Texas Instruments Annual Report

Notice of 2017 Annual Meeting and Proxy Statement Operating highlights (Millions of dollars, except share and per-share amounts)

Income statement 2016 2015 Revenue $ 13,370 $ 13,000 Gross profit 8,240 7,560 Operating expenses 3,137 3,028 Operating profit 4,799 4,274 Net income 3,595 2,986 Earnings per share (diluted) $ 3.48 $ 2.82 Cash flows statement Cash flow from operations (GAAP) $ 4,614 $4,397 Capital expenditures 531 551 Free cash flow (non-GAAP) 4,083 3,846 Shareholder return Dividends paid $ 1,646 $ 1,444 Shares repurchased 35.5M 51.4M

Note: Free cash flow (non-GAAP) = Cash flow from operations less Capital expenditures. See page 21 for reconciliation.

“It was a good year and we made solid progress in making TI a stronger company. In 2016, our revenue grew 3%. Gross margin and operating margin expanded to 61.6% and 35.9% of revenue, respectively. Most importantly, free cash flow increased to $4.1 billion, or 30.5% of revenue, reflecting the quality of our product portfolio and the efficiency of our manufacturing strategy.”

Rich Templeton, chairman, president and CEO

86% 6% $3. 8B Analog & Embedded Free Cash Flow Returned to % of TI Revenue Growth Shareholders Growing at 8 percent CAGR, Reflecting the ongoing strength Demonstrating our commitment combined, since 2004 of our business model 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 • Prior results of operations ...... 18 • Financial condition ...... 20 • Liquidity and capital resources ...... 20 • Non-GAAP financial information ...... 21 • Long-term contractual obligations ...... 21 • Critical accounting policies ...... 21 • Changes in accounting standards, Off-balance sheet arrangements, and Commitments and contingencies ...... 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ...... 23 Item 8. Financial Statements and Supplementary Data ...... 25 • Consolidated Statements of Income ...... 26 • Consolidated Statements of Comprehensive Income ...... 27 • Consolidated Balance Sheets ...... 28 • Consolidated Statements of Cash Flows ...... 29 • Consolidated Statements of Stockholders’ Equity ...... 30 Notes to financial statements ...... 31 • (1) Description of business, including segment and geographic area information ...... 31 • (2) Basis of presentation and significant accounting policies and practices ...... 32 • (3) Restructuring charges/other ...... 37 • (4) Stock compensation ...... 38 • (5) Profit sharing plans ...... 43 • (6) Income taxes ...... 43 • (7) Financial instruments and risk concentration ...... 45 • (8) Valuation of debt and equity investments and certain liabilities ...... 46 • (9) Goodwill and acquisition-related intangibles ...... 48 • (10) Postretirement benefit plans ...... 48 • (11) Debt and lines of credit ...... 54 • (12) Commitments and contingencies ...... 55 • (13) Supplemental financial information ...... 56 • (14) Quarterly financial data (unaudited) ...... 57

TEXAS INSTRUMENTS i Report of independent registered public accounting firm ...... 58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...... 59 Item 9A. Controls and Procedures ...... 59 Item 9B. Other Information ...... 61

PART III Item 10. Directors, Executive Officers and Corporate Governance ...... 61 Item 11. Executive Compensation ...... 61 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...... 61 Item 13. Certain Relationships and Related Transactions, and Director Independence ...... 62 Item 14. Principal Accountant Fees and Services ...... 62

PART IV Item 15. Exhibits, Financial Statement Schedules ...... 63 Notice regarding forward-looking statements ...... 65 Signatures ...... 66

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 ...... 14 Executive compensation ...... 17 Audit Committee report ...... 42 Proposal to ratify appointment of independent registered public accounting firm ...... 43 Additional information ...... 44 Notice regarding forward-looking statements ...... 50 Directions and other annual meeting information ...... 51 Appendix A (Non-GAAP reconciliations) ...... A-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 • 2016 FORM 10-K ITEM 1. Business. Power Power included products that helpdesigned customers to manage manage power power in requirements electronicand using systems. point-of-load battery Our products. management broad portfolio solutions, portable of Power power products components, is power supply controls HVAL included high-volume integrated productslow-voltage that motor support drivers applications and like integrated automotive motor safety controllers. systems, touchscreen controllers, HVAL In 2016, our Analog segment(Power), included High the Performance following Analog major (HPA) product and lines: Silicon High Valley Volume Analog Analog (SVA). & Logic (HVAL), Power Management Sales of our Analog productsfor generated analog about semiconductors 64 was percent about offragmented $48 our market, billion revenue the in in leading 2016. 2016. position. Our According We Analog to believe segment’s external we revenue sources, are in the well 2016 market positioned was about to 18 increase percent our market of share this over time. Analog generated $8.54 billion ofpressure revenue or in images, 2016. by Analog conditioning semiconductorsprocessed them, change by amplifying real-world other them signals, semiconductors, and such such often aselectronic as converting sound, equipment embedded them temperature, by processors. to Analog converting, a semiconductors distributing, streamequipment also storing, of is are discharging, digital plugged used isolating data into to and that a manage measuring canelectronics wall power electrical be and or in energy, industrial. running all whether off the a battery. Our Analog products are used in many markets, particularly personal 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 segments results. design also Additional and reflect information development how regarding each segment follows. 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, tens such products as processing of that converting data, are and canceling integral amplifying noise to and signals, almost interfacing improving all signal electronic resolution. equipment. This broad Product information We focus our resources onintrinsic Analog diversity and and Embedded need Processing for becausegeneration. less we This capital-intensive believe business manufacturing that model provide these is a segments’flow the combination long growth foundation of product is of stability, life important our profitability cycles, for capital andonly maximizing management strong if shareholder strategy, cash it value which is over is productively the basedcapital invested long on expenditures. in term. our the We belief business also that or believe free returned that cash to free shareholders. cash Free flow cash will flow be is valued cash flow from operations less 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 2016, Embedded we Processing. generated We $13.37 report billion the of results revenue.

FORM 10-K ieestcnlge ome hs eurmns nldn o-oe ieesntoksadrslk u-Gz Zigbee Sub-1GHz, many like support standards products network Connectivity wireless Bluetooth Our low-power like for application. including technologies requirements the requirements, other the on these with depending meet wirelessly, varying to data security technologies transfer and wireless and power connect distance, to capability, equipment data electronic speed, enable that products included Connectivity other and sensors Connectivity with interface or length, control program that and microcontrollers. memory components into for Analog integrated requirements complexity. often a minimal software are control have low systems to to and designed tend system are Microcontrollers operating that equipment. no peripherals electronic with and for memory tasks core, specific processor of a set with systems self-contained included Microcontrollers activity. computing specific for designed are Microcontrollers processors Applications data. computations mathematical digital perform improve DSPs or processors. process applications to and instantaneously (DSPs) almost processors signal digital included Processors Processors and Microcontrollers Processors, lines: product major following the included share segment Connectivity. market Processing our Embedded increase our to 2016, positioned In well was are 2016 we in believe revenue We segment’s leaders. Processing the sources, Embedded among external Our market, time. to 2016. fragmented over According in this 2016. billion of in $18 percent revenue about 17 our was about of processors percent embedded 23 for about market generated the customer next. products our the Processing of to Embedded length generation of the product Sales 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 many An in used are equipment. products as communications Processing such and Embedded applications automotive Our automotive (ADAS). industrial, in systems particularly low-cost used assistance markets, simple, devices driver from complex advanced various vary specialized, and for devices highly systems Our optimized to infotainment be application. toothbrushes can the electric and on in many tasks depending used of specific cost, microcontrollers “brains” handle and the to power are designed performance, products are of Processing processors combinations Embedded Embedded 2016. equipment. in electronic revenue of of types billion $3.02 generated Processing Embedded National of Processing purchase our Embedded through acquired life we long that have products generally of products 2011. primarily data SVA in consisted systems. and Corporation SVA display video years. Semiconductor and like 10 lighting applications than mobile support more and products often amplifier SVA conversion, cycles, operational systems. power and electronic voltage interface of high converter, range products, data wide interface management, a power manufacturing high-voltage in industrial, used of products portfolio broad a included SVA more often cycles, life long SVA have generally products HPA products. performance. end high of precision require range and that years. wide products systems 10 a interface in than manufacturing products, used in high-reliability typically them sensors, are use amplifiers, that who converters, products customers data different high-speed many included to products market HPA we that products included HPA HPA ® n WiFi. and EA NTUET 06FR 0K3 10-K FORM 2016 • INSTRUMENTS TEXAS ® and

FORM 10-K Electronic point of sale Appliances Power delivery Display Industrial transportation Lighting Industrial other products (primarily used in projectors to create ® Factory automation and control Medical/healthcare/fitness Building automation Grid infrastructure Test and measurement Space/avionics/defense Motor drives 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 Storage Portable electronics Tablets Home theater and entertainment Printers and other peripherals TV Wearables (non-medical) Gaming Wireless infrastructure Telecom infrastructure Enterprise switching Residential Projectors Servers High-performance computing Multi-function printers Thin client 4 TEXAS INSTRUMENTS • 2016 FORM 10-K MarketIndustrial (33% of TI revenue) Sector The table below lists thethe major market markets represented. that The used chart our also products lists, in in 2016 declining and order the of estimated our percentage revenue, of the our sectors 2016 within revenue each that market. Financial information with respect tofinancial our statements, segments which and is our included operationsoperations in outside are Item the described 8, United in “Financial States Item Statements is 1A, and contained “Risk Supplementary in Factors.” Data.” Note Risks 1 attendant toMarkets to the for our our foreign products In Other, we also includedof items these that items are include not acquisition usedenvironmental charges; in costs, restructuring evaluating insurance charges; the settlements, and results and certain of gains corporate-level or and items, in losses such allocating from as resources other litigation to activities, expenses, our including segments. asset Examples dispositions. high-definition images), calculators, certain customand semiconductors royalties known received as from application-specific agreements integrated involving circuits license (ASICs) rights to our patent portfolio. Automotive (18% of TI revenue) Personal electronics (26% of TI revenue) Communications equipment (13% of TI revenue) Enterprise systems (6% of TI revenue) Other (calculators, royalties and other) (4% of TI revenue) We report the results ofquantitative our remaining thresholds business for activities individually in reportablegenerated Other, segments $1.81 which and billion included cannot of operating be revenue segments aggregated in that with 2016 do other and not operating included meet segments. revenue the Other from DLP Other

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FORM 10-K 6 TEXAS INSTRUMENTS • 2016 FORM 10-K From time to time wedirectly consider or acquisitions indirectly and in divestitures private thatstrategic companies. may to Investments strengthen us. are our focused strategic primarily position. on We next-generation also technologies make investments and markets Acquisitions, divestitures and investments Backlog 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 $1.09 delivery, do billion i.e., not when at result December the in 31, customer backlog 2016, pulls because and the the $0.95 product order billion from at consigned December inventory. 31, Our 2015. backlog of orders About 60 percent of TIand revenue distributors. is With fulfilled these from programs, consignmentrecognize we inventory revenue own programs when inventory that the that we product is haveinto is stored in demand, pulled at place allowing our from for us consigned customers’ our to and inventory. largesales better distributors’ These customers of manage locations, consignment consigned our and programs inventory. factory we give loadings. us About improved 65 insight percent of our distributor revenue is generated from Inventory Our inventory practices differ byof product, customer but demand. we We generally carry maintainAdditionally, proportionally inventory we more levels inventory sometimes that maintain of are product products consistentlow-volume with inventory with products, long in our allowing unfinished life expectations greater cycles wafer flexibility and form, in a as periods broad well of customer as high base. higher demand. finished-goods inventory of Sales and distribution We market and sell ouroffices semiconductor in products more through than direct 30 salesthrough countries and distribution and distributors, we channels. and continue Our online. distributors to WeThey maintain expand have also an our sales sell inventory online or products of presence. marketing from our About our products 60 competitors. and percent sell of directly our to sales a are wide fulfilled range of customers. We estimate that we sellrevenue our deriving products from to customers about outside 100,000 our customers. largest Our 100. customer base is diverse, with more than one-third of our Customers We expect to maintain sufficientour internal manufacturing manufacturing capacity capacity and to maximize meetoutside our the suppliers, responsiveness vast commonly to majority known customer of as demand ourfrom foundries, and production external and return needs. foundries subcontractors. on To and In capital, supplement about 2016, we 40 we utilize percent sourced the of about capacity our 20 of assembly/test percent services of from our subcontractors. total wafers We own and operate semiconductorfabrication manufacturing and facilities assembly/test in facilities. North Our America,once facilities Asia, in require Japan operation. substantial and We investment Europe. own to Thesechanges much construct include in of and both factory our are wafer loadings manufacturing largely can capacity; fixed-costare cause therefore, assets spread short-term a over variations significant reduced in portion output profit ofincrease, and, margins. our our absent When operating fixed other factory cost costs circumstances, loadings is are our decrease, fixedoperating spread profit our and over focus margins fixed increased is decrease. costs more output Conversely, on and, asby maximizing absent factory factory long-term other loadings loadings. free circumstances, To cash our this flow profitopportunistic end, than margins purchases we minimizing increase. of seek short-term Our facilities to variations and maximize in equipment long-term profit free ahead margins cash of caused flow demand. by keeping capital expenditures low through

FORM 10-K * fetv aur ,21,M.VnHrnsceddM.Ws,wowl eiefo h opn nFbur 8 2017. President 28, Vice February Senior on company the from retire will who West, Ms. succeeded Haren Van Ms. 2017, 1, 49 the January President assume Effective Vice will Senior Lizardi Mr. officer. *** President financial Vice chief Senior as March Mr. succeeded Lizardi Mr. 2017, Counsel 1, General President February and Vice Effective Secretary Senior 51 President, Officer Vice 2017. Executive Senior 19, Chief January President ** Officer and Effective Vice 56 Accounting President Senior Chief Board, and the Officer of Financial Chairman Principal Director; President, * Vice President Senior Vice Officer Senior Financial 48 Chief and Xie President 53 Bing Vice Senior 60 Whitaker H. Darla 58 *** West President Officer L. Vice Operating 59 Teresa Senior Chief *** Officer 48 and Haren Information President Van Chief Vice M. and Executive Julie President Vice 44 Senior Trochu Hoff Cynthia Position Templeton K. Richard 54 Ritchie President J. Vice 44 Kevin President Senior Vice ** Senior 54 March P. Kevin Age ** Lizardi R. Rafael * Ilan Haviv 55 47 Delagi Gregory R. Crutcher T. Brian * Barker L. Ellen Anderson A. Stephen offices * or Anderskouv positions Niels the and company the of officers Name executive the named: of person ages each and by names held the company of the list with alphabetical an is following The Registrant the of officers Executive software semiconductor including on parties, suppliers third of foundry our range with wide a collaborate with we and engage technology. closely consortia, manufacturing also industry we select of However, and areas internally. universities primary R&D suppliers, Our our 2014. of in most billion conduct $1.36 We and 2015 in products. Processing billion $1.28 Embedded with and compared Analog 2016, are in investment billion R&D $1.37 was expense R&D Our of important most development the and assets, Research valuable are trademarks These monogram. business. corporate our our of and conduct Instruments” the “Texas in are used which are and that reasonable trademarks on own companies We other to initiatives. patents same our the of in certain participate license may to competitors us terms. Our require non-discriminatory standards. may technical initiatives set these to in our initiatives Participation consider industry not in do participate We often companies. We have other license. also of patent We those or portfolio. or patent to that portfolio one relating to our any fields patents to upon in add rights dependent countries continually involving materially other and duration, business and portfolio in States patent vary United broad-based which the strong, agreements, in a license pending, developed applications have patent We many business. have our and patents, many own We such that believe property we Intellectual and future. source present, foreseeable sole at the from available items in generally such available are purchase be business we will our cases supplies some to and In essential parts suppliers. supplies materials, of and number parts a materials, from The supplies suppliers. and parts materials, purchase We materials Raw epniiiiso he conigofcrefcieMrh1 07 twihtm r ac ilcaet eprincipal be to year. cease this will later March company Mr. the time from which retire at will 2017, March 1, Mr. March officer. effective financial officer accounting chief of responsibilities EA NTUET 06FR 0K7 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K 8 TEXAS INSTRUMENTS • 2016 FORM 10-K Rapid technological change in marketsprices we of serve our could products. contribute Our toinnovative results shortened of products. product operations We life make depend cycles significant in andmeet investments part a changing in upon decline customer research our in demands, and ability average and development to selling commercial we to successfully viability might develop develop, can not new manufacture be realize technologies and assured. a and market least Further, return products a projects on to few that our years are investments after commercially because they viable they are may are completed. not generally contribute made significant before revenue until at Rapid technological change in markets we serve requires us to develop new technologies and products. We face intense technological andcontinue pricing to competition increase in from the large marketscompanies, competitors in particularly and which in from we Asia, small operate. that competitors Wecompetition sell serving expect as products niche this a into markets, competition result the and will of same alsoinvestment. China markets from These actively in emerging actions promoting which may and we restrict reshaping operate.Chinese us its For companies. from domestic example, participating Certain semiconductor we of in industry may our the through facemarket competitors China increased policy products possess market changes that sufficient or and may financial, may compete prevent technicalcompete favorably us and more against from management effectively. our competing resources Additionally, products, effectively to traditional and with developand intellectual consolidation and complete property among hardware licensors our or are competitors software increasingly mayresult solutions allow providing from that them functionality, competition compete to designs may with lead ourmatch to products. the reduced The price profit price declines margins and or and productadvancements cost lost development of efficiencies, business pressures our or opportunities that competitors. meet in the the technological, event product, that support, we software are or unable manufacturing to We face substantial competition thatpricing requires pressures. us to respond rapidly to product development and You should read the followingthe risk Securities factors and in Exchange conjunction Commission withintended (SEC) the to and factors highlight in discussed certain materials elsewhere incorporated factors inexhaustive that by this discussion may reference and of affect into other risks our these of that financial filings. oursusceptible apply condition These filings to to and risk with macroeconomic TI, factors results downturns a are of in company operationsperformance the with and and United broad are the States international not performance or operations. meant of abroad Like toin our that other be general customers. may companies, an market Similarly, affect we conditions, the the are actual price generalchanges financial of economic in our results climate our securities that and and/or is do our the subject notour investment to meet control. community’s volatility our expectations due and/or for to the our fluctuations investment future community’s results expectations, and other factors, many of which are beyond ITEM 1A. Risk Factors. Available on our website atAudit, www.ti.com/corporategovernance Compensation, are: and (i) Governance our and Corporateand Stockholder Governance (iv) Relations Guidelines; our Committees (ii) Code of charters of our fordocuments Ethics board the free for of of TI directors; charge Chief (iii) by Executive ourAttention: writing Officer Code Investor to and of Relations. Texas Senior Conduct; Instruments Finance Incorporated, Officers. P.O. Stockholders Box may 660199, request MS copies 8657, of Dallas, these Texas, 75266-0199, Our internet address is www.ti.com.through Information our on Investor our Relations website website isreasonably our not practicable reports a after on part they Forms of are 10-K, thisour filed 10-Q report. directors and with We and 8-K, the make executive and SEC. available officers amendments Also free on to available of Forms those through charge 3, reports, the 4 as TI and soon Investor 5, as Relations and website amendments are to reports those filed reports. by Available information Employees At December 31, 2016, we had 29,865 employees. The term of office ofhave these been officers employees is of from the theand company date Mses. for of West more their and than election Whitaker five untilbecame have years. their executive served Messrs. successor officers as Anderson, shall of executive Crutcher, have the officers Delagi, been company of March, elected in the Ritchie and 2015. company and qualified. for Templeton All more than five years. Ms. Trochu and Mr. Xie

FORM 10-K rdtmresadohrsucso eddlqiiy emyb nbet bannee upis olc consrcial or receivable accounts collect supplies, 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. reputation. manufacturing our and increased and chain incur results supply to operating us our face cause affect We to or adversely disruption data; could a personal which cause employee of information; of any proprietary release costs, or the protection data in confidential technology lost result suppliers’ information in our operations; result or other networks; customers’ and unauthorized our technology manufacturing failures, our, information our system of our viruses, release compromise computer could unauthorized by events the caused These or be terrorism. could or systems vandalism technology sabotage, information access, our our of of disruptions disruptions or or Breaches breaches by affected adversely be systems. could technology reputation information our and prolonged results a condition. in financial operating results and Our severe that results as disaster our such natural affect occurrences A adversely natural operations. may to disrupt operations subject could our locations that to in epidemics disruption operations health other or and events facilities geological design weather, and data manufacturing, have na We by affected be could operations adverse of an have results to can Our relation transactions condition. in dollar financial fluctuates non-U.S. and significantly of operations our dollar remeasurement of and U.S. The results operations the business. our our when transact on on periods we effect effect to which adverse us in an expose currencies may in operations non-U.S. countries result global the other could our and This addition, experienced, trade. In have global results. we operate impact financial which we may in where that countries countries protectionism various and certain increasing to the conditions, Additionally, experience, exposed of labor States. are networks conditions, United We technology health the revenue. information acts, including our the and hostile operate, of outside communications other portion locations or transportation, large to terrorism in a shipments risks, disruptions represent from security possible typically comes conditions, revenue China economic our into and of products social percent of political, 85 shipments About particular, countries. in 30 States; than United more in facilities social, have political, We international or domestic with conditions. associated other risks or to economic us subject adversely operations and margins global profit Our our reduce condition. forecast would financial inaccurately that and we inventory operations If obsolete of quarter’s assumptions. or results a products excess multiple our meet manufacture on inadequate, affect to we based hold ability times, are may our lead forecasts we affect shipment These demand, may shorter demands. customer orders for customers’ fill requests of to customers’ forecasts needed to on mix responding based product when the addition, with In production forecast. and revenue liquidity. inventory needed match of to sources ability operations; other Our customer and disrupt markets political, that credit international systems access or technology to domestic example: information inability or for customer customer’s events from, of a natural resulting breaches or markets; demand conditions; financial customer other and in or credit decline economic global general social, of a stability of the because suffer regarding might uncertainty also and operations operations of of results results Our these our of affect practices adversely or may policies our adjustments, of sourcing inventory more manufacturing distributor or or condition. or one design customer financial by the of rapid purchases in timing often of change the and curtailment a or significant significant to customers, to or due of loss lead curtailments results may the including more our market Additionally, customers, or expects, semiconductor demand. large one management the product in th EA NTUET 06FR 0K9 10-K FORM 2016 • INSTRUMENTS TEXAS ua vnsi h oain nwihw operate. we which in locations the in events tural

FORM 10-K 10 TEXAS INSTRUMENTS • 2016 FORM 10-K In addition, we are subjectwhen to it laws is and subject regulations to indeemed taxation various to in jurisdictions earn that that income, jurisdiction. determine which Changes howChanges could in much in in these profit applicable turn laws has tax affect and been laws our regulations earnedassets, and results could and which regulations of affect could operations. or the also in We locations affect our have whereperformance our business deferred we for results performance tax are the of could assets year. operations. on affect If Each our our that quarter balance ability performance we sheet. to forecast forecast realize changes, our those our tax deferred forecasted liability tax tax based liability on will our change. forecast of our We have facilities in moreTax than rates 30 vary countries among and the asaffected. jurisdictions a A in result number which are of we subject factors operate. toearned could If taxation and cause our and taxed; our tax audit a taxes rate by change to increases, atax increase, in our number rates; including the results of changes mix a of taxing in of change operations authorities. tariff profits in could regulations from the be or those jurisdictions adversely surcharges; jurisdictions; in or changes which adverse in our resolution available profits of tax are audits credits; by changes taxing in authorities. applicable 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, or productpay communications liability, damage that epidemic awards could or or lead delivery settlements. to failures,customer In significant or or the expenses other end event as grounds consumer. of we relating We a defend toor maintain claim, such our adequate product we claims to liability may or protect insurance, also against incur butpart, all costs there for such if is example, claims. we no with In decide guarantee respect addition, to thatcosts to it compensate such and products is the insurance expenses used possible affected will relating in for be to automotive one available and the applications of our recall. or our reputation. Any handheld customers of to electronics, these recall which events a may could product cause adversely containing us affect to a our incur TI results of operations, financial condition claims, product recalls or legal proceedings. Our results of operations and our reputation could be affected 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 environment material 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 and imports; and intellectual bribery international property and operationsmay ownership corruption; relating be and tax; to, onerous infringement. data for and privacy Compliance example, expensive and withfail and protection; these to could labor laws, comply restrict and rules or our and if ability regulations Furthermore, we to should become manufacture these subject or laws, to ship rules enforcement ourgreater and activity, products compliance regulations we and costs could be operate or amended be our restrictions subject or business. on expanded, to If our fines, or we ability penalties new to or ones manufacture other enacted, our legal we products liability. could and incur operate materially our business. Our operations could be affectedis by subject. the complex laws, rules and regulations to which our business Our inability to timely implementresults new of manufacturing operations. technologies We or subcontract installon a manufacturing third portion equipment parties of could to our adversely provide wafer affectwith advanced fabrication our all logic and of manufacturing assembly these process and suppliers, technology testingpossible and development. of shortages the our We of number do products, capacity of not and in alternate have weprocess periods suppliers long-term depend technology of is contracts in high limited. a demand, Reliance timely, suppliers’ oncosts cost inability these on effective, to suppliers us. and develop involves appropriate and risks, manner deliver including and advanced the logic possibility manufacturing of suppliers’ imposition of increased In particular, our manufacturing processesresources and and critical utilities manufacturing be equipment available. requireoperations. Limited that Our or certain products delayed key contain access raw materials to materials,customers that and natural and are high suppliers subject costs may to of be conflict thesecosts adversely minerals items may affected reporting could increase if requirements. adversely if we affect Our one are relationships ourconflict-free. or unable results with more to of of describe our our customers products demand as that conflict-free. we Additionally, change our the sourcing of materials we cannot identify as

FORM 10-K as st as ud y o xml,isignwdb reut rsligassets. selling could or or equity and shareholders, or principal to debt make returned new to or issuing obligation operations example, our our for in addition, by, invested In funds be control. raise the our would to including otherwise beyond us operations, are that cause will our which funds which affecting of divert performance, to factors many could future ability other 1A, payments our the and Item interest upon have business under depends will and described 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 laws. operations countries U.S. our of as affect laws extent could the same Moreover, debt the trademark. to Our our rights products bearing property their products intellectual in counterfeit our technology of protect patented sale not our parties’ may or of third operate misappropriation use or we all parties’ so where prevent third do cannot example, to efforts for right our including, the However, technology, without rights. protected property our intellectual of own use our improper them protect indemnify and to enforce as obligation actively well legal We as other parties, or third contractual from a injunctions have claims. and/or we infringement damages where from for instances resulting claims in damages to customers against These parties, us our obtain companies. third expose by to other from could indemnification able against claims merit, for be actions infringement any claims will enforcement face of we pursue indirectly, not that to or or assurance patents directly whether To no acquired may, assertions, others. be have We of can that reasonable. rights there entities consider property others, non-practicing we intellectual from terms including or the technology on software infringing licensed or technology, without on all the so rely at develop do to licenses no independently can have be to we we can able that that There be or extent portfolio. will business the property we our intellectual areas, conduct our new to of into necessary strength expands know-how continued business the our on as part that, in assurance maintain depends to markets 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 do margins Our costs profit fixed affect manufacturing these adversely our general, can highly of In and a much fixed. loadings, in own is factory operate we costs or we Because operating demand addition, products. our customer In our of shipment tariffs. for portion and in pricing significant demand changes affect a customer and adversely capacity, in mix; might decreases product that including our environment factors, in market of shifts competitive number inventory; a our by of affected obsolescence adversely volume; be may margins profit Our current our time. to over harmful vary or may disruptive margins be pay could Our to distributors inability of their number in significant result a that of difficulties loss products. financial the our suffer or over distributors with business. carry products our Disputes distributors competing if us. Our promote affected to distributors. distributors be owed through our could amounts if products operations our affected of of be results sales could our from sales Moreover, generated our was and revenue lines, our product of competing percent 60 about 2016, In performance. financial distributors’ our aff or adversely our if lines be or product could insurer, operations or of distributor results customer, the Our from be inventory may lost condition the financial of and distributor value operations or full customer of the delayed. a results recover is If our not recovery distributors. inventory, do and TI-consigned we customers to if largest respect affected our with adversely of loss some a for experience place to in were programs inventory consignment have We inventory. our to respect with loss a conditio suffers financial distributor and might operations we of earnings, is foreign that results operations. these subsidiaries of Our of non-U.S. results any our our repatriate of affect we earnings could future undistributed which the our tax, in of income If portion U.S. States. the incremental United on incur the tax outside income U.S. reinvested for permanently provision considered a made not have We EA NTUET 06FR 0K11 10-K FORM 2016 • INSTRUMENTS TEXAS ol eavreyafce facsoe ra or customer a if affected adversely be could n ce yordsrbtr’pooino competing of promotion distributors’ our by ected

FORM 10-K le assets could adversely affect our results sts could affect our results of operations and 12 TEXAS INSTRUMENTS • 2016 FORM 10-K Not applicable. ITEM 1B. Unresolved Staff Comments. 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. intangib 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 we implement 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 Our continued success depends inqualified part employees on in our a ability competitive to environment. 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 co We maintain bank accounts, onefinancing or needs more of multi-year the revolving company. creditdebt Our agreements, obligations ability and and to a meet fund portfolio our our ofmay cash operations, investments depend return invest to on objectives in support access depends our the to upon business,short-term our continuous make bank bank strategic access loans. credit to acquisitions, If lines our service we that bank our markets), are support and our unable commercial investment results to paper accounts, of access borrowings and operations these andor and accounts provide redeem financial and additional our condition credit liquidity investments could lines through could (for be be example, adversely restricted. due affected to and instability our in ability the to financial access the capital markets Our results of operations and liquidity could be affected by changes in the financial markets.

FORM 10-K 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 needs. 3. future ITEM foreseeable and our current believe our We years. and five purpose next intended the their within both 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 2016, at of feet end square leased. the million were At 10.2 feet approximately approximately square which contained million of States 1.5 2016, United approximately 31, the which December outside of at facilities 2016, feet Our 31, square leased. December sites. million were non-U.S. 13.1 feet our approximately square for contained million particularly 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, † China Chengdu, Maine Portland, South California Clara, Santa * 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 ...... XX X ...... X ...... X X X X X X ...... X ...... X ...... X ...... X ...... X X ...... X X ...... X ...... X X ...... X X ...... EA NTUET 06FR 0K13 10-K FORM 2016 • 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 0.34 0.34 0.34 0.38 1st 2nd 3rd 4th 48.03 56.43 61.06 67.60 59.9451.78 58.73 51.51 52.08 43.52 58.98 48.44 Average per Share Price Paid $ 58.37 $ 63.30 $ 71.42 $ 74.87 $ 0.38 $ 0.38 $ 0.38 $ 0.50 Total Shares 943,139 71.36 943,139 5.80 billion Number of Purchased 2,919,230 $ 69.926,720,333 (2) 2,919,230 $ 70.68 $ 6.07 billion 6,720,333 (2) $ 5.80 billion (3) 2,857,964 71.23 2,857,964 5.87 billion PART II ...... Issuer Purchases of Equity Securities. Low Low...... of additional shares of TI common stock announced September 17, 2015. No expiration date has been specified for this authorization. 2016 High 2015 High 2016 2015 14 TEXAS INSTRUMENTS • 2016 FORM 10-K (1) All purchases during the quarter were made under the(2) authorization from our board All of purchases directors during to the(3) purchase quarter up were to open-market $ purchases. As 7.5 of billion December 31, 2016, this amount consisted of the remaining portion of the $ 7.5 billion authorized in September 2015. Total October 1, 2016 through OctoberNovember 31, 1, 2016 2016 through November 30, 2016 Period The following table contains information regarding our purchases of our common stock during the fourth quarter of 2016. 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, 2016 through December 31, 2016 The information concerning the numberSelected of Financial stockholders Data.” of record at December 31, 2016, is contained in Item 6, “Summary of Dividends paid: 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 oe otefnnilsaeet n aaeetsdsuso n nlsso iaca odto n eut foperations. of results and condition financial of analysis and discussion Management’s and statements financial the to Notes See record of Stockholders Employees of: Number – data Other debt Long-term paper commercial and debt long-term of portion Current assets investments Total short-term and equivalents cash Cash, data: sheet Balance 2. activities. Note operating See from 2016-09. flows ASU Cash of from adoption expenditures the Capital reflect subtracting amounts by 2. 2016 derived Note measure See non-GAAP 2016-09. a ASU (c) is adopted flow having cash presentation, Free 2016 the to conform to (b) reclassified periods Prior (a) share common per declared dividends Cash (c) (c) EPS millions Diluted in outstanding, shares diluted (c) Average EPS diluted for shares common to allocated Income RSUs units to following: stock allocated the restricted Income using unvested to calculated is allocated (c) (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 (c) income Net profit Operating charges/other Restructuring charges Acquisition SG&A) and (R&D expenses Operating profit Gross Revenue segment: by Revenue data: statement Income repurchases Stock paid Dividends (b) (a) flow cash Free expenditures (a) Capital activities operating from flows Cash data: flow Cash Data. Financial Selected 6. ITEM borrowings Other Processing Embedded Analog ...... EA NTUET 06FR 0K15 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 3,551 $ 3,490 $ 1.64 3.48 $ $ 3,595 $ 3,595 $ 4,614 $ 14,910 16,431 13,370 29,865 0621 0421 2012 2013 2014 2015 2016 0621 0421 2012 2013 2014 2015 2016 8,536 2,978 1,021 4,799 3,137 8,240 1,811 3,023 2,132 1,646 4,083 631 319 531 (44) (15) ,4 ,7 ,2 1,728 $ 2,126 $ 2,778 $ 2,944 $ ,1 ,4 ,2 3,965 $ 3,829 $ 3,541 $ 3,218 $ 0.72 1.51 $ $ 1.07 1.91 $ $ 1.24 2.57 $ $ 1.40 1,759 $ 2.82 $ $ 2,162 $ 2,821 $ 1,759 2,986 $ $ 2,162 $ 2,821 $ 2,986 $ 3,483 $ 3,514 $ 4,054 $ 4,397 $ 5531,6 72318,128 17,213 16,361 15,563 19,565 18,554 17,372 16,230 12,825 12,205 13,045 13,000 9973,0 22934,151 32,209 31,003 29,977 ,0 ,0 ,0 1,500 1,000 1,001 1,000 6,998 7,194 8,104 8,339 ,2 ,3 ,4 4,175 4,145 3,630 3,120 1,146 1,113 1,080 1,043 1,973 2,832 3,681 6,368 3,947 3,380 6,364 4,274 3,570 3,201 2,257 7,427 2,561 3,028 2,450 7,560 2,201 2,740 1,800 819 1,874 2,988 2,787 2,868 1,175 3,102 2,831 1,323 3,669 2,741 1,444 3,846 o er ne eebr31, December Ended Years For 2 3 4 450 341 330 329 495 412 385 551 4)(3 3)(31) (36) (43) (42) 7)(1 19 264 (189) (51) (71) eebr31, December

