted the As furnished has directors of board the of Committee Audit The $16,573,019. report of amount Committee the Audit retirement- in and ratio dependents) the eligible determining his of and Compensation purposes Summary CEO for 2017 our compensation our for total of (estimated annual column benefits in “Total” welfare resulted the and This in health benefits. reported of related amount value the the is in CEO adding our Table, of compensation total annual The total annual and the adjustments determine assumptions, to material as and well methodology as following employees, the our used all we estimates: of employee,” compensation “median 1. total the to annual of 210 the compensation of approximately of compensation was median total employees the annual all identify The the of To $78,951. of compensation was ratio total CEO), the annual our information, the than this of (other on median company Based the our $16,573,019. to of was CEO employees CEO our all our of of compensation compensation total total annual annual of median the 2017, For Ratio Pay eapidteecag aeta euiiei u arl ytm so h dniiaindt,t ovr oeg currency foreign convert to date, identification the of as system, payroll our in utilize we that rate exchange the the applied with We accordance in 2017 • for compensation employee’s median the of elements all the to calculated paid and is identified which We of each information, • sharing profit and salary base and used company we the employee,” at “median working the individuals identify employee.” 29,973 To “median approximately the of identify consisted • would population we employee which our upon date, date this the of as As 2017, 5, October • selected We • akA ln,CarTd .Budr ae .CakJa .Hobby M. Jean Clark F. Janet Bluedorn M. Todd Chair Blinn, A. Mark oUS dollars. benefits benefits. U.S. welfare retirement-related to and and health dependents) employee’s eligible the employee’s of the value and the employee including the S-K, for Regulation (estimated of or year. 402(c)(2)(x) year the Item fiscal of of full portion requirements the a than during less absence for of employees leave were unpaid who an employees on permanent were work. all who to for return annualized to were expected Salaries not employees. are who absence of leaves on employees excluding subsidiaries, consolidated EA NTUET 08POYSAEET43 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT 23,000 $ 28,000 2017 2016 722,000 $ 789,000 3,088,000 $ 3,238,000 9,774,000 $ 9,664,000 ...... $ ...... $ ...... $ 44 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT All Other: TI Foundation audit and training. Tax: professional services for taxadvice compliance on (preparation U.S. and and review foreign of tax income matters. tax returns and other tax-related filings) and tax Audit-related: including employee benefit planother audits regulatory and standards certification for procedures various relating non-U.S. to subsidiaries. compliance with local-government or Audit: our annual audit, includingdebt the offerings, audit statutory of audits internal required control internationally over and financial accounting reporting, consultations. reports on Form 10-Q, assistance with public a ...... Tax $ All Other The services provided were as follows: In order to respond toCommittee, time-sensitive the requests committee for has services delegated thatmanagement may pre-approval its arise authority responsibilities between to to regularly its pre-approve scheduled Chairseeks services). meetings (the ratification The Audit of of Chair the Committee such reports Audit does decisions pre-approval not at decisions delegate the to to Audit the Committee’s Audit next Committee scheduled and meeting. Annually the independent registered publicservices accounting expected firm to and be the performed directorappropriate, by of pre-approves the internal those firm audits over services. present The the toin services next the the and 12 Audit following estimated months. Committee categories: fees The Audit, are AuditAct). presented Audit-related, Committee For to reviews Tax each the and, and service Audit as All listed it Committee Otherbe in deems for (each provided. those consideration as The categories, defined term the in of committee Scheduleprovides any receives 14A for pre-approval detailed of a is documentation the different 12 indicating Securities period. months the Exchange and The from specific the the Audit services fees date Committee to incurred of reviews for pre-approval, ontime those at unless to services. least the time, The a Audit based Audit quarterly Committee on Committee basis specifically subsequent may the determinations. revise services the provided list to of date pre-approved by services the and firm related fees from Pre-approval policy. The Audit Committeeindependent is required registered public to pre-approve accounting the firmindependence. audit in order and to non-audit assure services that to the be provision performed of by such the services does not impair the firm’s Audit-Related Audit The fees for services provided by Ernst & Young to the company are described below: Representatives of Ernst & Youngmeeting. are They expected have to the be opportunity presentnot. to and make available a to statement respond if to they appropriate desire questions to at do the so; annual they have indicated that, as of this date, they do The members of the Auditcompany’s Committee independent and registered the public board accounting believethe that firm board is the asks in continued the the retention stockholders best ofAudit to interest Ernst Committee ratify of & will the the Young consider appointment company to whether of and serve it Ernst its as should & investors. the appoint Young. Consequently, another If the independent stockholders registered do public not accounting ratify firm. the appointment, the The lead audit partner onThe the Audit TI Committee engagement Chair serves and no management more have than direct five input consecutive into years the in selection that of role, the in accordance lead with audit SEC partner. rules. TI has engaged Ernst &over Young 60 or years. a In predecessor order firmaudit to to assure of serve continuing TI’s as financial auditor the statements independence, company’s should independent the be registered Audit conducted public Committee by periodically accounting another considers firm firm. whether for the annual independent registered public accounting firm for 2018.

PROXY STATEMENT i nlssadttlcmesto,adt rvd dqaefeiiiywiesilipsn ennfllmto uuegrants. future on market limit on meaningful based a reasonable imposing grant be still RSU to while one-time determined flexibility the were adequate grants, limit provide RSU award to and annual and option $500,000 compensation, annual the total The and and Comparator considers median. directors, analysis our this appropriate, appointed of as with or pay and, aligned elected of levels remains initially level compensation pay to median comparator director the considers our at and ensure be reviews to to company changes fees, the value. retainer years, date including two grant directors, Every in non-employee Group. total $500,000 for the exceed pay foregoing, not targets the shall company Plan Notwithstanding year The Director Plan. given 2018 of Director any the value 2018 in of date the director date grant under any effective a units to the with stock granted after units restricted awards stock appointed 2,000 of restricted or of value of of elected grant shares grant initially one-time purchase is annual a to who an receive options director and will of $100,000, eligible grant of each annual value addition, an date In receive grant $100,000. will a director with non-employee stock each common that TI provides Plan Director 2018 The are Administrator the of Decisions “Administrator”). Grants plan. (the the board administer the by and interpret appointed parties. directors things, all of other on committee among binding a to, and or power final board the the have by will administered Administrator be The will Plan Director 2018 The events. other and splits the stock by of adjusted because be benefits may related Administrator issuance plan shares for of plus 2,000,000, available enlargement Shares be or Plan. will dilution Director issuance prevent 2018 for to the available below) under stock (defined common granted Administrator of awards shares canceled of or number terminated the to Plan, Director 2018 the Under awards the stock of restricted for stock (2) available common options, Shares on stock based (1) valued Plan: rights) 2009 appreciation the stock as awards (including of awards types other same (3) company. the and of units, grant stock the restricted for and provides Plan Director 2018 The awards of Types Plan Director 2018 meanings the the of have Director features 2018 herein the defined Principal of separately text not complete terms the Capitalized Plan. to B. Director reference Appendix 2018 by as the entirety Statement in its Proxy forth in this set qualified to is attached approve Plan is not Director which do 2018 Plan, stockholders the If of Plan. summary 2009 following the The made into be deferred implemented. will be be awards to not further in able will no remain be it however, will will Plan, outstanding, Plan amounts Director remain 2009 additional 2018 awards the no the such approved, Similarly, Instruments no is Plan. Texas until Plan 2009 the Plan Director the of stock that 2018 under adoption common under the the of If outstanding approve shares Plan”). awards stockholders million Director for that 1.0 “2018 effect recommends approximately (the board were Plan The there Compensation Plan. 2017, Director 2009 31, 2018 the December under of As grant 2019. for the April available that in and expires objectives Plan and these 2009 growth achieving The the in in effective type. directors been this of has of interest Plan plan qualified vested 2009 a retain and the need and proprietary that to attract the believes continues to increase board company designed to The was and company. plan company the This the of compensation. non-employee of performance company’s their directors the defer as of to serve compensation opportunity to equity the individuals governs with Plan”) them “2009 provides (the and Plan directors Compensation Plan Director Compensation 2009 company’s Director The 2018 Instruments Texas the approve to Proposal 2017. during Young d & of Ernst board by The provided services all pre-approved Chair its or Committee Audit The dpnetreg ndependent i etr eomnsavt O rat FOR vote a recommends rectors i trdpubl stered i account c EA NTUET 08POYSAEET45 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS i gf ng i mfr2018 for rm i f i cat . i no h appo the of on i teto rs on L stecompany the as LLP Young & Ernst of ntment ’ s

PROXY STATEMENT ts Total ($) i cted Stock Un i ons Restr i on Plan (1) ect to Opt i j 66,715 (3) 13,871 (4) $ 2,199,285 rector Compensat i Texas Instruments 2018 D ...... pant Shares Sub shares and units reported doesof not the include director’s those cash that compensation maydeterminable. or be dividend credited equivalents to into a stock director unit upon accounts an because election future to elections defer are all not or a portion i c i 46 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Part Non-Employee Director Group (2) The actual number of unitsforth granted the will benefits depend or on amounts theyear that value ending would of December have our 31, been common 2017, received stock had by on the or the 2018 allocated date Director to of Plan each grant. been of The in the following effect non-employee table on directors sets such for date. the fiscal New plan benefits Each director will be ablerestricted to stock elect, unit with grant respect be tothat deferred any his in year, or accordance that her with all deferred the or compensation terms any for of portion any the of year 2018 his be Director or credited Plan. her to Each eligible a director cash cash will compensation account, be and a able stock to unit elect account or any combination thereof. No awards may be granted under the 2018 DirectorDeferral Plan after the tenth anniversary of the effective date of the 2018 Director Plan. Term (1) Based on the $79.26 closing price of our common stock on January 26, 2017, when 2017 awards were granted. Number of The board of directors mayHowever, amend, stockholder alter, approval discontinue must or be terminateavailable obtained the for for 2018 awards any Director or amendment Plan increase or orcertain the alteration any corporate total portion that events, value of would as of the increase described awards plan theDirector in that any number Plan. Section may time. of 5(d) be shares of granted the in 2018 any Director given Plan) year or (other any than other in material connection amendment with of the 2018 Amendment Unless otherwise determined by theencumbered Administrator, by no the award individual granted to underand whom the distribution. it 2018 During is Director the granted, Plan individual’s other mayguardian lifetime, than be or each by transferred legal award will, or representative. will by otherwise be designation exercisable of only a by beneficiary, the or individual by the or by laws the of individual’s descent The exercise price of stocksecurity under that any may stock be option, purchased thedefined under grant in any price the other of 2018 stock-based any Director award stock Plan) will appreciation of not right, the be and stock less the or than purchase other 100 price security percent of on of any the the date fair of market the value grant (as of the option, right or award. Awards will be granted formay no provide cash that consideration, upon or their forcombination exercise minimal thereof, the cash as holder consideration the will if Administrator receive requiredconsist will cash, by in determine. stock, applicable whole Any other law. or shares securities, Awards in of other part stock awards, of deliverable other authorized under property and the or unissued any 2018 shares Director or Plan treasury may shares. If a dividend or otherthe distribution, 2018 recapitalization, Director stock Plan split, affects orbenefits, our another or common corporate potential stock event such benefits, or that intended transactionmade an to described to: adjustment be in (i) is made Section the appropriate available 5(d) number to under of number and prevent the and type dilution 2018 type of or Director of shares enlargement Plan, shares (or of thenprice (or other the an with other securities equitable respect securities or adjustment to or property) shall any property) which be established award. subject may at The to be the Administrator outstanding made time may the awards, of not subject and grant. take of (iii) any awards, the other (ii) grant, action the purchase to or reduce exercise the exercise price of any option as Options will become exercisable innot four more equal than annual ten installments years commencingfor after on U.S. the the tax date first purposes. of anniversary Each grant. datepracticable restricted It of after stock is the the unit expected grant fourth will that and anniversary be all expire after of paid options a the or granted Change date settled under in of by the Control, grant. the Plansettled options If issuance will as become a of be soon immediately director one non-qualified as exercisable experiences share options practicable. and a of restricted Separation TI stock common from units stock Service vest as within immediately soon 24 and as months are paid or

