Investor Presentaiton

(1) Messrs. Templeton, March and Ritchie were retirement eligible for purposes of TI's defined benefit pension plans and under the terms of their equity compensation awards as of December 31, 2016. Mr. Anderson was retirement eligible under the terms of his equity compensation awards as of December 31, 2016. (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 December 31, 2016, due to disability, assuming the named executive officer does not request payment of his disability benefit until age 65. The assumptions used in calculating these amounts are the same as the age-65 lump-sum assumptions used for financial reporting purposes for the company's audited financial statements for 2016 and are described in note 6 to the 2016 pension benefits table. (3) Value of the benefit payable in a lump sum to the executive officer's beneficiary calculated as required by the terms of the plan assuming the earliest possible payment date. The plan provides that in the event of death, the beneficiary receives 50 percent of the participant's accrued benefit, reduced by the age-applicable joint and 50 percent survivor factor. (4) Lump-sum value of the accrued benefit as of December 31, 2016, calculated as required by the terms of the plans assuming the earliest possible payment date. (5) The amount shown is the lump-sum benefit payable at age 65, in the case of the Non-Qualified Defined Benefit Pension Plan, or separation from service in the case of Plan II. The assumptions used are the same as those described in note 2 above. (6) Calculated as required by the terms of the plan assuming the earliest possible payment date. (7) Balance as of December 31, 2016, under the non-qualified deferred compensation plan. For all other termination events, balances are distributed in accordance with the participant's distribution election. (8) Calculated by multiplying the number of outstanding RSUs by the closing price of TI common stock as of December 30, 2016 ($72.97). In the event of termination due to disability or death, all outstanding awards will continue to vest according to their terms. Please see the first table under "Outstanding equity awards at fiscal year-end 2016" for the number of unvested RSUs as of December 31, 2016, and the related discussion following that table of an additional outstanding RSU award held by Mr. Templeton. (9) Calculated by multiplying the previously discussed 120,000 vested RSUs by the closing price of TI common stock as of December 30, 2016 ($72.97). (10) Due to retirement eligibility, calculated by multiplying the number of outstanding RSUs held at such termination by the closing price of TI common stock as of December 30, 2016 ($72.97). RSU awards stay in effect and pay out shares according to the vesting schedule. (11) Calculated as the difference between the grant price of all outstanding in-the-money options and the closing price of TI common stock as of December 30, 2016 ($72.97), multiplied by the number of shares under such options as of December 31, 2016. (12) Calculated as the difference between the grant price of all exercisable in-the-money options and the closing price of TI common stock as of December 30, 2016 ($72.97), multiplied by the number of shares under such options as of December 31, 2016. Audit Committee report The Audit Committee of the board of directors has furnished the following report: As noted in the committee's charter, TI management is responsible for preparing the company's financial statements. The company's independent registered public accounting firm is responsible for auditing the financial statements. The activities of the committee are in no way designed to supersede or alter those traditional responsibilities. The committee's role does not provide any special assurances with regard to TI's financial statements, nor does it involve a professional evaluation of the quality of the audits performed by the independent registered public accounting firm. The committee has reviewed and discussed with management and the independent accounting firm, as appropriate, (1) the audited financial statements and (2) management's report on internal control over financial reporting and the independent accounting firm's related opinions. The committee has discussed with the independent registered public accounting firm, Ernst & Young, the required communications specified by auditing standards together with guidelines established by the SEC and the Sarbanes-Oxley Act. 42 TEXAS INSTRUMENTS • 2017 PROXY STATEMENT PROXY STATEMENT

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