FORM 10-K Our customers need We invest in manufacturing technologies that Together, the attributes above result in diverse and Our global sales force is larger than those of our competitors. The breadth of our of Operations. Over time, we have beenresult, allocating R&D resources expense from will areas continue like increasing manufacturing in support 2017. and SG&A into R&D activities. As a New products tend not tonumber have of a products. significant impact onFrom our time revenue to in time, any our givenproducts, revenue period which and because we gross we profit refer sell to are suchBecause as affected a we changes by large own in changes much the in of “mix” demandloadings our of for decrease, manufacturing products higher-priced our capacity, shipped. or fixed a lower-priced costs significantdecrease. are portion Conversely, spread of as over our factory reduced operating loadings output costcircumstances, increase, and, is our our absent fixed. profit fixed other When margins costs circumstances, factory increase. are ourand Increases spread profit decreases and over margins in decreases increased demand. in output factory and, loadings absent tend other to correspond to increases Unless otherwise noted, changes inby our fluctuations revenue in are shipment attributable volumes. to changes in customer demand, which are evidenced O O O O O Industry’s broadest portfolio of differentiatedmultiple analog chips and for embedded their processing systems. semiconductors. competitors, The which breadth gives of us our access portfolioinvest to means more more we than customers can and $1 solve billion the moreA opportunity each of strong year to these foundation to generate needs of develop more than manufacturing new revenue candifferentiate technology products per our the for system. and features We our low-cost of portfolio. production. ouroutsourcing semiconductors, it. and This we ability do to mostcustomers. directly of We control our produce our own billions manufacturing production of helps in-house,are semiconductors ensure as able each a opposed to year consistent to on keep supply a costs of mixtureProcessing low products of semiconductors for for 150-, can manufacturing our 200- be facilities and made and 300-millimeterattractive. using equipment wafers, In mature because and 2016, assets our we we that Analog increased we andwafers, factory acquire much which loadings ahead of have by of our a about demand Embedded 40 15 whenAnalog percent percent their growth cost for prices will advantage our are be per Analog most produced unpackaged semiconductorslong on chip on term. 300-millimeter over 300-millimeter wafers, 200-millimeter which wafers. will TheIndustry’s be majority largest meaningful of market our to channels. the growthportfolio of attracts our an cash increasing flow number over ofsearches the visits and to design-in our journey. website, Our whereabout web customers 100,000 presence, often customers. together begin with their our initialDiversity global product and sales longevity force, in provides our uslong-lived products unique positions and access that in to deliver the high marketsdependent terminal we on serve. value any to single our product, shareholders.application and Because or because of customer. of the Some the breadth of breadth ofinvestments. our of our products our portfolio, generate markets we we revenue are are for not not decades, dependent which on strengthens any the single return on our • All dollar• amounts in the When tables we are discuss stated our in results: millions of U.S. dollars. • • • • 16 TEXAS INSTRUMENTS • 2016 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 attributes Processing. is These that attributes over put timethat us we cash in have to a grown shareholders. unique free class cash of flow companies and with gained the market ability share to in grow, Analog generate and cash, and return We design, make and sellcarefully semiconductors constructed to around electronics the designers following and manufacturers attributes: all over the world. Our business model is Overview ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results

FORM 10-K 9preti 05 e oe6t h iaca ttmnsfrarcniito fteUS tttr noetxrt oteeffective the to rate tax income statutory U.S. and the 2016 of in reconciliation percent a 27 for were statements before rates financial income tax the higher effective to to Our 6 rate. due compensation. Note tax primarily stock See was for 2015. increase benefit in The tax percent billion. a 29 $1.23 by with offset compared partially related billion taxes, settlements $1.34 income from was million provision $188 tax of income income Our to due is increase The million. revenue. infringement. $32 of property with percent compared intellectual 32.9 million to or $211 billion, was $4.27 2016 with for compared OI&E revenue, statements. of financial percent and the 35.9 charges to or restructuring 3 billion, to Note $4.80 related See was 2015, million purposes. profit in $12 reporting Operating million by segment $71 offset for of partially Other million credit were in $40 net that included of a million are property with $83 amounts intellectual compared of These of This assets credits. sale charges. of other the restructuring sales on to on gain related gains a million included included $25 which which by statements. million, offset financial $15 partially the of was to credit that 13 net Note a See was assets. charges/other intangible Restructuring with of compared amortization million the $319 from were resulted Semiconductor charges National non-cash of These acquisition million. 2011 $329 our with expense associated SG&A charges costs. due Acquisition compensation-related percent, higher 7 costs. or and compensation-related million, activities higher R&D $90 to increased into due resources expense primarily of R&D million, SG&A. allocation $19 for ongoing increased billion our $1.77 of extent, and combination lesser R&D a a for to to billion and, $1.37 costs were manufacturing percent. expenses lower 58.2 Operating to with due compared percent, percent 9 61.6 or was million, margin $680 profit of Gross increase revenue. an higher Processing billion, Embedded $8.24 from was revenue profit higher Gross to due 2015, from percent, 3 or million, $370 Analog. up and was billion $13.37 of Revenue 2015 with compared 2016 – results the financial after section of information Details GAAP financial to Non-GAAP reconciliation the a see For measure, measure. non-GAAP section. percent this financial resources 40 non-GAAP providing capital represented a for and dividends is reason Liquidity returned Our flow the we dividends. cash of year, and Free explanation from the repurchases sustainability. an up During stock their and revenue, revenue. of underscoring of of percent combination flow, percent 30.5 a cash 20-30 was through free of 2016 investors of range flows in to targeted cash flow cash our 2016, cash of with In Free billion consistent operations. 2015. $3.78 and from in ago flow billion year cash $4.40 a strong from percent generate up 29.6 to billion, us $4.61 allows were Processing operations Embedded from our and of Analog quality on the focus reflects strategy. Our year manufacturing the our for percent of Analog 61.6 efficiency 2016, of the In margin as opportunities. highly Gross well serve growth revenue. as products long-term of portfolio, These dependable percent product Processing. have 86 Embedded believe represented and we Processing Analog and Embedded on applications, and focus of our thousands reflecting with 2016, markets in diverse well perform to continued We operations of Results ntefut ure f21,w dpe S 060 eae osokcmesto.W ple h e standard new the applied We compensation. stock to related 2016-09 ASU adopted we 2016, of quarter development fourth and the design In similar of basis • the on combined are that products similar of groups represent segments Our • l eid nteCnoiae ttmnso ahFos e oe2t h iaca ttmnsfrmr details. more for statements for financial basis the retrospective to full 2 a Note on See and Flows. Income Cash of of Statements Statements Consolidated Consolidated the the for in segments. 2016 periods our of all regarding beginning information the more of for as statements prospectively financial the to allocates 1 management Note how See and results. channels, measures distribution and and resources processes manufacturing characteristics, product requirements, O hc eoeaeadfo ..txbnft.TeelwrnnUS a ae r eeal tttr nntr,without nature, in jurisdictions. statutory in taxing generally jurisdictions are those the rates in of tax operate many non-U.S. that in lower companies lower operations These to from our benefits. available benefits to tax and taxes) U.S. applicable expiration income from rate) before tax and Income income operate of statutory we percentage U.S. which a the as to taxes (compared income rates for tax (Provision rate tax effective Our EA NTUET 06FR 0K17 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K 596 34% 630 (2)% 33.6% 21.4% 36.6% 3,048 11% $1,874 (3)% $ 8,339 2% $ 2,787 8% 618 34.1% 801 26.5% 39.6% 2016 2015 Change 3,380 2016 2015 Change 2016 2015 Change $1,811 $ 8,536 $ 3,023 ...... 18 TEXAS INSTRUMENTS • 2016 FORM 10-K Gross profit was $7.56 billion,58.2 an percent increase of of revenue $133 compared million, with or 2 56.9 percent, percent. due to lower manufacturing costs. Gross profit margin was Revenue of $13.00 billion waslower about revenue even from with Other. 2014, Our asexchange 2015 higher rates. revenue revenue was from negatively Analog affected and by Embedded about Processing $150 was million offset from by changes in foreign currency Details of financial results – 2015 compared with 2014 In 2015, cash flows fromrevenue, operations up were from $4.40 28.1 billion, percent uprepurchases in from and 2014. $4.05 dividends. During billion 2015, in we 2014. returned Free $4.19 cash billion flow of in cash 2015, to was investors 29.6 through percent a of combination of stock Other revenue decreased due to,partially in offset declining by order, growth lower in royalties, DLP custom products. ASIC Operating products profit and decreased calculators. $12 ThisPrior million. decrease results was of operations In 2015, Analog revenue grewrepresented 3 86 percent, percent and of Embedded revenue Processing in revenue 2015, grew up 2 from percent. 83 Analog percent and in Embedded 2014. Processing Gross margin was 58.2 percent for 2015. * Includes Acquisition charges and Restructuring charges/other Revenue Revenue Other (included DLP products, calculators, custom ASICs and royalties) Revenue Operating profit Operating profit Operating profit % of revenue Embedded Processing revenue increased duerevenue to, increased in due declining to order, the Processors,gross mix Microcontrollers profit. of and products Connectivity. shipped. Processors Operating profit increased primarily due to higher revenue and associated Operating profit * Operating profit % of revenue Analog (included High Volume AnalogValley & Analog Logic (SVA) (HVAL), product Power lines) Management (Power), High Performance Analog (HPA) and Silicon Segment results – 2016 compared with 2015 Net income was $3.60 billion,$0.13 an in increase 2016 of due $609 to million, the or application 20 percent. of the EPS was new $3.48 accounting compared standard with related $2.82. to EPS stock benefited compensation. Embedded Processing (included Processors, Microcontrollers and Connectivity product lines) Operating profit % of revenue Analog revenue increased primarily duemix to of SVA products and shipped. HPA. Operating Power profit also increased grew, due but to to higher a lesser gross extent, profit, while which HVAL benefited declined from due lower to manufacturing the costs.

FORM 10-K te eeu elndpiaiydet utmAIs eeu rmDPpout lodcie,btt esretn.Operating extent. lesser a to profit. but gross associated declined, also and products revenue DLP lower from to Revenue due ASICs. primarily custom declined to profit due primarily declined revenue Other charges/other Restructuring and charges Acquisition Includes * revenue of % profit Operating * profit Operating Revenue in decline Other a expenses. offset operating together lower which to Microcontrollers, due and primarily Connectivity increased to profit equally Operating about Processors. due increased revenue Processing Embedded revenue of % profit Operating profit Operating Revenue lower of extent, mix lesser the Processing a to Embedded to due and, declined profit HPA gross extent. associated lesser and a revenue to higher but to grew, costs. due also manufacturing SVA increased and profit Power Operating HVAL. shipped. to products due primarily increased revenue Analog revenue of % profit Operating profit Operating Revenue 2014. in $2.57 Analog with compared 2014 $2.82 was with EPS compared 2014. 2015 from – percent, results 6 or Segment million, $165 of was increase rate an tax billion, effective $2.99 Our was higher rates. income to tax Net due effective was non-U.S. 2014. provision from in tax benefit percent total lower 27 the a and in extent, 2015 increase lesser in The a percent 2014. billion. to 29 in $1.05 and, revenue, with taxes of compared income percent billion before 30.3 $1.23 income or was billion, provision $3.95 tax with income compared The revenue, of percent 32.9 of or expenses billion, other $4.27 and was in charges purposes. profit million restructuring reporting Operating $51 by segment of offset for credit partially Other net were in were a that included that with million are million compared $75 amounts $83 This of These of credits. assets million. assets other of $24 of and sales sales charges on on restructuring gains gains to reflecting included related 2014, which million million, $12 $71 by of offset credit partially net 2014. a with was even charges/other about assets. Restructuring million, intangible $329 of were amortization and the Semiconductor from National primarily of were acquisition charges 2011 non-cash our These to related were charges Acquisition These Japan. align and to costs. Processing company compensation-related Embedded and the higher in percent, across by actions 6 efforts offset or restructuring ongoing partially million, completed from were $78 the savings decreases decreased including reflect expense comparisons opportunities, R&D Both growth SG&A. percent. with for 5 costs billion or $1.75 million, and $95 R&D decreased for SG&A billion $1.28 were expenses Operating ...... $ ...... $ ...... $ ...... 9 8 55% 384 596 ...... 60777 630 ...... EA NTUET 06FR 0K19 10-K FORM 2016 • INSTRUMENTS TEXAS 0521 Change 2014 2015 Change 2014 2015 Change 2014 2015 ,7 ,0 (15)% 2,201 $ 1,874 2% 2,740 $ 2,787 9% 3% 2,786 8,104 $ 3,048 8,339 36 35.3% 33.6% 14.0% 21.4% 34.4% 36.6% (19)%

FORM 10-K 20 TEXAS INSTRUMENTS • 2016 FORM 10-K We had $1.15 billion ofU.S. Cash entities and owning cash about equivalents 80 andresources percent $2.34 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, 2016, 2016. least capital with We the expenditures, believe our next we dividend 12 have and months. the debt-related necessary payments, financial and In 2016, financing activities usedfrom $3.81 the billion issuance compared of with fixed-rate, $4.292015, long-term billion we debt in received (net 2015. proceeds of In of original 2016,repaid $498 issuance we $1.00 million discount) received billion from and proceeds the of repaid of maturing issuance $1.00 $499increases of debt. billion million in fixed-rate, Dividends of the long-term paid maturing dividend debt in debt. rate, (net 2016 In from partially of were $0.38 offset original $1.65 per by billion issuance share, fewer discount) compared resulting shares and withdividend in outstanding. $1.44 to an During billion $0.38 annualized 2016, in from dividend the 2015, $0.34 payment quarterly reflecting This per of dividend compared share. $2.00 increased with In per to $2.74 2016, share. $0.50 billion we Duringreflected used used 2015, in $2.13 in we Cash billion 2015 increased flows to to our from repurchase repurchase quarterly $396 financing 51.4 35.5 million activities. million million in In shares. shares 2015. 2016, Employee of these exercises our exercises of common provided stock stock. cash options proceeds are of also $472 million compared with In 2016, investing activities used$531 $650 million million compared compared with with $551 $302manufacturing million million equipment. in in In 2015. 2015. Capital 2016, For we expenditures 2016,In had Capital in comparison, purchases both expenditures in of periods were 2015 short-term were we investments, primarily2015, had net for we proceeds of semiconductor received from proceeds, $110 short-term that million investments, used from net cash asset of of sales, purchases, $113 compared that million. with provided none cash in of 2016. $125 million. In Our revolving credit facility is2021. 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, 2016, our credit facility Liquidity and capital resources Our primary source of liquidityShort-term is investments cash and flow a from variable operations.$4.61 rate, Additional billion, revolving sources an credit of increase facility. liquidity of Cash are $217 flows Cash million from and from operating cash 2015 activities equivalents, primarily for due 2016 to was an increase in Net income. Inventory was $1.79 billion atend the of end 2016 of were 2016. 126 This compared was with an 115 increase at of the $99 end million of from 2015. the end of 2015. Days of inventory at the Accounts receivable were $1.27 billionDays at sales the outstanding end were of 33 2016. at This the was end an of increase both of 2016 $102 and million 2015. compared with the end of 2015. At the end of 2016,$272 total million cash from (Cash the and end cash of equivalents 2015. plus Short-term investments) was $3.49 billion, an increase of Financial condition

FORM 10-K odto n htrqietems ujciejdmn.I culrslsdfe infcnl rmmngmn’ siae and financial estimates statements. our management’s financial of from our portrayal significantly on the differ effect to results significant important actual a from most If be vary are judgment. could may that subjective there and those most projections, disclosures be the related to require and policies that States, amounts accounting and United reported following condition the the the in affect consider accepted that We generally projections results. principles and actual accounting estimates with analyses, conformity statistical in use statements we financial consolidated our preparing In policies accounting Critical funding future planned Total any as well as 740, ASC under liabilities tax Thereafter uncertain of million 2016. $243 31, are December table at 2020/2021 the existed from that Excluded liabilities certain for payments 2018/2019 (e) of accounted estimate contracts an under Includes gases industrial of purchases 2017 and (d) equipment and facilities leased for payments minimum Includes (c) non-cancellable fixed, a 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) (e) Total (d) plans compensation Deferred (c) leases Operating (b) commitments Purchase (a) debt Long-term Obligations Contractual obligations contractual Long-term (non-GAAP) revenue of percent (GAAP) a revenue as of flow percent cash a Free as operations from flow Cash Revenue (non-GAAP) flow cash Free expenditures Capital (GAAP) operations from flow Cash most our the below. into to table insight Reconciliation the as liquidity, measures. in well our GAAP provided as into comparable is shareholders, insight the measures to provide to GAAP-based return ratios supplemental comparable to associated are directly available the measures potentially and non-GAAP cash flow These (also of cash performance. activities amount free financial operating the that from and believe calculated flows We capability was Cash operations). cash-generating flow not measure, from our cash were GAAP flow Free that comparable cash (GAAP). measures directly as States financial most to United are the referred the These from in measure. expenditures principles that Capital accounting on subtracting accepted based by ratios generally and with flow accordance cash in free prepared to references includes MD&A This information financial Non-GAAP rjcin eod21 r o rcia oetmt u oterlsafcigtxddcil otiuin n h impact legislation. the non-U.S. and and contributions U.S. tax-deductible potential funding affecting and but rules rates 2017, the interest in to performance, million due asset $100 estimate plans’ about authorities. to the contribute taxing practical from to respective not plan the are we with 2017 the plans, settlements beyond of cash benefit projections 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 table. as the for in reflected of not million are $3 which additional paid, cancellable an be are cancelled, to table be required the may be from arrangements may Excluded purchase penalties schedule. certain cancellation delivery when reduced on a depending with However, due arrangements. payments minimum or schedule payment months. 12 within mature will that obligations ...... 99$ $909 ...... 62$ $692 ...... 6 54 7240 57 41 75 67 ...... 12132 336 5 26 173 132 ...... 1 83 9192 99 37 38 18 ...... EA NTUET 06FR 0K21 10-K FORM 2016 • INSTRUMENTS TEXAS ...... ,3 1 ,8 4,637 $ 1,182 $ 910 $ 3,869 $ 1,636 1,021 $ 806 $ 1,350 amnsDeb Period by Due Payments 4,614 $ 13,370 $ 4,083 $ 0621 2014 2015 2016 (531) 30.5% 34.5% o er ne eebr31, December Ended Years For ,9 4,054 $ 4,397 $ 300$13,045 $ 13,000 $ 3,669 $ 3,846 $ 96 28.1% 31.1% 29.6% 33.8% 51 (385) (551)

FORM 10-K 22 TEXAS INSTRUMENTS • 2016 FORM 10-K In addition to the factorslooking described statements above, is the based estimated on annualthese then-current tax estimates. tax rate, Retroactive law. which changes Significant excludes in changes discreteof tax in items, enactment. law tax reflected enacted law in subsequent enacted forward- to during the the end year of could a affect reporting period are reflected in the period 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. effect of Also, accompanying on certain our reduction tax of plans or expense our for increase in non-U.S. the in future operations permanent years. could reinvestment change. or eventual Such changes could have a material 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 uncertaintiesresolution audit the in of issues ultimate the whether, in tax application and the outcome of the U.S. is complexassurance extent and tax can to other laws. be which, tax We given additional jurisdictions recognize that taxes basedtax the will on provisions final be an and outcome due. estimate accruals. of Although of these we the matters believe ultimate will the not estimates be are different reasonable, than no what is reflected in the historical income 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 We recognize in revenue shippingrevenue. fees, The if majority any, of received our from customers customers. pay We these include fees shipping directly and to handling third costs parties. in cost of 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 estimatesvolume-based the of incentives, semiconductor future product industry. credits returns These to due allowances, bepricing to which granted arrangements. quality are to Allowances issues, not customers are incentives material, or based designed generallyand on to include are analysis maximize recorded of growth when historical opportunities revenue data, anddistributors is current special in recognized. economic a We conditions timely believe and manner. we contractual can terms reasonably and reliably estimate allowances for credits to 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 We recognize revenue from salesoccurs of upon our shipment products, or including delivery salesevidence to to of the our an customer distributors, arrangement or when distributor, exists; titleFor when depending and sales sales upon risk to amounts the of distributors, are terms loss payment fixed of pass, is or the which due determinable; sales usually on and order; our when when standard collectability persuasive commercial is terms reasonably and assured. is not contingent upon resale of the products. Revenue recognition

FORM 10-K 14mlin eas neetrtso u ogtr etaefxd hne nitrs ae ol o fettecs flows cash the affect not 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 $7 interest interest by Because in investments million. short-term increase $104 and point basis equivalents 100 cash of in hypothetical effect a investments the 2016, (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 Japanese sell 2015. risk to year-end rate million at Interest $158 existed (including activities exposures hedging sheet Similar balance contracts euros). net exchange sell currency hedge to our to forward million on million had $123 have $494 we and may of 2016, yen fluctuations value year-end 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 $1 these to about use relative of We rates loss exchange or currency currency gain and non-U.S. exchange balances in currency 2016 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 and also jurisdictions, sheet those balance in Our U.S. income in taxable denominated on liabilities impact or significant rate. assets a tax own have effective entities can our non-U.S. fluctuations on Our rate consequently reporting. Exchange financial currencies. for other currency or functional dollars the is dollar U.S. The risk exchange Risk. Foreign Market About Disclosures Qualitative and Quantitative 7A. ITEM contingencies. and commitments our of discussion a for statements financial the to 12 Note See SEC contingencies of and 303(a)(4)(ii) Commitments Item in defined as arrangements sheet off-balance significant no S-K. had we Regulation 2016, 31, December of As arrangements standards. sheet accounting Off-balance new on information for statements financial the to 2 Note See standards factors. accounting other valuation in and determine Changes shifts to write- technology used future calculations negotiations, Actual customer and products. estimates demand, those from customer for differ in prices may changes statistical quarterly market reasons to the calculated of obsolescence due by also excess and allowances captured are in salability not Allowances are for event cancellation. products inventory significant of individual of risk a for offs is imminent costs to there with inventoried unlikely if demand where judged carried or instances inventory be part for identify will end-of-life to type an order material are in each Examples of sales for allowance. levels future allowance inventory estimated specific comparing and A salability by backlog sold. for determined current be inventory are shipments, of allowances historical disposals statistical to Statistical historical quarterly parts goods. on goods, individual finished based finished and work-in-process For work-in-process and reasons. materials, materials obsolescence raw raw and obsolete for or quarterly unsalable determined for are allowances allowances of net valued is Inventory allowances valuation Inventory EA NTUET 06FR 0K23 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K – includes investments in limited partnerships (accounted for under either the equity – includes mutual funds that were selected to generate returns that offset changes in certain – includes non-marketable (non-publicly traded) equity securities. liabilities related to deferred compensationInvestments arrangements. in The venture mutual capital funds funds holdor a cost variety method). of debt andEquity equity investments investments. Investments in mutual funds • • • 24 TEXAS INSTRUMENTS • 2016 FORM 10-K Investments in mutual funds arerelated stated changes at in fair deferred value. compensation Changeswould liabilities in not such prices materially that of affect the a operating 10 mutualImpairments results. percent fund deemed Non-marketable increase investments to equity or are be securities decrease expected other-than-temporary and in toare are some the offset stated expensed venture investments’ using in capital fair the Net funds values equity income. are method. Investments stated See in at Note the cost. 8 remaining to venture the capital financial funds statements for details of equity and other long-term investments. Long-term investments at year-end 2016 include the following: Equity risk

FORM 10-K umsino h ceue rbcueteifrainrqie sicue ntecnoiae iaca ttmnso the or statements financial require consolidated to the sufficient in amounts included in is present required not information or the thereto. present because notes not or is schedule, information the required of the submission 2016 because 31, omitted December been ended have period Schedules the in years 2016 three 31, the December of ended each period for the equity in Stockholders’ years three the of each for flows Cash 2015 2016 and 31, 2016 December 31, ended December period at the sheets in Balance years three 2016 the 31, of December each ended for period income the Comprehensive in years three the of each for Income 15(a)) (Item Statements Financial of List Data. Supplementary and Statements Financial 8. ITEM EA NTUET 06FR 0K25 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K 3290 21 94 (42) (43) (71) (51) 329 330 1,043 1,080 5,4407,560 5,618 1,2801,748 7,427 1,358 1,843 4,274 3,947 4,2161,230 3,874 1,053 1,030 1,065 $ 1.40 $ 1.24 $ 2,986 $$ 2,821 2,944 $ 2,778 $ 2,986 $ 2,821 $ 2.82 $ 2.57 $ 13,000 $ 13,045 $ 2.86 $ 2.61 80 (44) (15) 319 211 For Years Ended December 31, 1,021 5,130 8,240 1,370 1,767 4,799 4,930 1,335 1,003 2016 2015 2014 $ 1.64 $ 3,595 $ 3,551 $ 3,595 $ 3.48 $ 13,370 $ 3.54 ...... Diluted Basic Diluted Basic 26 TEXAS INSTRUMENTS • 2016 FORM 10-K (Millions of dollars, except share and per-share amounts) See accompanying notes. Income allocated to common stock for diluted EPS Net income Income allocated to RSUs As a result of accounting(RSUs) rule on ASC which 260, we which pay requires dividend a equivalents, portion diluted of Net EPS income is to calculated be using allocated the to following: unvested restricted stock units Cash dividends declared per common share Average shares outstanding (millions): Net income Earnings per common share (EPS): Income before income taxes Operating profit Research and development (R&D) Selling, general and administrative (SG&A) Acquisition charges Restructuring charges/other Other income (expense), net (OI&E) Provision for income taxes Gross profit Consolidated Statements of Income Revenue Cost of revenue (COR) Interest and debt expense

FORM 10-K e copnignotes. accompanying See income comprehensive Total (loss) income comprehensive Other income Net Income Comprehensive of Statements Consolidated Mlin fdollars) of (Millions te opeesv noe(os,nto taxes of net (loss), income comprehensive Other instruments: Derivative plans: benefit defined of credit (cost) service Prior plans: benefit defined of (losses) gains actuarial Net eonzdwti e noe e ftxbnft(xes)o 0 $)ad($1) and ($1) $0, of (expense) benefit tax of net $0 income, and Net $0 within $2, Recognized of (expense) benefit tax $0 of and net ($11) income, $0, Net of within (expense) Recognized benefit ($21) tax and of ($25) net ($25), Adjustment, of (expense) benefit tax $25 of and net $36 income, $6, Net of within (expense) Recognized benefit tax of net Adjustment, ...... EA NTUET 06FR 0K27 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 3,601 $ 3,595 $ 0621 2014 2015 2016 o er ne eebr31, December Ended Years For (43) — 51 (3) 6 1 ,8 2,817 $ 2,986 $ 2,821 $ 2,986 $ 7)(46) (74) (4) — —— 342 53 0(1) 20 11

FORM 10-K 46 85 62 37 95 — 376 201 196 109 846 736 221 410 386 664 (532) 1,691 7,074 4,362 1,583 3,120 6,284 1,741 1,629 9,946 2,218 1,165 1,000 5,465 2,596 2,555 (2,869) 31,176 (24,068) $ 16,230 $ 16,230 $ 1,000 $ 1,000 79 52 96 33 83 — 554 374 129 102 954 734 910 235 444 710 396 December 31, (526) 1,264 1,741 1,790 7,457 4,362 2,978 5,958 1,674 1,267 4,923 2,512 2,264 2,336 (2,411) 2016 2015 33,107 10,473 (25,523) $ 16,431 $ 16,431 $ 1,154 $ 631 ...... Shares issued – 1,740,815,939 Shares: 2016 – 744,831,978; 2015 – 729,547,527 Participating cumulative preferred. None issued. Work in process Finished goods Raw materials Common stock, $1 par value. Authorized – 2,400,000,000 shares Paid-in capital Retained earnings Treasury common stock at cost Total stockholders’ equity Preferred stock, $25 par value. Authorized – 10,000,000 shares Total current liabilities Accumulated other comprehensive income (loss), net of taxes (AOCI) Current portion of long-term debt Property, plant and equipment, net Total current assets Inventories Prepaid expenses and other current assets Accounts receivable, net of allowances of ($17) and ($7) Accumulated depreciation Accrued expenses and other liabilities Cash and cash equivalents Short-term investments Accounts payable Accrued compensation Income taxes payable 28 TEXAS INSTRUMENTS • 2016 FORM 10-K (Millions of dollars, except share amounts) Overfunded retirement plans Other assets Deferred credits and other liabilities Capitalized software licenses, net Deferred income taxes Acquisition-related intangibles, net Deferred income taxes Underfunded retirement plans See accompanying notes. Total liabilities and stockholders’ equity Stockholders’ equity: Total liabilities Long-term debt Goodwill, net Liabilities and stockholders’ equity Current liabilities: Total assets Long-term investments Property, plant and equipment at cost Consolidated Balance Sheets Assets Current assets:

FORM 10-K Mlin fdollars) of (Millions e copnignotes. accompanying See period of end at equivalents cash and period Cash of beginning at equivalents cash equivalents and cash Cash and Cash in change Net activities financing from flows Cash activities financing from flows Cash activities investing from flows Cash activities investing from flows Cash activities operating from flows Cash activities operating from flows Cash Flows Cash of Statements Consolidated Other transactions stock common from Proceeds repurchases Stock paid Dividends debt of debt Repayment long-term of issuance from Proceeds expenditures Capital in: changes from (decrease) Increase income: Net to Adjustments income Net Other investments short-term from Proceeds investments short-term of Purchases sales asset from Proceeds plans retirement Other of status funded in Changes rpi xessadohrcretassets current other and expenses Prepaid Inventories receivable Accounts taxes income Deferred assets of sales on Gains compensation Stock software capitalized of Amortization intangibles acquisition-related of Amortization Depreciation noetxspayable taxes Income compensation Accrued expenses accrued and payable Accounts ...... EA NTUET 06FR 0K29 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 3,595 $ 1,154 $ (3,810) (2,132) (1,646) (1,000) (3,503) 0621 2014 2015 2016 1,000 4,614 3,390 o er ne eebr31, December Ended Years For (108) (202) (650) (531) 319 154 472 499 252 605 333 (99) (40) (81) (26) (73) — 31 36 72 (3) (6) ,8 2,821 $ 2,986 $ ,0 1,199 $ 1,000 $ 424 (4,105) (4,294) (2,831) (1,323) (2,741) (1,000) (1,444) (1,000) 277 (3,107) (2,767) ,9 1,627 1,199 4,054 4,397 ,9 2,966 2,892 19 (428) (199) 32 (377) (302) (385) (551) 12 (132) (142) 1 321 319 9 554 396 498 498 277 286 850 766 1 142 110 5)(61) (73) (55) (85) 2)(58) (23) 859 48 3(53) (49) 93 77 465 94 579 15 1(81) 11 47 14 3 (3) (3) 789

FORM 10-K (2,741) — (2,831) — Stock AOCI Treasury Common (19) — — (18) — — 2,986 — — 2,821 — — (1,444) — — (1,323) — — Earnings Retained (116) — 513 — (226) — 781 — Capital Paid-in ——— —— —— (204) 3,595 — (1,646) 252 — — — — — 677 — (2,132) — — — — — —— —— —6 — (18) — — — (3) — — — 1,741 1,629 31,176 (24,068) (532) 1,741 $ 1,211 $ 28,173 $ (19,790) $ (528) 1,741 1,368 29,653 (21,840) (532) Stock Common $ 1,741 $ 1,674 $ 33,107 $ (25,523) $ (526) ...... — — ...... — — ...... — — — — — ...... — — — — (4) ...... — — — ...... — — — ...... — 90 — — — ...... — 110 — — — ...... $ ...... — 286 — — — ...... — 277 — — — ...... — — — ...... — — — ...... — — ...... — — ...... — 1 — — — ...... — (4) — — — Dividends declared and paid ($1.64Common per stock share) issued for stock-basedStock awards repurchases Stock compensation Other comprehensive income (loss), net of taxes Net income Net income Dividends declared and paid ($1.40Common per stock share) issued for stock-basedStock awards repurchases Stock compensation Dividend equivalents paid on restrictedOther stock units Net income Excess tax benefit for stock compensation Other comprehensive income (loss), netDividend of equivalents taxes paid on restricted stock units Dividends declared and paid ($1.24Common per stock share) issued for stock-based awards Stock repurchases Stock compensation Other Excess tax benefit for stock compensation Other comprehensive income (loss), netDividend of equivalents taxes paid on restricted stock units Other 30 TEXAS INSTRUMENTS • 2016 FORM 10-K See accompanying notes. Balance, December 31, 2016 (Millions of dollars, except per-share amounts) 2016 Balance, December 31, 2015 2015 Balance, December 31, 2014 Balance, December 31, 2013 2014 Consolidated Statements of Stockholders’ Equity

FORM 10-K .Dsrpino uies nldn emn n egahcae information area geographic and segment including business, of Description 1. uniaietrsod o niiulyrpral emnsadcno eageae ihohroeaigsget.Other the segments. meet operating not other do with that aggregated segments be operating cannot includes and Other DLP segments Other. includes reportable in individually activities for business thresholds remaining our quantitative of results the report We two have we 2016, follows: For as world. products of the over categories all major manufacturers along and established designers are electronics which to segments, semiconductors reportable sell and make design, We oa prtn profit operating Total profit: Operating revenue Total Revenue: practices. and policies accounting significant of summary the in information decision accounting below Segment operating The described chief revenue. those the intersegment as does material same nor no the segment, have are operating We segments by information. the assets asset of allocate discrete policies or using identify segments not operating do evaluate we maker goodwill, of in exception included the are With organizations these with associated the liabilities within and component assets identifiable The the independently provided. to an not Other. charged not is are is therefore, depreciation, expense and, including depreciation results our organizations, Consequently, segments’ to these basis. support by per-unit provide incurred a logistics, Costs on and Other. segments procurement in facilities, those as including such segments, organizations, operating support and on manufacturing based centralized segments Our operating headcount. our or to expenses asset activities operating including corporate of activities, with percentage other associated as Examples items, from expenses such segments. losses corporate-level our methodologies, our and certain of specific to gains and remainder resources 3); and the allocating Note settlements, allocate in (see insurance We or charges costs, dispositions. of restructuring environmental results 13); expenses, the Note litigation evaluating (see as in charges such used Acquisition not include are items that these items of include also we Other, In portfolio. statements financial to Notes Other Processing Embedded Analog Other Processing Embedded Analog • • meddProcessing Embedded Analog. Valley Silicon and Analog Analog ...... ® ...... ossigo h olwn rdc ie:Hg oueAao oi,PwrMngmn,Hg Performance High Management, Power Logic, & Analog Volume High lines: product following the of consisting – rdcs acltr,cso SC n oate eevdfo gemnsivliglcnergt oorpatent our to rights license involving agreements from received royalties and ASICs custom calculators, products, ...... ossigo h olwn rdc ie:Poesr,Mcootolr n Connectivity. and Microcontrollers Processors, lines: product following the of consisting – EA NTUET 06FR 0K31 10-K FORM 2016 • INSTRUMENTS TEXAS 4,799 $ 3,380 $ 13,370 $ 8,536 $ 0621 2014 2015 2016 1,811 3,023 o er ne eebr31, December Ended Years For 618 801 ,7 3,947 $ 4,274 $ ,4 2,786 $ 3,048 $ 13,045 $ 13,000 $ 8,104 $ 8,339 $ ,7 2,201 1,874 ,8 2,740 2,787 3 777 384 630 596