PROXY STATEMENT 2 etitdsokuisadsokuisceie odrcos eerdcmesto consaestldi hrso TI of shares in settled are accounts compensation deferred directors’ to credited units stock and units stock Restricted “2003 (2) (the Plan Compensation Director 2003 Instruments Texas the under issued be to stock common TI of shares Includes (1) holders security by Total approved not plans holders compensation security Equity by approved plans compensation Equity Category Plan 2017. 31, December of as plans compensation equity company’s the about information forth sets table following The information plan compensation Equity an in account unit stock d or of a account board to cash The entitled a be from participant. will made the company is by the The distribution recognized account, received. a income unit shares time the deferral stock and the to a or cash at equal of account any purposes amount result cash of tax a a value income as from the federal Code made to for Revenue is equal deduction Internal distribution income the a ordinary under When recognize income distribution. will taxable a participant any receives stock received participant restricted have the of to until respect deemed election in be participant not a will purposes by participant tax income thereof. A income ordinary settlement federal of the any, for recognition and if deduction the Plan income, a to, Director ordinary to equal 2018 the entitled the amount to be an under units. equal will in awards stock amount company and unit restricted an the as, or in Also, time options purposes option. same of tax an the grant income exercises at the federal who upon for participant purposes deduction a tax a by income to realized federal entitled for be participant deduction will the any company the stock, allowed The on or be stock cash received. not the in shares will of award or company value unit cash The market stock any fair restricted of the a value of of the generally any, settlement to Internal will if or equal the Plan excess, payment income Director under the Upon ordinary 2018 income of price. recognize the taxable amount option will under of the the receipt option in over in an exercise exercise receives be of of who not time date will participant the A unit at stock grant. income restricted the ordinary a of recognize or making option the an upon of Code grant Revenue a receives who participant A matters Tax 2017, in effect in been plan the had units stock restricted 1,261 of grant been a Plan received the have had would stock director common non-employee TI Each of shares 6,065 purchase (4) to option an received have would director non-employee Each directors. non-employee (3) 11 are there Currently, (2) omnsoko n-o-n ai.Acrigy uhuishv enecue o upsso optn h weighted- the computing of purposes for excluded been have units such price. Accordingly, exercise basis. average one-for-one a on stock common Employees TI the and Plan”) Director ESPP”). “2009 “2014 (the stockholder- (the Plan predecessor Plan and Compensation Purchase LTIP”) Director Stock “2009 2009 2014 (the Instruments Plan Texas Incentive the Long-Term plans, 2009 approved Instruments Texas the Plan”), Director have not other would of directors form non-employee the the awards. in and such benefits utilized any additional been of for not grant provides have automatic also awards for Plan of eligible Director types been 2018 these The date, $100,000. To of awards. value stock-based date grant a on based $100,000. of value date grant a on based 2017, in effect in were which $203,151, of and amount 2017. 2017; the during in in accounts granted units cash into units stock and stock compensation restricted unit cash restricted on stock their their equivalents director of of dividend into $368,333 receipt cash paid of deferred of total directors receipt a seven deferred deferred Plan; directors 2009 directors five four the 2017: under for accounts made unit elections stock deferral of result a As ...... i etr eomnsavt O h ea ntuet 08D 2018 Instruments Texas the FOR vote a recommends rectors EA NTUET 08POYSAEET47 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ...... ob sudUpon Issued be to 29960()$4.8()8,9,1 (3) 88,998,010 (2) 48.68 $ (1) 52,939,620 43161()$4.788,998,010 48.67 $ (5) 54,331,611 arnsand Warrants Outstand ,9,9 4 84 2 0 (2) 48.49 $ (4) 1,391,991 Exerc ubrof Number Secur R Opt i hs(a) ghts i i ons, i etrCompensat rector eof se i t i es i ng Exerc arnsand Warrants Outstand R We Opt Average i hs(b) ghts i ePr se i ghted- i ons, i nPlan on i i eof ce ng . ubro Secur of Number Rema Compensat secur i oun() (c) (a)) column n ne Equ under (exclud o Future for i Issuance i n t i i sreflected es gAva ng i nPlans on i ng i ty i lable i t i es

PROXY STATEMENT Percent of Class 83,312,134 (1) 8.47% 68,837,536 (4) 7.0% Shares Owned at December 31, 2017 ...... Street nd sole dispositive power for 81,711,196 and shared dispositive power for 1,600,938 of these68,837,536 shares. shares. 52,549,619 shares remain available forfuture future issuance issuance under under the the 2009 2009form Director LTIP of Plan. and restricted Under 1,045,755 stock the shares units, 2009 remain options LTIP available or and for other the stock-based 2009 awards Director such Plan, as shares restricted maywas stock. be replaced granted by in the the 2009Only LTIP, non-management which employees was were approved eligible byof to stockholders. shares receive No in awards further the under grants form the mayadministered of be 2003 by restricted LTIP. made a stock under The committee units, 2003 the of options LTIP 2003eligible independent or authorized LTIP. participants other directors the one stock-based (the grant or awards Committee). more such Theawards equity as Committee made awards restricted had through and stock. the assumption The to sole of, plan determine discretionand or is the to except in number grant as substitution or to a for, amount result outstanding ofof of awards any any an previously award. stock adjustment granted Except appreciation event by in right, such an theaward and as acquired case under the a company, of the stock purchase 2003 split, price LTIP the ofeffective could exercise any date not price security of be under that the less any could grant than stock be of 100 option, purchased the percent the under option, of grant anyAlso right the price includes other or fair stock-based shares award. market to value be ofInstruments issued the Restricted under stock Stock the or Unit Texas other Plan Instruments securityPlan for Directors on (which Directors. Deferred the was These Compensation replaced plans Plan by were and the replaced the 2009 by Texas Director the Plan), stockholder-approved and 2003 no Director further grantsvesting may of be outstanding made grants under of them. for restricted issuance stock in units, settlement 202,179 of shares directors’ for deferred issuance compensation under accounts. the 2014 ESPP and 149,196 shares 48 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT BlackRock, Inc. 55 East 52 (1) According to its Form 13G filing, The Vanguard(2) Group has sole voting power According for to 1,412,120, its shared Form voting 13G power filing, for BlackRock, 223,556, Inc. has sole voting power for 58,319,093 shares, and sole dispositive power for The following table shows theexecutive beneficial officers ownership and of directors TI as common a stock group. by Each directors, director the and named named executive executive officers officer and has all sole voting power (except for shares Security ownership of directors and management New York, NY 10055 Name and Address The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 Security ownership of certain beneficial owners The following table shows theof only the persons company who by have virtue reportedto of beneficial either filing ownership vote a of those schedule more shares 13G than or with 5 dispose the percent of SEC. of them. Persons the More generally common than “beneficially stock one own” person shares may if be they considered have to the beneficially right own the same shares. As stated in the noticemay of vote annual at meeting, the holders meeting ofwere or record outstanding. any of adjournment This the is of common the the stockfor only meeting. at each class As the share of of close held. capital February of stock 26, business entitled 2018, on 983,105,798 to February shares vote 26, of at 2018, TI the common meeting. stock Each holder of common stock has one vote Additional information Voting securities (3) Shares of TI common stock available for future issuance under the 2009 LTIP, the 2009 Director Plan and the 2014 ESPP. (4) Includes shares to be issued under the Texas Instruments 2003 Long-Term Incentive Plan (the “2003 LTIP”). The 2003 LTIP (5) Includes 44,754,593 shares for issuance upon exercise of outstanding grants of options, 9,225,643 shares for issuance upon

PROXY STATEMENT 1 nlddi h hrsondsonaoeare: above shown owned shares the in Included percent. 1 than (1) less (3) * group a as directors and officers executive All Delagi G. R. Ritchie J. K. March P. K. Lizardi R. R. (2) Management Templeton K. R. Sanders R. W. Sanchez E. R. Patsley H. P. Kirk R. Hobby M. J. Crutcher T. B. C.S.Cox ...... Clark F. J. Carp A. D. Bluedorn M. T. Blinn A. M. Jr. Babb, W. R. D shares pledged Name family has a officer by executive held or shares director excludes No table ownership. The beneficial the owned. disclaimed stock. in shares has common detailed the officer TI as to executive of accounts respect or compensation with director deferred power a to investment if credited sole member shares and and table) RSUs the to to subject footnotes shares days, 60 within obtainable i rectors b h hrsi eerdcmesto consaeise olwn h ietrstriaino service. of termination director’s the following issued are accounts compensation deferred in shares The (b) director’s the upon generally stock common TI in settled are 2007 before granted RSUs directors’ non-employee The (a) Templeton K. R. Sanders R. W. Sanchez E. R. Patsley H. P. Kirk R. Hobby M. J. Crutcher T. B. C.S.Cox ...... Clark F. J. Carp A. D. Bluedorn M. T. Blinn A. M. Jr. Babb, W. R. D i rectors ...... g o ietr.RU rne fe 06aestldi Icmo tc eeal pntefut niesr fthe of anniversary fourth the upon retirement generally company’s stock the common reached TI has in or settled years are eight 2006 date. least after grant at granted served RSUs has directors. she for or age he provided service of termination ...... — — ...... EA NTUET 08POYSAEET49 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ...... w ,1,7 3054397— 483,947 13,095 2,318,278 i Obta th Shares 6,7 0,8 — 201,284 — 267,276 i 0Days 60 n 761—92145,168 9,271 — 77,621 674—1,7 1,659 7,810 986 16,871 7,271 — 7,271 1,866 — — 42,803 26,714 28,296 26,714 34,960 — 21,139 26,714 — 18,296 70,621 — 41,463 41,463 i ,1 ,6 — 3,261 — 1,516 ,1 ,5 3,208 7,672 5,150 — 9,271 — 6,511 9,724 nable o401(k) to Cred Account Shares i ted ( i hrs (a) Shares) n RSUs ,0 — 2,000 eebr3,2017 31, December hrsOndat Owned Shares ,1,8 * 3,119,589 ,4,8 * 8,248,780 ,6,7 * 1,164,875 0,2 * 103,922 4,8 * * * 341,486 661,594 123,510 * * 151,085 * 468,785 119,226 008* * * 80,018 49,933 36,971 * * 14,869 * 26,667 81,898 ,0 * 2,000 ,7 * 4,777 Compensat cons(b) Accounts oDeferred to Cred Shares i ted i on fClass of Percent

