Financial objectives

 
We have three financial objectives that we seek to regularly achieve at TI and that should allow us to return value to our shareholders:
  • Grow core product revenue significantly faster than the semiconductor market
  • Grow earnings per share faster than revenue
  • Continue to provide healthy returns to our investors in for the form of dividends and share repurchases
Overall, we've made steady progress on each of these metrics over the years.

For the first objective, we have gained share in Analog in five of the last seven years, while our progress in Embedded Processing has been even stronger, with share gains in six of the last seven years.

In Analog, we continue to strengthen our strategic position through a series of actions: the acquisition of National Semiconductor with its portfolio of 12,000 analog products and large pool of scarce analog engineering talent; an expanded product portfolio; more funding for R&D; more manufacturing capacity, much of which has been obtained or equipped at low cost; and a large and growing sales network. Several of these – such as targeted R&D, low-cost manufacturing capacity and an expanded sales force – will also benefit our Embedded Processing business. In 2011, both Analog and Embedded Processing again outpaced their respective markets.

For the second objective, we have grown our earnings per share (EPS) faster than revenue in some years, and are working to do so on a more sustainable basis despite the cyclicality inherent in our industry. Since 1998, our EPS has had a cumulative annual growth rate of 18 percent. We believe to sustainably increase our EPS over time, our focus now needs to be to significantly outgrow our markets.

The combination of higher profitability and better capital efficiency has consistently generated strong cash flow enabling us to fund future growth, and return value directly to shareholders in the form of dividends and stock repurchases – our third financial objective. Based upon the strength of this business model, since 2004, we've been able to steadily increase dividends and actively repurchase shares. Through the first qaurter of 2011, we've increased our dividends eight consecutive years, and spent more than $22 billion to repurchase about 775 million shares of TI stock, reducing our total share count by about 34 percent in that time period. In 2011, cash flow from operations totaled $3.26 billion.