FORM 10-K 16 22 958130 1,096 162 122 124 188 179 1,127 1,032 7,9102,163 7,915 2,294 $ 1,370 $ 1,436 $ 2,596 $ 2,840 December 31, $ 13,000 $ 13,045 $ 1,612 $ 1,625 98 19 908 115 2016 2015 2014 231 For Years Ended December 31, $ 1,372 $ 2,512 1,040 8,024 2,393 2016 2015 2014 $ 13,370 $ 1,682 ...... December 31, 2016, 2015 and 2014, respectively. $5.7 billion in 2014. Asia (a) United States United States Rest of world Europe, Middle East and Africa Japan Asia (a) Europe, Middle East and Africa Japan Rest of world 32 TEXAS INSTRUMENTS • 2016 FORM 10-K The preparation of financial statements requires the use of estimates from which final results may vary. The consolidated financial statements includebeen the eliminated accounts in of consolidation. all All subsidiaries.amounts, dollar All are amounts intercompany stated in balances in the and millions financial transactionsperiods’ of statements have financial U.S. and statements dollars tables to unless in conform otherwise theseaccounting to indicated. notes, standard the We except related 2016 have per-share to presentation, reclassified stock retrospectively certain compensation. applying amounts certain in provisions the of prior the new Basis of presentation The consolidated financial statements haveUnited been States prepared (GAAP). in The accordance basis withadoption of accounting of these principles a financial generally new statements accepted accounting is inprovisions comparable standard the applied for in prospectively. all the See periods fourth Changes presented quarter in herein, of accounting except 2016 standards for related for the to further stock information. compensation, which includes certain Major customer No end customer accounted for11 10 percent percent of or revenue, more recognized of revenue primarily in in our 2016 or Analog 2014. segment. In 2015, Apple Inc. accounted for approximately Total property, plant and equipment, net (a) Property, plant and equipment, net, at our two sites in the Philippines was $412 million, $471 million and $546 million as of Property, plant and equipment, net: (a) Revenue from products shipped into China, including Hong Kong, was $6.0 billion in 2016, $5.8 billion in 2015 and Total revenue Revenue: Geographic area information The following geographic area informationequipment, includes based revenue, on based physical on location. productend The shipment applications revenue destination, containing information and our is property, products not plantour are necessarily and customers ultimately indicative manufacture consumed of their because the products. our geographicinclude Specifically, products area these many tend in parts of to which in our be the the products shippedworld. manufacture are to of shipped the their to locations own our where end customers in products, China which who they may may in turn export to their customers around the 2. Basis of presentation and significant accounting policies and practices

FORM 10-K r rsne norCnoiae ttmnso noeo e ecue rmrvne basis. revenue) transactions from These (excluded customers. net our a from on taxes Income excise of and Statements value-added sales, Consolidated as our such in taxes presented collect are to deferred us the require of transactions all Some or some that taxes not assessed the than Other in likely recognized more been is the have it for that when realized. refundable events allowance be or of valuation not payable consequences a will taxes tax record assets of future We tax amount for returns. the liabilities tax record and or We assets statements approach. tax financial liability deferred and the asset and an year using current taxes income for account and We 2015 in million $46 taxes 2016, Income in million $44 was expense This incurred. 2014. as in costs million promotional $45 other and advertising expense We The COR. in costs costs handling parties. Advertising and third shipping to include directly We fees customers. these from pay made. received customers is any, our determination if of such fees, majority on period shipping impact the revenue the in in assess charge recognize we a We risk, record of at will collectability is necessary, monitor collection if We When and, collected. aging. debts be receivable bad not accounts for may the recorded estimate of amounts we review that through receivable primarily accounts receivable for accounts allowances record to we credits addition, for In allowances estimate reliably and and terms reasonably contractual can manner. and we timely conditions believe a economic We in special current recognized. distributors and data, is opportunities historical revenue growth of when maximize analysis recorded include to on are generally designed based or material, incentives are customers not issues, Allowances to are quality arrangements. granted which to pricing be allowances, due to These returns credits industry. product future semiconductor incentives, of the volume-based estimates in management’s common are programs which under allowances, distributors of net revenue or locations. recognize customer designated We the at when store occurs we Delivery that arrangements above. inventory consignment discussed consignment including principles from agreements, the product consignment with pulls products. inventory accordance distributor the to in of subject recognized resale are is upon that distributors, contingent products with not our is of assured. and sales reasonably terms from is commercial Revenue 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 practices and policies accounting Significant EA NTUET 06FR 0K33 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K 2014 Net Income Shares EPS 13 15 2015 (43) (44) (42) (43) Net Income Shares EPS For Years Ended December 31, $ 2,986 $ 2,821 $ 2,986$ 2,943 1,030 $ 2.86 $ 2,777 $ 2,821 1,065 $ 2.61 $ 2,944 1,043 $ 2.82 $ 2,778 1,080 $ 2.57 18 2016 We consider investments in debt securities with maturities of 90 days or less (44) (45) Net Income Shares EPS $ 3,595 $ 3,550 1,003 $ 3.54 $ 3,551 1,021 $ 3.48 $ 3,595 Depending on our reasons for holding the investment and our ownership percentage, we Long-term investments consist of mutual funds, venture capital funds and non-marketable equity ...... Cash equivalents and short-term investments: from the date of our90 investment days to from be the cash date equivalents.investments. of We The our consider primary investment investments objectives as in of being debtmaintain our available securities liquidity cash for with equivalent while use maturities generating and in beyond short-term current appropriateLong-term investment operations returns. investments: activities and are include to them preserve insecurities. capital short-term and Classification of investments: classify our investments as eitherin available Note for 8. sale, We trading, determine equity cost method or or amortized cost cost, method, as which appropriate, are on more a fully specific described identification basis. • • • Net income Income allocated to RSUs diluted EPS calculation Stock compensation plans basic EPS calculation Net income Income allocated to RSUs 34 TEXAS INSTRUMENTS • 2016 FORM 10-K Inventories Inventories are stated at thestandard lower cost of basis, cost which or approximates estimatedinstalled cost net factory on realizable capacity. a value. Cost first-in Cost associated first-out islocations with basis. generally is Standard underutilization computed included cost of on in is capacity a our based is currentlyDecember finished on expensed adjusted 31, goods the as 2016 inventory. normal incurred. and Consigned utilization Inventory 2015, inventory of held respectively. was at $334 consignment million and $275 million as of Diluted EPS: Investments We present investments on ourinvestments. Consolidated Specific Balance details Sheets are as as cash follows: equivalents, short-term investments or long-term No potentially dilutive securities werePotentially excluded dilutive from securities the representing computation 12 of2014, million diluted respectively, and earnings were 11 per excluded million common from shares shareeffect the of during would computation common 2016. have of stock been diluted that anti-dilutive. earnings were per outstanding common in share 2015 for and these periods because their 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.

FORM 10-K hssadr nyafcsorpeetto ffi auso oteieetpa sesi oe1 n osntipc u financial our impact not does and 10 Note in of assets adoption plan Our postretirement beginning presentation. of operations. effective in values of was consistency fair results standard for of and This adjusted presentation position share. retrospectively our per been affects value have only asset amounts standard net period this the prior Its using and (or measured 2016, Share but 1, per available January Value readily Asset not Net is Calculate value 2015-07, That fair No. Entities (ASU) Certain Update in Standards Investments Accounting for Equivalent) issued Disclosures (FASB) 820): Board (Topic Standards Measurement Accounting Value Financial the 2015, May In period current for standards Adopted standards accounting in Changes purposes. trading or speculative been for not derivatives have use transactions not derivative do these We of are results that The agreements debt. lock related treasury-rate the as of such life derivatives the financial over material. use amortized we and debt, AOCI long-term in of recognized foreign issuance our the to with these accounting connection of hedge In value apply fair not the do in We changes OI&E. from to losses charged rate and or instruments. exchange Gains credited derivative that exposures. are currency impact sheet contracts earnings balance exchange the net currency forward reduce dollar foreign primarily to non-U.S. forward are hedges our instruments economic on These as have risk. used may exchange are fluctuations foreign which to contracts, exposure exchange manage currency to foreign instruments financial derivative information. use additional We for 13 exchange Note hedging Currency See and exchange. OI&E. Derivatives of to rate charged daily or appropriate credited expense the are plant and at remeasurement Property, Revenue remeasured from period. rates. are losses reporting exchange month and each historical each gains of at for end valued depreciation the are than at inventories other current effect and accounts dollar assets, in depreciation U.S. other rates associated the taxes, exchange with than income at equipment other deferred remeasured and currencies inventories), are in (except liabilities recorded assets long-term Accounts Current and dollar. currency. liabilities U.S. functional the the is into subsidiaries remeasured non-U.S. are our for currency functional each The information. for value additional fair for 9 the currency compares Note Foreign See which We units, goodwill. arise. reporting including indicators our value, impairment for carrying certain 1 associated if October its frequently of to more as unit or test reporting annually impairment impairment goodwill for annual reviewed our is perform but amortized market not available is by Goodwill determined is intangibles value indefinite-lived Fair and assets. Goodwill those of flows. value charge cash fair impairment discounted the Any by over amounts. or amount the carrying carrying applicable, respective comparing the if by their of valuations, assets to excess of assets the equipment those recoverability on and the with based plant assess associated is We property, flows of impaired. cash values are net assets, carrying undiscounted the intangible projected indicate including that assets, exist long-lived circumstances other or or facts whether review regularly amortization. We or term depreciation assets the accumulated long-lived over against of basis off Impairments straight-line written 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 equipment the other and by and plant captured intangibles; Property, not acquisition-related event equipment; occurs. significant and disposal a plant as is which Property, well there in 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 salability to for quarterly inventory review We hssadr eoe h eurmn octgrz ihntefi au irrh eti netet o which for investments certain hierarchy value fair the within categorize to requirement the removes standard This . EA NTUET 06FR 0K35 10-K FORM 2016 • INSTRUMENTS TEXAS Fair

FORM 10-K 1,018 3rd 2014 2nd For Years Ended December 31, Quarter 2015 1,069 $ 1,109 $ 1,413 $ 1,465 4,268 $ 4,397 $ 3,892 $ 4,054 (4,165) (4,294) (3,943) (4,105) Reported Recast Reported Recast 1st 0.650.65 $ 0.70 $ 0.69 $ 0.77 $ 0.76 $ 0.81 $ 0.79 $ 0.95 $ 0.94 $ 1.00 $ 0.98 (839) (945) (1,180) (1,220) (676) (728) 1,018 1,022 1,016 1,020 1,017 1,023 Reported Recast Reported Recast Reported Recast Compensation – Stock Compensation (Topic 718): Improvements to Employee ...... $ 547 $ 653 $ ...... $ . This standard provides for several changes to the accounting for stock compensation, including : Prospective basis – Net excess tax benefits and deficiencies will now be included in Provision for ...... $ 282 $ 239 $ 323 $ 283 $ 413 $ 363 : Retrospective basis – Excess tax benefits are now included in Cash flows from operating activities rather ...... $ ...... 668 711 779 819 968 ...... $ Income statement effects income taxes, rather than ininitial Paid-in adjustment capital. to The interim new periods standardrather in requires than the this in year to Paid-in of be capital, adoption. adoptedthird for We on quarters excess recorded a of tax adjustments prospective 2016, benefits within basis, respectively. of Provision with$150 Excess $43 for an million tax million, income recognized benefits $40 taxes, for for million all the andaverage of fourth $50 shares 2016. quarter million outstanding See of for used Note 2016 the in 6 were first,below. the for $17 second Results more diluted million, and for information EPS for prior on calculation. a annual income total TheCash periods taxes. of effects flow were This of effects not standard these affected. also adjustments affects arethan the shown Cash in flows the from table financingpresentation activities retrospectively, in and our thus, Consolidated prior Statementsvesting periods of of have Cash RSUs been Flows. are adjusted. We now Taxes electedThis included paid to change in for apply is Cash employee this required flows shares change to from withheld in be financing upon applied activities the retrospectively, in and our thus, Consolidated prior Statements periods of have Cash been Flows. adjusted. • • 36 TEXAS INSTRUMENTS • 2016 FORM 10-K Average diluted shares outstanding, inBasic millions EPS Diluted EPS Cash flow data: Cash flows from operating activities Cash flows from financing activities Cash flows from operating activities Income statement data: Provision for income taxes Net income Cash flows from financing activities Certain annual cash flow informationretrospectively. has The also impact been to adjusted our to previously reflect reported select annual aspects results of is the as new follows: standard that are applied In March 2016, the FASB issued ASU No. 2016-09, The primary effects of early adoption on our financial statements are as follows: The effects of our adoption of the new standard on our unaudited quarterly results for 2016 are as follows: Share-Based Payment Accounting a requirement that certain income-taxor effects vested, of rather awards than be recognized recognizedpresentation as in of Paid-in Net excess capital income tax in in benefits the theinterim and equity period and statutory section in annual tax of which periods withholdings the the beginning in balance awardsthe January the sheet. are fourth 1, statement The settled quarter 2017; of standard of however, cash also 2016, early flows. changesthat which adoption This the includes requires is standard the us permitted. is adoption. to We effective Each reflect elected for applied of any to prospectively the adjustments adopt and provisions as this others of within standard have January this in been 1, standard applied 2016, has on the its a beginning own retrospective specified of basis. the transition annual method; period some have been Under this standard, entities arecompensation permitted awards, to as make previously an required, accountingaccounting or policy for to election forfeitures recognize to and forfeitures either will as estimatecost continue they forfeitures to occur. to on be We estimate stock recognized elected forfeitures in not expected each to to period. change occur in our policy determining on the amount of compensation

FORM 10-K .Rsrcuigcharges/other Restructuring 3. etutrn hre/te r eonzdi te o emn eotn purposes. reporting segment costs. for exit Other other in or recognized estimates are in charges/other changes Restructuring depreciation, accelerated benefits, and severance Includes (a) charges/other Restructuring Other assets of sales on Gains (a) charges Restructuring components: following the of comprised is charges/other Restructuring on impact material a have to it expect not do retrospective we modified but operations. a standard, of using this results and applied of and 2019, be impact position 15, will potential financial December standard the our after The evaluating that beginning 2018. currently and periods 15, are presented, annual December We other and and before approach. are recorded interim not There be our but incurred. may for application been assets effective earlier having financial be permits of other will current probable of standard the is impairments This under it how disclosures. than until affect expand losses loss that of a standard recognition recognize the earlier to within in waiting provisions result requires will which methodology approach, this loss Using incurred assets. financial certain of impairments material 2016-13, a No. Instruments have ASU Financial to issued on it FASB expect the not 2016, do June we In but position, of the financial evaluating beginning our currently the on operations. are after, standard of We into this results permitted. entered of our is or impact on beginning adoption at, potential impact periods Early existing the annual statements. leases and and to financial adoption interim basis the of our retrospective in timing for modified presented asset) effective a period right-of-use be on comparative the a will applied earliest of for standard be the amortization Costs This must the term. liability). and (for lease lease 2019, expense the the 1, operating over operating on January an basis an interest of straight-line both (for Costs on a as expense lease. leases on recognized interest financing these expense and and a of operating disaggregated costs or single be the operating a will of an as lease Recognition either recognized financing asset term. as be right-of-use the classification to corresponding over their continue the paid upon will and be dependent lease payments to be lease expected will for amounts statement liability of income the value the with present sheet the balance at the measured on initially recognized 2016-02, be No. to ASU months at issued 12 recorded FASB already the are 2016, a investments February have equity In to our standard of this all expect nearly method. not as equity This do operations, the We impairment. of under 2018. minus results or 1, prices and value determinable January observable position fair readily in beginning financial a changes periods our have for annual on not adjusted and impact do cost, interim material that at our investments measured for Equity be effective value. expedient, is fair practical standard at a measured as be may, to value required fair are method equity Liabilities the Financial under and Assets 2016-01, No. Financial ASU of issued Measurement FASB the from 2016, pulled January are In goods the of when majority revenue performance a our recognize on of we revenue sales, satisfaction recognizing consignment upon of For distributors inventory. timing shipped. and consignment financial or are customers our manner to goods on the sales the impact change on when transition material to revenue obligations selected a expect recognize our have not We as not do transactions. well will we revenue as standard as our operations, new operations, of currently the of results are believe results and We we and position method. assessment, position financial transition preliminary our effect our before on cumulative on not standard or Based for but this retrospective method. effective adoption, of the is early impact either It permits potential of disclosures. standard the use additional This the evaluating requires 2017. permits 15, and and December industries 2016, after all 15, across beginning December used periods be reporting to interim recognition and revenue annual for 2014-09, guidelines No. of ASU set issued single FASB the 2014, May In adopted yet not Standards ...... hssadr eursette oueacretlftm xetdcei osmtoooyt measure to methodology loss credit expected lifetime current a use to entities requires standard This ...... EA NTUET 06FR 0K37 10-K FORM 2016 • INSTRUMENTS TEXAS eeu rmCnrcswt utmr Tpc606) (Topic Customers with Contracts from Revenue iaca ntuet rdtLse Tpc36:Maueeto rdtLosses Credit of Measurement 326): (Topic Losses Credit – Instruments Financial iaca ntuet vrl Sboi 2-0:Rcgiinand Recognition 825-10): (Subtopic Overall – Instruments Financial ess(oi 842) (Topic Leases ne hssadr,aleut netet xettoeacutdfor accounted those except investments equity all standard, this Under . hssadr eursallae hthv emo over of term a have that leases all requires standard This . hssadr rvdsa provides standard This . o er ne eebr31, December Ended Years For (15) $ $25 0621 2014 2015 2016 (40) — 7)$(51) $ (71) $ $20 $14 8)(75) (83) 2 4 (2)

FORM 10-K 14 20 —— (39) (124) $32 $ 57 $ 57 $ 161 (6) 25 (11) 2016 2015 2014 $40 $32 ...... 38 TEXAS INSTRUMENTS • 2016 FORM 10-K Payments Non-cash items (a) 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 and plan, employees options the in have option amounts a price based three-month per on term. 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 outstandinggranted to by participants companies under that long-term we incentiveshare later plans. may acquired. We not Unless also be the have less options assumedand than are stock generally the acquisition-related options vest fair replacement that ratably market options, were over value the four of option years. our price Our common per options stock continue on the to date vest after of the the option grant. The recipient options retires. have a 10-year term Restructuring charges We recognized $75 million ofNice, gains France; on $28 sales million of associated assetsassociated with in primarily the 2014. with sales This factory of consisted closures real of in estate $30 Houston, in million Texas, Santa associated and Clara, with Hiji, California; the Japan. and sale of $17 a million site of in asset sales 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. (a) Reflects charges for impacts of accelerated depreciation and changes in exchange rates. Balance, December 31 Balance, January 1 Changes in accrued restructuring balances The 2014 restructuring charges werecompleted. related to prior actions in Embedded Processing and Japan. These actions have been We announced in January 2016Scotland. our We intentions are to moving phase production outJapan from through and this the Maine. facility end Total to of restructuring more 2018reduction cost-effective charges, a of 200-millimeter primarily manufacturing about TI severance facility 350 manufacturing and in jobs, related facilities Greenock, 2015. are benefit in These estimated Germany, costs charges to associated were be with comprised about theare of $40 expected expected severance million. to and We be benefits recognized recognized costs, charges through as of well the $7 as end million accelerated of in depreciation. 2018. 2016 The and remaining $17 charges million in Restructuring charges In the fourth quarter ofreorganization 2016, of we product recognized lines $18 that million we of announced restructuring in charges for January severance 2017. and As of benefit December costs 31, related 2016, to no the payments have been made. 4. Stock compensation

FORM 10-K custo charges Acquisition sntue odtrietefi au e hr fteeaad.Tefi au e hr ne hspa qasteaon fthe 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 date consequently the discount. 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 to determined plan is approved RSUs an of is share there per unless value included fair is The change our rate of dividend price term. future market near a current the for the in assumption and No dividend rate grant. the dividend of change 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 nearing assumptions or and eligible methods basis retirement Fair-value straight-line are a who on employees basis. expense to accelerated compensation issued an RSUs related on activity. the expensed forfeiture recognize are We expected eligibility for grant. retirement of adjusting date period, the vesting after the years over four vest generally retirement RSUs nearing Our or the eligible of retirement vesting are basis. for who accelerated We required employees an years). period to on four service issued expensed for minimum Awards are year the activity. eligibility per over forfeiture percent basis expected 25 straight-line for (e.g., a adjusting provisions on award, vesting expense graded compensation with related options the stock recognize non-qualified of stock awards employee issue our We under offered options forfeitures. stock expected 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 06FR 0K39 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 10.03 $ 252 $ $40 o er ne eebr31, December Ended Years For o er ne eebr31, December Ended Years For 0621 2014 2015 2016 0621 2014 2015 2016 152 1.72% 2.87% — 60 7.3 25% 8 277 $ 286 $ $48$47 .9$8.13 $ 9.49 $ 6 156 169 .4 2.45% 1.64% .2 2.72% 2.52% 011 10 062 60 . 7.3 7.3 2 22% 22%

FORM 10-K Options Share Exercisable Grant Date Fair Value per Share Exercise Price per Weighted Average Weighted Average RSUs Options Exercisable 6.5 4.9 Number (Shares) Exercisable 50,994,139 24,017,386 $$ 41.63 1,598 $ $ 33.16 956 (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 — — (5,639,666) 31.64 Shares (965,893) 48.12 (421,473) 42.63 56,773,98310,974,304 $ 37.45 53.02 16,055,54252,265,788 2,337,976 $ 38.51 41.89 53.98 12,332,379 44.44 (14,516,606) 32.51 — — Life (Years) Weighted Average Stock Options Outstanding Remaining Contractual ...... 54,764 9.7 71.00 — — ...... Number ...... (Shares) 1,996,8015,130,1779,854,196 2.1 2.6 7.1 $ 14.96 24.59 1,996,801 44.10 5,130,177 $ 14.96 3,544,639 24.59 44.10 ...... Outstanding 14,126,45421,103,396 5.3 8.6 33.06 53.44 11,328,597 2,017,172 33.12 53.96 52,265,788 6.6 41.89 24,017,386 33.16 ...... aggregate intrinsic value of stock options outstanding was $1,624 million. 20.01 to 30.00 30.01 to 40.00 40.01 to 50.00 50.01 to 60.00 60.01 to 71.27 14.47 to 71.27 40 TEXAS INSTRUMENTS • 2016 FORM 10-K Number of outstanding (shares) Summarized information as of Decemberas 31, stock 2016, options about that outstanding are stock currently options exercisable, that is are as vested follows: and expected to vest, as well 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 2016, forfeitures,Statements the the total of Income future was compensation $250 costunvested million, related RSUs. consisting to The of equity $250 $111 awards million million not2019 is related yet and expected to recognized $4 to unvested in million be stock our in recognized options Consolidated 2020. as and follows: $139 $129 million million related in to 2017, $80 million in 2018, $37 million in In 2016, 2015 and 2014,the the exercise aggregate price intrinsic paid values by (i.e., the the optionee) difference of in options the exercised closing were market $424 price million, on $290 the million date and of $367 exercise million, and respectively. $14.47 to 20.00 Exercise Price Range Summarized information about stock options outstanding as of December 31, 2016, is as follows: The weighted average grant daterespectively. fair In values 2016, per 2015 share and of$114 2014, RSUs million the granted and total in $133 grant 2016, million, date 2015 respectively. fair and values 2014 of were shares $53.98, vested $53.22 from and RSU $44.71, grants were $178 million, Outstanding grants, December 31, 2016 Granted Vested RSUs Forfeited and expired Exercised Outstanding grants, December 31, 2015 Long-term incentive and director compensation plans Stock option and RSU transactions under our long-term incentive and director compensation plans are as follows:

FORM 10-K 58 ilo fsokrprhs uhrztosrmi,adn xiaindt a enspecified. been 2016, has 31, date December expiration of no As and program. remain, repurchase authorizations stock repurchase board-authorized stock the of with billion connection $5.80 in acquired were shares Treasury shares under treasury exercised and options outstanding of shares value on 2015 intrinsic Effect 2016, total in the plans 2014, purchase and year. stock 2015 per employee 2016, million the In $12 under respectively. was granted $7.34, plans options and these of $7.89 share $9.79, per were values 2014 fair and date grant average weighted The 2016 31, December grants, Outstanding Exercised Granted 2015 31, December grants, Outstanding follows: as are of transactions as plan exercisable purchase were 3, stock January none Employee on options, occurred outstanding exercise total automatic the percent The Of 85 exercise. share. to automatic per equal of $62.55 2016. price date of 31, exercise the price December an on exercise had stock an 2016, common in 31, TI resulting December of 2017, of value as market plan fair purchase the stock of employee the under outstanding Options plan purchase stock Employee 2016 31, December Outstanding, Issued deferred shares New 2015 31, December Outstanding, Director defer. to elected they compensation for distributions stock follows: receive as may is board activity the stock from deferred resign or retire who Directors compensation deferred Director ...... EA NTUET 06FR 0K41 10-K FORM 2016 • INSTRUMENTS TEXAS ...... mlyeStock Employee ucaePlan Purchase 13222 51.50 (1,362,202) ,7,3 55.51 1,273,036 Sae)Eecs Price Exercise (Shares) 8,0 62.55 283,400 46.19 $ 372,566 ietrDfre Stock Deferred Director 142,913 143,645 (13,587) (Shares) 14,319

FORM 10-K (7,178) (7,531) Shares Treasury 51,384,339 61,665,209 35,480,036 744,831,978 658,012,970 694,189,127 729,547,527 (81) (108) $ 396 $ 554 $ 90 $ 110 $ 171 $ 218 Plan Total (105) Stock 2016 2015 2014 For Years Ended December 31, Purchase Employee $ 472 $ 150 $ 255 — — (13,587) — 1,336,476 8,562 845,164 6,618 1,408,701 December 31, 2016 Director Plans (a) (1,532,264) — (1,784,184) — (1,362,202) — Stock Options RSUs (11,953,455) (3,386,415) (19,503,382) (5,609,627) (21,280,948) (4,200,926) (25,481,874) (13,477,157) (2,541,251) (16,018,408) (15,878,808) (4,303,190) (20,181,998) (14,516,606) (5,639,666) Compensation Plans Incentive Long-Term 59,581,585 1,314,646 36,387,172 97,283,403 (63,715,186) (1,026,626) (283,400) (65,025,212) 123,296,771 2,341,272 36,670,572 162,308,615 ...... — — ...... — — ...... shares are not included as grants outstanding as of December 31, 2016. and RSUs Stock options/RSUs Stock applied to exercises orESPP taxes Director deferred stock Stock options/RSUs Stock applied to exercises or taxes Director deferred stock Stock options/RSUs Stock applied to exercises orESPP taxes ESPP Director deferred stock 42 TEXAS INSTRUMENTS • 2016 FORM 10-K Shares to be issued upon exercise of outstanding options (a) Net of taxes paid for employee shares withheld of $70 million in 2016, $46 million in 2015 and $62 million in 2014. Excess tax benefit for stock compensation Proceeds from common stock transactions (a) The effects on cash flows are as follows: (a) Includes 143,645 shares credited to directors’ deferred stock accounts that settle in shares of TI common stock. These Available for future grants Shares Reserved for issuance Shares used for: Shares available for future grants and reserved for issuance are as follows: Balance, December 31, 2016 Total issued Total issued Balance, December 31, 2015 Repurchases Repurchases Total issued Balance, December 31, 2014 Repurchases Shares used for: Shares used for: Tax benefit realized from stock compensation Balance, December 31, 2013 Our current practice is todirector issue deferred shares of compensation common and stock vesting from of treasury RSUs. shares The upon following exercise table of reflects stock the options, changes distribution in of our treasury shares: Reduction to deferred income tax asset

FORM 10-K .Icm taxes Income 6. plans sharing Profit 5. ercgie 36mlin 39mlinad$6 ilo fpoi hrn xes ne h IEpoe rftSaigPa in Plan Sharing Profit Employee TI the under expense sharing profit of respectively. million 2014, $269 and only and 2015 paid million 2016, is year. $309 which calendar million, payroll, full $346 of eligible a recognized percent of for We 2 percent percent of be 20 35 will threshold is above minimum sharing plan or a profit the at achieve margin, under is must operating available margin TI percent sharing operating plan, 10 profit TI’s this At of if Under paid. amount sharing year. is maximum profit calendar sharing The for full profit payroll. provides the any eligible plan for before This margin margin We Plan. operating operating metrics. Sharing TI’s percent financial Profit on 10 company-wide Employee solely or TI based subsidiary company-wide paid more the be or under to one primarily by benefits determined sharing and profit formulaic pay generally are benefits sharing Profit epciey h em fteMlyi a oia r urnl ne oenetlrve srqie o h n ftefrtfive first the of end the 2017, for and required 2018 as in review expire 2015 governmental and 2016, under in Philippines, currently period. million the are holiday $44 and holiday the and Malaysia tax of million in Malaysia years $50 operations the non-U.S. million, our of the $30 to terms in statutory of relate The included generally holidays benefits respectively. Also are tax tax jurisdictions. rates from The taxing tax benefits respectively. those non-U.S. are 2014, in lower above and operations operate These item our that benefits. reconciling to companies tax rates to applicable U.S. tax from rate) available effective tax and and income operate, expiration statutory we without U.S. which nature, the in in with jurisdictions (compared the 2. rates of Note lower many in from in discussed benefits as rate 2016-09 tax ASU effective of Our adoption the to related is This (a) rate tax Effective (a) compensation stock for benefit tax excess U.S. rates tax effective Non-U.S. rate tax income statutory U.S. a as taxes income for (Provision rate tax follows: effective as the are to taxes) rate income tax before income Income statutory of U.S. percentage the from items reconciling Principal Total state U.S. Non-U.S. federal U.S. Taxes Income for (Benefit) Provision Total U.S. Taxes Income before Income mato hne oucrantxpositions tax Other uncertain to changes of Impact expenses non-deductible U.S. credit tax R&D U.S. manufacturing for benefit tax U.S. Non-U.S...... ,3 22 1,335 $ (202) $ 1,537 $ ,8 12 1,167 $ (122) $ 1,289 $ ...... urn eerdTtlCretDfre oa urn eerdTotal Deferred Current Total Deferred Current Total Deferred Current ...... 3 8)158 (80) 238 0—10 — 10 ...... EA NTUET 06FR 0K43 10-K FORM 2016 • INSTRUMENTS TEXAS 2016 ...... ,8 5)$120$114$(1 1,053 $ (61) $ 1,114 $ 1,230 $ (55) $ 1,285 $ ,1 7)$108$91$(3 838 $ (73) $ 911 $ 1,038 $ (72) $ 1,110 $ o er ne eebr31, December Ended Years For 6 412141 205 11 194 182 14 168 31073 10 91 2015 4,930 $ 3,953 $ 35.0% 27.1% 0621 2014 2015 2016 0621 2014 2015 2016 (3.7) (3.0) (1.2) (1.5) o er ne eebr31, December Ended Years For 0.6 0.6 0.3 o er ne eebr31, December Ended Years For 977 ,1 3,874 $ 4,216 $ ,1 2,684 $ 3,218 $ 50 35.0% 35.0% 92 27.2% 29.2% 2014 40 (5.5) (4.0) 13 (1.5) (1.3) 16 (1.3) (1.6) . 0.1 0.2 . 0.2 0.2 0.6 0.3 —— 9 1,190 998

FORM 10-K 87 (37) 101 226 147 215 834 (565) (186) (105) (670) 1,020 $ 164 $ 244 $ 164 $ 201 81 82 (33) December 31, (32) December 31, 145 214 219 961 833 (460) (128) (492) 2016 2015 2016 2015 $ 341 $ 220 $ 341 $ 374 ...... Other Inventories and related reserves Retirement costs for defined benefit and retiree health care International earnings Deferred loss and tax credit carryforwards Acquisition-related intangibles and fair-value adjustments Stock compensation Accrued expenses 44 TEXAS INSTRUMENTS • 2016 FORM 10-K 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 income2014, taxes, respectively. net of refunds, were $1.15 billion, $1.17 billion and $1.10 billion in 2016, 2015 and A provision has been madepayments for from deferred these taxes subsidiaries on are undistributedapproximately expected earnings $9.03 to of billion result non-U.S. as in subsidiaries of additional toU.S. December tax the tax 31, liability. extent provision 2016, The that has have remaining dividend been been undistributednon-U.S. made indefinitely earnings subsidiaries for reinvested of are taxes outside primarily due of invested upon theunrecognized in remittance United deferred working of States; income capital these therefore, tax and earnings. no liability property, The is plant indefinitely not and reinvested practical equipment. earnings because Determination of of of our the the complexities amount associated of with its hypothetical calculation. Deferred income tax liabilities: We have U.S. and non-U.S. tax loss carryforwards of approximately $12 million, none of which will expire before the year 2026. 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.2016 years tax This and and liabilities assessment 2015 expectations is that of for based can $58 future on be million taxable used and income. to $9 Changes absorb million, in deferred respectively, valuation tax impacted allowance assets, Net balances income in by $63 million and $0 million, respectively. Deferred income tax assets Net deferred income tax asset The deferred income tax assetsfollows: and liabilities based on tax jurisdictions are presented on our Consolidated Balance Sheets as Total deferred income tax liabilities Net deferred income tax asset Total deferred income tax assets, before valuation allowance Total deferred income tax assets, after valuation allowance Valuation allowance Deferred income tax liabilities Deferred income tax assets: The primary components of deferred income tax assets and liabilities are as follows:

FORM 10-K .Fnnilisrmnsadrs concentration risk and instruments Financial 7. netvsadcletblt.Teealwne r eutdfo consrcial norCnoiae aac Sheets. Balance Consolidated our on their adjustments, receivable 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 across to respect dispersion contracts with derivative risk financial credit and of deposits Concentrations cash 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 are We inputs. 2 2 Level Level of are definition which the concentration quotes, and Risk broker-dealer value instruments. using fair such measured of of as description maturity value a short fair for and the the 8 assets to approximates Note financial due debt See current value long-term inputs. other fair our for approximate of values payable, value carrying plan accounts carrying The postretirement and The our value. receivable as fair accounts well at as as carried such investments, are liabilities, long-term liabilities, certain compensation and deferred investments and short-term assets Japanese equivalents, sell cash to in million investments $158 Our including a exposures, had sheet 2016, balance 31, euros. net December sell dollar of to not as non-U.S. million was our outstanding $123 which contracts hedge and of to exchange yen value currency million fair $494 foreign the of forward contracts, value Our exchange 2016. notional currency 31, foreign December forward of as as such material instruments financial derivative hold We instruments 2007. Financial before years for to audits respect tax With income limitations. to of subject statute longer the no under are open subsidiaries still our years States, the United represent the audit outside to jurisdictions open major for years returns the tax jurisdictions, federal non-U.S. U.S. In treaty to tax pertain pending taxation certain double for years. from except following relief 2011. completed and for through been 2010 procedures 2006 have for The years 2012 returns taxation. the tax through double returns federal from tax U.S. relief for federal for U.S. open procedures remains our to limitations of related taxation. activities statute would double the Audit assets from 2016, tax relief 31, deferred for December existing recognized, procedures of of if from As million that, resulting $12 positions jurisdictions realized, of counterparty ultimately comprised from are is refunds 2015, liabilities to 31, tax related December these realized, of If be as rate. also positions tax tax effective uncertain the taxation. for benefit would double liability would assets from million tax relief $84 deferred for the existing recognized, procedures of of if from All million that, resulting $12 positions jurisdictions realized, of counterparty ultimately comprised from are is refunds 2016, liabilities to 31, tax related December these realized, of If be as rate. also Sheets. positions tax Balance tax effective Consolidated uncertain the our for benefit on liability would liabilities million other $243 and the credits of Deferred All of component a is positions tax uncertain for liability The 31 December of as (payable) receivable Interest 31 December ended year the in recognized (expense) income Interest 31 December Balance, 1 January Balance, follows: as are positions tax uncertain of amounts total the in changes The diin ae ntxpstosrltdt h urn year current the to related positions tax on based Additions eteet ihtxauthorities tax years with prior Settlements of positions tax years for prior Reductions of positions tax for Additions ...... EA NTUET 06FR 0K45 10-K FORM 2016 • INSTRUMENTS TEXAS ...... $4 $13 243 $ $84 0621 2014 2015 2016 189 (32) (2) 4 8$6 $8 9$—$9 4$108 $ 84 $ 91 $ 108 $ 2)(9) (21) 1)(36) (17) 110 11 352