PROXY STATEMENT RSUs n Shares) i ( ted to i 401(k) Shares Account Cred nable i 75,686 — 40,178 n 60 Days i 360,672194,556 2,111 — 98,187 145,461 Shares th Obta i 1,018,420 12,220 130,916 w ...... cer i ve Off i stockholder, or, if the 5or percent 13D stockholder filed is under not the astock SEC natural (individually rules person, or and any collectively, regulations person a by or “5 the entity percent 5 designated holder”); percent in or stockholder the as Form having 13G an ownership(a) interest is in employed, TI or of which someone listed in (a) is a director, principal or partner. compensation accounts are issued following a director’s termination of service. (a) A TI director(b) or executive officer, or an A Immediate stockholder Family owning Member more of than a 5 director percent or of executive the officer; common stock of TI or an Immediate Family Member(c) of such An entity in which someone listed in (a) above has a 5 percent or greater ownership interest, by which someone listed in K. P. March K. J. Ritchie R. G. Delagi (a) 5,624,074 shares obtainable(b) within 60 days; 28,137 shares credited to(c) 401(k) accounts; 1,845,391 shares subject(d) to RSU awards; for the 132,312 terms shares of credited these to RSUs, certain see non-employee pages directors’ 15 deferred and compensation 34-35; accounts; and shares in deferred Execut R. R. Lizardi 50 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT The policy specifies that arelationship related (including person any transaction indebtedness includes, or but guarantee is not of limited indebtedness) to, or any any financial series of transaction, similar arrangement transactions or or arrangements. For purposes of the policy,mother-in-law, an father-in-law, “Immediate son-in-law, Family daughter-in-law, Member” is brother-in-law,employee) any sister-in-law sharing child, or the stepchild, any household parent, person of stepparent, (other a spouse, than TI sibling, a director, tenant executive or officer or 5 percent holder. Because we believe that companyand transactions executive with officers directors present and a executiveperson heightened officers transaction risk of policy of TI that creating or has or withofficers been appearing persons should approved to related obtain by create to the the a TI approvals board conflict directors applies or of of to ratifications directors. interest, transactions specified The we in below policy have which: in states a connection that written with TI related directors any1. and related executive person transaction. The policy TI or any2. TI subsidiary is or will The be amount a involved3. participant; exceeds or is expected to Any exceed of $120,000 the in following a (a fiscal “related year; person”) and has or will have a direct or indirect interest: Related person transactions (3) Includes: (2) Included in the shares owned shown above are:

PROXY STATEMENT h or a eemndta h olwn ye ftascin oeltl iko ofito neetadteeoehsdeemed has therefore and interest of conflict a of risk little pose transactions of types Committee following approved: is practicable. GSR the them that as that aware soon determined becomes as has officer terminated board compliance be The chief shall the above person which forth related of set Any or process transactions. officer the person compliance to related chief pursuant on the approved committee of not the attention to the the reports to of periodic brought interests provide transaction best faith. will the good officer with, in compliance inconsistent determine chief not shall The or persons in, or be body to approving determined the is as it stockholders, unless its approved and be company will organizations arrangement other person to related obligations No judgment, create the or TI. influence responsibilities to adversely TI responsibilities to meeting with the appear in conflict was or officer in (a) influence executive come person adversely or may related could director that the parties (b) the and third or of TI unrelated person actions between to related or of transaction available the decisions availability the terms from the the whether influence independence; is and undue director’s consideration arrangement; of a primary the result applicable) on The of (if impact terms generally. including the the employees them, arrangement; services; to to the or or available of products circumstances company comparable and the for facts to sources relevant benefits other the the of to: all limited consider not or will but member persons such or which body in person. approving arrangement related The person the related is a Members of Family consideration Immediate the her in or participate his will of Committee any GSR the of member No holder percent 5 A interest ownership the greater of or any percent which 5 in a entity has an foregoing or Family person, Immediate such an of officer, Member executive or director other Any interest ownership greater of or any percent which 5 in a has entity an foregoing his or the of Members, any Family officer, Immediate compliance her chief or Committee, GSR the of Chair greater or percent 5 a interest has ownership in foregoing entity the an of an or any board, person, which TI such the of of Member member Family a Immediate also is who officer Executive Involv Arrangement follows: as are approvals required The rnatosi h riaycus fbsns hr h nyrltosi faT ietro xctv fie,o their or officer, executive or director TI a of relationship only the where business of course ordinary the in Transactions • or from: indenture only trust arising a person under related trustee a registrar, of agent, Interests transfer a funds, as of • services depository of bank rendering a the as involve services person bids, involving related competitive Transactions a by in determined interest are • sole involved the charges where or or rates such, the as where services Transactions for officer executive • or director TI a to paid Compensation • n i)aonsivle o h iclya ontece h rae f$0,0 r2preto h niysconsolidated entity’s the of transaction percent the 2 of or terms $200,000 the of negotiating greater in the involved exceed not not year; beneficial is do that percent officer year for 10 executive fiscal revenues a or the gross than director for less TI involved and/or the amounts officer) (i) (ii) executive if and an entity than other (other the employee of an owner as is Member, Family Immediate authority; governmental or law with conformity in fixed services; charges similar or rates at utility, such; public as or position carrier, their contract is or holder common percent 5 or officer executive director, TI a of transaction O O O O h wesi fT tc n l odr fta ls fsokrcietesm eei naport basis; pro-rata a on benefit same the receive stock of class that of holders all and organization; stock ownership or TI total corporation of the another ownership of of the percent director other 5 a the than as all less position with is their combined above, partnership; when 3(a)-(c) limited interest, in the ownership specified of that individuals interest of and other equity partnership, the outstanding a of the in interests of partner ownership percent limited 5 a the than as with less interest combined is an when above, ownership, 3(a)-(c) that in and specified party; transaction individuals such the other to the party all another of in ownership ownership indirect or direct the i ng : EA NTUET 08POYSAEET51 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS hi fteGRCommittee GSR the of Chair the with consultation in Officer Compliance Chief Committee GSR Committee GSR prvlRequ Approval i e by red :

PROXY STATEMENT ng i n i on i nees to be i als) i Proxy Mater (and Not for Inclus Other Proposals/Nom Presented at 2019 Annual Meet No earlier than December 27, 2018, and no later than January 26, 2019 on i als i nees for Inclus i (Proxy Access) n 2019 Proxy Mater i rector Nom i D No earlier than October 14, 2018, and no later than November 13, 2018 n i on als i i 2019 Proxy Mater On or before November 13, 2018 Proposals for Inclus director or executive officer, orofficer) their if Immediate the Family aggregate Member, payments isconsolidated as for gross a the revenues trustee fiscal for or year that employee dopayments year. (other not under “Payments” than exceed the exclude as the TI payments an greater Director arising executive ofprograms; Award solely $200,000 and Program from or and investments 2 payments in percent under TI of non-discretionary stock, the charitable recipient’s contribution matching or executive officer does notthe participate Immediate in Family the Member decisions and regardingconsistent such the with hiring, hiring, TI’s performance performance human evaluation evaluation resources or or policies. compensation compensation is of determined on a basis • Charitable contributions, grants or endowments by TI or the TI Foundation to an entity where the only relationship of the TI • Transactions involving the employment of an Immediate Family Member of a TI director or executive officer if such director When proposal must be received by Texas Instruments 52 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT If you are a participantunder in the the plans TI and Contribution are and entitled 401(k) to Savings direct Plan, the or voting the of TI shares 401(k) allocable Savings to Plan, your you accounts are under a these “named fiduciary” plans. The trustee Benefitplanvoting The table below shows the deadlines for stockholders to submit proposals or director nominations for next year’s annual meeting. Stockholder proposals and nominations for 2019 Without receiving additional compensation, officialsemail, and from regular some employees stockholders of if TIof proxies may proxies are solicit at not proxies a promptly personally, cost received. by of We telephone, $12,000 have fax plus also or out-of-pocket hired expenses. Georgeson Inc. to assist in the solicitation The solicitation is made onbrokerage behalf houses of and our other board custodians, ofmaterials nominees directors. to and TI you fiduciaries will if for pay you reasonable the are expenses cost a they of beneficial incur soliciting holder in these of sending proxies. our We these shares. will proxy reimburse Cost of solicitation Compensation committee interlocks and insider participation During 2017, Messrs. Carp andmember Sanchez (i) and was Mses. an Patsley officer andthe or Whitman SEC’s employee served rules of on governing TI, the (ii) disclosure Compensationas was of Committee. a formerly related No director an person committee or officer transactions member of (Itemmember of TI 404 of the or of our compensation (iii) Regulation board committee had S-K). of of any No directors another relationship executive or entity, requiring officer a one of disclosure member of TI under of whose served the directors Compensation or Committee. executive officers served as a In addition, all suggestions fromTI’s stockholders management. concerning To the ensure company’s that businessstockholders your are and suggestions welcome management’s receive and responses. appropriate will Stockholders review, beformal are the carefully stockholder thereby GSR considered proposals. given Committee by Generally, access reviews the at correspondenceof board the from formal prefers board stockholder you level proposals. present without See your having “Communications views to with in resort the this to board” manner for rather information than on through contacting the the process board. We reserve the right tothat reject, does rule not out comply of with order, these or and take any other other applicable appropriate requirements. action with respect to any proposal or nomination Proposals are to be sent to: Texas Instruments Incorporated, 12500 TI Boulevard, MS 8658, Dallas, TX 75243, Attn: Secretary. During 2017, the son ofinvolved R. in Gregory any Delagi decisions (Senior regarding Vicesimilarly President) his situated was son’s employees. employed employment at in TI, our and facilities the organization. compensation Mr. of Delagi his was son not was consistent with that of

