Texas Instruments Incorporated
Reconciliation of Non-GAAP Financial Measures
On March 8, 2012, we held a publicly webcast conference call with analysts to discuss our first-quarter 2012 business outlook. During the call we made a non-GAAP reference to our fourth-quarter 2011 gross margin, adjusted for acquisition-related charges and a baseband inventory charge, as being almost 50 percent. We provided this non-GAAP measure to give investors additional insight into TI's underlying business conditions and results without the impact of some quarter-specific charges.
In the fourth quarter of 2011, we had an acquisition-related inventory write-up of $103 million and inventory charges of $44 million related to wireless baseband inventory. These amounts, totaling $147 million, were recognized in Cost of revenue.
The table below provides a reconciliation of the non-GAAP item (gross margin excluding the impact of the acquisition-related inventory and inventory charges) to our fourth-quarter results prepared in accordance with GAAP.