FORM 10-K Long-Term Investments (5) (9) — (1) $12 $22 $7 $12 10 — 2016 2015 2014 $7 $17 Short-Term Investments December 31, 2015 ——25 ——9 — — 187 228 — — 772 2,218 187 132245 285 1,933 — — $ 1,000 $ 2,218 $ 221 $ 395 $ — $ — Equivalents Cash and Cash Long-Term Investments Short-Term Investments December 31, 2016 ——9 ——25 — — 201 211 — — 943 2,336 201 107 544 — 490 1,792 — ...... $ 1,154 $ 2,336 $ 235 $ 346 $ — $ — Equivalents Cash and Cash ...... Treasury securities Cost-method investments Cash on hand Equity-method investments Money market funds Corporate obligations U.S. government agency and Mutual funds 46 TEXAS INSTRUMENTS • 2016 FORM 10-K In 2016, 2015 and 2014,$3.39 the billion, proceeds $2.89 from billion sales, redemptions and and $2.97 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, 2016material. and We 2015, did unrealized not gains recognize and any losses credit associated losses with related our to available-for-sale available-for-sale investments investments were in not 2016, 2015 and 2014. Total Total Other measurement basis: Measured at fair value: Available-for-sale securities: Details of our investments are as follows: Our other investments are notinvestments measured consist at of fair interests value in butequity-method venture are investments capital accounted are funds for reflected and using in other eitheron OI&E non-marketable the cost-method based equity equity investments on securities. method are our Gains or recorded ownership and costbased in share losses method. on OI&E of from These our when the assessment realized investee’s of or financial the when results. recoverability an Gains of impairment and each of losses investment. the investment’s value is warranted We classify certain mutual fundsto as generate trading returns securities. that These offset mutualmutual changes funds funds in hold and certain a the deferred variety related compensation of deferred debt liabilities. compensation and We liabilities record equity in changes investments SG&A. in intended the fair value of these Available-for-sale and trading securities arethe stated fair-value at discussion fair below. value, Unrealized whichdecrease, gains is net and generally of losses based taxes, on on in available-for-sale marketavailable-for-sale AOCI securities prices securities on are or in our recorded broker OI&E Consolidated as quotes. in Balance an See our Sheets. increase Consolidated We or Statements record of other-than-temporary Income. impairments on Debt and equity investments We classify our investments asavailable available for for sale. sale, trading, equity method or cost method. Most of our investments are classified as Additions charged (credited) to operatingRecoveries results and write-offs, net Trading securities: Balance, December 31 Balance, January 1 Details of these accounts receivable allowances are as follows: 8. Valuation of debt and equity investments and certain liabilities

FORM 10-K oa 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 measurements. fair-value estimate to used judgment of for level market and advantageous extent most the or indicates principal date. below measurement the discussed price in the hierarchy the price) on three-level as exit participants The defined (an market is liability between value a transaction Fair transfer orderly basis. to an recurring paid in a or liability on asset or value an asset fair sell the at to liabilities received and be assets would financial that certain report and measure We 2016, in considerations material Fair-value not were OI&E in recognized investments these of 2014. values and the 2015 in impairments and declines Other-than-temporary years two to One less or year One of as sale for available Due as classified securities debt in investments of 2016: maturities 31, aggregate December the presents table following The eerdcompensation Deferred obligations Corporate funds market Money uulfunds securities Mutual Treasury and agency government U.S. • • • fmre atcpn supin.A fDcme 1 06ad21,w a oLvl3ast rlaiiis te than other liabilities, or assets 3 Level no had we plans. 2015, postretirement and our estimates 2016 by management 31, held utilize December assets that of certain models As pricing assumptions. using participant determined market generally of are values These or judgment. brokers markets. management from active obtained in provide quotes assets to unadjusted similar 3 service to for Level data relative prices third-party reasonableness observable interest a for on as utilize valuations based such pricing We these dealers models, other data. verify the or observable We in models readily valuations. used using by 2 assumptions valued corroborated Level input are are the that factors, prices since liabilities volatility quoted judgment and and and significant assets rates markets require includes active not also in 2 do liabilities Level that and active. methodologies assets not similar are for that prices markets quoted in including data, market with correlation 2 Level date. reporting 1 Level ...... ssipt htaeuosral,spotdb iteo omre ciiyadrfetteueo significant of use the reflect and activity market no or little by supported unobservable, are that inputs Uses – through date reporting the of as observable indirectly or directly either the are of that as 1 liabilities Level or than assets other identical inputs for Uses markets – active in available are that prices quoted unadjusted Uses – ...... $ ...... 25 ...... EA NTUET 06FR 0K47 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 1 218 $ — $ 218 $ 3,480 $ 891 $ 2,589 $ 4 346 $ — $ 346 $ 1 218 $ — $ 218 $ ee ee oa ee ee Total 2 Level 1 Level Total 2 Level 1 Level ,4 4 2,282 240 2,042 0 201 — 201 5 651 651 — eebr3,2016 31, December 9 198 $ — $ 198 $ 3,177 $ 767 $ 2,410 $ 9 395 $ — $ 395 $ 9 198 $ — $ 198 $ ,2 5 2,178 350 1,828 8 187 — 187 1 417 417 — eebr3,2015 31, December arValue Fair 3,254

FORM 10-K 4,158 4,362 Goodwill Intangibles Amortization of Acquisition-Related Amortization Net Accumulated December 31, 2015 321 810 431 379 Amount $ 2,131 $$ 2,944 928 $ 1,203 $ 1,361 $ 1,583 Gross Carrying Amortization Net Accumulated December 31, 2016 Amount $ 2,940 $ 1,676 $ 1,264 Gross Carrying 5——— 8 810 532 278 7 - 10 $ 2,130 $ 1,144 $ 986 Amortization Period (Years) ...... 172 ...... — ...... $ ...... $318 ...... 318 288 198 142 ...... $ ...... 32 48 TEXAS INSTRUMENTS • 2016 FORM 10-K Other intangibles U.S. retirement plans Our principal retirement plans innon-qualified the defined U.S. are benefit a pension defined plans.participants contribution The were plan; defined allowed an benefit to enhanced plans make defined wereand a closed contribution instead one-time to plan; to election new and participate to participants qualified in continue in and the accruing 1997, enhanced a and defined benefit then contribution in current plan the plans, described or below. to cease accruing a benefit 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. Customer relationships . . . 2017 2018 2019 2020 2021 Thereafter Amortization of acquisition-related intangibles wasrespectively, $319 primarily million, related $319 to million developed andFuture technology. $321 estimated Fully million amortization amortized in of assets 2016, acquisition-related are 2015 intangibles written and off is 2014, as against follows: accumulated amortization. Total Acquisition-Related Intangibles Developed technology The components of Acquisition-related intangibles, net, are as follows: We perform our annual goodwillunits impairment is test in as excess of of Octoberunobservable its 1 carrying inputs and value. in determine Determination discounted whether of cash theinputs fair flow fair are value models value considered is to of Level based calculate each 3 upon the ofwas measurements, management fair our indicated. as estimates value reporting described and of in judgment, each Note reporting using 8. unit. In These 2016, unobservable 2015 and 2014, we determined no impairment Embedded Processing Total Analog Goodwill, net, by segment as of December 31, 2016 and 2015, is as follows: Other 9. Goodwill and acquisition-related intangibles 10. Postretirement benefit plans

FORM 10-K oa,icuigohrpsrtrmn 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 2015 Income and of 2016 Statements in Consolidated stock our common on common TI Effects TI of held shares plans these on contribution paid defined Dividends non-U.S. respectively. TI’s million, elections, material. $17 employees’ not and of were million result $20 a at as 2015, valued and stock 2016 local 31, to December subject of are As and of basis years plan employee’s and an country on through individual circumstances. based appropriate, an market generally deem on and are we determined practices benefits extent are country Retirement the requirements plans. to Funding contribution or compensation. defined laws and and local service by benefit required defined as of employees, number non-U.S. a for coverage retirement the provide for We responsible are 2001, plans 1, Medicare retirement for January Non-U.S. after eligibility hired and Employees service retirement. of participants. during years plan’s benefits various retirement, the medical upon of by their based date borne of are hire, is cost rates of cost full contribution date the The employee’s of dependents. an balance toward their are The contribution and which benefits. a retirees of make certain important We for most retirement. benefits the during medical factors, coverage retiree medical those offered of are cost requirements the eligibility meet who employees plan U.S. benefit care and health unfunded retiree are U.S. plans laws benefit local defined applicable non-qualified of of The years requirements appropriate. consecutive funding deem participants. five minimum we new highest the as to the meet amounts closed and to additional service plan such of this plus qualified years to regulations, the upon amounts and under based contribute longer Benefits formula to no plan. a intend who contribution using We participants defined determined compensation. and enhanced are employees the plan as in pension well participate benefit as may defined benefits, instead, accruing but still benefits, 2014. employees service-related and include accrue 2015 plans 2016, pension in benefit million defined $60 The was plans contribution common defined TI U.S. the the 2016, for 1, expense April fund. aggregate Effective the Our respectively. into Dividends million, transfers respectively. $19 or TI million, and contributions of $704 million new shares and $20 to held million were frozen plans $796 2015 was contribution at and fund valued defined 2016 stock shares U.S. in million TI’s shares 13 elections, these and employees’ on shares of paid million result earnings. 11 a eligible as totaling annual 2015, stock employee’s and common the 2016 of 31, after percent December hired 2 of Employees of As earnings. contribution earnings, eligible employer eligible annual fixed annual employee’s the employee’s the receive the of not of percent do defined percent 4 2003, 2 enhanced to 31, of the up December in contribution of pension employer participate contribution benefit may fixed employer-matching defined 2003, a an the 31, for plus in December provides of benefit through plan percent a and This 2 accruing 1997 plan. to continue November contribution up to after for not hired plans provided elected employees pension are who and benefit contributions Employees plans, defined employer-matching earnings. qualified where eligible the plan, annual to in contribution employee’s contributions benefit defined the pre-tax a the make accruing in to continue participate employees to also allows elected may that who option Employees savings choices. employer-matching investment an various offer plans contribution defined Both utimn gain Curtailment (gains) ...... EA NTUET 06FR 0K49 10-K FORM 2016 • INSTRUMENTS TEXAS $65 $22 0621 0421 0521 0621 2014 2015 2016 2014 2015 2016 2014 2015 2016 (41) — — 21 21 44 42 ..DfndBenefit Defined U.S. 6 $55 $61 $21 $22 4)(42) (48) —— —— 926 19 55 50 25 36 45 43 $9 $5 (20) ..RtreHat Care Health Retiree U.S. — — 20 (3) 7 9 1 $17 $13 $4 $5 2)(20) (22) —— —— 317 13 022 20 87 24 $43 $34 o-..DfndBenefit Defined Non-U.S. (68) — 25 41 52 (2) 2 3 $48 $36 $39 $35 7)(80) (76) (2) — 424 24 449 34 368 53 2 (2) (2) 21

FORM 10-K 6 6 35 53 25 72 14 — — — — (73) (18) (73) (18) (91) (102) $ 2,316 $ 2,231 $ 2,213 $ 2,134 $ (97) 6 6 Non-U.S. (8) (8) 34 52 — — — — (77) (77) 227 160 259 Defined Benefit (136) (133) $ 2,231 $ 2,361 $ 2,134 $ 2,309 $ (52) Non-U.S. Defined Benefit Total 1 5 3 20 19 19 — — — — — — (46) (21) (30) (46) (30) $ 513 $ 463 $ 497 $ 441 $ (22) U.S. 1 5 1 20 10 20 10 — — — — — — — (38) (27) (38) U.S. Retiree Health Care $ 463 $ 434 $ 441 $ 434 $— Retiree Health Care (8) (6) (8) (9) — (6) (15) 52 22 43 11 — — — — — — — (14) $ (22) $ (97) $ (133) (16) — (6) (22) (49) (22) (125) (196) (24) (94) (94) (53) (3) (73) (129) $ 66 $ 3$ 4 $ 27 $ — $ 96 $ (52) $ (48) Benefit U.S. Defined $ 1,076 $ 1,033 $ 1,082 $ 1,019 $ (14) U.S. (9) (9) 15 22 42 79 15 27 — — — — — — — (85) (85) Defined Benefit 2016 2015 2016 2015 2016 2015 $ 1,033 $ 1,030 $ 1,019 $ 1,034 $4 ...... $ ...... $ 51 $ — $ 34 $ 85 ...... plans) liabilities liabilities Interest cost Participant contributions Employer contributions (funding of qualifiedEmployer plans) contributions (payments for non-qualified Service cost Benefits paid Actual return on plan assets Medicare subsidy Actuarial loss (gain) Settlements Plan amendments Effects of exchange rate changes Participant contributions Benefits paid Settlements Effects of exchange rate changes Other Accrued expenses and other liabilities & Deferred credits and other Underfunded retirement plans Overfunded retirement plans Accrued expenses and other liabilities & Deferred credits and other Overfunded retirement plans Underfunded retirement plans Fair value of plan assets at end of year (FVPA) Fair value of plan assets at beginning of year: Benefit obligation at end of year (BO) Benefit obligation at beginning of year: 50 TEXAS INSTRUMENTS • 2016 FORM 10-K Funded status (FVPA – BO) at end of 2015 2015 Funded status (FVPA – BO) at end of 2016 2016 Amounts recognized on our Consolidated Balance Sheets as of December 31, are as follows: Funded status (FVPA – BO) at end of year Change in plan assets Change in plan benefit obligation Changes in the benefit obligations and plan assets for defined benefit and retiree health care benefit plans are as follows: For the U.S. qualified pensioncost and is retiree based health upon care a plans,value market-related the adjusted value expected by of return a assets. on smoothing In plan technique accordance assets with whereby component U.S. certain of GAAP, gains net the and periodic market-related losses benefit value are of phased assets in is over the a fair period of three years.

FORM 10-K a ossso odidxadeut ne ud,maue tntastvleprshare. 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 information. have more but for With 2 value 8. Note fair Note See 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 for million ($2) and U.S. million assets $27 the plan for and on none plan; Information and benefit million care $15 health are: retiree year U.S. 2016, fiscal the plans. 31, next for benefit December the million defined of over ($4) non-U.S. as cost and the AOCI benefit million in periodic $4 included net plans; credit into benefit service amortized defined prior be unrecognized to and expected loss are actuarial that net of amounts estimated The taxes, of net balance, AOCI category: by AOCI in Changes 31, December taxes, of net balance, AOCI follows: defined as non-U.S. is the AOCI for in respectively, change 2015, U.S. The and the 2016 for 31, respectively, December 2015, of and as 2016 billion 31, $2.09 December impact and of plans. the billion as benefit exclude $2.22 million they and $948 as plans, and obligations million benefit benefit $926 defined projected were the increases, than salary less future generally of are deductible. which pension tax obligations, non-qualified not benefit for are Accumulated were our them to plans to million benefit contributions $100 defined because about U.S. fund contribute underfunded not to for do expect shown we We amounts which requirements. The plans, funding 2017. minimum in all plans exceed benefit or retirement meet plans the to Contributions 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 2016 31, December AOCI to change Total effect Tax income Net within Recognized Adjustments 2015 ...... 17$8 (3 33$()$5 $(20) $550 (7) $ $303 $(13) 80 $ $167 ...... EA NTUET 06FR 0K51 10-K FORM 2016 • INSTRUMENTS TEXAS ..Defined U.S. Actuarial Benefit 3 8$(1 5 6 4 (17) $ 542 $ (6) $ 351 $ (11) $ 58 $ 133 $ Loss ...... Net 1)(7 6—4 — 49 — 86 — (27) (10) 3)(2 81()3 5 (8) (76) 1 2 48 (27) 2 3 (22) (7) (34) (42) 81 1 1)()1 (2) 19 (1) (11) (1) 12 18 Actuarial ..RtreHat Care Health Retiree U.S. Loss Net ro Service Prior Credit ee ee ee te a Total (a) Other 3 Level 2 Level 1 Level 4$15$3$217$2,309 $ 2,137 $ 3 1,654 $ $ 434 1,508 145 $ $ $ 227 251 24 — $ $ $ $ 127 44 $ — $ $ 19 3 $ 1,034 $ — $ $ 685 1,034 $ $ 180 3 $ — 685 $ $ $ 180 $ — $ — $ — — $ $ — $ Actuarial o-..DfndBenefit Defined Non-U.S. 0 207 3 207 — 3 —— 349 — — 349 — — — — 8—69652 629 — 18 5 Loss Net ro Service Prior eebr3,2016 31, December Credit Actuarial Loss Net Total ro Service Prior Credit

FORM 10-K 2.41% 3.21% 2.34% 3.55% 3.27% 1,019 Non-U.S. Defined Benefit 1.76% 3.18% 3.11% 2.41% 3.21% 1,385 $ 1,498 1,993 $ 2,134 n/a n/a 4.40% 4.70% 4.15% U.S. Retiree Health Care n/a n/a 4.08% 4.40% 4.40% December 31, 2015 4.62% 3.30% 5.10% 3.30% 4.33% Benefit U.S. Defined 2016 2015 2016 2015 2016 2015 4.29% 3.30% 4.60% 3.30% 4.40% Level 1 Level 2 Level 3 Other (a) Total ...... $ — $249 $— $...... 415 $ $178 664 $ 5 $—...... $ $ 37 4 $ 220 $109 $— $ ...... — —...... — — 355 —...... 355 — 6 221 18 221 — 608 632 ...... — — 4 — 4 ...... $ 10 $127 $ 4 $ ...... $178 $ 5 $— $ 258 $ 441 ...... $ — $249 $— $ 770 $ Discount rate Fixed income securities and cash equivalents Equity securities Equity securities Equity securities Other Long-term pay progression Discount rate Long-term rate of return onLong-term plan pay assets progression Fixed income securities and cash equivalents Fixed income securities and cash equivalents 52 TEXAS INSTRUMENTS • 2016 FORM 10-K Weighted average assumptions used to determine benefit obligations: Assumptions and investment policies The only Level 3 assetplan. in These our investments worldwide are benefit valued plansfund using for since inputs the December from periods 31, the presented 2014, fund is have managers a not and diversified been internal property material, models. fund and Changes in are to a due the non-U.S. to fair pension redemptions. value of this The investments in our majorwithin benefit market plans sectors. largely Our consist investment ofliabilities. policy low-cost, The is broad-market designed appropriate index to mix funds of better tomodeling equity match mitigate studies the and risks that interest bond of look rate investments concentration to sensitivity iscover balance of determined future the the primarily service impact plan through cost. of assets the Most changes and usecharacteristics of in of that our the detailed are plans discount asset-liability more around rate closely the againstwe aligned world the utilize with have need an changes a to option in greater provide collar the proportion asset strategy liabilities of growth to caused fixed to reduce by income the discount securities volatility rate with of volatility. return returns For on the investments U.S. in plans, U.S. equity funds. (a) Consists of bond index and equity index funds, measured at net asset value per share. Total Assets of non-U.S. defined benefit plans: Total 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. Total Assets of U.S. retiree health care plan: Assets of U.S. defined benefit plan:

FORM 10-K netet ntesm netetfnsta r fee nordfndcnrbto plans. contribution notional participant’s defined 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 or arrangements increased compensation have Deferred would 2016, expense 31, plan December 2016 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 $2 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 2026 - 2022 2021 2020 2019 2018 2017 assets plan from made benefit be our will measure assumptions, to these used from are significantly assets. years vary company 10 may from next which not the payments, and the in the in participants of TI plan all to to Almost assets payments obligations. plans’ benefit pension future TI benefit assumed in defined following invested the The directly of are any plan return benefit to care expect health not retiree do and months. we plans 12 2016, pension next 31, benefit December defined of the As to stock. related common assets plan the of None securities equivalents Equity cash and securities income Fixed Category Asset follows: as are 31 December of as ranges. allocations allocation asset target average the Weighted within not are they when investments plans’ the rebalance We securities equivalents Equity cash and securities follows: income as Fixed are assets benefit defined the Category of Asset majority substantial a hold that plans the for ranges allocation the the target within of The environments nature economic long-term different and mix the investment reflect expenses the plans reasonable on benefit of based defined payment appropriate non-U.S. countries. asset the are the various each for assumptions for for results our used returns the believe Assumptions for adjust We investments. expectations We assets. plans’ future rebalancing. plan on allocation from based asset plan are target the assets periodic of plan of on effect return the of and rate class long-term expected the for Assumptions ...... 113 91 89 87 84 32 33 33 82 $ 32 101 91 32 86 $ ...... 120 ...... $128 ...... 5 5 489 151 450 ...... 3%3%5%0%–40% 35%–50% 35% ...... EA NTUET 06FR 0K53 10-K FORM 2016 • INSTRUMENTS TEXAS ...... 6%5%6%60%– 50%–65% 65% ...... 0621 0621 062015 2016 2015 2016 2015 2016 66% 34% ..Defined U.S. ..Defined U.S. ..Defined U.S. Benefit Benefit Benefit 65% 35% 52% 48% elhCare Health ..Retiree U.S. elhCare Health ..Retiree U.S. elhCare Health Retiree U.S. 50% 50% 5.00% 6.75% 062015 2016 2024 eie Benefit Defined eie Benefit Defined eie Benefit Defined 72% 28% Non-U.S. Non-U.S. Non-U.S. 5.00% 7.00% 2024 100% 70% 30%

FORM 10-K (5) — 500 250 375 500 750 500 250 4,125 4,120 (1,000) $ 3,120 $ 1,000 (16) December 31, 500 250 375 500 750 500 250 500 (631) 3,609 3,625 2016 2015 $ 2,978 $— ...... 54 TEXAS INSTRUMENTS • 2016 FORM 10-K Notes due 2023 at 2.25% Net unamortized discounts, premiums and debt issuance costs Current portion of long-term debt Interest and debt expense wasof $80 the million debt in discounts, 2016, premiums $90$99 and million million debt in in issuance 2015 2015 costs. and and Cash $94 $102 payments million million for in in interest 2014. 2014. on This Capitalized long-term was interest debt net was were of not $88 the material. million amortization in 2016, Long-term debt Total debt Total debt, including net unamortized discounts, premiums and debt issuance costs Notes due 2016 at 2.375% Notes due 2017 at 0.875% Notes due 2017 at 6.60%Notes (assumed due with 2018 National at acquisition) 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% Long-term debt outstanding is as follows: In March 2014, we issued2017 an and aggregate $250 principal million amount due ofand in $500 debt 2021. million expense We of over incurred fixed-rate, the $3 long-termand term million debt, were of of with used the issuance $250 toward debt. and million the The other due repayment proceeds related in of of costs, the the which $1.0 offering are billion amortized were of to $498 debt million, Interest that net matured of in the May original 2014. issuance discount, In May 2015, we issuedissuance a and principal other amount related of costs, $500offering which million were are of $498 amortized fixed-rate, million, to long-term net Interest debtmatured of and due in the debt in August original expense 2020. 2015. issuance over We We discount, the incurred retired and term $3 $250 were of million million used the of of toward debt. maturing the The debt repayment proceeds in of of April a the 2015 portion and of another the $750 debt million that in August 2015. Long-term debt In May 2016, we issuedissuance a and principal other amount related of costs, $500offering which million were are of $499 amortized fixed-rate, million, to long-term net Interest debtof of and due maturing the debt in debt original expense 2022. retired issuance over We in discount, the incurred May and term $3 2016. were of million used the of toward debt. the The repayment proceeds of of a the portion of $1.0 billion Short-term borrowings We maintain a line ofAs credit of to December support 31, commercial 2016, paperus we borrowings, to had if borrow a any, up variable-rate and to revolving toapplicable $2 credit provide London billion facility additional Interbank until from liquidity a March Offered through consortium 2021. Rate bankcommercial of The (LIBOR). loans. paper investment-grade interest As outstanding. of banks rate December on that 31, borrowings allows 2016, under our this credit credit facility facility, was if undrawn drawn, and is we indexed had to no the As of December 31, 2016,Deferred our liability credits and to other participants liabilities ofdeferrals on the and our deferred earnings Consolidated compensation thereon Balance plans as was Sheets.plans of $218 This that that million amount are date. and reflects recorded As is the in of recorded accumulatedchanges Long-term December in participant in investments 31, fair on 2016, values our we of Consolidated heldrelated our Balance $201 investment other million Sheets, in deferred in and SG&A compensation mutual serve as liabilities. as funds discussed We an related in record economic to Note changes hedge these 8. in against the fair value of the liability and the 11. Debt and lines of credit

FORM 10-K 2 omtet n contingencies and Commitments 12. atr,w eiv htterslso hs rceig ilnthv aeilavreefc norfnnilcniin results condition, financial our on effect these adverse of material outcome a the have predict not to will possible proceedings liquidity. not these or is of operations it results of 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 only liabilities had future have any we estimate Historically, reasonably sale. cannot of we terms Consequently, result. the indemnities. may in these that included with indemnification associated property losses intellectual infrequent an minimal, with products sell routinely We guarantees Indemnification Thereafter 2021 2020 2019 2018 2017 and commitments purchase our under payments minimum following the make to leases: committed respectively. operating had 2014, we non-cancellable and 2016, 2015 31, and 2016, December Rental in of costs. million As maintenance $113 and and insurance million taxes, $98 addition, agreements pay million, In Lease to $86 equipment. leases. us was other require operating incurred and as and expense processing for provisions lease data accounted renewal our are and of gases purchase portion industrial include a purchase frequently lease to also agreements and supply facilities long-term leased certain in operations certain conduct We leases payments. Operating minimum require licenses, software including commitments, purchase our of Some commitments Purchase ...... 17 24 28 2 47 24 81 $67...... 92 ...... $132 ...... 57 5 ...... EA NTUET 06FR 0K55 10-K FORM 2016 • INSTRUMENTS TEXAS Commitments Purchase Operating Leases

FORM 10-K (2) 20 199 2,789 2,549 $ (550) $ (532) $ 801 $ 1,000 $ 127 $ 5,465 586 (4) 35 67 (4) (7) 14 14 $— $— $32 $21 (1) 17 December 31, December 31, December 31, 344 December 31, 2,753 2,043 2016 2015 2016 2015 2016 2015 For Years Ended 2 5 (6) (3) $ 127 $ 4,923 $ 566 $ 910 $ (542) $ (526) 11 14 2016 2015 2014 $ 188 $ 211 Depreciable Lives (Years) ...... 5-40 ...... 2-10 ...... n/a ...... Prior service credit Net actuarial loss 56 TEXAS INSTRUMENTS • 2016 FORM 10-K Tax interest income (expense) Other Currency exchange gains (losses) Investment gains (losses) Interest income Cash flow hedge derivative Total Postretirement benefit plans: Lease income Other prepaid expenses and current assets Accumulated Other Comprehensive Income (Loss), Net of Taxes (AOCI) Total Property, Plant and Equipment atLand Cost Total Prepaid Expenses and Other Current Assets Prepaid taxes on intercompany inventory profits, net Total Other Income (Expense), Net (OI&E) Income from settlements related to intellectual property infringement Buildings and improvements Machinery and equipment Acquisition charges Acquisition charges represent the ongoingSemiconductor amortization Corporation. of These intangible amounts assets are resultingmanagement included from measures in the the Other acquisition performance for of of segment National its reporting segments. purposes, See consistent Note with 9 how for additional information. 13. Supplemental financial information

FORM 10-K 4 urel iaca aa(unaudited) data financial Quarterly 14. iue EPS Diluted EPS Basic income Net profit Operating profit: Operating in Included profit Gross Revenue reported to previously 2016 on of change quarters the three of first effects the the for including EPS information, and additional income for Net 2 recast Note have data. See we quarterly 2016-09, presentation. ASU new of the adoption to early conform our of result a As charges/other. Restructuring and SG&A R&D, COR, in included is expense Pension 10. (b) Note in Detailed (a) 2014 2015 instruments: 2016 Derivative plans: benefit defined of credit (cost) service Prior plans: benefit defined of (losses) gains actuarial Net Components AOCI about Income. Details of Statements Consolidated 2015 our 2016, in in recorded income are Net transactions within these recognized where been details have below income that table Net items The to include 2014. taxes, Income and of Comprehensive net of (loss), Statements income Consolidated comprehensive Our other Accumulated of out reclassified amounts on Details etutrn charges/other Restructuring charges Acquisition taxes of net income, Net within Recognized effect Tax locks treasury-rate of Amortization taxes of net income, Net within Recognized effect Tax and (credit) cost service prior of Amortization taxes of net income, Net within Recognized . . (a) losses effect Settlement Tax and loss actuarial net Recognized utimn an(a) gain Curtailment ...... ,1 ,7 ,7 3,008 $ 3,273 $ 3,675 $ 3,414 $ .2$09 .9$0.69 $ 0.70 $ 0.79 $ 0.81 $ 0.98 $ 1.00 $ 1.02 $ 1.04 $ ,4 ,1 1 711 968 819 1,117 1,018 1,395 1,824 1,047 1,319 2,003 2,280 2,133 t r n s t r n 1st 2nd 3rd 4th 1st 2nd 3rd 4th EA NTUET 06FR 0K57 10-K FORM 2016 • INSTRUMENTS TEXAS 2)122 2 1 (20) 08 980 79 80 80 ...... 06Quarters 2016 $1 (3) $ $51 $76 $1 (5) $ (25) — 2 o er Ended Years For eebr31, December eraet e income Net to Decrease 1 $ 1 $ income Net to Increase — $ — $ income Net to Decrease 42 (b) $ expense Pension to Increase 53 $ 63 $ 78 $ nraet neetaddb expense debt and Interest to Increase 2 $ 2 $ (b) expense Pension to Decrease — $ — $ 2)(1 eraet rvso o noetaxes income for Provision to Decrease (21) (25) nraet rvso o noetaxes income for Provision to Increase — — 1 1 eraet rvso o noetaxes income for Provision to Decrease (1) (1) ,8 ,2 ,3 3,150 $ 3,232 $ 3,429 $ 3,189 $ .0$07 .5$0.61 $ 0.62 $ 0.65 $ 0.66 $ 0.76 $ 0.77 $ 0.80 $ 0.81 $ ,4 ,6 ,1 958 1,010 1,164 1,816 1,142 1,881 1,997 1,866 3 9 9 656 696 798 836 6)—()(2) (1) — (68) 18 283 82 83 81 05Quarters 2015 eae Statement Related fIcm Line Income of matto Impact

FORM 10-K 58 TEXAS INSTRUMENTS • 2016 FORM 10-K Dallas, Texas February 23, 2017 We also have audited, inCompany’s accordance internal with control the over standards financial ofIntegrated reporting the Framework as Public issued of Company by December Accounting the 31, Oversightour Committee 2016, Board report of based (United dated Sponsoring on States), February Organizations criteria the 23, established of 2017, the in expressed Treadway Internal an Commission Control- unqualified (2013 opinion framework) thereon. and As discussed in Note 2compensation to the in consolidated 2016. financial statements, the Company changed its method of accounting for stock In our opinion, the financialof statements Texas referred Instruments to Incorporated above and presentoperations subsidiaries fairly, and at in their December all cash 31, material flows 2016 respects,generally for and the accepted each 2015, consolidated accounting of and financial principles. the the position three consolidated years results in of the their period ended December 31, 2016, in conformity with U.S. We conducted our audits inThose accordance standards with require the that standards we ofare plan the free and Public of perform Company material the Accounting misstatement. audit Oversightin An to Board the audit obtain (United financial includes reasonable States). statements. examining, assurance An on aboutmanagement, audit a whether as also test the well includes basis, financial as assessing evidence statements evaluating the supportingbasis the accounting the for overall principles amounts our financial used and opinion. statement and disclosures presentation. significant We estimates believe made that by our audits provide a reasonable We have audited the accompanyingCompany) consolidated as balance of sheets December of 31, Texasstockholders’ 2016 Instruments equity, and Incorporated 2015, and and and cash subsidiaries the flows (the statements for related are each consolidated the of statements responsibility the of of three income,statements the years comprehensive based Company’s in income, on management. the our Our period audits. responsibility ended is December to 31, express 2016. an These opinion financial on these financial The Board of Directors andTexas Stockholders Instruments Incorporated Report of independent registered public accounting firm