PROXY STATEMENT naT eei lnadwudlk orqeteetoi eiey alT netrRltosfrmr information. more for Relations Investor TI call visit delivery, participant delivery, a electronic electronic are request request you to to If like like information. would would more and and for plan stockholder 479-3773 benefit registered (214) TI for a at a information are Relations in entering you Investor and If TI holding www.icsdelivery.com/ti broker. call stockholders visiting or or date, by bank www-us.computershare.com/investor meeting delivery a the electronic by After request held when years. may account opportunity and, future bank each the www.proxyvote.com in or stockholders at electronically broker offer internet materials a to the proxy through pleased via access shares are vote or we delivery, receive years, electronic to future request enroll in To prompted, materials electronically. these mailings of proxy copies receive printed to receiving 10-K to Form alternative an our As of copies and receiving materials are above. proxy you given if address of you the delivery to at Electronic materials Relations of Investor Texas set to to one writing writing only or by annual send 540-7095 or future we (866) 479-3773 For that calling (214) Relations. request by at Investor or copies, Relations Attn: materials, multiple these Investor 75266-0199, separate of calling TX request set by Dallas, may one you 8657, you an only to MS meetings, share received cost 660199, who have no Box stockholders and at P.O. to stockholder copy Incorporated, Materials) another separate Instruments to Proxy with a us of address request permit Availability an may that Internet share you rules of you materials, “householding” Notice If SEC’s one requested. the (or otherwise of materials unless advantage proxy address take of we set materials, one duplicate only delivering deliver of expenses the reduce To address same stockholder. usage the the as by sharing such borne Stockholders access, be electronic must with that associated providers, costs access be internet may and there companies that telephone understand from are should charges options internet which the see via to voting record Stockholders of holder other and or offer stockholders broker banks registered bank, and to your firms provided by you. brokerage program forwarded to of the information available number from the A differ Check bank. may participants. or programs plan firm These benefit brokerage options. a voting of internet name and the telephone in registered shares Inc., with Solutions, Stockholders Financial counsel Broadridge by through law. advised available applicable been made of has been requirements TI have the properly. which with give recorded procedures, consistent to been voting are stockholders have internet allow instructions and to stockholders’ telephone identities, that the stockholders’ confirm that authenticate to to and designed instructions are voting procedures their 690-6903 voting (800) internet calling www.proxyvote.com. and by at telephone telephonically internet The vote the may via plan or benefit toll-free) TI only, a Canada (TI’s in and Computershare shares U.S. with own the directly beneficially (within registered who shares participants with and Stockholders agent) participants. transfer plan benefit and stockholders Registered were 2017 during reports other voting all that internet believes and company Telephone The error, shares. administrative of an gift officers. to a executive Due to and company. respect directors the with its of to Xie by securities officers, Mr. filed equity executive for timely certain and filing of directors late company’s ownership one the beneficial was including regarding there persons, SEC certain the requires with Act reports Exchange file Securities the of 16(a) Section been have compliance instructions reporting voting ownership which for beneficial are plans 16(a) instructions the Section voting in no shares which the law. for as by plans proportions required savings same otherwise the 401(k) the unless under TI in date held the voted that stock by be by TI held will received voting shares 2018, meeting. of TI 23, purpose annual received. April of the is by for notice direction received fiduciaries” the voting “named in no as described which voting designated manner for the are the plans on plans in trustee the 2018, the 23, under instruct April participants to by Additionally, wish so you do If should instructions. you your accounts, with your accordance for in held shares shares your of vote will plan your administering EA NTUET 08POYSAEET53 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT . Box . O . l 26, 2018 i . ons, P i com . proxyvote . ng to be held on Apr i www s annual report on Form 10-K for the : ng to Investor Relat ’ i t i ble at i Sincerely, Cynthia Hoff Trochu Senior Vice President, Secretary and General Counsel thout charge by wr i als for the Stockholder Meet i n a copy of the company i th the SEC w i s 2017 annual report are access ’ led w i Our Form 10-K is also available in the “Investor Relations” section of our website at ty of Proxy Mater . i l i You may also obta lab i ng the Ava i ce Regard i s 2018 proxy statement and the company i 54 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT www.ti.com. Th The company’s annual report to2017, stockholders, accompanies which this contains proxy consolidated statement. financial statements for the year ended December 31, year ended December 31, 2017, that was f 660199, MS 8657, Dallas, TX 75266-0199 Notice regarding forward-looking statements This proxy statement includes forward-lookingPrivate statements Securities intended Litigation to Reform qualify Act forspending of the levels 1995. safe and Statements harbor potential herein from for that liabilityforward-looking growth, describe established statements improved TI’s by are profit business the subject strategy, margins to plans, andmaterially certain goals, cash from risks generation future those and capital are in uncertainties forward-looking forward-looking that statements.discussion statements. could All in For cause such Item a actual 1A detailed results of discussion andincluded our of amounts in annual the to this report risks differ proxy on and statement Form uncertainties,the are 10-K see forward-looking made for the statements only the Risk to as year factors reflect of ended subsequent the December date events 31, or of 2017. circumstances. The this proxy forward-looking statement, statements and we undertake no obligation to update March 13, 2018 Dallas, Texas Important Not

PROXY STATEMENT o diinlifrainaotatnigteana etn e h icsinudr“tednerqieet”o ae4. page on requirements” “Attendance under discussion the see meeting annual the attending about information additional For will bags All Attendance buildings. TI inside building. devices the recording into audio/video entry and upon cameras search weapons, to forbids subject policy be security TI’s that advised Be available. be will Security parking reserved where Lobby, South the at park should visitors All your on be will Instruments Texas to entrance the Parking light, third the At lights. traffic two pass will You Lane. left. Forest light. on traffic (East) second right the Turn at right airport: your Field on Love be From will Instruments Texas Lane. Forest on (West) right Turn Greenville. airport: DFW From Directions information meeting annual other and Directions aeteNrhArotei oI-3E aeI-3Et h revleAeu xt unrgt(ot)on (South) right Turn exit. Avenue Greenville the to IH-635E Take IH-635E. to exit Airport North the Take aeMcigidLn att S7N(eta xrswy.Tae ot n7Nt h oetLn exit. Lane Forest the to 75N on North Travel Expressway). (Central US-75N to East Lane Mockingbird Take EA NTUET 08POYSAEET55 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT 34.8% 30.5% 34.5% 33.8% 30.5% 29.6% Percentage of Revenue December 31, For Years Ended (1,777) $ 41,331 $ 14,374 35.8% $ 12,597 31.2% (531) (551) $ 13,370$ $ 4,614 13,000 $$ 4,397 4,083 $ 3,846 For Years Ended December 31, (695) $ 14,961 $ 5,363 $ 4,668 )...... A-1 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT Free cash flow (non-GAAP) Free Cash Flow as a Percentage(Millions of of Revenue dollars) Revenue 2017 2016 2015 Total 2017 2016 2015 Total Cash flow from operations (GAAP Capital expenditures This proxy statement refers towith ratios generally based accepted on free accounting cash principlesCapital flow. in expenditures These the from are U.S. the financial (GAAP). most measures FreeCash directly that cash flow comparable were flow from GAAP not is operations). measure, a prepared We Cash non-GAAP ingenerating believe flows measure accordance capability free from calculated cash and operating by flow the activities subtracting and amount (alsoperformance. these of referred These ratios cash to non-GAAP based potentially as measures on available are it tobelow supplemental provide return to to insight to the the into shareholders, most comparable our as directly GAAP liquidity, well comparable measures our as GAAP and insight cash- measures. are into reconciled our in financial the table Non-GAAP reconciliations Appendix A

PROXY STATEMENT g “ (g) (f) (e) (d) (c) (b) below: forth set meanings the (a) have shall terms following the Plan, the in used As is Plan This Company. DEFINITIONS. the 2. of performance SECTION Company and Date. the growth Effective of the the directors in after as directors or serve such on to 2009 of granted individuals Company’s interest Awards qualified the vested for retain to and effective and plan proprietary successor attract the a to increase as designed to intended is and is Plan Plan”) This (“the Plan. Plan Compensation Compensation Director Director 2018 Instruments Texas The PURPOSE. 1. SECTION 2018 26, April Dated PLAN COMPENSATION DIRECTOR 2018 INSTRUMENTS TEXAS B Appendix ii ntedt n esnaqie o a curddrn h 2mnhpro nigo h aeo h otrecent most the of date the on ending period 12-month the during acquired has (or acquires whose Person directors any by date period the 12-month On any during replaced is (iii) Board the of members of majority a date the On (ii) holding fiduciary other or trustee a (ii) Subsidiaries, its of any or Company the (i) than other Person, any date the On (i) ietrwoeet usatt eto 1b ohv n fhso e eerdCmesto rdtdt ahaccount. cash a to credited Compensation Deferred her or his of any have to 11(b) Section to pursuant elects who Director Account” “Cash in be may Agreement Award An “Board” Director. a by acknowledged or executed be not, need form. but electronic may, which Plan, the under Agreement” “Award “Award” “Administrator” “Account” hnei Control in Change ietyo niety yaPro hton,drcl ridrcl,a es 0preto h oa au rvtn oe of power voting or owned, value is total which the of of stock percent the 50 of least of power at stock voting Company. indirectly, outstanding or or the a the value directly of (iii) of total stock owns, Company; power the that outstanding the voting of Person the by or percent a indirectly, value 50 by or total least indirectly, directly the at or owned, of entity, directly least is percent an at which 50 (iv) entity, of least or before an stock at Company; (immediately (ii) the indirectly, the stock; Company of or the outstanding power directly of then voting owns, stockholder Company’s or that a the value Person (i) to total to respect the there transfer with of However, or or percent assets. value sale for 50 such the a exchange with or such in associated Company is transfer) liabilities the there asset acquisition any of when the such to assets Control before regard the in immediately of without Change Company value determined no than the the of, is more of means disposed or assets value being to the market assets equal of fair the value all gross of market of purpose, fair value this gross market For total fair acquisitions. a gross or have total that the Company of the percent or from 80 election; assets or Person) appointment such the by of acquisition date the before Board the of majority a by endorsed not is election additional or of appointment acquisition the Control; Company, in the Change than of a more stock be own the to to of considered considered power not market is voting is fair Person total Person total any or same the if value the of However, market by percent Company. fair stock 50 the total than of the stock more stock of of constitutes the percent the ownership Person, of 50 of acquires such power stockholders Company, by voting the the held total by of stock or indirectly, stock with value or of together holding directly ownership that, temporarily owned, their Company underwriter as corporation the an a proportions of (iii) (iv) same Affiliates, or the its stock, substantially of such in any of Company or offering Company an the to of pursuant plan stock benefit employee an under stock en h or fDrcoso h opn,a osiue rmtm otime. to time from constituted as Company, the of Directors of Board the means en n pin etitdSokUi,SokApeito ih rohrsokbsdaadudrtePlan. the under award stock-based other or Right Appreciation Stock Unit, Stock Restricted Option, any means en ahAcuto tc ntAcutetbihdudrScin1 ftePlan. the of 11 Section under established Account Unit Stock or Account Cash a means en h or racmiteo ietr eintdb h or oamnse h Plan. the administer to Board the by designated directors of committee a or Board the means en h okepn consetbihdo anandprun oScin1()i nbhl feach of behalf on 11(b)(i) Section to pursuant maintained or established accounts bookkeeping the means hl ena vn htwl edee ohv occurred: have to deemed be will that event an mean shall ” en n rte gemn,cnrc rohrisrmn rdcmn vdnigayAadgranted Award any evidencing document or instrument other or contract agreement, written any means EA NTUET 08POYSAEETB-1 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS

PROXY STATEMENT means a Cash Account or Stock Unit Account containing amounts earned and deferred means that portion of any Director’s Eligible Compensation that is payable in cash and that he means that portion of any Director’s Eligible Compensation that he or she elects pursuant to means a contractual right granted under this Plan that is denominated in Shares, each of which ” means (i) the cash portion of any compensation payable by the Company to a Director for his or her means the closing price of the Shares on the date specified (or, if there is no trading on The NASDAQ means the Governance and Stockholder Relations Committee of the Board or any successor committee. or if unavailable, then by reference to any other source as may be deemed appropriate by the GSR , ” means the date this Plan is approved by stockholders of the Company. means an individual who has received an Award or established an Account under the Plan. means the Secretary of the Company. means Texas Instruments Incorporated, together with any successor thereto. Act of 1934, as amended; Person acting as a group as defined by the Final Treasury Regulations issued under Sectionof 409A the of Company the audited Code; by and to the stockholders. Company’s independent auditors and reported to stockholders in the annual report means a member of the Board who is not an employee of the Company or any subsidiary thereof. means an option granted under this Plan to purchase Shares on the terms and conditions set forth in the Plan and means the Internal Revenue Code of 1986, as amended. means this Texas Instruments 2018 Director Compensation Plan. Control unless such event alsoof constitutes Treas. a Reg. “change § in 1.409A-3(i)(5) control or event” any with successor respect provision. to the Company within the meaning (A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated(B) under Section 12 of “Person” the shall Securities have Exchange the meaning given in Section 7701(a)(1) of the(C) Code. Person shall include “Subsidiary” more means than any one entity whose assets and net income are included in the consolidated financial statements Effective Date Eligible Compensation “Option” the applicable Award Agreement. “Participant” “Plan” “Restricted Stock Unit” “Deferred Cash Compensation” Section 11(a) to be deferred in accordance with this Plan. “Deferred Compensation Account” Committee. “GSR Committee” represents a right to receive a Share on the terms“Secretary” and conditions set forth in the Plan and the applicable Award Agreement. (v) Notwithstanding the foregoing, in no case will an event in (i), (ii) or (iii) of this“Code” Section 2(g) be treated as a Change in “Company” or she elects pursuant to Section 11(a) to be deferred“Deferred in Compensation” accordance with this Plan. under this Plan and Restricted Stock Units, the receipt of“Director” which a Director has elected to defer. services as a Director butto shall attendance not include at a any meeting reimbursementincurred by of on the the behalf Company Company’s of of stockholders, the expenses theas Company, incurred Board, a (ii) by or Director, any a any and Restricted Director committee (iii) Stock incidental of any Units the dividend granted Board, equivalents by or paid the of on Company any“Fair Restricted to other Market Stock a expense Value” Units Director pursuant for to hisStock Section or Market her 9(d). on services such date,Bloomberg then L.P. on the first previous date on which there is such trading) as reported by WSJ.com or (iv) For purposes of (i), (ii) and (iii) of this Section 2(g): B-2 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (u) (r) (s) (t) (j) (l) (q) (v) (h) (i) (k) (m) (n) “ (o) “ (p)

PROXY STATEMENT (cc) (bb) (aa) (z) (y) (x) “ (w) eemndb h diitao ae nterlvn at n icmtne n spoie o nTes Reg. Treas. in “Year” for provided as as other and all (iii) circumstances control, or and provision. Participant’s casualty, facts successor the to relevant any due beyond the or events property on §1.409A-3(i)(3) of Participant’s based without result the Administrator Code, a of the the as loss by of arising (ii) determined 152 circumstances Code), Section unforeseeable the in of and defined (d)(1)(B) extraordinary (as and similar dependent (b)(2), or 152(b)(1), beneficiary, Sections account. spouse, to unit Participant’s regard stock the a or to Participant credited the Compensation of Cash Deferred her or Emergency” his “Unforeseeable of any have to 11(b), Market Section Fair to the pursuant than elects, less who be specified a not shall during Account” price dates right. Unit or grant the “Stock date which of any right, grant or the of exercise of date of price the date grant on the the Share on (ii) one Share over of one exercise Value of of Value date Market the Fair before the period (i) of excess the Participant, Right Appreciation “Stock this of (i) part with accordance in employee” “key a as identified individuals the among is who Participant Each (ii) upon based be shall employee” “key of definition above-referenced the within fall who individuals the of Identification following (i) the in Employee, Administrator Specified the a by is annually Participant determined a as whether apply: period, determining shall applicable In provisions the §1.409A-1(i). for Reg. thereof) Treas. (5) with paragraph accordance to regard without Code the Employee” “Specified a have cannot she or “Shares” he contractor, independent an as Company the to services additional providing also is Director a If (iii) circumstances and facts the when services of termination a experienced have to considered be shall Participant A (ii) Separation his of time the at employee an as Affiliate ERISA any or Company the to services provides also Director provisions a If following the Affiliate, ERISA an of (i) directors of board a of a or experienced Board has the the Participant of apply: by a member shall determined whether a are as determining as Company involuntary, In Service the or §1.409A-1(h). from Code) than voluntary Reg. Separation the other is Treas. of members termination with 414(b) group such accordance Section controlled whether in in the Affiliates”), Administrator defined 2(x), “ERISA (as Section as corporations this collectively of of to group purposes referred controlled (for the Company of the member includes other which any of directors of board eaainfo Service” from Separation eaainfo evc uigte1-ot eidta eiso h pi s olwn h plcbeidentification applicable the a following experiences 1st April Participant the such if on Plan begins this that of period purposes 12-month date. for the Employee during Specified Service a from as Separation treated be shall 2(z) in Section provided rules special the of any (iii) and §1.415(c)-2(d), §1.415(c)-2(e), Reg. Reg. Treas. Treas. in in and provided provided §1.415(c)-2(g); harbor rules Reg. safe timing Treas. in any special determined (i) the the be to of applying shall regard any In “compensation” without (ii) date”). individuals, §1.415(c)2(a) “identification such Reg. the identify Treas. as to with below 416(i) accordance to Section (referred Code 31st of December provisions each applicable on ending period 12-month the a as both service from separated has she or he until Code contractor. the independent of an 409A as Section and of Director purposes for Service directors from of expired. Separation board has the Board (or the Board of the member a of as member term a as Participant’s will the Affiliate Participant ERISA and the any Affiliate), that or ERISA anticipate Company any reasonably the of Affiliate for ERISA services each further and no Company perform the Participant, the that indicate with §1.409A-1(c)(2)(ii) Reg. Treas. employee). Plan under an this aggregated as of determination, participates purposes into such Participant for taken of the Director be time which a not the in as shall at plan Service employee not, any from an is Separation as Plan a provides this has Participant that Participant such (provided the services whether the determining Board, in the account of member a as Service from en aedryear. calendar a means hl ensae ftecmo tc fteCmay 10 a value. par $1.00 Company, the of stock common the of shares mean shall en h okepn consetbihd usatt eto 1b(i,o eafo ahDirector each of behalf on 11(b)(ii), Section to pursuant established, accounts bookkeeping the means en n atcpn h sdtrie ob kyepoe”(sdfndudrScin46i of 416(i) Section under defined (as employee” “key a be to determined is who Participant any means ” en emnto fsrie rvddb atcpn samme fteBado fthe of or Board the of member a as Participant a by provided services of termination a means or en eeefnnilhrsi otePriiatrsligfo i nileso accident or illness an (i) from resulting Participant the to hardship financial severe a means “SAR” EA NTUET 08POYSAEETB-3 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS en ih rne usatt eto 0t eev,uo xrieb the by exercise upon receive, to 10 Section to pursuant granted right a means

