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Texas Instruments Incorporated And Subsidiaries

The following excerpt is from the company's SEC filing.

Consolidated Statements of Income

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

For Three Months Ended


Cost of revenue (COR)

Gross profit

Research and development (R&D)

Selling, general and administrative (SG&A)

Acquisition charges

Restructuring charges/other

Operating profit

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

Interest and debt expense

Income before income taxes

Provision for income taxes

Net income

Diluted earnings per common share

Average diluted shares outstan ding (millions)

Cash dividends declared per common share

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

Income allocated to RSUs

Income allocated to common stock for diluted EPS


Consolidated Balance Sheets

(Millions of dollars, except share amounts)


Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable, net of allowances of ($11) and ($12)

Raw materials

Work in process

Finished goods


Prepaid expenses and other current assets

Total current assets

Property, plant and equipment at cost

Accumulated depreciation



Property, plant and equipment, net

Long-term investments

Goodwill, net

Acquisition-related intangibles, net

Deferred income taxes

Capitalized software licenses, net

Overfunded retirement plans

Other assets

Total assets



Liabilities and stockholders’ equity

Current liabilities:

Current portion of long-term debt

Accounts payable

Accrued compensation

Income taxes payable

Accrued expenses and other liabilities

Total current liabilities

Long-term debt

Underfunded retirement plans

Deferred credits and other liabilities

Total liabilities

Stockholders’ equity:

Preferred stock, $25 par value. Authorized – 10,000,000 shares

Participating cumulative preferred – None issued

Common stock, $1 par value. Authorized – 2,400,000,000 shares

Shares issued – 1,740,815,939

Paid-in capital

Retained earnings



Treasury common stock at cost

Shares: March 31, 2016 – 734,244,179; March 31, 2015 – 696,401,920



Accumulated other comprehensive income (loss), net of taxes (AOCI)

Total stockholders’ equity


Total liabilities and stockholders’ equity

Consolidated Statements of Cash Flows

(Millions of dollars)

Cash flows from operating activities

Adjustments to Net income:


Amortization of acquisition-related intangibles

Amortization of capitalized software

Stock-based compensation

Gains on sales of assets

Increase (decrease) from changes in:

Accounts payable and accrued expenses

Changes in funded status of retirement plans

Cash flows from investing activities

Capital expenditures

Proceeds from asset sales

Purchases of short-term investments

Proceeds from short-term investments

Cash flows from financing activities

Dividends paid

Stock repurchases

Proceeds from common stock transactions

Excess tax benefit from share-based payments

Net change in Cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

1Q16 segment results

Amounts are in millions of dollars.


Embedded Processing:


Operating profit*

* Includes Acquisition charges and Restructuring charges/other.

Compared with the year-ago quarter:

(includes High Volume Analog & Logic, Power Management, High Performance Analog and Silicon Valley Analog)

Revenue decreased primarily due to High Volume Analog & Logic. Power Management and High Performance Analog also declined, while Silicon Valley Analog grew.

Operating profit decreased primarily due to lower revenue, which was partially offset by lower manufacturing costs and a higher percentage of more profitable products.

(includes Microcontrollers, Processors and Connectivity)

Revenue increased in all three product lines, led by Processors.

Operating profit increased primarily due to higher revenue and associated gross profit, as well as lower operating expenses.

(includes DLP® products, calculators, custom ASIC products and royalties)

Revenue declined primarily due to custom ASIC products.

Operating profit decreased by $7 million.

Non-GAAP financial information

This release includes references to free cash flow and ratios based on that measure. These are financial measures that were not prepared in accordance with GAAP. Free cash flow was calculated by subtracting Capital expenditures from the most directly comparable GAAP measure, Cash flows from operating activities (also referred to as cash flow from operations).

The company believes that free cash flow and the associated ratios provide insight into its liquidity, its cash-generating capability and the amount of cash potentially available to return to investors, as well as insight into its financial performance. These non-GAAP measures are supplemental to the comparable GAAP measures.

Reconciliation to the most directly comparable GAAP-based measures is provided in the table below.

For 12 Months Ended

Cash flow from operations (GAAP)

Free cash flow (non-GAAP)



Cash flow from operations as a percent of revenue (GAAP)

Free cash flow as a percent of revenue (non-GAAP)

Notice regarding forward-looking statements

This release 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, 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.

We urge you to carefully consider the following important factors that could cause actual results to differ materially from the expectations of TI or its management:

Market demand for semiconductors, particularly in TI’s end markets;

TI’s ability to compete in products and prices in an intensely competitive industry;

Losses or curtailments of purchases from key customers and the timing and amount of distributor and other customer inventory adjustments;

Customer demand that differs from forecasts and the financial impact of inadequate or excess TI inventory that results from demand that differs from projections;

TI’s ability to maintain or improve profit margins, including its ability to utilize its manufacturing facilities at sufficient levels to cover its fixed operating costs, in an intensely competitive and cyclical industry;

TI’s ability to develop, manufacture and market innovative products in a rapidly changing technological environment;

Economic, social and political conditions in the countries in which TI, its customers or its suppliers operate, including security risks, health conditions, possible disruptions in transportation, communications and information technology networks and fluctuations in foreign currency exchange rates;

Natural events such as severe weather, geological events or health epidemics in the locations in which TI, its customers or its suppliers operate;

Breaches of TI’s information technology systems or those of its customers or suppliers;

Availability and cost of raw materials, utilities, manufacturing equipment, third-party manufacturing services and manufacturing technology;

Timely implementation of new manufacturing technologies and installation of manufacturing equipment, and the ability to obtain needed third-party foundry and assembly/test subcontract services;

TI’s ability to maintain and enforce a strong intellectual property portfolio and obtain needed licenses from third parties, expiration of license agreements between TI and its patent licensees, and market conditions reducing royalty payments to TI;

Compliance with or changes in the complex laws, rules and regulations to which TI is or may become subject, or actions of enforcement authorities, that restrict TI’s ability to manufacture its products or operate its business, or subject us to fines, penalties, or other legal liability;

Product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to TI products, manufacturing, services, design or communications, or recalls by TI customers for a product containing a TI part;

Changes in the tax rate applicable to TI as the result of changes in tax law, the jurisdictions in which profits are determined to be earned and taxed, adverse resolution of tax audits and the ability to realize deferred tax assets;

Financial difficulties of distributors or their promotion of competing product lines to TI’s detriment;

A loss suffered by a customer or distributor of TI with respect to TI-consigned inventory;

Instability in the global credit and financial markets that affects TI’s ability to fund its daily operations, invest in the business, make strategic acquisitions, or make principal and interest payments on its debt;

Increases in health care and pension benefit costs;

TI’s ability to recruit and retain skilled personnel;

TI’s ability to successfully integrate and realize opportunities for growth from acquisitions, and its ability to realize its expectations regarding the amount and timing of restructuring charges and associated cost savings; and

Impairments of TI’s non-financial assets.

For a more detailed discussion of these factors, see the Risk Factors discussion in Item 1A of TI’s Form 10-K for the year ended December 31, 2015. The forward-looking statements included in this release are made only as of the date of this release, and we undertake no obligation to update the forward-looking statements to reflect subsequent events or circumstances.

About Texas Instruments

Texas Instruments Incorporated (TI) is a global semiconductor design and manufacturing company that develops analog ICs and embedded processors. By employing the world’s brightest minds, TI creates innovations that shape the future of technology. TI is helping more than 100,000 customers transform the future, today. Learn more at

TI trademarks:

Other trademarks are the property of their respective owners.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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