FORM 10-K Isidpnetrgsee ulcacutn im rs on L,hsise nadtrpr nteefcieeso our of effectiveness the on report report. audit this an follows issued immediately has which LLP, reporting, Young financial & over Ernst control criteria. firm, internal COSO accounting of the public as on registered that, based independent believe effective TI’s we is assessment, reporting (2013 our financial Commission on over Treadway Based control the Framework. internal this of Integrated our making Organizations – 2016, In Sponsoring Control 31, 2016. of Internal December 31, Committee in December the criteria) of by COSO as forth (the reporting set framework) financial criteria over the deteriorate. control used may internal we procedures of assessment, or inadequate effectiveness policies become the may the assessed controls with management that compliance TI risk of misstatements. the degree detect to the or subject that prevent are or not periods conditions, may future in and to changes limitations effectiveness of inherent of because have evaluation designed, any well of how projections is matter Also, or no affected, systems, materially control has internal that reporting. All 15d-15(f) 2016 financial and of over 13a-15(f) quarter control Rule fourth internal in the our defined during affect, (as occurred materially reporting that to financial 1934) likely accounting over of reasonably accepted control Act generally internal Exchange with our Securities preparation accordance in the the in change under and purposes no reporting external been internal financial for has TI’s of issued There reporting. reliability statements principles. financial the financial over regarding of control assurance presentation internal reasonable fair effective provide and maintaining to and designed establishing was for system responsible control is TI of management The reporting financial over control internal on management by Report reporting financial disclosure over those control that Internal concluded officer financial Exchange principal Securities and the officer under executive effective. and 15d-15(e) chief were participation design and the procedures the the 13a-15(e) evaluation, and of with Rules that controls effectiveness and in upon the supervision defined Based of the (as 1934). officer, under procedures of financial out and Act carried principal controls was and disclosure report officer TI’s this executive of by chief operation covered its period including the management, of TI’s end of the of as evaluation An procedures and controls Disclosure Procedures. and Controls 9A. ITEM applicable. Not and Accounting on Accountants With Disagreements and in Changes 9. ITEM iaca Disclosure. Financial EA NTUET 06FR 0K59 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K irm on internal control over financial reporting 60 TEXAS INSTRUMENTS • 2016 FORM 10-K Dallas, Texas February 23, 2017 We also have audited, inconsolidated accordance balance with sheets the of standards Texas ofrelated Instruments the consolidated Incorporated Public statements and Company of subsidiaries Accounting income, as Oversightyears comprehensive of Board in income, December (United the stockholders’ 31, States), period equity, 2016 the ended and and December cash 2015, 31, flows and 2016, for the and each our of report the dated three February 23, 2017, expressed an unqualified opinion thereon. In our opinion, Texas Instrumentsreporting Incorporated as maintained, of in December all 31, material 2016, respects, based effective on internal the control COSO over criteria. financial Because of its inherent limitations,projections internal of control any over evaluation financial of reportingbecause effectiveness may of to not changes future prevent in periods or conditions, are detect or subject misstatements. that to Also, the the degree risk of that compliance controls with may the become policies inadequate or procedures may deteriorate. A company’s internal control overreliability financial of reporting financial is reporting a and processaccepted designed the accounting preparation to principles. provide of A reasonable financial company’s assurance statements(1) internal regarding for pertain control external the to over purposes the financial in maintenance reporting accordanceof of includes with the records those generally assets that, policies of in and the reasonable proceduresof company; detail, that financial (2) accurately provide statements and in reasonable fairly accordance assurance reflectcompany with that the are generally transactions transactions being are accepted and made recorded accounting dispositions only as principles,reasonable in necessary and assurance accordance to that regarding with permit receipts prevention authorizations preparation and or of expendituresassets timely management of that detection and the could of directors have unauthorized of a acquisition, the material company; use, effect or and on disposition (3) the provide of financial the statements. company’s We conducted our audit inThose accordance standards with require the that standards we ofcontrol plan the over and Public financial perform Company reporting the Accounting was audit Oversightcontrol maintained to Board over in obtain (United financial all reasonable States). reporting, material assurance assessing respects. abouteffectiveness the Our whether of risk audit effective internal that included internal control a obtaining based material anin on weakness understanding the the exists, of circumstances. assessed testing internal We risk, and believe and evaluating that performing the our such design audit other and provides procedures operating a as reasonable we basis considered for necessary our opinion. Report of independent registered public accounting f We have audited Texas Instrumentson Incorporated’s criteria internal established control in over Internal financialTreadway Control reporting Commission – as (2013 Integrated of framework) Framework December (the issued 31,maintaining COSO by 2016, criteria). effective the based Texas internal Committee Instruments control of Incorporated’s over Sponsoringover management financial Organizations financial is reporting, of reporting responsible and the included for for in itsresponsibility the assessment is accompanying of to report the express by effectiveness an management of opinion on internal on internal control the control company’s over internal financial control reporting. over Our financial reporting based on our audit. The Board of Directors andTexas Stockholders Instruments Incorporated

FORM 10-K qiycmesto ln o prvdb euiyholders security by Total approved not plans holders compensation security Equity by approved plans compensation Equity Category Plan 2016. 31, December of as plans compensation equity company’s the about information forth sets table following The information plan compensation Equity and Management and Owners Beneficial Certain of Ownership Security statement. 12. proxy such ITEM to reference statement by proxy herein our incorporated in is participation” stockholders insider of and meeting interlocks annual committee 2017 “Compensation the caption for the the under that 10-K. contained provided Form information statement, this The proxy with such filed to deemed for reference be statement by not proxy herein shall our incorporated report in is Committee compensation” stockholders Compensation “Executive of and meeting compensation” annual “Director 2017 captions the the under contained information The Compensation. Executive 11. reference ITEM by herein incorporated is audit stockholders the of and meeting committee annual audit 2017 the the statement. to for proxy respect statement such with proxy to board” our the in of expert “Committees financial caption committee the under contained information The on website. found same be the can on Committee Code information the regarding such Audit of SEC posting copy the by A of Code Officers. requirements the Finance disclosure from, Senior the waivers and satisfy or Officer to to, Executive intend amendments Chief We TI www.ti.com/corporategovernance. for at Ethics website of our Code the adopted have report. We this of 1 Item I, Part Ethics in of appears information Code biographical their and proxy officers such executive to our reference of by list herein A incorporated same is the stockholders of of caption meeting the annual under 2017 contained the compliance for statement. reporting statement ownership proxy beneficial our 16(a) in Section name such to to respect reference with by information herein The incorporated nominee is and stockholders, diversity of “Board meeting caption annual the 2017 under the statement. contained for proxy is statement which proxy experience, our business in by directors’ qualifications” herein to incorporated respect is with stockholders, information under of The contained meeting is annual which 2017 service, the of for statement. periods statement proxy and proxy such office our to of in reference term directors” positions, of ages, “Election names, caption directors’ the to respect with information The applicable. Not Information. Other 9B. ITEM TM1.Drcos xctv fiesadCroaeGovernance. Corporate and Officers Executive Directors, 10. ITEM ...... eae tchle Matters. Stockholder Related EA NTUET 06FR 0K61 10-K FORM 2016 • INSTRUMENTS TEXAS ...... ATIII PART ..... ob sudUpon Issued be to 50522()$4.097,283,403 (3) 97,283,403 42.00 $ (2) 42.01 $ (5) 65,025,212 (1) 62,380,188 arnsand Warrants Outstanding ,4,2 4 18 2 0 (2) 41.89 $ (4) 2,645,024 xrieof Exercise ubrof Number Securities Options, Rights (a) xriePieof Price Exercise arnsand Warrants Outstanding Weighted- Options, Average Rights (b) ubro Securities of Number eann Available Remaining opnainPlans Compensation euiisreflected securities nclm (a)) column in ne Equity under (excluding o Future for Issuance (c)

FORM 10-K Independence. Director Plan”), the Texas Instrumentsapproved 2009 plans, Long-Term the Incentive Texas Plan Instruments (the2014 2009 “2009 Stock Director LTIP”) Purchase Compensation and Plan predecessor Plan (the stockholder- (the “2014 “2009 ESPP”). Director Plan”) and the TI Employees TI common stock on aweighted-average one-for-one basis. exercise Accordingly, price. such units have been excluded for purposes of computing the 59,581,585 shares remain available forfuture future issuance issuance under under the the 2009 2009form Director LTIP of Plan. and restricted Under 1,314,646 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 other includes 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 grantsupon may vesting be of made outstanding under grants them. shares of for restricted issuance stock in units, settlement 283,400 of shares directors’ for deferred issuance compensation under accounts. the 2014 ESPP and 143,645 62 TEXAS INSTRUMENTS • 2016 FORM 10-K ITEM 14. Principal Accountant Fees and Services. The information with respect toof principal independent accountant registered fees public and accounting servicesincorporated contained firm” herein in under by our the reference proxy caption to statement “Proposal such for to proxy the ratify statement. 2017 appointment annual meeting of stockholders is The information contained under thestockholders caption is “Director incorporated independence” herein in by our reference proxy to statement such for proxy the statement. 2017 annual meeting of The information contained under thestockholders caption is “Related incorporated person herein transactions” by in reference our to proxy such statement proxy for statement. the 2017 annual meeting of ITEM 13. Certain Relationships and Related Transactions, and Director 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 2017 “Security annual ownership meeting of stockholders is incorporated herein by Security ownership of certain beneficial owners and management (1) Includes shares of TI common stock to be issued under the Texas Instruments 2003 Director Compensation Plan (the “2003 (2) Restricted stock units and stock units credited to directors’ deferred compensation accounts are(3) settled in shares of Shares of TI common stock available for future issuance under the 2009 LTIP, the 2009 Director Plan and(4) the 2014 ESPP. Includes shares to be issued under the Texas Instruments 2003 Long-Term Incentive Plan (the “2003 LTIP”). The 2003 LTIP (5) Includes 52,265,788 shares for issuance upon exercise of outstanding grants of options, 12,332,379 shares for issuance

FORM 10-K h iaca ttmnsaelse nteidxicue nIe ,“iaca ttmnsadSplmnayData.” Supplementary and Statements “Financial 8, Item in included index the in listed are statements financial The Schedules. Statement Financial Exhibits, 15. ITEM Designation 10(k) 10(j) 10(i) 10(h) 10(g) 10(f) 10(e) 10(d) 10(c) 10(b) 10(a) 4(f) 4(e) 4(d) 4(c) 4(b) 4(a) 3(b) 3(a) 10(n) 10(m) 10(l) fEhbtDsrpino Exhibit of Description Exhibit of ntuet 09Ln-emIcniePlan* Incentive Long-Term 2009 Texas Instruments the under Officers Executive Agreement for Option Stock Non-Qualified of Form 2012 19, January amended as Plan Compensation Director 2003 Instruments Texas 1998 16, April dated amended, as Plan, Compensation Deferred Directors Instruments Texas 1998 16, April dated amended, for as Plan Directors, Unit Stock Restricted Instruments Texas 17, 2009* September amended as Plan Performance Officer Executive 4.1 Instruments Texas 2008 16, 10(c) October amended as Plan Incentive Long-Term 2003 4.2 Instruments 4.2 Texas 2016 4.2 2008* 24, 2015 16, February 6, October May amended as Plan Incentive 4.3 Long-Term 001-3761 2000 Instruments 2014 Texas 10(a) 12, 10-K March 001-3761 1993* 2013 2011 15, 8, 23, April May May adopted Plan, 8-K Incentive Long-Term 001-3761 2016 Instruments 24, 2011 Texas February 23, II* May Plan 8-K Pension 001-3761 Non-Qualified 001-3761 Employees TI 001-3761 amended* as 8-K 8-K 2009, 10-K 1, 001-3761 January effective Plan, 3 Pension Non-Qualified 8-K Employees TI amended* request. as upon Plan, a Commission Compensation furnish Exchange Deferred to and TI Registrant undertakes Securities 2016 the Registrant the 12, of The to December debt 601(b)(4)(iii)(A). instruments long-term Item such of S-K, of holders Regulation copy of to 001-3761 rights pursuant the subsidiaries defining its instruments and certain 8-K omitted has Registrant The Certificate Officer’s Certificate Officer’s Certificate Officer’s Certificate Officer’s Indenture Registrant the of By-Laws amended as 1985, 18, April dated the Registrant, of Incorporation of Certificate Restated lna mne aur 9 2012 19, January amended as Plan Compensation Director 2009 Instruments Texas * 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 EA NTUET 06FR 0K63 10-K FORM 2016 • INSTRUMENTS TEXAS ATIV PART 0K0136 eray2,21 10(j) 2015 24, February 10(i) 001-3761 10-K 2012 24, 10(h) February 001-3761 2012 10-K 24, February 10(g) 001-3761 10-K 2015 24, 10(f) February 001-3761 2015 10-K 24, 10(e) February 001-3761 2015 10-K 24, 10(c) February 001-3761 2012 10-K 24, February 001-3761 10(b) 10-K 2016 24, February 001-3761 10-K 3(a) 2015 24, 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

FORM 10-K X X X X X X Filed or Herewith Furnished Exhibit Number Incorporated by Reference File Number Date of Filing Form Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive Officer Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial Officer Section 1350 Certification of ChiefOfficer Executive Section 1350 Certification of ChiefOfficer Financial Instance Document XBRL Taxonomy SchemaXBRL Taxonomy Calculation LinkbaseXBRL Taxonomy Definitions DocumentXBRL Taxonomy Labels LinkbaseXBRL Taxonomy Presentation Linkbase X X X X X Ratio of Earnings to Fixed ChargesList of Subsidiaries of the RegistrantConsent of Independent Registered Public Accounting Firm X X of Exhibit Description of Exhibit 101.cal 101.Def 101.lab 101.pre 31(a) 31(b) 32(a) 32(b) 101.ins 101.sch 12 21 23 Designation 64 TEXAS INSTRUMENTS • 2016 FORM 10-K * Management compensation plans and arrangements

FORM 10-K ttmnsicue nti eotaemd nya ftedt fti eot n eudraen biaint paethe update to obligation no undertake we and forward-looking report, The this report. of this circumstances. date or of 1A events the Item of subsequent as in reflect only discussion to Factors made statements Risk are forward-looking the report see this factors in these included of statements discussion detailed more a For the from materially differ to results actual cause could that management: factors our important or following TI the of consider expectations carefully to you urge cause We could statements. that forward-looking uncertainties in are and those also risks from goals certain materially or to differ intentions subject to plans, are results objectives, statements actual its outlook, forward-looking or strategy, such similar TI business All of as TI’s statements. phrases such describe or forward-looking phrases that words by herein other Private identified statements or the be Similarly, “estimates” by can “forecasts,” import. established generally “foresees,” liability statements “anticipates,” from forward-looking “expects,” harbor These “believes,” safe 1995. management the of for Act qualify Reform to Litigation intended Securities statements forward-looking includes report This statements forward-looking regarding Notice Isaiiyt ucsflyitgaeadraieopruiisfrgot rmaqiiin,o u blt oraieour realize to ability assets. our non-financial or TI’s acquisitions, of from Impairments growth for opportunities • personnel; realize technical and and integrate management successfully engineering, to skilled ability retain TI’s the and in recruit invest costs; to operations, • benefit ability daily pension TI’s our and fund care to health • ability in TI’s Increases affects that TI’s markets or • financial operation; and of credit freedom global maintain the and in portfolio Instability property intellectual sufficient strong at • a facilities enforce manufacturing and our maintain utilize to to ability ability TI’s our including customer margins, • other profit and improve distributor or of maintain amount to and ability timing TI’s the a or of customers loss • key the from or purchases detriment, of TI’s curtailments to or lines Losses product inventory; competing TI-consigned of to • promotion respect their with or TI distributors of of distributor are difficulties or profits customer Financial which a in by jurisdictions suffered • the loss law, A tax in changes • of result the products, as TI TI to to relating applicable claims rate other tax or the failure, in delivery Changes or epidemic on of • based actions claims or claims, subject, warranty become or may liability or Product is TI which • to regulations and rules laws, complex the in changes and or services with manufacturing Compliance third-party equipment, manufacturing • utilities, materials, to raw ability of the cost or and equipment, Availability manufacturing suppliers; of or installation customers • and our technologies of or those manufacturing customers or new our systems of TI, technology implementation which information Timely in TI’s locations of the disruptions • in or epidemics Breaches health or events • geological weather, severe as including such operate, events suppliers Natural our or customers • our TI, environment; which technological in changing countries rapidly the a in in conditions from products political results innovative and that market social inventory and Economic, TI manufacture excess develop, or to • inadequate ability of TI’s impact financial industry; the • competitive and intensely forecasts an from in differs prices that and demand products Customer in markets; compete end to • TI’s ability in TI’s particularly semiconductors, for • demand Market • xettosrgrigteaon n iigo etutrn hre n soitdcs aig;and savings; cost associated and charges restructuring of timing and amount the regarding expectations debt; our on payments interest and principal make or acquisitions, strategic make business, industry; claims; cyclical infringement and to competitive exposure intensely an in costs, operating fixed its cover to levels adjustments; inventory distributors; of number significant realize to ability the and rates, tariff in increases audits, tax of resolution assets; part; adverse tax TI taxed, deferred a and containing earned product be a to for determined customers TI by recalls or communications, TI or subject design or services, business, manufacturing, our operate or products liability; our legal ship other or or manufacture penalties, to fines, ability to TI’s restrict that authorities, enforcement technology; manufacturing services; subcontract assembly/test and foundry third-party needed obtain operate; rates; suppliers exchange our transportation, currency in foreign disruptions in possible fluctuations conditions; and health networks; instability; technology social information and and political communications policies; trade global risks; security projections; from differs that demand EA NTUET 06FR 0K65 10-K FORM 2016 • INSTRUMENTS TEXAS

FORM 10-K Title Director Director Director Director Director Director Director Director Kevin P. March Senior Vice President, Principal Financial Officer and Chief Accounting Officer TEXAS INSTRUMENTS INCORPORATED By: /s/ Kevin P. March SIGNATURES Signature Ronald Kirk Carrie S. Cox Mark A. Blinn /s/ Ronald Kirk Janet F. Clark Daniel A. Carp Jean M. Hobby /s/ Carrie S. Cox /s/ Mark A. Blinn /s/ Janet F. Clark /s/ Daniel A. Carp /s/ Jean M. Hobby Pamela H. Patsley Ralph W. Babb, Jr. /s/ Pamela H. Patsley /s/ Ralph W. Babb, Jr. 66 TEXAS INSTRUMENTS • 2016 FORM 10-K Pursuant to the requirements ofon the behalf Securities of Exchange the Act Registrant of and 1934, in this the Report capacities has indicated been signed on the below 23rd by day the of following February persons 2017. Each person whose signature appearsCynthia below Hoff constitutes Trochu, and or appoints any eachsubstitution of of and them, Richard resubstitution, each K. acting for Templeton, such alone, Kevinwith person his P. the and or March, annual her in and report true his on or andamendments Form her lawful to 10-K name, attorneys-in-fact the of place and Form Texas and agents, 10-K, Instruments stead, withthe and Incorporated in full Securities to for any power and file the and of Exchange the year all Commission, same, ended capacitiesauthority granting with December in to all unto 31, connection do exhibits said 2016, and thereto, attorneys-in-fact to perform and and signto each other agents, any all and documents each and intents every in acting all and act connection alone, purposes and therewith, fulland as thing power with agents, he requisite and or or and their she necessary substitutes might to or or be substitute, could done may do in lawfully in and do person, about or hereby the cause ratifying premises, to and as be confirming fully done all by that virtue said hereof. attorneys-in-fact Date: February 23, 2017 Pursuant to the requirements ofReport Section to 13 be or signed 15(d) on of its the behalf Securities by Exchange the Act undersigned, of 1934, thereunto the duly Registrant authorized. has duly caused this

FORM 10-K s hitn odWhitman Todd Christine /s/ hitn odWhitman Todd Christine s ihr .Templeton K. Richard /s/ ihr .Templeton K. Richard s oetE Sanchez E. Robert /s/ s an .Sanders R. Wayne /s/ oetE Sanchez E. Robert an .Sanders R. Wayne s ei .March P. Kevin /s/ ei .March P. Kevin Signature EA NTUET 06FR 0K67 10-K FORM 2016 • INSTRUMENTS TEXAS eirVc rsdn;PicplFnnilOfficer; Financial Principal President; Vice Senior himno h or;Drco;President; Director; Board; the of Chairman he conigOfficer Accounting Chief he xctv Officer Executive Chief Director Director Director Title

FORM 10-K (This page intentionally left blank.)

TEXAS INSTRUMENTS ac ,2017 6, 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 2017, urge 21, We February on business of close the at record of Stockholders matters: following the upon act and important our consider for on will requirements” auditorium we “Attendance the meeting see at the Please 2017, At time). 20, meeting. (Central April annual a.m. Thursday, the 8:30 on at attending stockholders Texas, about of Dallas, information meeting Boulevard, annual TI 2017 12500 the at attend property to invited cordially are You Stockholder: Dear uhohrmtesa a rprycm eoetemeeting. the for before firm come accounting properly public may registered as independent matters company’s other the such as LLP Young • compensation, & executive Ernst on of votes appointment advisory the future of for ratification frequency annual of • compensation, approval executive advisory company’s the year, of • next approval the advisory for directors of • election the • 07 and 2017, OIEO NULMEIGO STOCKHOLDERS OF MEETING ANNUAL OF NOTICE EA NTUET 07POYSAEET1 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS pi 0 2017 20, April eea Counsel General and Secretary President, Vice Senior Trochu Hoff Cynthia Sincerely,

PROXY STATEMENT .... 44 ..... 51 ...... 33 ...... 50 ...... 49 ...... 38 ...... A-1 ...... 35 ...... 43 ...... 30 ...... 49 ...... 31 ...... 32 ...... 46 ...... 30 ...... 42 ...... 44 ...... 48 ...... 49 ...... 36 ...... 44 ...... 50 ...... 48 ...... 29 ...... 49 ...... 39 hedging of compensation Stock ownership guidelines and policy against Consideration of tax and accounting treatment control participation compliance our Form 10-K Option exercises and stock vested Pension benefits Non-qualified deferred compensation Potential payments upon termination or change in registered public accounting firm Voting securities Security ownership of certain beneficialSecurity owners ownership of directors andRelated management person . transactions . .Compensation committee interlocks and insider 45 Cost of solicitation Stockholder proposals and nominations forBenefit 2018 plan voting . . .Section 16(a) beneficial ownership reporting 48 Telephone and internet voting Stockholders sharing the same address Electronic delivery of proxy materials and copies of Compensation Committee report Summary compensation table Grants of plan-based awards Outstanding equity awards at fiscal year-end Audit Committee report Proposal to ratify appointment of independent Additional information Notice regarding forward-looking statements Directions and other annual meetingAppendix information A (Non-GAAP reconciliations) ...... 19 ...... 22 TABLE OF CONTENTS ...... 18 ...... 7 ...... 18 ...... 17 ...... 6 ...... 6 ...... 28 ...... 9 ...... 11 ...... 27 ...... 6 ...... 29 ...... 10 ...... 14 ...... 5 ...... 13 ...... 28 ...... 11 ...... 21 ...... 9 ...... 10 ...... 18 ...... 19 ...... 17 ...... 27 ...... 14 ...... 7 ...... 5 ...... 11 ...... 28 ...... 3 or change in control executive compensation Compensation philosophy and elements Comparator group Equity dilution Process for equity grants Benefits Compensation following employment termination Analysis of compensation determinations Recoupment policy Most recent stockholder advisory vote on Detailed discussion Executive summary company’s executive compensation votes on executive officer compensation Director candidate recommendations Corporate governance Director nomination process Stockholder nomination of directors Director nominees Board diversity and nominee qualifications Communications with the board Annual meeting attendance Director independence Compensation Discussion and Analysis requirements Nominees for directorship Board and committee meetings Committees of the board Board leadership structure Risk oversight by the board Proposal regarding advisory approval of the Proposal regarding advisory vote on future advisory 2 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Board organization Voting procedures, quorum and attendance Election of directors Director compensation Executive 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. who instructions specific are owner voting without non-votes and beneficial with vote broker a issued broker and and stock when the discretion Abstentions common occur provide its exist. TI non-votes not exercise will of Broker does quorum shares quorum. broker a the a a proxy, of establishing through by majority of stock or a purposes person least for in at present present If as are meeting. counted vote valid to a entitled hold time and to any necessary outstanding at is authorization stockholders shares your of the revoke quorum instructions, can A voting You give directors. not of meeting. your do board the instructions, meeting, but the at voting the proxy by voted internet to your recommended are or come return as shares not telephone and voted the do the sign be before you followed you will If or If proxy person. proxy proxy. that in signed enclosed by vote properly the represented being can a on are you returned found vote proxy meeting, have be and related the you can you and to if which represent statement come only to proxy you voted proxy the This If be the return meeting. 2017. can in and annual 6, shares named sign of March persons you notice about the If the or 2017. authorize in on 20, you mentioned distributed April internet, purposes on the the stockholders on for of or shares meeting telephone your annual by the vote for or proxy proxy, your enclosed requests directors of board TI’s requirements attendance and quorum procedures, Voting 75266-0199 TEXAS DALLAS, 660199, BOX P.O. ADDRESS: 75243 MAILING TEXAS DALLAS, BOULEVARD, TI 12500 OFFICES EXECUTIVE umte ttemeeting. the be at properly submitted may that matter other Any Non-Votes Broker or Abstentions of Impact firm. accounting public registered independent of appointment ratify to Approval Proposal or Election for Vote Required compensation. on executive votes advisory future for annual frequency of approval on vote or Advisory person in present votes of Majority compensation. officer executive named approve to vote Advisory directors. of Election Matter RX TTMN AC ,2017 6, MARCH – STATEMENT PROXY EA NTUET 07POYSAEET3 STATEMENT PROXY 2017 • 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 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 vote without 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

PROXY STATEMENT X Record Holder Beneficial Holder Proof of Ownership Copy of an account statement showing stockLegal ownership proxy on from the bank, record broker date or nomineeNotice regarding availability of proxy materials (noticeCopy and of access voting mailing) instruction form Top half of proxy card X X X X X X 4 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT If you plan to attendyou. as If proxy you for plan a to stockholderrecord attend of (i.e., as record, the proxy you bank, for must broker a presentfrom or street a the other name valid street holder stockholder, legal name of you proxy stockholder record) must from to to present the you. the a stockholder Stockholders street valid of may name legal record appoint stockholder proxy to only that from one the is proxy assignable stockholder holder and of to a attend valid on legal their proxy behalf. Attendance at the meeting isphoto limited ID to and stockholders proof or of theirour ownership legal transfer (see proxy agent, table holders. Computershare. below) Each You as attendeea are of must broker. a the present If beneficial record a you holder date. government-issued are if Youbank a you are or beneficial hold a nominee. holder your record Guest and shares holder tickets wish through iforder are to an you to not vote intermediary, hold facilitate available. your such your their Exceptions shares as shares own may at a through attendance be the bank (for granted meeting, or example, to you due stockholders must to who bring a require a physical legal a disability) companion proxy by from ticket contacting your in Investor broker, Relations. Attendance requirements

PROXY STATEMENT h etn,teprosnmda rxe a oefrasbttt rtenme fdrcoswl erdcdaccordingly. reduced be will directors of number before the serve or to a substitute as unable a Directors serve becomes for to nominee vote qualifications any may If nominee’s proxies each qualifications.” as of nominee named discussion and persons a diversity the For “Board meeting, company. see the the please 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 ROBERT proxy PATSLEY, a H. return PAMELA you KIRK, If TODD RONALD BLINN, HOBBY, TEMPLETON. A. M. K. and MARK JEAN RICHARD elected JR., COX, and are BABB, S. SANDERS successors W. CARRIE R. their RALPH CLARK, WAYNE until nominees: F. SANCHEZ, and as JANET E. 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 68 Age CARP A. DANIEL Committee Audit Member, 2017 since Director 53 Age BLUEDORN M. TODD Committee Audit Member, 2013 since Director 55 Age BLINN A. MARK Committee Audit Chair, 2010 since Director 68 Age JR. BABB, W. RALPH EA NTUET 07POYSAEET5 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS Committee Audit Member, 2015 since Director 62 Age CLARK F. JANET eain Committee Relations Stockholder and Governance Member, 2013 since Director 62 Age KIRK RONALD Committee Audit Member, 2016 since Director 56 Age HOBBY M. JEAN Committee Relations Stockholder and Governance Member, 2004 since Director 59 Age COX S. CARRIE Committee Compensation Member, 2004 since Director 60 Age PATSLEY H. PAMELA n ietrsne2003 since director and 2008 since Chairman 58 Age TEMPLETON K. RICHARD Committee Relations Stockholder and Governance Chair, 1997 since Director 69 Age SANDERS R. WAYNE Committee Compensation Chair, Director; Lead 2011 since Director 51 Age SANCHEZ E. ROBERT

PROXY STATEMENT rnance guidelines. Our board of directors has adopted a written ctors. To assist in this task, the board has designated a standing CHRISTINE TODD WHITMAN Age 70 Member, Compensation Committee Committee will consider the numberboard’s of policy other that boards directors on should which not the serve individual on serves the as boards arepresent of director, the more and interests than in of three particular any other the particular public group). companies). • Outstanding achievement• in the individual’s Breadth personal of career. • experience. Soundness of• judgment. Ability to• make independent, analytical Ability inquiries. to• contribute to a Willingness diversity and of ability viewpoints to among devote board the members. time required to perform board activities• adequately (in this Ability regard, to the represent G&SR the total corporate interests of TI (a director will not be selected to, nor will he or she be expected to, 6 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT The company’s by-laws also allownominee stockholders in to the nominate company’s directors proxy withoutwhich materials. involving can To the be do G&SR found so, Committee on stockholders or our must including comply website the with at the www.ti.com/corporategovernance. requirements set forth in the by-laws, Under the company’s by-laws, aoutstanding stockholder, common or stock a continuously group for ofdirector at up nominees least to constituting three 20 up years, stockholders, to may owningstockholder(s) the nominate at and greater and least the of include 3 nominee(s) two in percent satisfy individuals the of the or company’s the requirements 20 proxy company’s specified percent materials in of the the by-laws. board of directors, provided that the Stockholder nomination of directors In evaluating prospective nominees, the G&SR Committee looks for the following minimum qualifications, qualities and skills: Director candidate recommendations It is a long-standing policywho of wishes the to board recommend to a considerG&SR prospective prospective Committee, board board Texas nominee nominees Instruments for recommended Incorporated, the byevaluate P.O. G&SR 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 G&SR manner the Committee as will it evaluates other nominees. The board is responsible for approving nominees for election as dire Director nomination process committee, the Governance and Stockholder Relationsrecommending Committee nominees (the to G&SR the Committee), board. which Thethe is G&SR NASDAQ responsible Committee Stock for is Market reviewing comprised (NASDAQ) and solely and of the independent board’s directors corporate as gove defined by the rules of Ms. Whitman, a highly valuedby-laws director to since stand 2003, for has re-election attained at the the age 2017 of annual 70 meeting. and is therefore ineligible under the company’s Director not standing for re-election charter for the G&SR Committee. It can be found on our website at www.ti.com/corporategovernance.

PROXY STATEMENT r Blinn Mr. challenging ask to willingness a previous as Babb of well Mr. born as 2017), deliberations 1, board March to below effective insight listed board brings attributes the nominees and joined the experiences who of specific Bluedorn each questions. the Mr. that on to board, relied as the board (except on the knowledge service director, personal a direct as the serve on should and each nominee which each on that experience concluding other relevant In one additional least provides at which of of directors all of office, judge board political to the high draw. ability on in can the serving served nominee in developed has has experience one and and have and personnel leaders nominees corporation, performance, effective director major financial to the the exposure of managing at had Eleven 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 2017 to the relate for typically nominees and director board considered at it occurs As that 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 qualifications board’s the nominee in and stated diversity as range Board desired the within is size current interest. its most believes conducted the board then had The potential It Committee possess. of G&SR number should the a candidates whom identify that in to determined candidates research Committee the identified conducted G&SR on search initially firm the research A nominees search skills further time. potential The and first evaluating candidates. qualifications the and director on for director identifying potential based stockholders only in as candidates, the the Committee Bluedorn by are G&SR Mr. They election the and 2017. for assist Hobby 1, standing to Ms. the March are company to effective who the elected board stockholders by was the of retained Hobby to meeting firm Ms. elected annual directors. was 2017 new Bluedorn the two Mr. at including and nominees company, 2016, the 20, of July directors effective currently board are directorship for nominees All nominees Director sCOadadrco fFosreCroain(09Mrh3,21) a andfrthn xeinei aaiga managing in experience first-hand gained has 2017), 31, (2009-March Corporation Flowserve of director a and CEO As • and Incorporated Comerica of officer financial chief 2013-present), 19, banking, (April in company career the long at a chair through Committee and Audit (2002-present) As Bank Comerica and • Incorporated Comerica of CEO and chairman As • ag,mliainlcroainoeaigi lblidsra akt,wt liaemngmn epniiiyfrthe investments. for R&D responsibility and management capital ultimate significant with and markets, performance industrial financial global organization’s in operating corporation multinational large, extensive gained has (1971-1978), matters. Co. & control-related Mitchell financial Marwick and Peat audit- of in and firm experience (1978-1995), accounting and Bancorporation the knowledge Mercantile at audit of manager officer audit financial later chief and markets. later auditor financial and into controller insight (1995-2002), as Bank well Comerica as institutions, complex large, managing in experience first-hand gained has EA NTUET 07POYSAEET7 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT operates on an international scalepolicies and and developed strategies insight and into the issues workings bearing of on foreign global governments. economic activity,2009), international has trade gained first-hand experience as an advisor to numerousCorporation multinational (2016-present), companies. has helped oversee the strategy and operations of other large corporations. (2005-2008) at PricewaterhouseCoopers LLP, hascontrol-related gained matters extensive and audit technology. knowledge and experience in audit- and financial oversee the strategy and operations of another multinational corporation. 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 Services Inc. (2003-2004) and viceappreciation president and for audit- controller and of Centex financial Corporation control-related (2000-2002), matters. has developed a keen • As U.S. Trade Representative (2009-2013), has gained first-hand experience in managing a• complex organization that As Senior Of Counsel of Gibson, Dunn• & Crutcher LLP As (2013-present), a and director as of a Brinker partner International, of Inc. Vinson (1997-2009), & Dean Elkins, Foods LLP Company (2005- (1997-2009), and Macquarie Infrastructure • As global strategy officer (2013-2015), technology, media and telecom sector leader (2008-2013)• and chief financial As officer a director of Integer Holdings Corporation (and its predecessor company, Greatbatch, Inc.) (2015-present), has helped • 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 chief financial officer of Flowserve Corporation (2004-2009), chief financial officer of FedEx Kinko’s Office and Print 8 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Mr. Kirk Ms. Hobby Ms. Cox Ms. Clark Mr. Carp Mr. Bluedorn

PROXY STATEMENT ea ntuet noprtd ..Bx609,M 67 als X72609,At:Ivso Relations. our Investor on Attn: to available 75266-0199, writing are TX by by-laws Dallas, charge our 8657, of and MS free officers 660199, documents financial Box these senior P.O. of and Incorporated, copies CEO Instruments board’s request our Texas the may for of Stockholders ethics each of www.ti.com/corporategovernance. of code at charters board’s our website the The conduct, matters. standards), of compensation independence code executive director TI’s extensive and the committees, conduct governance include annually to (which We specific guidelines governance. outreach governance corporate investor corporate effective in and engage responsible and to reviews commitment governance long-standing a has board The the with shared be governance will Corporate address to this write to may sent director, applicable. communications individual as All an director 75265-5936. or individual TX committee or Dallas, board committee 8658, a MS board, board, 655936, the Box with P.O. communicate at: to them wish who others and Stockholders board the with Communications Templeton Mr. Sanders Mr. Sanchez Mr. Patsley Ms. sa3-ervtrno h eiodco nuty evn h at2 er tasno ee ttecmay including company, the at level senior a at years 21 last the serving industry, semiconductor the of veteran 36-year a As • helped has (2003-2013), Corporation Belo of director a and (2008-present) Inc. Group, Snapple Pepper Dr of chairman As in experience • first-hand gained has Corporation, Kimberly-Clark of (1991-2002) CEO and (1992-2003) chairman 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 Snapple Dr Pepper of Dr director at a committee As audit the of • member a 2013), 18, (2006-April company the at chair committee audit As • senior Inc., International, MoneyGram of (2009-2015) CEO and chairman and (2016-present) chairman executive 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 corporations. large other of operations and strategy the oversee financial its investments. for R&D responsibility and management capital ultimate significant with its corporation, and goods performance consumer multinational large, a managing 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. years Company multinational matters. six Brewing control-related almost Coors financial for Molson and Marwick of audit- Peat director for KPMG at appreciation auditor keen a an and developed (1987-1994) has Inc. USA, USA, First First joining of before officer financial chief Inc., Group, significant and performance financial for technology responsibility of management application ultimate investments. the (1991-2000), with capital including Inc. sector, organizations, Paymentech, services of multinational financial CEO large, the and managing in president in and experience (2000-2007) first-hand Corporation gained Data has First of president vice executive EA NTUET 07POYSAEET9 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT 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 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 the company (excluding compensation as a non-executive officer employee ofcompany’s the audit company); within that time; and worked on the company’s audit within that time; during the past three years served on that entity’s compensationexecutive committee; officers or at any time during the past three years served on that entity’s compensation committee. 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 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 4. A family member of the A director family was member employed of as the an5. director executive received officer more by than the $120,000 company; He during or any she twelve-month was period (but in6. is compensation no from longer) a partner A or family employee member of of the the company’s7. director independent was auditors (but and is worked no on He longer) the or a she partner was or an employee8. executive of officer the of company’s another independent entity auditors A at family which member any of of the the director company’s was current an executive executive officers officer at of any another time entity atthe which company, any other of than the in company’sinclude his current the or receipt her of capacity fixed asservice amounts a with of member the of compensation company the under (provided board ano that or retirement member such any plan of compensation board (including the is committee. deferred Audit not Compensatory compensation) Committee contingent fees for may in do prior be any not an way affiliated on person continued of service). the In company addition, except in his or her capacity as a director. 10 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT A. In no event will a director be considered independent if: B. In no event will a director be considered independent if, within the preceding three years: C. No member of the Audit Committee may accept directly or indirectly any consulting, advisory or other compensatory fee from The board has determined thatdetermination, each information of was our reviewed directors regarding ismembers independent directors’ and business except their and for employers, charitable Mr. and affiliations, Templeton.board any In directors’ has transactions immediate connection adopted or family with the arrangements this following between standards the 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 2016, 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