PROXY STATEMENT . The terms and conditions of each Restricted Stock Unit granted under this Section 6 shall be as . Each Director will be granted annually an Option with a grant-date value of approximately $100,000 . Following the effective date of this Plan, each Director shall, effective as of the date of such individual’s initial determined using a Black-Scholes option-pricingapproximately model $100,000, and in a each Restricted case Stockunder rounded Unit this down Award Section to with 7(a) the a shall nearest grant-date be whole value in share. of addition The to Restricted any Stock RSUs Units granted granted to any Director pursuant to Section 6. described in Section 9. Annual Grant Initial Grant election or appointment to the Board, be granted 2,000 RestrictedTerms Stock and Units. Conditions be treated as Accounts. Forincreased the by: avoidance (1) of the doubt, withholding theShares of number to Shares of pay as Shares the a available exercise result formarket price of issuance using or the under the withholding net the proceeds taxes settlement Plan of relating of shall an to an not Option’s an outstanding be exercise. Award; Option; or (2) (3) the the delivery repurchase of of Shares onShares, the of open treasury Shares or of both. recapitalization, stock split, reverse stockrepurchase split, or reorganization, exchange merger, of consolidation, Shares split-up,Shares or spin-off, or other combination, other securities securities of of theadjustment the Company, is Company, issuance appropriate or of other in warrants order similar oravailable corporate to other under transaction prevent rights the dilution or to Plan, event or purchase then affects enlargementStock the the of Units, Administrator Shares the (ii) shall such benefits the equitably that or number an adjust potentialOptions and any benefits and type or intended SARs, of all to (iv) Shares of be the credited (i) made cash exercise to the payment price Stock number to with Unit of the respect Accounts, outstanding holder to (iii) Restricted that of any the no an Option number fractional outstanding or and Restricted SAR Option type Stock or, or ofrespect Units if SAR, Shares to or deemed and subject a Shares appropriate, (v) to “Stock shall the make Right” be provision limitsthat outstanding issued specified for is under or a in intended the outstanding Section to Plan hereunder. 5(a); avoid as Any provided, imposition defined such however, of in adjustment any Section with additional 409A tax of or the penalty Code, under shall Section be 409A. made in a manner 2,000,000 Shares. Notwithstanding anything togranted the to contrary any set Director forth shall herein, not in exceed any $500,000 given in Year, grant-date the value. total value of Awards relates, are forfeited, or (ii)Shares, if then an such Award Shares, or to Accountbecome, the expires available extent or for of is issuance any cancelled under such ordirector the forfeiture, is compensation Plan. otherwise expiration, plan For terminated cancellation, of purposes without or the of termination, the Company this delivery shall shall Section, of again be awards be, treated and or as options shall Awards, granted and under accounts any established previous under any such plan shall B-4 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (a) SECTION 7. ANNUAL EQUITY GRANTS. (a) (b) SECTION 6. EQUITY GRANT UPON INITIAL ELECTION. (c) Any Shares delivered pursuant to an Award or Stock Unit(d) Account may consist, in In whole the or event in that part, any of dividend authorized or and other unissued distribution (whether in the form of cash, Shares, other securities, or other property), (a) Subject to adjustment as provided in this Section 5, the number of Shares available for(b) issuance under the Plan If, shall after be the effective date of the Plan, (i) any Shares covered by an Award or Stock Unit Account, or to which such an Award SECTION 5. SHARES AVAILABLE FOR AWARDS. SECTION 4. ADMINISTRATION. This Plan shall be administeredhave by full the power Administrator. and Subject authority toAward to: the granted (i) terms or interpret, of Accounts construe the established and Planappoint under, administer and such the the applicable agents Plan; Plan law, as (ii) and the it establish, any Administratortake deems amend, instrument shall any appropriate suspend or other for or agreement action the waive relating that proper such to,be it administration rules or final, deems of and conclusive necessary the regulations and or Plan; and binding desirable and for upon (iii) the all make administration parties, any of including other this the determination Plan. Company, and All the decisions stockholders of and the the Administrator Directors. shall Each Director shall be eligible to defer Eligible Compensation and to receive Awards under the Plan. SECTION 3. ELIGIBILITY.

PROXY STATEMENT (e) (d) (c) (b) and Code the of 422 Section under 8: (a) qualify Section to this intended in not described options conditions stock and nonstatutory terms be the will have Plan shall this under granted Options The OPTIONS. 8. SECTION (d) (c) (b) hl oti h em n rvsosstfrhhri n hl tews ecnitn ihtepoiin ftePlan. the of provisions the with consistent be otherwise shall and herein forth set provisions and terms the contain shall Agreement Option be shall Participant the by held Options outstanding all above, specified those than other termination any For Other: a after months 24 (v) within cause) for than (other Service From Separation a experiences Participant a If Control: in Change reelection (iv) for stand to ineligibility of reason for termination or service, of years 8 after accordance termination in disability, exercisable Permanent becoming term, full (iii) to continue shall Participant termination. the by upon immediately held Options canceled be outstanding shall All Participant Death: the by held Options (ii) outstanding All cause: for Termination (i) follows: Director. as a as Service of Termination grant. the of to date deemed anniversary or first made be may Option an Exercisability. equal to date respect exercise with the price on exercise Value the Market of Fair payment made. a which been having in have thereof, price, combination exercise 7(b). any relevant Section or the in property, to determined other as or grant Shares, the cash, of limitation, date effective the on Shares Payment the of share per Value Market Fair the of 100% Options of Term and Price determine. and shall Award Board any the reduce as to factors whether such determining consideration In into 7. take Section shall this Board under the granted reduction, be any to of Awards amount the the in reductions make to right Awards in Reductions respectively. 9, and 8 Sections in and described Options as the be date the be Conditions shall and year Terms such of trading quarter third first the the to then for granted. equity process, results are grant review financial Units not compensation Company’s Stock does annual the Restricted Committee the of Compensation and with release the Options connection the the which in after in date officers day year the executive any be Company’s in shall the that committee) of successor provided any any granted; (or are Board Units the Stock of Restricted Committee Compensation the by officers Grant Annual of Date Effective er a xrieteOtosfrapro fu ooeya fe h atcpn’ et,btol oteetn any extent the to only but death, Participant’s the Participant’s termination. after such of year then date one date termination, to the the her on up on or of exercisable exercisable his was period were after a portion Options days for unexercised such 30 Options that within the extent dies exercise the Participant may to the heirs only if termination, that of except date termination, the of after days 30 for exercisable immediately be shall Participant the by held Options and term. apply full not to shall continue 8(c) shall Section and of exercisable provisions the Control, in Change becoming term, full to continue shall Participant 8(c). the Section by with held accordance Options in outstanding exercisable All By-Laws: Company’s the under representatives. legal or heirs Participant’s such by exercisable be shall and 8(c), Section with h ertr hl eemn h ehdo ehd ywih n h omo om,icuig without including, forms, or form the and which, by methods or method the determine shall Secretary The . ujc oScin8d,Otossalbcm xrial nfu qa nulisalet omnigo the on commencing installments annual equal four in exercisable become shall Options 8(d), Section to Subject ahOto rne ne hsPa hl eeiecdb nAadAreetwt h opn,which Company, the with Agreement Award an by evidenced be shall Plan this under granted Option Each . ro oteefciedt fayana rn sdsrbdi hsScin7 h or hl aethe have shall Board the 7, Section this in described as grant annual any of date effective the to Prior . h em n odtoso ahOto n etitdSokUi rne ne hsScin6shall 6 Section this under granted Unit Stock Restricted and Option each of conditions and terms The . h ucaepieprsaeo hrsdlvrbeuo h xrieo ahOto hl be shall Option each of exercise the upon deliverable Shares of share per price purchase The . nec erteefciedt o h nulgato qiyt h opn’ executive Company’s the to equity of grant annual the for date effective the year each In . EA NTUET 08POYSAEETB-5 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS h feto atcpn’ emnto fsriea ebro h or hl be shall Board the of member a as service of termination Participant’s a of effect The

PROXY STATEMENT . The effect of a Participant’s termination of service as a member of the Board shall be . Each Restricted Stock Unit Award granted under this Plan shall be evidenced by an Award Each recipient of Restricted Stock Units under this Plan shall have the right, during the period . Subject to Section 9(b) and subject to a Director’s election to defer the settlement of Restricted Stock . A stock certificate or certificates shall be registered and issued or other indicia of ownership of shares Restricted Stock Units held bydefer the settlement Participant under (including Section any 11) suchParticipant’s will Restricted Separation be Stock From issued Units Service; on, subject provided, or toSeparation however, as an From that soon election Service, if as to the practicable the shares participant (butthe will no is first be a later day issued Specified than of on, Employee 60 the or days) uponoutstanding seventh as after, such under month soon the this following as Plan practicable the shall (but Separation vest no From and more Service be than and paid 10 any immediately. days) such after, Restricted Stock Units Award will continue to fullAgreement term as and if the the shares Participant willan were be election still issued to a at defer Director the settlement on issuance pursuant such date date to specified Section or in (for 11) the any in Award such accordance Restricted with Stock Section Units 11(h)(i). subject to and conditions of this Plan,the and Participant shares were shall still be a issued member to of such the Participant’s Board. heirs at such times and in suchunder manner the as Company’s if By-Laws: Allsubject outstanding to Restricted the Stock other Units terms heldin and by such conditions the manner of Participant as this shall if Plan, continue the and to Participant shares full were shall term still be a issued member to of such the Participant Board. at suchcause) times within and 24 months after a Change in Control, the(A) provisions of Section 9(a) shall To not the apply extent and: permitted without additional tax or penalty by Section 409A of the Code, all shares underlying such (B) To the extent that the issuance of shares is not permitted without additional tax or penalty by Section 409A, the Participant shall terminate and become void without any shares being issued. Vesting and Settlement Units pursuant to Section 11,after the the shares fourth covered anniversary by of the the Restricted date Stock of Units grant. shall beTermination paid of or Service settled as as a soon Director as practicable as follows: (i) Death: All outstanding Restricted Stock Units held by the Participant shall continue to full term(ii) subject to the other Permanent terms disability, termination after 8 years of service, or termination for reason of ineligibility to stand for reelection (iii) Separation From Service after a Change in Control: If a Participant experiences a Separation From Service (other than for (iv) Other: For any termination other than those specified above, all outstandingRestricted Restricted Stock Stock Unit Units held Agreement byAgreement the with the Company, whichwith shall the contain provisions the of terms this and Plan. conditions set forth herein andRight shall to otherwise Dividend be Equivalents. consistent when such Restricted Stock Unitsreceive are dividend outstanding equivalents and equal prior to tonumber the the of amount termination, Shares. or forfeiture The value or Company of paymentDirector shall any or has accumulate cash settlement elected dividend or thereof, to equivalents other to defer on distributionswithout receipt each or interest of dividend dividends in such payment payable December dividend date on of equivalents and, thein each pursuant unless same which fiscal to a the year, Section related but 11, dividend no pay is later such declared. than accumulated March amounts 15 ofIssuance the of calendar Shares year following theshall calendar be year issued, in thepracticable name after or such for Restricted the Stock benefit Units of have the become holder payable of or Restricted settleable Stock in Units accordance and with delivered the to terms such of holder the as Plan. soon as B-6 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (a) Each Restricted Stock Unit grantedand under conditions this described Plan in shall this be Section paid 9: or settled by the issuance of one Share and shall have the terms (b) SECTION 9. RESTRICTED STOCK UNITS. (c) (d) (e)