PROXY STATEMENT s lr.SneJl 0 06 h omte ebr aebe r ab(hi) r ln,M.CakadM.Hbywith Hobby for: Ms. responsible and generally Clark is Ms. Committee and Blinn, Audit Blinn Mr. to The Mr. (chair), ineligible 2017. (chair), Babb therefore 1, Babb Mr. was March Mr. been and committee were have meeting members the members annual committee committee joining 2016 the the Bluedorn the 2016, 2016, Mr. by 19, 20, (chair), 70 July July Babb of to Since Mr. age 2016, Clark. were the 22, Ms. the members reached April and committee (who From rules the Simmons re-election). NASDAQ 2016, J. for under 21, Ruth stand independent April and are to Clark Committee 2015, Ms. the 14, 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 97 the approximately Committees of was the percent meetings of 75 committee committees least and The at board below. attended at described director attendance committees Each Overall standing 2016. combined. three in meetings has meetings board 29 The held meetings. collectively ten board held board the 2016, 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. eiwn h opn’ oiyrgrigivsmnsadfnnildrvtv products. derivative financial company. and the investments to regarding relevant policy are company’s that the company. changes Reviewing the policy of accounting policies in • accounting trends major Reviewing in any, conflict if TI’s • changes, including Reviewing conduct, programs. of insurance code non-employee-related • TI’s TI’s with Reviewing personnel operating and • management of compliance of report a program. Reviewing ethics and policies. compliance • management TI’s risk Reviewing and assessment TI’s risk of • policy. TI’s integrity whistleblower Reviewing the TI’s affecting reviewing factors periodically • other and and Creating controls accounting internal • TI’s TI. of and adequacy firm the accounting discussing public and registered Reviewing independent the between • relationships Reviewing firm, accounting public • registered independent the and management with with statements discussing financial and audited results TI’s financial Discussing 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 the by or of made 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 to in relationship management a from has director a whether determining fitrs policy. interest of firm. accounting public registered independent the with and management with reports financial regulatory or legal applicable under reviewed be to required matters the regarding firm requirements. the agencies. with rating discussion and a analysts including 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 EA NTUET 07POYSAEET11 STATEMENT PROXY 2017 • 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) the board must approve. O plans that are not required to be approved by theother board. advisor. O • 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: 12 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT The CEO and the seniorattend vice meetings president of responsible the for committee. Humanexecutive The Resources, officer CEO who determines is is his excused an or from executiveboard, her the officer, the own meeting are members compensation during regularly of or any invited the the deliberations to with committee compensation or our receive of vote management. information any on The concerning other his CEO the executive compensation.ended. gives performance officer. No He the of As also committee the members reviews and company of the the during the their performance board the compensation. of an year The the assessment and senior other of interact vice executive hiscompensation president officers own recommendations responsible with performance made for the during to Human committee the the Resources and year committee assists makes just other in recommendations than the regarding for preparation her of compensation. and reviews the The Compensation Committee considers executiveinformation, compensation performance in data a and multistep possible processJanuary. compensation that Before levels involves setting over the executive several review compensation, meetings ofofficers the leading market and committee to considers reviews the the the annual impact total determinationscompensation that compensation in and their and benefits. retirement, benefits or of termination the under executive various other scenarios, would have on their The Compensation Committee considers itother important engagements that with its the compensation company consultant’sconsultants, or objectivity a its not copy management. be of In compromised which support by its may of compensation be this consultant found belief, was on the independent www.ti.com/corporategovernance. committee of During has the 2016, a company the policy and committee on had determined compensation no that conflict of interest. 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 2016 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 2016. the The board, Compensationreport and Committee of consults holds the with regularly committee. the scheduled board meetings, before reports setting annual executive compensation. Please see page 30 for a All members of the CompensationMr. Committee Sanchez are (chair), independent. Mr. Since Carp, April Ms. 17, Patsley 2015, and the Ms. committee Whitman. members The have committee been is responsible for: Compensation Committee The Audit Committee met sixthe times board. in The 2016. committee The also Auditaudit continued Committee plan its holds and long-standing regularly to scheduled practice allow of meetingsfor for meeting and a direct directly reports report interaction with its of between activities our the Audit to internal committee. Committee audit members staff and to our discuss internal the auditors. Please see pages 42-43 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, Babb has as interpreted as amended. the such audit committee financial expert as

PROXY STATEMENT h eddrco seetdb h needn ietr nuly h needn ietr aeeetdM.Snhzt ev as serve to Sanchez Mr. elected to: have are directors director independent lead The the annually. of directors duties independent The the director. management. by lead of elected board oversight is each appropriate director at and lead directors directors The the independent independent influence the of and of engagement on session active comment executive the to an maintain directors practices holding to other independent (b) it its the and allows with for meetings meeting), at combined opportunity future presides structure, an for who this agenda agenda director that board strategic lead believes each proposed a board on includes The including and below. (a) CEO, listed as and duties (such chairman the of performs positions and the sessions combines executive structure leadership current board’s The board. the contact to structure how leadership on of discussion details Board a for for board” activities directors” its the of reports with and nomination “Communications meetings “Stockholder and scheduled and recommendations recommendations” regularly and holds candidate nominations Committee “Director stockholder G&SR see Please The 2016. board. in the times to seven met Committee G&SR The Sanders Mr. for: been responsible have generally members is committee Committee the G&SR 2015, The 17, Kirk. April Mr. Since and independent. Cox are Ms. Committee (chair), G&SR the of members All Committee Relations the Stockholder of and or activity Governance amend grant grant, the to reviews authority Committee no Compensation has The incentive committee officers. long-term special executive company’s The TI’s committee. the Templeton. for special under Mr. compensation (RSUs) is of the units committee form board stock special any the restricted the terminate by and of established options member committee stock sole special of The a number plans. to limited delegated a has grant 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 Committee’s Compensation The frqetdb ao hrhles nueta eo h saalbefrcnutto n ietcommunication. direct and consultation for and available items; is agenda she all or of he discussion that for ensure time shareholders, sufficient major is by there requested that If assure to schedules • meeting board; Approve the for agendas • meeting board; Approve independent directors; the the independent to of the sent • sessions and information executive chairman Approve including the present, between not liaison • is as chairman Serve the which at • board the of meetings all at Preside • committee. 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 • directors; 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 07POYSAEET13 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT Compensation Committee; and $15,000 for service as chair of the G&SR Committee. • Annual retainer• of $85,000 for Additional board annual and• retainer committee of service. $25,000 Additional for annual service retainer as the of $30,000 lead for director. service as chair of the Audit Committee; $20,000 for service as chair of the 14 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT The compensation arrangements in 2016 for the non-employee directors were: Director compensation The G&SR Committee has responsibilitynon-employee for directors, reviewing with and the making board recommendationsresponsibility making to regarding the the director final board compensation. determination. on In The compensationorganization. carrying committee for The out has CEO, this no the responsibility, authority senior it tomade vice is delegate to president supported its the responsible by committee. for TI’s The Human Human CEO Resources Resources also and votes, the as Secretary a review member the of recommendations the board, on the compensation of non-employee directors. The board’s leadership structure isboard consistent has with found the that board its andaspects current committees’ of structure roles risk and in oversight practices risk among are oversight.and the effective As operational committees in discussed provides risks fully above, with for engaging the similar the theoperates engagement. board independent and Having ensures directors. the that the Allocating competition chairman the various and and directorefficient other most CEO process. challenges knowledgeable review it strategic about faces the shares company, those the insights industry with in the which board, it providing for a thorough and 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 G&SR 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 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 Risk oversight by the board 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 G&SR questions: Committee, would regularly stockholders reviews the beviews better board’s are leadership served informed and structure. by would The a the board’sgathered review consideration board 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 In addition, the lead director has authority to call meetings of the independent directors.

PROXY STATEMENT o-mlyedrcosaenteiil opriiaei n Isosrdpninplan. pension TI-sponsored any in participate employees. to to eligible available not In conditions are program. and directors gift terms Non-employee matching same cultural the and on educational participate an to has TI entitled Foundation containing are TI products directors the consumer cases, addition, purchase both may In employees pricing. our discounted whereby at customers components units certain stock with restricted arrangements the the have after of We issued settlement be defer will also which may stock, was Directors common rate units. TI that stock of 2016, these shares For on receive. Bonds. underlying paid they Cash the Corporate are account. Aaa with equivalents unit Seasoned value Dividend board stock Moody’s in period. the or on fluctuate deferral leave account based accounts they cash currently unit until a rate Stock either compensation a percent. cash to at 4.00 their credited TI of were from part amounts interest or deferred earn all These accounts defer times). to specified chosen other have certain directors (or some Plan, at Director attendance the with Under connection in On incurred events. expenses designated spouses’ other the reimbursed. and events; also meetings board are In these attend events events. from to those TI related and invited designated and to are other lodging aircraft spouses and travel, company directors’ meetings their on occasion, 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 a the paid regarding not discussion are a Directors for grants” equity equity such for Accordingly, “Process process. see grants. when review Please compensation occur compensation January. equity to annual in of timed the made timing 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 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 common TI purchase to option 10-year a of grant 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 may death, 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 Compensation Director EA NTUET 07POYSAEET15 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT 8,010 3,889 2,000 8,010 9,058 24,535 25,035 18,658 17,035 33,699 27,035 11,058 Restricted (in Shares) Stock Units ($) (6) Total ($) All Other Compensation Pension Deferred Value and Change in Earnings (5) Nonqualified Compensation ($) Non-Equity Incentive Plan Compensation ($) (4) Option Awards Stock ($) (3) Awards 85,00085,000 $ 99,98585.000 $ 99,98585,000 $ $ 99,991 99,98538,159 $ $ 99,991 99,98585,000 $ $ 99,991 130,90085,000 — $ $ 99,991 99,985 — $ 99,985 — $ 99,991 — — $ 99,991 — — — — — $ 7,324 — $ 6,540 $ $ $ 818 20,040 5,040 $ 291,516 — — — $ $ $ 285,794 305,016 297,340 $ $ $ 40 40 40 $ 285,016 $ 169,099 $ 285,016 28,33585,000 $ 99,985 $ 99,985 $ 99,991 $ 99,991 — — $ 831 — $ 10,040 $ $ 239,182 1,040 $ 286,016 123,333 $ 99,985 $ 99,991 —121,667100,000 $ 99,985 $ 99,985 — $ 99,991 $ 99,991 $ — — 40 $ 323,349 — — $ 10,040 $ $ 331,683 818 $ 300,794 or Paid in Cash ($) (2) Fees Earned ...... $ ...... $ $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ $ C. T. Whitman R. J. Simmons M. A. Blinn D. A. Carp J. F. Clark C.S.Cox...... J. M. Hobby R. Kirk P. H. Patsley R. E. Sanchez W. R. Sanders Name R. W. Babb, Jr...... $ the date of the 2016meeting. annual Mr. meeting Bluedorn and was therefore elected wasservices to ineligible as the under a board the TI effective company’s director March by-laws in 1, to 2016. 2017, stand and for accordingly re-election received at no the compensation for 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 2016. 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 please death or December shares see or upon 31, underlying the disability. the 2016. outstanding discussion For The on restricted information her value page stock initial shown 15. units election for The held to Ms. table by Hobby the the represents board. named the individuals one-time as restricted stock unit grant she received upon 16 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Name (1) R. W. Babb, Jr. M. A. Blinn D. A. Carp J. F. Clark ...... C.S.Cox $ J. M. Hobby R. Kirk P. H. Patsley R. E. Sanchez W. R. Sanders R. J. Simmons The following table shows theservices compensation in of all all capacities persons to who TI were in non-employee 2016. members of the board during 2016 for 2016 director compensation C. T. Whitman (1) Ms. Hobby was elected to the board effective July 20, 2016. Ms. Simmons, an independent director, reached the(2) age of 70 by Includes amounts deferred at(3) the director’s election. Shown is the aggregate grant date fair value of restricted stock units granted in 2016 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 scommens is officers executive progr named and the policies by the received that compensation believe We 2016. for program officers and executive policies compensation executive our Discu discusses Compensation It the review to shareholders encourage We resolution: following the compensated approve highly to most shareholders other 31-42. ask three pages We the on and tables officer compensation financial the chief in officer, named executive as chief officers, the executive 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 2016 in granted options of value fair date grant aggregate the is Shown (4) ne h rga nAlOhrCmesto ftedrcoswopriiae h otatiual oec fMsr.Carp Messrs. of each to attributable $778. cost was costs The program annual participate. this company’s who in the directors participation included the their all have of for and we Compensation Sanders program, rules, Other and the SEC All us. from with in by benefit accordance program approved financial In the and no company. under of director receive the total the Directors to a by death. belong contribute recommended director’s deductions will institutions the charitable we educational following which made three under is as are program 2002, many contributions donation 20, as The June charitable to a to third-party director Program, prior Sanders, eligible Award commenced and per $10,000 service Director Carp $500,000 Cox, whose the Messrs. Ms. director in for for (c) Each participate $5,000 Program. and to Clark, Award Whitman eligible Ms. Director Ms. for for the $20,000 $1,000 for Blinn, fees and Mr. Simmons, administration for Ms. $6,500 and of Sanchez program Mr. gift for matching Foundation interest Rate. TI of Federal the amount the under the of is excess Shown in Corporate points. was Aaa percentage that Seasoned 1.74 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 2016, 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, fT.Tetbeblwsosteageaenme fsae neligottnigsokotoshl ytenamed the control by in held change options a stock upon outstanding as exercisable underlying are fully shares 2016. options becomes of 31, these grant number December of the aggregate of terms 2010, the as financial The before shows individuals the 2016. granted below to 31, options table 4 December for The Note ended that TI. in year except of appears the 15 value for page fair 10-K on date Form forth grant on set the report calculating annual of TI’s purposes in for statements used assumptions the of discussion .T Whitman T. C. .J Simmons J. R. Sanders R. W. Sanchez E. R. Patsley H. P. .Kirk R. Hobby M. J. C.S.Cox ...... Clark F. J. .A Carp A. D. .A Blinn A. M. .W ab Jr. Babb, W. R. Name ...... — ...... EA NTUET 07POYSAEET17 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS n xlistecmesto eiin eaigt h named the to relating decisions compensation the explains and s so n nlssscino h rx ttmn,wihfollows. which statement, proxy the of section Analysis and ssion m ev h neet forsaeodr n htthe that and shareholders our of interests the serve ams rt ihtepromneadsrtgcpsto ftecompany. the of position strategic and performance the with urate i Shares) (in 90,735 40,168 69,735 59,733 90,735 32,828 90,735 90,735 32,828 69,735 Options 9,990

PROXY STATEMENT think and act in both theour short- executives and each long-term year interests comesshort-term of in performance our the shareholders. of form the The of company, majority variablecompany. and of cash We the total and believe compensation value equity our of for compensation. compensation equity Variablecompetitive program is cash performance holds tied is of our to tied TI. the executive to long-term officers the performance accountable of for the the financial and • TI’s compensation program is structured to pay for performance and deliver rewards that encourage executives to • The elements• of the 2016 How compensation we program, determined why the we amount selected of them compensation and for how 2016. they relate to one another; and 18 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Executive summary The executive officers of TIaccountable have for the the broadest company’s job performance responsibilitiesCFO and and and for policy-making the maintaining authority three a in other culture theofficers”) highest of company. can paid strong We be individuals ethics. hold found who Details them in were of the executive compensation tables officers for following in our the 2016 CEO, Compensation (collectively Committee called report. the “named executive Compensation Discussion and Analysis This section describes TI’s compensation program for executive officers. It will provide insight into the following: The board of directors recommendscompany’s a executive vote officers. of EVERY YEAR for future advisory votes on the compensation of the Although the outcome of theof vote future is advisory not votes. binding on the company, the board will consider the outcome when setting the frequency The board requests that shareholdersour vote shareholders in to favor provide of us futureconsistent with advisory with their votes our direct to policy and be of timely heldmatters seeking input annually. and input on An our from, our annual executive and compensation advisory compensation engaging philosophy, vote philosophy, in policies will policies discussions and allow and with, practices practices. our and shareholders is on corporate governance The board asks shareholders tobe cast held an every advisory year, vote every on two whether years future or advisory every votes three on years. executive officer compensation should Proposal regarding advisory votecompensation on future advisory votes on executive officer The board of directors recommendscompensation a for vote 2016, FOR as the disclosed annual in resolution this approving proxy the statement. named executive officer 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

PROXY STATEMENT em adtiemonthly twice Paid elements performance-based the to compensation total weight to order in income median of market source below Terms stable Pay 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 u xctv opnainpormi eindt norg xctv fiest usesrtge htsrethe serve that strategies pursue to officers executive encourage to designed is program compensation executive Our • CEO: the for decisions compensation 2016 • O O O O O a on built is It executives. our by includes: risk-taking excessive and O promote governance to corporate not sound and of shareholders, foundation and company the of interests of projections and estimates Includes group.” “Comparator under outlined as competitors semiconductor to Relative * O O O oa hrhle eun(S)3.%Aoemedian Above median Below 36.7% 2.8% (TSR) Return Shareholder Total o % a as Operations from Profit TI Total Growth: Revenue h ou eiinwsbsdpiaiyo h olwn efrac eut n2016: in results 2015. performance from following unchanged the was on 2016 primarily in based awarded was compensation decision equity bonus of The value fair 2015. over date percent grant 2 The by increased was salary Base 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 company. to not the subject do terminated of are We been control awards has in compensation double- grantee change equity with the a and compensation if after Bonus equity only time grant grants limited We of a options. vesting within reload the involuntarily grant accelerate not which terms, do We change-in-control or options. trigger amounts stock bonus repriced increases, never salary have guaranteed We not are compensation. and equity contracts of employment awards have not do officers Executive would rate growth TI’s that entirely estimate rate.) is we growth rate companies, median growth competitor the TI’s from above whereas excluded or acquisitions, that were at of note acquisitions be effect to of the important effect is includes the (It companies If performance. competitor organic. 2016 TI’s of of of rate Assessment assessment growth – Committee’s median Bonus Compensation the – the determinations of compensation details of for “Analysis performance” See results. financial competitors’ certain ecie below described 21 ou oprdwt 2015) with compared bonus (2016 Bonus CEO in Change Year-on-Year EA NTUET 07POYSAEET19 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS eeu PO)3.%Aoemedian Above 35.9% (PFO%) Revenue f 06Aslt efrac 06Rltv Performance Relative 2016 Performance Absolute 2016 %change 0% *

PROXY STATEMENT ) as compared with competitors and on 1 profit sharing between 10% and 24%, andmaximum 1% profit of sharing base is salary 20% for of each base percentage salary. point of Margin above 24%. The • Below 10% company-level annual operating profit as• a percentage of At revenue 10% (“Margin”):• Margin: no profit sharing At = Margin 2% above of 10%: base profit salary sharing increases by 0.5% of base salary for each percentage point of Margin level of equity compensation awarded to executives in similar positions within the Comparator Group. awards at fiscal year-end 2016.”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 to long-term reflectThe shareholder our committee near- value. aims 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 As in recent years, the formula for 2016 was: In 2016, TI delivered Marginprofit of sharing 35.9%. of As 20.0% a of result, base all salary. eligible employees, including executive officers, received can share in it Profit sharing is paid in addition to any performance bonus awardedFor for the the last year. 12 years,was the set formula by has the been TI based board. on The company-level committee’s annual practice operating has profit been margin. not The to formula adjust amounts earned under the formula. relevant time period, as determinedto by the dividends Performance paid summary and table the under change “Analysis in of the compensation company’s determinations share – price Bonus.” during the period. See notes 20 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 1 Total shareholder return refers to the percentage change in the value of a shareholder’s investment in a company over the Strategy We grant a combination of nonqualified stock options and restricted stock units, generally targeted at the median Purpose Alignment with shareholders; long-term focus; retention, particularly with respect to restrictedTerms stock units The terms and conditions of stock options and restricted stock units are summarized under “Outstanding equity Long-term compensation, awarded in equity Stock Options and Restricted Stock Units Terms Determined by the committee and paid in a single payment after the performance year Performance Bonus Purpose To motivate executives and reward them according to the company’s relative and absolute performance and the Strategy Determined primarily on the basis of one-year and three-year company performance on certain measures Purpose Broad-basedStrategy program designed to emphasize that each employee contributes to the company’s profitability and Pay according to a formula that focuses employees on a company goal, and at a level thatTerms will affect behavior. Payable in a single cash payment shortly after the end of the performance year Profit Sharing

PROXY STATEMENT nfnnilcmaaiiyt opn erc,icuigmre aiaiaint eeu ais prtn agnadfe cash free and margin operating ratios, revenue based to including screened capitalization complexity, were market and Group including margin. size Comparator metrics, flow similar the company of to to and industries additions comparability size incorporate Potential financial similar to processes. on of broadened manufacturing competitors be sophisticated direct should use few group that been with peer companies either market that the had and determined company, companies revenue committee the certain industry, The as activity, of appropriate. complexity reorganization terms longer and in no divestiture Group were merger, Comparator or recent the eliminated with of that review noted regular its and please conducted capitalization 2015, committee July the in 2016, Group statement. July Comparator proxy In in the 2016 made setting company’s it in the decisions committee of compensation the 19-20 equity by pages and considered on salary factors group” base the “Comparator the of see for discussion 2015 a July For in 2016. Group January Comparator the set committee The 2016. for decisions compensation the for used Group Comparator the is TI’s. below to table comparable the compensation in in executive Shown comparable of positions forms executive use in have (4) (3) engage and activities, (2) TI U.S.-based, technology of are information those (1) or to companies electronics complexity Group other Comparator or the business Historically, semiconductor Group. the Comparator the sets committee The similar Group”). in “Comparator executives (the to its companies paid by of compensation provided group about information peer compensation organization uses a total Benefits committee at weight and the positions to pay, Compensation order of TI’s in level and median market consultant equity market the compensation and below estimate bonuses salary To salary, targets elements. the committee performance-based setting The to when officers. compensation executive of the level of market compensation the considers Committee Compensation The group Comparator eoe nJl 2016 July in Removed * Co. Electric Emerson * Corporation EMC * Inc. eBay Corporation Sciences Computer Corporation Broadcom Inc. Materials, Applied Inc. Devices, Analog EA NTUET 07POYSAEET21 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS eo oprto * Corporation Xerox Corporation Digital Western Ltd. Connectivity TE * Technology Seagate Incorporated QUALCOMM Inc. Solutions, Motorola Corporation Intel

PROXY STATEMENT 23.1 13.9 22.3 ($ Billion) * Market Cap Change from 2015 Annual Rate 57.948.939.3 173.4 153.3 88.5 35.3 72.5 30.1 107.1 29.0 97.0 23.6 96.6 18.0 56.8 14.5 36.7 14.3 19.8 13.2 70.9 14.5 56.8 12.210.8 24.5 34.4 13.1 73.5 Revenue ($ Billion) * 668,000825,000690,000618,000 2.9% 3.1% 3.0% 3.0% 1,166,000 2.0% 2016 Annual Rate ...... 5.4...... 8.1 ...... 5.8 ...... 9.1 ...... 3.4 ...... $ ...... $ ...... $ ...... $ ...... $ ...... 2017, as reported by Thomson Reuters. Technologies Limited was renamed Broadcom Limited and was added to the list. 22 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT K. P. March Officer R. K. Templeton Base salary The committee set the 2016 rate of base salary for the named executive officers as follows: Total compensation Before finalizing the compensation ofinformation the included executive total officers, cash the compensation committeecompensation, (salary, reviewed the profit all impact sharing elements that and of proposed projected compensation.summary compensation bonus), The of would the benefits have grant that on date the other fairsee executives compensation value how would elements of various receive such equity compensation under as elements various pension,opportunity relate termination and of to scenarios. a the one The executives. another review In and enableduse assessing what the a the impact committee formula information, its to to the decisions allocate committee wouldwas compensation did have consistent among not on with the target the the various a total objectives elements. specific earnings was of Instead, level appropriate. the it of program. used total Based its compensation on judgment or this in review, assessing the whether committee the determined total that the level of compensation B. T. Crutcher K. J. Ritchie S. A. Anderson Company Intel Corporation With the advice of itsto compensation add consultant, eight. the The committee resulting decidedreconstituted, Comparator to the Group remove Comparator was four Group used companies companies for frominformation (1) the the technology are bonus Comparator activities U.S.-based, decisions Group or (2) in and use engage Januarycomplexity sophisticated in 2017 to manufacturing the relating those semiconductor processes, to of (3) business, 2016 TI have other performance.Comparator and executive electronics As Group (4) positions or to use comparable TI forms in in of terms executive of compensation revenue comparable and to market TI’s. capitalization. The table below compares the current Cisco Systems, Inc. ** Honeywell International Inc. ** Accenture PLC ** 3M Company ** Medtronic Public Limited Company ** QUALCOMM Corporation Thermo Fisher Scientific Inc. ** Emerson Electric Co. Western Digital Corporation Broadcom Limited ** TE Connectivity Ltd. Motorola Solutions, Inc. Computer Sciences Corporation Median Texas Instruments Incorporated Analog Devices, Inc. Applied Materials, Inc. Corning Incorporated ** * Trailing four-quarter revenue is as reported by Thomson Reuters on** January Added 4, in 2017. July Market 2016. capitalization Broadcom is Corporation as was of removed January after 4, being acquired by Avago TechnologiesAnalysis Limited; of however, compensation Avago determinations

PROXY STATEMENT t eeto au.I aigti seset h omte sdisjdmn n i o pl n oml,trsodor threshold awards. formula, the any of apply decrease 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 award officer, The each Group. accounting. For Comparator financial be the for to within used expected companies methodology awards of same the tenure) the of and using value scope estimated estimated job was organization the (considering value Benefits on executives and consultant) situated Compensation compensation similarly TI’s committee’s to by the granted presented by information provided considered data committee using the (prepared level, market the assessing market In median the approximately at value Group. fair Comparator date the general grant by committee’s a granted The had 40 2016) officers. that the executive compensation case named equity this the officers in of those level, each to to award compensation to equity was awarded objective calculated. committee was the value responsibilities. 2016, fair new January date assumed In grant Anderson Mr. how on when 2014, information June for in table made compensation grant summary the Retention to ** 2 and 1 notes See * Anderson A. S. Ritchie J. K. Crutcher T. B. March P. K. Templeton K. R. table. compensation summary the in shown years Officer reader the “Stock the of the assist each in to for and provided shares table is of that below number in table and reflected values The table is fair table. the awards date compensation in the summary grant shown of 2016 the are value the comparing grants fair of in The date columns officers. grant Awards” executive The “Option named 2016.” and the in Awards” of awards each plan-based to of compensation “Grants equity under awarded committee the 2016, and In officer officers. each the for between pay compensation of differential Equity rate a market maintain the to by designed primarily formula driven a were of officers application to 2016. executive the paid January named not be in the to Group between expected Comparator differences salaries the salary its of within The with level companies median keeping of In estimated tenure) 2016. the and January below scope in be job officers to (considering executive rates executives named base-salary situated the annual similarly of the each set for committee rate the base-salary strategy, 2016 the set committee The ...... th o60 to th ecnieo h he-eraeaeo qiycmesto icuiga siaeo mut for amounts of estimate an (including compensation equity of average three-year the of percentile EA NTUET 07POYSAEET23 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS 04$27009160830,620 35,225 35,897 166,048 200,252 189,828 2,700,039 $ 3,800,037 $ 2014 3,800,028 $ 2015 2016 04$40005259745,362 37,079 37,786 245,997 210,792 51,032 199,819 4,000,015 $ 50,983 4,000,045 $ 51,956 2014 276,747 4,000,014 $ 2015 289,839 30,620 2016 274,751 4,500,008 $ 25,028 5,500,029 $ 25,506 2014 166,048 5,500,031 $ 2015 142,285 2016 134,878 111,137 2,700,039 $ 90,842 2,700,017 $ 92,576 2014 602,692 2,700,035 $ 2015 516,440 2016 489,557 9,800,034 $ 9,800,023 $ 2014 9,800,055 $ 2015 2016 Year ,0,0 *4,4 ** 41,745 ** 2,000,003 $ arVle* Value Fair rn Date Grant tc Options Stock I Shares) (In tc Units Stock I Shares) (In Restricted

PROXY STATEMENT Microchip Technology Incorporated NVIDIA Corporation NXP Semiconductors N.V. ON Semiconductor Corporation QUALCOMM Incorporated Skyworks Solutions, Inc. STMicroelectronics N.V. Xilinx, Inc. Assessment of 2016 performance revenue growth, operating profit as a percentagetotal of shareholder revenue, return, and O O O Advanced Micro Devices, Inc. Analog Devices, Inc. Broadcom Limited Infineon Technologies AG Intel Corporation Intersil Corporation Linear Technology Corporation Marvell Technology Group Ltd. Maxim Integrated Products, Inc. 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 measuresbasis resulting for on all decisions 2016. both measures were an were founded absolute positive on andmeasures and both relative were improved solid as from data good the and as prior soundwas or year, judgment. strong better and On and than in an on the relative absolute par median. comparisonsperformance with In with to the aggregate, competitors the prior the most same year, committee levels which determinedincreased they also that to were was performance reflect in strong. in the 2015 Therefore, 2016 growth for theon named of committee the his executive held committee’s role officers, bonuses assessment and except for are the for 2016 below. one increased individual impact he whose had bonus on the performance of the company. Details • The absolute one-year and three-year performance of TI on the above measures. • The relative one-year and three-year performance of TI as compared with competitor companies, as measured by 24 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT In the comparison of relative performance, the committee used the following companies (the “competitor companies”): This list includes both broad-basedproducts. and The niche committee suppliers considers that annually operatechanges whether in in the our business list key activities is markets of still orother the appropriate offer companies. companies. in technology Also, In terms that in 2016, of competes July three revenue, withgroup 2016, companies market our to the were capitalization TI. committee removed and The added from committee Skyworks the made Solutions, list no Inc. after other to being changes increase acquired to the by the overall list comparability of of competitor the companies in 2016. One-year relative performance on thecommittee’s three assessment measures of and the one-year company’s strategicthresholds 2016 progress performance. or were multiples. In the assessing Because primary performance, market considerationsyear the conditions in could committee can the prove did quickly irrelevant not change by use inin year-end. formulas, our hindsight The industry, after committee thresholds year-end, believes established gives its atstrategies it approach, the that the which beginning serve insight assesses of the the to a long-term most company’s interests effectively relative of and performance the critically company judge and results its and shareholders. encourages executives to pursue In addition, the committee consideredproducts our and strategic technologies, progress as by well reviewing as how the competitive strength we of are our in relationships key with markets customers. with our core Bonus In January 2017, the committeeperformance. set In the setting 2016 the bonus bonuses, compensation the for committee executive used officers the based following on its performance assessment measures of to 2016 assess the company: All grants have the termsawards described between under the “Outstanding named equity executive awardsequity officers at compensation were fiscal for primarily year-end their the 2016.” positions, result Theofficers. and of differences not differences in the in the application the equity of applicable any estimated formula market designed level to of maintain differentials between the The exercise price of thereleased options its was annual the and closing fourth-quarter priceTerm of financial Incentive TI results Plan, stock for which on 2015. shareholders January All approved 29, grants in 2016, were April the made 2009. second under trading the day Texas after Instruments the 2009 Long- company

PROXY STATEMENT 2 recs lwwscluae ysbrcigCptlepniue rmteGA-ae ahfosfo prtn activities. statement. operating proxy from this flows to Cash A GAAP-based Appendix the see from GAAP, expenditures to Capital reconciliation subtracting a by For calculated was flow cash Free taei progress Strategic (TSR) return shareholder Total margin and Revenue • 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 • the provide to continues semiconductors Processing Embedded and Analog on focus strategic company’s The • competitor median the above was which billion. percent, $3.5 21.6 of was investments TSR short-term for and rate cash growth with annual year compound the three-year ending The robust, remained sheet • balance The • revenue. of percent 30.5 at flow companies. cash competitor free with with compared cash, as strong TSR generated median again the company than The better percent, 36.7 • was TSR • • hr eucae f$. ilo eue usadn hrsb . ecn nto tc sune uigthe during issuances 15 stock (the of percent dividends. (net 31.6 and percent increased repurchases 1.5 rate share by dividend shares through quarterly 2016 outstanding The in reduced year). shareholders billion to $2.1 returned of was repurchases flow Share cash free of percent 93 O O O performance Annual eeu rwh oa TI total growth: Revenue generation. cash 2016. and in margins actions improving thereby which wafer, wafers, per 300-millimeter produced on be production to increased chips again more company enabled the 2016, In advantage. competitive product. or customer market, single a on dependence semiconductors. prevents Processing that of 2016, Embedded tens In and year. the Analog each in from number added came products portfolio revenue more TI’s TI’s with in of products longevity, percent The and 86 terms. differentiation long strong and offer near and the thousands in results strong for foundation comparison. strategy. management capital TI’s of elements important are increases dividend and repurchases O O performance Three-year recs lwa frevenue of % as flow cash Free margin Operating 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 prtn rftmri a 59pret hc a bv ohtepirya’ agnadtemedian the and margin year’s prior the both above was competitors. which with and percent, comparison percent 35.9 2.4 was up margin were profit Processing Operating Embedded and Analog respectively. or of percent, at businesses 8.5 be core would company’s rate the growth for the TI’s Revenues If estimate rate.) of organic. we growth rate entirely companies, median growth is competitor the median rate from above the growth excluded competitor that TI’s were with note whereas acquisitions Compared to acquisitions, of year. important of effect prior is effect the (It the in median. includes than the companies 2016 below competitor in was higher rate was growth percent TI’s 2.8 companies, of rate growth revenue TI’s vrg prtn rftfr21-06ws3. ecn,wihwsaoetemda competitor median the above was which percent, 33.0 was comparison. competitor 2014-2016 median for the profit below operating was Average which percent, 3.1 was 2014-2016 comparison. for growth revenue annual Compound /ubro years of 1/number ...... iu 1. minus ...... EA NTUET 07POYSAEET25 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS ...... efrac summary Performance ...... th nraei h at1 er) Share years). 13 last the in increase 59 30 average 33.0% 35.9% 05 94 average 29.4% 30.5% 25 0.%average 104.9% 92.5% 67 16 CAGR 21.6% 66.7% 36.7% 31.6% -er3-Year 1-Year .%31 CAGR 3.1% 2.8% 2 Approximately