PROXY STATEMENT (e) (d) (c) (b) years. (a) 10 exceed not shall but Administrator COMPENSATION. the DEFERRED by 11. fixed be SECTION shall SAR with each inconsistent of not term determine The shall Administrator the as (b) conditions and terms such with Directors to granted be may SARs (a) (SARs). RIGHTS APPRECIATION STOCK 10. SECTION om(Eeto om)pecie yteSecretary. the by prescribed Form”) (“Election form Election. of Time Units. Stock Equivalents. Dividend Units Stock Restricted (ii) thereof. combination any to or Account Unit (i) Stock a or Account Cash a to credited be Year Alternatives Investment Compensation Plan. Cash this of terms the with accordance in deferred be Compensation Election Deferral Plan. the of provisions the C so h amn aefrec iiedo hrsdcae yteBad hr hl eceie oec Stock each to credited be shall there Board, the by declared Shares on dividend each for date payment the of As (C) her or his payable, becomes Compensation Cash Deferred Director’s a of amount any which on date each of As (B) each for Accounts Unit Stock unfunded separate appropriate, as maintain, and establish shall Company The (A) Accounts Unit Stock balances the of average the on credited be shall Account Cash each on interest month, each of day last the of As her or his (C) payable, becomes Compensation Cash Deferred Director’s a of amount any which on date the of As Director each for Accounts (B) Cash unfunded separate appropriate, as maintain, and establish shall Company The (A) Accounts Cash otepouto:()tedvdn e hr,ad(i h ubro nt nsc tc ntAcutimmediately Account Unit Stock such in equal units amount of an number dividend. at with the such purchased dividend (ii) for be such and date could for share, record as date per the Shares payment dividend to fractional the the prior or preceding (i) full day of: of trading product number first the the the to to on equal Value are Market as Fair units the of number that Account Unit Stock her or the his with to date credited such be fractional preceding elected or day has full trading Director of first such number the as Account. the on Compensation Unit to Value Cash equal Market Deferred are Fair such as the of units at portion of purchased number be that could with as credited Shares be shall Account Unit Stock Stock a to credited be Compensation Cash Deferred her or his of portion Account. any Unit that elected has who Director Year. each for Committee GSR the of by rate determined “reasonable be published a may as as as reported) qualify Code, is would the yield that of a rate 409A such no other Section which is such by for there at defined on date if or as yield (or preceding H.15, interest” average Year next Release the preceding the Statistical to the on Reserve equivalent of then Federal rate 30 date, in a September such at on for credited Service reported be Investors yield shall Moody’s such Interest by month. Aaa such rated of bonds day corporate last and first the on such as Compensation Cash Account. Deferred Cash such her of or portion his that to to credited equal be amount elected an has with Director credited Account. be Cash shall a Account to Cash credited be Compensation Cash Deferred her or his of portion any that elected has who ahDrco a lc,wt epc oayYa,ta l raypretg fhso e Eligible her or his of percentage any or all that Year, any to respect with elect, may Director Each . neeto odfralo n oto fEiil opnainfrayYa hl emd nwiigi the in writing in made be shall Year any for Compensation Eligible of portion any or all defer to election An . ahDrco a lc odfralo oto fayRsrce tc ntAward. Unit Stock Restricted any of portion a or all defer to elect may Director Each . ahDrco a lc odfralo oto faydvdn qiaet ado Restricted on paid equivalents dividend any of portion a or all defer to elect may Director Each . EA NTUET 08POYSAEETB-7 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS ahDrco a lc hthso e eerdCs opnainfrany for Compensation Cash Deferred her or his that elect may Director Each .

PROXY STATEMENT A Director’s election to defer all or any portion of his or her Eligible Compensation for any Year shall . an equivalent number of Shares. by issuing to such ParticipantNotwithstanding the the whole foregoing, number of no Shares fractionalpayment attributable shares of will to cash be such in issued vested the and Restrictedpreceding amount any Stock the represented fractional Units. date by unit of such will payment. fractional be unit distributed based by on the Fair Market Value on the date (i) Distributions of amounts credited to(ii) each Participant’s Cash Account shall Distributions be of made units in credited cash. to each Participant’s Stock Unit Account shall(iii) be made by Distribution issuing of to Shares such relating Participant to vested Restricted Stock Units the Participant has elected to defer shall be made Account shall be made onfor the any first reason day other of than the death. month following such Participant’s SeparationNotwithstanding from the Service foregoing, on no the distribution Board after may the be date made of to Separation a from Specified Service Employee or, before if the earlier, date the that date is of six death. months months after a Change inthe Control, Code, then, such to Participant the shall extentattributable receive permitted to a without amounts distribution additional credited of tax to the ordeferred the balances penalty Restricted account. credited by Stock See to Section Units. Section the 409A 9(b)(iii) Participant’s of for Account the which effect are of suchThe Separation amounts From to Service be on distributedthan pursuant 60 to days) this after, Section the 11(h)(ii)Employee Participant’s shall upon Separation be such from paid Separation Service, on, From provided, oror Service, however, as as the that soon soon balances if as as credited the practicable practicable to Participant (butFrom (but the is no Service. no Participant’s a later more Account Specified than will 10 be days) distributed after, on, the first dayTo of the the extent seventh that month distributions followingpenalty of such by amounts Separation Section pursuant 409A to of thisSection the Section 11(h)(ii) Code, 11(h)(ii) in the are accordance affected not with Participant permitted Section shall without 11(h)(i). receive additional distribution tax of or the amounts referred to in this Unforeseeable Emergency. A withdrawal onsuch account emergency of is Unforeseeable or Emergency may mayliquidation be not relieved of be (A) the made through Participant’s to reimbursement assets, thehardship, or to extent or compensation the that (C) from extent by insurance the cessation or liquidation of otherwise, of deferrals (B) such under by assets the would Plan. not cause severe financial Units that may be grantedYear. in In such the Year, case must of bedays a received following Director’s by initial his the or election Secretary her to oneffective election the or only to Board, before for the the December Eligible Board initial 31 Compensation and, of Electiontime earned if the Form of after received preceding must election the within be and election such received the becomes 30-day notSection time irrevocable period, more 409A of pursuant than the of distribution to Election 30 the shall Section Form Code. comply 11(f). shall in The be all respects with the applicable requirements of Irrevocability of Election. be irrevocable upon receipt by the Secretary of a completedForm Election of Form Distributions from the Director. Time of Distributions. (i) Normal Distributions. Except as otherwise hereinafter provided, distributions from a Participant’s Deferred Compensation (ii) Change in Control. In the event a Participant experiences a Separation From Service (other than for cause) within 24 (iii) Unforeseeable Emergency. An earlier distribution may be made upon a finding that the Participant is suffering from an (i) Except as hereinafter provided, to be effective, an Election Form relating to payments for a Year, or to Restricted Stock B-8 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (g) (h) (f)

PROXY STATEMENT xett h xetpoiie yo nossetwt plcbelaw: (a) applicable with inconsistent or by prohibited extent the to Except TERMINATION. Code AND the of is AMENDMENT 409A right 13. Section purchase SECTION with such comply date shall the Section of this as to securities pursuant other the granted or by Shares Awards established such other applicable. as of such if consideration, Value that other which Market intends or of Fair Company method Awards, value the The such other the than granted. by securities, determine, less paid other shall be be Shares, Administrator not may cash, the shall which limitation, as Administrator, consideration, without thereof, such including, combination the pursuant for forms, any of delivered purchased or or terms securities be form property, the other shall such to or 12 in Subject Shares Section and Plan. Awards. this methods the such under or convertible of of granted securities purposes conditions right limitation, the and purchase without with terms a (including, consistent the to in Shares be determine valued to, to shall in, related Administrator Administrator payable or the the or on by Plan, denominated based deemed are otherwise are that or as Awards to, Shares) other reference into such by Directors part to in grant or to whole authorized hereby is Administrator The AWARDS. STOCK-BASED OTHER 12. SECTION (k) (j) (i) lno n wr gemn hl emd htwud()pri pin rSR ob rne ihaprSaeexercise Share per a with granted be to SARs or Options the permit of (1) termination would or that discontinuation made suspension, be other alteration, shall may any amendment, Agreement Administrator Notwithstanding no Award The in Participants. Agreement, any Code. provided from Award or the as consent any Plan of except without or 409A case 409A Plan Section each Section the in with with of Year, compliance comply provision given in to any be Awards in shall outstanding granted amendment any be such modify may any that addition, Awards In and of 5(d). Award; value Section outstanding total any affected the under the increase of Participants or consent such Plan of the (ii) rights or the Market affect is Stock adversely further approval NASDAQ would such The action if of such approval requirements if stockholder listing Participants, stockholder, (i) the any without with of made comply consent be to the shall person; necessary without other termination 10, or or and Award, discontinuation 7 any suspension, 6, of alteration, Sections beneficiary to or pursuant holder granted other Awards Participant, to subject shares of number Amendments government. federal or the ethics with foreign agreement or ethics local an to state, with distributed federal, comply be applicable to will any necessary defer of if to violation or elected avoid law Stock has to interest Participant’s Participant necessary of such such is conflict in that payment units Units such to Stock if equivalent Restricted Participant shares to the Account, attributable Cash Shares Participant’s and such Account in Unit amounts all agency, government a effected be may Affiliations termination Certain Stock or Restricted modification vested suspension, Code. to such the attributable any of Accounts, Shares that 409A Unit all provided Section Stock and defer, under of Accounts to penalty case such elected without Cash the in has Participant’s in units Participant such including, the a in Account, to that amounts Unit equivalent Units all Stock cash Participant Participant’s distribute each such to to in right distribute units the to to right equivalent the Shares have or grant. shall Account of Company date the the Plan, of this anniversary Company terminates fourth the the by be than Reserved also earlier Rights shall event Certain Units no death Stock in the Restricted but which deferred sentence in with preceding no month connection the if the in in or following Participant described Participant, practicable the as Account, the as to distributed by Compensation soon distributed Deferred designated as be her beneficiaries estate to or or Participant’s Shares his beneficiary the occurred. from the to distributed to designated, be distributed been to be has shares will beneficiary of shares number and/or and cash cash such of all amount full the of Participant Participant of Death amn pna noeeal mrec.I h vn fapoa fapyetuo nUfrsebeEmergency, Unforeseeable cancelled. an be upon shall payment Plan a a the deny of under or approval elections grant of deferral to event outstanding form discretion the Participant’s the absolute In the using and Emergency. Emergency,” sole Unforeseeable “Unforeseeable the an an retains upon sole upon Administrator payment its payment The in a Administrator. Administrator, or for the the taxes writing by by income in prescribed determined foreign apply as or must local, distribution), Participant the state, the The satisfy from federal, discretion. to result any necessary to pay reasonably to anticipated amount necessary reasonably the amounts penalties to include limited may be (which must need Emergency emergency Unforeseeable an of because Withdrawal htn uhaedeto leainsalices h grgt ubro hrsta a eise ne the under issued be may that shares of number aggregate the increase shall alteration or amendment such no that , h or a mn,atr upn,dsotneo emnt h ln nldn,wtotlmtto,the limitation, without including, Plan, the terminate or discontinue suspend, alter, amend, may Board The . nteeetta atcpn emntshso e ebrhpo h or n eoe fiitdwith affiliated becomes and Board the on membership her or his terminates Participant a that event the In . owtsadn h oeon,i h vn ftedaho atcpn ro orcitb such by receipt to prior Participant a of death the of event the in foregoing, the Notwithstanding . EA NTUET 08POYSAEETB-9 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS nteeetta,prun oScin1,teCmayssed,mdfe or modifies suspends, Company the 13, Section to pursuant that, event the In . rvdd however provided, htn uhamendment, such no that , provided