PROXY STATEMENT Equity Fair Value) Total (Grant Date Compensation minus 1. Adjusted closing price is as 1/3 Profit Sharing Bonus elating to the named executive officers for 2016 are summarized in of these elements is, in its judgment, in a reasonable range. Salary (Annual Rate) 20162015 $ 1,166,0002014 $ 1,143,000 $ 1,110,000 $2016 232,817 $2015 203,877 $ $ $ 3,450,0002014 168,941 668,000 $ $ 3,450,000 $ 649,000 $ $ 9,800,055 3,450,0002016 $ 630,000 9,800,023 $ 133,283 $2015 $ 14,648,872 9,800,034 $ $ 115,758 $2014 14,596,900 $ 825,000 $ $ 1,110,000 $ 14,528,975 95,884 $ 800,000 $ 1,110,000 $2016 2,700,035 775,000 $ * $ 164,583 1,110,000 $2015 2,700,017 $ $ $ 142,6682014 $ $ $ 4,611,318 112,860 690,000 $ 2,000,000 2,700,039 $ $ 4,574,775 670,000 $ 1,750,000 $ $ $ 1,510,0002016 5,500,031 650,000 $ 4,535,923 137,667 $2015 5,500,029 $ $ $ $ 4,500,008 119,4982014 $ 8,489,614 618,000 $ $ 1,265,000 $ 98,872 $ $ 8,192,697 600,000 $ 1,265,000 6,897,868 $ 4,000,014 550,000 $ * $ 123,300 1,265,000 $ 4,000,045 $ $ 106,535 $ $ $ 6,092,681 1,000,000 4,000,015 $ 77,635 $ 6,054,543 1,000,000 $ $ 3,800,028 $ 6,013,887 $ 3,800,037 925,000 $ 5,541,328 $ $ 4,700,042 5,506,572 $ 6,252,677 2013 year-end adjusted closing price) described above. year-end adjusted closing price) minusunder 1. Historical The Prices adjusted for closing the pricesplits company’s is and stock as reinvestment on shown of Yahoo dividends. Finance and reflects stock ...... One-year TSR % = (adjusted closing price of the company’s stock at year-end 2016, divided by 2015 Three-year TSR CAGR % = (adjusted closing price of the company’s stock at year-end 2016, divided by Before setting the bonuses forperformance. the The named performance executive of officers, Mr. theofficers, Templeton committee the was considered committee judged the considered according officers’ the to individual assessment, factors the the described performance committee below of did in the not assessing company. apply individual For any performance. the formula In other or making performance this Mr. targets. March is the chief financial officer. The committee notedMr. the Crutcher financial is management responsible of for theperformance all company. and of strategic the position company’s of product the lines product and lines sales activities. and The activitiesMr. committee for Anderson noted which is the he responsible is financial for responsible. performance the and company’s strategic analog position semiconductor of product the lines. product The lines committee for noted which theMr. he financial Ritchie is is responsible. responsible forperformance the of company’s those semiconductor operations, manufacturing including operations. their The cost-competitiveness committee and noted inventory the management. The bonuses awarded for 2016the performance named are executive shown officers in were theapplicable primarily table market the below. level result The of of differences total differences inthe cash in the Comparator compensation the amounts Group. expected officers’ awarded The to level to bonus be ofPlan of paid responsibility described each to and under named similarly the “Consideration executive situated of officer officerssummary tax was at compensation and paid companies table. accounting under within treatment the of Executive compensation” Officer and Performance footnote 3 to the 2016 26 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT R. K. Templeton Officer Year K. P. March B. T. Crutcher K. J. Ritchie S. A. Anderson * Annual rate effective July 2014 Results of the compensation decisions Results of the compensation decisions made by the committee r the following table. This table isto provided see as the a data supplement presented to ininformation the this similar summary form. to compensation Although that table the in for committee the investors does table who not to may target ensure find a that it specific the useful level sum of total compensation, it considers

PROXY STATEMENT aete fetv ntedyo omte cin h xriepieo tc pin stecoigpieo Isoko the on stock to TI is of practice price its closing months, the other is In options later. stock if of day price is meeting exercise practice the The grant. committee’s on action. the the (ii) committee of results, or of date financial released day effective company’s been the the have on of results effective release the them the after make 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 2016 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 1.2 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 2016 following the in equity resulted 2016 above of shown value decisions the compensation and flat. The 2016 as held for well were officers, bonus as officers other salary, the other the base Both these For in company. of company. increases the each growth the of of to his of because profits granted reflecting performance 2015 increased compensation 2016, the from the in on slightly reflecting bonus had increased sharing, higher he 2016 profit the for impact increased to “Total” increased due the the primarily and Templeton, 2015 Mr. President for Vice including than Executive higher as was role 2016 his for in grant “Total” how the about Crutcher, information Mr. for For table compensation summary in summary the Compensation,” the to Plan In 2 calculated. Incentive bonus. and was “Non-Equity and 1 value for sharing notes fair column “Salary” profit see date the the for Please in table, columns requirements. compensation separate aggregated SEC summary has are with the bonus table accordance In This and committee. year. sharing the the profit by in table, set paid compensation as salary salary actual base the of shows rate column annual the shows table This * Average dataforthenamedexecutiveofficer Ba s e S 2 lr Equity alary % 23 % EA NTUET 07POYSAEET27 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS C EO 8% 6 7 C % ompen s s to Profit ation otherthanMr.Templeton 2 % 22 % Other NEOs S 6 aigBonu haring 11 5 * % % s

PROXY STATEMENT 28 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 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 Anderson 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 March already and reached Mr. the Ritchie are eligible for early retirement under Employees accruing benefits in theMr. qualified Crutcher pension and plan, Mr. including Anderson, thematching also named contributions. are executive eligible The officers enhanced to other participate defined thanparticipate, in contribution Mr. provides a plan, Templeton, for qualified in a defined which fixed contribution Mr. employer Templeton, plan contribution Mr. that plus Crutcher provides an and employer employer Mr. matching Anderson contribution. 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 “2016 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 Anderson, benefits or Crutcher plan. who under change chose The joined that in not other the plan to named company were executive in frozen officers 1999, in have participates 1997 continued in and their the they participation enhanced participate in defined in the 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 executive compensation In April 2016, 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 2016. 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 Recoupment policy The committee has a policyin concerning the recoupment event (“clawback”) of of a executivecircumstances material bonuses and restatement and take of equity the TI’s compensation. actions financial Underor it results the willful considers due policy, misconduct appropriate to contributed with misconduct, to respect thebonus the to committee paid need the will to for compensation review such such of the officer restatement. any factsresults exceeding Such executive and been the action officer properly amount may whose reported that, include fraud and in (a)period (b) the seeking under seeking judgment reimbursement equity to of of compensation recover the any awards. profits committee,all All received would interested determinations by have parties. such by been officer the paid during committee had with the the 12 respect financial months to after this the policy are restated final and binding on

PROXY STATEMENT fie,t naei rdn n“us otost ela ie rc) cls smlrotost u) rohrotoso hedging or options other or buy), to executive options an (similar 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 2016 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 5 gross-ups in footnote tax the change see no in or Please provides is termination travel. company it air upon The reasons, company- payments personal details. security a for “Potential further for for aircraft and that eligible company 2016 determined are use for has They to table directors employees. CEO compensation of U.S. the 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 deferred plan on purchase earned stock were Employee rates deferred market” on “above earnings no no because rules, 2016 SEC for year. company with table that The accordance compensation in above. In summary amounts described deferred. the plans amounts in participant. contribution the shown the defined on are by the return compensation selected in minimum alternatives participants any investment to guarantee company’s of offered not the performance those does of the to part tracks identical remain amounts are amounts deferred alternatives all the These and of unsecured value are The balances assets. account operating competitive compensation be deferred to officers’ plan executive the The group have select a We a in officers. companies. to compensation executive other limited their the by be of to, offered plan receipt limited packages this the not benefits that defer are the of require to but with portion employees Labor include, a of allows employees of Department plan Eligible receipt U.S. The manner. the the employees. tax-efficient defer of compensated may Rules highly level sharing. or certain profit management a and of exceed bonus responsibility salary, management her and or sala . EA NTUET 07POYSAEET29 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT Robert E. Sanchez, Chair Daniel A. Carp Pamela H. Patsley Christine Todd Whitman 30 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 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 2016 board and of the directors company’s that proxy the statement CD&A for be the included 2017 in annual the meeting of stockholders. The Compensation Committee of the board of directors has furnished the following report: Compensation Committee report When setting equity compensation, theintends committee to considers grant. the Its cost consideration forfor of financial 2016 the reporting – cost purposes Equity of of compensation.” grants equity made compensation in it 2016 is discussed under “Analysis of compensation determination The Texas Instruments Executive Officertax Performance deductible Plan under is intended Section 162(m). tounder The ensure “Grants plan, that of which performance plan-based shareholders bonuses awards approved undercommittee in in the reserves 2016.” 2002, plan the The is are discretion committee’s further fully to general describedour pay policy following shareholders a is the to bonus to table do outside award so. the bonusesdescribed The plan within under committee if the “Analysis set it plan, of the determines although compensation bonuses that the determinations of it the for is 2016 named in – executive the Bonus.” officers best The for interest bonuses 2016 of were performance the awarded at company the within and levels the plan. Consideration of tax and accounting treatment of compensation Section 162(m) of the IRCthe generally company’s denies CEO a and deduction three to(other other any than highest publicly qualified compensated held performance-based officers corporation compensation) excluding forthis exceeds the compensation deductibility $1 CFO, paid limit million. to in on The the a the Compensation extent taxablethat compensation Committee that year does that considers the to not it the officer’s meet intends impact compensation the to of inconsistent requirements award. with of The our Section committee compensation 162(m) exercises policies when itscommittee and/or applying discretion has when the to exercised the limits award this value of compensation discretion Section ofto when the 162(m) vesting. awarding would foregone The restricted frustrate deduction committee stock or would believes units be notprovide it that be for is vest material. the in over The retention the time, of best without our interest performance executive of conditions officers the in company all and market our conditions. shareholders that restricted stock unit awards

PROXY STATEMENT 3 ossso efrac oue adudrteTxsIsrmnsEeuieOfcrPromnePa n rftsaigfor sharing profit and Plan Performance Officer Executive Instruments Texas the under paid bonuses performance of Consists (3) the of discussion The 718. ASC with accordance in calculated options of value fair date grant aggregate the is Shown (2) 718. ASC with accordance in calculated awards (RSU) unit stock restricted of value fair date grant aggregate the is Shown (1) Anderson A. Stephen Ritchie J. Kevin Crutcher T. Brian Year March P. Kevin Templeton K. Richard Position Principal and Name all in compensated services highly for most officers”) three executive other “named 2016. the the in of called company each (collectively the and 2016 to CFO during capacities CEO, officers company’s executive the were of who compensation individuals the shows below table The table compensation summary 2016 eirVc rsdn 05$5583$19007$19000$11655$—$8,6 5,588,971 $ 86,566 $ — $ 1,106,535 $ 7,429,024 1,900,000 $ $ 1,900,037 $ 595,833 5,300 $ 2015 $ 1,370,848 $ 6,974,251 8,316,358 1,384,498 $ $ $ 2,000,004 President $ Vice 110,688 125,744 2,000,041 Senior $ $ $ 668,333 1,112 — $ 2015 $ 1,622,860 5,469,220 $ 6,176,590 2,250,007 $ $ President $ Vice 1,892,668 2,250,001 $ Senior $ $ 23,837 739,583 2,750,006 $ 20,509 2,750,023 $ $ $ $ 797,917 2014 872,191 1,621,825 $ $ 2015 $ 1,205,884 President $ Vice 1,225,758 Executive $ 1,350,003 $ & 1,350,007 1,350,036 Officer $ $ Operating 1,350,010 14,925,802 Chief 628,333 $ $ 647,417 15,043,694 $ 317,702 $ $ 2014 $ 318,084 $ 2015 13,950 199,552 Officer Financial Chief $ $ & 3,618,941 3,653,877 $ President $ Vice 4,900,004 4,900,006 Senior $ $ 4,900,030 4,900,017 $ $ 1,107,083 1,140,250 $ $ 2014 2015 Officer Executive Chief & President Chairman, h mut fbnsadpoi hrn adt aho h ae xctv fiesfr2016. for officers to executive for decided named decisions” committee the compensation The of the so. each of do to Results to paid – appropriate sharing 2016 is for profit it and determinations decides bonus compensation Compensation it of of the if amounts “Analysis However, level see the plan). cash lower Please the a a 2016. 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 on of report terms annual the TI’s Under in 2016. annual statements TI’s financial in the statements to respectively. financial 5 2014, the Note 31, to and December 4 2015, ended Note 31, year in December the for the appears ended for used see 2014 year 10-K assumptions please and the Form the terms, 2015 for of grant in 10-K discussion the granted Form The of awards on in table. description the report statements 2016 a of financial year-end For valuation the fiscal 2016. the to at 31, of 4 awards December purposes Note equity ended in Outstanding year appears the the 2016 for following in 10-K discussion granted Form options on of report valuation annual the TI’s of statements purposes financial for the respectively. used to 2014, assumptions 5 31, financial Note December the and ended to 2015, year 4 31, the Note December for in ended 10-K appears year Form 2014 the on the and for report of 2015 10-K annual discussion grant in Form TI’s The the granted on in of table. awards report 2016 description the annual the year-end a of TI’s to fiscal For valuation in 4 at 2016. the statements Note 31, awards of in December equity purposes appears ended Outstanding for 2016 year the used in the following assumptions granted for discussion awards 10-K the the Form see of on please valuation report terms, the annual of TI’s purposes in for statements used financial assumptions the of discussion The ...... 06$6833$20003$20001$14267$14851$530$7,564,845 $ 5,300 $ 1,468,531 $ 1,402,667 $ 2,000,001 $ 2,000,013 $ 688,333 $ 2016 5,694,156 $ 5,300 $ 1,079,121 $ 1,243,283 $ 1,350,002 $ 1,350,033 $ 666,417 15,080,069 $ $ 325,510 2016 $ 107,604 $ 3,682,817 $ 4,900,007 $ 4,900,048 $ 1,164,083 $ 2016 04$5870$33009$13003$10265$—$7,0 6,285,629 $ 74,202 $ 5,633,591 — $ 93,763 $ — $ 1,002,635 $ 8,163,477 1,350,003 $ $ 3,350,039 $ 508,750 $ 5,200 1,123,300 $ $ 2014 1,900,000 $ $ 1,900,028 $ 2,146,473 616,500 $ 1,363,872 $ $ 2016 2,000,004 $ 2,000,011 8,643,187 $ 647,917 $ $ 155,079 2014 $ 577 $ 2,164,583 $ 2,750,000 $ 2,750,031 $ 822,917 $ 2016 EA NTUET 07POYSAEET31 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS Salary ($) Awards $ (1) ($) Stock Awards Option $ (2) ($) Compensation netv Plan Incentive Non-Equity $ (3) ($) anns()(4) ($) Earnings Compensation eso Value Pension Nonqualified hnein Change Deferred and Compensation l Other All $ 5 oa ($) Total (5) ($)

PROXY STATEMENT of Stock Fair Value Grant Date and Option Awards (5) Unused Time (b) Vacation (4) ($/Sh) Option or Base Price of Awards Exercise Defined Plan (a) Retirement Contribution (#) (3) Option Options Awards: All Other Securities Number of Underlying 5,300 $ N/A $ — 5,300 $ N/A $ — 10,600 $ 265,320 $ 2,308 10,600 $ 133,76110,600 $ $ 83,163 — $ — 401(k) Contribution Units Stock (#) (2) Awards: Stock or All Other Shares of Number of Action Date of Committee Date Grant 1/29/16 (1)1/29/16 (1) 1/21/161/29/16 1/21/16 (1)1/29/16 (1) 1/21/16 92,5761/29/16 1/21/16 (1)1/29/16 (1) 1/21/16 25,506 489,5571/29/16 1/21/16 (1)1/29/16 $ (1) 52.93 1/21/16 51,956 134,8781/29/16 1/21/16 $ (1) 4,900,007 1/29/16 $ (1) 52.93 1/21/16 37,786 274,751 1/21/16 $ 1,350,002 $ $ 52.93 4,900,048 35,897 199,819 $ 2,750,000 $ $ 52.93 1,350,033 189,828 $ 2,000,001 $ $ 52.93 2,750,031 $ 1,900,000 $ 2,000,013 $ 1,900,028 ...... $ ...... $ ...... $ ...... $ ...... $ ...... additional amount of $260,020 forTI Mr. to Templeton, offset $128,461 IRC for limitations Mr.which on Crutcher, amount amounts and is that $77,863 also could for shown be Mr. in contributed Anderson the accrued to 2016 by the non-qualified enhanced deferred defined compensation contribution table. retirement plan, grants”), the grants became effectivequarter on and the year second 2015. trading The day company after released the these company results released on its January financial 27, results 2016. for the fourth- Name R. K. Templeton K. P. March column for deferred compensation. Theexecutive amounts officers’ in benefits this under column the representdefined qualified the benefit defined change pension benefit in plans the pension (TI actuarial planDecember Employees value (TI 31, Non-Qualified of Employees 2015, Pension the Pension through Plan named Plan) December and andand 31, TI the 2016 2016. Employees non-qualified present This Non-Qualified value “change Pension of in Planbenefit the the II) is pension actuarial from not benefit value” paid is accumulated until the asas age difference of of 65. year-end between December Mr. by the 31, Templeton’s the 2015 1997. and named Mr. Mr. executive Anderson Crutcher’s officer, does benefits assuming not under that participate the in company’s any pension of plans(ii) the were perquisites company’s frozen and defined personal benefit benefits pensionparagraph that plans. below. meet the disclosure thresholds established by the SEC and are detailed in the B. T. Crutcher K. J. Ritchie S. A. Anderson (a) Consists of (i) contributions under the company’s enhanced defined contribution retirement plan of $5,300 and (ii) an (b) Represents payments for unused vacation timeThe that perquisites could and not personal be benefits carriedexecutive are forward. physical as and follows: personal $47,282 use forcounseling of Mr. and company Templeton, an aircraft consisting executive ($32,026), of physical. and financialnamed Financial $10,718 counseling, executive for counseling an officers, Mr. and but Crutcher, an the consisting executive amounts of physical attributable financial were to made those available officers to were the below other the disclosure thresholds. 32 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Name R. K. Templeton The following table shows the grants of plan-based awards to the named executive officers in 2016. K. P. March B. T. Crutcher K. J. Ritchie S. A. Anderson (1) In accordance with the grant policy of the Compensation Committee of the board (described under “Process for equity Grants of plan-based awards in 2016 (4) The company does not pay above-market earnings on deferred compensation. Therefore, no amounts are reported in this (5) Consists of (i) the amounts in the table below, which result from programs available to all eligible U.S. employees, and

PROXY STATEMENT 2 n-ure ftesae eaeeecsbeo aur 9 07 n n-hr ftermiigsae become shares remaining the of ($72.97). one-third 2016 and 30, 2017, December 29, 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) .A Anderson A. S. Ritchie J. K. Crutcher T. B. March P. K. Templeton K. R. Name 2016. 31, December of as officers executive named the of each for awards equity outstanding the shows table following The 2016 year-end fiscal at awards equity Outstanding and Discussion Compensation the company. see the please by practices, modified grant or compensation repriced equity Analysis. was TI’s officers regarding executive information named additional the For to granted awards equity The other 2016. or in options awards the option of and None stock for 718 ASC with accordance 2016. in 29, computed January value on fair stock date common grant TI aggregate of the price is closing Shown the is options conditions the and (5) of terms price the exercise on The information For Plan. Incentive (4) Long-Term 2009 company’s the under granted were the options under The made were awards These (3) awards. RSU were 2016 in officers executive named the to granted awards stock The (2) xrial nec fJnay2,21,Jnay2,21,adJnay2,2020. 29, January and 2019, 29, January 2018, 29, January of each on exercisable icsino h supin sdfrproe ftevlainapasi oe4t h iaca ttmnsi Isannual TI’s in statements financial the 2016. to 31, 4 December Note ended in year appears the valuation for the 10-K of Form purposes on for report used assumptions the of discussion table. 2016 year-end fiscal at awards equity Outstanding the following discussion the see please options, these the of see please awards, table. RSU 2016 these year-end of fiscal at conditions awards and terms equity the Outstanding on the information following For discussion Plan. Incentive Long-Term 2009 company’s ...... — ...... — ...... — ...... — ...... — ...... EA NTUET 07POYSAEET33 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS Unexercised Exercisable pin (#) Options Underlying ubrof Number Securities 4,0 30 /822 — — — — — — 1/28/2020 1/27/2021 23.05 $ 12,769,750 1/26/2022 $ 34.63 $ 8,109,667 6,628,741 $ 32.36 $ (9) $ 175,000 — (8) 111,137 — (7) 90,842 1/25/2023 — 1/23/2024 32.80 $ 1/28/2025 540,000 44.09 $ (5) 131,250 450,000 53.94 $ (4) 301,346 475,000 (3) 387,330 393,750 301,346 129,110 5,0 23 /622 — — 3,648,500 $ 1/26/2022 (9) 50,000 32.36 $ 1/25/2023 — 32.80 $ (5) 37,500 150,000 112,500 3048,2 4 40 /322 060()$2,234,341 $ 2,570,368 $ (8) 30,620 (7) 35,225 1/23/2024 44.09 1/28/2025 $ 53.94 $ (4) 83,024 (3) 150,189 83,024 50,063 2681804()$5.412/053,7 7 2,705,655 $ (7) 37,079 1/28/2025 3,720,230 $ 53.94 $ (7) 50,983 (3) 158,094 2,234,341 1/28/2025 $ 52,698 1,826,293 53.94 $ $ (8) 30,620 (3) 217,380 (7) 25,028 1/23/2024 72,459 44.09 1/28/2025 $ 53.94 $ (4) 83,024 (3) 106,714 83,024 35,571 435()$3.012/034,3 9 3,344,507 $ (9) 45,834 1/25/2023 32.80 $ (5) 34,375 — 000()$3.012/036,6 9 4,864,691 $ 3,310,065 $ (9) 66,667 (8) 45,362 1/25/2023 5,472,750 $ 32.80 1/23/2024 $ 3,723,805 $ (9) 75,000 44.09 $ (5) 50,000 (8) 51,032 (4) 1/25/2023 122,999 — 32.80 1/23/2024 $ — 44.09 $ (5) 56,250 (4) 138,374 — — Unexercisable Unexercised pin (#) Options Underlying 8,2 2 29 /922 587()$2,619,404 $ (6) 35,897 1/29/2026 52.93 $ (2) 189,828 6,755,271 $ (6) 92,576 1/29/2026 52.93 $ (2) 489,557 9,1 2 29 /922 776()$2,757,244 $ (6) 37,786 1/29/2026 3,791,229 $ 52.93 $ (6) 51,956 (2) 199,819 1/29/2026 1,861,173 52.93 $ $ (2) 274,751 (6) 25,506 1/29/2026 52.93 $ (2) 134,878 ubrof Number Securities pinAwards Option Exercise rc ($) Price Option Expiration Option Date htHv Not Have That Stock of Units ubrof Number etd(#) Vested hrsor Shares 175(0 3,046,133 $ (10) 41,745 tc Awards Stock htHv Not Have That Stock of Units aktValue Market fSae or Shares of Vested $ (1) ($)

PROXY STATEMENT Other Termination Circumstances of Employment exercisable for 30 days Cause Employment Termination for Option cancels Option remains Eligible** Employment Termination with 20 Years of Credited Service, but Not Retirement (at Least 6 Months after Grant) Option remains in effect tothe the term; end vesting of does notemployment continue termination after Eligible* Employment When Retirement Vesting continues; option remains in effect to end of term 6 Months after Grant) Termination (at Least Disability Employment on each of January 28, 2018, and January 28, 2019. January 23, 2018. Termination Due to Death or Permanent For awards made before 2013,“2016 the pension definition benefits”). of normal or early retirement eligibility in the relevant pension plan applies (see 34 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Vesting continues; option remains in effect to end of term 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 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. (3) One-third of the shares became exercisable on January 28, 2017, and one-half of the remaining shares become exercisable 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 ten right the is years to the paragraph unless purchase on closing the following the price option the first of is chart. anniversary TI terminated Options of common earlier vestoutstanding the stock pursuant (become as date on exercisable) to of of the in provisions December the grant increments summarized 31, grant. of inprovisions 2016. The 25 the 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 (4) One-half of the shares became exercisable on January 23,(5) 2017, and the remaining Became one-half fully become exercisable exercisable on(6) on January 25, 2017. Vesting date is January(7) 31, 2020. Vesting date is January(8) 31, 2019. Vesting date is January(9) 31, 2018. Vested on January 31,(10) 2017. Vesting date is July 31, 2018.

PROXY STATEMENT .A Anderson A. S. Ritchie J. K. Crutcher T. B. March P. K. 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 2016. 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 2016 shares in of officers number executive the lists table following The vested stock and exercises compensation option to deferred 2016 likely non-qualified was 2016 it the until These in expense reason. reflected compensation any is related for award the employment this award of postponing requirements, the termination by SEC Under his company with table. 2000. after the accordance in year to In vested the benefit deductible. stock, of tax fully an common March a be holds TI in provide Templeton of Templeton to Mr. shares Mr. designed table, 120,000 to were 2016 for issued terms year-end award, be fiscal The will at 1995. shares awards in the options. equity granted terms, stock outstanding was of the that discussion in RSUs the shown of in Awards” award 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 date vesting scheduled the at paid are shares continues; Vesting 2016. 31, December of as outstanding RSUs of to provisions paid termination amount the the shows to below equal table rate The RSU a at Each cash date. terminated in is grant annually award the the paid after years are unless four date”) which dividends. “vesting approximately equivalents, in is (the dividend stockholders RSU date date receive Each vesting stated to awards. a the right RSU on general, the are stock In includes 2016 common below. year-end TI summarized fiscal of terms at share under awards one earlier equity receive outstanding to of right table the the represents in column Awards” “Stock The u oDaho emnn Disability Permanent or Death to Due mlyetTermination Employment ...... ceue etn date vesting scheduled the at shares out pays and effect in stays Grant 2012: after made grants For a es otsatrGrant) after Months 6 Least (at EA NTUET 07POYSAEET35 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS hnRtrmn Eligible Retirement When mlyetTermination Employment hrsAcquired Shares nEecs (#) Exercise on ubrof Number 4,2 ,9,7 584$2,343,492 $ 45,834 6,694,176 $ 240,625 1,4 ,3,2 834$2,982,617 $ 10,218,625 $ 2,556,500 58,334 $ 8,095,617 162,500 $ 50,000 4,732,924 $ 6,512,588 158,334 $ 10,069,525 $ 216,748 36,091,027 $ 253,998 245,000 934,461 r issued are shares no cancels; Grant pinAwards Option emnto for Termination Employment Cause nEecs ($) Exercise on au Realized Value hrsAcquired Shares nVsig(#) Vesting on ubrof Number r issued are shares no cancels; Grant te Circumstances Other tc Awards Stock fEmployment of Termination au Realized Value nVsig($) Vesting on

PROXY STATEMENT Last Fiscal During Year ($) Payments of Accumulated Present Value Benefit ($) (6) Number of Service (#) Years Credited s of service or change in eligible earnings) as of December 31, 1997. Employees Pension Plan 37 (3) $ 1,558,907 — Employees Pension Plan 0.9 (3) $ 4,636 — Employees Pension Plan 31 (3) $ 1,086,561 — Employees Pension Plan 16 (3) $ 724,431 — TI Employees Non-Qualified Pension PlanTI Employees Non-Qualified Pension Plan II 25 (4) 37 (5) $ $ 554,872 8,723,722 — — TI Employees Non-Qualified Pension PlanTI Employees Non-Qualified Pension Plan II 19 (4) 31 (5) $ $ 185,528 6,489,098 — — TI Employees Non-Qualified Pension PlanTI Employees Non-Qualified Pension Plan II 16 (3) 16 (5) $ $ 299,404 234,474 — — ...... TI ...... TI ...... TI ...... TI plans were closed to new participants. or participating in a new enhancedin defined the contribution defined retirement contribution plan. plan. Messrs. Accordingly,(i.e., Templeton their they and accrued will Crutcher pension experience chose benefits no to under increase participate the attributable qualified to and year non-qualified plans were frozen Contributions to the defined contribution plancompensation for table. Mr. Templeton’s and Mr. Crutcher’s benefits are included in the 2016 summary 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 2016, 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 4.33 bond assumption of percent yield of December for interest 1.25 31,amount. the assumption percent 2016, A TI of or discount Employees 4.29 (ii) rate Non-Qualified percent the assumption Pension forpension of Plans, the plans 4.29 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 4.33 lump percent sum. for the non-qualified 36 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT (1) Mr. Anderson does not participate in any of the(2) company’s defined benefit pension In plans 1997, because TI’s he U.S. joined employees were TI given after the these 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 B. T. Crutcher (2) K. J. Ritchie K. P. March Name (1)R. K. Templeton (2) Plan Name The following table shows thequalified present defined value benefit as pension of December planNon-Qualified 31, (TI Pension 2016, Employees Plan of Pension (which the Plan) governs benefit andgoverns amounts of non-qualified amounts earned the defined earned before named benefit after 2005) executive pension 2004)). and officers plansnamed In TI under (TI executive accordance Employees our Employees officer’s with Non-Qualified retirement SEC Pension eligibility requirements, Plancontinued or the II employment any amounts (which after increase shown December in in 31, benefits the 2016. that table may do result not from reflect the any named executive officer’s 2016 pension benefits

PROXY STATEMENT h icsino evso bec ne Ptnilpyet pntriaino hnei oto emnto Perquisites.” – Termination see – Please control plan. in pension change qualified or the termination under upon service payments the of “Potential of years under day to absence first credited of the are leaves is retirement, of payment to discussion and of bridge the 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 the event may service the credited status. in take of disabled payable then years and benefit and bonus, disabled The 65 and become age salary not reaching on he until based had is benefit 65 time 65 accrued age any age the to at at of accrued benefit paid receipt have accrued defer benefit would his to disability 65. receive choose The age to may benefit. at choose participant disability received may the a have participant Alternatively, would the 65. he disability, age one to to is the due prior benefit than terminates such lower employment time, is participant’s that benefit the at annual If benefit the retirement result, annual a retire his As to receiving factor. elects based. begin retirement he is to early when benefit chooses an birth, Security and by of Social retirement reduced year his early his which takes of on on individual years (based compensation an consecutive percentage of If highest a amount five less the the IRS, of of the TI) average by with to the imposed service equal (ii) limit of benefit and a years retirement service to his annual credited up and an of bonus with years plus participant (i) salary a of base provide product his to the intended by is multiplied plan percent qualified 1.5 the for formula pension The n upsmdsrbto amn ne lnI eoetefrtdyo h eet ot olwn emnto femployment. of termination receive not following they month that seventh requires the IRC of executive the day named of first 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 plan are IRS qualified II the the Plan However, under and Plan. as I Pension same Plan the under is benefits plans participant’s eligible these A not under sum. are retirement lump 1997, early a 30, and in November normal paid plans. after for are the payroll Eligibility Benefits of U.S. II. above). purpose the Plan see the a joined or (please is of who I discussion Each employees Plan a 2004. plan, in for after pension participate plans” earned benefit to Retirement amounts defined – governs qualified earned “Benefits which the amounts see II), with governs Please (Plan As 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 plans pension non-qualified employees TI will 70 he of payment, age request the not reaches joint does he (v) participant after annuity, life the year survivor single If the percent (i) annuity. of 50 are: survivor April and annuity percent in joint of 100 benefit (iv) forms and his annuity, the joint receive life payment, (vi) to and periodic and begin lump- certain smallest annuity, a 10-year to survivor choose (iii) largest percent may annuity, of 75 Participants order life and thereafter. In and time certain annuity. any 5-year of or (ii) forms termination six annuity, at of benefit one for accrued or eligible his payment were of sum 60 Ritchie payment or Mr. request employment and may of of March participant year years Mr. A one 20 Templeton, with with Mr. age age 2016, of of 31, years years December 65 55 of least least As retirement. at at employment. normal is is of or he he years early if if five plan retirement with the early age of for of terms eligible years the is under participant retirement A eligible normal service. not for credited are eligible 1997, is 30, participant November plan after A a payroll for U.S. plans” the Retirement joined – who “Benefits Employees plan. see plan. this Please the in plan. of participate pension purpose to benefit and defined origin qualified the a of is discussion Plan Pension Employees TI The Plan Pension Employees TI EA NTUET 07POYSAEET37 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS 1 ⁄ 2 ntefr faniyrqie ne h IRC. the under required annuity of form the in

PROXY STATEMENT Aggregate FYE ($) (5) Balance at Last Aggregate Withdrawals/ Distributions ($) Last FY ($) Aggregate Earnings in ($) (2) in Last FY Registrant Contributions 113,229 $200,000 128,461 $ 77,863 $ 121,515 $ 65,446 — $ 116,322 $ 1,442,751 $ 901,660 172,923 $ 260,020 $ 2,465,527 (3) $ 312,071 (4) $ 10,185,016 (6) Executive Contributions in Last FY ($) (1) ...... $ ...... $ ...... $ ...... — — — — — ...... — — — — — of his salary and bonus paid in 2016; and for Mr. Anderson includesCompensation a column portion of of the his 2016 bonus summary paid compensation in table. 2016. 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 $2,179,200 number award increaseand of at in (c) RSUs year-end the a is 2015 value $89,527 multiplied from of gain by the the rate in the value as Mr. closing of dividends Templeton’s price the on deferred of award TI compensation TI at common account common year-end stock. in stock 2016 on 2016. Dividend the last equivalents trading are date paid of atMr. the the Templeton’s year)); same deferred compensation balance. 38 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT K. J. Ritchie S. A. Anderson (1) Amount shown for Mr. Templeton includes a portion of(2) his salary and bonus Company paid matching in contributions 2016; pursuant for to Mr. the Crutcher defined includes contribution a(3) plan. portion These amounts are included Consists in of: the (a) All $196,800 Other in dividend equivalents paid under the 120,000-share 1995 RSU award previously discussed, (4) Consists of dividend equivalents paid on the RSU award discussed in note 3 and a scheduled distribution of a portion of R. K. Templeton Name K. P. March B. T. Crutcher The following table shows contributionsaggregate to amount each of named his executive deferred officer’s compensation deferred as compensation of account December in 31, 2016 2016. and the 2016 non-qualified deferred compensation TI’s qualified and non-qualified pensionbeneficiary plans receives provide a that payment upon equal theplans to death had half of he of a retired the retirement-eligible instead benefit employee,reduced of to the amounts died. which employee’s the We the beneficiary have employee receives a wouldreceive under survivor have had the benefit been he pension plan entitled retired plans, that under instead equals pays thetheir of the the pension beneficiaries died. benefit beneficiary would Because the a be Messers. employee lump eligible Templeton, sum would for March that, have benefits and when been under Ritchie added entitled the were to to eligible survivor the benefit for plan early retirement if they in were 2016, to die. TI Employees Survivor Benefit Plan Leaves of absence, including aa bridge discussion to of retirement, leaves are of creditedPerquisites.” absence, to please years see of “Potential service payments under upon the termination non-qualified or pension change plans. in For control – Termination – Balances in the plans arepresent unsecured value obligations of of the the individual’s company.occurred. benefit For For would amounts such be under amounts, paid Plan the not I,equity pre-2010 later in awards definition than the at of event the fiscal a of month year-end change a followingassets 2016 in change the of table) control in month the applies. (please control, in company For see the which occurred, all the thereasonably the amounts discussion change practicable present accrued following in following value under the control of the this Outstanding the sale plan,control. individual’s of if assets. benefit a For would sale amounts be of under distributed substantially Plan all in II, of a no the lump distribution sum of as benefits soon is as triggered by a change in In the event of death,death payment and under will both be plans in isthe the based month form on of of salary death. a and lump bonus, sum. years The of earliest credited date service of and payment age is at the the first time day of of the second calendar month following If a participant terminates dueunder to the disability, qualified amounts plan under commences. Plandisability For I benefit amounts will is under be reduced Plan distributed to II, when reflect distribution payment the is of payment governed the of by participant’s the Section benefit benefit 409A prior of to the age IRC, 65. and the

PROXY STATEMENT rcag ncnrl o icsino h mato hs rgaso h opnaindcsosfr21,pes see please termination 2016, employment for termination decisions following to compensation “Compensation relating the and payments on compensation” control.” of programs Total in result these – change reimburse a of 2016 or not as impact for does executive the determinations TI the of compensation company. by discussion of the the a payable “Analysis 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 of definition. None Plan control the in is control change in or the Change termination of control. 409A in upon Section change payments by a Potential distribution permitted after 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, limitations. the balance IRC by participant’s applicable contributed a to Amounts Otherwise, subject unforeseeable IRC. is an the and obtain of election To 409A distribution emergency. Section his unforeseeable of to an requirements pursuant of the paid case meet is the must in participant plan a the withdrawal, from emergency party distribution third request A may investments. participant on A return minimum the any that guarantee investments not program. the does compensation of company deferred performance The company’s deferred the balance. the their by plan administers to solely his Retirement relating determined for Index instructions are chosen Lifepath their balance has BlackRock change participant’s participant and may a 2030 F participants on Index Fund alternatives, Earnings Lifepath 2050 investment daily. BlackRock Index available compensation F, Lifepath the Fund BlackRock among 2020 F, From Index Fund F. BlackRock Lifepath 2040 Fund F, BlackRock Index Fund F, Lifepath Index Fund BlackRock Equity Index F, BlackRock Index Equity Fund 2000 Fund, East) Russell Puritan Far Trust Fidelity Australia, Russell Northern Fund-Lending, (Europe, Trust Fund-Lending, Index (EAFE) Northern Index 400 Fund-Lending, Growth MidCap the Non-Lendable Index 1000 Trust are Index Bond Russell Northern time, IMI Aggregate Trust Fund-Lending, any ex-U.S. Trust Northern at ACWI Northern Fund-Lending, changed MSCI Fund, Index be BlackRock Investment Value may plans): Term 1000 which contribution Short the alternatives, defined Trust of (these the Northern more party in F, or third participants Fund one a to of by offered performance managed those the is as mirror which same compensation of deferred each their funds, have mutual prior to following year choose calendar their could of the participants in percent 2016, 90 made During (ii) be earned. salary, must be base compensation will their defer compensation of to the percent Elections which 25 sharing. in (i) profit year to of the up percent to defer 90 to (iii) choose and may bonus, account. plan performance contributions compensation compensation matching deferred deferred (ii) his the and into in plan deferred Participants of contribution officer excess defined executive in enhanced the are the compensation that to to company make related the compensation may make by deferred company may contributions employee’s the company and An contributions the defer plan. (i) to the on elected of limits has purpose IRS employee the the the of compensation discussion The a eligible 3. for contains note plans” account in Retirement described – as “Benefits calculated see award, Please RSU 1995 Temp eane steblneo i eerdcmesto account. compensation deferred his of officer. balance executive the named is a remainder not was for he amount which the for of years remainder in The earned $395,554. amounts Anderson to Mr. relates and Anderson $1,442,751; Mr. Crutcher, Mr. $1,428,616; Templeton, Mr. EA NTUET 07POYSAEET39 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT 40 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Our only program, plan orPension arrangement Plan. providing A benefits change triggered in bysee control a “2016 at change pension December in benefits 31, control – 2016, isprovisions TI would the of employees have TI that non-qualified accelerated Employees plan pension payment Non-Qualified as plans” of well for the as a balance the discussion under circumstances of that and the plan. the purpose Please timing of of change payment. in 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, andservice the beginning to have (bridge earlier the commence at to of at paid least retirement). age the leave 15 The 55 end of years pension bridge with of absence, plans to at the the described retirement least paid above. will 20 leave Stock be years and options credited of end will employment to when continue years or of to age service become 60 under exercisable with the and at qualified RSUs least will five and remain years non-qualified of in effect. 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 calculating continue executive credited benefits to officer’s to under vest. stock years the Amounts options of paid qualified will service to and continue an non-qualified to individual pension become during plans. a paid leave of absence are not counted when Perquisites Financial counseling is provided tocontinue executive after officers termination for of a employment. transition period following retirement. Otherwise, no perquisites Equity compensation Depending on the circumstances ofpreviously termination, granted grantees stock whose options employment and terminatesOutstanding receive may equity shares retain awards under the at outstanding right fiscal RSU toequivalents year-end awards exercise are 2016 as paid table. described annually RSU in by awards the the include discussion company a following in right the a to single receive cash dividend payment equivalents. after The the dividend last dividend payment of the year. Deferred compensation plan The purpose of this plansolely is on described the under performance “Benefits of –under investments Deferred “2016 that Compensation.” non-qualified the The deferred participant amounts compensation” has payableparticipant’s and chosen under distribution except for this election. in his program Amounts the plan depend distributed case balance. are of The paid death, timing by payments of the are payments company. made is according discussed to the Survivor benefit plan The purpose of this plan,payments, along are with described the under formula “2016 forTI pension determining Employees benefits the Health – amount Benefit TI of Trust. Employees benefit, Survivor the Benefit form Plan.” of Amounts benefit distributed and are the paid timing by of the Qualified and non-qualified defined benefit pension plans The purposes of these plansbenefit are and described the under timing “Benefits of –non-qualified payments Retirement plans are plans.” are described The paid, under formula respectively, “2016 for by pension determining the benefits.” benefits, TI The the Employees amounts forms Pension disbursed of Trust under and the the qualified company. and Bonus Our policies concerning bonus anda the bonus timing would of be payments awarded aretermination under described and other under is circumstances “Compensation subject and philosophy to in and the what elements.” Compensation amount Whether Committee’s would discretion. depend If on awarded, the bonuses facts are and paid circumstances by of the company. The following programs may resultprograms in have payments been to discussed a above. named executive officer whose employment terminates. Most of these Termination

PROXY STATEMENT omo opnainDsblt Death Disability (1) Templeton R.K. Compensation of Form officers. executive named the of each for control in change or termination upon payments potential the shows and further below options for RSUs. table stock table and The such 2016 options of year-end stock vesting fiscal to an the at relating upon will awards provisions Only TI equity control 2009. of Outstanding in after control the change granted in following concerning RSUs change discussion information and a the options after see stock months Please of 24 accelerate. vesting within RSUs of cause) acceleration for no (not is termination there involuntary control in change a Upon ..Adro (1) Anderson S.A. (1) March K.P. ..Crutcher B.T. ..Rthe(1) Ritchie K.J. eerdCompensation Deferred RSUs Plan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Benefit Defined Qualified RSUs Compensation Deferred Plan Benefit Survivor Options Stock RSUs Compensation Deferred Plan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Benefit Defined Qualified Options Stock Benefit Defined Non-Qual. Benefit Defined Non-Qual. Benefit Defined Qualified tc Options Stock Options Stock RSUs Compensation Deferred Plan Benefit Survivor eerdCompensation Deferred Plan Benefit Survivor Benefit Defined Non-Qual. Benefit Defined Non-Qual. Benefit Defined Qualified RSUs tc Options Stock o-ul eie Benefit Defined Non-Qual. Benefit Defined Non-Qual. Benefit Defined Qualified eso lnII Plan Pension II Plan Pension Plan Pension Plan Pension eso lnII Plan Pension Plan Pension Plan Pension II Plan Pension Plan Pension Plan Pension Total Templeton R.K. ..RtheTotal Ritchie K.J. ..Adro Total Anderson S.A. II Plan Pension Plan Pension Plan Pension Total March K.P. eso Plan Pension Plan Pension Total Crutcher B.T...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... $ ...... — — — — — — — — — — — — ...... $ ...... $ ...... — — — — — — ...... $ ...... $ ...... $ ...... $ ...... $ ...... —————— — — — — — ...... $ ...... —————— — — — — — ...... $ — ...... $ — ...... — — — — — — ...... $ — ...... — — — — — — ...... $ — ...... — — — — — — ...... $ — ...... — — — — — — ...... $ — ...... 13764$4,1,1 38703$4,1,1 11114$709,436 $ 41,111,114 $ 41,111,114 $ 13,897,003 $ 41,111,114 $ 41,357,604 $ 9,169,975 $ 166,399,776 $ 166,399,776 $ 10,503,228 $ 167,828,392 $ 166,455,984 $ 76602$2,0,7 76602$2,0,1 — 27,606,012 $ 27,606,012 $ — 28,507,672 $ 27,606,012 $ 248,669 $ 42,328,725 $ 42,328,725 $ 10,435,313 $ 42,328,725 $ 42,749,941 $ 39643$3,3,0 ,5 ,8,4 — — 1,383,247 $ 4,352 $ 35,430,407 $ 33,996,493 $ 2,3,2 1)$116310(1 2,3,2 1)$116310(1 — (11) 121,633,120 $ (11) 121,633,120 $ — (11) 121,633,120 $ (11) 121,633,120 10599()$56794()$1,6,5 4 11247()$1,6,5 4 — (4) 11,162,457 $ (4) 11,162,457 $ (4) 11,162,457 $ (3) 5,677,964 $ (5) 11,085,929 (9) 8,756,400 $ (10) 43,019,828 $ (10) 43,019,828 $ (9) 8,756,400 $ (8) 43,019,828 $ (8) 43,019,828 36765()$1,3,5 8 36765(0 36765(0 — (10) 13,637,655 $ (10) 13,637,655 $ — (8) 13,637,655 $ (8) 13,637,655 38473()$1,1,5 8 — (8) 13,814,753 $ (8) 13,814,753 35646(1 35646(1 35646(1 35646(1 — (11) 13,576,456 $ (11) 13,576,456 $ — (11) 13,576,456 $ (11) 13,576,456 37129(1 37129(1 — (11) 13,791,259 $ (11) 13,791,259 — (11) 22,323,105 $ (11) 22,323,105 $ — (11) 22,323,105 $ (11) 22,323,105 67804()$1,0,1 8 — — — — (8) 16,708,014 $ (8) 16,708,014 72740(1 72740(1 ,7,9 1)—— — (12) 1,378,895 $ — (11) 17,277,450 $ (11) 17,277,450 ,1,3 2 8,1 3 ,8,3 4 ,8,3 4 ,8,3 4 — (4) 1,489,136 $ (4) 1,489,136 $ (4) 1,489,136 $ (3) 780,816 $ (2) 1,717,833 ,7,0 8 ,7,0 8 ,7,0 1)$95037(0 — (10) 9,570,307 $ — (10) 9,570,307 $ — (4) 8,697,508 $ (4) 8,697,508 $ (8) 9,570,307 (4) 8,697,508 $ $ (8) 9,570,307 (3) 4,559,507 $ (5) 8,788,904 ,3,1 2 ,3,7 3 ,2,1 4 ,2,1 4 ,2,1 4 — (4) 2,025,110 $ (4) 2,025,110 $ (4) 2,025,110 $ (3) 1,030,370 $ (2) 2,131,015 0,7 5 0,9 3 1,7 4 1,7 4 1,7 4 1,7 (4) 413,575 $ — (4) 413,575 $ (4) 413,575 (4) 1,009,367 $ $ (4) (4) 413,575 1,009,367 $ $ (4) (3) 1,009,367 209,693 $ $ (3) 511,601 (5) 609,677 $ (2) 969,593 2,6 5 6,9 3 2,8 4 2,8 4 2,8 4 — (4) 323,886 $ (4) 323,886 $ (4) 323,886 $ (3) 164,092 $ (5) 223,766 4,9 5 3,4 3 4,6 4 4,6 4 4,6 4 4,6 (4) 248,669 $ (4) 248,669 $ (4) 248,669 $ (4) 248,669 $ (3) 131,344 $ (5) 349,792 2,4 5 6,2 3 0,3 4 0,3 4 0,3 4 0,3 (4) 709,436 $ (4) 709,436 $ (4) 709,436 $ (4) 709,436 $ (3) 362,423 $ (5) 926,549 109()$212()$432()$432()—— — (4) 4,352 $ (4) 4,352 $ (3) 2,192 $ (2) 11,029 EA NTUET 07POYSAEET41 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS ,2,1 7 — — — — (7) 1,428,616 ,2,4 6 — — — — (6) 6,826,246 ,6,4 6 — — — — (6) 4,963,646 ,4,5 7 — — — — (7) 1,442,751 6,4 6 — — — — (6) 861,442 0,6 7 — — — — (7) 901,660 Termination Involuntary o Cause for $ $ Resignation; Termination Involuntary 38473(0 38473(0 — (10) 13,814,753 $ (10) 13,814,753 37129(1 37129(1 — (11) 13,791,259 $ (11) 13,791,259 ntfor (not as)Retirement Cause) hnein Change Control

PROXY STATEMENT the terms of their equityterms compensation of awards his as equity of compensation December awards 31, as 2016. of Mr. December Anderson 31, was 2016. retirement eligible underDecember the 31, 2016, due tobenefit disability, until assuming age the 65. named The executiveused assumptions officer for used does financial in not reporting calculating request purposes payment thesethe for of amounts 2016 the his are pension company’s disability the benefits audited same table. financial as statements the for age-65 2016 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. ($72.97). In the event ofterms. termination Please due see to the disability first oras table death, of under all December “Outstanding outstanding 31, equity awards 2016, awards willMr. and at continue Templeton. the fiscal to related year-end vest discussion 2016” according following for to that the their table number of of an unvested additional RSUs outstanding RSU awardDecember held 30, by 2016 ($72.97). price of TI common stockvesting as schedule. of December 30, 2016 ($72.97). RSU awards stay in effect and paycommon out stock shares as according of to December the December 30, 2016 31, ($72.97), 2016. multiplied by the number of shares under such options ascommon of stock as of DecemberDecember 30, 2016 31, ($72.97), 2016. multiplied by the number of shares under such options as of 42 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT The committee has discussed withspecified the by independent auditing registered standards public together accounting with firm, guidelines Ernst established & by Young, the the SEC required and communications the Sarbanes-Oxley Act. The committee has reviewed andaudited discussed financial with statements management and and (2) theaccounting management’s independent firm’s report accounting related on firm, opinions. internal as control appropriate, over (1) financial the reporting and the independent As noted in the committee’scompany’s charter, independent TI management registered public is responsible accountingcommittee for firm are preparing is in responsible the no company’s for way financial auditingany designed statements. the special to The financial assurances supersede statements. with or The regard alter activitiesaudits to those of performed TI’s traditional the by financial responsibilities. the statements, The independent nor committee’s does registered role it public does involve accounting not a firm. provide professional evaluation of the quality of the The Audit Committee of the board of directors has furnished the following report: Audit Committee report (1) Messrs. Templeton, March and Ritchie were retirement eligible for purposes of TI’s defined benefit pension plans and under (2) The amount shown is the lump-sum benefit payable at age 65 to the named executive officer in the event of termination as of (3) Value of the benefit payable in a lump sum to the executive officer’s(4) beneficiary calculated as required by Lump-sum the value terms of of the the accrued benefit as of December(5) 31, 2016, calculated as The required amount by shown the is terms the of lump-sum the benefit plans payable assuming (6) at 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 2016, 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 30, 2016 (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 closing price of TI

PROXY STATEMENT needn eitrdpbi conigfr nodrt sueta h rvso fsc evcsde o martefirm’s the impair not does services the such by of performed provision be the to that services assure non-audit to and order in audit independence. firm the accounting pre-approve to public registered required is independent Committee Audit The policy. Pre-approval training. and audit tax Foundation and TI filings) Other: tax-related All other and returns tax matters. income tax of foreign review and and U.S. (preparation on compliance advice tax for services professional Tax: or local-government with compliance subsidiaries. to non-U.S. relating various procedures for certification standards and regulatory audits other public plan with benefit assistance employee 10-Q, including Form Audit-related: on reports consultations. reporting, accounting financial and over internationally control required internal audits of statutory audit offerings, the debt including audit, annual our Audit: follows: as were provided services The Other All $ Tax ...... Audit-Related Audit below: described are company the to date, Young this & of Ernst as by that, provided indicated services have for they fees the so; The at do questions, to appropriate desire to they respond if to statement available a make be not. to to do and opportunity they present, the be have to They the expected meeting. appointment, are annual the Young firm. ratify & accounting not Ernst public do of registered stockholders Representatives independent the If another Consequently, Young. appoint the investors. & should as its Ernst it serve and of whether to company appointment consider Young the the will & of ratify Committee Ernst interest to Audit of best stockholders retention the the continued in asks the is board firm that the believe accounting board public rules. the registered partner. SEC and independent audit with Committee company’s lead accordance Audit in the the role, of of that selection members in the The years into consecutive input five direct than have more management no and serves Chair engagement Committee TI Audit the The on partner annual audit the lead for whether firm. The firm considers another accounting periodically by Committee public conducted Audit registered be the independent should company’s independence, statements the auditor financial as TI’s continuing serve of assure to to audit firm order predecessor In a years. TI’s or 60 be Young over to & LLP Ernst Young engaged & has Ernst TI appointed has oversight Committee and Audit 2017. retention The for compensation, firm. firm appointment, accounting accounting the public public for registered registered responsibility independent independent and TI’s authority of the work has the board of the firm of Committee accounting Audit public The registered independent of appointment ratify to Proposal SEC. the with filing audited for the 2016 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 the received has committee The ap .Bb,J. hi akA ln ae .CakJa .Hobby M. Jean Clark F. Janet Blinn A. Mark Chair Jr., Babb, W. Ralph ...... $ ...... $ ...... $ ...... EA NTUET 07POYSAEET43 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS ,3,0 2,827,000 $ 3,238,000 ,6,0 9,096,000 $ 9,664,000 8,0 795,000 $ 789,000 062015 2016 800$29,000 $ 28,000

PROXY STATEMENT Percent of Class 53,007,241 (5) 5.32% 62,941,800 (4) 6.32% 64,081,361 (3) 6.43% 76,095,137 (1) 7.64% Shares Owned at December 31, 2016 ...... Street nd sole dispositive power for 74,355,091 and shared dispositive power for 1,740,046 of these shares. 44 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT (1) According to its Form 13G filing, The Vanguard Group(2) has sole voting power A for division 1,566,804, of shared Capital voting Research power and for Management 188,609, Company (CRMC). Capital World Investors (2) 333 South Hope Street Los Angeles, CA 90071 BlackRock, Inc. 55 East 52 New York, NY 10055 Name and Address The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 Capital Research Global Investors (2) 333 South Hope Street Los Angeles, CA 90071 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. Voting securities 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 21, business entitled 2017, on 999,639,733 to February shares vote 21, of at 2017, TI the common meeting. stock Each holder of common stock has one vote Additional information The board of directors recommendsindependent a registered vote public FOR accounting ratification firm of the for appointment 2017. of Ernst & Young LLP as the company’s The Audit Committee or its Chair pre-approved all services provided by Ernst & Young during 2016. 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

PROXY STATEMENT 1 r leonwseetdt h or fetv ac ,21.O htdt,h a rne ,0 etitdsokunits stock restricted 2,000 granted was he date, that On 2017. 1, March effective board the to elected was Bluedorn Mr. percent. 1 than (1) less (3) * group a as directors and officers executive All Anderson A. S. Ritchie J. K. Crutcher T. B. March P. K. (2) Management Whitman T. C. Templeton K. R. Sanders R. W. Sanchez E. R. Patsley H. P. Kirk R. Hobby M. J. C.S.Cox ...... Clark F. J. Carp A. D. Blinn A. M. Jr. Babb, W. R. (1) Directors 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 shares accounts respect or for compensation with director (except deferred power a power to investment if voting credited sole member sole shares and all has and table) and officer RSUs the officers executive to to executive named subject footnotes named and shares the days, director directors, 60 Each by within group. stock a obtainable common as TI directors of and ownership officers beneficial executive the shows table following The management of and result a directors as of shares ownership these of Security owner beneficial the be to deemed is Investors World Capital for filing, power 13G voting Form shared its shares, to 51,697,857 According for power voting sole (5) has Inc. BlackRock, filing, 13G a Form as its shares to these According of owner beneficial the (4) be to deemed is Investors Global Research Capital filing, 13G Form its to According (3) usatt h em fte20 ietrCmesto Plan. Compensation Director 2009 the of terms the to pursuant and power voting sole has Investors World Capital shares. companies. these investment for various power to dispositive advisor sole investment an as shares. acting 15,738 CRMC for power dispositive shared and shares 62,926,062 for power dispositive sole shares, 15,738 sole has Investors Global Research shares. Capital these companies. for investment power various voting to sole advisor and investment power an dispositive as acting CRMC of result ...... EA NTUET 07POYSAEET45 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS ...... eebr3,2016 31, December hrsOndat Owned Shares ,8,5 * 3,788,950 ,1,4 * 9,619,542 9,1 * 495,815 * 124,121 * 106,700 5,7 * * * 455,075 648,381 863,074 * 145,008 * 149,634 110* * * 91,150 64,268 25,000 * * 32,296 92,179 ,5 * 8,552 ,0 * 2,000 fClass of Percent

PROXY STATEMENT RSUs (in Shares) Shares Credited to Deferred Accounts (b) Compensation 401(k) Shares Account Credited to 2,000 — RSUs (in Shares) (a) Shares 306,494 — 189,321 339,131266,937 — — 228,971 186,894 529,485 2,120 131,154 Obtainable within 60 Days 401(k) Shares Account Credited to 2,497 — 3,889 2,166 53,89716,99074,897 —74,897 — — 17,035 8,010 — 33,69943,895 20,247 53,897 27,035 7,296 41,038 74,897 — — 1,629 9,058 — 18,658 24,535 6,225 1,618 9,697 16,99074,897 — — 8,010 11,058 43,076 — Shares Obtainable 2,822,716 13,154 589,555 — within 60 Days ...... — — ...... compensation accounts are issued following a director’s termination of service. termination of service provided hefor or directors. she RSUs has granted served after atdate. 2006 least are eight settled years in or TI has common reached stock the generally company’s upon retirement the age fourth anniversary of the grant (a) 6,685,805 shares obtainable(b) within 60 days; 34,572 shares credited to(c) 401(k) accounts; 2,024,572 shares subject(d) to RSU awards; for the 132,991 terms shares of credited these to RSUs, certain please non-employee see directors’ pages deferred 15 compensation and accounts; 35; shares and in deferred (a) A TI director or executive officer, or an Immediate Family Member of a director or executive officer; M. A. Blinn D. A. Carp J. F. Clark ...... C.S.Cox J. M. Hobby W. R. Sanders R. K. Templeton (a) The non-employee directors’ RSUs granted before 2007 are settled in TI common stock generally upon the director’s (b) The shares in deferred compensation accounts are issued following the director’s termination of service. R. W. Babb, Jr. C. T. Whitman Included in the shares owned shown above are: Directors P. H. Patsley R. E. Sanchez R. Kirk 46 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT (3) Includes: K. J. Ritchie S. A. Anderson Related person transactions 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: B. T. Crutcher Executive Officer K. P. March (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 is approved: practicable. G&SR the that them 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 interests brought provide best transaction 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 judgment, No 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 by: available of products Required circumstances company comparable Approval and the for facts to sources relevant benefits other the the of to: all limited consider not or will member but 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 G&SR 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, G&SR 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 Involving: Arrangement arrangements. follows: or as or transactions are arrangement similar approvals transaction, of required series financial The any any or to, indebtedness) limited of not is guarantee but or includes, indebtedness transaction any person (including related relationship holder. a percent that 5 specifies or policy officer The executive director, tenant TI a sibling, a than spouse, of (other stepparent, household person parent, the any stepchild, sharing or child, employee) sister-in-law any or brother-in-law, is Member” daughter-in-law, Family son-in-law, “Immediate father-in-law, an mother-in-law, policy, the of purposes For rnatosivligsrie sabn eoioyo ud,tase gn,rgsrr rse ne rs netr or indenture trust a under trustee registrar, agent, 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 • c nett nwihsmoelse n()aoehsa5preto rae wesi neet ywihsmoelisted someone which by interest, ownership greater or percent 5 a has above (a) in listed someone which in entity An such of (c) Member Family Immediate an or TI of stock common the of percent 5 than more owning stockholder A (b) omno otatcrir rpbi tlt,a ae rcagsfxdi ofriywt a rgvrmna 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 n()i mlyd ro hc oen itdi a sadrco,picplo partner. or principal director, a is (a) in listed someone which of or stock employed, TI is in (a) interest in or ownership 13G an Form having the as in stockholder or designated percent holder”); entity 5 percent or the “5 person by a any regulations collectively, person, and or natural rules (individually a SEC not the is under stockholder filed percent 13D 5 the if or, stockholder, EA NTUET 07POYSAEET47 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS hi fteGS Committee G&SR the of Chair the with consultation in Officer Compliance Chief Committee G&SR Committee G&SR

PROXY STATEMENT Proxy Materials) (and Not for Inclusion in our Other Proposals/Nominees to be Presented at 2018 Annual Meeting No earlier than December 21, 2017, and no later than January 20, 2018 (Proxy Access) in 2018 Proxy Materials Director Nominees for Inclusion No earlier than October 7, 2017, and no later than November 6, 2017 2018 Proxy Materials On or before November 6, 2017 Proposals for Inclusion in their position as a directorthe of ownership another of corporation TI or stock organization; and all holders of that class of stock receive the same benefit on a pro-rata basis; the direct or indirect ownershipownership in of another all party the to other theparty; individuals transaction specified and in that 3(a)-(c) ownership, above, whenan is combined interest less with as than the a 5 limited percentownership partner of interests in the of a outstanding the partnership, equity other and ofinterest individuals that such of specified ownership the in interest, limited 3(a)-(c) when partnership; above, combined is with less all than the 5 other percent of the total ownership O O Immediate Family Member is asowner an of employee the (other other than entity anand if executive (ii) (i) officer) amounts the and/or involved TI less for director thangross the or a revenues fiscal executive 10 for year officer percent that do is beneficial year; not not exceed involved the in greater negotiating of the $200,000 termsdirector or of or 2 the executive percent transaction officer, of or theofficer) their entity’s if Immediate consolidated 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 O O • Transactions in the ordinary course of business where the only relationship of a TI director or executive officer, or their • 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 • Interests of a related person arising only from: When proposal must be received by Texas Instruments 48 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 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 2018 Without receiving additional compensation, officialse-mail, 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 During 2016, 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 Compensation committee interlocks and insider participation During 2016, 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 etns o a eus eaaemtras rrqetta esn nyoesto aeil oyui o r receiving are above. you given if address you the to at materials Relations of Investor set to Texas one writing to only or writing annual send 540-7095 by future we (866) or For that calling 214-479-3773 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 only an to MS meetings, received share cost 660199, have who no Box and stockholders P.O. at 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 stockholders offer broker registered banks bank, to and your firms provided by you. brokerage program forwarded to of the information available from number the A differ Check may bank. participants. programs or plan These firm benefit options. brokerage a voting of internet name and the telephone in registered shares Inc., with Solutions, Stockholders Financial Broadridge counsel 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 voting all that internet believes and company officers. Telephone The executive company. and the directors of to its securities officers, by equity executive filed certain and timely of directors were company’s ownership 2016 the beneficial during including regarding reports 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 2017, meeting. of TI 17, 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 2017, the 17, under instruct April participants trustee to by Additionally, The wish so plans. fiduciary” you do “named these If should a under instructions. you are accounts your accounts, you your with your Plan, to accordance for Savings allocable in held 401(k) shares shares shares TI of your of the voting vote or the will Plan, direct plan Savings to your 401(k) entitled administering and are Contribution and TI plans the the in under participant a are you If board. the process contacting the on through information Benefitplanvoting than for rather board” manner the to this with resort in “Communications to views see having your Please without present proposals. level you stockholder board prefers formal from the board of correspondence at the reviews access Generally, by Committee given proposals. considered G&SR thereby stockholder carefully the are formal be review, Stockholders will appropriate responses. and receive management’s welcome suggestions and are your stockholders business that company’s ensure nomination the To or concerning management. proposal stockholders TI’s any from to suggestions respect all with addition, action In requirements. appropriate applicable other other any take and or these order, with Secretary. of comply Attn: out not 75243, rule does TX reject, that Dallas, to 8658, right MS the Boulevard, reserve TI We 12500 Incorporated, Instruments Texas to: sent be to are Proposals EA NTUET 07POYSAEET49 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT Cynthia Hoff Trochu Senior Vice President, Secretary and General Counsel Sincerely, Our Form 10-K is also available in the “Investor Relations” section of our website at You may also obtain a copy of the company’s annual report on Form 10-K for the 50 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT 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,forward-looking are 10-K see statements made for the to only the Risk reflect as year factors subsequent of ended the events December date or 31, circumstances. of 2016. The this proxy forward-looking statement statements and we undertake no obligation to update the March 6, 2017 Dallas, Texas Notice regarding forward-looking statements The company’s annual report to2016, stockholders, accompanies which this contains proxy consolidated statement. financialyear statements ended for December the 31, year 2016, ended660199, that December MS was 31, 8657, filed Dallas, with TX the 75266-0199. www.ti.com. SEC without charge by writing to Investor Relations, P.O. Box Important Notice Regarding the AvailabilityThis of 2017 Proxy proxy Materials statement for and the the Stockholder company’s Meeting 2016 to annual be report held are on accessible April at: 20, www.proxyvote.com. 2017. As an alternative to receivingto printed receive copies proxy of mailings these electronically. materialswhen To in prompted, request future enroll electronic years, to delivery, we receive please areholding or vote pleased shares access via to through proxy the offer materials a internet stockholders electronically broker at theinformation or in www.proxyvote.com opportunity for bank future and, each may years. account request After held electronic thedelivery, by delivery meeting please a by date, visit bank visiting stockholders www-us.computershare.com/investor or www.icsdelivery.com/ti or broker. andyou call If entering are TI you a Investor are participant Relations a in at registeredinformation. a 214-479-3773 stockholder TI for and benefit more would information. plan like and If to would request like electronic to request electronic delivery, please call TI Investor Relations for more Electronic delivery of proxy materials and copies of our Form 10-K

PROXY STATEMENT o diinlifrainaotatnigteana etn laesetedsuso ne Atnac requirements.” “Attendance under discussion the see please meeting annual the attending about information additional For buildings. building. Attendance TI the inside into devices entry recording upon audio/video search and to cameras subject weapons, be forbids will policy bags security All TI’s that advised be Please 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 07POYSAEET51 STATEMENT PROXY 2017 • INSTRUMENTS TEXAS

PROXY STATEMENT 33.1% 29.4% 33.8% 31.1% 29.6% 28.1% Percentage of Revenue December 31, For Years Ended (1,467) $ 39,415 $ 13,065 34.5% $ 11,598 30.5% (551) (385) $ 13,000$ $ 4,397 13,045 $$ 4,054 3,846 $ 3,669 For Years Ended December 31, (531) $ 13,370 $ 4,614 $ 4,083 )...... A-1 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT Free cash flow (non-GAAP) Free Cash Flow as a Percentage(Millions of of Revenue dollars) Revenue 2016 2015 2014 Total 2016 2015 2014 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 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, 2011, and ending December 31, 2016. 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

$350

$300

$250

$200

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

$0 12/11 12/12 12/13 12/14 12/15 12/16

12/11 12/12 12/13 12/14 12/15 12/16 Texas Instruments Incorporated 100.00 108.69 158.98 198.88 209.18 286.00 S&P 500 100.00 116.00 153.58 174.60 177.01 198.18 S&P Information Technology 100.00 114.82 147.47 177.13 187.63 213.61

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 certain risks 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 in this 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.

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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 and President and Chief Executive Officer, President and Chief Financial Officer Chief Executive Officer, Humacyte, Inc. Chief Executive Officer Kevin P. March Texas Instruments Incorporated Jean M. Hobby Brian T. Crutcher Senior Vice President Ralph W. Babb, Jr. Retired Partner Executive Vice President and Kevin J. Ritchie Chairman of the Board and PricewaterhouseCoopers LLP Chief Operating Officer Senior Vice President Chief Executive Officer, Ronald Kirk Niels Anderskouv Comerica Incorporated and Cynthia Hoff Trochu Senior Of Counsel, Senior Vice President Comerica Bank Gibson, Dunn & Crutcher LLP Senior Vice President, Stephen A. Anderson Secretary and Mark A. Blinn Pamela H. Patsley Senior Vice President General Counsel President and Executive Chairman, Chief Executive Officer, MoneyGram International, Inc. Ellen L. Barker Julie M. Van Haren Flowserve Corporation Senior Vice President and Senior Vice President Robert E. Sanchez Chief Information Officer Todd M. Bluedorn Chairman of the Board and Darla H. Whitaker Chairman of the Board and Chief Executive Officer, R. Gregory Delagi Senior Vice President Senior Vice President Chief Executive Officer, Ryder System, Inc. Bing Xie Lennox International Inc. Wayne R. Sanders Haviv Ilan Senior Vice President Daniel A. Carp Retired Chairman of the Board Senior Vice President Retired Chairman of the Board and Chief Executive Officer, and Chief Executive Officer, Kimberly-Clark Corporation Eastman Kodak Company Christine Todd Whitman Janet F. Clark President, Retired Executive Vice President and The Whitman Strategy Group Chief Financial Officer, Marathon Oil Corporation * Effective March 1, 2017

TI Fellows

TI Fellows are engineers, scientists or technologists who are recognized by TI Fellows announced in 2016: peers and TI management for outstanding performance. Fellows are elected • Erich Bayer or re-elected every five years based on their exceptional leadership in driving • Jerry Doorenbos deeper levels of innovation that make TI stronger. • Sameer Prakash Pendharkar • Kevin Scoones • Bob Todd Stockholder and other information

StockholderStock records information SEC Form 10-K StockholderStock older correspondence: Overnight correspondence: A copy of the company’s annual report to ComputershareComp are Computershare the Securities and Exchange Commission P.POB O. Box 3017070 211 Quality Circle, Suite 210 on Form 10-K is available on the Investor CollegeCollege Station,Stat on, TXT 77842-3170 CollegeCollege Station,Sta on, TXT 77845 Relations websitee at www.ti.com/ir.www.t

Copieses of thehe FormFo 10-K,K, includinginc a list of Toll free: fr e: 800-981-867680 8676 exhibitsexh andd any exhibitexhib specifically requested,ested Phone:Phone 312-360-51511 5151 areare availablele withoutwi hout charge by writing to:o: TexasTex s InstrumentsInst ts InvestorInv Relationselatio Website:Webs e: wwww.computershare.com/investorww.co share com/ nvest r P.O.PO Box 660199, 6 MS 8657 For onlineon ine inquiries:inquirie : https://www-us.computershare.com/investor/contacthttps://www-us computershare.com/investor/ ontact Dallas, TX 75266-0199

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