PROXY STATEMENT . The Administrator may correct any defect, supply any omission, or . Nothing contained in the Plan shall prevent the Company from adopting No Award and no right under any such Award, shall be assignable, alienable, saleable or . Neither a Participant nor a Participant’s legal representative shall be, or have any of the rights and . Neither the Plan nor any Award or Account shall create or be construed to create a trust or separate . Until distributed, all amounts credited to any Cash Accounts or represented by units credited to any . The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall . The Company shall be authorized to withhold from any Awards granted or any transfer made under any Award . If any provision of the Plan or any Award Agreement is or becomes or is deemed to be invalid, illegal, or Stock Unit Account shall becreditors property of of the the Company. Company, The availableanticipation, rights for alienation, of the any sale, Company’s Participant transfer, use, assignment, or andParticipant beneficiary or subject or encumbrance, to to beneficiary. and distributions the shall under claims not this of be Plan general subject are to not the subject debts to Withholding or liabilities of any or under the Plan orsecurities, from or any other dividend property) equivalents of toAward any be or taxes paid any required on payment to Restricted of be Stockmay dividend withheld Units be equivalents in the necessary under respect amount in Restricted of (in the Stock a cash, opinion grant, Units Shares, of or exercise, other the under payment Company or the to settlement Plan satisfy of and all an to obligations take of such the other Company action for as the payment of any such taxes. No Rights of Stockholders privileges of, a stockholder ofAccount, the in Company whole in or respect in of part, any unless Shares and issuable until under certificates theLimits or Plan of other in Transfer indicia connection of of with Awards. ownership any of Award such or shares shall have been issued. be determined in accordance withlaws the thereof. laws of the State of Delaware without giving effectSeverability to the principles of conflict of fund of any kind orany a person fiduciary acquires relationship a between right thepursuant to Company to receive and this an a Plan, Award Participant such or or right Account, any shall or other be Shares person. no pursuant To greater to theAccounts than an extent Unsecured the Award that right or Account, of from any the unsecured Company general creditor of the Company. reconcile any inconsistency in theinto Plan effect. or any Award in the manner and to the extent it shall deem desirable to carry the Plan transferable by a Participant otherwiselifetime, than rights by under will an or Award byParticipant’s shall the guardian be laws or exercisable of legal only descent representative. by and the distribution. Participant, During or the if Participant’s permissibleNo under Limit applicable on law, Other by Compensation the or Arrangements continuing in effect otherapplicable or or additional applicable compensation only arrangements, in and specific such cases. arrangements may be eitherGoverning generally Law unenforceable in any jurisdiction, orany as law to deemed any applicable person, by Awardapplicable the or laws, Administrator, Account, or such or if provision would it shall disqualifymaterially cannot be the altering be construed Plan the so or or intent construed deemed any of or amended AwardAward, the deemed to under and Plan amended conform the or without, to remainder the in of Award, the the such determination Plan provision of and shall the any be Administrator, such strickenNo Award as Trust shall to or remain such Fund in jurisdiction, Created full person force or and effect. price of less than thereduce Fair the Market exercise Value price of of aU.S. any Share generally Option on accepted or the accounting SAR date established principles ofrestricted at (“GAAP”), grant stock (y) the thereof unit cancel time or or an of (2) any Option grant exceptthan other or thereof, as the Award, SAR (x) provided excess, or in be in if (z) exchange treated Section any, terminate for as 5(d),times of an another a (w) the the Option Option, repricing number Fair or SAR, under of Market SAR Shares Value inimmediately outstanding of exchange preceding under the for sentence the underlying a is Award. Shares cash prohibited A on amountdelivered regardless cancellation the equal simultaneously of and date to with whether exchange of or the the cancellation greater described cancellation option, in overrepricing and SAR, the clause under regardless restricted (y) exercise GAAP of stock of price or whether unit the are the or voluntary cancellation other on and equity the exchange is part are of treatedCorrection the as of Participant. a Defects, Omissions and Inconsistencies B-10 TEXAS INSTRUMENTS • 2018 PROXY STATEMENT (h) SECTION 14. GENERAL PROVISIONS. (a) (b) (e) (g) (c) (d) (f) (b)

PROXY STATEMENT ne eto 2t mn,atr dut upn,dsotne rtriaeaysc wr rAcut rt av any waive to Board or the Account, and or Committee Award date. the such such of any beyond authority terminate extend the or shall Account and discontinue, thereunder, or date, suspend, rights Plan. granted such adjust, or the Award beyond alter, conditions of any extend amend, Date Agreement, may to Effective Award Plan 12 the applicable the Section of an of under anniversary in termination tenth or the the Plan to after the prior Plan in established the provided under expressly deferred otherwise compensation unless or However, granted be shall Award No Company. PLAN. the THE of OF stockholders the TERM by 16. approval SECTION its of date the of as effective be shall Plan The PLAN. THE OF DATE EFFECTIVE 15. SECTION (j) (i) ragmn anandudrtePa ilcml ihScin49 fteCode. the of 409A Section with comply will Account. Plan or the Award under to any maintained refuse or arrangement or to Plan fail refuse this or election under fail any claim Compliance time at or 409A any may liability at Company any may the from Board of free The stockholders Board Company. the the the and to of Board, Participant director the any a to elect as election retained for be Participant to a right nominate the Participant a giving Membership as Board Continued to Right No h opn ae orpeettoso oeat htayAadgatdo eerdCompensation Deferred or granted Award any that covenants or representations no makes Company The . EA NTUET 08POYSAEETB-11 STATEMENT PROXY 2018 • INSTRUMENTS TEXAS h rn fa wr retbiheto nAcutsalntb construed be not shall Account an of establishment or Award an of grant The .

PROXY STATEMENT (This page intentionally left blank.)

TEXAS INSTRUMENTS OTHER INFORMATION

Comparison of total shareholder return

This graph compares TI’s total shareholder return with the S&P 500 Index and the S&P Information Technology Index over a five- year period, beginning December 31, 2012, and ending December 31, 2017. The total shareholder return assumes $100 invested at the beginning of the period in TI common stock, the S&P 500 Index and the S&P Information Technology Index. It also assumes reinvestment of all dividends. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Texas Instruments Incorporated, the S&P 500 Index and the S&P Information Technology Index

$400

$350

$300

$250

$200

$150 Texas Instruments Incorporated $100 S&P 500 $50 S&P Information Technology

$0 12/12 12/13 12/14 12/15 12/16 12/17

12/12 12/13 12/14 12/15 12/16 12/17 Texas Instruments Incorporated 100.00 146.27 182.98 192.47 263.14 386.22 S&P 500 100.00 132.39 150.51 152.59 170.84 208.14 S&P Information Technology 100.00 128.43 154.26 163.40 186.03 258.28

Notice regarding forward-looking statements

This Annual Report includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as TI or its management “believes,”“expects,”“anticipates,”“foresees,”“forecasts,”“estimates” or other words or phrases of similar import. Similarly, statements herein that describe TI’s business strategy, ability to generate free cash flow in the future, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certainrisks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. For a more detailed discussion of these factors see the risk factors discussion that begins on page 8 of this report. Forward-looking statements inthis report are made only as of the date of this report and we undertake no obligation to update them to reflect subsequent events or circumstances.

COMPARISONAmong Texas InstrumentsOF 5 YEAR CUMULATIVE Incorporated, TOTAL the S&P RETURN 500 Index* and the S&P Information Technology Index

TEXAS INSTRUMENTS 1 (This page intentionally left blank.)

TEXAS INSTRUMENTS BOARD OF DIRECTORS, EXECUTIVE OFFICERS

Directors Executive officers

Richard K. Templeton Carrie S. Cox Richard K. Templeton* Rafael R. Lizardi Chairman of the Board, Chairman of the Board and Chairman of the Board, Senior Vice President President and Chief Executive Officer, President and and Chief Financial Officer Chief Executive Officer, Humacyte, Inc. Chief Executive Officer Texas Instruments Incorporated Kevin J. Ritchie Brian T. Crutcher Brian T. Crutcher* Senior Vice President Ralph W. Babb, Jr. Executive Vice President Executive Vice President Chairman of the Board and and Chief Operating Officer, and Chief Operating Officer Cynthia Hoff Trochu Chief Executive Officer, Texas Instruments Incorporated Senior Vice President, Comerica Incorporated Niels Anderskouv Secretary and and Comerica Bank Jean M. Hobby Senior Vice President General Counsel Retired Partner, Mark A. Blinn PricewaterhouseCoopers LLP Stephen A. Anderson Julie M. Van Haren Retired President and Senior Vice President Senior Vice President Chief Executive Officer, Ronald Kirk Flowserve Corporation Senior Of Counsel, Ellen L. Barker Darla H. Whitaker Gibson, Dunn & Crutcher LLP Senior Vice President Senior Vice President Todd M. Bluedorn and Chief Information Officer Chairman of the Board and Pamela H. Patsley Bing Xie Chief Executive Officer, Retired Executive Chairman, R. Gregory Delagi Senior Vice President Lennox International Inc. MoneyGram International, Inc. Senior Vice President

Daniel A. Carp Robert E. Sanchez Haviv Ilan Retired Chairman of the Board Chairman of the Board and Senior Vice President and Chief Executive Officer, Chief Executive Officer, Eastman Kodak Company Ryder System, Inc. *In January 2018, TI announced that Mr. Crutcher Janet F. Clark Wayne R. Sanders will become president and Retired Executive Vice President Retired Chairman of the Board CEO, effective June 1, and and Chief Financial Officer, and Chief Executive Officer, Mr. Templeton will continue Marathon Oil Corporation Kimberly-Clark Corporation as chairman.

TI Fellows

TI Fellows are engineers, scientists or technologists who are recognized by peers and TI management for outstanding performance. Fellows are elected or re-elected every five years based on their exceptional leadership in driving deeper levels of innovation that make TI stronger.

Announced in 2017: Baher Haroun named Senior Fellow, Hal Edwards and Vishy Pentakota named Fellows

Stockholder and other information

Stockholder records information SEC Form 10-K Stockholder correspondence: Overnight correspondence: A copy of the company’s annual report to the Securities and Computershare Computershare Exchange Commission on Form 10-K is available on the P.O. Box 505000 462 South 4th Street, Suite 1600 Investor Relations website at www.ti.com/ir. Louisville, KY 40233-5000 Louisville, KY 40202 Copies of the Form 10-K, including a list of exhibits and any Toll free: 800-981-8676 exhibit specifically requested, are available without charge by writing to: Phone: 312-360-5151 Texas Instruments Investor Relations P.O. Box 660199, MS 8657 Website: www.computershare.com/investor Dallas, TX 75266-0199 Online inquiries: https://www-us.computershare.com/investor/contact

DLP and the platform bar are trademarks of Texas Instruments. All other trademarks are the property of their respective owners. Texas Insts ruments Incorporatedd P.O. Box 660199 DaD lll as, TX 75266-0199

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